PART I [Business](index=5&type=section&id=Item%201.%20Business) ChoiceOne is a Michigan-based financial holding company primarily engaged in banking, with growth driven by strategic mergers and extensive state and federal regulation - ChoiceOne is a financial holding company primarily engaged in banking through its subsidiary, ChoiceOne Bank, with operations concentrated in Michigan[26](index=26&type=chunk)[43](index=43&type=chunk) - The company has grown through strategic mergers, including the acquisition of **County Bank Corp. (2019)** and **Community Shores Bank Corporation (2020)**[43](index=43&type=chunk) - The company faces competition from a range of financial institutions, including larger commercial banks, credit unions, and fintech companies, competing on price, convenience, and quality of service[28](index=28&type=chunk) - The company and its bank are extensively regulated by the Federal Reserve Board, the Michigan DIFS, and the FDIC and were categorized as **"well-capitalized"** as of December 31, 2022[30](index=30&type=chunk)[47](index=47&type=chunk)[79](index=79&type=chunk) Key Financial Metrics (as of and for the year ended Dec 31, 2022) | Metric | Value (in millions) | | :--- | :--- | | Total Assets | $2,400 | | Net Loans | $1,200 | | Total Deposits | $2,100 | | Shareholders' Equity | $168.9 | | Net Income | $23.6 | Revenue Composition by Year | Revenue Source | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Interest and fees on loans | 59% | 58% | 60% | | Interest on securities | 24% | 19% | 11% | [Statistical Information](index=8&type=section&id=Statistical%20Information) This section provides detailed statistical data on the company's investment, loan, and deposit portfolios as of December 31, 2022 Investment Securities Portfolio by Maturity (Dec 31, 2022, in thousands) | Security Type | Fair Value (AFS) | Amortized Cost (HTM) | Total | | :--- | :--- | :--- | :--- | | U.S. Gov & Agency | $78,204 | $2,966 | $81,170 | | State & Municipal | $229,938 | $201,890 | $431,828 | | Corporate | $711 | $19,603 | $20,314 | | Asset-backed | $12,333 | $974 | $13,307 | | Mortgage-backed | $208,563 | $200,473 | $409,036 | | **Total** | **$529,749** | **$425,906** | **$955,655** | Loan Portfolio Composition (Dec 31, 2022 vs 2021, in thousands) | Loan Category | 2022 | 2021 | | :--- | :--- | :--- | | Commercial and industrial | $210,210 | $203,024 | | Commercial real estate | $630,953 | $525,884 | | Construction real estate | $14,736 | $19,066 | | Residential real estate | $229,916 | $168,881 | | Agricultural | $64,159 | $64,819 | | Consumer | $39,808 | $35,174 | | **Total Loans** | **$1,189,782** | **$1,016,848** | Allowance for Loan Losses (ALL) Analysis (Year-end 2022) | Metric | Value (in thousands) | | :--- | :--- | | Allowance for Loan Losses | $7,619 | | Nonperforming Loans | $2,667 | | Nonaccrual Loans | $1,263 | | Net Charge-offs | $319 | | ALL as % of Total Loans | 0.64% | | ALL as % of Nonaccrual Loans | 603.25% | Average Deposit Balances and Rates | Deposit Category | 2022 Avg. Balance (in thousands) | 2022 Avg. Rate | 2021 Avg. Balance (in thousands) | 2021 Avg. Rate | | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing demand | $582,992 | -% | $527,876 | -% | | Interest-bearing demand & money market | $902,090 | 0.39% | $791,886 | 0.23% | | Savings | $452,542 | 0.16% | $398,969 | 0.14% | | Certificates of deposit | $196,166 | 0.83% | $186,898 | 0.51% | | **Total** | **$2,133,790** | **0.27%** | **$1,905,629** | **0.17%** | [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from credit, interest rates, competition, regulation, operations, and stock market volatility [Risks Related to the Company's Business](index=15&type=section&id=Risks%20Related%20to%20the%20Company's%20Business) Business risks include credit losses, interest rate volatility, liquidity challenges, intense competition, and cybersecurity threats - The allowance for loan losses may be inadequate, and the adoption of CECL on January 1, 2023, is expected to increase the allowance by **$6.5 million to $7.0 million**[16](index=16&type=chunk)[72](index=72&type=chunk) - A significant portion of the loan portfolio is concentrated in commercial and residential real estate, totaling approximately **73.6% of the portfolio** as of December 31, 2022, which exposes the company to real estate market fluctuations[544](index=544&type=chunk) - Changes in interest rates represent a major risk to the company's income and cash flow, as they affect the spread between interest earned on assets and interest paid on liabilities[6](index=6&type=chunk)[114](index=114&type=chunk) - The company is subject to liquidity risk and had **$161.0 million in unrealized losses** on its investment securities portfolio as of December 31, 2022, which could impact financial condition if securities must be sold at a loss[522](index=522&type=chunk)[543](index=543&type=chunk) - The company faces extensive government regulation and competition from a wide array of financial institutions, including fintech companies, which could adversely affect performance[102](index=102&type=chunk)[103](index=103&type=chunk) - The transition away from LIBOR to an alternative rate like SOFR creates uncertainty and could adversely affect the value and performance of financial instruments tied to LIBOR[521](index=521&type=chunk) - Operational risks include reliance on information systems, potential cybersecurity incidents, employee misconduct, and dependence on third-party service providers[535](index=535&type=chunk)[537](index=537&type=chunk)[552](index=552&type=chunk) [Risks Related to the Company's Common Stock](index=23&type=section&id=Risks%20Related%20to%20the%20Company's%20Common%20Stock) Investors face risks from stock price volatility, limited trading liquidity, potential ownership dilution, and anti-takeover provisions - The market price of the company's common stock is subject to significant fluctuation and has **less trading liquidity** than the average for Nasdaq-listed stocks[559](index=559&type=chunk)[585](index=585&type=chunk) - Shareholders may experience ownership dilution from future issuances of common or preferred stock, as they do not have preemptive rights[328](index=328&type=chunk)[540](index=540&type=chunk) - The company's revenue is highly dependent on dividends from its subsidiary, ChoiceOne Bank, which are subject to regulatory limitations[539](index=539&type=chunk)[558](index=558&type=chunk) - Anti-takeover provisions in the company's articles, bylaws, and under Michigan law could make a change in control more difficult[563](index=563&type=chunk)[588](index=588&type=chunk) [Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments - None[565](index=565&type=chunk)[590](index=590&type=chunk) [Properties](index=18&type=section&id=Item%202.%20Properties) The company owns its headquarters in Sparta, Michigan, and operates 36 locations, the majority of which are owned bank branches - The company operates 36 locations, including 31 banking offices and 5 loan production offices, with all but six of the banking offices owned by the Bank[565](index=565&type=chunk) - The company's headquarters are located at 109 East Division, Sparta, Michigan, and are owned by the company[591](index=591&type=chunk) [Legal Proceedings](index=18&type=section&id=Item%203.%20Legal%20Proceedings) The company is not party to any significant pending legal proceedings outside the ordinary course of business - There were no significant pending legal proceedings as of December 31, 2022, other than those arising in the ordinary course of business[566](index=566&type=chunk) [Mine Safety Disclosures](index=18&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[567](index=567&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=19&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock (COFS) trades on NASDAQ, with cash dividends of $1.01 per share declared in 2022 and an active repurchase program - The company's common stock is traded on the NASDAQ Capital Market under the symbol **COFS**[568](index=568&type=chunk) - Under its stock repurchase program, the company had authorization to purchase up to **375,388 additional shares** as of December 31, 2022, with no shares repurchased during the fourth quarter of 2022[119](index=119&type=chunk)[570](index=570&type=chunk) Quarterly Cash Dividends Declared Per Share | Quarter | 2022 | 2021 | | :--- | :--- | :--- | | First | $0.25 | $0.22 | | Second | $0.25 | $0.22 | | Third | $0.25 | $0.25 | | Fourth | $0.26 | $0.25 | | **Total** | **$1.01** | **$0.94** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income grew to $23.6 million in 2022, driven by higher net interest income from loan and securities growth, despite a decline in noninterest income - Core loans (excluding PPP, held-for-sale, and loans to other financial institutions) grew organically by **$206.1 million (21.0%)** in 2022[601](index=601&type=chunk) - Noninterest income decreased by **$5.1 million**, primarily due to a $4.4 million decline in gains on mortgage sales as rising interest rates slowed refinancing activity[633](index=633&type=chunk) - The company adopted the CECL standard on January 1, 2023, anticipating a **$6.5 to $7.0 million increase** in the allowance for loan losses[575](index=575&type=chunk) - All Paycheck Protection Program (PPP) loans were forgiven as of December 31, 2022, with PPP fee income declining to **$1.2 million** in 2022 from $5.2 million in 2021[125](index=125&type=chunk)[128](index=128&type=chunk) Financial Performance Summary | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Income | $23.6 million | $22.0 million | | Diluted EPS | $3.15 | $2.86 | | Net Interest Income | $67.3 million | $60.6 million | | Noninterest Income | $14.1 million | $19.2 million | | Total Assets | $2.39 billion | $2.37 billion | [Net Interest Income](index=23&type=section&id=Net%20Interest%20Income) Tax-equivalent net interest income rose by $6.8 million due to higher asset volumes, though the net interest margin compressed slightly to 3.09% - The increase in net interest income was primarily driven by a **$224.8 million** increase in the average balance of securities and a **$153.9 million** growth in average core loans[639](index=639&type=chunk) Change in Tax-Equivalent Net Interest Income (2022 vs 2021) | Component | Change due to Volume | Change due to Rate | Total Change | | :--- | :--- | :--- | :--- | | **Interest Income** | | | | | Loans | $3,026k | $1,163k | $4,189k | | Securities & Other | $3,348k | $1,948k | $5,296k | | **Total Interest Income** | **$7,500k** | **$3,111k** | **$10,611k** | | **Interest Expense** | | | | | Deposits & Borrowings | $1,573k | $2,196k | $3,769k | | **Net Change** | **$5,927k** | **$915k** | **$6,842k** | Key Rates and Margins | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Margin (Tax-Equivalent) | 3.09% | 3.14% | | Cost of Deposits | 0.27% | 0.17% | | Cost of Funds | 0.35% | 0.21% | [Provision and Allowance For Loan Losses](index=25&type=section&id=Provision%20and%20Allowance%20For%20Loan%20Losses) The provision for loan losses was $250,000 in 2022 to support loan growth, while nonperforming loans decreased significantly - Nonperforming loans decreased by **$2.8 million**, from $5.5 million at year-end 2021 to $2.7 million at year-end 2022[614](index=614&type=chunk) - The ratio of allowance for loan losses to total loans was **0.64%** at the end of 2022, compared to 0.76% at the end of 2021[133](index=133&type=chunk)[614](index=614&type=chunk) Allowance for Loan Losses (ALLL) Activity (in thousands) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Beginning ALLL | $7,688 | $7,593 | $4,057 | | Net Charge-offs | $319 | $321 | $464 | | Provision for Loan Losses | $250 | $416 | $4,000 | | **Ending ALLL** | **$7,619** | **$7,688** | **$7,593** | [Financial Condition](index=26&type=section&id=Financial%20Condition) Total assets grew to $2.4 billion, while shareholders' equity decreased due to unrealized securities losses, though the bank remained well-capitalized - Total assets increased by **$19.2 million** to $2.39 billion at year-end 2022[136](index=136&type=chunk) - Shareholders' equity declined by **$52.8 million**, largely due to a $69.2 million decrease in accumulated other comprehensive income (AOCI) from unrealized losses on securities[680](index=680&type=chunk) - Despite the drop in equity, ChoiceOne Bank remained **"well-capitalized"** with a total risk-based capital ratio of 13.0% at December 31, 2022[144](index=144&type=chunk)[680](index=680&type=chunk) Key Balance Sheet Changes (2022 vs 2021) | Account | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Total Loans, gross | $1,189.8M | $1,016.8M | +$173.0M | | Total Securities | $964.2M | $1,107.4M | -$143.2M | | Total Deposits | $2,118.0M | $2,052.3M | +$65.7M | | Total Shareholders' Equity | $168.9M | $221.7M | -$52.8M | [Liquidity and Interest Rate Risk](index=30&type=section&id=Liquidity%20and%20Interest%20Rate%20Risk) Management believes liquidity is sufficient, supported by deposits and borrowing capacity, while actively monitoring interest rate risk through simulation models - Primary sources of liquidity include deposits, cash flows from assets, and access to FHLB and Federal Reserve borrowings, with **$39.6 million** in additional FHLB borrowing capacity at year-end 2022[146](index=146&type=chunk) - The company is taking steps to ensure liquidity, including limiting bond purchases, increasing FHLB borrowing capacity, and exploring the Bank Term Funding Program[654](index=654&type=chunk) Contractual Obligations (as of Dec 31, 2022, in thousands) | Obligation | Total | Less than 1 year | 1 - 5 Years | More than 5 Years | | :--- | :--- | :--- | :--- | :--- | | Time deposits | $238,174 | $210,989 | $27,185 | $0 | | Borrowings | $50,000 | $50,000 | $0 | $0 | | Subordinated Debentures & Preferred Securities | $36,295 | $0 | $0 | $36,295 | | **Total** | **$324,469** | **$260,989** | **$27,185** | **$36,295** | Interest Rate Sensitivity Analysis (as of Dec 31, 2022) | Rate Change Scenario | % Change in Net Interest Income | % Change in Market Value of Equity | | :--- | :--- | :--- | | +200 bps | -1% | -5% | | +100 bps | -1% | 0% | | -100 bps | -3% | -11% | | -200 bps | -6% | -26% | [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with simulations showing a vulnerability to falling rates that is actively monitored by ALCO - The company's primary market risk exposure is **interest rate risk**, which is managed by the Asset/Liability Management Committee (ALCO)[154](index=154&type=chunk) - As of December 31, 2022, the bank was outside its policy guidelines for the market value of shareholders' equity in the **down 100 and 200 basis point scenarios**, indicating higher sensitivity to falling interest rates[157](index=157&type=chunk) Interest Rate Sensitivity Gap Analysis (as of Dec 31, 2022, in thousands) | Time Horizon | Rate-Sensitive Assets | Rate-Sensitive Liabilities | Cumulative Gap | | :--- | :--- | :--- | :--- | | 0 - 3 Months | $381,718 | $1,395,569 | ($1,013,851) | | 3 - 12 Months | $183,251 | $155,288 | ($985,888) | | 1 - 5 Years | $642,848 | $59,684 | ($402,724) | Hypothetical Interest Rate Shock Impact (as of Dec 31, 2022) | Rate Change Scenario | % Change in Net Interest Income | % Change in Market Value of Equity | | :--- | :--- | :--- | | +200 bps | -1% | -5% | | -100 bps | -3% | -11% | | -200 bps | -6% | -26% | [Financial Statements and Supplementary Data](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the audited consolidated financial statements, which received an unqualified opinion with a critical audit matter related to the loan loss allowance [Report of Independent Registered Public Accounting Firm](index=35&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued an unqualified opinion, concluding the financial statements are fairly presented, with a critical audit matter on the allowance for loan losses - Plante & Moran, PLLC issued an **unqualified (clean) opinion** on the company's consolidated financial statements[667](index=667&type=chunk) - The audit identified one Critical Audit Matter: the estimation of current factor adjustments within the **allowance for loan losses**, due to the high degree of management judgment involved[213](index=213&type=chunk)[669](index=669&type=chunk) [Consolidated Financial Statements](index=37&type=section&id=Consolidated%20Financial%20Statements) The financial statements show net income of $23.6 million and total assets of $2.39 billion, with a notable decrease in shareholders' equity - Comprehensive income was a **loss of ($45.6 million)** in 2022, compared to income of $8.4 million in 2021, driven by a ($69.2 million) change in other comprehensive income (loss)[675](index=675&type=chunk) - Net cash from operating activities was **$45.0 million** in 2022, while investing activities used $90.5 million and financing activities provided $57.5 million[222](index=222&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $43,943 | $31,887 | | Total Securities | $964,225 | $1,107,873 | | Loans, net | $1,182,163 | $1,009,160 | | Goodwill | $59,946 | $59,946 | | **Total Assets** | **$2,385,915** | **$2,366,682** | | Total Deposits | $2,118,003 | $2,052,294 | | Borrowings & Debentures | $85,262 | $85,017 | | **Total Liabilities** | **$2,217,041** | **$2,145,013** | | **Total Shareholders' Equity** | **$168,874** | **$221,669** | Consolidated Income Statement Highlights (in thousands) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Interest Income | $67,314 | $60,641 | $51,071 | | Provision for loan losses | $250 | $416 | $4,000 | | Noninterest Income | $14,072 | $19,194 | $22,698 | | Noninterest Expense | $53,478 | $52,921 | $50,884 | | **Net Income** | **$23,640** | **$22,042** | **$15,613** | [Notes to Consolidated Financial Statements](index=42&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, including the 2023 CECL adoption, securities portfolio changes, derivative usage, and regulatory capital adequacy - **CECL Adoption:** The company adopted ASU 2016-13 (CECL) on January 1, 2023, and anticipates an increase in its allowance for loan losses of between **$6.5 million and $7.0 million**[227](index=227&type=chunk) - **Securities Transfer:** On January 1, 2022, the company transferred **$428.4 million** of securities from the available-for-sale (AFS) classification to held-to-maturity (HTM)[230](index=230&type=chunk) - **Unrealized Losses:** As of December 31, 2022, the company had significant unrealized losses on its securities portfolio, totaling **$89.0 million for AFS** and **$72.0 million for HTM**, primarily due to rising interest rates[231](index=231&type=chunk)[232](index=232&type=chunk) - **Derivatives:** The company uses interest rate swaps and caps to manage interest rate risk, holding derivative assets with a fair value of **$9.2 million** and liabilities of **$5.8 million** as of Dec 31, 2022[353](index=353&type=chunk)[384](index=384&type=chunk) - **Regulatory Capital:** At year-end 2022, ChoiceOne Bank was categorized as **"well capitalized,"** with a total risk-based capital ratio of 13.0% and a Tier 1 leverage ratio of 8.7%[444](index=444&type=chunk)[466](index=466&type=chunk) - **Subsequent Event:** On March 15, 2023, the company terminated pay-floating interest rate swaps with a notional amount of **$200.0 million**, resulting in a loss of $4.2 million that will be amortized into interest income[449](index=449&type=chunk) [Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2022 - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[498](index=498&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2022[499](index=499&type=chunk) - No changes occurred in the company's internal control over financial reporting during the fourth quarter of 2022 that materially affected, or are reasonably likely to materially affect, these controls[477](index=477&type=chunk) PART III Part III incorporates by reference information from the company's 2023 Definitive Proxy Statement regarding governance, compensation, and security ownership [Directors, Executive Officers and Corporate Governance](index=74&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors and governance is incorporated by reference from the proxy statement, and the company has adopted a public Code of Ethics - Detailed information is incorporated by reference from the Definitive Proxy Statement for the May 24, 2023, Annual Meeting of Shareholders[502](index=502&type=chunk) - The company has adopted a **Code of Ethics** for Executive Officers and Senior Financial Officers, available at www.choiceone.com[480](index=480&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=74&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates security ownership data by reference and details securities available under equity compensation plans - The two equity compensation plans not approved by security holders are the Directors' Stock Purchase Plan and the Directors' Equity Compensation Plan[503](index=503&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2022) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Available for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Approved by security holders | 74,498 | $7.01 | 393,088 | | Not approved by security holders | - | - | 166,910 | | **Total** | **74,498** | **$7.01** | **559,998** | PART IV Part IV lists the financial statements, schedules, and exhibits filed with the Form 10-K, including governance documents and material contracts [Exhibits and Financial Statement Schedules](index=75&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the report, with many exhibits incorporated by reference from prior filings - The report includes the full set of consolidated financial statements and the report of the independent registered public accounting firm, Plante & Moran, PLLC[487](index=487&type=chunk)[506](index=506&type=chunk) - No financial statement schedules were filed with this report[517](index=517&type=chunk) - A list of 21 exhibits is provided, including governance documents, debt agreements, compensation plans, and XBRL data files, with many incorporated by reference[508](index=508&type=chunk)[518](index=518&type=chunk)[519](index=519&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2022 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 000-19202 ChoiceOne Financial Services, Inc. (Exact Name of Registrant as Specified in its Charter) Michigan (State or Other Jurisdiction of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2022 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 000-19202 ChoiceOne Financial Services, Inc. (Exact Name of Registrant as Specified in its Charter) Michigan (State or Other Jurisdiction of Incor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2022 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 000-19202 ChoiceOne Financial Services, Inc. (Exact Name of Registrant as Specified in its Charter) Michigan (State or Other Jurisdiction of Inco ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2021 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from__________________ to __________________ Commission File Number: 000-19202 ChoiceOne Financial Services, Inc. (Exact Name of Registrant as Specified in its Charter) 38-2659066 (I.R ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 000-19202 ChoiceOne Financial Services, Inc. (Exact Name of Registrant as Specified in its Charter) Michigan (State or Other Jurisdiction of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2021 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 000-19202 ChoiceOne Financial Services, Inc. (Exact Name of Registrant as Specified in its Charter) Michigan (State or Other Jurisdiction of Incor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each class Trading symbol(s) Name of each exchange on which registered Common stock COFS NASDAQ Capital Market FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2021 ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 000-19202 ChoiceOne Finan ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2020 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from__________________ to __________________ Commission File Number: 000-19202 ChoiceOne Financial Services, Inc. (Exact Name of Registrant as Specified in its Charter) 38-2659066 (I.R ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) Interim consolidated financial statements reflect significant asset and net income growth driven by recent mergers and increased net interest income [Consolidated Balance Sheets](index=3&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Total assets grew to **$1.83 billion** by September 30, 2020, primarily due to merger-driven increases in loans and deposits Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2020 (Unaudited) | Dec 31, 2019 (Audited) | | :--- | :--- | :--- | | **Total Assets** | **$1,828,984** | **$1,386,128** | | Cash and cash equivalents | $117,883 | $59,558 | | Loans, net | $1,072,111 | $797,991 | | Goodwill | $60,506 | $52,870 | | **Total Liabilities** | **$1,606,058** | **$1,193,989** | | Total deposits | $1,586,370 | $1,154,602 | | **Total Shareholders' Equity** | **$222,926** | **$192,139** | [Consolidated Statements of Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Net income for the nine months ended September 30, 2020, significantly increased to **$11.5 million**, driven by higher net interest and noninterest income Income Statement Summary (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net Interest Income | $37,079 | $16,567 | | Provision for loan losses | $3,000 | $0 | | Noninterest Income | $17,009 | $5,721 | | Noninterest Expense | $37,115 | $17,473 | | **Net Income** | **$11,513** | **$4,144** | | Diluted EPS | $1.55 | $1.14 | | Dividends declared per share | $0.60 | $1.20 | [Consolidated Statements of Cash Flows](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash increased by **$58.3 million** for the nine months ended September 30, 2020, driven by financing activities despite operating and investing outflows Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | $(20,256) | $5,420 | | Net cash (used in)/provided by investing activities | $(97,979) | $8,479 | | Net cash provided by/(used in) financing activities | $176,560 | $(17,015) | | **Net change in cash and cash equivalents** | **$58,325** | **$(3,116)** | [Notes to Interim Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Interim%20Consolidated%20Financial%20Statements) Notes detail accounting policies, business combinations, and specific financial statement components like securities, loans, and fair value measurements - On July 1, 2020, ChoiceOne completed the merger of Community Shores Bank Corporation, which was consolidated into ChoiceOne Bank on October 16, 2020[25](index=25&type=chunk) - The company adopted ASU No. 2016-13 (CECL) with an effective date for fiscal years beginning after December 15, 2022, as it is a smaller reporting company. Management is currently evaluating the impact[39](index=39&type=chunk) - A qualitative assessment of goodwill as of June 30, 2020, concluded that it was more likely than not that the fair value exceeded the carrying value, and no impairment was necessary[41](index=41&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes significant growth to mergers, with COVID-19 impacting loan loss provisions and PPP loan origination, while maintaining stable net interest margin and strong capital [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Net income significantly increased in Q3 and the first nine months of 2020, primarily due to mergers and PPP loan processing Net Income Performance (in thousands) | Period | Net Income | YoY Change | | :--- | :--- | :--- | | Q3 2020 | $3,829 | +275% | | Nine Months 2020 | $11,513 | +178% | - The company processed over **$126 million** in Paycheck Protection Program (PPP) loans through September 30, 2020, and acquired an additional **$37 million** in PPP loans from the Community Shores merger. Net fees of **$4.5 million** are being recognized over the life of the loans[117](index=117&type=chunk) - Cash dividends of **$0.60 per share** were declared in the first nine months of 2020, compared to **$1.20 per share** in the prior year, which had included a special dividend related to the County merger[118](index=118&type=chunk) [Net Interest Income](index=31&type=section&id=Net%20Interest%20Income) Tax-equivalent net interest income increased by **$20.7 million** due to merger-driven balance sheet growth, maintaining a stable net interest margin of **3.42%** - Tax-equivalent net interest income increased by **$20.7 million** in the first nine months of 2020 compared to 2019[131](index=131&type=chunk) - Net interest margin on a tax-equivalent basis was **3.42%** for the first nine months of 2020, a slight decrease from **3.43%** in the same period of 2019[131](index=131&type=chunk) - Interest income was supported by **$1.8 million** in loan fees recognized from PPP loans in the first nine months of 2020[131](index=131&type=chunk) [Provision and Allowance for Loan Losses](index=34&type=section&id=Provision%20and%20Allowance%20for%20Loan%20Losses) A **$3.0 million** provision for loan losses was recorded due to loan growth and COVID-19 uncertainty, with the allowance at **0.62%** of total loans - A provision for loan losses of **$3,000,000** was recorded in the first nine months of 2020, primarily due to loan growth and the economic impact of the COVID-19 pandemic[135](index=135&type=chunk) - The allowance for loan losses to total loans was **0.62%** at Sept 30, 2020. Including the credit mark on acquired loans, the ratio would be **1.52%**[135](index=135&type=chunk) - The company granted approximately **750 payment deferrals** on loans totaling **$148 million**. By September 30, 2020, active deferrals had decreased to less than **50 loans** with balances of **$10.3 million**[137](index=137&type=chunk) [Financial Condition](index=36&type=section&id=Financial%20Condition) Financial condition strengthened with total assets reaching **$1.83 billion**, driven by mergers, loan growth, and deposit increases, while maintaining stable asset quality and strong capital ratios - Total loans grew by **$276.7 million** from year-end 2019, including **$174.0 million** from the Community Shores merger and **$126.1 million** in PPP loans originated by ChoiceOne[146](index=146&type=chunk) - Total deposits increased by **$431.8 million** in the first nine months of 2020, with **$227.8 million** from the Community Shores merger and additional growth from government stimulus and PPP loan proceeds[154](index=154&type=chunk) Nonperforming Loan Balances (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Nonaccrual loans | $5,081 | $4,687 | | Accruing loans past due 90+ days | $157 | $0 | | Troubled Debt Restructurings (not included above) | $1,790 | $1,726 | | **Total** | **$7,028** | **$6,413** | [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures, including adjusted net income of **$13.7 million** and adjusted diluted EPS of **$1.84**, provide a clearer view of operational performance by excluding merger-related expenses Non-GAAP Reconciliation (Nine Months Ended Sep 30, 2020, in thousands) | Metric | As Reported (GAAP) | Adjustments | As Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Income | $11,513 | $2,167 | $13,680 | | Diluted EPS | $1.55 | $0.29 | $1.84 | [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting - Management concluded that ChoiceOne's disclosure controls and procedures were effective as of September 30, 2020[170](index=170&type=chunk) - No changes in internal control over financial reporting occurred during Q3 2020 that materially affected, or are reasonably likely to materially affect, the company's internal controls[170](index=170&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings.) No material pending legal proceedings are reported, with current proceedings not expected to materially affect financial condition - There are no material pending legal proceedings against ChoiceOne or its subsidiaries, other than those arising in the ordinary course of business[172](index=172&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors.) The ongoing COVID-19 pandemic and related economic and legal uncertainties in Michigan pose significant risks to business operations and financial condition - The continuing global coronavirus (COVID-19) outbreak and related uncertainty in Michigan could adversely affect the business and results of operations[174](index=174&type=chunk) - Uncertainty regarding legal requirements in Michigan, following a State Supreme Court decision invalidating the governor's executive orders, may negatively impact ChoiceOne and its customers[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered sales or issuer purchases of equity securities occurred during the third quarter of 2020 - There were no unregistered sales of equity securities in the third quarter of 2020[181](index=181&type=chunk) - There were no issuer purchases of equity securities during the third quarter of 2020[184](index=184&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No other information is reported for this item - None[185](index=185&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including merger agreements, corporate governance documents, and required CEO/CFO certifications - Exhibits filed include merger agreements for County Bank Corp and Community Shores Bank Corporation, corporate governance documents, and required CEO/CFO certifications (31.1, 31.2, 32.1)[186](index=186&type=chunk)