ChoiceOne Financial Services(COFS) - 2024 Q3 - Quarterly Results

Financial Performance - ChoiceOne reported net income of $7,348,000 for Q3 2024, a 43.5% increase from $5,122,000 in Q3 2023[1] - Diluted earnings per share were $0.85 for Q3 2024, compared to $0.68 in Q3 2023, reflecting the impact of a capital raise[2] - Net income for Q3 2024 was $7,348,000, up from $5,122,000 in Q3 2023, reflecting a 43.3% increase[22] - Basic earnings per share for Q3 2024 were $0.86, compared to $0.68 in Q3 2023, indicating a 26.5% increase[22] - Adjusted net income for Q3 2024 was $7,981,000, up from $5,122,000 in Q3 2023, reflecting a 55.1% increase[22] - Net interest income for Q3 2024 was $20,248,000, an increase from $16,226,000 in Q3 2023, representing a 24.8% year-over-year growth[21] - Total interest income reached $31,690,000 in Q3 2024, compared to $26,304,000 in Q3 2023, marking a 20.5% increase[21] Asset and Loan Growth - Total assets increased to $2.7 billion as of September 30, 2024, up $151.8 million from the previous year, driven by core loan growth[3] - Core loans grew by $64.5 million or 18.4% on an annualized basis in Q3 2024, and by $179.4 million or 14.0% since September 30, 2023[1] - Core loans rose to $1,465,458 thousand, up from $1,400,958 thousand in the previous quarter, indicating an increase of about 4.6%[19] - Gross loans increased to $1,509,944 thousand in Q3 2024, up from $1,443,473 thousand in Q2 2024, representing a growth of 4.0%[25] - Total assets grew to $2,726,003 thousand in Q3 2024, up from $2,623,067 thousand in Q2 2024, marking a 3.9% rise[25] Deposits and Liabilities - Deposits, excluding brokered deposits, rose by $102.1 million or 19.5% annualized in Q3 2024, and by $117.6 million or 5.7% year-over-year[4] - Total liabilities increased to $2,478,257 thousand from $2,408,548 thousand, reflecting a rise of approximately 2.9%[19] - Total deposits reached $2,208,228 thousand in Q3 2024, up from $2,126,679 thousand in Q2 2024, a growth of 3.8%[25] Equity and Capital - Shareholders' equity totaled $247.7 million as of September 30, 2024, up from $181.2 million a year earlier, largely due to a $34.5 million capital raise[8] - Shareholders' equity increased to $247,746 thousand from $214,519 thousand, representing a growth of approximately 15.5%[19] - The total capital to risk-weighted assets ratio improved to 15.0% in Q3 2024, up from 13.5% in Q2 2024, indicating stronger capital position[27] Interest Margin and Income - The GAAP net interest margin increased to 3.17% in Q3 2024, up from 2.64% in Q3 2023, aided by cash settlements from interest rate swaps[1] - The net interest margin (GAAP) for Q3 2024 was $20,248,000, compared to $18,371,000 in Q2 2024, marking a 10.2% increase[29] - The net interest margin (fully tax-equivalent) improved to 3.23% in Q3 2024, up from 3.01% in Q2 2024[28] Noninterest Income and Expenses - Noninterest income increased by $1.2 million in Q3 2024 compared to the same period in 2023, driven by higher customer service charges[9] - Total noninterest income for Q3 2024 was $4,867,000, an increase from $3,704,000 in Q3 2023, representing a 31.4% growth[21] - Noninterest expense rose by $1.7 million or 12.3% in Q3 2024, partly due to merger-related expenses of $645,000[10] - Noninterest expense for Q3 2024 was $15,417,000, compared to $13,728,000 in Q3 2023, which is a 12.3% increase[21] Credit Quality - The provision for credit losses expense on loans was $425,000 in Q3 2024, with nonperforming loans at 0.19% of total loans[6] - The allowance for credit losses was $16,490 thousand, up from $16,152 thousand, indicating a rise of about 2.1%[19] - Annualized net loan charge-offs decreased to 0.02% in Q3 2024 from 0.04% in Q2 2024, indicating improved asset quality[28] - Nonperforming loans increased to $2,884,000 in Q3 2024 from $2,358,000 in Q2 2024, reflecting a rise in credit risk[28] Merger and Strategic Initiatives - The company is in the process of a proposed merger with Fentura, which is expected to enhance strategic and financial benefits[13] - The company has filed a Registration Statement on Form S-4 with the SEC regarding the proposed merger, which will include a Proxy Statement and Prospectus[17] - The company emphasizes the importance of reading the Proxy Statement and Prospectus for detailed information on the merger[17]