ChoiceOne Reports Fourth Quarter and Year End 2024 Results

Core Financial Performance - ChoiceOne Financial Services reported a net income of $7,159,000 for Q4 2024, a 35.3% increase from $5,293,000 in Q4 2023, and a total net income of $26,727,000 for the full year 2024, up 25.7% from $21,261,000 in 2023 [4][8] - Diluted earnings per share for Q4 2024 were $0.79, compared to $0.70 in Q4 2023, and for the full year, it was $3.25, up from $2.82 in 2023 [4][8] - Adjusted net income, excluding merger-related expenses, was $7,532,000 for Q4 2024 and $27,733,000 for the full year [4][8] Asset and Loan Growth - Total assets increased to $2.7 billion as of December 31, 2024, up $146.5 million from the previous year, primarily driven by a $114.5 million increase in core loans [5][8] - Core loans grew by $40.3 million or 11.0% on an annualized basis in Q4 2024 and $114.5 million or 8.2% for the full year [8][10] - The company strategically shifted from lower-yielding assets to higher-yielding loans to support organic loan growth [5][8] Deposit Trends - Deposits, excluding brokered deposits, decreased by $24.0 million or an annualized 4.4% in Q4 2024 but increased by $79.0 million or 3.8% for the full year [6][8] - The decline in deposits during Q4 was attributed to seasonal outflows of public funds [6][8] - Total available borrowing capacity secured by pledged assets was $837.2 million as of December 31, 2024 [6][8] Interest Income and Margin - Net interest income for Q4 2024 was $19.3 million, compared to $16.6 million in Q4 2023, aided by cash settlements from pay-fixed interest rate swaps [8][10] - The GAAP net interest margin decreased to 2.98% in Q4 2024 from 3.17% in Q3 2024 but increased from 2.66% in Q4 2023 [8][10] Noninterest Income and Expenses - Noninterest income increased by $948,000 in Q4 2024 and $3.1 million for the full year, driven by higher customer service charges and earnings on life insurance policies [13][14] - Noninterest expenses rose by $1.6 million or 11.4% in Q4 2024 and $3.6 million or 6.6% for the full year, influenced by merger-related expenses and increased employee benefit costs [14][8] Merger and Future Outlook - The company is preparing for a merger with Fentura Financial, Inc. and The State Bank, expected to close in Q1 2025, which is anticipated to enhance market presence and capabilities [3][15] - The CEO expressed optimism about the merger and its potential benefits for customers and communities [15]