ChoiceOne Reports First Quarter 2025 Results

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]