choiceone-reports-third-quarter-2026-resultsChoiceOne Reports Third Quarter 2026 Results

, /PRNewswire/ — ChoiceOne Financial Services, Inc. (“ChoiceOne”, NASDAQ: COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended September 30, 2026. 

Highlights

  • ChoiceOne reported net income of $14.5 million, or $0.97 per diluted share, for the third quarter of 2026, and net income of $40.7 million, or $2.71 per diluted share, for the first nine months of 2026.
  • Core loans increased $33.6 million, or 4.4% annualized, during the third quarter of 2026, and $145.4 million, or 5.0%, during the twelve months ended September 30, 2026, reflecting continued loan production.
  • Deposits, excluding brokered deposits, increased $95.7 million or an annualized 10.9% during the third quarter of 2026, and $109.9 million, or 3.1%, during the twelve months ended September 30, 2026.
  • GAAP net interest margin expanded 8 basis points from 3.59% in the second quarter of 2026 to 3.67% in the third quarter of 2026, reflecting the benefits of loan growth and steady funding costs.
  • Asset quality remained strong, with annualized net charge-offs of 0.08% of average loans for the third quarter of 2026, while nonperforming loans to total loans, excluding loans held for sale, were 1.25% at September 30, 2026. Notably, 0.40% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to certain purchased loans which were identified prior to acquisition as having credit deterioration.

“ChoiceOne delivered strong third quarter results, highlighted by expansion in our net interest margin and growth in net interest income,” said Kelly Potes, Chief Executive Officer. “The improvement reflects the benefits of our disciplined balance sheet management and continued loan growth. We believe we are well positioned to build on this momentum as we move through the remainder of 2026.”

ChoiceOne reported net income of $14.5 million, or $0.97 per diluted share, for the third quarter of 2026, and net income of $40.7 million, or $2.71 per diluted share, for the first nine months of 2026, compared with net income of $14.7 million, or $0.97 per diluted share, for the third quarter of 2025, and net income of $14.3 million, or $1.05 per diluted share, for the first nine months of 2025.  For the nine months ended September 30, 2025, results were impacted by the acquisition of Fentura Financial, Inc., which was completed during the first quarter of 2025.  As of September 30, 2026, total assets were $4.5 billion, an increase of $162.2 million compared to September 30, 2025.  The growth in total assets was primarily attributed to growth in core loans and warehouse mortgage advances.  

Core loans, which exclude held for sale loans and mortgage warehouse advances, increased by $33.6 million or an annualized 4.4% during the third quarter of 2026 and grew by $145.4 million or 5.0% during the twelve months ended September 30, 2026.  Loan interest income increased $1.7 million in the third quarter of 2026 compared to the second quarter of 2026 and $894,000 compared to the third quarter of 2025.  Interest income due to accretion from purchased loans was approximately $2.7 million during the third quarter of 2026 compared to $3.6 million for the three months ended September 30, 2025.  Interest income due to accretion from purchased loans increased GAAP net interest margin by 25 and 36 basis points in the third quarter of 2026 and the third quarter of 2025, respectively.  Of the amount recognized in the third quarter of 2026, $1.9 million was calculated using the effective interest rate method of amortization, while the remaining $806,000 resulted from unexpected payoffs and paydowns of loans with an associated fair value mark.  Estimated interest income due to accretion from purchased loans for the remainder of 2026 and 2027 using the effective interest method of amortization is $1.8 million and $6.0 million, respectively; however, actual results will be dependent on prepayment speeds and other factors.  It is estimated that a total of $45.3 million remains to be recognized as interest income due to accretion from purchased loans over the life of the purchased loans portfolio, with $22.0 million expected to be recognized using the effective interest method over the next five years.

Deposits, excluding brokered deposits, totaled $3.6 billion at September 30, 2026, an increase of $95.7 million from June 30, 2026, and $109.9 million from September 30, 2025.  The growth during the quarter was primarily due to seasonal fluctuations related to municipal deposits and the timing of tax receipts, while growth year over year reflects steady growth in sustainable deposits. The increase from June 30, 2026 was primarily attributable to growth of $100.3 million in interest-bearing demand deposits and $8.6 million in savings deposits, partially offset by a $7.0 million decrease in noninterest-bearing deposits and a $6.2 million decrease in certificates of deposit.  Growth in relationship-based deposits strengthened the balance sheet, improved liquidity, and reduced the Company’s reliance on brokered deposits and other borrowed funds.  Brokered deposits decreased $25.8 million during the third quarter of 2026 to $67.5 million, while borrowed funds decreased $60.0 million to $234.9 million.  At September 30, 2026, total available borrowing capacity secured by pledged assets was $1.2 billion. ChoiceOne can increase its borrowing capacity by utilizing unsecured federal fund lines and pledging additional assets.  Uninsured deposits totaled $1.3 billion or 35.0% of deposits at September 30, 2026.

For the three months ended September 30, 2026, the annualized cost of deposits decreased four basis points to 1.54% from 1.58% for the second quarter of 2026, while the annualized cost of funds decreased four basis points to 1.73% from 1.77%.  The cost of interest-bearing liabilities also decreased four basis points to 2.28% for the three months ended September 30, 2026 compared to June 30, 2026. These improvements were primarily due to deposit mix, as the average balance of lower cost liquid deposit balances were higher in the third quarter due to seasonality.  Average brokered deposits decreased $68.1 million and average borrowings decreased $11.5 million in the third quarter of 2026 compared to the second quarter of 2026.

ChoiceOne has improved its funding profile through growth in relationship-based deposits in the third quarter of 2026 compared to the third quarter of 2025. During the three months ended September 30, 2026, ChoiceOne’s annualized cost of deposits declined to 1.54% from 1.57%, while annualized cost of funds decreased to 1.73% from 1.77%.  Average brokered deposits declined $24.1 million and average certificates of deposit declined $32.8 million in the three months ended September 30, 2026 compared to the three months ended September 30, 2025, while average interest-bearing demand and savings deposits increased $113.2 million. This favorable deposit mix contributed to lower funding costs and enhanced ChoiceOne’s net interest income performance.

ChoiceOne incurred a $900,000 provision for credit losses on loans during the third quarter of 2026, due to the increase in loan balances and $647,000 in net charge offs.  The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.16% on September 30, 2026 compared to 1.16% and 1.18% on June 30, 2026 and December 31, 2025, respectively.  Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.08% for the third quarter of 2026.  Nonperforming loans to total loans (excluding loans held for sale) increased to 1.25% as of September 30, 2026 compared to 1.07% as of June 30, 2026.  Notably, 0.40% of the nonperforming loans to total loans (excluding loans held for sale) was attributed to certain purchased loans which were identified prior to acquisition as having credit deterioration. Although nonperforming loans increased to $38.6 million at September 30, 2026, the portfolio continues to benefit from meaningful credit protection. Approximately 35.5% of the loans are supported by SBA or USDA guarantees, and approximately 34.3% of nonperforming assets consist of residential real estate loans, where strong collateral values and the Bank’s historical loss experience have limited realized losses.

At September 30, 2026, shareholders’ equity totaled $469.8 million, compared with $482.7 million at June 30, 2026 and $449.6 million at September 30, 2025. The decline in the third quarter of 2026 compared to the second quarter of 2026 was primarily attributable to a $22.3 million decline in accumulated other comprehensive income resulting from the effect of higher long-term interest rates on the fair value of the Company’s available-for-sale securities portfolio, partially offset by third-quarter earnings. During the third quarter of 2026, ChoiceOne repurchased 40,000 shares of its common stock for $1.3 million under its existing share repurchase plan. The repurchase reflects management’s continued confidence in the Company’s capital position and its commitment to enhancing long-term shareholder value. ChoiceOne Bank continues to be “well-capitalized,” with a total risk-based capital ratio of 12.9% as of September 30, 2026, compared to 12.8% on September 30, 2025.

Noninterest income for the three months ended September 30, 2026 was $6.8 million, a decrease of $389,000, from $7.1 million for the third quarter of 2025. The year-over-year decrease was primarily attributable to a $309,000 loss on other assets during the third quarter of 2026 compared to a $39,000 loss in the third quarter of 2025, and an unrealized loss on the market value of equity securities of $156,000 during the third quarter of 2026 compared to a gain of $458,000 in the third quarter of 2025, due to a CRA bond mutual fund whose fair value is impacted by higher long-term interest rates.  These two items decreased 2026 third quarter earnings by approximately $0.03 per fully diluted share. Compared with the second quarter of 2026, noninterest income increased $1.8 million, primarily due to the absence of the $1.9 million loss on the sale of securities recognized in the second quarter of 2026.  For the nine months ended September 30, 2026, noninterest income decreased $1.1 million to $17.5 million compared to the same period in 2025, primarily due to losses on sales of securities and unfavorable changes in the market value of equity securities, partially offset by growth in customer service charges, interchange income, and insurance and investment commissions.

Noninterest expense for the three months ended September 30, 2026 increased $330,000 to $26.5 million, compared to the third quarter of 2025. The increase primarily reflected higher salaries and benefits and data processing expenses, partially offset by lower intangible amortization, occupancy and equipment expense, and lower other operating expenses. Compared with the second quarter of 2026, noninterest expense increased $494,000.  For the nine months ended September 30, 2026, noninterest expense decreased $9.0 million compared to the same period in 2025, primarily due to the absence of $17.4 million of merger-related expenses.  Excluding those merger-related expenses, the year-over-year increase primarily reflected higher salaries and benefits and other operating costs associated with the Company’s expanded operations.

ChoiceOne’s tax expense for the first nine months of 2026 was reduced by $600,000 as a result of purchasing a transferable tax credit that will be applied to 2026 income taxes. Management intends to purchase similar sized transferable tax credits in the remainder of 2026 to reduce tax expense.

“The third quarter demonstrated the earnings power of our franchise,” said Kelly Potes, Chief Executive Officer. “The combination of strong loan production, growth in relationship-based deposits, and continued credit discipline drove improved net interest margin and profitability.  These results reflect the hard work and commitment of our employees, and I want to thank them for continuing to serve our customers and communities at a high level.  With a well-capitalized balance sheet and a strong liquidity position, we believe in our ability to capitalize on growth opportunities and continue generating value for shareholders.”

About ChoiceOne

ChoiceOne Financial Services, Inc. is a financial holding company headquartered in Sparta, Michigan, with assets over $4 billion, and the parent corporation of ChoiceOne Bank. Member FDIC. ChoiceOne Bank operates 54 offices in West, Central and Southeast Michigan. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. ChoiceOne Financial Services, Inc. common stock is quoted on the Nasdaq Capital Market under the symbol “COFS.” For more information, please visit Investor Relations at ChoiceOne’s website choiceone.bank.

Forward-Looking Statements

This press release contains forward-looking statements.  Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “may,” “could,” “look forward,” “continue”, “future”, “view” and variations of such words and similar expressions are intended to identify such forward-looking statements.   These statements reflect current beliefs as to the expected outcomes of future events and are not guarantees of future performance.  These statements involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence.  Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, ChoiceOne does not undertake any obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise. 

Risk factors include, but are not limited to, the risk factors described in Item 1A in ChoiceOne’s Annual Report on Form 10-K for the year ended December 31, 2025 and in any of ChoiceOne’s subsequent SEC filings, which are available on the SEC’s website, www.sec.gov.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release includes certain non-GAAP financial measures. ChoiceOne believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand underlying financial performance and condition and trends of ChoiceOne.

Non-GAAP financial measures have inherent limitations. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To compensate for these limitations, non-GAAP measures are used as comparative tools, together with GAAP measures, to assist in the evaluation of operating performance or financial condition. These measures are also calculated using the appropriate GAAP or regulatory components in their entirety and are computed in a manner intended to facilitate consistent period-to-period comparisons. ChoiceOne’s method of calculating these non-GAAP measures may differ from methods used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP or in-effect regulatory requirements.

Where non-GAAP financial measures are used, the most directly comparable GAAP or regulatory financial measure, as well as the reconciliation to the most directly comparable GAAP or regulatory financial measure, can be found in the tables to this press release under the heading non-GAAP reconciliation.

Condensed Balance Sheets
(Unaudited)

(In thousands)

September 30,
2026

June 30, 2026

September 30,
2025

Cash and cash equivalents

$

94,965

$

88,649

$

98,978

Equity securities, at fair value

9,421

9,497

9,505

Securities Held to Maturity

376,611

383,345

388,517

Securities Available for Sale

527,285

555,571

544,023

Federal Home Loan Bank stock

15,823

15,823

18,562

Federal Reserve Bank stock

12,555

12,554

12,554

Loans held for sale

1,573

3,833

6,323

Mortgage warehouse advances

42,228

53,535

2,483

Core loans

3,052,799

3,019,246

2,907,445

  Total loans held for investment

3,095,027

3,072,781

2,909,928

Allowance for credit losses

(35,990)

(35,738)

(34,754)

Loans, net of allowance for credit losses

3,059,037

3,037,043

2,875,174

Premises and equipment

50,400

50,383

46,159

Cash surrender value of life insurance policies

87,763

87,011

74,231

Goodwill

129,854

129,854

126,730

Intangible assets

26,316

27,888

31,694

Other assets

67,502

55,438

64,452

Total Assets

$

4,459,105

$

4,456,889

$

4,296,902

Noninterest-bearing deposits

$

936,946

$

943,943

$

903,925

Interest-bearing demand deposits

1,456,823

1,356,540

1,395,724

Savings deposits

629,123

620,525

588,798

Certificates of deposit

581,402

587,596

605,912

Brokered deposits

67,475

93,228

72,672

Borrowings

234,882

294,850

197,752

Subordinated debentures

48,728

48,646

48,368

Other liabilities

33,917

28,882

34,136

Total Liabilities

3,989,296

3,974,210

3,847,287

Common stock and paid-in capital, no par value; shares authorized:
30,000,000; shares outstanding: 14,918,659 at September 30, 2026, 14,950,472
at June 30, 2026, and 15,017,802 at September 30, 2025.

395,878

396,681

398,688

Retained earnings

130,354

120,135

93,124

Accumulated other comprehensive income (loss), net

(56,423)

(34,137)

(42,197)

Shareholders’ Equity

469,809

482,679

449,615

Total Liabilities and Shareholders’ Equity

$

4,459,105

$

4,456,889

$

4,296,902

Condensed Statements of Operations (Unaudited)

Three Months Ended

Nine Months Ended

(Dollars in thousands, except per share data)

September 30,

June 30,

September
30,

September 30,

2026

2026

2025

2026

2025

Interest income

Loans, including fees

$

48,017

$

46,346

$

47,123

$

140,005

$

126,297

Securities:

Taxable

5,653

5,633

5,249

16,778

15,243

Tax exempt

1,291

1,430

1,418

4,172

4,220

Other

729

532

908

1,951

2,822

Total interest income

55,690

53,941

54,698

162,906

148,582

Interest expense

Deposits

14,331

14,341

14,287

42,417

39,843

Advances from Federal Home Loan Bank

2,134

2,102

1,926

6,418

5,637

Other

790

801

888

2,297

2,872

Total interest expense

17,255

17,244

17,101

51,132

48,352

Net interest income

38,435

36,697

37,597

111,774

100,230

Provision for credit losses on loans

900

550

200

1,450

14,013

Provision for (reversal of) credit losses on unfunded commitments

–

–

–

–

–

Net Provision for credit losses expense

900

550

200

1,450

14,013

Net interest income after provision

37,535

36,147

37,397

110,324

86,217

Noninterest income

Customer service charges

1,858

1,745

1,729

5,259

4,311

Interchange income

2,132

2,139

2,133

6,163

5,725

Insurance and investment commissions

714

720

485

1,985

1,320

Gains on sales of loans

604

466

671

1,478

1,470

Net gains (losses) on sales of securities

–

(1,933)

–

(2,136)

–

Net gains (losses) on sales and write downs of other assets

(309)

97

(39)

(203)

(26)

Earnings on life insurance policies

660

706

558

1,950

1,791

Trust income

758

671

734

2,121

1,836

Change in market value of equity securities

(156)

59

458

(71)

804

Other

494

269

415

963

1,338

Total noninterest income

6,755

4,939

7,144

17,509

18,569

Noninterest expense

Salaries and benefits

14,642

14,463

14,127

43,167

38,178

Occupancy and equipment

2,571

2,433

2,694

7,595

6,845

Data processing

2,641

2,450

2,499

7,381

6,937

Communication

578

531

517

1,664

1,458

Professional fees

917

1,018

834

2,917

2,478

Supplies and postage

269

294

267

898

816

Advertising and promotional

268

279

207

811

723

Intangible amortization

1,571

1,577

1,728

4,833

4,140

FDIC insurance

489

543

530

1,602

1,535

Merger related expenses

–

–

–

–

17,369

Other

2,599

2,463

2,812

7,504

6,907

Total noninterest expense

26,545

26,051

26,215

78,372

87,386

Income (loss) before income tax

17,745

15,035

18,326

49,461

17,400

Income tax expense (benefit)

3,200

2,572

3,645

8,749

3,091

Net income (loss)

$

14,545

$

12,463

$

14,681

$

40,712

$

14,309

Basic earnings (loss) per share

$

0.97

$

0.83

$

0.98

$

2.72

$

1.05

Diluted earnings (loss) per share

$

0.97

$

0.83

$

0.97

$

2.71

$

1.05

Dividends declared per share

$

0.29

$

0.29

$

0.28

$

0.87

$

0.84

Table 1 – Average Balances and tax-Equivalent Interest Rates (Unaudited)

Three Months Ended
September 30, 2026

Three Months Ended June 30,
2026

Three Months Ended
September 30, 2025

(Dollars in thousands)

Average

Average

Average

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Assets:

Loans (1)(3)(4)(5)

$

3,054,471

$

48,039

6.24

%

$

2,998,144

$

46,364

6.20

%

$

2,927,878

$

47,142

6.39

%

Taxable securities (2)

771,925

5,653

2.91

774,014

5,633

2.92

703,045

5,249

2.96

Nontaxable securities (1)

248,799

1,634

2.61

275,477

1,810

2.64

287,274

1,795

2.48

Other

75,400

729

3.84

56,036

532

3.81

79,365

909

4.54

Interest-earning assets

4,150,595

56,055

5.36

4,103,671

54,339

5.31

3,997,562

55,095

5.47

Noninterest-earning assets

317,371

311,894

310,727

Total assets

$

4,467,966

$

4,415,565

$

4,308,289

Liabilities and Shareholders’
Equity:

Interest-bearing demand deposits

$

1,449,580

$

7,171

1.96

%

$

1,363,149

$

6,562

1.93

%

$

1,374,827

$

6,392

1.84

%

Savings deposits

630,094

1,540

0.97

620,744

1,516

0.98

591,653

1,125

0.75

Certificates of deposit

583,930

4,949

3.36

584,423

4,922

3.38

616,686

5,777

3.72

Brokered deposit

67,598

671

3.94

135,700

1,341

3.96

91,735

993

4.30

Borrowings

219,811

2,187

3.95

231,263

2,240

3.89

179,122

2,019

4.47

Subordinated debentures

48,685

737

6.01

48,597

663

5.47

48,663

701

5.72

Other

–

–

0.00

–

–

0.00

8,550

94

4.38

Interest-bearing liabilities

2,999,698

17,255

2.28

2,983,876

17,244

2.32

2,911,236

17,101

2.33

Demand deposits

952,183

927,628

930,346

Other noninterest-bearing
liabilities

36,719

27,385

28,258

Total liabilities

3,988,600

3,938,889

3,869,840

Shareholders’ equity

479,366

476,676

438,449

Total liabilities and
shareholders’ equity

$

4,467,966

$

4,415,565

$

4,308,289

Net interest income (tax-
equivalent basis) (Non-GAAP)
(1)

$

38,800

$

37,095

$

37,994

Net interest margin (tax-
equivalent basis) (Non-GAAP)
(1)

3.71

%

3.63

%

3.77

%

(1)

Adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets. The adjustment uses an incremental tax
rate of 21%.  The presentation of these measures on a tax-equivalent basis is not in accordance with GAAP, but is customary in the banking
industry.  These non-GAAP measures ensure comparability with respect to both taxable and tax-exempt loans and securities.

(2)

Taxable securities include dividend income from Federal Home Loan Bank and Federal Reserve Bank stock.

(3)

Loans include both mortgage warehouse advances and loans held for sale.

(4)

Non-accruing loan balances are included in the balances of average loans.  Non-accruing loan average balances were $33.8 million, $29.4
million, and $17.0 million in the third quarter of 2026, the second quarter of 2026 and the third quarter of 2025, respectively.  

(5)

Interest on loans included net origination fees and interest income due to accretion
from purchased loans.  Interest income due to accretion from purchased loans was $2.7 million, $2.4 million and $3.6 million in the third
quarter of 2026, the second quarter of 2026 and the third quarter of 2025, respectively.

Other Selected Financial Highlights

(Unaudited)

Quarterly

Earnings

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

(in thousands except per share data)

Net interest income

$

38,435

$

36,697

$

36,642

$

36,840

$

37,597

Net provision expense

900

550

–

800

200

Noninterest income

6,755

4,939

5,815

6,097

7,144

Noninterest expense

26,545

26,051

25,776

25,349

26,215

Net income (loss) before federal income
tax expense

17,745

15,035

16,681

16,788

18,326

Income tax expense (benefit)

3,200

2,572

2,977

2,921

3,645

Net income (loss)

14,545

12,463

13,704

13,867

14,681

Basic earnings (loss) per share

0.97

0.83

0.91

0.92

0.98

Diluted earnings (loss) per share

0.97

0.83

0.91

0.92

0.97

Book value per share

31.49

32.29

31.42

31.02

29.94

Tangible book value per share (non-
GAAP)

21.02

21.73

20.77

20.29

19.39

End of period balances

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

(in thousands except shares data)

Gross loans

$

3,096,601

$

3,076,614

$

2,993,273

$

3,029,219

$

2,916,251

Loans held for sale (1)

1,573

3,833

9,976

7,185

6,323

Mortgage warehouse advances (2)

42,228

53,535

51,187

58,987

2,483

Core loans (gross loans excluding 1 and 2
above)

3,052,799

3,019,246

2,932,110

2,963,047

2,907,445

Allowance for credit losses

35,990

35,738

35,496

35,550

34,754

Securities available for sale

527,285

555,571

573,531

554,420

544,023

Securities held to maturity

376,611

383,345

384,339

385,193

388,517

Other interest-earning assets

82,689

66,577

76,229

74,857

79,677

Total earning assets (before allowance)

4,083,186

4,082,107

4,027,372

4,043,689

3,928,468

Total assets

4,459,105

4,456,889

4,394,565

4,410,551

4,296,902

Noninterest-bearing deposits

936,946

943,943

912,845

907,007

903,925

Interest-bearing demand deposits

1,456,823

1,356,540

1,428,338

1,364,887

1,395,724

Savings deposits

629,123

620,525

624,084

607,045

588,798

Certificates of deposit

581,402

587,596

598,743

616,180

605,912

Brokered deposits

67,475

93,228

103,381

104,906

72,672

Total deposits

3,671,769

3,601,832

3,667,391

3,600,025

3,567,031

Deposits excluding brokered

3,604,294

3,508,604

3,564,010

3,495,119

3,494,359

Total subordinated debt

48,728

48,646

48,552

48,460

48,368

Total borrowed funds

234,882

294,850

184,819

264,788

197,752

Other interest-bearing liabilities

–

–

1

7,689

7,695

Total interest-bearing liabilities

3,018,432

3,001,385

2,987,918

3,013,955

2,916,921

Shareholders’ equity

469,809

482,679

470,001

465,353

449,615

Basic weighted average shares
outstanding

14,941,089

14,962,556

14,990,017

15,015,486

15,014,933

Dilutive weighted average shares
outstanding

15,001,838

15,006,518

15,041,910

15,065,937

15,061,155

Average Balances

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

(in thousands)

Loans

$

3,054,471

$

2,998,144

$

2,979,652

$

2,961,133

$

2,927,878

Securities

1,020,724

1,049,491

1,037,013

1,036,038

990,319

Other interest-earning assets

75,400

56,036

74,803

69,056

79,365

Total earning assets (before allowance)

4,150,595

4,103,671

4,091,468

4,066,227

3,997,562

Total assets

4,467,966

4,415,565

4,404,620

4,375,527

4,308,289

Noninterest-bearing deposits

952,183

927,628

907,453

925,414

930,346

Interest-bearing deposits

2,663,604

2,568,316

2,616,606

2,552,997

2,583,166

Brokered deposits

67,598

135,700

100,175

100,133

91,735

Total deposits

3,683,385

3,631,644

3,624,234

3,578,544

3,605,247

Total subordinated debt

48,685

48,597

48,503

48,411

48,663

Total borrowed funds

219,811

231,263

226,192

255,978

179,122

Other interest-bearing liabilities

–

–

4,871

6,311

8,550

Total interest-bearing liabilities

2,999,698

2,983,876

2,996,347

2,963,830

2,911,236

Shareholders’ equity

479,366

476,676

470,395

459,423

438,449

Loan Breakout (in thousands)

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

Agricultural

$

54,305

$

49,672

$

47,840

$

56,218

$

51,183

Commercial and Industrial

411,597

411,187

369,425

352,556

352,876

Commercial Real Estate

1,753,635

1,730,214

1,745,410

1,780,396

1,728,774

Consumer

30,209

26,121

23,180

26,701

27,328

Construction Real Estate

23,675

25,230

20,897

19,139

18,440

Residential Real Estate

779,378

776,822

725,358

728,037

728,844

Mortgage Warehouse Advances

42,228

53,535

51,187

58,987

2,483

Gross Loans (excluding held for sale)

$

3,095,027

$

3,072,781

$

2,983,297

$

3,022,034

$

2,909,928

Allowance for credit losses

35,990

35,738

35,496

35,550

34,754

Net loans

$

3,059,037

$

3,037,043

$

2,947,801

$

2,986,484

$

2,875,174

Performance Ratios

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

Annualized return on average assets

1.30

%

1.13

%

1.24

%

1.27

%

1.36

%

Annualized return on average equity

12.14

%

10.46

%

11.65

%

12.07

%

13.39

%

Annualized return on average tangible common equity
(non-GAAP)

19.59

%

17.24

%

19.39

%

20.19

%

23.00

%

Net interest margin (GAAP)

3.67

%

3.59

%

3.63

%

3.59

%

3.73

%

Net interest margin (fully tax-equivalent) (non-GAAP)

3.71

%

3.63

%

3.67

%

3.63

%

3.77

%

Efficiency ratio

54.27

%

55.86

%

55.99

%

54.12

%

54.76

%

Annualized cost of funds

1.73

%

1.77

%

1.73

%

1.79

%

1.77

%

Annualized cost of deposits

1.54

%

1.58

%

1.54

%

1.57

%

1.57

%

Cost of interest bearing liabilities

2.28

%

2.32

%

2.25

%

2.35

%

2.33

%

Shareholders’ equity to total assets

10.54

%

10.83

%

10.70

%

10.55

%

10.46

%

Tangible common equity to tangible assets (non-GAAP)

7.29

%

7.56

%

7.34

%

7.16

%

7.04

%

Annualized noninterest expense to average assets

2.38

%

2.36

%

2.34

%

2.32

%

2.43

%

Loan to deposit

84.34

%

85.42

%

81.62

%

84.14

%

81.76

%

Full-time equivalent employees

571

577

561

569

573

Capital Ratios ChoiceOne Financial Services Inc.

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

Total capital (to risk weighted assets)

13.4

%

13.3

%

13.2

%

12.7

%

13.0

%

Common equity Tier 1 capital (to risk weighted assets)

10.9

%

10.7

%

10.6

%

10.2

%

10.3

%

Tier 1 capital (to risk weighted assets)

11.4

%

11.2

%

11.1

%

10.7

%

10.9

%

Tier 1 capital (to average assets)

9.0

%

8.8

%

8.6

%

8.5

%

8.5

%

Tier 1 capital (to total assets)

8.7

%

8.4

%

8.3

%

8.1

%

8.2

%

Commercial Real Estate Loans (non-owner occupied) as
a percentage of total capital

248.1

%

249.9

%

262.9

%

279.0

%

275.2

%

Capital Ratios ChoiceOne Bank

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

Total capital (to risk weighted assets)

12.9

%

12.9

%

12.9

%

12.5

%

12.8

%

Common equity Tier 1 capital (to risk weighted assets)

11.8

%

11.8

%

11.8

%

11.4

%

11.7

%

Tier 1 capital (to risk weighted assets)

11.8

%

11.8

%

11.8

%

11.4

%

11.7

%

Tier 1 capital (to average assets)

9.3

%

9.3

%

9.2

%

9.1

%

9.1

%

Tier 1 capital (to total assets)

9.0

%

8.9

%

8.9

%

8.7

%

8.8

%

Commercial Real Estate Loans (non-owner occupied) as
a percentage of total capital

258.5

%

256.9

%

268.9

%

284.4

%

280.0

%

Asset Quality

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

(in thousands)

Net loan charge-offs (recoveries)

$

647

$

309

$

53

$

305

$

244

Annualized net loan charge-offs (recoveries) to average
loans

0.08

%

0.04

%

0.01

%

0.04

%

0.03

%

Allowance for credit losses

$

35,990

$

35,738

$

35,496

$

35,550

$

34,754

Unfunded commitment liability

$

1,347

$

1,347

$

1,347

$

1,347

$

1,647

Allowance to loans (excludes held for sale)

1.16

%

1.16

%

1.19

%

1.18

%

1.19

%

Total funds reserved to pay for loans (includes liability
for unfunded commitments and excludes held for sale)

1.21

%

1.21

%

1.23

%

1.22

%

1.25

%

Non-Accruing loans

$

36,678

$

30,904

$

27,892

$

27,058

$

17,365

Nonperforming loans (includes OREO)

$

38,586

$

32,773

$

30,177

$

29,582

$

19,940

Nonperforming loans to total loans (excludes held for
sale)

1.25

%

1.07

%

1.01

%

0.98

%

0.69

%

Non-Accrual classified as PCD

$

12,227

$

15,102

$

18,210

$

19,007

$

11,393

Nonperforming loans to total loans (excludes held for
sale) attributed to PCD

0.40

%

0.49

%

0.61

%

0.63

%

0.39

%

Nonperforming assets to total assets

0.87

%

0.74

%

0.69

%

0.67

%

0.46

%

Non-GAAP Reconciliation

(Unaudited)

NON-GAAP Reconciliation

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

Net interest income (tax-equivalent basis) (Non-GAAP)

$

38,800

$

37,095

$

37,047

$

37,232

$

37,994

Net interest margin (fully tax-equivalent)

3.71

%

3.63

%

3.67

%

3.63

%

3.77

%

Reconciliation to Reported Net Interest Income

Net interest income (tax-equivalent basis) (Non-GAAP)

$

38,800

$

37,095

$

37,047

$

37,232

$

37,994

Adjustment for taxable equivalent interest

(365)

(398)

(405)

(392)

(397)

Net interest income  (GAAP)

$

38,435

$

36,697

$

36,642

$

36,840

$

37,597

Net interest margin (GAAP)

3.67

%

3.59

%

3.63

%

3.59

%

3.73

%

(dollars in thousands)

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

Total assets

$

4,459,105

$

4,456,889

$

4,394,565

$

4,410,551

$

4,296,902

Less: goodwill

129,854

129,854

129,854

129,854

126,730

Less: intangible assets

26,316

27,888

29,464

31,149

31,694

Tangible assets

$

4,302,935

$

4,299,147

$

4,235,247

$

4,249,548

$

4,138,478

Total equity

$

469,809

$

482,679

$

470,001

$

465,353

$

449,615

Less: goodwill

129,854

129,854

129,854

129,854

126,730

Less: intangible assets

26,316

27,888

29,464

31,149

31,694

Tangible common equity

$

313,639

$

324,937

$

310,683

$

304,350

$

291,191

Tangible common equity to tangible assets

7.29

%

7.56

%

7.34

%

7.16

%

7.04

%

(dollars in thousands)

2026 3rd
Qtr.

2026 2nd
Qtr.

2026 1st
Qtr.

2025 4th
Qtr.

2025 3rd
Qtr.

Net income

$

14,545

$

12,463

$

13,704

$

13,867

$

14,681

Add: intangible amortization (tax affected at 21%)

1,241

1,246

1,331

1,330

1,365

Adjusted net income

$

15,786

$

13,709

$

15,035

$

15,197

$

16,046

Average shareholders’ equity

$

479,366

$

476,676

$

470,395

$

459,423

$

438,449

Less: average goodwill

129,854

129,854

129,854

127,308

126,730

Less: average intangible assets

27,125

28,696

30,319

31,092

32,599

Average tangible common equity

$

322,387

$

318,126

$

310,222

$

301,023

$

279,120

Return on average tangible common equity

19.59

%

17.24

%

19.39

%

20.19

%

23.00

%

SOURCE ChoiceOne Financial Services, Inc.