ChoiceOne Reports Second Quarter 2026 Results

Rhea-AI Summary

ChoiceOne Financial Services (NASDAQ: COFS) reported second quarter 2026 net income of $12.5 million, or $0.83 per diluted share, and first-half 2026 net income of $26.2 million, or $1.74 per share. Second quarter results included a pre-tax $1.9 million securities loss that reduced EPS by about $0.10 as ChoiceOne sold lower-yielding municipal securities to fund loan growth and improve its interest rate profile.

Total assets reached $4.46 billion, up $146.6 million year over year, driven mainly by core loan, securities, and warehouse mortgage advance growth. Core loans rose $87.1 million in the quarter (11.9% annualized), including about $40 million of purchased adjustable-rate residential mortgages. GAAP net interest margin was 3.59%, slightly lower than both the prior quarter and prior-year quarter. Asset quality metrics remained strong, with annualized net charge-offs of 0.04% and nonperforming loans at 1.07% of total loans.

Deposits excluding brokered deposits declined $55.4 million sequentially, mainly from seasonal municipal outflows, while such deposits rose $22.2 million year over year. Shareholders’ equity increased to $482.7 million, ChoiceOne repurchased 35,000 shares for $1.1 million in the quarter, and the bank remained “well-capitalized” with a total risk-based capital ratio of 12.9%.

Positive

• First-half 2026 net income $26.2 million versus $0.4 million loss in 2025
• Core loans grew $87.1 million in Q2 2026 (11.9% annualized)
• Total assets increased to $4.46 billion, up $146.6 million year over year
• Strong credit metrics: net charge-offs 0.04%, allowance 1.16% of loans
• Shareholders’ equity rose to $482.7 million from $431.8 million year over year
• Noninterest expense for first half 2026 down $9.3 million, mainly from no merger costs

Negative

• Q2 2026 net income $12.5 million versus $13.5 million in Q2 2025
• GAAP net interest margin declined to 3.59% from 3.66% year over year
• Noninterest income down $1.6 million year over year in Q2, to $4.9 million
• Recorded $1.9 million pre-tax loss on sale of municipal securities in Q2 2026
• Nonperforming loans ratio increased to 1.07% from 1.01% sequentially
• Uninsured deposits at $1.2 billion, or 33.1% of total deposits

Market Context

Tagged earnings events averaged a 3.24% move, adding a historical benchmark to this quarter’s loan g...

Analysis

Tagged earnings events averaged a 3.24% move, adding a historical benchmark to this quarter’s loan growth and credit-quality update. The active S-3 allows offerings up to $100,000,000, a documented financing and dilution risk to monitor.

Key Figures

Net income: $12.5 million Diluted EPS: $0.83 Pre-tax securities loss: $1.9 million +5 more

8 metrics

Net income $12.5 million Q2 2026

Diluted EPS $0.83 Q2 2026

Pre-tax securities loss $1.9 million Q2 2026

Core loan growth $87.1 million; 11.9% annualized Q2 2026

GAAP net interest margin 3.59% Q2 2026

Deposit change $55.4 million decline Excluding brokered deposits, Q2 2026

Annualized net charge-offs 0.04% Of average loans, Q2 2026

Nonperforming loans 1.07% Of total loans at June 30, 2026

Previous Earnings Reports

5 past events · Latest: Apr 24 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Apr 24	First-quarter earnings	Positive	+2.0%	Reported $13.704M net income, $0.91 EPS, and a 3.63% net interest margin
Jan 30	Fourth-quarter earnings	Positive	-2.9%	Reported $13.9M quarterly net income and $28.2M full-year net income
Oct 24	Third-quarter earnings	Positive	+11.5%	Reported $14.7M quarterly net income and 3.73% GAAP net interest margin
Jul 25	Second-quarter earnings	Positive	+4.6%	Reported $13.5M net income and merger-driven expansion in assets, loans, and deposits
Apr 30	First-quarter earnings	Negative	+1.0%	Reported a $13.9M net loss following merger-related expenses and provisions

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Tagged earnings reactions were positive in four of five events, with one negative reaction; the average move was 3.24%.

Key Terms

gaap, net interest margin, net charge-offs, nonperforming loans, +1 more

5 terms

gaap financial

"GAAP net interest margin was 3.59% for the second quarter of 2026"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

net interest margin financial

"GAAP net interest margin was 3.59% for the second quarter of 2026"

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

net charge-offs financial

"Asset quality remained strong, with annualized net charge-offs of 0.04%"

Net charge-offs are the amount of loans or credit a lender removes from its books as uncollectible after subtracting any money later recovered from previously written-off accounts. Think of it like a store writing off unpaid tabs but getting back a few dollars later — the net figure shows the real loss. Investors watch this to judge a lender’s loan quality, future profits and how much capital may be needed to cover bad debts.

nonperforming loans financial

"nonperforming loans to total loans were 1.07% at June 30, 2026"

Nonperforming loans are loans on which borrowers have stopped making the scheduled interest or principal payments for an extended period (commonly 90 days or more) or are otherwise in serious danger of default. Think of them as IOUs that aren’t being repaid: they tie up a lender’s money, reduce future interest income, and force the lender to hold extra reserves or take losses. For investors, a rising share of nonperforming loans signals weakening credit quality, higher potential losses, and greater risk to a bank’s profitability and capital.

adjustable-rate residential mortgages financial

"purchase of approximately $40 million of seasoned, high-quality adjustable-rate residential mortgages"

Adjustable-rate residential mortgages are home loans whose interest rate can change during the loan term, usually after an initial fixed-rate period, with adjustments tied to a market benchmark. They matter to investors because changing rates alter borrowers' monthly payments, default risk, bank lending revenue and the cash flows of mortgage-backed securities — like a thermostat that makes heating costs go up or down as the room temperature changes.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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SPARTA, Mich., July 24, 2026 /PRNewswire/ -- ChoiceOne Financial Services, Inc. ("ChoiceOne", NASDAQ:COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended June 30, 2026. 

Highlights

• ChoiceOne reported net income of $12.5 million, or $0.83 per diluted share, for the second quarter of 2026, and net income of $26.2 million, or $1.74 per diluted share, for the first six months of 2026.  Second quarter results included a pre-tax securities loss of approximately $1.9 million, which reduced diluted earnings per share by approximately $0.10, as ChoiceOne repositioned lower-yielding municipal securities to fund loan growth and improve its interest rate profile.
• Core loans increased $87.1 million, or 11.9% annualized, during the second quarter, reflecting continued organic production and the purchase of approximately $40 million of seasoned, high-quality adjustable-rate residential mortgages.
• GAAP net interest margin was 3.59% for the second quarter of 2026, compared to 3.63% in the first quarter of 2026 and 3.66% in the second quarter of the prior year, as higher earning asset yields were offset by slightly higher funding costs and lower interest income due to accretion from purchased loans.  Deposits, excluding brokered deposits, declined by $55.4 million during the second quarter, primarily reflecting normal seasonal fluctuations in municipal operating balances, while total liquidity and borrowing capacity remained strong.
• Asset quality remained strong, with annualized net charge-offs of 0.04% of average loans for the second quarter, while nonperforming loans to total loans, excluding loans held for sale, were 1.07% at June 30, 2026.

"ChoiceOne delivered solid second quarter results, highlighted by loan growth, stable credit quality, and continued capital accretion," said Kelly Potes, Chief Executive Officer. "Our disciplined approach to balance sheet management is improving our earning asset mix and interest rate positioning, while supporting continued momentum through the remainder of 2026."

ChoiceOne reported net income of $12,463,000 and $26,167,000 for the three and six months ended June 30, 2026, respectively, compared to net income of $13,534,000 and a net loss of $372,000 for the three months and six months ended June 30, 2025, respectively.  Diluted earnings per share were $0.83 and $1.74 for the three and six months ended June 30, 2026, compared to diluted earnings per share of $0.90 and diluted loss per share of $0.03 for the three and six months ended June 30, 2025, respectively.  Second quarter results included a pre-tax securities loss of approximately $1.9 million, which reduced diluted earnings per share by approximately $0.10, as ChoiceOne repositioned lower-yielding municipal securities to fund loan growth and improve its interest rate profile.

As of June 30, 2026, total assets were $4.5 billion, an increase of $146.6 million compared to June 30, 2025.  The growth in total assets is primarily attributed to growth in core loans, securities and warehouse mortgage advances.  This growth was partially offset by a reduction in the cash balance of $67.6 million during the twelve months ended June 30, 2026.  

Core loans, which exclude held for sale loans and mortgage warehouse advances, increased by $87.1 million or an annualized 11.9% during the second quarter of 2026 and grew by $101.5 million or 3.5% during the twelve months ended June 30, 2026.  Of this growth approximately $40.0 million was due to a purchase of seasoned, high quality adjustable rate mortgages from another community bank made during the quarter.  Loan interest income increased $703,000 in the second quarter of 2026 compared to the first quarter of 2026 and decreased $187,000 compared to the second quarter of 2025.  The decrease from the second quarter of 2025 is partially due to a decline in interest income due to accretion from purchased loans during the second quarter of 2026 compared to the second quarter of 2025.  Interest income due to accretion from purchased loans was approximately $2.4 million during the second quarter of 2026 compared to $3.5 million for the three months ended June 30, 2025.  Interest income due to accretion from purchased loans increased GAAP net interest margin by 24 and 36 basis points in the second quarter of 2026 and the second quarter of 2025, respectively.  Of the amount recognized in the second quarter of 2026, $2.0 million was calculated using the effective interest rate method of amortization, while the remaining $433,000 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 using the effective interest method of amortization is $3.8 million; however, actual results will be dependent on prepayment speeds and other factors.  It is estimated that a total of $48.0 million remains to be recognized as interest income due to accretion from purchased loans over the life of the purchased loans portfolio.

Deposits, excluding brokered deposits, decreased by $55.4 million as of June 30, 2026, compared to March 31, 2026.  This decline is largely due to seasonality in municipal deposits as municipal operational balances fluctuate with the timing of tax receipts.  Municipal deposits decreased by approximately $95.0 million during the quarter, which is consistent with historical fluctuations.  Deposits, excluding brokered deposits, increased by $22.2 million as of June 30, 2026, compared to June 30, 2025.  This increase is primarily organic growth in interest bearing and savings accounts offset by a decline in higher interest certificate of deposit accounts.  ChoiceOne continues to be proactive in managing its liquidity position by using brokered deposits and short-term FHLB advances to ensure ample liquidity.  As of June 30, 2026, the total balance of borrowed funds from the FHLB was $295.0 million at a weighted average rate of 3.80%, with $275.0 million due within 12 months.  At June 30, 2026, total available borrowing capacity secured by pledged assets was $1.1 billion. ChoiceOne can increase its borrowing capacity by utilizing unsecured federal fund lines and pledging additional assets.  Uninsured deposits totaled $1.2 billion or 33.1% of deposits at June 30, 2026.

In the three months ended June 30, 2026, ChoiceOne's annualized cost of deposits to average total deposits increased four basis points to 1.58% from 1.54% for the three months ended March 31, 2026.  The annualized cost of funds increased four basis points to 1.77% for the three months ended June 30, 2026, from 1.73% in the prior quarter, primarily driven by higher rates on interest-bearing demand deposits and savings deposits offset by lower rates on certificates of deposit, borrowings, subordinated debentures, and brokered deposits. The average balance of certificates of deposit declined $14.2 million during the quarter.  Interest expense on borrowings increased $58,000 compared to the first quarter of 2026 as average borrowings increased $5.1 million.  ChoiceOne's deposit costs may have slight upward pressure as new and repriced deposits carry rates above the existing portfolio average.

ChoiceOne incurred $550,000 provision for credit losses on loans during the second quarter of 2026, due to the increase in loan balances and $309,000 in net charge offs.  The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.16% on June 30, 2026 compared to 1.19% and 1.18% on March 31, 2026 and December 31, 2025, respectively.  Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.04% for the second quarter of 2026.  Nonperforming loans to total loans (excluding loans held for sale) increased to 1.07% as of June 30, 2026 compared to 1.01% as of March 31, 2026.  Notably, 0.49% 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.  In addition, 30.6% of the nonperforming loans carry partial government guarantees from the SBA or USDA.

At June 30, 2026, shareholders' equity was $482.7 million, an increase from $431.8 million on June 30, 2025. ChoiceOne repurchased 35,000 shares of stock for a net cost of $1.1 million in the second quarter of 2026 and 75,116 shares [collectively] during the first quarter of 2026 and the fourth quarter of 2025 for a net cost of $2.2 million under our existing share repurchase plan.  The repurchase plan has 265,272 shares remaining to purchase as of June 30, 2026.  The repurchase of shares reflects our view that our capital position is healthy and the repurchase of shares is in the best interest of our shareholders.  ChoiceOne Bank continues to be "well-capitalized," with a total risk-based capital ratio of 12.9% as of June 30, 2026, compared to 12.4% on June 30, 2025.

Noninterest income for the three months ended June 30, 2026 decreased $1.6 million to $4.9 million compared to $6.5 million for the same period in 2025. The decline was primarily driven by a $1.9 million loss on the sale of securities during the second quarter of 2026, compared to no securities gains or losses in the prior-year period.  In late June 2026 ChoiceOne sold approximately $25 million of municipal securities with a tax-equivalent yield of 2.28% for a pre-tax loss of $1.9 million.  The sale of securities was undertaken to provide funding for the purchase of adjustable-rate residential mortgages and improve ChoiceOne's overall interest rate profile.  Partially offsetting this decline were increases in customer service charges and interchange income and insurance and investment commissions.  Compared to the first quarter of 2026, noninterest income declined $876,000, primarily due to the increase in net losses on sales of securities.  Noninterest income for the six months ended June 30, 2026 decreased $671,000, to $10.8 million compared to $11.4 million for the same period in 2025.

Noninterest expense for the three months ended June 30, 2026 increased $545,000, or 2.1%, to $26.1 million compared to $25.5 million for the same period in 2025. The increase was primarily attributable to higher salaries and benefits expense, partially offset by lower intangible amortization expense. Compared to the first quarter of 2026, noninterest expense increased $275,000, reflecting higher salaries and benefits expenses and data processing costs, partially offset by lower occupancy and equipment and intangible amortization expenses. Noninterest expense for the six months ended June 30, 2026 decreased $9.3 million, to $51.8 million compared to $61.2 million for the same period in 2025. The decrease was primarily attributable to the absence of $17.4 million of merger-related expenses incurred during the prior-year period. Excluding merger-related expenses, noninterest expense increased due to higher salaries and benefits, occupancy and equipment, data processing, professional fees, and other operating expenses associated with the Company's growth and integration activities.  ChoiceOne expects to open a full service branch and lending office in Troy, MI later in 2026.  ChoiceOne currently serves customers throughout Southeast Michigan and expects the Troy office to further support commercial lending and treasury management growth initiatives.

ChoiceOne's year to date 2026 tax expense was reduced by $400,000 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.

"As we enter the second half of 2026, we remain focused on disciplined growth, operational efficiency, and prudent capital management," said Kelly Potes, Chief Executive Officer. "We believe this balanced approach positions ChoiceOne to build on our momentum and create long-term value for our customers, communities, and 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)		June 30, 2026				March 31, 2026				June 30, 2025
Cash and cash equivalents		$	88,649			$	84,218			$	156,280
Equity securities, at fair value			9,497				9,425				9,582
Securities Held to Maturity			383,345				384,339				390,457
Securities Available for Sale			555,571				573,531				479,426
Federal Home Loan Bank stock			15,823				18,562				18,562
Federal Reserve Bank stock			12,554				12,554				12,547
Loans held for sale			3,833				9,976				7,639
Mortgage warehouse advances			53,535				51,187				3,033
Core loans			3,019,246				2,932,110				2,917,759
Total loans held for investment			3,072,781				2,983,297				2,920,792
Allowance for credit losses			(35,738)				(35,496)				(34,798)
Loans, net of allowance for credit losses			3,037,043				2,947,801				2,885,994
Premises and equipment			50,383				48,670				45,667
Cash surrender value of life insurance policies			87,011				86,305				73,673
Goodwill			129,854				129,854				126,730
Intangible assets			27,888				29,464				33,421
Other assets			55,438				59,866				70,274
Total Assets		$	4,456,889			$	4,394,565			$	4,310,252
Noninterest-bearing deposits		$	943,943			$	912,845			$	943,873
Interest-bearing demand deposits			1,356,540				1,428,338				1,322,336
Savings deposits			620,525				624,084				595,981
Certificates of deposit			587,596				598,743				624,209
Brokered deposits			93,228				103,381				106,225
Borrowings			294,850				184,819				198,428
Subordinated debentures			48,646				48,552				48,277
Other liabilities			28,882				23,802				39,162
Total Liabilities			3,974,210				3,924,564				3,878,491
Common stock and paid-in capital, no par value; shares authorized: 30,000,000; shares outstanding: 14,950,472 at June 30, 2026, 14,960,200 at March 31, 2026, and 15,008,864 at June 30, 2025.			396,681				397,498				398,201
Retained earnings			120,135				112,008				82,647
Accumulated other comprehensive income (loss), net			(34,137)				(39,505)				(49,087)
Shareholders' Equity			482,679				470,001				431,761
Total Liabilities and Shareholders' Equity		$	4,456,889			$	4,394,565			$	4,310,252

 

Condensed Statements of Operations
(Unaudited)
		Three Months Ended												Six Months Ended
(Dollars in thousands, except per share data)		June 30,				March 31,				June 30,				June 30,
		2026				2026				2025				2026				2025
Interest income
Loans, including fees		$	46,346			$	45,642			$	46,533			$	91,988			$	79,174
Securities:
Taxable			5,633				5,492				5,264				11,125				9,994
Tax exempt			1,430				1,451				1,393				2,881				2,802
Other			532				690				735				1,222				1,914
Total interest income			53,941				53,275				53,925				107,216				93,884
Interest expense
Deposits			14,341				13,745				14,840				28,086				25,556
Advances from Federal Home Loan Bank			2,102				2,182				1,659				4,284				3,711
Other			801				706				1,104				1,507				1,984
Total interest expense			17,244				16,633				17,603				33,877				31,251
Net interest income			36,697				36,642				36,322				73,339				62,633
Provision for credit losses on loans			550				-				650				550				13,813
Provision for (reversal of) credit losses on unfunded commitments			-				-				-				-				-
Net Provision for credit losses expense			550				-				650				550				13,813
Net interest income after provision			36,147				36,642				35,672				72,789				48,820
Noninterest income
Customer service charges			1,745				1,656				1,401				3,401				2,582
Interchange income			2,139				1,892				2,083				4,031				3,592
Insurance and investment commissions			720				551				540				1,271				835
Gains on sales of loans			466				408				355				874				799
Net gains (losses) on sales of securities			(1,933)				(203)				-				(2,136)				-
Net gains (losses) on sales and write downs of other assets			97				9				3				106				13
Earnings on life insurance policies			706				584				844				1,290				1,233
Trust income			671				692				596				1,363				1,102
Change in market value of equity securities			59				26				239				85				346
Other			269				200				442				469				923
Total noninterest income			4,939				5,815				6,503				10,754				11,425
Noninterest expense
Salaries and benefits			14,463				14,062				13,731				28,525				24,051
Occupancy and equipment			2,433				2,591				2,432				5,024				4,151
Data processing			2,450				2,290				2,439				4,740				4,438
Communication			531				555				561				1,086				941
Professional fees			1,018				982				947				2,000				1,644
Supplies and postage			294				335				305				629				549
Advertising and promotional			279				264				260				543				516
Intangible amortization			1,577				1,685				1,732				3,262				2,412
FDIC insurance			543				570				550				1,113				1,005
Merger related expenses			-				-				166				-				17,369
Other			2,463				2,442				2,383				4,905				4,095
Total noninterest expense			26,051				25,776				25,506				51,827				61,171
Income (loss) before income tax			15,035				16,681				16,669				31,716				(926)
Income tax expense (benefit)			2,572				2,977				3,135				5,549				(554)
Net income (loss)		$	12,463			$	13,704			$	13,534			$	26,167			$	(372)
Basic earnings (loss) per share		$	0.83			$	0.91			$	0.90			$	1.75			$	(0.03)
Diluted earnings (loss) per share		$	0.83			$	0.91			$	0.90			$	1.74			$	(0.03)
Dividends declared per share		$	0.29			$	0.29			$	0.28			$	0.58			$	0.56

 

Table 1 - Average Balances and tax-Equivalent Interest Rates (Unaudited)
	Three Months Ended June 30, 2026												Three Months Ended March 31, 2026												Three Months Ended June 30, 2025
(Dollars in thousands)	Average												Average												Average
	Balance				Interest				Rate				Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Loans (1)(3)(4)(5)	$	2,998,144			$	46,364				6.20		%	$	2,979,652			$	45,661				6.21		%	$	2,936,168			$	46,551				6.36		%
Taxable securities (2)		774,014				5,633				2.92				755,718				5,492				2.95				695,546				5,264				3.04
Nontaxable securities (1)		275,477				1,810				2.64				281,295				1,837				2.65				289,061				1,764				2.45
Other		56,036				532				3.81				74,803				690				3.74				63,416				735				4.65
Interest-earning assets		4,103,671				54,339				5.31				4,091,468				53,680				5.32				3,984,191				54,314				5.47
Noninterest-earning assets		311,894												313,152												314,322
Total assets	$	4,415,565											$	4,404,620											$	4,298,513
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	1,363,149			$	6,562				1.93		%	$	1,404,153			$	6,282				1.81		%	$	1,332,318			$	6,163				1.86		%
Savings deposits		620,744				1,516				0.98				613,837				1,379				0.91				595,362				1,003				0.68
Certificates of deposit		584,423				4,922				3.38				598,616				5,099				3.45				646,247				6,353				3.94
Brokered deposit		135,700				1,341				3.96				100,175				985				3.99				120,720				1,321				4.39
Borrowings		231,263				2,240				3.89				226,192				2,182				3.91				169,257				1,945				4.61
Subordinated debentures		48,597				663				5.47				48,503				661				5.53				48,971				689				5.65
Other		-				-				0.00				4,871				45				3.75				11,763				129				4.39
Interest-bearing liabilities		2,983,876				17,244				2.32				2,996,347				16,633				2.25				2,924,638				17,603				2.41
Demand deposits		927,628												907,453												915,637
Other noninterest-bearing liabilities		27,385												30,425												30,695
Total liabilities		3,938,889												3,934,225												3,870,970
Shareholders' equity		476,676												470,395												427,543
Total liabilities and shareholders' equity	$	4,415,565											$	4,404,620											$	4,298,513
Net interest income (tax- equivalent basis) (Non-GAAP) (1)					$	37,095											$	37,047											$	36,711
Net interest margin (tax- equivalent basis) (Non-GAAP) (1)										3.63		%										3.67		%										3.70		%

(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 $29.4 million, $27.5 million, and $16.8 million in the second quarter of 2026, the first quarter of 2026 and the second 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 $2.4 million, $2.7 million and $3.5 million in the second quarter of 2026, the first quarter of 2026 and the second quarter of 2025, respectively.

 

Other Selected Financial Highlights
(Unaudited)
		Quarterly
Earnings		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
(in thousands except per share data)
Net interest income		$	36,697			$	36,642			$	36,840			$	37,597			$	36,322
Net provision expense			550				-				800				200				650
Noninterest income			4,939				5,815				6,097				7,144				6,503
Noninterest expense			26,051				25,776				25,349				26,215				25,506
Net income (loss) before federal income tax expense			15,035				16,681				16,788				18,326				16,669
Income tax expense (benefit)			2,572				2,977				2,921				3,645				3,135
Net income (loss)			12,463				13,704				13,867				14,681				13,534
Basic earnings (loss) per share			0.83				0.91				0.92				0.98				0.90
Diluted earnings (loss) per share			0.83				0.91				0.92				0.97				0.90
Book value per share			32.29				31.42				31.02				29.94				28.77
Tangible book value per share (non-GAAP)			21.73				20.77				20.29				19.39				18.10

 

End of period balances		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
(in thousands)
Gross loans		$	3,076,614			$	2,993,273			$	3,029,219			$	2,916,251			$	2,928,431
Loans held for sale (1)			3,833				9,976				7,185				6,323				7,639
Mortgage warehouse advances (2)			53,535				51,187				58,987				2,483				3,033
Core loans (gross loans excluding 1 and 2 above)			3,019,246				2,932,110				2,963,047				2,907,445				2,917,759
Allowance for credit losses			35,738				35,496				35,550				34,754				34,798
Securities available for sale			555,571				573,531				554,420				544,023				479,426
Securities held to maturity			383,345				384,339				385,193				388,517				390,457
Other interest-earning assets			66,577				76,229				74,857				79,677				110,206
Total earning assets (before allowance)			4,082,107				4,027,372				4,043,689				3,928,468				3,908,520
Total assets			4,456,889				4,394,565				4,410,551				4,296,902				4,310,252
Noninterest-bearing deposits			943,943				912,845				907,007				903,925				943,873
Interest-bearing demand deposits			1,356,540				1,428,338				1,364,887				1,395,724				1,322,336
Savings deposits			620,525				624,084				607,045				588,798				595,981
Certificates of deposit			587,596				598,743				616,180				605,912				624,209
Brokered deposits			93,228				103,381				104,906				72,672				106,225
Total deposits			3,601,832				3,667,391				3,600,025				3,567,031				3,592,624
Deposits excluding brokered			3,508,604				3,564,010				3,495,119				3,494,359				3,486,399
Total subordinated debt			48,646				48,552				48,460				48,368				48,277
Total borrowed funds			294,850				184,819				264,788				197,752				198,428
Other interest-bearing liabilities			-				1				7,689				7,695				8,529
Total interest-bearing liabilities			3,001,385				2,987,918				3,013,955				2,916,921				2,903,985
Shareholders' equity			482,679				470,001				465,353				449,615				431,761

 

Average Balances		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
(in thousands)
Loans		$	2,998,144			$	2,979,652			$	2,961,133			$	2,927,878			$	2,936,168
Securities			1,049,491				1,037,013				1,036,038				990,319				984,607
Other interest-earning assets			56,036				74,803				69,056				79,365				63,416
Total earning assets (before allowance)			4,103,671				4,091,468				4,066,227				3,997,562				3,984,191
Total assets			4,415,565				4,404,620				4,375,527				4,308,289				4,298,513
Noninterest-bearing deposits			927,628				907,453				925,414				930,346				915,637
Interest-bearing deposits			2,568,316				2,616,606				2,552,997				2,583,166				2,573,927
Brokered deposits			135,700				100,175				100,133				91,735				120,720
Total deposits			3,631,644				3,624,234				3,578,544				3,605,247				3,610,284
Total subordinated debt			48,597				48,503				48,411				48,663				48,971
Total borrowed funds			231,263				226,192				255,978				179,122				169,257
Other interest-bearing liabilities			-				4,871				6,311				8,550				11,763
Total interest-bearing liabilities			2,983,876				2,996,347				2,963,830				2,911,236				2,924,638
Shareholders' equity			476,676				470,395				459,423				438,449				427,543

 

Loan Breakout (in thousands)		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
Agricultural		$	49,672			$	47,840			$	56,218			$	51,183			$	47,273
Commercial and Industrial			411,187				369,425				352,556				352,876				351,367
Commercial Real Estate			1,730,214				1,745,410				1,780,396				1,728,774				1,743,541
Consumer			26,121				23,180				26,701				27,328				29,741
Construction Real Estate			25,230				20,897				19,139				18,440				21,508
Residential Real Estate			776,822				725,358				728,037				728,844				724,329
Mortgage Warehouse Advances			53,535				51,187				58,987				2,483				3,033
Gross Loans (excluding held for sale)		$	3,072,781			$	2,983,297			$	3,022,034			$	2,909,928			$	2,920,792
Allowance for credit losses			35,738				35,496				35,550				34,754				34,798
Net loans		$	3,037,043			$	2,947,801			$	2,986,484			$	2,875,174			$	2,885,994

 

Performance Ratios		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
Annualized return on average assets			1.13	%			1.24	%			1.27	%			1.36	%			1.26	%
Annualized return on average equity			10.46	%			11.65	%			12.07	%			13.39	%			12.66	%
Annualized return on average tangible common equity (non-GAAP)			14.10	%			15.95	%			16.66	%			19.08	%			18.26	%
Net interest margin (GAAP)			3.59	%			3.63	%			3.59	%			3.73	%			3.66	%
Net interest margin (fully tax-equivalent) (non-GAAP)			3.63	%			3.67	%			3.63	%			3.77	%			3.70	%
Efficiency ratio			55.86	%			55.99	%			54.12	%			54.76	%			55.32	%
Annualized cost of funds			1.77	%			1.73	%			1.79	%			1.77	%			1.84	%
Annualized cost of deposits			1.58	%			1.54	%			1.57	%			1.57	%			1.65	%
Cost of interest bearing liabilities			2.32	%			2.25	%			2.35	%			2.33	%			2.41	%
Shareholders' equity to total assets			10.83	%			10.70	%			10.55	%			10.46	%			10.02	%
Tangible common equity to tangible assets (non-GAAP)			7.56	%			7.34	%			7.16	%			7.04	%			6.54	%
Annualized noninterest expense to average assets			2.36	%			2.34	%			2.32	%			2.43	%			2.37	%
Loan to deposit			85.42	%			81.62	%			84.14	%			81.76	%			81.51	%
Full-time equivalent employees			577				561				569				573				571

 

Capital Ratios ChoiceOne Financial Services Inc.		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
Total capital (to risk weighted assets)			13.3	%			13.2	%			12.7	%			13.0	%			12.4	%
Common equity Tier 1 capital (to risk weighted assets)			10.7	%			10.6	%			10.2	%			10.3	%			9.8	%
Tier 1 capital (to risk weighted assets)			11.2	%			11.1	%			10.7	%			10.9	%			10.4	%
Tier 1 capital (to average assets)			8.8	%			8.6	%			8.5	%			8.5	%			8.2	%
Tier 1 capital (to total assets)			8.4	%			8.3	%			8.1	%			8.2	%			7.9	%
Commercial Real Estate Loans (non-owner occupied) as a percentage of total capital			249.9	%			262.9	%			279.0	%			275.2	%			288.2	%

 

Capital Ratios ChoiceOne Bank		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
Total capital (to risk weighted assets)			12.9	%			12.9	%			12.5	%			12.8	%			12.4	%
Common equity Tier 1 capital (to risk weighted assets)			11.8	%			11.8	%			11.4	%			11.7	%			11.3	%
Tier 1 capital (to risk weighted assets)			11.8	%			11.8	%			11.4	%			11.7	%			11.3	%
Tier 1 capital (to average assets)			9.3	%			9.2	%			9.1	%			9.1	%			8.9	%
Tier 1 capital (to total assets)			8.9	%			8.9	%			8.7	%			8.8	%			8.6	%
Commercial Real Estate Loans (non-owner occupied) as a percentage of total capital			256.9	%			268.9	%			284.4	%			280.0	%			290.6	%

 

Asset Quality		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
(in thousands)
Net loan charge-offs (recoveries)		$	309			$	53			$	305			$	244			$	418
Annualized net loan charge-offs (recoveries) to average loans			0.04	%			0.01	%			0.04	%			0.03	%			0.06	%
Allowance for credit losses		$	35,738			$	35,496			$	35,550			$	34,754			$	34,798
Unfunded commitment liability		$	1,347			$	1,347			$	1,347			$	1,647			$	1,647
Allowance to loans (excludes held for sale)			1.16	%			1.19	%			1.18	%			1.19	%			1.19	%
Total funds reserved to pay for loans (includes liability for unfunded commitments and excludes held for sale)			1.21	%			1.23	%			1.22	%			1.25	%			1.25	%
Non-Accruing loans		$	30,904			$	27,892			$	27,058			$	17,365			$	16,854
Nonperforming loans (includes OREO)		$	32,773			$	30,177			$	29,582			$	19,940			$	19,296
Nonperforming loans to total loans (excludes held for sale)			1.07	%			1.01	%			0.98	%			0.69	%			0.66	%
Non-Accrual classified as PCD		$	15,102			$	18,210			$	19,007			$	11,393			$	12,017
Nonperforming loans to total loans (excludes held for sale) attributed to PCD			0.49	%			0.61	%			0.63	%			0.39	%			0.41	%
Nonperforming assets to total assets			0.74	%			0.69	%			0.67	%			0.46	%			0.45	%

 

Non-GAAP Reconciliation
(Unaudited)
NON-GAAP Reconciliation		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
Net interest income (tax-equivalent basis) (Non-GAAP)		$	37,095			$	37,047			$	37,232			$	37,994			$	36,711
Net interest margin (fully tax-equivalent)			3.63	%			3.67	%			3.63	%			3.77	%			3.70	%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP)		$	37,095			$	37,047			$	37,232			$	37,994			$	36,711
Adjustment for taxable equivalent interest			(398)				(405)				(392)				(397)				(389)
Net interest income  (GAAP)		$	36,697			$	36,642			$	36,840			$	37,597			$	36,322
Net interest margin (GAAP)			3.59	%			3.63	%			3.59	%			3.73	%			3.66	%

 

(dollars in thousands)		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
Total assets		$	4,456,889			$	4,394,565			$	4,410,551			$	4,296,902			$	4,310,252
Less: goodwill			129,854				129,854				129,854				126,730				126,730
Less: intangible assets			27,888				29,464				31,149				31,694				33,421
Tangible assets		$	4,299,147			$	4,235,247			$	4,249,548			$	4,138,478			$	4,150,101
Total equity		$	482,679			$	470,001			$	465,353			$	449,615			$	431,761
Less: goodwill			129,854				129,854				129,854				126,730				126,730
Less: intangible assets			27,888				29,464				31,149				31,694				33,421
Tangible common equity		$	324,937			$	310,683			$	304,350			$	291,191			$	271,610
Tangible common equity to tangible assets			7.56	%			7.34	%			7.16	%			7.04	%			6.54	%

 

(dollars in thousands)		2026 2nd Qtr.				2026 1st Qtr.				2025 4th Qtr.				2025 3rd Qtr.				2025 2nd Qtr.
Net income		$	12,463			$	13,704			$	13,867			$	14,681			$	13,534
Less: intangible amortization (tax affected at 21%)			1,246				1,331				1,330				1,365				1,369
Adjusted net income		$	11,217			$	12,373			$	12,537			$	13,316			$	12,165
Average shareholders' equity		$	476,676			$	470,395			$	459,423			$	438,449			$	427,543
Less: average goodwill			129,854				129,854				127,308				126,730				126,730
Less: average intangible assets			28,696				30,319				31,092				32,599				34,356
Average tangible common equity		$	318,126			$	310,222			$	301,023			$	279,120			$	266,457
Return on average tangible common equity			14.10	%			15.95	%			16.66	%			19.08	%			18.26	%

 

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SOURCE ChoiceOne Financial Services, Inc.

FAQ

How did ChoiceOne (NASDAQ: COFS) perform financially in Q2 2026?

ChoiceOne reported Q2 2026 net income of $12.5 million, or $0.83 per diluted share. According to ChoiceOne, first-half 2026 net income reached $26.2 million, or $1.74 per share, compared with a small net loss in the first half of 2025.

What happened to ChoiceOne’s net interest margin in the second quarter of 2026?

ChoiceOne’s GAAP net interest margin was 3.59% in Q2 2026. According to ChoiceOne, this compared with 3.63% in Q1 2026 and 3.66% in Q2 2025, as higher earning-asset yields were offset by slightly higher funding costs and lower accretion income.

How fast did ChoiceOne’s core loans grow in Q2 2026 (COFS)?

Core loans increased $87.1 million in Q2 2026, an 11.9% annualized growth rate. According to ChoiceOne, this reflected continued organic production plus about $40 million of purchased seasoned adjustable-rate residential mortgages from another community bank during the quarter.

What was the impact of the securities sale loss on ChoiceOne’s Q2 2026 earnings?

ChoiceOne recorded a pre-tax $1.9 million loss on municipal securities in Q2 2026. According to ChoiceOne, this repositioning reduced diluted earnings per share by approximately $0.10 but funded adjustable-rate mortgage purchases and aimed to improve the bank’s interest rate profile.

How did ChoiceOne’s deposits and liquidity look at June 30, 2026?

Deposits excluding brokered deposits fell $55.4 million quarter over quarter but rose $22.2 million year over year. According to ChoiceOne, declines were largely seasonal municipal outflows; the bank reported $295.0 million in FHLB borrowings and $1.1 billion available secured borrowing capacity.

What are ChoiceOne’s asset quality and capital ratios as of Q2 2026?

Asset quality remained strong, with annualized net charge-offs at 0.04% and nonperforming loans at 1.07% of total loans. According to ChoiceOne, its bank stayed “well-capitalized,” showing a total risk-based capital ratio of 12.9% at June 30, 2026, up from 12.4% a year earlier.

Did ChoiceOne (COFS) repurchase shares in the second quarter of 2026?

ChoiceOne repurchased 35,000 shares in Q2 2026 at a net cost of about $1.1 million. According to ChoiceOne, total repurchases under the plan reached 75,116 shares across late 2025 and early 2026, with 265,272 shares remaining authorized at quarter-end.