ChoiceOne Reports Third Quarter 2026 Results

Lower funding costs accompanied loan growth, while nonperforming loans increased and securities valuations weighed on equity.

Rhea-AI Summary

ChoiceOne Financial Services (COFS) reported third-quarter 2026 net income of $14.5 million, slightly below the year-earlier quarter. Diluted earnings per share held at $0.97, while nine-month net income rose to $40.7 million from $14.3 million; 2025 results included the Fentura acquisition's impact.

GAAP net interest margin rose to 3.67% from 3.59% in the second quarter. Core loans grew $33.6 million during the quarter, and deposits excluding brokered deposits increased $95.7 million, primarily reflecting seasonal municipal deposits and tax receipts. Borrowings fell $60.0 million to $234.9 million.

Nonperforming loans reached 1.25% of loans excluding loans held for sale, up from 1.07% in June. Shareholders' equity fell to $469.8 million from $482.7 million, primarily reflecting a $22.3 million decline in accumulated other comprehensive income as higher long-term rates affected available-for-sale securities.

19 points · 0 major

PositiveiHow this balance works

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Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointNine-month net income rose to $40.7 million, or $2.71 per diluted share, from $14.3 million, or $1.05.
• Moderate pointThird-quarter net interest income reached $38.435 million, versus $36.697 million sequentially and $37.597 million a year earlier.
• Moderate pointNine-month net interest income increased to $111.774 million from $100.230 million in 2025.
• Moderate pointGAAP net interest margin expanded 8 basis points to 3.67% from the second quarter.
• Moderate pointCore loans grew $33.6 million, or 4.4% annualized, quarterly; twelve-month growth was $145.4 million, or 5.0%.
• Moderate pointDeposits excluding brokered deposits grew $95.7 million, or 10.9% annualized, quarterly; twelve-month growth was $109.9 million, or 3.1%.
• Moderate pointBorrowed funds declined $60.0 million to $234.9 million during the third quarter.
• Moderate pointAnnualized deposit costs fell to 1.54%, from 1.58% sequentially and 1.57% a year earlier.
• Moderate pointAnnualized funding costs fell to 1.73%, from 1.77% both sequentially and a year earlier.
• Moderate pointNine-month noninterest expense fell $9.0 million, primarily reflecting the absence of $17.4 million in merger-related expenses.
• Moderate pointNine-month loan-loss provision declined to $1.450 million from $14.013 million in 2025.

8 minor points

• Minor pointBrokered deposits fell $25.8 million to $67.5 million during the third quarter.
• Minor pointInterest-bearing liability costs fell four basis points to 2.28% from the second quarter.
• Minor pointAvailable borrowing capacity secured by pledged assets totaled $1.2 billion at September 30, 2026.
• Minor point. Forward-looking: it has not happened yet and may not happen.Transferable tax credits reduced nine-month tax expense by $600,000; management plans similar-sized purchases during the remainder of 2026.
• Minor pointShare repurchases returned $1.3 million through purchases of 40,000 shares during the third quarter.
• Minor pointChoiceOne Bank's total risk-based capital ratio rose to 12.9% from 12.8% a year earlier.
• Minor point. Forward-looking: it has not happened yet and may not happen.Purchased-loan accretion is estimated at $1.8 million for the remainder of 2026 and $6.0 million for 2027.
• Minor point. Forward-looking: it has not happened yet and may not happen.Remaining purchased-loan accretion is estimated at $45.3 million, with $22.0 million expected over the next five years.

Negative

• Moderate pointNonperforming loans reached $38.6 million; their ratio rose to 1.25% from 1.07% sequentially, excluding loans held for sale.
• Moderate pointNine-month noninterest income declined $1.1 million to $17.5 million year over year, primarily reflecting securities losses.
• Minor pointThird-quarter net income fell to $14.5 million from $14.7 million year over year; diluted EPS remained $0.97.
• Minor pointThird-quarter loan-loss provision rose to $900,000, versus $550,000 sequentially and $200,000 a year earlier.
• Minor pointThird-quarter net charge-offs totaled $647,000, or an annualized 0.08% of average loans.

5 minor points

• Minor pointShareholders' equity fell to $469.8 million from $482.7 million sequentially, though above $449.6 million a year earlier.
• Minor pointThird-quarter noninterest income fell $389,000 to $6.8 million year over year, but increased $1.8 million sequentially.
• Minor pointThird-quarter noninterest expense rose to $26.5 million, up $330,000 year over year and $494,000 sequentially.
• Minor pointPurchased-loan accretion declined to approximately $2.7 million from $3.6 million in the year-earlier quarter.
• Minor point. Forward-looking: it has not happened yet and may not happen.Estimated future purchased-loan accretion depends on prepayment speeds and other factors.

News Explained

During the third quarter of 2026, ChoiceOne repurchased 40,000 common shares for $1.3 million under its existing plan.

Key Figures

Net income: $14.5 million Diluted EPS: $0.97 Net income: $40.7 million +5 more

Net income

$14.5 million

Third quarter 2026

Diluted EPS

$0.97

Third quarter 2026

Net income

$40.7 million

First nine months of 2026

Diluted EPS

$2.71

First nine months of 2026

Net interest margin

3.67%

Q3 2026; up 8 basis points from 3.59% in Q2 2026

Core loan growth

$33.6 million

Q3 2026; 4.4% annualized

Deposit growth, excluding brokered deposits

$95.7 million

Q3 2026; 10.9% annualized

Annualized net charge-offs

0.08% of average loans

Q3 2026

Previous Earnings Reports

3 past events · Latest: Jul 24

Same Type 3 events

1. Jul 24

   Quarterly earnings

   24h Move

   -2.8%

   Net interest margin was 3.59%, while deposits excluding brokered deposits fell sequentially.

2. Apr 24

   Quarterly earnings

   24h Move

   +2.0%

   Net interest margin rose to 3.63%, and deposits excluding brokered deposits increased.

3. Oct 24

   Quarterly earnings

   24h Move

   +11.5%

   Third-quarter net income was $14.7 million, with net interest margin at 3.73%.

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

Key Terms

gaap, net interest margin, brokered deposits, nonperforming loans

4 terms

gaap financial

"GAAP net interest margin expanded 8 basis points"

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 expanded 8 basis points"

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.

brokered deposits financial

"Deposits, excluding brokered deposits, increased $95.7 million"

Brokered deposits are large sums of customer cash placed at a bank through a third-party intermediary that shops around for the best interest rate, like a broker assembling a big bucket of savings and directing it to a bank. They matter to investors because they can quickly change a bank’s funding level and cost — providing fast liquidity but also adding volatility and regulatory scrutiny that can affect a bank’s stability and profitability.

nonperforming loans financial

"nonperforming loans to total loans, excluding loans held for sale, were 1.25%"

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.

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

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SPARTA, Mich., Oct. 30, 2026 /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	%

 

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SOURCE ChoiceOne Financial Services, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were ChoiceOne's third-quarter 2026 earnings?

ChoiceOne earned $14.5 million, or $0.97 per diluted share, in the third quarter of 2026. That compares with $14.7 million, or $0.97 per diluted share, in the third quarter of 2025.

How did ChoiceOne's net interest margin change in the third quarter of 2026?

ChoiceOne's GAAP net interest margin increased 8 basis points to 3.67% from 3.59% in the second quarter of 2026. Purchased-loan accretion contributed 25 basis points to third-quarter 2026 margin, versus 36 basis points in the year-earlier quarter.

How much of ChoiceOne's deposits were uninsured at September 30, 2026?

Uninsured deposits totaled $1.3 billion, or 35.0% of deposits, at September 30, 2026. Available borrowing capacity secured by pledged assets was $1.2 billion. ChoiceOne can increase borrowing capacity through unsecured federal fund lines and additional asset pledges.

What credit protections did ChoiceOne report for its nonperforming loan portfolio?

Approximately 35.5% of the nonperforming loans were supported by SBA or USDA guarantees. Approximately 34.3% of nonperforming assets consisted of residential real estate loans. Purchased loans identified as credit-deteriorated before acquisition accounted for 0.40% of total loans excluding loans held for sale.