[10-Q] CHOICEONE FINANCIAL Quarterly Earnings Report

Rhea-AI Filing Summary

ChoiceOne reported stronger quarterly operating results driven by a completed merger that materially expanded its balance sheet. For the quarter, net income was $13.534 million versus $6.586 million a year earlier and diluted EPS was $0.90 versus $0.87. Net interest income roughly doubled to $36.322 million, reflecting higher loan balances after the acquisition.

The March merger of Fentura added substantial scale: total assets grew to $4.31 billion from $2.72 billion at year-end, loans held for investment rose to $2.921 billion, and deposits to $3.593 billion. Acquisition accounting increased goodwill to $126.73 million and intangible assets to $33.42 million. The company recorded a $13.813 million six-month provision for credit losses tied to acquired loans and reported higher noninterest expense, including $17.369 million of merger-related costs during the six months, producing a six-month net loss of $0.372 million.

Positive

• Completed merger with Fentura expanding total assets to $4.31 billion and substantially increasing loans and deposits
• Quarterly net income doubled year-over-year to $13.534 million with diluted EPS of $0.90
• Net interest income increased to $36.322 million, reflecting higher loan balances and interest earning assets
• Common equity strengthened with paid-in capital reported at $398.2 million following merger consideration

Negative

• Six-month provision for credit losses of $13.813 million, largely acquisition-related, pressured year-to-date earnings
• Allowance for credit losses rose to $34.798 million (1.19% of gross loans), reflecting acquired loan credit marks and increased credit risk coverage
• Noninterest expense surged to $61.171 million for six months, including $17.369 million of merger-related expenses and higher amortization
• Accumulated other comprehensive loss widened to $(49.087) million, contributing to a six-month comprehensive loss and volatility in equity

Insights

Financial Analyst

TL;DR: Quarter shows meaningful revenue lift and EPS stability, offset by acquisition-related provisions and elevated costs.

ChoiceOne's quarter reflects clear revenue benefits from scale: net interest income increased to $36.3M and quarterly net income doubled year-over-year to $13.5M. However, the six-month results show the near-term accounting impact of the merger: a $13.8M provision for credit losses, higher amortization and merger expenses driving noninterest expense to $61.2M for six months. The allowance for credit losses doubled to $34.8M (1.19% of gross loans), reflecting acquired loan marks and conservative provisioning. From an operating perspective, margin expansion is visible but the integration and credit accounting effects are key drivers of six-month profitability volatility.

M&A Specialist

TL;DR: The Fentura merger materially expanded scale and capital but generated significant acquisition accounting impacts and integration costs.

Transaction effects are prominent: ChoiceOne issued common stock consideration with a noncash issuance value of $192.8M, acquired assets and liabilities totaling roughly $1.579B and $1.625B respectively, and received $173.1M of cash in the transaction. Balance-sheet scale increased substantially—assets to $4.31B, loans to $2.92B, and deposits to $3.59B. Goodwill and intangibles rose materially to $126.7M and $33.4M. These are impactful, long-lived changes that drive future operating leverage but also create near-term expense and credit provisioning volatility evidenced in the six-month results.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

☒	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2025
☐	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from  to                   .

Commission File Number: 001-39209

ChoiceOne Financial Services, Inc.

(Exact Name of Registrant as Specified in its Charter)

Michigan (State or Other Jurisdiction of Incorporation or Organization)	38-2659066 (I.R.S. Employer Identification No.)
109 East Division Sparta, Michigan (Address of Principal Executive Offices)	49345 (Zip Code)
(616) 887-7366 (Registrant’s Telephone Number, including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock	COFS	NASDAQ Capital Market

As of July 31, 2025, the Registrant had 15,015,000 shares of common stock outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Statements Of Income	4
	Consolidated Statements Of Comprehensive Income (Loss)	6
	Consolidated Statements Of Changes In Shareholders’ Equity	7
	Consolidated Statements Of Cash Flows	10
	Notes To Interim Consolidated Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 4.	Controls and Procedures	62
PART II.	OTHER INFORMATION	63
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 5.	Other Information	63
Item 6.	Exhibits	64
Signatures		65

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

ChoiceOne Financial Services, Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)

	June 30,				December 31,
(Dollars in thousands, except share data)	2025				2024
Assets
Cash and due from banks	$	154,946			$	96,401
Time deposits in other financial institutions		1,334				350
Cash and cash equivalents		156,280				96,751
Equity securities, at fair value (Note 2)		9,582				7,782
Securities available for sale, at fair value (Note 2)		479,426				479,117
Securities held to maturity, at amortized cost net of credit losses (Note 2)		390,457				394,534
Federal Home Loan Bank stock		18,562				9,383
Federal Reserve Bank stock		12,547				5,307
Loans held for sale		7,639				7,288
Loans to other financial institutions (Note 3)		3,033				39,878
Core loans (Note 3)		2,917,759				1,505,762
Total loans held for investment (Note 3)		2,920,792				1,545,640
Allowance for credit losses (Note 3)		(34,798	)			(16,552	)
Loans, net		2,885,994				1,529,088
Premises and equipment, net		45,667				27,099
Other real estate owned, net		2,442				473
Cash value of life insurance policies		73,673				44,896
Goodwill		126,730				59,946
Intangible assets		33,421				1,096
Other assets		67,832				60,483
Total assets	$	4,310,252			$	2,723,243
Liabilities
Deposits – noninterest-bearing	$	943,873			$	524,945
Deposits – interest-bearing		2,542,526				1,652,647
Brokered deposits		106,225				36,511
Total deposits		3,592,624				2,214,103
Borrowings		198,428				175,000
Subordinated debentures		48,277				35,752
Other liabilities		39,162				37,973
Total liabilities		3,878,491				2,462,828
Shareholders' Equity
Preferred stock; shares authorized: 100,000; shares outstanding: none		-				-
Common stock and paid-in capital, no par value; shares authorized: 30,000,000; shares outstanding: 15,008,864 at June 30, 2025 and 8,965,483 at December 31, 2024		398,201				206,780
Retained earnings		82,647				91,414
Accumulated other comprehensive loss, net		(49,087	)			(37,779	)
Total shareholders’ equity		431,761				260,415
Total liabilities and shareholders’ equity	$	4,310,252			$	2,723,243

See accompanying notes to interim consolidated financial statements.

3

ChoiceOne Financial Services, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

4

	Three Months Ended								Six Months Ended
(Dollars in thousands, except share data)	June 30,								June 30,
	2025				2024				2025				2024
Interest income
Loans, including fees	$	46,533			$	21,971			$	79,174			$	42,757
Securities:
Taxable		5,264				5,471				9,994				10,819
Tax exempt		1,393				1,410				2,802				2,822
Other		735				1,092				1,914				1,978
Total interest income		53,925				29,944				93,884				58,376
Interest expense
Deposits		14,840				8,325				25,556				17,102
Advances from Federal Home Loan Bank		1,659				463				3,711				904
Other		1,104				2,785				1,984				5,525
Total interest expense		17,603				11,573				31,251				23,531
Net interest income		36,322				18,371				62,633				34,845
Provision for (reversal of) credit losses on loans		650				272				13,813				675
Provision for (reversal of) credit losses on unfunded commitments		-				(272	)			-				(675	)
Net Provision for (reversal of) credit losses expense		650				-				13,813				-
Net interest income after provision		35,672				18,371				48,820				34,845
Noninterest income
Customer service charges		1,401				1,146				2,582				2,289
Credit and debit card fees		2,083				1,516				3,592				2,778
Insurance and investment commissions		540				190				835				388
Gains on sales of loans		355				525				799				979
Net gains on sales and write downs of other assets		3				11				13				12
Earnings on life insurance policies		844				305				1,233				800
Trust income		596				220				1,102				433
Change in market value of equity securities		239				(71	)			346				(36	)
Other		442				241				923				491
Total noninterest income		6,503				4,083				11,425				8,134
Noninterest expense
Salaries and benefits		13,731				8,264				24,051				16,095
Occupancy and equipment		2,432				1,477				4,151				2,939
Data processing		2,439				1,468				4,438				2,808
Communications		561				312				941				642
Professional fees		947				593				1,644				1,208
Supplies and postage		305				168				549				346
Advertising and promotional		260				199				516				349
Intangible amortization		1,732				203				2,412				406
FDIC insurance		550				390				1,005				765
Merger related expenses		166				—				17,369				-
Other		2,383				1,204				4,095				2,404
Total noninterest expense		25,506				14,278				61,171				27,962
(Loss) income before income tax (benefit) expense		16,669				8,176				(926	)			15,017
Income tax (benefit) expense		3,135				1,590				(554	)			2,797
Net (loss) income	$	13,534			$	6,586			$	(372	)		$	12,220
Basic (loss) earnings per share (Note 4)	$	0.90			$	0.87			$	(0.03	)		$	1.62
Diluted (loss) earnings per share (Note 4)	$	0.90			$	0.87			$	(0.03	)		$	1.61

5

Dividends declared per share $ 0.28 $ 0.27 $ 0.56 $ 0.54

See accompanying notes to interim consolidated financial statements.

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

	Three Months Ended								Six Months Ended
(Dollars in thousands)	June 30,								June 30,
	2025				2024				2025				2024
Net income	$	13,534			$	6,586			$	(372	)		$	12,220
Other comprehensive income:
Change in net unrealized gain (loss) on available-for-sale securities		(2,123	)			184				(2,024	)			(2,986	)
Income tax benefit (expense)		446				(39	)			425				627
Less: reclassification adjustment for net (gain) loss included in net income		-				-				-				-
Income tax benefit (expense)		-				-				-				-
Less: reclassification adjustment for net (gain) loss for fair value hedge		(2,118	)			1,663				(6,696	)			6,986
Income tax benefit (expense)		445				(349	)			1,406				(1,467	)
Less: net unrealized (gains) losses on securities transferred from available-for-sale to held-to-maturity		-				-				-				-
Income tax benefit (expense)		-				-				-				-
Unrealized gain (loss) on available-for-sale securities, net of tax		(3,350	)			1,459				(6,889	)			3,160
Reclassification of unrealized gain (loss) upon transfer of securities from available-for-sale to held-to-maturity		-				-				-				-
Income tax benefit (expense)		-				-				-				-
Amortization of net unrealized (gains) losses on securities transferred from available-for-sale to held-to-maturity		62				56				132				112
Income tax benefit (expense)		(13	)			(12	)			(28	)			(24	)
Unrealized loss on held to maturity securities, net of tax		49				44				104				88
Change in net unrealized gain (loss) on cash flow hedge		(1,580	)			1,719				(5,528	)			7,805
Income tax benefit (expense)		331				(361	)			1,161				(1,639	)
Less: reclassification adjustment for net (gain) loss on cash flow hedge		-				-				-				-
Income tax benefit (expense)		-				-				-				-
Less: amortization of net unrealized (gains) losses included in net income		(270	)			205				(197	)			1,092
Income tax benefit (expense)		56				(43	)			41				(229	)
Unrealized gain (loss) on cash flow hedge instruments, net of tax		(1,463	)			1,520				(4,523	)			7,029
Other comprehensive income (loss), net of tax		(4,764	)			3,023				(11,308	)			10,277
Comprehensive income (loss)	$	8,770			$	9,609			$	(11,680	)		$	22,497

See accompanying notes to interim consolidated financial statements.

6

ChoiceOne Financial Services, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the three months ended June 30,

														Accumulated
						Common								Other
						Stock and								Comprehensive
		Number of				Paid in				Retained				Income/(Loss),
(Dollars in thousands, except per share data)		Shares				Capital				Earnings				Net				Total
Balance, April 1, 2024			7,556,137			$	173,786			$	77,294			$	(44,324	)		$	206,756
Net income											6,586								6,586
Other comprehensive income (loss)															3,023				3,023
Shares issued			17,481				25												25
Effect of employee stock purchases							11												11
Stock-based compensation expense							162												162
Cash dividends declared ($0.27 per share)											(2,044	)							(2,044	)
Balance, June 30, 2024			7,573,618			$	173,984			$	81,836			$	(41,301	)		$	214,519
Balance, April 1, 2025			14,977,248			$	398,075			$	73,316			$	(44,323	)		$	427,068
Net income											13,534								13,534
Other comprehensive income (loss)															(4,764	)			(4,764	)
Shares issued for directors and employee stock plans			9,402				261												261
Effect of employee stock purchases							16												16
Stock-based compensation expense							176												176
Restricted stock units issued			22,214																-
Shares surrendered by participants for RSU tax payments							(327	)											(327	)
Cash dividends declared ($0.28 per share)											(4,203	)							(4,203	)
Balance, June 30, 2025			15,008,864			$	398,201			$	82,647			$	(49,087	)		$	431,761

7

ChoiceOne Financial Services, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the six months ended June 30,

														Accumulated
						Common								Other
						Stock and								Comprehensive
		Number of				Paid in				Retained				Income/(Loss),
(Dollars in thousands, except per share data)		Shares				Capital				Earnings				Net				Total
Balance, January 1, 2024			7,548,217			$	173,513			$	73,699			$	(51,578	)		$	195,634
Net income											12,220								12,220
Other comprehensive income (loss)															10,277				10,277
Shares issued for directors and employee stock plans			24,521				115												115
Effect of employee stock purchases							22												22
Stock options exercised and issued			880																—
Stock-based compensation expense							334												334
Cash dividends declared ($0.54 per share)											(4,083	)							(4,083	)
Balance, June 30, 2024			7,573,618			$	173,984			$	81,836			$	(41,301	)		$	214,519
Balance, January 1, 2025			8,965,483			$	206,780			$	91,414			$	(37,779	)		$	260,415
Net (loss) income											(372	)							(372	)
Other comprehensive income (loss)															(11,308	)			(11,308	)
Shares issued for directors and employee stock plans			14,917				433												433
Effect of employee stock purchases							29												29
Stock-based compensation expense							353												353
Restricted stock units issued			22,214																-
Shares surrendered by participants for RSU tax payments							(327	)											(327	)
Merger with Fentura Financial, Inc., net of issuance costs			6,064,057				192,770												192,770
Repurchase of shares from Fentura Financial, Inc. ESOP			(57,807	)			(1,837	)											(1,837	)
Cash dividends declared ($0.56 per share)											(8,395	)							(8,395	)
Balance, June 30, 2025			15,008,864			$	398,201			$	82,647			$	(49,087	)		$	431,761

8

9

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

10

	Six Months Ended
(Dollars in thousands)	June 30,
	2025				2024
Cash flows from operating activities:
Net (loss) income	$	(372	)		$	12,220
Adjustments to reconcile net income to net cash from operating activities:
(Reversal of) provision for credit losses		13,813				-
Depreciation		1,529				1,272
Amortization		7,518				4,810
Accretion		(6,413	)			-
Compensation expense on employee stock purchase plan, stock options, and restricted stock units		382				576
Net change in market value of equity securities		(346	)			36
Gains on sales of loans		(799	)			(979	)
Loans originated for sale		(25,905	)			(29,067	)
Proceeds from loan sales		26,033				28,400
Earnings on bank-owned life insurance		(930	)			(604	)
Earnings on death benefit from bank-owned life insurance		(303	)			(196	)
(Gains)/losses on sales of other real estate owned		(46	)			-
Write downs of OREO		34				-
Deferred federal income tax (benefit)/expense		(554	)			231
Net change in:
Other assets		(411	)			794
Other liabilities		(10,744	)			13,557
Net cash (used in) provided by operating activities		2,486				31,050
Cash flows from investing activities:
Sales of securities available for sale		78,856				-
Maturities, prepayments and calls of securities available for sale		15,417				17,962
Maturities, prepayments and calls of securities held to maturity		9,325				15,086
Purchases of securities available for sale		(13,560	)			(768	)
Purchases of equity securities		(90	)			(33	)
Purchases of securities held to maturity		(2,610	)			(700	)
Purchase of Federal Home Loan Bank stock		-				(1	)
Purchase of Federal Reserve Bank stock		(7,239	)			-
Loan originations and payments, net		11,571				(27,232	)
Proceeds from bank owned life insurance death benefits claim		940				490
Additions to premises and equipment		(2,910	)			(794	)
Proceeds from sales of other real estate owned		621				-
Proceeds from derivative contracts settlements		3,636				-
Issuance costs		(8	)			-
Cash received from merger with Fentura Financial, Inc.		173,082				-
Net cash provided by (used in) investing activities		267,031				4,010
Cash flows from financing activities:
Net change in deposits		(53,360	)			4,624
Net change in short term borrowings		(146,501	)			10,073
Issuance of common stock		432				115
Repurchase of shares from Fentura Financial, Inc. ESOP		(1,837	)			-
Share based compensation withholding obligation		(327	)			(220	)
Cash dividends		(8,395	)			(4,083	)
Net cash provided by (used in) financing activities		(209,988	)			10,509
Net change in cash and cash equivalents		59,529				45,569
Beginning cash and cash equivalents		96,751				55,433
Ending cash and cash equivalents	$	156,280			$	101,002
Supplemental disclosures of cash flow information:
Cash paid for interest	$	29,084			$	24,686
Cash paid for income taxes		2,840				2,750
Noncash transactions:

11

Loans transferred to other real estate		843				150
Acquisition of assets from merger, net of cash		1,578,547				-
Acquisition of liabilities from merger		1,625,421				-
Issuance of common stock as consideration for merger		192,770				-

See accompanying notes to interim consolidated financial statements.

12

ChoiceOne Financial Services, Inc.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include ChoiceOne Financial Services, Inc. (“ChoiceOne”), its wholly-owned subsidiaries, ChoiceOne Bank (the “Bank”) and 109 Technologies, LLC, and ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. (the “Insurance Agency”). Intercompany transactions and balances have been eliminated in consolidation.

ChoiceOne owns all of the common securities of Community Shores Capital Trust I, Fentura Capital Trust I, and Fentura Capital Trust II (collectively, the “Capital Trusts”). Under U.S. generally accepted accounting principles (“GAAP”), the Capital Trusts are not consolidated because each is a variable interest entity and ChoiceOne is not the primary beneficiary.

The accompanying unaudited consolidated financial statements and notes thereto reflect all adjustments ordinary in nature which are, in the opinion of management, necessary for a fair presentation of such financial statements. Operating results for the six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in ChoiceOne’s Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Events

On March 1, 2025, ChoiceOne completed the merger (the “Merger”) of Fentura Financial, Inc. (“Fentura”), the former parent company of The State Bank, with and into ChoiceOne with ChoiceOne surviving the merger. On March 14, 2025, ChoiceOne Bank completed the consolidation of The State Bank with and into ChoiceOne Bank with ChoiceOne Bank surviving the consolidation.

On July 26, 2024, ChoiceOne completed an underwritten public offering of 1,380,000 shares of its common stock at a price to the public of $25.00 per share (the “Common Stock Offering”). The aggregate gross proceeds of the Common Stock Offering were approximately $34.5 million before deducting underwriting discounts and estimated offering expenses. The proceeds from the Common Stock Offering qualify as tangible common equity and Tier 1 common equity.

Identification and Classification of Merger-Related Expenses

Merger-related expenses are costs incurred directly in connection with the company's merger and acquisition activities and are expensed in the period in which the costs are incurred and services are received. The costs to issue equity securities associated with the merger are netted against the value of the securities issued. Merger related expenses include legal fees for negotiation and drafting of merger agreements, accounting and auditing fees related to due diligence and financial statement preparation, consulting fees for strategic advisory services specific to the merger, costs related to regulatory filings and compliance, expenses for integration planning and execution (including IT, systems integration, and contract terminations), severance and retention bonuses for employees affected by the merger, and travel and accommodation expenses directly related to merger activities.

To ensure accurate classification and segregation of these expenses, detailed documentation supporting the nature and purpose of each expense is maintained, including invoices, contracts, and internal memos. All merger-related expenses must be reviewed and approved by the CFO or an authorized delegate to ensure they meet the criteria for classification as merger-related. The Accounting Department conducts periodic reviews of these expenses to ensure proper classification and segregation, promptly addressing and correcting any discrepancies. Merger-related expenses are disclosed separately in the financial statements and accompanying notes to provide transparency to investors and stakeholders.

Use of Estimates

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, ChoiceOne’s management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. These estimates and assumptions are subject to many risks and uncertainties, and actual results may differ from these estimates. Estimates associated with the allowance for credit losses, the unrealized gains and losses on securities available for sale and held to maturity, and the fair value measurement of acquired assets and liabilities associated with the Merger are particularly susceptible to change.

Goodwill

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Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of the acquired tangible assets and liabilities and identifiable intangible assets. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed.

Core Deposit Intangible

Core deposit intangible represents the value of the acquired customer core deposit bases and is included as an asset on the consolidated balance sheets. The core deposit intangible has an estimated finite life, is amortized on an accelerated basis over its useful life and is subject to periodic impairment evaluation.

Stock Transactions

A total of 7,005 and 10,306 shares of common stock were issued to ChoiceOne’s Board of Directors for a cash price of $203,000 and $320,000 for the three and six months ended June 30, 2025, respectively, under the terms of the Directors’ Stock Purchase Plan. A total of 2,397 and 4,611 shares for a cash price of $58,000 and $113,000 were issued for the three and six months ended June 30, 2025, respectively, under the Employee Stock Purchase Plan.

On March 1, 2025, ChoiceOne issued 6,070,836 shares of common stock at a net cost of $192.8 million as consideration in the Merger. Also on March 1, 2025, as required in the Merger, ChoiceOne purchased 57,807 shares of common stock for a cash price of approximately $2.2 million. ChoiceOne retired 6,750 shares of stock that were FETM shares which were owned by ChoiceOne prior to the merger for a cash price of $215,000 on March 1, 2025.

ChoiceOne's common stock repurchase program announced in April 2021 and amended in 2022, authorizes repurchases of up to 375,388 shares, representing 5% of the total outstanding shares of common stock as of the date the program was adopted. No shares were repurchased under this program in 2025.

Reclassifications

Certain amounts presented in prior periods have been reclassified to conform to the current presentation.

Allowance for Credit Losses (“ACL”)

The ACL is a valuation allowance for expected credit losses. The ACL is increased by the provision for credit losses and decreased by loans charged off less any recoveries of charged off loans. As ChoiceOne has had very limited loss experience since 2011, management elected to utilize benchmark peer loss history data to estimate historical loss rates. ChoiceOne identified an appropriate peer group for each loan cohort which shared similar characteristics. Management estimates the ACL required based on the selected peer group loan loss experience, the nature and volume of the loan portfolio, information about specific borrower situations and estimated collateral values, a reasonable and supportable economic forecast, and other factors. Allocations of the ACL may be made for specific loans, but the entire ACL is available for any loan that, in management’s judgment, should be charged off. Loan losses are charged against the ACL when management believes that collection of a loan balance is not possible.

The ACL consists of general and specific components. The general component covers loans collectively evaluated for credit losses and is based on peer historical loss experience adjusted for current and forecasted factors. Management's adjustment for current and forecasted factors is based on trends in delinquencies, trends in charge-offs and recoveries, trends in the volume of loans, changes in underwriting standards, trends in loan review findings, the experience and ability of lending staff, and a reasonable and supportable economic forecast described further below.

The discounted cash flow methodology is utilized for all loan pools included in the general component. This methodology is supported by our CECL software provider and allows management to automatically calculate contractual life by factoring in all cash flows and adjusting them for behavioral and credit-related aspects.

Reasonable and supportable economic forecasts have to be incorporated in determining expected credit losses. The forecast period represents the time frame from the current period end through the point in time that we can reasonably forecast and support entity and environmental factors that are expected to impact the performance of our loan portfolio. Ideally, the economic forecast period would encompass the contractual terms of all loans; however, the ability to produce a forecast that is considered reasonable and supportable becomes more difficult or may not be possible in later periods. Subsequent to the end of the forecast period, we revert to historical loan data based on an ongoing evaluation of each economic forecast in relation to then current economic conditions as well as any developing

14

loan loss activity and resulting historical data. As of June 30, 2025, we used a one-year reasonable and supportable economic forecast period, with a two year straight-line reversion period.

We are not required to develop and use our own economic forecast model, and we elected to utilize economic forecasts from third-party providers that analyze and develop forecasts of the economy for the entire United States at least quarterly.

Other inputs to the calculation are also updated or reviewed quarterly. Prepayment speeds are updated on a one quarter lag based on the asset liability model from the previous quarter. This model is performed at the loan level. Curtailment is updated quarterly within the ACL model based on our peer group average. The reversion period is reviewed by management quarterly with consideration of the current economic climate. Prepayment speeds and curtailment were updated during the second quarter of 2025; however, the effect was insignificant.

We are also required to consider expected credit losses associated with loan commitments over the contractual period in which we are exposed to credit risk on the underlying commitments unless the obligation is unconditionally cancellable by us. Any allowance for off-balance sheet credit exposures is reported as an other liability on our Consolidated Balance Sheet and is increased or decreased via the provision for credit losses account on our Consolidated Statement of Income. The calculation includes consideration of the likelihood that funding will occur and forecasted credit losses on commitments expected to be funded over their estimated lives. The allowance is calculated using the same aggregate reserve rates calculated for the funded portion of loans at the portfolio level applied to the amount of commitments expected to be funded.

Loans that do not share risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation. ChoiceOne has determined that any loans which have been placed on non-performing status, loans with a risk rating of 6 or higher, and loans past due more than 60 days will be assessed individually for evaluation. Management's judgment will be used to determine if the loan should be migrated back to pool on an individual basis. Individual analysis will establish a specific reserve for loans in scope. Specific reserves on non-performing loans are typically based on management’s best estimate of the fair value of collateral securing these loans, adjusted for selling costs as appropriate or based on the present value of the expected cash flows from that loan.

ACL for Purchased Loans: With and Without Credit Deterioration

Acquired loans are initially recorded at fair value. ChoiceOne’s accounting methods for acquired loans depend on whether or not the loan reflects more than insignificant credit deterioration since origination at the date of acquisition. ChoiceOne estimated the valuation mark on acquired loans to be a reduction of $64.7 million related to the Merger. This valuation mark contained two separate populations: a valuation mark on loans purchased with credit deterioration ("PCD loans") of $13.1 million and a valuation mark on loans purchased without credit deterioration ("Non-PCD loans") of $51.6 million. ChoiceOne estimates $59.8 million of the total valuation mark will be accretable to interest income.

Purchased Loans with Credit Deterioration

Purchased loans that reflect a more than insignificant credit deterioration since origination at the date of acquisition are classified as purchased credit deteriorated (PCD) loans. PCD loans are recorded at fair value plus the ACL expected at the time of acquisition. Under this method, there is no provision for credit losses on acquisition of PCD loans. The allowance for credit losses of $4.9 million was recorded as the credit mark on PCD loans. PCD loans are assessed on a regular basis and subsequent adjustments to the ACL are recorded on the income statement. The non-credit-related difference between fair value and the unpaid principal balance at the acquisition date is amortized or accreted to interest income over the contractual life of the loan using the effective interest method.

Purchased Loans Without Credit Deterioration

Loans not considered purchased credit deteriorated (Non-PCD) loans do not reflect more than insignificant credit deterioration since origination at the date of acquisition. These loans are recorded at fair value and an increase to the allowance for credit losses (ACL) is recorded with a corresponding increase to the provision for credit losses at the date of acquisition. The difference between fair value and the unpaid principal balance at the acquisition date is amortized or accreted to interest income over the contractual life of the loan using the effective interest method. Purchased loans from the Merger were brought into the model and segmented into classes on the same basis as ChoiceOne originated loans. The provision for credit losses of $12.0 million was expensed on March 1, 2025 due to the acquisition of $1.3 billion of Non-PCD loans in the Merger.

ACL for Securities

Securities Available for Sale ("AFS") – For securities AFS in an unrealized loss position, management determines whether they intend to sell or if it is more likely than not that ChoiceOne will be required to sell the security before recovery of the amortized cost basis. If

15

either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities AFS with unrealized losses not meeting these criteria, management evaluates whether any decline in fair value is due to credit loss factors. In making this assessment, management considers any changes to the rating of the security by rating agencies and adverse conditions specifically related to the issuer of the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses (“ACL”) is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Changes in the ACL under ASC 326-30 are recorded as provisions for (or reversal of) credit loss expense. Losses are charged against the allowance when the collectability of a debt security AFS is confirmed or when either of the criteria regarding intent or requirement to sell is met. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income, net of income taxes. At June 30, 2025, there was no ACL related to debt securities AFS.

Securities Held to Maturity ("HTM") – Since the adoption of CECL, ChoiceOne measures credit losses on HTM securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The ACL on securities HTM is a contra asset valuation account that is deducted from the carrying amount of HTM securities to present the net amount expected to be collected. HTM securities are charged off against the ACL when deemed uncollectible. Adjustments to the ACL are reported in ChoiceOne’s Consolidated Statements of Income in the provision for credit losses. Accrued interest receivable totaled $2.0 million at both June 30, 2025 and December 31, 2024 and was reported in other assets on the consolidated balance sheets and is excluded from the estimate of credit losses. With regard to US Treasury securities, these have an explicit government guarantee; therefore, no ACL is recorded for these securities. With regard to obligations of states and political subdivisions and other HTM securities, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. At June 30, 2025 and December 31, 2024, the ACL related to HTM securities is insignificant.

Recent Accounting Pronouncements

Adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about the Company's operating segments. This adoption was aimed at providing more transparent and comprehensive information regarding the Company's financial performance and position. The Company operates in one reportable segment. The Company adopted this guidance as of December 31, 2024, on a retrospective basis. The adoption did not have a material impact on the Company's financial statements but resulted in additional entity-wide disclosures about products and services, geographic areas, and major customers. These disclosures are intended to provide users of the financial statements with a better understanding of the Company's operations and the economic environments in which it operates.

While ChoiceOne’s management monitors the revenue streams of various products and services for the Bank and the Insurance Agency, operations and financial performance are evaluated on a company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated into one reportable operating segment.

ASU 2023-09 Improvements to Income Tax Disclosures

In 2023, the FASB issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures. The amendments in this update enhance transparency and decision usefulness of income tax disclosures. This ASU requires consistent categorization, greater disaggregation, and detailed disclosures related to income taxes paid. These changes aim to help users of financial statements understand factors contributing to differences between effective and statutory tax rates. The disclosure is effective for annual reporting periods beginning after December 15, 2024. The Company is evaluating the impact this will have on the Company's income tax disclosures.

16

NOTE 2 – SECURITIES

On January 1, 2022, ChoiceOne reassessed and transferred, at fair value, $428.4 million of securities classified as available for sale to the held to maturity classification. The net unrealized after-tax loss of $2.7 million as of the transfer date remained in accumulated other comprehensive income to be amortized over the remaining life of the securities, offsetting the related amortization of discount or premium on the transferred securities. No gains or losses were recognized at the time of the transfer. The remaining net unamortized unrealized loss on transferred securities included in accumulated other comprehensive income was $1.9 million after tax as of June 30, 2025.

ChoiceOne acquired $90.7 million in securities as part of the Merger; however, management chose to sell $78.9 million of those securities to pay down higher cost wholesale funding. The sale of the securities was completed so close to the fair value determination date that no loss was recognized. Consequently, the net increase in securities from the Merger was $11.8 million.

The fair value of equity securities and the related gross unrealized gains and (losses) recognized in noninterest income were as follows:

	June 30, 2025
					Gross				Gross
(Dollars in thousands)	Amortized				Unrealized				Unrealized				Fair
	Cost				Gains				Losses				Value
Equity securities	$	9,563			$	574			$	(555	)		$	9,582

	December 31, 2024
					Gross				Gross
(Dollars in thousands)	Amortized				Unrealized				Unrealized				Fair
	Cost				Gains				Losses				Value
Equity securities	$	8,043			$	397			$	(658	)		$	7,782

The following tables present the amortized cost and fair value of securities available for sale and the gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and the amortized cost and fair value of securities held to maturity and the related gross unrealized gains and losses:

	June 30, 2025
					Gross				Gross
(Dollars in thousands)	Amortized				Unrealized				Unrealized				Fair
Available for Sale:	Cost				Gains				Losses				Value
U.S. Treasury notes and bonds	$	94,367			$	18			$	(6,636	)		$	87,749
State and municipal		262,632				-				(45,787	)			216,845
Mortgage-backed		182,811				84				(17,238	)			165,657
Corporate		250				-				(38	)			212
Asset-backed securities		9,159				-				(196	)			8,963
Total	$	549,219			$	102			$	(69,895	)		$	479,426
(Dollars in thousands)
Held to Maturity:
U.S. Government and federal agency	$	2,981			$	-			$	(186	)		$	2,795
State and municipal		197,957				7				(27,563	)			170,401
Mortgage-backed		168,407				16				(16,930	)			151,493
Corporate		21,011				22				(1,768	)			19,265
Asset-backed securities		101				-				(1	)			100
Total	$	390,457			$	45			$	(46,448	)		$	344,054

17

	December 31, 2024
					Gross				Gross
(Dollars in thousands)	Amortized				Unrealized				Unrealized				Fair
Available for Sale:	Cost				Gains				Losses				Value
U.S. Treasury notes and bonds	$	89,875			$	-			$	(9,373	)		$	80,502
State and municipal		258,815				-				(30,579	)			228,236
Mortgage-backed		181,863				62				(20,955	)			160,970
Corporate		250				-				(38	)			212
Asset-backed securities		9,387				-				(190	)			9,197
Total	$	540,190			$	62			$	(61,135	)		$	479,117
(Dollars in thousands)
Held to Maturity:
U.S. Government and federal agency	$	2,978			$	-			$	(279	)		$	2,699
State and municipal		196,510				5				(31,477	)			165,038
Mortgage-backed		174,323				7				(21,963	)			152,367
Corporate		20,495				29				(1,803	)			18,721
Asset-backed securities		228				-				(5	)			223
Total	$	394,534			$	41			$	(55,527	)		$	339,048

Available for sale securities with unrealized losses as of June 30, 2025 and December 31, 2024, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows:

	June 30, 2025
	Less than 12 months								More than 12 months								Total
(Dollars in thousands)	Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
Available for Sale:	Value				Losses				Value				Losses				Value				Losses
U.S. Treasury notes and bonds	$	-			$	-			$	83,003			$	6,636			$	83,003			$	6,636
State and municipal		4,642				608				212,203				45,179				216,845				45,787
Mortgage-backed		7,814				95				139,969				17,143				147,783				17,238
Corporate		-				-				212				38				212				38
Asset-backed securities		-				-				8,963				196				8,963				196
Total temporarily impaired	$	12,456			$	703			$	444,350			$	69,192			$	456,806			$	69,895

	December 31, 2024
	Less than 12 months								More than 12 months								Total
(Dollars in thousands)	Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
Available for Sale:	Value				Losses				Value				Losses				Value				Losses
U.S. Treasury notes and bonds	$	-			$	-			$	80,502			$	9,373			$	80,502			$	9,373
State and municipal		-				-				228,236				30,579				228,236				30,579
Mortgage-backed		963				1				142,170				20,954				143,133				20,955
Corporate		-				-				212				38				212				38
Asset-backed securities		-				-				9,197				190				9,197				190
Total temporarily impaired	$	963			$	1			$	460,317			$	61,134			$	461,280			$	61,135

18

Held to maturity securities with unrealized losses as of June 30, 2025 and December 31, 2024, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows:

	June 30, 2025
	Less than 12 months								More than 12 months								Total
(Dollars in thousands)	Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
Held to Maturity:	Value				Losses				Value				Losses				Value				Losses
U.S. Government and federal agency	$	-			$	-			$	2,795			$	186			$	2,795			$	186
State and municipal		4,326				119				164,819				27,444				169,145				27,563
Mortgage-backed		5,535				41				139,440				16,889				144,975				16,930
Corporate		1,432				5				15,655				1,763				17,087				1,768
Asset-backed securities		-				-				100				1				100				1
Total temporarily impaired	$	11,293			$	165			$	322,809			$	46,283			$	334,102			$	46,448

	December 31, 2024
	Less than 12 months								More than 12 months								Total
(Dollars in thousands)	Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
Held to Maturity:	Value				Losses				Value				Losses				Value				Losses
U.S. Government and federal agency	$	-			$	-			$	2,699			$	279			$	2,699			$	279
State and municipal		5,262				630				159,558				30,847				164,820				31,477
Mortgage-backed		2,350				11				141,970				21,952				144,320				21,963
Corporate		-				-				16,591				1,803				16,591				1,803
Asset-backed securities		-				-				223				5				223				5
Total temporarily impaired	$	7,612			$	641			$	321,041			$	54,886			$	328,653			$	55,527

19

ChoiceOne evaluates all securities on a quarterly basis to determine if an ACL and corresponding impairment charge should be recorded. Consideration is given to the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of ChoiceOne to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value of amortized cost basis. ChoiceOne believes that unrealized losses on securities were temporary in nature and were caused primarily by changes in interest rates, increased credit spreads, and reduced market liquidity and were not caused by the credit status of the issuer. No ACL was recorded in the three and six months ended June 30, 2025 and June 30, 2024 on AFS securities.

The majority of unrealized losses at June 30, 2025, are related to U.S. Treasury notes and bonds, state and municipal bonds and mortgage backed securities. The U.S. Treasury notes are guaranteed by the U.S. government and 100% of the notes are rated AA or better. State and municipal bonds are backed by the taxing authority of the bond issuer or the revenues from the bond. On June 30, 2025, 85% of state and municipal bonds held are rated AA or better, 10% are A rated and 5% are not rated. Of the mortgage-backed securities held on June 30, 2025, 43% were issued by US government sponsored entities and agencies, and rated AA, 44% are AAA rated private issue and collateralized mortgage obligation, and 13% are unrated privately issued mortgage-backed securities with structured credit enhancement and collateralized mortgage obligation.

Unrealized losses have not been recognized into income because the issuers’ bonds are of high credit quality, and management does not intend to sell prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

20

Presented below is a schedule of maturities of securities as of June 30, 2025. Available for sale securities are reported at fair value and held to maturity securities are reported at amortized cost. Callable securities in the money are presumed called and matured at the callable date.

	Available for Sale Securities maturing within:
																	Fair Value
	Less than				1 Year -				5 Years -				More than				at June 30,
(Dollars in thousands)	1 Year				5 Years				10 Years				10 Years				2025
U.S. Treasury notes and bonds	$	-			$	87,749			$	-			$	-			$	87,749
State and municipal		229				24,666				22,018				169,932				216,845
Corporate		-				-				212				-				212
Asset-backed securities		-				6,541				2,422				-				8,963
Total debt securities		229				118,956				24,652				169,932				313,769
Mortgage-backed securities		2,909				93,344				50,911				18,493				165,657
Total Available for Sale	$	3,138			$	212,300			$	75,563			$	188,425			$	479,426

	Held to Maturity Securities maturing within:
																	Amortized Cost
	Less than				1 Year -				5 Years -				More than				at June 30,
(Dollars in thousands)	1 Year				5 Years				10 Years				10 Years				2025
U.S. Government and federal agency	$	-			$	2,981			$	-			$	-			$	2,981
State and municipal		3,019				37,980				80,723				76,235				197,957
Corporate		-				-				21,011				-				21,011
Asset-backed securities		101				-				-				-				101
Total debt securities		3,120				40,961				101,734				76,235				222,050
Mortgage-backed securities		3,893				92,276				72,238				-				168,407
Total Held to Maturity	$	7,013			$	133,237			$	173,972			$	76,235			$	390,457

Following is information regarding unrealized gains and losses on equity securities for the three and six months ended June 30, 2025 and 2024:

		Three Months Ended							Six Months Ended
		June 30,							June 30,
		2025				2024			2025				2024
(Dollars in thousands)
Net gains and (losses) recognized during the period		$	239			$	(71	)	$	346			$	(36	)
Less: Net gains and (losses) recognized during the period on securities sold			—				—			—				—
Unrealized gains and (losses) recognized during the reporting period on securities still held at the reporting date		$	239			$	(71	)	$	346			$	(36	)

21

NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans by type as a percentage of the portfolio were as follows:

	June 30, 2025							December 31, 2024
(Dollars in thousands)	Balance			%				Balance			%				Percent Increase (Decrease)
Agricultural	$	47,273			1.6	%		$	48,221			3.1	%			(2.0	)	%
Commercial and Industrial		351,367			12.0	%			228,256			14.8	%			53.9		%
Commercial Real Estate		1,743,541			59.7	%			901,130			58.3	%			93.5		%
Consumer		29,741			1.0	%			29,412			1.9	%			1.1		%
Construction Real Estate		21,508			0.7	%			17,042			1.1	%			26.2		%
Residential Real Estate		724,329			24.8	%			281,701			18.2	%			157.1		%
Loans to Other Financial Institutions		3,033			0.1	%			39,878			2.6	%			(92.4	)	%
Gross Loans	$	2,920,792						$	1,545,640
Allowance for credit losses		34,798			1.19	%			16,552			1.07	%
Net loans	$	2,885,994						$	1,529,088

22

Activity in the allowance for credit losses and balances in the loan portfolio were as follows:

						Commercial																				Loans to Other
(Dollars in thousands)						And								Commercial				Construction				Residential				Financial
		Agricultural				Industrial				Consumer				Real Estate				Real Estate				Real Estate				Institutions				Total
Allowance for Credit Losses Three Months Ended June 30, 2025
Beginning balance		$	220			$	5,503			$	703			$	20,727			$	90			$	7,320			$	4			$	34,567
Charge-offs			-				(10	)			(259	)			(208	)			-				(30	)			-				(507	)
Recoveries			-				4				82				-				-				3				-				89
Provision			(1	)			(257	)			247				(2,208	)			-				2,868				1				650
Ending balance		$	219			$	5,240			$	773			$	18,311			$	90			$	10,161			$	5			$	34,798
Allowance for Credit Losses Six Months Ended June 30, 2025
Beginning balance		$	90			$	2,260			$	733			$	9,460			$	59			$	3,890			$	60			$	16,552
Acquisition related allowance for credit loss (PCD)			2				2,963				-				1,791				-				168				-				4,924
Charge-offs			-				(10	)			(392	)			(208	)			-				(52	)			-				(662	)
Recoveries			-				6				142				-				-				23				-				171
Provision			127				21				289				7,268				31				6,132				(55	)			13,813
Ending balance		$	219			$	5,240			$	773			$	18,311			$	90			$	10,161			$	5			$	34,798
Individually evaluated for credit loss		$	-			$	2,920			$	-			$	637			$	2			$	57			$	-			$	3,616
Collectively evaluated for credit loss		$	219			$	2,320			$	773			$	17,673			$	88			$	10,104			$	5			$	31,182
Loans
June 30, 2025
Individually evaluated for credit loss		$	6			$	8,287			$	—			$	3,776			$	229			$	3,006			$	-			$	15,304
Collectively evaluated for credit loss			47,267				343,080				29,741				1,739,765				21,279				721,323				3,033				2,905,488
Ending loan balance		$	47,273			$	351,367			$	29,741			$	1,743,541			$	21,508			$	724,329			$	3,033			$	2,920,792

The outstanding balance and related allowance on PCD loans as of March 1, 2025 (the acquisition date) and June 30, 2025 is as follows (in thousands):

23

		As of June 30, 2025								As of March 1, 2025
		Loan Balance				ACL Balance				Loan Balance				ACL Balance
(dollars in thousands)
Agricultural		$	461			$	2			$	611			$	2
Commercial and Industrial			11,887				2,953				13,572				2,960
Commercial Real Estate			67,651				1,408				79,444				1,791
Consumer			17				-				32				0
Residential Real Estate			18,665				167				19,252				171
Total		$	98,681			$	4,530			$	112,911			$	4,924

There were no PCD loans in the prior year.

					Commercial																				Loans to Other
(Dollars in thousands)					and								Commercial				Construction				Residential				Financial
	Agricultural				Industrial				Consumer				Real Estate				Real Estate				Real Estate				Institutions				Total
Allowance for Credit Losses
December 31, 2024
Ending balance	$	90			$	2,260			$	733			$	9,460			$	59			$	3,890			$	60			$	16,552
Loans
December 31, 2024
Ending loan balance	$	48,221			$	228,256			$	29,412			$	901,130			$	17,042			$	281,701			$	39,878			$	1,545,640

					Commercial
(Dollars in thousands)					and								Commercial				Construction				Residential				Loans to Other
	Agricultural				Industrial				Consumer				Real Estate				Real Estate				Real Estate				Financial Institution				Unallocated				Total
Allowance for Credit Losses Three Months Ended June 30, 2024
Beginning balance	$	97			$	2,243			$	918			$	9,167			$	49			$	3,513			$	50			$	-			$	16,037
Charge-offs		-				-				(328	)			-				-				-				-				-				(328	)
Recoveries		-				2				166				-				-				3				-				-				171
Provision		15				(84	)			39				194				-				108				-				-				272
Ending balance	$	112			$	2,161			$	795			$	9,361			$	49			$	3,624			$	50			$	-			$	16,152
Allowance for Credit Losses Six Months Ended June 30, 2024
Beginning balance	$	94			$	2,216			$	823			$	8,820			$	58			$	3,644			$	30.00			$	-			$	15,685
Charge-offs		-				(1	)			(451	)			-				-				-				-				-				(452	)
Recoveries		-				11				226				-				-				7				-				-				244
Provision		18				(65	)			197				541				(9	)			(27	)			20				-				675
Ending balance	$	112			$	2,161			$	795			$	9,361			$	49			$	3,624			$	50			$	-			$	16,152
Individually evaluated for credit loss	$	1			$	7			$	-			$	1			$	-			$	78			$	-			$	-			$	87
Collectively evaluated for credit loss	$	111			$	2,154			$	795			$	9,360			$	49			$	3,546			$	50			$	-			$	16,065

24

The process to monitor the credit quality of ChoiceOne’s loan portfolio includes tracking (1) the risk ratings of business loans and (2) delinquent and nonperforming consumer loans. Business loans are risk rated on a scale of 1 to 9. A description of the characteristics of the ratings follows:

Risk Rating 1 through 5 or pass: These loans are considered pass credits. They exhibit acceptable credit risk and demonstrate the ability to repay the loan from normal business operations.

Risk rating 6 or special mention: Loans and other credit extensions bearing this grade are considered to be inadequately protected by the current sound worth and debt service capacity of the borrower or of any pledged collateral. These obligations, even if apparently protected by collateral value, have well-defined weaknesses related to adverse financial, managerial, economic, market, or political conditions that have clearly jeopardized repayment of principal and interest as originally intended. Furthermore, there is the possibility that ChoiceOne Bank will sustain some future loss if such weaknesses are not corrected. Clear loss potential, however, does not have to exist in any individual assets classified as substandard. Loans falling into this category should have clear action plans and timelines with benchmarks to determine which direction the relationship will move.

Risk rating 7 or substandard: Loans and other credit extensions graded “7” have all the weaknesses inherent in those graded “6”, with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. Loans in this classification should be evaluated for non-accrual status. All nonaccrual commercial and Retail loans must be at a minimum graded a risk code “7”.

Risk rating 8 or doubtful: Loans and other credit extensions bearing this grade have been determined to have the extreme probability of some loss, but because of certain important and reasonably specific factors, the amount of loss cannot be determined. Such pending factors could include merger or liquidation, additional capital injection, refinancing plans, or perfection of liens on additional collateral.

Risk rating 9 or loss: Loans in this classification are considered uncollectible and cannot be justified as a viable asset of ChoiceOne Bank. This classification does not mean the loan has absolutely no recovery value, but that it is neither practical nor desirable to defer writing off this loan even though partial recovery may be obtained in the future.

25

The following table reflects the amortized cost basis of loans as of June 30, 2025 based on year of origination (dollars in thousands):

Commercial:	2025				2024				2023				2022				2021				Prior				Term Loans Total				Revolving Loans				Grand Total
Agricultural
Pass	$	3,026			$	4,264			$	2,018			$	3,769			$	5,068			$	19,238			$	37,383			$	9,550			$	46,933
Special mention		-				-				-				-				-				161				161				-				161
Substandard		-				-				-				-				-				179				179				-				179
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	3,026			$	4,264			$	2,018			$	3,769			$	5,068			$	19,578			$	37,723			$	9,550			$	47,273
Current year-to-date gross write-offs (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Commercial and Industrial
Pass	$	25,225			$	47,641			$	22,494			$	40,894			$	14,719			$	27,556			$	178,529			$	163,693			$	342,222
Special mention		-				-				-				175				172				115				462				-				462
Substandard		-				469				4,838				49				1,525				1,802				8,683				-				8,683
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	25,225			$	48,110			$	27,332			$	41,118			$	16,416			$	29,473			$	187,674			$	163,693			$	351,367
Current year-to-date gross write-offs (1)	$	-			$	-			$	10			$	-			$	-			$	-			$	10			$	-			$	10
Commercial Real Estate
Pass	$	109,106			$	185,770			$	166,067			$	352,158			$	242,282			$	442,631			$	1,498,014			$	211,264			$	1,709,278
Special mention		-				-				214				15,579				1,572				9,501				26,866				-				26,866
Substandard		-				111				1,749				1,304				-				4,233				7,397				-				7,397
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	109,106			$	185,881			$	168,030			$	369,041			$	243,854			$	456,365			$	1,532,277			$	211,264			$	1,743,541
Current year-to-date gross write-offs (1)	$	-			$	-			$	-			$	108			$	-			$	100			$	208			$	-			$	208
Total Commercial Loans	$	137,357			$	238,255			$	197,380			$	413,928			$	265,338			$	505,416			$	1,757,674			$	384,507			$	2,142,181

26

Retail:	2025				2024				2023				2022				2021				Prior				Term Loans Total				Revolving Loans				Grand Total
Consumer
Performing	$	4,012			$	5,074			$	5,978			$	7,195			$	3,755			$	2,658			$	28,672			$	1,031			$	29,703
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				1				-				-				28				9				38				-				38
Total	$	4,012			$	5,075			$	5,978			$	7,195			$	3,783			$	2,667			$	28,710			$	1,031			$	29,741
Current year-to-date gross write-offs (1)	$	4			$	23			$	76			$	11			$	6			$	6			$	126			$	-			$	126
Construction real estate
Performing	$	252			$	1,249			$	-			$	-			$	511			$	-			$	2,012			$	19,267			$	21,279
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				-				-				-				-				-				-				229				229
Total	$	252			$	1,249			$	-			$	-			$	511			$	-			$	2,012			$	19,496			$	21,508
Current year-to-date gross write-offs (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Residential real estate
Performing	$	29,919			$	57,568			$	67,074			$	167,796			$	113,584			$	168,236			$	604,177			$	112,176			$	716,353
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				62				531				2,991				1,711				2,361				7,656				320				7,976
Total	$	29,919			$	57,630			$	67,605			$	170,787			$	115,295			$	170,597			$	611,833			$	112,496			$	724,329
Current year-to-date gross write-offs (1)	$	-			$	-			$	17			$	4			$	30			$	1			$	52			$	-			$	52
Loans to Other Financial Institutions
Performing	$	3,033			$	-			$	-			$	-			$	-			$	-			$	3,033			$	-			$	3,033
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				-				-				-				-				-				-				-				-
Total	$	3,033			$	-			$	-			$	-			$	-			$	-			$	3,033			$	-			$	3,033
Current year-to-date gross write-offs (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Total Retail Loans	$	37,216			$	63,954			$	73,583			$	177,982			$	119,589			$	173,264			$	645,588			$	133,023			$	778,611

(1) It is noted that write-offs in the tables above do not include checking account write-offs. Checking account write-offs during the first six months of 2025 were $266,000 or an annualized $532,000 compared to $607,000 during the full year 2024.

27

The following table reflects the amortized cost basis of loans as of December 31, 2024 based on year of origination (dollars in thousands):

Commercial:	2024				2023				2022				2021				2020				Prior				Term Loans Total				Revolving Loans				Grand Total
Agricultural
Pass	$	7,669			$	1,729			$	2,998			$	2,867			$	1,545			$	18,573			$	35,381			$	12,666			$	48,047
Special mention		-				-				-				-				-				174				174				-				174
Substandard		-				-				-				-				-				-				-				-				-
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	7,669			$	1,729			$	2,998			$	2,867			$	1,545			$	18,747			$	35,555			$	12,666			$	48,221
Current year-to-date gross write-offs	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Commercial and Industrial
Pass	$	40,184			$	17,481			$	30,769			$	14,659			$	6,100			$	10,110			$	119,303			$	108,656			$	227,959
Special mention		-								84				14				24				174				296				-				296
Substandard		-				-				-				-				-				1				1				-				1
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	40,184			$	17,481			$	30,853			$	14,673			$	6,124			$	10,285			$	119,600			$	108,656			$	228,256
Current year-to-date gross write-offs	$	-			$	-			$	-			$	-			$	-			$	7			$	7			$	-			$	7
Commercial Real Estate
Pass	$	150,126			$	140,105			$	120,517			$	99,381			$	69,773			$	151,908			$	731,810			$	165,046			$	896,856
Special mention		-				-				-				-				-				4,274				4,274				-				4,274
Substandard		-				-				-				-				-				-				-				-				-
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	150,126			$	140,105			$	120,517			$	99,381			$	69,773			$	156,182			$	736,084			$	165,046			$	901,130
Current year-to-date gross write-offs	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Total Commercial Loans	$	197,979			$	159,315			$	154,368			$	116,921			$	77,442			$	185,214			$	891,239			$	286,368			$	1,177,607

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Retail:	2024				2023				2022				2021				2020				Prior				Term Loans Total				Revolving Loans				Grand Total
Consumer
Performing	$	6,489			$	6,636			$	8,427			$	4,240			$	1,632			$	1,283			$	28,707			$	697			$	29,404
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				7				1				-				-				-				8				-				8
Total	$	6,489			$	6,643			$	8,428			$	4,240			$	1,632			$	1,283			$	28,715			$	697			$	29,412
Current year-to-date gross write-offs (1)	$	-			$	69			$	111			$	11			$	-			$	2			$	193			$	-			$	193
Construction real estate
Performing	$	1,436			$	451			$	-			$	522			$	-			$	-			$	2,409			$	14,404			$	16,813
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				-				-				-				-				-				-				229				229
Total	$	1,436			$	451			$	-			$	522			$	-			$	-			$	2,409			$	14,633			$	17,042
Current year-to-date gross write-offs	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Residential real estate
Performing	$	40,095			$	43,531			$	54,379			$	25,350			$	13,717			$	45,051			$	222,123			$	56,111			$	278,234
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		63				292				1,864				736				278				183				3,416				51				3,467
Total	$	40,158			$	43,823			$	56,243			$	26,086			$	13,995			$	45,234			$	225,539			$	56,162			$	281,701
Current year-to-date gross write-offs	$	-			$	23			$	-			$	1			$	-			$	6			$	30			$	-			$	30
Loans to Other Financial Institutions
Performing	$	39,878			$	-			$	-			$	-			$	-			$	-			$	39,878			$	-			$	39,878
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				-				-				-				-				-				-				-				-
Total	$	39,878			$	-			$	-			$	-			$	-			$	-			$	39,878			$	-			$	39,878
Current year-to-date gross write-offs	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Total Retail Loans	$	87,961			$	50,917			$	64,671			$	30,848			$	15,627			$	46,517			$	296,541			$	71,492			$	368,033

(1) It is noted that write-offs in the tables above do not include checking account write-offs. Checking account write-offs were $607,000 during the full year 2024.

The following tables present the amortized cost basis of the loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable and type of concession granted during the first six months of 2025 and the full year 2024.

For the period ended:	June 30, 2025
	Term Extension
					% of Total
					Class of
(Dollars in thousands)	Amortized				Financing
	Cost Basis				Receivable
Residential real estate	$	132				0	%
Total	$	132

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For the period ended:	December 31, 2024
	Term Extension
					% of Total
					Class of
(Dollars in thousands)	Amortized				Financing
	Cost Basis				Receivable
Residential real estate		121				0	%
Total	$	121

The following table presents the financial effect by type of modification made to borrowers experiencing financial difficulty and class of financing receivable during the first six months of 2025 and the full year 2024.

For the period ended:	June 30, 2025
	Term Extension
Residential real estate	Provided with new payment schedule to catch up on past due balance

For the period ended:	December 31, 2024
	Term Extension
Residential real estate	Provided with new five year payment plan based on bankruptcy

The following table presents the period-end amortized cost basis of financing receivables that had a payment default during the period and were modified in the 12 months before default to borrowers experiencing financial difficulty.

For the period ended:	June 30, 2025
(Dollars in thousands)	Term extension
Residential real estate	$	132
Total	$	132

For the period ended:	December 31, 2024
(Dollars in thousands)	Term extension
Residential real estate		121
Total	$	121

The following table presents the period-end amortized cost basis of loans that have been modified in the past 12 months to borrowers experiencing financial difficulty by payment status and class of financing receivable.

For the period ended:	June 30, 2025
(Dollars in thousands)	Current				30-89 days				Greater than 90 days				Total
Residential real estate	$	132			$	-			$	-			$	132
Total	$	132			$	-			$	-			$	132

For the period ended:	December 31, 2024
(Dollars in thousands)	Current				30-89 days				Greater than 90 days				Total
Residential real estate	$	-			$	-			$	121			$	121
Total	$	-			$	-			$	121			$	121

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Nonaccrual loans by loan category were as follows:

As of June 30, 2025
(Dollars in thousands)	Nonaccrual loans with no ACL				Total nonaccrual loans				Interest income recognized year to date on nonaccrual loans
Agricultural	$	-			$	-			$	-
Commercial and industrial		-				6,830				-
Consumer		-				38				-
Construction real estate		-				229				-
Commercial real estate		-				1,781				11
Residential real estate		962				7,976				48
Total nonaccrual loans	$	962			$	16,854			$	59
As of December 31, 2024
(Dollars in thousands)	Nonaccrual loans with no ACL				Total nonaccrual loans				Interest income recognized year to date on nonaccrual loans
Agricultural	$	-			$	-			$	-
Commercial and industrial		-				-				-
Consumer		-				8				1
Construction real estate		-				229				9
Commercial real estate		-				-				-
Residential real estate		806				3,467				71
Total nonaccrual loans	$	806			$	3,704			$	81

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An aging analysis of loans by loan category follows:

									Loans																Loans
	Loans				Loans				Past Due																90 Days
	Past Due				Past Due				Greater																Past
(Dollars in thousands)	30 to 59				60 to 89				Than 90								Loans Not				Total				Due and
	Days (1)				Days (1)				Days (1)				Total (1)				Past Due				Loans				Accruing
June 30, 2025
Agricultural	$	-			$	-			$	-			$	-			$	47,273			$	47,273			$	-
Commercial and industrial		54				-				4,958				5,012				346,355				351,367				-
Consumer		112				28				-				140				29,601				29,741				-
Commercial real estate		13,594				-				1,781				15,375				1,728,166				1,743,541				-
Construction real estate		-				774				229				1,003				20,505				21,508				-
Residential real estate		446				3,364				3,072				6,882				717,447				724,329				-
Loans to Other Financial Institutions		-				-				-				-				3,033				3,033				-
	$	14,206			$	4,166			$	10,040			$	28,412			$	2,892,380			$	2,920,792			$	-

									Loans																Loans
	Loans				Loans				Past Due																90 Days
	Past Due				Past Due				Greater																Past
(Dollars in thousands)	30 to 59				60 to 89				Than 90								Loans Not				Total				Due and
	Days (1)				Days (1)				Days (1)				Total (1)				Past Due				Loans				Accruing
December 31, 2024
Agricultural	$	-			$	-			$	-			$	-			$	48,221			$	48,221			$	-
Commercial and industrial		-				49				-				49				228,207				228,256				-
Consumer		52				87				7				146				29,266				29,412				-
Commercial real estate		23				-				-				23				901,107				901,130				-
Construction real estate		694				-				229				923				16,119				17,042				-
Residential real estate		4,866				765				1,850				7,481				274,220				281,701				-
Loans to Other Financial Institutions		-				-				-				-				39,878				39,878				-
	$	5,635			$	901			$	2,086			$	8,622			$	1,537,018			$	1,545,640			$	-

(1) Includes nonaccrual loans.

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NOTE 4 – EARNINGS PER SHARE

Earnings per share are based on the weighted average number of shares outstanding during the period. A computation of basic earnings per share and diluted earnings per share follows:

	Three Months Ended								Six Months Ended
(Dollars in thousands, except share data)	June 30,								June 30,
	2025				2024				2025				2024
Basic
Net (loss) income	$	13,534			$	6,586			$	(372	)		$	12,220
Weighted average common shares outstanding		14,999,067				7,569,241				12,849,509				7,560,960
Basic (loss) earnings per common shares	$	0.90			$	0.87			$	(0.03	)		$	1.62
Diluted
Net (loss) income	$	13,534			$	6,586			$	(372	)		$	12,220
Weighted average common shares outstanding		14,999,067				7,569,241				12,849,509				7,560,960
Plus dilutive stock options and restricted stock units		36,046				35,722				39,390				37,255
Weighted average common shares outstanding and potentially dilutive shares		15,035,113				7,604,963				12,888,899				7,598,215
Diluted (loss) earnings per common share	$	0.90			$	0.87			$	(0.03	)		$	1.61

There were no stock options that were considered anti-dilutive to earnings per share for the three and six months ended June 30, 2025. There were 6,000 and 4,500 stock options that were considered anti-dilutive to earnings per share for the three and six months ended June 30, 2024, respectively. There were 2,359 and 1,945 performance awards that were considered anti-dilutive to earnings for the three and six months ended June 30, 2025, respectively.

33

Note 5 – Financial Instruments

Financial instruments as of the dates indicated were as follows:

34

									Quoted Prices
									In Active				Significant
									Markets for				Other				Significant
									Identical				Observable				Unobservable
(Dollars in thousands)	Carrying				Estimated				Assets				Inputs				Inputs
	Amount				Fair Value				(Level 1)				(Level 2)				(Level 3)
June 30, 2025
Assets
Cash and cash equivalents	$	156,280			$	156,280			$	156,280			$	-			$	-
Equity securities at fair value		9,582				9,582				5,613				-				3,969
Securities available for sale		479,426				479,426				87,749				391,677				-
Securities held to maturity		390,457				344,054				-				327,695				16,359
Federal Home Loan Bank and Federal
Reserve Bank stock		31,109				31,109				-				31,109				-
Loans held for sale		7,639				7,868				-				7,868				-
Loans, net		2,885,994				2,826,525				-				-				2,826,525
Accrued interest receivable		14,934				14,934				-				14,934				-
Interest rate lock commitments		127				127				-				127				-
Interest rate derivative contracts		7,932				7,932				-				7,932				-
Loan swaps		1,750				1,750				-				1,750				-
Liabilities
Noninterest-bearing deposits		943,873				943,873				943,873				-				-
Interest-bearing deposits		2,542,526				2,540,908				-				2,540,908				-
Brokered deposits		106,225				106,359				-				106,359				-
Borrowings		198,428				198,734				-				198,734				-
Subordinated debentures		48,277				42,912				-				42,912				-
Accrued interest payable		3,862				3,862				-				3,862				-
Interest rate derivative contracts		-				-				-				-				-
Interest rate swaps		1,765				1,765				-				1,765				-
December 31, 2024
Assets
Cash and cash equivalents	$	96,751			$	96,751			$	96,751			$	-			$	-
Equity securities at fair value		7,782				7,782				4,838				-				2,944
Securities available for sale		479,117				479,117				80,502				398,615				-
Securities held to maturity		394,534				339,048				-				324,591				14,457
Federal Home Loan Bank and Federal
Reserve Bank stock		14,690				14,690				-				14,690				-
Loans held for sale		7,288				7,507				-				7,507				-
Loans, net		1,529,088				1,496,704				-				-				1,496,704
Accrued interest receivable		10,376				10,376				-				10,376				-
Interest rate lock commitments		95				95				-				95				-
Interest rate derivative contracts		23,649				23,649				-				23,649				-
Interest rate swaps		686				686				-				686				-
Liabilities
Noninterest-bearing deposits		524,945				524,945				524,945				-				-
Interest-bearing deposits		1,652,647				1,652,169				-				1,652,169				-
Brokered deposits		36,511				36,508				-				36,508				-
Borrowings		175,000				175,139				-				175,139				-
Subordinated debentures		35,752				32,895				-				32,895				-
Accrued interest payable		1,694				1,694				-				1,694				-
Interest rate swaps		686				686				-				686				-

35

NOTE 6 – FAIR VALUE MEASUREMENTS

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024, and the valuation techniques used by the Company to determine those fair values.

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

36

Disclosures concerning assets and liabilities measured at fair value are as follows:

Assets and Liabilities Measured at Fair Value on a Recurring Basis

	Quoted Prices
	In Active				Significant
	Markets for				Other				Significant
	Identical				Observable				Unobservable				Balance
(Dollars in thousands)	Assets				Inputs				Inputs				at Date
	(Level 1)				(Level 2)				(Level 3)				Indicated
Equity Securities Held at Fair Value - June 30, 2025
Equity securities	$	5,613			$	-			$	3,969			$	9,582
Investment Securities, Available for Sale - June 30, 2025
U.S. Treasury notes and bonds	$	87,749			$	-			$	-			$	87,749
State and municipal		-				216,845				-				216,845
Mortgage-backed		-				165,657				-				165,657
Corporate		-				212				-				212
Asset-backed securities		-				8,963				-				8,963
Total	$	87,749			$	391,677			$	-			$	479,426
Derivative Instruments - June 30, 2025
Interest rate derivative contracts - assets	$	-			$	7,932			$	-			$	7,932
Interest rate derivative contracts - liabilities	$	-			$	-			$	-			$	-
Loan Swaps - June 30, 2025
Loan swaps - assets	$	-			$	1,750			$	-			$	1,750
Loan swaps - liabilities	$	-			$	1,765			$	-			$	1,765
Equity Securities Held at Fair Value - December 31, 2024
Equity securities	$	4,838			$	-			$	2,944			$	7,782
Investment Securities, Available for Sale - December 31, 2024
U. S. Treasury notes and bonds	$	80,502			$	-			$	-			$	80,502
State and municipal		-				228,236				-				228,236
Mortgage-backed		-				160,970				-				160,970
Corporate		-				212				-				212
Asset-backed securities		-				9,197				-				9,197
Total	$	80,502			$	398,615			$	-			$	479,117
Derivative Instruments - December 31, 2024
Interest rate derivative contracts - assets	$	-			$	23,649			$	-			$	23,649
Interest rate derivative contracts - liabilities	$	-			$	-			$	-			$	-
Loan Swaps - December 31, 2024
Interest rate swaps - assets	$	-			$	686			$	-			$	686
Interest rate swaps - liabilities	$	-			$	686			$	-			$	686

Securities classified as available for sale are generally reported at fair value utilizing Level 2 inputs. ChoiceOne’s external investment advisor obtained fair value measurements from an independent pricing service that uses matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). The fair value measurements considered observable data that may include dealer quotes, market spreads, cash flows and the bonds' terms and conditions, among other things. Securities classified in Level 2 included U.S. Government and federal agency securities, state and municipal securities,

37

mortgage-backed securities, corporate bonds, and asset backed securities. The Company classified certain state and municipal securities and corporate bonds, and equity securities as Level 3. Based on the lack of observable market data, estimated fair values were based on the observable data available and reasonable unobservable market data.

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

	Six Months Ended
(Dollars in thousands)	June 30,
	2025				2024
Equity Securities Held at Fair Value
Balance, January 1	$	2,944			$	2,756
Total realized and unrealized (losses) gains included in noninterest income		255				52
Net purchases, sales, calls, and maturities		770				33
Net transfers into Level 3		-				-
Balance, June 30,	$	3,969			$	2,841
Amount of total losses for the period included in earnings attributable to the change in    unrealized gains (losses) relating to assets and liabilities still held at June 30,	$	10			$	12

Of the Level 3 assets that were held by the Company at June 30, 2025, the net unrealized gain as of June 30, 2025 was $572,000, compared to $265,000 as of June 30, 2024. The change in the net unrealized gain or loss is recognized in noninterest income or other comprehensive income in the consolidated balance sheets and income statements. Amounts recognized in noninterest income relate to changes in equity securities. A total of $770,000 and $33,000 of Level 3 securities were purchased during the six months ended 2025 and 2024, respectively.

Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 assets and liabilities. As a result, the unrealized gains and losses for these assets and liabilities presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs.

The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets are not normally measured at fair value, but can be subject to fair value adjustments in certain circumstances, such as impairment. Disclosures concerning assets measured at fair value on a non-recurring basis are as follows:

Assets Measured at Fair Value on a Non-recurring Basis

					Quoted Prices
					In Active				Significant
					Markets for				Other				Significant
	Balances at				Identical				Observable				Unobservable
(Dollars in thousands)	Dates				Assets				Inputs				Inputs
	Indicated				(Level 1)				(Level 2)				(Level 3)
Collateral Dependent Loans
June 30, 2025	$	420			$	-			$	-			$	420
December 31, 2024	$	1,887			$	-			$	-			$	1,887
Other Real Estate
June 30, 2025	$	2,442			$	-			$	-			$	2,442
December 31, 2024	$	473			$	-			$	-			$	473

Collateral dependent loans classified as Level 3 are loans for which the repayment is expected to be provided substantially through the sale or operation of the collateral when the borrower is experiencing financial difficulty. The fair value of the collateral should be adjusted for estimated costs to sell if the repayment depends on the sale of the collateral. The net carrying amount of the loan should not exceed the fair value of the collateral (less costs to sell, if applicable).

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NOTE 7 – REVENUE FROM CONTRACTS WITH CUSTOMERS

ChoiceOne has a variety of sources of revenue, which include interest and fees from customers as well as revenue from non-customers. ASC Topic 606, Revenue from Contracts with Customers, covers certain sources of revenue that are classified within noninterest income in the Consolidated Statements of Income. Sources of revenue that are included in the scope of ASC Topic 606 include service charges and fees on deposit accounts, interchange income, investment asset management income and transaction-based revenue, and other charges and fees for customer services.

Service Charges and Fees on Deposit Accounts

Revenue includes charges and fees to provide account maintenance, overdraft services, wire transfers, funds transfer, and other deposit-related services. Account maintenance fees such as monthly service charges are recognized over the period of time that the service is provided. Transaction fees such as wire transfer charges are recognized when the service is provided to the customer.

Interchange Income

Revenue includes debit card interchange and network revenues. This revenue is earned on debit card transactions that are conducted through payment networks such as MasterCard. The revenue is recorded as services are delivered and is presented net of interchange expenses.

Earnings on life insurance policies

The Company holds life insurance contracts on certain employees. Revenue is recognized from these contracts through two sources; Increase in cash surrender value and death benefits received. The cash surrender value represents the amount that would be realized upon termination of the policy prior to the death of the insured. Revenue is also recognized upon receipt of death benefits from these policies. The Company evaluates the carrying amount of life insurance assets at each reporting date to ensure it reflects the realizable value. Any proceeds received from death benefits or changes in surrender value are included in noninterest income.

Investment Commission Income

Revenue includes fees from the investment management advisory services and revenue is recognized when services are rendered. Revenue also includes commissions received from the placement of brokerage transactions for purchase or sale of stocks or other investments. Commission income is recognized when the transaction has been completed.

Trust Fee Income

Revenue includes fees from the management of trust assets and from other related advisory services. Revenue is recognized when services are rendered.

Following is noninterest income separated by revenue within the scope of ASC 606 and revenue within the scope of other GAAP topics:

	Three Months Ended								Six Months Ended
	June 30,								June 30,
(Dollars in thousands)	2025				2024				2025				2024
Customer service charges	$	1,401			$	1,146			$	2,582			$	2,289
Credit and debit card fees		2,083				1,516				3,592				2,778
Insurance and investment commissions		540				190				835				388
Trust fee income		596				220				1,102				433
Other charges and fees for customer services		198				98				359				247
Noninterest income from contracts with customers within the scope of ASC 606		4,818				3,170				8,470				6,135
Noninterest income within the scope of other GAAP topics		1,685				913				2,955				1,999
Total noninterest income	$	6,503			$	4,083			$	11,425			$	8,134

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NOTE 8 – DERIVATIVE AND HEDGING ACTIVITIES

ChoiceOne is exposed to certain risks relating to its ongoing business operations. ChoiceOne utilizes interest rate derivatives as part of its asset liability management strategy to help manage its interest rate risk position. Derivative instruments represent contracts between parties that result in one party delivering cash to the other party based on a notional amount and an underlying term (such as a rate, security price or price index) as specified in the contract. The amount of cash delivered from one party to the other is determined based on the interaction of the notional amount of the contract with the underlying term. Derivatives are also implicit in certain contracts and commitments.

ChoiceOne recognizes derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. ChoiceOne records derivative assets and derivative liabilities on the balance sheet within other assets and other liabilities, respectively. Changes in the fair value of derivative financial instruments are either recognized in income or in shareholders’ equity as a component of accumulated other comprehensive income or loss depending on whether the derivative financial instrument qualifies for hedge accounting and, if so, whether it qualifies as a fair value hedge or cash flow hedge.

Interest rate swaps

ChoiceOne uses interest rate swaps as part of its interest rate risk management strategy to add stability to net interest income and to manage its exposure to interest rate movements. Interest rate swaps designated as hedges involve the receipt of variable-rate amounts from a counterparty in exchange for ChoiceOne making fixed-rate payments or the receipt of fixed-rate amounts from a counterparty in exchange for ChoiceOne making variable rate payments, over the life of the agreements without the exchange of the underlying notional amount.

In the second quarter of 2022, ChoiceOne entered into two pay-floating/receive-fixed interest rate swaps (the “Pay Floating Swap Agreements”) for a total notional amount of $200.0 million that were designated as cash flow hedges. These derivatives hedge the variable cash flows of specifically identified available-for-sale securities, cash and loans. The Pay Floating Swap Agreements were determined to be highly effective during the periods presented and therefore no amount of ineffectiveness has been included in net income. The Pay Floating Swap Agreements pay a coupon rate equal to SOFR while receiving a fixed coupon rate of 2.41%. In March 2023, ChoiceOne terminated all Pay Floating Swap Agreements for a cash payment of $4.2 million. The loss was amortized into interest income over 13 months, which was the remaining period of the swap agreements. During the first quarter of 2024, $205,000 of the loss was amortized, and as of April 2024, the loss was fully amortized.

In the second quarter of 2022, ChoiceOne entered into one forward starting pay-fixed/receive-floating interest rate swap (the “Pay Fixed Swap Agreement”) for a notional amount of $200.0 million that was designated as a cash flow hedge. This derivative hedges the risk of variability in cash flows attributable to forecasted payments on future deposits or floating rate borrowings indexed to the SOFR Rate. The Pay Fixed Swap Agreement is two years forward starting with an eight-year term set to expire in 2032. The Pay Fixed Swap Agreement will pay a fixed coupon rate of 2.75% while receiving the SOFR Rate, which began in April 2024. On February 6, 2025, ChoiceOne sold $50 million of pay fixed receive floating interest rate swaps. The sold swaps had a fixed rate of 2.75% and a floating rate that will be determined periodically over the life of the swaps. This transaction resulted in a gain of approximately $3.6 million, which will be recognized through interest expense over the 7 years remaining on the life of the swap. Net settlements on the Pay Fixed Swap Agreement were $598,000 and $1.3 million for the three and six months ended June 30, 2025 compared to $974,000 for the three and six months ended June 30, 2024, which reduced interest expense. Interest expense was further reduced by $124,000 and $197,000 during the three and six months ended June 30, 2025 from accretion of the gain on the $50 million pay fixed receive floating interest rate swap sale.

In the fourth quarter of 2022, ChoiceOne entered into four pay-fixed/receive-floating interest rate swaps for a total notional amount of $201.0 million that were designated as fair value hedges. These derivatives hedge the risk of changes in fair value of certain available for sale securities for changes in the SOFR benchmark interest rate component of the fixed rate bonds. All four of these hedges were effective immediately on December 22, 2022. Of the total notional value, $101.9 million has a ten-year term set to expire in 2032, with the benchmark SOFR interest rate risk component of the fixed rate bonds equal to 3.390%. Of the total notional value, $50.0 million has a nine-year term set to expire in 2031, with the benchmark SOFR interest rate risk component of the fixed rate bonds equal to 3.4015%. The remaining notional value of $49.1 million has a nine-year term set to expire in 2031, with the benchmark SOFR interest rate risk component of the fixed rate bond equal to 3.4030%. ChoiceOne adopted ASC 2022-01, as of December 20, 2022, to use the portfolio layer method. The fair value basis adjustment associated with available-for-sale fixed rate bonds initially results in an adjustment to AOCI. For available-for-sale securities subject to fair value hedge accounting, the changes in the fair value of the fixed rate bonds related to the hedged risk (the benchmark interest rate component and the partial term) are then reclassed from AOCI to current earnings offsetting the fair value measurement change of the interest rate swap, which is also recorded in current earnings. Net cash settlements are received/paid semi-annually, with the first starting in March 2023, and are included in interest

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income. These settlements amounted to $472,000 and $978,000 for the three and six months ended June 30, 2025 compared to $988,000 and $2.0 million during the same periods in 2024.

On June 30, 2025, ChoiceOne held pay-fixed interest rate swaps with a total notional value of $351.0 million, a weighted average coupon of 3.12%, a fair value of $7.9 million and an average remaining contract length of 6.9 years. On December 31, 2024, ChoiceOne held pay-fixed interest rate swaps with a total notional value of $401.0 million, a weighted average coupon of 3.07%, a fair value of $23.6 million and an average remaining contract length of 7.4 years.

These derivative instruments change in value as rates rise or fall inverse to the change in unrealized losses of the available for sale portfolio due to rates. Income from the effect of swaps amounted to $1.3 million and $2.6 million for the three and six months ended June 30, 2025 compared to $1.8 million for the three and six months ended June 30, 2024, which were included in interest income and interest expense.

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The table below presents the fair value of derivative financial instruments as well as the classification within the consolidated statements of financial condition:

	June 30, 2025					December 31, 2024
(Dollars in thousands)	Balance Sheet Location	Fair Value				Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Interest rate contracts	Other Assets	$	7,932			Other Assets	$	23,649
Interest rate contracts	Other Liabilities	$	-			Other Liabilities	$	-

The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of operations for the periods presented:

	Location and Amount of Gain or (Loss)														Location and Amount of Gain or (Loss)
	Recognized in Income on Fair Value and Cash Flow Hedging Relationships														Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Three months ended June 30, 2025							Three months ended June 30, 2024							Six months ended June 30, 2025							Six months ended June 30, 2024
(Dollars in thousands)	Interest Income			Interest Expense				Interest Income			Interest Expense				Interest Income			Interest Expense				Interest Income			Interest Expense
Total amounts of income and expense line items presented in the consolidated statements of income in which the effects of fair value or cash flow hedges are recorded	$	536		$	723			$	800		$	974			$	1,086		$	1,473			$	858		$	974
Gain or (loss) on fair value hedging relationships:
Interest rate contracts:
Hedged items	$	2,118		$	-			$	(1,664	)	$	-			$	6,696		$	-			$	(6,986	)	$	-
Derivatives designated as hedging instruments	$	(2,054	)	$	-			$	1,680		$	-			$	(6,588	)	$	-			$	6,945		$	-
Amount excluded from effectiveness testing recognized in earnings based on amortization approach	$	-		$	-			$	-		$	-			$	-		$	-			$	-		$	-
Gain or (loss) on cash flow hedging relationships:
Interest rate contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	$	-		$	124			$	(205	)	$	-			$	-		$	211			$	(1,092	)	$	-
Amount excluded from effectiveness testing recognized in earnings based on amortization approach	$	-		$	-			$	-		$	-			$	-		$	-			$	-		$	-

The table below presents the cumulative basis adjustments on hedged items designated as fair value hedges and the related amortized cost of those items as of the periods presented:

				June 30, 2025
				Cumulative amount of Fair
(Dollars in thousands)				Value Hedging Adjustment
Line Item in the Statement of				included in the carrying
Financial Position in which the	Amortized cost of the			amount of the Hedged
Hedged Item is included	Hedged Assets/(Liabilities)			Assets/(Liabilities)
Securities available for sale	$	218,448		$	(905	)

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Back to Back Loan Swaps

Derivatives not designated as hedges are not speculative and result from a service provided to certain commercial loan borrowers. ChoiceOne executes interest rate swaps with commercial banking customers desiring longer-term fixed rate loans, while simultaneously entering into interest rate swaps with a correspondent bank to offset the impact of the interest rate swaps with the commercial banking customers. This is known as a back to back loan swap agreement. The net result is the desired floating rate loan and a minimization of the risk exposure of the interest rate swap transactions. Under this arrangement the Bank has freestanding interest rate swaps, each of which is carried at fair value. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the commercial banking customer interest rate swaps and the offsetting interest rate swaps with the correspondent bank are recognized directly to earnings. As the terms mirror each other, there is no income statement impact to the Bank.

The table below presents the notional and fair value of these derivative instruments as of June 30, 2025 and December 31, 2024:

	June 30, 2025
(Dollars in thousands)	Notional Amount			Balance Sheet Location	Fair Value
Derivative assets
Interest rate swaps	$	85,311		Other Assets	$	1,750
Derivative liabilities
Interest rate swaps	$	85,311		Other Liabilities	$	1,765
	December 31, 2024
(Dollars in thousands)	Notional Amount			Balance Sheet Location	Fair Value
Derivative assets
Interest rate swaps	$	56,526		Other Assets	$	686
Derivative liabilities
Interest rate swaps	$	56,526		Other Liabilities	$	686

The fair value of interest rate swaps in a net liability position, which includes accrued interest was $1.8 million and $686,000 as of June 30, 2025 and December 31, 2024, respectively. ChoiceOne has a master netting agreement with the correspondent bank and has the right to offset; however, ChoiceOne has elected to present the assets and liabilities gross. ChoiceOne is required to pledge collateral to the correspondent bank equal to or in excess of the net liability position. ChoiceOne's derivative liability with the correspondent banks was $1.8 million and $686,000 at June 30, 2025 and December 31, 2024, respectively. Cash pledged as collateral to the correspondent bank was $1.9 million and $0 at June 30, 2025 and December 31, 2024, respectively.

Interest rate swaps entered into with commercial loan customers had notional amounts aggregating $85.3 million as of June 30, 2025 and $56.5 million at December 31, 2024. Associated credit exposure is generally mitigated by securing the interest rate swaps with the underlying collateral of the loan instrument that has been hedged.

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NOTE 9 – Borrowings

The following represents the contractual maturities of Federal Home Loan Bank Advances:

(Dollars in thousands)		June 30, 2025				December 31, 2024
Maturity of January 2025 with fixed interest rate of 4.48%		$	-			$	135,000
Maturity of July 2025 with fixed interest rate of 4.88%			20,000				20,000
Maturity of July 2025 with fixed interest rate of 4.45%			115,000
Maturity of December 2025 with fixed interest rate of 4.11%			10,000
Maturity of January 2026 with fixed interest rate of 4.35%			10,000				10,000
Maturity of December 2026 with fixed interest rate of 3.88%			10,000
Maturity of December 2026 with fixed interest rate of 4.20%			10,000				10,000
Maturity of December 2027 with fixed interest rate of 3.76%			20,000
Total contractual advances outstanding at period end		$	195,000			$	175,000

Advances from the FHLB were secured by residential real estate loans with a carrying value of approximately $606.9 million at June 30, 2025. Based on this collateral, the Bank was eligible to borrow an additional $213.4 million at June 30, 2025. Advances from the FHLB were secured by residential real estate loans with a carrying value of approximately $204.4 million and securities with a carrying value of approximately $265.5 million at December 31, 2024.

Advances from the Federal Reserve Bank were secured by securities with a carrying value of approximately $344.1 million and loans with a carrying value of approximately $869.4 million at June 30, 2025. Based on this collateral, the Bank was eligible to borrow an additional $981.6 million at June 30, 2025. As of June 30, 2025, ChoiceOne had no borrowings from the Federal Reserve Bank. As of December 31, 2024, ChoiceOne had no borrowings from the Federal Reserve Bank, and had securities pledged with a carrying value of approximately $349.9 million and loans pledged with a carrying value of approximately $460.6 million.

In June 2021, ChoiceOne obtained a $20 million line of credit with an annual renewal. The line carries a floating rate of prime rate with a floor of 3.25% and current rate of 7.5% at June 30, 2025. The credit agreement includes certain financial covenants, including minimum capital ratios, asset quality ratios, and the requirements of achieving certain profitability thresholds. ChoiceOne was in compliance with all covenants as of June 30, 2025. The line of credit balance was $3.7 million at June 30, 2025.

ChoiceOne acquired trust preferred securities in the acquisition of Fentura. Fentura Capital Trust I sold 12,000 Cumulative Preferred Securities (“trust preferred securities”) at $1,000 per security in a December 2003 offering. The proceeds from the sale of the trust preferred securities were used by the Fentura Capital Trust I to purchase an equivalent amount of subordinated debentures from Fentura. The trust preferred securities and subordinated debentures carry a floating rate of 3.00% over the 3-month LIBOR and the rate was 7.58% at June 30, 2025. The stated maturity is December 15, 2033. Total trust preferred securities at June 30, 2025 were $10.8 million consisting of $12.0 million in trust preferred securities less $1.2 million in merger fair value adjustments, which is being amortized over the next 8 years. The trust preferred securities are redeemable at par value on any interest payment date and are, in effect, guaranteed by ChoiceOne. Interest on the subordinated debentures is payable quarterly on March 15, June 15, September 15 and December 15. ChoiceOne is not considered the primary beneficiary of the Fentura Capital Trust I, and the Fentura Capital Trust I is not consolidated in the consolidated financial statements. Rather, the subordinated debentures are shown as a liability, and the interest expense is recorded in the consolidated statement of income.

The Fentura Capital Trust II sold 2,000 Cumulative Preferred Securities (“trust preferred securities”) at $1,000 per security in an August 2005 offering. The proceeds from the sale of the trust preferred securities were used by the Fentura Capital Trust II to purchase an equivalent amount of subordinated debentures from Fentura. The trust preferred securities and subordinated debentures carry a floating rate of 1.86% over the 3-month LIBOR and the rate was 6.19% at June 30, 2025. The stated maturity is November 23, 2035. Total trust preferred securities at June 30, 2025 were $1.6 million consisting of $2.0 million in trust preferred securities less $410,000 in merger fair value adjustments, which is being amortized over the next 10 years. The trust preferred securities are redeemable at par value on any interest payment date and are, in effect, guaranteed by ChoiceOne. Interest on the subordinated debentures is payable quarterly on February 23, May 23, August 23 and November 23. ChoiceOne is not considered the primary beneficiary of the Fentura Capital Trust II, and the Fentura Capital Trust II is not consolidated in the consolidated financial statements. Rather, the subordinated debentures are shown as a liability, and the interest expense is recorded in the consolidated statement of income.

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Note 10 – Segment Reporting

Segment Reporting

ChoiceOne operates in one reportable segment, which is community banking. ChoiceOne provides a full range of financial services to individual and business customers through its network of branches and ATMs. ChoiceOne’s products and services include deposit accounts, loans, mortgage banking, and other financial services.

At ChoiceOne, the Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM evaluates key metrics, such as consolidated net income and its major components, to develop strategies and allocate resources effectively. This analysis involves receiving comprehensive financial information on a consolidated basis, which includes actual and budgeted data, credit quality metrics, net income, earnings per share, loan originations, deposit growth, total non-interest income, and non-interest expense.

Entity-Wide Disclosures

Products and Services: ChoiceOne's revenues are derived from a variety of financial products and services, including interest income from loans and investments, fees from deposit accounts, and income from mortgage banking activities.

Geographic Areas: ChoiceOne operates primarily in the state of Michigan, with a significant portion of its revenues generated from customers located in Michigan. ChoiceOne does not have any operations outside of the United States.

Major Customers: ChoiceOne does not have any single customer that accounts for 10% or more of its total revenues.

Reconciliations: The following table reconciles ChoiceOne's total revenues, profit or loss, and assets to the consolidated financial statements:

		Six months ended June 30,
(Dollars in thousands)		2025				2024
Total Revenues		$	105,309			$	66,510
Net (loss) Income		$	(372	)		$	12,220
Total Assets		$	4,310,252			$	2,670,699

NOTE 11 – BUSINESS COMBINATION

On March 1, 2025, ChoiceOne completed the Merger, in an all stock transaction, of Fentura, the former parent company of The State Bank, with and into ChoiceOne, with ChoiceOne surviving the Merger. The primary reason for the Merger was to expand ChoiceOne's market presence and enhance its financial strength by integrating Fentura's substantial customer base. On March 14, 2025, ChoiceOne Bank completed the consolidation of The State Bank with and into ChoiceOne Bank, with ChoiceOne Bank surviving the consolidation. Fentura had 20 branch offices and one loan production office as of the date of the Merger. Total assets acquired in the Merger were approximately $1.8 billion, including total loans of approximately $1.4 billion. Total deposits acquired in the Merger, the majority of which were core deposits, totaled approximately $1.4 billion. The impact of the Merger has been included in ChoiceOne’s results of operations since March 1, 2025. As consideration in the Merger, ChoiceOne issued 6,070,836 shares of ChoiceOne common stock with an approximate total value of $193.0 million. Transaction costs incurred after the merger date were primarily in salaries and employee benefits and legal and consulting in the Consolidated Statements of Operations, as well as a $12.0 million provision for credit losses. The initial accounting for the business combination has been determined provisionally for the fair value of certain assets and liabilities, including loans, core deposit intangible, and deferred taxes. Management expects to finalize calculations supporting the fair value of these assets and liabilities during the measurement period.

The table below presents the allocation of purchase price for the Merger with Fentura (dollars in thousands):

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Purchase Price
Consideration	$	192,992
Net assets acquired:
Cash and cash equivalents		173,082
Securities available for sale		90,696
Federal Home Loan Bank and Federal Reserve Bank stock		9,179
Originated loans		1,376,721
Premises and equipment		16,664
Other real estate owned		1,735
Intangible assets		34,737
Other assets		48,815
Total assets		1,751,629
Non-interest bearing deposits		404,497
Interest bearing deposits		1,027,384
Total deposits		1,431,881
Borrowing		169,786
Subordinated debentures		12,344
Other liabilities		11,410
Total liabilities		1,625,421
Net assets acquired		126,208
Goodwill	$	66,784

The following pro forma presentation of net income (loss) for the three- and six-month periods ended June 30, 2025, gives effect to completion of the Merger as if it had occurred on January 1, 2024. This pro forma presentation excludes the impact of after-tax merger-related expenses totaling $132,000 and $13.9 million for the three- and six-month periods ended June 30, 2025, respectively, as well as a non-recurring provision for credit losses on acquired loans of $9.5 million and includes these expenses for the six month period ended June 30, 2024.

Additional adjustments include estimated accretion of fair value marks on acquired loans, which increased net interest income by $1.6 million in 2025 and by $2.4 million and $4.8 million for the three- and six-month periods ended June 30, 2024, respectively. Net income (loss) was further adjusted to reflect the after-tax impact of incremental interest income and intangible amortization, resulting in after-tax adjustments of $433,000 in 2025 and $649,000 and $1.3 million for the three- and six-month periods ended June 30, 2024, respectively.

	Three Months Ended							Six Months Ended
	June 30,							June 30,
(Dollars in thousands)	2025			2024				2025			2024
Net interest income plus other income	$	42,825		$	39,005			$	85,391		$	76,511
Net income (loss)	$	13,666		$	9,083			$	24,160		$	(5,059	)

The pro forma information is theoretical in nature and not necessarily indicative of future consolidated results of operations of the Company or the consolidated results of operations which would have resulted had ChoiceOne acquired Fentura during the periods presented.

ChoiceOne has determined that it is impractical to report the amounts of revenue and earnings of legacy Fentura since the Merger date due to the integration of operations shortly after the merger date. Accordingly, reliable and separate complete revenue and earnings information is no longer available. In addition, such amounts would require significant estimates related to the proper allocation of Merger cost savings that cannot be objectively made.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion is designed to provide a review of the consolidated financial condition and results of operations of ChoiceOne Financial Services, Inc. (“ChoiceOne”) and its wholly-owned subsidiaries. This discussion should be read in conjunction with the interim consolidated financial statements and related notes.

FORWARD-LOOKING STATEMENTS

This discussion and other sections of this quarterly report contain forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and ChoiceOne. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “may,” “could,” “look forward,” “continue,” “future,” “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. Management’s determination of the provision and allowance for credit losses, the carrying value of goodwill, loan servicing rights, other real estate owned, and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) and management’s assumptions concerning pension and other post-retirement benefit plans involve judgments that are inherently forward-looking. All of the information concerning interest rate sensitivity is forward-looking. All statements with references to future time periods are forward-looking. These statements are not guarantees of future performance and 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 undertakes no 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 discussed in Item 1A of ChoiceOne’s Annual Report on Form 10-K for the year ended December 31, 2024. These are representative of the risk factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

NON-GAAP FINANCIAL MEASURES

In addition to results presented in accordance with GAAP, this report 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 Form 10-Q
under the heading non-GAAP reconciliation.

RECENT EVENTS

On July 26, 2024, ChoiceOne completed an underwritten public offering of 1,380,000 shares of its common stock at a price to the public of $25.00 per share (the “Common Stock Offering”). The aggregate gross proceeds of the Common Stock Offering were approximately $34.5 million before deducting underwriting discounts and estimated offering expenses. The proceeds from the Common Stock Offering will qualify as tangible common equity and Tier 1 common equity.

On March 1, 2025, ChoiceOne completed the merger (the “Merger”) of Fentura Financial, Inc. (“Fentura”), the former parent company of The State Bank, with and into ChoiceOne with ChoiceOne surviving the Merger. On March 14, 2025, ChoiceOne Bank completed the consolidation of The State Bank with and into ChoiceOne Bank with ChoiceOne Bank surviving the consolidation. Following the Merger, ChoiceOne has approximately $4.3 billion in consolidated total assets and 56 offices in Western, Central and Southeastern Michigan.

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RESULTS OF OPERATIONS

ChoiceOne reported net income of $13,534,000 and a net loss of $372,000 for the three and six months ended June 30, 2025, compared to net income of $6,586,000 and $12,220,000 for the same periods in the prior year, respectively. Net income excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes was $13,666,000 and $22,976,000 for the three and six months ended June 30, 2025, respectively. Diluted earnings per share was $0.90 for the three months ended June 30, 2025 and diluted loss per share was $0.03 per share for the six months ended June 30, 2025, compared to diluted earnings per share of $0.87 and $1.61 in the same periods in the prior year. Diluted earnings per share excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes, were $0.91 and $1.78 for the three and six months ended June 30, 2025, respectively.

A reconciliation for non-GAAP adjusted net income and adjusted earnings per share to GAAP net income and earnings (loss) per share follows:

		Three Months Ended								Six months Ended
		June 30,								June 30,
		2025				2024				2025				2024
(In Thousands, Except Per Share Data)
Net (loss) income		$	13,534			$	6,586			$	(372	)		$	12,220
Merger related expenses net of tax			132				-				13,885				-
Merger related provision for credit losses, net of tax (1)			-				-				9,463				-
Adjusted net income (Non-GAAP)		$	13,666			$	6,586			$	22,976			$	12,220
Weighted average number of shares			14,999,067				7,569,241				12,849,509				7,560,960
Diluted average shares outstanding			15,035,113				7,604,963				12,888,899				7,598,215
Basic earnings (loss) per share		$	0.90			$	0.87				(0.03	)			1.62
Diluted earnings (loss) per share		$	0.90			$	0.87				(0.03	)			1.61
Adjusted basic earnings per share (Non-GAAP)		$	0.91			$	0.87			$	1.79			$	1.62
Adjusted diluted earnings per share (Non-GAAP)		$	0.91			$	0.87			$	1.78			$	1.61

(1) Merger related provision for credit losses represents the calculated credit loss on Non-PCD loans acquired during the Merger on March 1, 2025.

As of June 30, 2025, total assets were $4.3 billion, an increase of $1.7 billion compared to June 30, 2024. The growth is primarily attributed to the Merger. This growth was offset by a $33.5 million reduction in loans to other financial institutions and a $14.5 million reduction in securities on June 30, 2025 compared to June 30, 2024. Loans to other financial institutions consist of a warehouse line of credit used to facilitate mortgage loan originations, with interest rates that fluctuate in line with the national mortgage market. This decline is attributed to ChoiceOne's strategic shift towards a higher percentage of internally driven originations. The reduction in securities occurred as ChoiceOne chose to restructure much of the acquired securities portfolio purchased in the Merger in order to reduce high cost wholesale funding. ChoiceOne has actively managed its balance sheet to support organic loan growth with a loan to deposit ratio of 81.5% at June 30, 2025.

Core loans, which exclude held for sale loans and loans to other financial institutions, declined by $4.8 million or less than 1% on an annualized basis during the second quarter of 2025 and grew organically by $140.1 million or 10.0% during the twelve months ended June 30, 2025. Core loans grew by $1.4 billion due to the Merger on March 1, 2025. Loan interest income increased $24.6 million in the second quarter of 2025 compared to the same period in 2024. Interest income for the three months ended June 30, 2025 includes $3.5 million of interest income accretion due to loans purchased. Of this amount, $2.4 million was calculated using the effective interest rate method of amortization, while the remaining $1.1 million resulted from accretion through unexpected payoffs and paydowns of loans with an associated fair value mark. Estimated accretion income from purchased loans for the remainder of 2025 using the effective interest method of amortization is $4.1 million; however, actual results will be dependent on prepayment speeds and other factors.

ChoiceOne uses interest rate swaps to manage interest rate exposure to certain fixed rate assets and variable rate liabilities. On February 6, 2025, ChoiceOne sold $50.0 million notional value of pay fixed receive floating interest rate swaps. The sold swaps had a fixed rate of 2.75% and a floating rate that will be determined periodically over the life of the swaps. This transaction resulted in a gain of approximately $3.6 million, which will be recognized through interest expense over the 7 years remaining on the life of the swap. On June 30, 2025, ChoiceOne held pay-fixed interest rate swaps with a total notional value of $351.0 million, a weighted average coupon of 3.12%, a fair value of $7.9 million and an average remaining contract length of 6.9 years. These derivative instruments change in

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value as rates rise or fall inverse to the change in unrealized losses of the available for sale portfolio due to rates. Income from the effect of swaps amounted to $1.3 million and $2.6 million, respectively, for the three and six months ended June 30, 2025 compared to $1.8 million for both the three and six months ended June 30, 2024, which were included in interest income and interest expense. In addition to the pay-fixed interest rate swaps, ChoiceOne also employs back-to-back swaps on select commercial loans, with the impact reflected in interest income.

ChoiceOne's annualized cost of deposits to average total deposits has increased by 9 basis points from June 30, 2024 to June 30, 2025, as higher cost deposits were acquired in the Merger. The increase was slightly offset by the decline in the cost of CD's during the same time period. ChoiceOne has been able to mitigate the increase in the annualized cost of deposits to average total deposits by paying down borrowings in order to decrease the cost of funds to average total deposits to an annualized 1.84% in the second quarter of 2025, down from 1.92% in the second quarter of 2024. If rates continue to decline, we anticipate further reductions in deposit costs, although these will be tempered by decreased cash flows from pay-fixed interest rate swaps. Interest expense on borrowings for the three months ended June 30, 2025, declined by $536,000 compared to the same period in the prior year. As of June 30, 2025, the total borrowed balance at the FHLB was $195.0 million at a weighted average fixed rate of 4.36%, with $155.0 million due within 12 months.

The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.19% on June 30, 2025 compared to 1.07% on December 31, 2024. Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.06% and nonperforming loans to total loans (excluding loans held for sale) of 0.66% as of June 30, 2025. Notably, 0.41% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to loans purchased with credit deterioration acquired through the Merger.

The annualized return on average assets and annualized return on average shareholders’ equity was 1.26% and 12.66%, respectively, for the second quarter of 2025, compared to an annualized 0.99% and an annualized 12.50%, respectively, for the same period in 2024. The annualized loss on average assets and annualized loss on average shareholders’ equity was (0.02)% and (0.21)%, respectively, for the first six months of 2025, compared to a return of 0.93% and 11.91%, respectively, for the same period in 2024.

Dividends

Cash dividends of $4.2 million or $0.28 per share were declared in the second quarter of 2025, compared to $2.0 million or $0.27 per share in the second quarter of 2024. Cash dividends declared in the first six months of 2025 were $8.4 million or $0.56 per share, compared to $4.1 million or $0.54 per share in the same period during the prior year. The cash dividend payout percentage was 31.1% for the second quarter of 2025, compared to 31.0% in the same period in the prior year.

Interest Income and Expense

Tables 1 and 2 on the following pages provide information regarding interest income and expense for the three and six months ended June 30, 2025 and 2024. Table 1 documents ChoiceOne’s average balances and interest income and expense, as well as the average rates earned or paid on assets and liabilities. Table 2 documents the effect on interest income and expense of changes in volume (average balance) and interest rates. These tables are referred to in the discussion of interest income, interest expense and net interest income.

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Table 1 – Average Balances and Tax-Equivalent Interest Rates

	Three Months Ended June 30,
	2025												2024
(Dollars in thousands)	Average												Average
	Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Loans (1)(3)(4)(5)	$	2,936,168			$	46,551				6.36		%	$	1,435,966			$	21,981				6.16		%
Taxable securities (2)		695,546				5,264				3.04				696,023				5,471				3.16
Nontaxable securities (1)		289,061				1,764				2.45				290,258				1,785				2.47
Other		63,416				735				4.65				80,280				1,092				5.47
Interest-earning assets		3,984,191				54,314				5.47				2,502,527				30,329				4.87
Noninterest-earning assets		314,322												145,189
Total assets	$	4,298,513											$	2,647,716
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	1,332,318			$	6,163				1.86		%	$	876,344			$	2,921				1.34		%
Savings deposits		595,362				1,003				0.68				333,056				649				0.78
Certificates of deposit		646,247				6,353				3.94				391,620				4,331				4.45
Brokered deposit		120,720				1,321				4.39				34,218				424				4.98
Borrowings		169,257				1,945				4.61				210,000				2,480				4.75
Subordinated debentures		48,971				689				5.65				35,596				412				4.65
Other		11,763				129				4.39				26,426				356				5.41
Interest-bearing liabilities		2,924,638				17,603				2.41				1,907,260				11,573				2.44
Demand deposits		915,637												516,308
Other noninterest-bearing liabilities		30,695												13,406
Total liabilities		3,870,970												2,436,974
Shareholders' equity		427,543												210,742
Total liabilities and shareholders' equity	$	4,298,513											$	2,647,716
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	36,711											$	18,756
Net interest margin (tax-equivalent basis) (Non-GAAP) (1)										3.70		%										3.01		%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	36,711											$	18,756
Adjustment for taxable equivalent interest						(389	)											(385	)
Net interest income (GAAP)					$	36,322											$	18,371
Net interest margin (GAAP)										3.66		%										2.95		%

(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 loans to other financial institutions and loans held for sale.

(4)Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $16.8 million and $1.9 million in the second quarter of 2025 and 2024, respectively.

(5)Interest on loans included net origination fees and accretion income. Accretion income was $3.5 million and $279,000 in the second quarter of 2025 and 2024, respectively.

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	Six Months Ended June 30,
	2025												2024
(Dollars in thousands)	Average												Average
	Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Loans (1)(3)(4)(5)	$	2,480,437			$	79,217				6.44		%	$	1,424,266			$	42,788				6.04		%
Taxable securities (2)		692,710				9,994				2.91				703,266				10,819				3.09
Nontaxable securities (1)		288,970				3,547				2.48				290,944				3,573				2.47
Other		89,108				1,914				4.33				72,172				1,978				5.51
Interest-earning assets		3,551,225				94,672				5.38				2,490,648				59,158				4.78
Noninterest-earning assets		260,529												143,734
Total assets	$	3,811,754											$	2,634,382
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	1,222,719			$	10,584				1.75		%	$	879,858			$	6,498				1.49		%
Savings deposits		513,730				1,885				0.74				335,776				1,290				0.77
Certificates of deposit		567,286				11,302				4.02				384,630				8,446				4.42
Brokered deposit		83,344				1,784				4.32				34,463				868				5.06
Borrowings		181,542				4,143				4.60				212,418				5,004				4.74
Subordinated debentures		44,446				1,200				5.44				35,566				824				4.66
Other		16,134				352				4.40				22,413				601				5.40
Interest-bearing liabilities		2,629,201				31,251				2.40				1,905,124				23,531				2.48
Demand deposits		784,261												511,241
Other noninterest-bearing liabilities		42,090												12,743
Total liabilities		3,455,552												2,429,108
Shareholders' equity		356,202												205,274
Total liabilities and shareholders' equity	$	3,811,754											$	2,634,382
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	63,421											$	35,627
Net interest margin (tax-equivalent basis) (Non-GAAP) (1)										3.60		%										2.88		%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	63,421											$	35,627
Adjustment for taxable equivalent interest						(788	)											(782	)
Net interest income (GAAP)					$	62,633											$	34,845
Net interest margin (GAAP)										3.56		%										2.81		%

(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 loans to other financial institutions and loans held for sale.

(4)Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $12.4 million and $1.8 million in the six months ended June 30, 2025 and 2024, respectively.

(5)Interest on loans included net origination fees and accretion income. Accretion income was $6.4 million and $669,000 in the six months ended June 30, 2025 and 2024, respectively.

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Table 2 – Changes in Tax-Equivalent Net Interest Income

	Three Months Ended June 30,
(Dollars in thousands)	2025 Over 2024
	Total				Volume				Rate
Increase (decrease) in interest income (1)
Loans (2)	$	24,570			$	23,833			$	737
Taxable securities		(207	)			(4	)			(203	)
Nontaxable securities (2)		(21	)			(7	)			(14	)
Other		(357	)			(208	)			(149	)
Net change in interest income		23,985				23,614				371
Increase (decrease) in interest expense (1)
Interest-bearing demand deposits		3,242				1,864				1,378
Savings deposits		354				897				(543	)
Certificates of deposit		2,022				5,100				(3,078	)
Brokered deposit		897				1,243				(346	)
Borrowings		(535	)			(464	)			(71	)
Subordinated debentures		277				177				100
Other		(227	)			(170	)			(57	)
Net change in interest expense		6,030				8,647				(2,617	)
Net change in tax-equivalent net interest income	$	17,955			$	14,967			$	2,988

(1)The volume variance is computed as the change in volume (average balance) multiplied by the previous year’s interest rate. The rate variance is computed as the change in interest rate multiplied by the previous year’s volume (average balance). The change in interest due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

(2)Interest on nontaxable investment securities and loans has been adjusted to a fully tax-equivalent basis using an incremental tax rate of 21%.

	Six Months Ended June 30,
(Dollars in thousands)	2025 Over 2024
	Total				Volume				Rate
Increase (decrease) in interest income (1)
Loans (2)	$	36,429			$	34,141			$	2,288
Taxable securities		(825	)			(210	)			(615	)
Nontaxable securities (2)		(26	)			(39	)			13
Other		(64	)			720				(784	)
Net change in interest income		35,514				34,612				902
Increase (decrease) in interest expense (1)
Interest-bearing demand deposits		4,086				3,072				1,014
Savings deposits		595				707				(112	)
Certificates of deposit		2,856				4,527				(1,671	)
Brokered deposit		916				1,207				(291	)
Borrowings		(860	)			(749	)			(111	)
Subordinated debentures		376				250				126
Other		(249	)			(166	)			(83	)
Net change in interest expense		7,720				8,848				(1,128	)
Net change in tax-equivalent net interest income	$	27,794			$	25,764			$	2,030

(1)The volume variance is computed as the change in volume (average balance) multiplied by the previous year’s interest rate. The rate variance is computed as the change in interest rate multiplied by the previous year’s volume (average balance).

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The change in interest due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

(2)Interest on nontaxable investment securities and loans has been adjusted to a fully tax-equivalent basis using an incremental tax rate of 21%.

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Net Interest Income

Tax-equivalent net interest income increased $18.0 and $27.8 million in the three and six months ended June 30, 2025, respectively compared to the same periods in 2024. The primary factor contributing to the increase in interest income was loan growth, both organically and due to the Merger, the impact of interest income accretion due to purchased loans, and the impact of fixed rate swaps (see note 8). Tax equivalent net interest margin increased 69 and 72 basis points in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. GAAP based net interest margin increased 71 and 75 basis points in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

The following table presents the annualized cost of deposits and the annualized cost of funds for the three and six months ended June 30, 2025 and 2024.

	Three Months Ended June 30,							Six Months Ended June 30,
		2025			2024			2025			2024
Cost of deposits		1.65	%		1.56	%			1.61	%		1.59	%
Cost of funds		1.84	%		1.92	%			1.83	%		1.95	%

ChoiceOne has experienced loan growth, leading to an increase in interest income from loans of $24.6 million and $36.4 million in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. In the three and six months ended June 30, 2025, average loans increased by $1.5 billion and $1.1 billion, respectively, driven by both organic growth and the impact of the Merger, compared to the same periods in 2024. In addition, the average rate earned on loans increased 20 and 40 basis points in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. Interest income for the three and six months ended June 30, 2025 includes $3.5 million and $6.4 million, respectively, of interest income accretion due to purchased loans.

The average balance of total securities decreased $1.7 million and $12.5 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year. The decrease is due to paydowns and a decline in the fair value of available for sale securities. The average rate earned on securities decreased 9 basis points and 14 basis points for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year. Interest income and rate on securities were impacted by a decline in cash settlements from fixed rate interest rate swaps which are hedged against securities.

Total interest expense increased $6.0 million and $7.7 million in the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year. This increase was driven by a $1.2 billion increase in interest bearing liabilities from the Merger. Interest expense on interest bearing-demand deposits and savings deposits increased $3.6 million and $4.7 million in the three and six months ended June 30, 2025, respectively. The average rate paid on interest bearing-demand deposits and savings deposits increased by 31 basis points and 15 basis points in the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year as higher cost deposits were acquired in the Merger.

ChoiceOne's annualized cost of deposits to average total deposits has increased by 9 basis points from June 30, 2024 to June 30, 2025, as higher cost deposits were acquired in the Merger. The increase was slightly offset by the decline in the cost of CD's during the same time period. ChoiceOne has been able to mitigate the increase in the annualized cost of deposits to average total deposits by paying down borrowings in order to decrease the cost of funds to average total deposits to an annualized 1.84% in the second quarter of 2025, down from 1.92% in the second quarter of 2024. If rates continue to decline, we anticipate further reductions in deposit costs, although these will be tempered by decreased cash flows from pay-fixed interest rate swaps.

The average balance of borrowings declined by $40.7 million and $30.9 million in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. In addition, the rate paid on borrowings declined by 14 basis points in both the three and six months ended June 30, 2025, compared to the same periods in 2024. The decline in balance and rate led to a decline in interest expense of $535,000 and $860,000 in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

In September 2021, ChoiceOne completed a private placement of $32.5 million in aggregate principal amount of 3.25% fixed-to-floating rate subordinated notes due 2031. In addition, ChoiceOne holds certain subordinated debentures issued in connection with trust preferred securities that were obtained as part of the merger with Community Shores and the Merger with Fentura. The average balance of subordinated debentures increased $8.9 million and the average rate on subordinated debentures increased 78 basis points in the first six months of 2025, compared to the same period in the prior year due to the additional subordinated debentures obtained in the Merger. The increase led to additional expense of $376,000 for the first six months of 2025 compared to the same period in prior year.

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Provision and Allowance for Credit Losses

The ACL consists of general and specific components. The general component covers loans collectively evaluated for credit loss and is based on peer historical loss experience adjusted for current and forecasted factors. Management's adjustment for current and forecasted factors is based on trends in delinquencies, trends in charge-offs and recoveries, trends in the volume of loans, changes in underwriting standards, trends in loan review findings, the experience and ability of lending staff, and a reasonable and supportable economic forecast described further below.

The determination of our loss factors is based, in part, upon benchmark peer loss history adjusted for qualitative factors that, in management's judgment, affect the collectability of the portfolio as of the analysis date. We have updated our lookback period for benchmark peer net charge-off history to exclude the years 2020 and 2021 due to the COVID-19 pandemic. Our revised lookback period now spans from January 1, 2004, to December 31, 2019, and January 1, 2022, to December 31, 2024.

The provision for credit losses on loans was $650,000 and $13.8 million for the three and six months ended June 30, 2025, respectively. The provision for credit losses in the first six months of 2025 was due primarily to $12.0 million of expense in the first quarter for the acquisition of $1.3 billion of non-PCD loans in the Merger. Additional expense was recorded to account for organic growth, changes in qualitative factors, and forecast data used in the allowance for credit losses calculation. The allowance for credit losses also increased by $4.9 million in the first quarter of 2025 as the credit mark on PCD loans migrated into the reserve in accordance with CECL guidelines.

Nonperforming assets, which includes Other Real Estate Owned ("OREO") but excludes performing troubled loan modifications ("TLM"), increased by $15.1 million to $19.3 million at June 30, 2025, compared to the balance on December 31, 2024, largely due to $12.9 million in non-accrual loans and $1.7 million of OREO acquired in the Merger. All non-accrual loans from the Merger are classified as PCD loans. The ACL was 1.19% of total loans, excluding loans held for sale, at June 30, 2025, compared to 1.07% as of December 31, 2024. The liability for expected credit losses on unfunded loans and other commitments was $1.6 million as of June 30, 2025, compared to $1.5 million as of December 31, 2024.

Charge-offs and recoveries for respective loan categories for the six months ended June 30, 2025 and 2024 were as follows:

(Dollars in thousands)	2025								2024
	Charge-offs				Recoveries				Charge-offs				Recoveries
Commercial and industrial	$	10			$	6			$	1			$	11
Consumer		392				142				451				226
Commercial real estate		208				-				-				-
Residential real estate		52				23				-				7
	$	662			$	171			$	452			$	244

Net charge-offs were $491,000 during the first six months of 2025, compared to net charge-offs of $208,000 during the same period in 2024. Net charge-offs for checking accounts during the first six months of 2025 were $132,000 compared to $91,000 for the same period in the prior year. Annualized net loan charge-offs as a percentage of average loans were 0.06% for the second quarter of 2025 compared to 0.04% for the same period in the prior year. Nonperforming loans to total loans (excluding loans held for sale) was 0.66% as of June 30, 2025. Notably, 0.41% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to PCD loans acquired through the Merger which have a corresponding PCD credit reserve.

Noninterest Income

Noninterest income increased by $2.4 million and $3.3 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year. This increase was partly driven by higher credit and debit card fees, which rose due to increased volume from the Merger. Additionally, ChoiceOne recognized income from two death benefit claims during the second quarter for an additional $299,000 of noninterest income. Trust income also increased as a result of higher estate settlement fees and customers obtained from the Merger.

Noninterest Expense

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Noninterest expense increased by $11.2 million and $33.2 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. This increase was largely due to merger-related expenses of $166,000 and $17.4 million during the three and six months ended June 30, 2025, respectively, compared to $0 in the same periods in the prior year. The remainder of the increase was primarily due to the additional operating expenses as a result of the Merger. Management is committed to managing costs strategically while making prudent investments to sustain our competitive edge and provide exceptional value to our customers, shareholders, and communities.

Income Tax Expense

Income tax expense was $3.1 million in the three months ended June 30, 2025 and income tax benefit was $554,000 in the six months ended June 30, 2025, compared to income tax expense of $1.6 million and $2.8 million for the same periods in 2024. The effective tax rate was 18.8% and 59.8% for the three and six months ended June 30, 2025, respectively, compared to 19.4% and 18.6% for the same periods in 2024. The effective tax rate in 2025 is higher than compared to 2024 due to reduced pre-tax net income in 2025 as well as increased non-deductible expenses in 2025.

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FINANCIAL CONDITION

At June 30, 2025, ChoiceOne had consolidated total assets of $4.3 billion, net loans of $2.9 billion, total deposits (excluding brokered deposits) of $3.5 billion and total shareholders' equity of $431.8 million.

Securities

In the first quarter of 2025, ChoiceOne acquired $90.7 million in securities as part of the Merger. However, to reduce higher-cost wholesale funding, management opted to sell $78.9 million of those securities. As a result, the net increase in securities from the Merger totaled $11.8 million.

On June 30, 2025, total available-for-sale securities amounted to $479.4 million, up from $479.1 million on December 31, 2024. This small increase was driven by securities acquired through the Merger and purchases, offset by principal repayments, calls, and maturities. The unrealized loss on securities available for sale increased by $8.7 million to $69.8 million in the first six months of 2025 primarily due to an increase in spreads on tax exempt municipal bonds.

Total held to maturity securities on June 30, 2025 were $390.5 million compared to $394.5 million on December 31, 2024. ChoiceOne's held to maturity securities declined during the first six months of 2025 due to $9.3 million of principal repayments, calls and maturities, which was offset by $3.5 million in securities acquired through the Merger and purchases during the first six months of 2025.

At June 30, 2025, ChoiceOne had $116.9 million in gross unrealized losses on its investment securities, including $69.9 million in unrealized losses on available for sale securities, $46.4 million in unrealized losses on held to maturity securities, and $555,000 in unrealized losses on equity securities. Unrealized losses on corporate and municipal bonds have not been recognized into income because management believes the issuers are of high credit quality, and management does not intend to sell prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

ChoiceOne utilizes interest rate derivatives as part of its asset liability management strategy to help manage its interest rate risk position. In order to hedge the risk of rising rates and unrealized losses on securities resulting from the rising rates, ChoiceOne currently holds pay fixed, receive variable interest rate swaps with a total notional value of $351.0 million. These derivative instruments change in value as rates rise or fall inverse to the change in unrealized losses of the available for sale portfolio. Refer to Note 8 - Derivatives and Hedging Activities of the consolidated financial statements for more discussion on ChoiceOne’s derivative position.

Equity securities included a money market preferred security ("MMP") of $1.0 million and common stock of $8.6 million as of June 30, 2025. As of December 31, 2024, equity securities included a MMP of $1.0 million and common stock of $6.8 million.

Per U.S. generally accepted accounting principles, unrealized gains or losses on securities available for sale are reflected on the balance sheet in accumulated other comprehensive income (loss), while unrealized gains or losses on securities held to maturity are not reflected on the balance sheet.

Loans

The company's loan portfolio by call report code was as follows:

		June 30, 2025							December 31, 2024
(Dollars in thousands)	Call Report Codes	Balance			%				Balance			%
Construction & Development Loans	1A2	$	68,714			2.4	%		$	61,740			4.0	%
1-4 Family Loans	1A1, 1C1, 1C2A, 1C2B, 9A		817,751			28.0	%			380,139			24.6	%
Multifamily Loans	1D		156,312			5.4	%			83,766			5.4	%
Owner Occupied CRE Loans	1E1		538,715			18.4	%			325,966			21.1	%
Non-Owner Occupied CRE Loans	1E2		910,981			31.2	%			387,102			25.0	%
Commercial & Industrial Loans	2A2, 4A		335,862			11.4	%			216,376			14.0	%
Farm & Agriculture Loans	1B, 3		51,469			1.8	%			48,246			3.1	%
Consumer & Other Loans	6B, 6C, 6D, 8, 9b2,10B		40,988			1.4	%			42,305			2.7	%
Total Loans		$	2,920,792						$	1,545,640

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Average loan balances increased to $2.9 billion in the second quarter of 2025 compared to $1.4 billion in the second quarter of 2024. Core loans, which exclude held for sale loans and loans to other financial institutions, declined by $4.8 million or less than 1% on an annualized basis during the second quarter of 2025 and grew organically by $140.1 million or 10.0% during the twelve months ended June 30, 2025. Core loans grew by $1.4 billion due to the Merger on March 1, 2025. Loan interest income increased $24.6 million in the second quarter of 2025 compared to the same period in 2024.

Interest income for the three months ended June 30, 2025 includes $3.5 million of interest income accretion due to loans purchased. Of this amount, $2.4 million was calculated using the effective interest rate method of amortization, while the remaining $1.1 million resulted from accretion through unexpected payoffs and paydowns of loans with an associated fair value mark. Estimated accretion income from purchased loans for the remainder of 2025 using the effective interest method of amortization is $4.1 million; however, actual results will be dependent on prepayment speeds and other factors. The remaining yield mark on acquired loans totaled $54.7 million as of June 30, 2025.

Loans to other financial institutions decreased by $36.8 million from June 30, 2024 to June 30, 2025. These loans consist of a
warehouse line of credit used to facilitate mortgage loan originations, with interest rates that fluctuate in line with the national mortgage market. This decline is attributed to ChoiceOne's strategic shift towards a higher percentage of internally driven originations.

Goodwill

Goodwill is not amortized but is evaluated annually for impairment and on an interim basis if events or changes in circumstances indicate that goodwill might be impaired. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit’s fair value. Accounting pronouncements allow a company to first perform a qualitative assessment for goodwill prior to a quantitative assessment (Step 1 assessment). If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, then a quantitative assessment must be performed. If not, there is no further assessment required. The Company acquired Valley Ridge Financial Corp. in 2006, County Bank Corp in 2019, Community Shores in 2020, and Fentura in 2025, which resulted in the recognition of goodwill of $13.7 million, $38.9 million, $7.3 million and $66.6 million, respectively.

ChoiceOne conducted an annual assessment of goodwill as of June 30, 2025 and no impairment was identified. No material changes and no triggering events have occurred that indicated impairment.

Deposits and Borrowings

Deposits, excluding brokered deposits, declined by $98.0 million as of June 30, 2025, compared to March 31, 2025, primarily due to seasonal municipal fluctuations and some reduction of higher cost deposits acquired from the Merger. Deposits, excluding brokered deposits, increased by $1.4 billion as of June 30, 2025, compared to June 30, 2024 as a result of the Merger. ChoiceOne continues to be proactive in managing its liquidity position by using brokered deposits and FHLB advances to ensure ample liquidity. At June 30, 2025, 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 $1.1 billion or 29.6% of deposits on June 30, 2025 compared to $833.2 million, or 37.6% of total deposits at December 31, 2024.

ChoiceOne recognized a core deposit intangible of $31.0 million related to the Merger. This intangible asset, valued at 2.78% of Fentura's core deposits, is being amortized over a period of 10 years using the sum-of-years-digits method. This approach reflects the anticipated pattern of economic benefits derived from the core deposits. ChoiceOne recognized core deposit intangible expense of $2.4 million for the six months ended June 30, 2025.

ChoiceOne's annualized cost of deposits to average total deposits has increased by 9 basis points from June 30, 2024 to June 30, 2025, as higher cost deposits were acquired in the Merger. The increase was slightly offset by the decline in the cost of CD's during the same time period. ChoiceOne has been able to mitigate the increase in the annualized cost of deposits to average total deposits by paying down borrowings in order to decrease the cost of funds to average total deposits to an annualized 1.84% in the second quarter of 2025, down from 1.92% in the second quarter of 2024. If rates continue to decline, we anticipate further reductions in deposit costs, although these will be tempered by decreased cash flows from pay-fixed interest rate swaps.

As of June 30, 2025, the total borrowed balance at the FHLB was $195.0 million at a weighted average fixed rate of 4.36%, with the earliest maturity in July 2025. ChoiceOne also has a $3.7 million line of credit at the holding company with a rate of 7.50%.

In September 2021, ChoiceOne completed a private placement of $32.5 million in aggregate principal amount of 3.25% fixed-to-floating rate subordinated notes due 2031. ChoiceOne also holds $15.9 million in subordinated debentures that were obtained in the merger with Community Shores and the Merger with Fentura, offset by the merger mark-to-market adjustment.

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Shareholders' Equity

As of June 30, 2025, shareholders’ equity was $431.8 million, a significant increase from $214.5 million on June 30, 2024. This growth was primarily driven by the Merger, in which ChoiceOne issued 6,070,836 shares of common stock on March 1, 2025, valued at $193.0 million. Additionally, the sale of 1,380,000 shares of common stock at $25.00 per share on July 26, 2024, generated $34.5 million in aggregate gross proceeds (before deducting discounts and estimated offering expenses). However, this was slightly offset by a minor decline in retained earnings. ChoiceOne Bank continues to be “well-capitalized,” with a total risk-based capital ratio of 12.4% as of June 30, 2025, compared to 13.2% on June 30, 2024, primarily due to the impact of the Merger.

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Regulatory Capital Requirements

Following is information regarding compliance of ChoiceOne and ChoiceOne Bank with regulatory capital requirements:

																	Minimum Required
																	to be Well
									Minimum Required								Capitalized Under
									for Capital								Prompt Corrective
(Dollars in thousands)	Actual								Adequacy Purposes								Action Regulations
	Amount				Ratio				Amount				Ratio				Amount				Ratio
June 30, 2025
ChoiceOne Financial Services Inc.
Total capital (to risk weighted assets)	$	405,961				12.4		%	$	261,080				8.0		%	N/A				N/A
Common equity Tier 1 capital (to risk weighted assets)		320,697				9.8				146,858				4.5			N/A				N/A
Tier 1 capital (to risk weighted assets)		339,197				10.4				195,810				6.0			N/A				N/A
Tier 1 capital (to average assets)		339,197				8.2				165,597				4.0			N/A				N/A
ChoiceOne Bank
Total capital (to risk weighted assets)	$	402,647				12.4		%	$	260,724				8.0		%	$	325,905				10.0		%
Common equity Tier 1 capital (to risk weighted assets)		368,214				11.3				146,657				4.5				211,839				6.5
Tier 1 capital (to risk weighted assets)		368,214				11.3				195,543				6.0				260,724				8.0
Tier 1 capital (to average assets)		368,214				8.9				165,438				4.0				206,797				5.0
December 31, 2024
ChoiceOne Financial Services Inc.
Total capital (to risk weighted assets)	$	287,927				14.5		%	$	158,391				8.0		%	N/A				N/A
Common equity Tier 1 capital (to risk weighted assets)		237,152				12.0				89,095				4.5			N/A				N/A
Tier 1 capital (to risk weighted assets)		241,652				12.2				118,793				6.0			N/A				N/A
Tier 1 capital (to average assets)		241,652				9.1				106,485				4.0			N/A				N/A
ChoiceOne Bank
Total capital (to risk weighted assets)	$	250,494				12.7		%	$	158,197				8.0		%	$	197,746				10.0		%
Common equity Tier 1 capital (to risk weighted assets)		236,479				12.0				88,986				4.5				128,535				6.5
Tier 1 capital (to risk weighted assets)		236,479				12.0				118,647				6.0				158,197				8.0
Tier 1 capital (to average assets)		236,479				8.9				106,422				4.0				133,028				5.0

Management reviews the capital levels of ChoiceOne and ChoiceOne Bank on a regular basis. The Board of Directors and management believe that the capital levels as of June 30, 2025 are adequate for the foreseeable future. The Board of Directors’ determination of appropriate cash dividends for future periods will be based on, among other things, market conditions and ChoiceOne’s requirements for cash and capital.

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Liquidity

Net cash provided by operating activities was $2.5 million for the six months ended June 30, 2025 compared to $31.1 million net cash provided in the same period in 2024. The change was due to the net loss of $372,000 in the first six months of 2025 compared to net income of $12.2 million in the same period in 2024 and a decline in other liabilities of $24.3 million in the six months ended June 30, 2025. The change was partially offset by a provision for credit losses of $13.8 million in the six months ended June 30, 2025 compared to $0 in the same period in 2024. Net cash provided by investing activities was $267.0 million for the six months ended June 30, 2025 compared to $4.0 million in the same period in 2024. The increase is due to the sale of $78.9 million of securities acquired in the Merger with Fentura. ChoiceOne also received $173.1 million of cash from The State Bank as part of the Merger. Net cash used in financing activities was $210.0 million for the six months ended June 30, 2025, compared to $10.5 million provided in the same period in the prior year. ChoiceOne decreased borrowing by $146.5 million in the first six months of 2025 compared to an increase of $10.0 million in the same period during the prior year. ChoiceOne had $53.4 million in deposit decline in the first six months of 2025 compared to an increase of $4.6 million in the same period in 2024. The deposit decline was primarily due to seasonal municipal fluctuations and some reduction of higher cost deposits acquired from the Merger, offset by an increase in brokered deposits.

ChoiceOne's market risk exposure occurs in the form of interest rate risk and liquidity risk. ChoiceOne's business is transacted in U.S. dollars with no foreign exchange risk exposure. Agricultural loans comprise a relatively small portion of ChoiceOne's total assets. Management believes that ChoiceOne's exposure to changes in commodity prices is insignificant.

Liquidity risk deals with ChoiceOne's ability to meet its cash flow requirements. These requirements include depositors desiring to withdraw funds and borrowers seeking credit. Longer-term liquidity needs may be met through core deposit growth, maturities of and cash flows from investment securities, normal loan repayments, advances from the FHLB and the Federal Reserve Bank, brokered certificates of deposit, and income retention. ChoiceOne had $195.0 million in outstanding borrowings from the FHLB at a weighted average fixed rate of 4.36%, with the earliest maturity in July 2025 as of June 30, 2025. ChoiceOne had $3.7 million in outstanding borrowings at the holding company from a line of credit at June 30, 2025. The acceptance of brokered certificates of deposit is not limited as long as the Bank is categorized as “well capitalized” under regulatory guidelines. At June 30, 2025, total available borrowing capacity from the FHLB and the Federal Reserve Bank was $1.2 billion.

Item 4. Controls and Procedures.

An evaluation was performed under the supervision and with the participation of ChoiceOne’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of ChoiceOne’s disclosure controls and procedures as of June 30, 2025. Based on and as of the time of that evaluation, ChoiceOne’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that ChoiceOne’s disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that material information required to be disclosed in the reports that ChoiceOne files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that ChoiceOne files or submits under the Exchange Act is accumulated and communicated to management, including ChoiceOne’s principal executive and principal financial officers, as appropriate to allow for timely decisions regarding required disclosure.

There was no change in ChoiceOne’s internal control over financial reporting that occurred during the six months ended June 30, 2025 that has materially affected, or that is reasonably likely to materially affect, ChoiceOne’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

There are no material pending legal proceedings to which ChoiceOne or ChoiceOne Bank is a party or to which any of their properties are subject, except for proceedings that arose in the ordinary course of business.

Item 1A. Risk Factors.

Information concerning risk factors is contained in the discussion in Item 1A, “Risk Factors,” in ChoiceOne’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities in the second quarter of 2025.

There were no issuer purchases of equity securities during the second quarter of 2025.

Item 5. Other Information

None.

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Item 6. Exhibits

The following exhibits are filed or incorporated by reference as part of this report:

Exhibit Number		Document
3.1		Restated Articles of Incorporation of ChoiceOne Financial Services, Inc. Previously filed as an exhibit to ChoiceOne’s Form 10-K Annual Report for the year ended December 31, 2024. Here incorporated by reference.
3.2		Bylaws of ChoiceOne as currently in effect and any amendments thereto. Previously filed as an exhibit to ChoiceOne’s Form 8-K filed April 21, 2021. Here incorporated by reference.
4.1		Advances, Pledge and Security Agreement between ChoiceOne Bank and the Federal Home Loan Bank of Indianapolis. Previously filed as an exhibit to ChoiceOne Financial Services, Inc.’s Form 10-K Annual Report for the year ended December 31, 2013. Here incorporated by reference.
4.2		Form of 3.25% Fixed-to-Floating Rate Subordinated Note due September 3, 2031. Previously filed as an exhibit to ChoiceOne Financial Services, Inc.'s Form 8-K filed September 7, 2021. Here incorporated by reference.
4.3		Form of 3.25% Fixed-to-Floating Rate Global Subordinated Note due September 3, 2031. Previously filed as an exhibit to ChoiceOne Financial Services, Inc.'s Form 8-K filed September 7, 2021. Here incorporated by reference.
31.1		Certification of Chief Executive Officer
31.2		Certification of Chief Financial Officer
32.1		Certification pursuant to 18 U.S.C. § 1350.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHOICEONE FINANCIAL SERVICES, INC.
Date: August 8, 2025	/s/ Kelly J. Potes
	Kelly J. Potes Chief Executive Officer (Principal Executive Officer)
Date: August 8, 2025	/s/ Adom J. Greenland
	Adom J. Greenland Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

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FAQ

What were ChoiceOne's reported quarterly net income and EPS for the quarter?

The company reported quarterly net income of $13.534 million and diluted EPS of $0.90.

How did the Fentura merger change ChoiceOne's balance sheet and capital?

Post-merger total assets increased to $4.31 billion, loans held for investment rose to $2.921 billion, deposits to $3.593 billion, and goodwill increased to $126.73 million.

What acquisition-related charges and equity consideration were recorded in the merger?

ChoiceOne issued 6,070,836 shares as merger consideration with a net cost of about $192.8 million; a valuation mark on acquired loans of $64.7 million was recorded, and a $12.0 million provision was expensed on March 1 related to Non-PCD loans.

What is the company's allowance for credit losses and how large is it relative to loans?

The allowance for credit losses was $34.798 million, which represents 1.19% of gross loans of $2.921 billion.

How much did merger-related expenses and amortization affect operating costs?

Noninterest expense totaled $61.171 million for six months and included $17.369 million of merger-related expenses and increased intangible amortization of $2.412 million for the period.

How many shares were outstanding after the merger and what dividends were declared?

Shares outstanding were reported as 15,015,000 (as of July 31, 2025 header) and cash dividends declared were $0.28 per share for the quarter ($0.56 for six months).