[10-Q] CHOICEONE FINANCIAL SERVICES INC Quarterly Earnings Report

Rhea-AI Filing Summary

ChoiceOne Financial Services reported stronger Q3 2025 results following its March merger with Fentura. Net income was $14.7 million, up from $7.3 million a year ago, and diluted EPS was $0.97 versus $0.85. Net interest income rose to $37.6 million from $20.2 million as loan interest grew with a larger balance sheet. The provision for credit losses was $0.2 million, compared with $0.4 million last year.

Noninterest income increased to $7.1 million from $4.9 million, led by higher service charges and interchange. Noninterest expense rose to $26.2 million from $15.4 million, reflecting scale and higher amortization. At quarter‑end, total assets were $4.30 billion (up from $2.72 billion at December 31, 2024), loans, net were $2.88 billion (vs. $1.53 billion), and deposits were $3.57 billion (vs. $2.21 billion). The allowance for credit losses was $34.8 million (vs. $16.6 million).

During 2025, the company issued 6,070,836 shares as merger consideration and recorded cash received of $173.1 million from the merger. Shareholders’ equity ended at $449.6 million, with 15,017,802 shares outstanding at September 30, 2025. As of October 31, 2025, shares outstanding were 15,023,732.

Insights

Banking sector analyst

Q3 profits rose on a larger post‑merger balance sheet; expenses also higher.

ChoiceOne posted Q3 net income of $14.7M and diluted EPS of $0.97, with net interest income at $37.6M. Year-over-year growth reflects the closing of the Fentura merger and higher earning assets, alongside modest credit provisioning of $0.2M.

Operating costs rose as scale and amortization stepped up, with noninterest expense at $26.2M. Balance sheet metrics expanded: assets $4.30B, loans net $2.88B, deposits $3.57B. The allowance for credit losses was $34.8M, consistent with portfolio growth and purchased loan accounting.

Key items to watch include integration progress and expense run-rate following the merger completed on March 1, 2025. Subsequent filings may detail normalization of amortization and merger-cost trajectories.

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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 September 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 October 31, 2025, the Registrant had 15,023,732 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)	5
	Consolidated Statements Of Changes In Shareholders’ Equity	6
	Consolidated Statements Of Cash Flows	8
	Notes To Interim Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 4.	Controls and Procedures	58
PART II.	OTHER INFORMATION	59
Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 5.	Other Information	59
Item 6.	Exhibits	60
Signatures		61

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

ChoiceOne Financial Services, Inc.
CONSOLIDATED BALANCE SHEETS (September 30, 2025 Unaudited)

	September 30,				December 31,
(Dollars in thousands, except share data)	2025				2024
Assets
Cash and due from banks	$	97,885			$	96,401
Time deposits in other financial institutions		1,093				350
Cash and cash equivalents		98,978				96,751
Equity securities, at fair value (Note 2)		9,505				7,782
Securities available for sale, at fair value (Note 2)		544,023				479,117
Securities held to maturity, at amortized cost net of credit losses (Note 2)		388,517				394,534
Federal Home Loan Bank stock		18,562				9,383
Federal Reserve Bank stock		12,554				5,307
Loans held for sale		6,323				7,288
Loans to other financial institutions (Note 3)		2,483				39,878
Core loans (Note 3)		2,907,445				1,505,762
Total loans held for investment (Note 3)		2,909,928				1,545,640
Allowance for credit losses (Note 3)		(34,754	)			(16,552	)
Loans, net		2,875,174				1,529,088
Premises and equipment, net		46,159				27,099
Other real estate owned, net		2,575				473
Cash value of life insurance policies		74,231				44,896
Goodwill		126,730				59,946
Intangible assets		31,694				1,096
Other assets		61,877				60,483
Total assets	$	4,296,902			$	2,723,243
Liabilities
Deposits – noninterest-bearing	$	903,925			$	524,945
Deposits – interest-bearing demand deposits		1,395,724				920,167
Savings deposits		588,798				338,109
Certificates of deposit		605,912				394,371
Brokered deposits		72,672				36,511
Total deposits		3,567,031				2,214,103
Borrowings		197,752				175,000
Subordinated debentures		48,368				35,752
Other liabilities		34,136				37,973
Total liabilities		3,847,287				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: 15,017,802 at September 30, 2025 and 8,965,483 at December 31, 2024		398,688				206,780
Retained earnings		93,124				91,414
Accumulated other comprehensive loss, net		(42,197	)			(37,779	)
Total shareholders’ equity		449,615				260,415
Total liabilities and shareholders’ equity	$	4,296,902			$	2,723,243

3

See accompanying notes to interim consolidated financial statements.

ChoiceOne Financial Services, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended								Nine Months Ended
(Dollars in thousands, except share data)	September 30,								September 30,
	2025				2024				2025				2024
Interest income
Loans, including fees	$	47,123			$	23,252			$	126,297			$	66,009
Securities:
Taxable		5,249				5,563				15,243				16,382
Tax exempt		1,418				1,402				4,220				4,224
Other		908				1,473				2,822				3,451
Total interest income		54,698				31,690				148,582				90,066
Interest expense
Deposits		14,287				8,362				39,843				25,464
Advances from Federal Home Loan Bank		1,926				468				5,637				1,372
Other		888				2,612				2,872				8,137
Total interest expense		17,101				11,442				48,352				34,973
Net interest income		37,597				20,248				100,230				55,093
Provision for (reversal of) credit losses on loans		200				425				14,013				1,100
Provision for (reversal of) credit losses on unfunded commitments		-				—				-				(675	)
Net Provision for (reversal of) credit losses expense		200				425				14,013				425
Net interest income after provision		37,397				19,823				86,217				54,668
Noninterest income
Customer service charges		1,729				1,249				4,311				3,537
Interchange income		2,133				1,524				5,725				4,303
Insurance and investment commissions		485				184				1,320				572
Gains on sales of loans		671				631				1,470				1,610
Net (losses) gains on sales and write downs of other assets		(39	)			191				(26	)			203
Earnings on life insurance policies		558				315				1,791				1,115
Trust income		734				232				1,836				665
Change in market value of equity securities		458				277				804				241
Other		415				264				1,338				755
Total noninterest income		7,144				4,867				18,569				13,001
Noninterest expense
Salaries and benefits		14,127				8,372				38,178				24,467
Occupancy and equipment		2,694				1,475				6,845				4,414
Data processing		2,499				1,598				6,937				4,406
Communications		517				334				1,458				976
Professional fees		834				610				2,478				1,818
Supplies and postage		267				174				816				520
Advertising and promotional		207				168				723				517
Intangible amortization		1,728				198				4,140				604
FDIC insurance		530				390				1,535				1,155
Merger related expenses		-				645				17,369				645
Other		2,812				1,453				6,907				3,857
Total noninterest expense		26,215				15,417				87,386				43,379
Income before income tax		18,326				9,273				17,400				24,290
Income tax expense		3,645				1,925				3,091				4,722
Net income	$	14,681			$	7,348			$	14,309			$	19,568
Basic earnings per share (Note 4)	$	0.98			$	0.86			$	1.05			$	2.48
Diluted earnings per share (Note 4)	$	0.97			$	0.85			$	1.05			$	2.46
Dividends declared per share	$	0.28			$	0.27			$	0.84			$	0.81

4

See accompanying notes to interim consolidated financial statements.

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

	Three Months Ended								Nine Months Ended
(Dollars in thousands)	September 30,								September 30,
	2025				2024				2025				2024
Net income	$	14,681			$	7,348			$	14,309			$	19,568
Other comprehensive income:
Change in net unrealized gain (loss) on available-for-sale securities		9,997				14,077				7,973				11,091
Income tax benefit (expense)		(2,099	)			(2,956	)			(1,674	)			(2,329	)
Less: reclassification adjustment for net (gain) loss for fair value hedge		(578	)			(9,827	)			(7,274	)			(2,841	)
Income tax benefit (expense)		121				2,064				1,527				597
Unrealized gain (loss) on available-for-sale securities, net of tax		7,441				3,358				552				6,518
Amortization of net unrealized (gains) losses on securities transferred from available-for-sale to held-to-maturity		70				61				202				173
Income tax benefit (expense)		(14	)			(12	)			(42	)			(36	)
Unrealized loss on held to maturity securities, net of tax		56				49				160				137
Change in net unrealized gain (loss) on cash flow hedge		(641	)			(9,558	)			(6,169	)			(1,753	)
Income tax benefit (expense)		133				2,006				1,294				367
Less: amortization of net unrealized (gains) losses included in net income		(126	)			-				(323	)			1,092
Income tax benefit (expense)		27				-				68				(229	)
Unrealized gain (loss) on cash flow hedge instruments, net of tax		(607	)			(7,552	)			(5,130	)			(523	)
Other comprehensive income (loss), net of tax		6,890				(4,145	)			(4,418	)			6,132
Comprehensive income	$	21,571			$	3,203			$	9,891			$	25,700

See accompanying notes to interim consolidated financial statements.

5

ChoiceOne Financial Services, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the three months ended September 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, July 1, 2024			7,573,618			$	173,984			$	81,836			$	(41,301	)		$	214,519
Net income											7,348								7,348
Other comprehensive income (loss)															(4,145	)			(4,145	)
Shares issued			5,914				165												165
Effect of employee stock purchases							11												11
Stock options exercised and issued			132																—
Stock-based compensation expense							174												174
Common stock offering			1,380,000				32,093												32,093
Cash dividends declared ($0.27 per share)											(2,419	)							(2,419	)
Balance, September 30, 2024			8,959,664			$	206,427			$	86,765			$	(45,446	)		$	247,746
Balance, July 1, 2025			15,008,864			$	398,201			$	82,647			$	(49,087	)		$	431,761
Net income											14,681								14,681
Other comprehensive income (loss)															6,890				6,890
Shares issued for directors and employee stock plans			8,938				245												245
Effect of employee stock purchases							17												17
Stock-based compensation expense							225												225
Cash dividends declared ($0.28 per share)											(4,204	)							(4,204	)
Balance, September 30, 2025			15,017,802			$	398,688			$	93,124			$	(42,197	)		$	449,615

6

ChoiceOne Financial Services, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the nine months ended September 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											19,568								19,568
Other comprehensive income (loss)															6,132				6,132
Shares issued for directors and employee stock plans			30,435				280												280
Effect of employee stock purchases							33												33
Stock options exercised and issued			1,012																-
Stock-based compensation expense							508												508
Common stock offering			1,380,000				32,093												32,093
Cash dividends declared ($0.81 per share)											(6,502	)							(6,502	)
Balance, September 30, 2024			8,959,664			$	206,427			$	86,765			$	(45,446	)		$	247,746
Balance, January 1, 2025			8,965,483			$	206,780			$	91,414			$	(37,779	)		$	260,415
Net income											14,309								14,309
Other comprehensive income (loss)															(4,418	)			(4,418	)
Shares issued for directors and employee stock plans			23,855				678												678
Effect of employee stock purchases							46												46
Stock-based compensation expense							578												578
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 ($0.84 per share)											(12,599	)							(12,599	)
Balance, September 30, 2025			15,017,802			$	398,688			$	93,124			$	(42,197	)		$	449,615

7

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

	Nine Months Ended
(Dollars in thousands)	September 30,
	2025				2024
Cash flows from operating activities:
Net income	$	14,309			$	19,568
Adjustments to reconcile net income to net cash from operating activities:
Provision for credit losses		14,013				425
Depreciation		2,576				1,907
Amortization		11,975				7,263
Accretion on purchased loans		(10,034	)			(944	)
Compensation expense on employee stock purchase plan, stock options, and restricted stock units		624				541
Net change in market value of equity securities		(804	)			(241	)
Gains on sales of loans		(1,470	)			(1,610	)
Loans originated for sale		(41,493	)			(48,171	)
Proceeds from loan sales		43,368				47,810
Earnings on bank-owned life insurance		(1,488	)			(919	)
Earnings on death benefit from bank-owned life insurance		(303	)			(196	)
(Gains)/losses on sales of other real estate owned		(51	)			(17	)
Write downs of OREO		78				139
Deferred federal income tax (benefit)/expense		2,297				166
Net change in:
Other assets		(2,177	)			(3,534	)
Other liabilities		(13,640	)			1,507
Net cash provided by operating activities		17,780				23,694
Cash flows from investing activities:
Sales of securities available for sale		78,856				-
Maturities, prepayments and calls of securities available for sale		19,593				25,109
Maturities, prepayments and calls of securities held to maturity		12,294				16,710
Purchases of securities available for sale		(73,673	)			(1,116	)
Purchases of equity securities		(203	)			(70	)
Purchases of securities held to maturity		(4,108	)			(2,000	)
Purchase of Federal Home Loan Bank stock		-				(242	)
Purchase of Federal Reserve Bank stock		(7,247	)			-
Loan originations and payments, net		25,533				(93,177	)
Proceeds from bank owned life insurance death benefits claim		940				490
Additions to premises and equipment		(4,510	)			(1,047	)
Proceeds from sales of other real estate owned		728				-
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		224,913				(55,343	)
Cash flows from financing activities:
Net change in deposits		(78,953	)			86,173
Net change in short term borrowings		(147,213	)			10,109
Issuance of common stock		678				500
Repurchase of shares from Fentura Financial, Inc. ESOP		(2,051	)			-
Share based compensation withholding obligation		(327	)			(220	)
Cash dividends		(12,599	)			(6,502	)
Cash related to common stock offering		-				32,094
Net cash provided by (used in) financing activities		(240,465	)			122,154
Net change in cash and cash equivalents		2,227				90,505
Beginning cash and cash equivalents		96,751				55,433
Ending cash and cash equivalents	$	98,978			$	145,938
Supplemental disclosures of cash flow information:
Cash paid for interest	$	44,055			$	34,358
Cash paid for income taxes		2,840				4,450
Noncash transactions:
Loans transferred to other real estate		1,122				529
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.

8

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 nine months ended September 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.

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

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.

9

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 6,136 and 16,442 shares of common stock were issued to ChoiceOne’s Board of Directors for a cash price of $176,000 and $496,000 for the three and nine months ended September 30, 2025, respectively, under the terms of the Directors’ Stock Purchase Plan. A total of 2,802 and 7,413 shares for a cash price of $69,000 and $182,000 were issued for the three and nine months ended September 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 $1.8 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 the first nine months of 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 pool 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 current expected credit loss ("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 loan loss activity and resulting historical data. As of September 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.

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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 third 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

Purchased loans are initially recorded at fair value. ChoiceOne’s accounting treatment for these loans depends on whether they exhibit significant credit deterioration since origination at the time of purchase. As part of the Merger, ChoiceOne recognized a valuation adjustment on the purchased loans, which included two distinct categories: loans purchased with credit deterioration and those without. A substantial portion of this adjustment is expected to be recognized as interest income over time.

Purchased Loans with Credit Deterioration

Purchased loans that reflect a more than insignificant credit deterioration since origination at the date of purchase are classified as purchased credit deteriorated (PCD) loans. PCD loans are recorded at fair value plus the ACL expected at the time of purchase. Under this method, there is no provision for credit losses on purchase of PCD loans. The ACL 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 purchase 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 purchase. 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 purchase. The difference between fair value and the unpaid principal balance at the purchase 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.

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 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 ACL when the collectability of a debt security AFS is confirmed or when either of the criteria regarding intent

11

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 September 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 $2.3 million at September 30, 2025 and $2.0 million at 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 September 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.

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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 $1.8 million after tax as of September 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 (losses) recognized in noninterest income were as follows:

	September 30, 2025
					Gross				Gross
(Dollars in thousands)	Amortized				Unrealized				Unrealized				Fair
	Cost				Gains				Losses				Value
Equity securities	$	9,352			$	649			$	(496	)		$	9,505

	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 (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:

	September 30, 2025
					Gross				Gross
(Dollars in thousands)	Amortized				Unrealized				Unrealized				Fair
Available for Sale:	Cost				Gains				Losses				Value
U.S. Treasury notes and bonds	$	94,284			$	25			$	(5,923	)		$	88,386
State and municipal		262,393				-				(38,236	)			224,157
Mortgage-backed		238,535				98				(16,172	)			222,461
Corporate		250				-				(33	)			217
Asset-backed securities		8,936				-				(134	)			8,802
Total	$	604,398			$	123			$	(60,498	)		$	544,023
(Dollars in thousands)
Held to Maturity:
U.S. Government and federal agency	$	2,983			$	-			$	(182	)		$	2,801
State and municipal		197,497				43				(24,081	)			173,459
Mortgage-backed		167,458				14				(14,849	)			152,623
Corporate		20,532				32				(1,497	)			19,067
Asset-backed securities		47				-				-				47
Total	$	388,517			$	89			$	(40,609	)		$	347,997

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	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 September 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:

	September 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	$	-			$	-			$	83,597			$	5,923			$	83,597			$	5,923
State and municipal		4,696				520				219,230				37,716				223,926				38,236
Mortgage-backed		67,359				982				134,772				15,190				202,131				16,172
Corporate		-				-				217				33				217				33
Asset-backed securities		-				-				8,802				134				8,802				134
Total temporarily impaired	$	72,055			$	1,502			$	446,618			$	58,996			$	518,673			$	60,498

	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

14

Held to maturity securities with unrealized losses as of September 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:

	September 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	$	-			$	-			$	2,801			$	182			$	2,801			$	182
State and municipal		951				21				167,633				24,060				168,584				24,081
Mortgage-backed		4,329				39				140,576				14,810				144,905				14,849
Corporate		1,447				3				15,929				1,494				17,376				1,497
Asset-backed securities		-				-				47				-				47				-
Total temporarily impaired	$	6,727			$	63			$	326,986			$	40,546			$	333,713			$	40,609

	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

15

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 nine months ended September 30, 2025 and September 30, 2024 on AFS securities.

The majority of unrealized losses at September 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 September 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 September 30, 2025, 47% were issued by US government sponsored entities and agencies, and rated AA, 38% are AAA rated private issue and collateralized mortgage obligations, and 15% are unrated privately issued mortgage-backed securities with structured credit enhancement and collateralized mortgage obligations.

Unrealized losses have not been recognized into income because the issuers’ bonds are of high credit quality, and management does not intend to sell the bonds 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.

16

Presented below is a schedule of maturities of securities as of September 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 September 30,
(Dollars in thousands)	1 Year				5 Years				10 Years				10 Years				2025
U.S. Treasury notes and bonds	$	980			$	87,406			$	-			$	-			$	88,386
State and municipal		230				32,024				29,622				162,281				224,157
Corporate		-				-				217				-				217
Asset-backed securities		-				6,406				2,396				-				8,802
Total debt securities		1,210				125,836				32,235				162,281				321,562
Mortgage-backed securities		1,649				124,723				72,250				23,839				222,461
Total Available for Sale	$	2,859			$	250,559			$	104,485			$	186,120			$	544,023

	Held to Maturity Securities maturing within:
																	Amortized Cost
	Less than				1 Year -				5 Years -				More than				at September 30,
(Dollars in thousands)	1 Year				5 Years				10 Years				10 Years				2025
U.S. Government and federal agency	$	-			$	2,983			$	-			$	-			$	2,983
State and municipal		2,332				45,985				90,267				58,913				197,497
Corporate		-				-				20,532				-				20,532
Asset-backed securities		47				-				-				-				47
Total debt securities		2,379				48,968				110,799				58,913				221,059
Mortgage-backed securities		3,416				93,193				70,849				-				167,458
Total Held to Maturity	$	5,795			$	142,161			$	181,648			$	58,913			$	388,517

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

		Three Months Ended							Nine Months Ended
		September 30,							September 30,
		2025				2024			2025				2024
(Dollars in thousands)
Net gains (losses) recognized during the period		$	458			$	277		$	804			$	241
Less: Net gains (losses) recognized during the period on securities sold			—				—			—				—
Unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date		$	458			$	277		$	804			$	241

17

NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

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

	September 30, 2025							December 31, 2024
(Dollars in thousands)	Balance			%				Balance			%				Percent Increase (Decrease)
Agricultural	$	51,183			1.8	%		$	48,221			3.1	%			6.1		%
Commercial and Industrial		352,876			12.1	%			228,256			14.8	%			54.6		%
Commercial Real Estate		1,728,774			59.4	%			901,130			58.3	%			91.8		%
Consumer		27,328			0.9	%			29,412			1.9	%			(7.1	)	%
Construction Real Estate		18,441			0.6	%			17,042			1.1	%			8.2		%
Residential Real Estate		728,843			25.0	%			281,701			18.2	%			158.7		%
Loans to Other Financial Institutions		2,483			0.1	%			39,878			2.6	%			(93.8	)	%
Gross Loans	$	2,909,928						$	1,545,640
Allowance for credit losses		34,754			1.19	%			16,552			1.07	%
Net loans	$	2,875,174						$	1,529,088

18

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 September 30, 2025
Beginning balance		$	219			$	5,240			$	772			$	18,311			$	90			$	10,161			$	5			$	34,798
Charge-offs			-				-				(193	)			(185	)			-				-				-				(378	)
Recoveries			-				2				131				-				-				1				-				134
Provision			14				1,055				26				(551	)			(7	)			(336	)			(1	)			200
Ending balance		$	233			$	6,297			$	736			$	17,575			$	83			$	9,826			$	4			$	34,754
Allowance for Credit Losses Nine Months Ended September 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			-				(9	)			(586	)			(393	)			-				(52	)			-				(1,040	)
Recoveries			-				8				273				-				-				25				-				306
Provision			141				1,075				316				6,717				24				5,795				(56	)			14,013
Ending balance		$	233			$	6,297			$	736			$	17,575			$	83			$	9,826			$	4			$	34,754
Individually evaluated for credit loss		$	-			$	2,916			$	-			$	637			$	-			$	38			$	-			$	3,591
Collectively evaluated for credit loss		$	233			$	3,382			$	736			$	16,938			$	82			$	9,788			$	4			$	31,163
Loans
September 30, 2025
Individually evaluated for credit loss		$	5			$	8,176				1			$	4,506			$	—			$	2,944			$	-			$	15,632
Collectively evaluated for credit loss			51,178				344,700				27,327				1,724,268				18,441				725,899				2,483				2,894,296
Ending loan balance		$	51,183			$	352,876			$	27,328			$	1,728,774			$	18,441			$	728,843			$	2,483			$	2,909,928

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

19

		As of September 30, 2025								As of March 1, 2025
		Loan Balance				ACL Balance				Loan Balance				ACL Balance
(dollars in thousands)
Agricultural		$	460			$	2			$	611			$	2
Commercial and Industrial			11,628				2,934				13,572				2,960
Commercial Real Estate			65,988				1,096				79,444				1,791
Consumer			12				-				32				0
Residential Real Estate			18,014				138				19,252				171
Total		$	96,102			$	4,170			$	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				Total
Allowance for Credit Losses Three Months Ended September 30, 2024
Beginning balance	$	112			$	2,161			$	795			$	9,360			$	49			$	3,625			$	50			$	16,152
Charge-offs		-				-				(166	)			-				-				(23	)			-				(189	)
Recoveries		-				2				96				-				-				4				-				102
Provision		(2	)			307				36				(140	)			(13	)			227				10				425
Ending balance	$	110			$	2,470			$	761			$	9,220			$	36			$	3,833			$	60			$	16,490
Allowance for Credit Losses Nine Months Ended September 30, 2024
Beginning balance	$	94			$	2,216			$	823			$	8,820			$	58			$	3,644			$	30			$	15,685
Charge-offs		-				(1	)			(616	)			-				-				(23	)			-				(640	)
Recoveries		-				13				321				-				-				11				-				345
Provision		16				242				233				400				(22	)			201				30				1,100
Ending balance	$	110			$	2,470			$	761			$	9,220			$	36			$	3,833			$	60			$	16,490
Individually evaluated for credit loss	$	1			$	7			$	1			$	1			$	-			$	78			$	-			$	88
Collectively evaluated for credit loss	$	109			$	2,463			$	760			$	9,219			$	36			$	3,755			$	60			$	16,402

20

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 net 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 special mention. 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.

21

The following tables reflect the amortized cost basis of loans as of September 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	$	3,743			$	4,209			$	1,858			$	3,706			$	4,952			$	19,586			$	38,054			$	12,794			$	50,848
Special mention		-				-				-				-				-				157				157				-				157
Substandard		-				-				-				-				-				178				178				-				178
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	3,743			$	4,209			$	1,858			$	3,706			$	4,952			$	19,921			$	38,389			$	12,794			$	51,183
Current year-to-date gross write-offs (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Commercial and Industrial
Pass	$	43,364			$	44,434			$	18,784			$	37,820			$	13,564			$	23,539			$	181,505			$	158,391			$	339,896
Special mention		-				-				-				152				163				106				421				-				421
Substandard		-				692				5,804				46				1,471				1,758				9,771				2,788				12,559
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	43,364			$	45,126			$	24,588			$	38,018			$	15,198			$	25,403			$	191,697			$	161,179			$	352,876
Current year-to-date gross write-offs (1)	$	-			$	-			$	9			$	-			$	-			$	-			$	9			$	-			$	9
Commercial Real Estate
Pass	$	156,993			$	180,641			$	141,991			$	338,974			$	236,175			$	415,475			$	1,470,249			$	223,075			$	1,693,324
Special mention		-				-				212				14,068				1,561				5,199				21,040				-				21,040
Substandard		-				110				1,430				8,662				-				4,208				14,410				-				14,410
Doubtful		-				-				-				-				-				-				-				-				-
Loss		-				-				-				-				-				-				-				-				-
Total	$	156,993			$	180,751			$	143,633			$	361,704			$	237,736			$	424,882			$	1,505,699			$	223,075			$	1,728,774
Current year-to-date gross write-offs (1)	$	-			$	-			$	36			$	257			$	-			$	100			$	393			$	-			$	393
Total Commercial Loans	$	204,100			$	230,086			$	170,079			$	403,428			$	257,886			$	470,206			$	1,735,785			$	397,048			$	2,132,833

22

Retail:	2025				2024				2023				2022				2021				Prior				Term Loans Total				Revolving Loans				Grand Total
Consumer
Performing	$	5,167			$	4,176			$	5,208			$	6,320			$	3,321			$	2,333			$	26,525			$	754			$	27,279
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				-				13				-				27				8				48				1				49
Total	$	5,167			$	4,176			$	5,221			$	6,320			$	3,348			$	2,341			$	26,573			$	755			$	27,328
Current year-to-date gross write-offs (1)	$	9			$	37			$	76			$	11			$	6			$	7			$	146			$	-			$	146
Construction real estate
Performing	$	2,067			$	1,179			$	-			$	-			$	501			$	-			$	3,747			$	14,584			$	18,331
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				-				-				-				-				-				-				110				110
Total	$	2,067			$	1,179			$	-			$	-			$	501			$	-			$	3,747			$	14,694			$	18,441
Current year-to-date gross write-offs (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Residential real estate
Performing	$	52,954			$	55,531			$	64,393			$	162,816			$	109,639			$	161,232			$	606,565			$	113,536			$	720,101
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				380				760				2,979				2,086				2,102				8,307				435				8,742
Total	$	52,954			$	55,911			$	65,153			$	165,795			$	111,725			$	163,334			$	614,872			$	113,971			$	728,843
Current year-to-date gross write-offs (1)	$	-			$	-			$	17			$	4			$	30			$	1			$	52			$	-			$	52
Loans to Other Financial Institutions
Performing	$	2,483			$	-			$	-			$	-			$	-			$	-			$	2,483			$	-			$	2,483
Nonperforming		-				-				-				-				-				-				-				-				-
Nonaccrual		-				-				-				-				-				-				-				-				-
Total	$	2,483			$	-			$	-			$	-			$	-			$	-			$	2,483			$	-			$	2,483
Current year-to-date gross write-offs (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Total Retail Loans	$	62,671			$	61,266			$	70,374			$	172,115			$	115,574			$	165,675			$	647,675			$	129,420			$	777,095

(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 nine months of 2025 were $440,000 or an annualized $587,000 compared to $607,000 during the full year 2024.

23

The following tables reflect 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 (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
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 (1)	$	-			$	-			$	-			$	-			$	-			$	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 (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Total Commercial Loans	$	197,979			$	159,315			$	154,368			$	116,921			$	77,442			$	185,214			$	891,239			$	286,368			$	1,177,607

24

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 (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
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 (1)	$	-			$	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 (1)	$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
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 nine months of 2025 and the full year 2024.

For the period ended:	September 30, 2025
	Term Extension
					% of Total
					Class of
(Dollars in thousands)	Amortized				Financing
	Cost Basis				Receivable
Commercial real estate	$	761				0	%
Residential real estate		131				0	%
Total	$	892

25

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 nine months of 2025 and the full year 2024.

For the period ended:	September 30, 2025
	Term Extension
Commercial real estate	Reduced interest rate upon listing a property for sale
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:	September 30, 2025
(Dollars in thousands)	Interest rate reduction				Term extension
Commercial real estate	$	761			$	-
Residential real estate		-				131
Total	$	761			$	131

For the period ended:	December 31, 2024
(Dollars in thousands)	Interest rate reduction				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:	September 30, 2025
(Dollars in thousands)	Current				30-89 days				Greater than 90 days				Total
Commercial real estate	$	-			$	-			$	761			$	761
Residential real estate		131				-				-				131
Total	$	131			$	-			$	761			$	892

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 September 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		17				7,412				26
Consumer		-				49				2
Construction real estate		-				110				4
Commercial real estate		761				1,077				9
Residential real estate		1,219				8,743				79
Total nonaccrual loans	$	1,997			$	17,391			$	120
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
September 30, 2025
Agricultural	$	-			$	-			$	-			$	-			$	51,183			$	51,183			$	-
Commercial and industrial		1,029				-				5,591				6,620				346,256				352,876				-
Consumer		33				94				5				132				27,196				27,328				-
Commercial real estate		7,982				-				1,077				9,059				1,719,715				1,728,774				-
Construction real estate		-				-				110				110				18,331				18,441				-
Residential real estate		6,088				135				3,778				10,001				718,842				728,843				-
Loans to Other Financial Institutions		-				-				-				-				2,483				2,483				-
	$	15,132			$	229			$	10,561			$	25,922			$	2,884,006			$	2,909,928			$	-

(1) Includes nonaccrual loans.

									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								Nine Months Ended
(Dollars in thousands, except share data)	September 30,								September 30,
	2025				2024				2025				2024
Basic
Net (loss) income	$	14,681			$	7,348			$	14,309			$	19,568
Weighted average common shares outstanding		15,014,933				8,567,548				13,579,249				7,898,938
Basic (loss) earnings per common shares	$	0.98			$	0.86			$	1.05			$	2.48
Diluted
Net (loss) income	$	14,681			$	7,348			$	14,309			$	19,568
Weighted average common shares outstanding		15,014,933				8,567,548				13,579,249				7,898,938
Plus dilutive stock options and restricted stock units		46,222				48,269				46,538				45,227
Weighted average common shares outstanding and potentially dilutive shares		15,061,155				8,615,817				13,625,787				7,944,165
Diluted (loss) earnings per common share	$	0.97			$	0.85			$	1.05			$	2.46

There were no stock options that were considered anti-dilutive to earnings per share for the three and nine months ended September 30, 2025. There were no stock options that were considered anti-dilutive to earnings per share for the three months ended September 30, 2024 and 3,000 stock options that were considered anti-dilutive to earnings per share for the nine months ended September 30, 2024. There were 1,729 and 1,686 performance awards that were considered anti-dilutive to earnings for the three and nine months ended September 30, 2025, respectively.

29

Note 5 – Financial Instruments

Financial instruments as of the dates indicated were as follows:

30

									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)
September 30, 2025
Assets
Cash and cash equivalents	$	98,978			$	98,978			$	98,978			$	-			$	-
Equity securities at fair value		9,505				9,505				5,713				-				3,792
Securities available for sale		544,023				544,023				88,386				455,637				-
Securities held to maturity		388,517				347,997				-				331,565				16,432
Federal Home Loan Bank and Federal
Reserve Bank stock		31,116				31,116				-				31,116				-
Loans held for sale		6,323				6,513				-				6,513				-
Loans, net		2,875,174				2,829,132				-				-				2,829,132
Accrued interest receivable		16,219				16,219				-				16,219				-
Interest rate lock commitments		247				247				-				247				-
Interest rate derivative contracts		6,756				6,756				-				6,756				-
Interest rate swaps		1,770				1,770				-				1,770				-
Liabilities
Noninterest-bearing deposits		903,925				903,925				903,925				-				-
Total interest-bearing deposits		2,590,434				2,589,395				-				2,589,395				-
Brokered deposits		72,672				72,827				-				72,827				-
Borrowings		197,752				198,068				-				198,068				-
Subordinated debentures		48,368				46,486				-				46,486				-
Accrued interest payable		1,982				1,982				-				1,982				-
Interest rate derivative contracts		-				-				-				-				-
Interest rate swaps		1,783				1,783				-				1,783				-
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				-				-
Total 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				-

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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 September 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.

32

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 - September 30, 2025
Equity securities	$	5,713			$	-			$	3,792			$	9,505
Investment Securities, Available for Sale - September 30, 2025
U.S. Treasury notes and bonds	$	88,386			$	-			$	-			$	88,386
State and municipal		-				224,157				-				224,157
Mortgage-backed		-				222,461				-				222,461
Corporate		-				217				-				217
Asset-backed securities		-				8,802				-				8,802
Total	$	88,386			$	455,637			$	-			$	544,023
Derivative Instruments - September 30, 2025
Interest rate derivative contracts - assets	$	-			$	6,756			$	-			$	6,756
Interest rate derivative contracts - liabilities	$	-			$	-			$	-			$	-
Interest rate swaps - September 30, 2025
Interest rate swaps - assets	$	-			$	1,770			$	-			$	1,770
Interest rate swaps - liabilities	$	-			$	1,783			$	-			$	1,783
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	$	-			$	-			$	-			$	-
Interest rate 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,

33

mortgage-backed securities, corporate bonds, and asset backed securities. The Company classified certain state and municipal securities and corporate bonds 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.

The Company classified certain 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.

Derivative instruments and interest rate swaps are generally reported at fair value using Level 2 inputs. The estimated fair value is determined by calculating the present value of expected future cashflows, based on market observable inputs.

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

	Nine Months Ended
(Dollars in thousands)	September 30,
	2025				2024
Equity Securities Held at Fair Value
Balance, January 1	$	2,944			$	2,756
Total realized and unrealized gains (losses) included in noninterest income		289				71
Net purchases, sales, calls, and maturities		559				70
Net transfers into Level 3		-				-
Balance, September 30,	$	3,792			$	2,897
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 September 30,	$	11			$	36

Of the Level 3 assets that were held by the Company at September 30, 2025, the net unrealized gain as of September 30, 2025 was $606,000, compared to $283,000 as of September 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 $883,000 and $70,000 of Level 3 securities were purchased during the nine 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
September 30, 2025	$	1,007			$	-			$	-			$	1,007
December 31, 2024	$	1,887			$	-			$	-			$	1,887
Other Real Estate
September 30, 2025	$	2,575			$	-			$	-			$	2,575
December 31, 2024	$	473			$	-			$	-			$	473

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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). The fair value of other real estate owned was based on appraisals or other reviews of property values, adjusted for estimated costs to sell.

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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.

Customer service charges

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. The revenue is recorded as services are delivered and is presented net of interchange expenses.

Insurance and 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 and commission income is recognized when the transaction has been completed. The Company earns commissions from the sale of life insurance and credit life insurance products. Revenue is recognized at the time the policy is sold, as the Company’s performance obligation is satisfied upon completion of the sale.

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								Nine Months Ended
	September 30,								September 30,
(Dollars in thousands)	2025				2024				2025				2024
Customer service charges	$	1,729			$	1,249			$	4,311			$	3,537
Interchange income		2,133				1,524				5,725				4,303
Insurance and investment commissions		485				184				1,320				572
Trust fee income		734				232				1,836				665
Other charges and fees for customer services		204				162				563				409
Noninterest income from contracts with customers within the scope of ASC 606		5,285				3,351				13,755				9,486
Noninterest income within the scope of other GAAP topics		1,859				1,516				4,814				3,515
Total noninterest income	$	7,144			$	4,867			$	18,569			$	13,001

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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. By April of 2024, the loss was fully amortized, reducing interest income by $1.1 million for the year ended December 31, 2024.

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 the Pay Fixed Swap Agreement. 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 $608,000 and $1.9 million for the three and nine months ended September 30, 2025 compared to $1.3 million and $2.3 million for the three and nine months ended September 30, 2024, which reduced interest expense. Interest expense was further reduced by $126,000 and $337,000 during the three and nine months ended September 30, 2025, respectively, due to accretion from the gain on the sale of $50 million of the Pay Fixed Swap Agreement.

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 income.

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In the third quarter of 2025, ChoiceOne entered into $30.4 million in amortizing pay fix swaps to hedge interest rate risk on approximately $40.6 million of newly purchased agency mortgage backed securities. The swaps are designated as a fair value hedge and will amortize with the expected cash flow of the bonds and hold a coupon of 3.52% and a contractual term ending in 2040. A fair value basis adjustment associated with available-for-sale agency mortgage backed securities 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 agency mortgage backed securities related to the hedged risk (the benchmark interest rate component) 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 monthly, with the first starting in October 2025, and will be included in interest income.

Settlements on the four pay-fixed/receive-floating interest rate swaps for a total notional amount of $201.0 million and the $30.4 million in amortizing pay fix swaps amounted to $510,000 and $1.5 million for the three and nine months ended September 30, 2025 compared to $1.0 million and $3.0 million during the same periods in 2024.

In total, as of September 30, 2025, ChoiceOne held pay-fixed interest rate swaps with a total notional value of $381.3 million, a weighted average coupon of 3.15%, a fair value of $6.8 million and an average remaining contract length of 7.2 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. In total, income from the effect of swaps amounted to $1.3 million and $3.8 million for the three and nine months ended September 30, 2025 compared to $2.5 million and $4.3 million for the three and nine months ended September 30, 2024, which were included in interest income and interest expense.

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

	September 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	$	6,756			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:

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	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 September 30, 2025							Three months ended September 30, 2024							Nine months ended September 30, 2025							Nine months ended September 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	$	553		$	734			$	1,180		$	1,327			$	1,639		$	2,207			$	2,038		$	2,301
Gain or (loss) on fair value hedging relationships:
Interest rate contracts:
Hedged items	$	578		$	-			$	9,827		$	-			$	7,274		$	-			$	2,841		$	-
Derivatives designated as hedging instruments	$	(535	)	$	-			$	(9,665	)	$	-			$	(7,124	)	$	-			$	(2,720	)	$	-
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	$	-		$	126			$	-		$	-			$	-		$	337			$	(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:

				September 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	$	258,247		$	(327	)

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.

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

	September 30, 2025
(Dollars in thousands)	Notional Amount			Balance Sheet Location	Fair Value
Derivative assets
Interest rate swaps	$	84,986		Other Assets	$	1,770
Derivative liabilities
Interest rate swaps	$	84,986		Other Liabilities	$	1,783
	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 September 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 September 30, 2025 and December 31, 2024, respectively. Cash pledged as collateral to the correspondent bank was $2.5 million and $0 at September 30, 2025 and December 31, 2024, respectively.

Interest rate swaps entered into with commercial loan customers had notional amounts aggregating $85.0 million as of September 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.

NOTE 9 – Borrowings

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

(Dollars in thousands)		September 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
Maturity of October 2025 with fixed interest rate of 4.51%			20,000
Maturity of October 2025 with fixed interest rate of 4.29%			118,000
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		$	198,000			$	175,000

Advances from the FHLB were secured by residential real estate loans with a carrying value of approximately $610.1 million at September 30, 2025. Based on this collateral, the Bank was eligible to borrow an additional $212.4 million at September 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 $349.4 million and loans with a carrying value of approximately $841.1 million at September 30, 2025. Based on this collateral, the Bank was eligible to borrow an additional $975.1 million at September 30, 2025. As of September 30, 2025, ChoiceOne had no borrowings from the Federal Reserve Bank. As of December 31, 2024, advances from the Federal Reserve Bank were secured by securities with a carrying value of

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approximately $349.9 million and loans with a carrying value of approximately $460.6 million. As of December 31, 2024, ChoiceOne had no borrowings from the Federal Reserve Bank.

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 a rate of 7.25% at September 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 September 30, 2025. The available line of credit balance was $3.7 million at June 30, 2025. The line of credit had no outstanding balance at September 30, 2025.

ChoiceOne acquired trust preferred securities in the merger with Fentura. Fentura Capital Trust I sold 12,000 Cumulative 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 SOFR and the rate was 7.30% at September 30, 2025. The stated maturity is December 15, 2033. Total trust preferred securities at September 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 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 SOFR and the rate was 6.06% at September 30, 2025. The stated maturity is November 23, 2035. Total trust preferred securities at September 30, 2025 were $1.6 million consisting of $2.0 million in trust preferred securities less $403,000 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 commercial 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:

		Nine months ended September 30,
(Dollars in thousands)		2025				2024
Total Revenues		$	167,151			$	103,067
Net (loss) Income		$	14,309			$	19,568
Total Assets		$	4,296,902			$	2,723,243

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 fees 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 nine month periods ended September 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 $0 and $13.9 million for the three- and nine-month periods ended September 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 nine month period ended September 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 nine-month periods ended September 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 $1.9 million for the three- and nine month periods ended September 30, 2024, respectively.

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
(Dollars in thousands)	2025			2024				2025			2024
Net interest income plus other income	$	44,741		$	41,717			$	130,132		$	118,228
Net income (loss)	$	16,681		$	8,231			$	40,841		$	3,172

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 financial measures are used as comparative tools, together with GAAP financial 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 financial measures may differ from methods used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP or applicable 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 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.

RESULTS OF OPERATIONS

ChoiceOne reported net income of $14,681,000 and $14,309,000 for the three and nine months ended September 30, 2025, compared to net income of $7,348,000 and $19,568,000 for the same periods in the prior year, respectively. Adjusted net income (non-GAAP) excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes, was $14,681,000 and $37,657,000 for the three and nine months ended September 30, 2025, respectively. Diluted earnings per share were $0.97 and $1.05 for the three

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and nine months ended September 30, 2025, compared to diluted earnings per share of $0.85 and $2.46 in the same periods in the prior year. Adjusted diluted earnings per share (non-GAAP) excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes, were $0.97 and $2.76 for the three and nine months ended September 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								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
(In Thousands, Except Per Share Data)
Net (loss) income		$	14,681			$	7,348			$	14,309			$	19,568
Merger related expenses net of tax			-				633				13,885				633
Merger related provision for credit losses, net of tax (1)			-				-				9,463				-
Adjusted net income (Non-GAAP)		$	14,681			$	7,981			$	37,657			$	20,201
Weighted average number of shares			15,014,933				8,567,548				13,579,249				7,898,938
Diluted average shares outstanding			15,061,155				8,615,500				13,625,787				7,944,143
Basic earnings (loss) per share		$	0.98			$	0.86				1.05				2.48
Diluted earnings (loss) per share		$	0.97			$	0.85				1.05				2.46
Adjusted basic earnings per share (Non-GAAP)		$	0.98			$	0.94			$	2.77			$	2.56
Adjusted diluted earnings per share (Non-GAAP)		$	0.97			$	0.93			$	2.76			$	2.54

(1) Merger related provision for credit losses represents the estimated credit loss on loans purchased without credit deterioration in the Merger on March 1, 2025.

As of September 30, 2025, total assets were $4.3 billion, an increase of $1.6 billion compared to September 30, 2024. The growth in total assets is primarily attributed to the Merger. The growth in total assets was offset by a $36.0 million reduction in loans to other financial institutions and a $47.0 million reduction in cash and cash equivalents on September 30, 2025 compared to September 30, 2024. Loans to other financial institutions consist of a warehouse line of credit used to facilitate mortgage loan originations, with interest rates and balances that fluctuate in line with the national mortgage market. The reduction in cash balances is primarily due to purchases of agency mortgage backed securities during the third quarter of 2025. ChoiceOne has actively managed its balance sheet to support organic loan growth with a loan to deposit ratio of 81.8% at September 30, 2025.

Core loans, which exclude held for sale loans and loans to other financial institutions, declined by $10.3 million or 1.4% on an annualized basis during the third quarter of 2025 and grew organically by $65.3 million or 4.5% during the twelve months ended September 30, 2025. Core loans grew by $1.4 billion due to the Merger on March 1, 2025. Loan interest income increased $23.9 million in the third quarter of 2025 compared to the same period in 2024. Interest income for the three months ended September 30, 2025 includes $3.6 million of interest income due to accretion from purchased loans. Of this amount, $1.8 million was calculated using the effective interest rate method of amortization, while the remaining $1.8 million resulted from unexpected payoffs and paydowns of loans with an associated fair value mark. Estimated interest income due to accretion from purchased loans for the remainder of 2025 and 2026 using the effective interest method of amortization is $2.3 million and $8.2 million, respectively; however, actual results will be dependent on prepayment speeds and other factors. It is estimated that a total of $54.0 million remains to be recognized as interest income due to accretion from purchased loans over the life of the loan portfolio.

Deposits, excluding brokered deposits, increased by $8.0 million as of September 30, 2025, compared to June 30, 2025. During the third quarter of 2025 non-interest bearing deposits declined by $39.9 million while interest bearing demand deposits increased by $73.4 million. The shift from non-interest-bearing to interest-bearing demand deposits was partly due to quarter-end timing and fluctuations in business and municipal activity. The growth in interest-bearing demand deposits was primarily concentrated in non-maturity interest-bearing checking and money market accounts. The average balance of non-interest-bearing deposits rose to $930.3 million in the third quarter of 2025, up from $915.6 million in the second quarter of 2025. Deposits, excluding brokered deposits, increased by $1.3 billion as of September 30, 2025, compared to September 30, 2024 largely 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 September 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 $1.2 billion or 33.2% of deposits at September 30, 2025.

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In the three months ended September 30, 2025, compared to the same period in the prior year, ChoiceOne’s cost of deposits to average total deposits increased by 4 basis points, rising from 1.53% to 1.57%, primarily due to higher-cost deposits acquired through the Merger. This increase was partially offset by a decline in CD costs and a reduction in wholesale funding costs. The annualized cost of funds decreased by 10 basis points, from 1.87% to 1.77% in the three months ended September 30, 2025 compared to the same period in the prior year. In the three months ended September 30, 2025, compared to the three months ended June 30, 2025, annualized cost of funds decreased to 1.77% from 1.84%, primarily due to a decrease in higher cost local and brokered CDs. Interest expense on borrowings for the three months ended September 30, 2025, declined by $489,000 compared to the same period in the prior year. As of September 30, 2025, the total balance of borrowed funds from the FHLB was $198.0 million at a weighted average fixed rate of 4.23%, with $158.0 million due within 12 months.

ChoiceOne uses interest rate swaps to manage interest rate exposure to certain fixed rate assets and variable rate liabilities. During the third quarter of 2025, ChoiceOne entered into $30.4 million in amortizing pay fix swaps to hedge interest rate risk on approximately $40.6 million of newly purchased agency mortgage backed securities. The swaps are designed to amortize with the expected cash flow of the bonds and hold a coupon of 3.52% and a contractual term ending in 2040. On September 30, 2025, ChoiceOne held pay-fixed interest rate swaps with a total notional value of $381.3 million, a weighted average coupon of 3.15%, a fair value of $6.8 million and an average remaining contract length of 7.2 years. Settlements from swaps amounted to $1.3 million for the third quarter of 2025 compared to $1.3 million for the second quarter of 2025. 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.

The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.19% on September 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 0.03% and nonperforming loans to total loans (excluding loans held for sale) of 0.69% as of September 30, 2025. Notably, 0.39% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to loans purchased with credit deterioration acquired in the Merger.

The annualized return on average assets and annualized return on average shareholders’ equity were 1.36% and 13.39%, respectively, for the third quarter of 2025, compared to an annualized 1.09% and an annualized 12.36%, respectively, for the same period in 2024. The annualized return on average assets and annualized return on average shareholders’ equity were 0.48% and 5.00%, respectively, for the first nine months of 2025, compared to 0.98% and 12.00%, respectively, for the same period in 2024.

Dividends

Cash dividends of $4.2 million or $0.28 per share were declared in the third quarter of 2025, compared to $2.4 million or $0.27 per share in the third quarter of 2024. Cash dividends declared in the first nine months of 2025 were $12.6 million or $0.84 per share, compared to $6.5 million or $0.81 per share in the same period during the prior year. The cash dividend payout percentage was 88.0% for the nine months ended September 30, 2025, compared to 33.2% 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 nine months ended September 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 September 30,												Three Months Ended June 30,												Three Months Ended September 30,
	2025												2025												2024
(Dollars in thousands)	Average												Average												Average
	Balance				Interest				Rate				Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Loans (1)(3)(4)(5)	$	2,927,878			$	47,142				6.39		%	$	2,936,168			$	46,551				6.36		%	$	1,460,033			$	23,262				6.34		%
Taxable securities (2)		703,045				5,249				2.96				695,546				5,264				3.04				681,578				5,563				3.25
Nontaxable securities (1)		287,274				1,795				2.48				289,061				1,764				2.45				289,335				1,775				2.44
Other		79,365				909				4.54				63,416				735				4.65				108,019				1,473				5.43
Interest-earning assets		3,997,562				55,095				5.47				3,984,191				54,314				5.47				2,538,965				32,073				5.03
Noninterest-earning assets		310,727												314,322												146,225
Total assets	$	4,308,289											$	4,298,513											$	2,685,190
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	1,374,827			$	6,392				1.84		%	$	1,332,318			$	6,163				1.86		%	$	916,459			$	3,111				1.35		%
Savings deposits		591,653				1,125				0.75				595,362				1,003				0.68				329,613				728				0.88
Certificates of deposit		616,686				5,777				3.72				646,247				6,353				3.94				388,183				4,296				4.40
Brokered deposit		91,735				993				4.30				120,720				1,321				4.39				17,227				227				5.25
Borrowings		179,122				2,019				4.47				169,257				1,945				4.61				210,000				2,508				4.75
Subordinated debentures		48,663				701				5.72				48,971				689				5.65				35,658				413				4.61
Other		8,550				94				4.38				11,763				129				4.39				11,756				159				5.37
Interest-bearing liabilities		2,911,236				17,101				2.33				2,924,638				17,603				2.41				1,908,896				11,442				2.38
Demand deposits		930,346												915,637												519,511
Other noninterest-bearing liabilities		28,258												30,695												18,908
Total liabilities		3,869,840												3,870,970												2,447,315
Shareholders' equity		438,449												427,543												237,875
Total liabilities and shareholders' equity	$	4,308,289											$	4,298,513											$	2,685,190
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	37,994											$	36,711											$	20,631
Net interest margin (tax-equivalent basis) (Non-GAAP) (1)										3.77		%										3.70		%										3.23		%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	37,994											$	36,711											$	20,631
Adjustment for taxable equivalent interest						(397	)											(389	)											(383	)
Net interest income (GAAP)					$	37,597											$	36,322											$	20,248
Net interest margin (GAAP)										3.73		%										3.66		%										3.17		%

(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 $17.0 million, $16.8 million, and $2.2 million in the third quarter of 2025, the second quarter of 2025 and the third quarter of 2024, respectively.

(5)Interest on loans included net origination fees and interest income due to accretion from purchased loans. Interest income due to accretion from purchased loans was $3.6 million, $3.5 million and $275,000 in the third quarter of 2025, the second quarter of 2025 and the third quarter of 2024, respectively.

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	Nine Months Ended September 30,
	2025												2024
(Dollars in thousands)	Average												Average
	Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Loans (1)(3)(4)(5)	$	2,631,222			$	126,359				6.42		%	$	1,436,277			$	66,051				6.14		%
Taxable securities (2)		697,188				15,243				2.92				695,984				16,382				3.14
Nontaxable securities (1)		288,398				5,342				2.48				290,404				5,347				2.46
Other		85,827				2,822				4.40				84,209				3,451				5.47
Interest-earning assets		3,702,635				149,766				5.41				2,506,874				91,231				4.86
Noninterest-earning assets		276,538												143,570
Total assets	$	3,979,173											$	2,650,444
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	1,273,979			$	16,976				1.78		%	$	892,174			$	9,609				1.44		%
Savings deposits		539,990				3,010				0.75				333,707				2,019				0.81
Certificates of deposit		583,934				17,079				3.91				385,823				12,742				4.41
Brokered deposit		86,172				2,778				4.31				29,347				1,095				4.98
Borrowings		180,726				6,174				4.57				211,606				7,511				4.74
Subordinated debentures		45,897				1,889				5.50				35,597				1,237				4.64
Other		13,578				446				4.39				18,835				760				5.39
Interest-bearing liabilities		2,724,276				48,352				2.37				1,907,089				34,973				2.45
Demand deposits		833,490												514,019
Other noninterest-bearing liabilities		39,862												11,946
Total liabilities		3,597,628												2,433,054
Shareholders' equity		381,545												217,390
Total liabilities and shareholders' equity	$	3,979,173											$	2,650,444
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	101,414											$	56,258
Net interest margin (tax-equivalent basis) (Non-GAAP) (1)										3.66		%										3.00		%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	101,414											$	56,258
Adjustment for taxable equivalent interest						(1,184	)											(1,165	)
Net interest income (GAAP)					$	100,230											$	55,093
Net interest margin (GAAP)										3.62		%										2.94		%

(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 $13.7 million and $2.1 million in the nine months ended September 30, 2025 and 2024, respectively.

(5)Interest on loans included net origination fees and accretion income. Accretion income was $10.0 million and $944,000 in the nine months ended September 30, 2025 and 2024, respectively.

Table 2 – Changes in Tax-Equivalent Net Interest Income

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	Three Months Ended September 30,
(Dollars in thousands)	2025 Over 2024
	Total				Volume				Rate
Increase (decrease) in interest income (1)
Loans (2)	$	23,880			$	23,696			$	184
Taxable securities		(314	)			943				(1,257	)
Nontaxable securities (2)		20				(63	)			83
Other		(564	)			(350	)			(214	)
Net change in interest income		23,022				24,226				(1,204	)
Increase (decrease) in interest expense (1)
Interest-bearing demand deposits		3,281				1,895				1,386
Savings deposits		397				1,033				(636	)
Certificates of deposit		1,481				5,384				(3,903	)
Brokered deposit		766				1,050				(284	)
Borrowings		(489	)			(349	)			(140	)
Subordinated debentures		288				174				114
Other		(64	)			(38	)			(26	)
Net change in interest expense		5,660				9,149				(3,489	)
Net change in tax-equivalent net interest income	$	17,362			$	15,077			$	2,285

(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%.

	Nine Months Ended September 30,
(Dollars in thousands)	2025 Over 2024
	Total				Volume				Rate
Increase (decrease) in interest income (1)
Loans (2)	$	60,308			$	57,946			$	2,362
Taxable securities		(1,139	)			37				(1,176	)
Nontaxable securities (2)		(5	)			(45	)			40
Other		(629	)			84				(713	)
Net change in interest income		58,535				58,022				513
Increase (decrease) in interest expense (1)
Interest-bearing demand deposits		7,367				5,196				2,171
Savings deposits		991				1,193				(202	)
Certificates of deposit		4,337				6,207				(1,870	)
Brokered deposit		1,683				1,881				(198	)
Borrowings		(1,336	)			(1,125	)			(211	)
Subordinated debentures		652				440				212
Other		(314	)			(210	)			(104	)
Net change in interest expense		13,380				13,582				(202	)
Net change in tax-equivalent net interest income	$	45,155			$	44,440			$	715

(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.

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

Net Interest Income

Tax-equivalent net interest income (non-GAAP) increased $17.4 million and $45.2 million in the three and nine months ended September 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 due to accretion from purchased loans, and the impact of fixed rate swaps (see note 8). Tax equivalent net interest margin (non-GAAP) increased 54 and 66 basis points in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. GAAP based net interest margin increased 56 and 68 basis points in the three and nine months ended September 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 nine months ended September 30, 2025 and 2024.

	Three Months Ended September 30,							Nine Months Ended September 30,
		2025			2024			2025			2024
Cost of deposits		1.57	%		1.53	%			1.60	%		1.58	%
Cost of funds		1.77	%		1.87	%			1.81	%		1.93	%

ChoiceOne has experienced loan growth, leading to an increase in interest income from loans of $23.9 million and $60.3 million in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. In the three and nine months ended September 30, 2025, average loans increased by $1.5 billion and $1.2 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 5 and 28 basis points in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. Interest income for the three and nine months ended September 30, 2025 includes $3.6 million and $10.0 million, respectively, of interest income due to accretion from purchased loans.

The average balance of total securities increased $19.4 million and decreased $802,000 for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year. The increase during the three months ended September 30, 2025 is due to $40.6 million of newly purchased agency mortgage backed securities. These securities were purchased in congruence to $30.4 million of amortizing pay fix swaps designed to amortize with the expected cash flow of the bonds and hold a coupon of 3.52%. The decrease in securities during the nine months ended September 30, 2025, is due to paydowns and a decline in the fair value of available for sale securities, offset by the purchase of agency mortgage backed securities during the third quarter of 2025. The average rate earned on securities decreased 18 basis points and 15 basis points for the three and nine months ended September 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 $5.7 million and $13.4 million in the three and nine months ended September 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 $3.7 million and $8.4 million in the three and nine months ended September 30, 2025, respectively. The average rate paid on interest bearing-demand deposits and savings deposits increased by 30 basis points and 20 basis points in the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year as higher cost deposits were acquired in the Merger.

In the three months ended September 30, 2025, compared to the same period in the prior year, ChoiceOne’s cost of deposits to average total deposits increased by 4 basis points, rising from 1.53% to 1.57%, primarily due to higher-cost deposits acquired through the Merger. This increase was partially offset by a decline in CD costs and a reduction in wholesale funding costs. The annualized cost of funds decreased by 10 basis points, from 1.87% to 1.77% in the three months ended September 30, 2025 compared to the same period in the prior year. In the three months ended September 30, 2025, compared to the three months ended June 30, 2025, annualized cost of funds decreased to 1.77% from 1.84%, primarily due to a decrease in higher cost local and brokered CDs.

The average balance of borrowings increased by $9.9 million and declined by $30.9 million in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. In addition, the rate paid on borrowings declined by 28 basis points and 17 basis points in the three and nine months ended September 30, 2025, compared to the same periods in 2024. The decline in balance and rate led to a decline in interest expense of $489,000 and $1.3 million in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

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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 $10.3 million and the average rate on subordinated debentures increased 86 basis points in the first nine 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 $652,000 for the first nine 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. Our lookback period for benchmark peer net charge-off history excludes the years 2020 and 2021 due to the COVID-19 pandemic and 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 $200,000 and $14.0 million for the three and nine months ended September 30, 2025, respectively. The provision for credit losses in the first nine months of 2025 was due primarily to $12.0 million of expense in the first quarter for the acquisition of $1.3 billion of loans purchased without credit deterioration 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 loans purchased with credit deterioration (“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 $15.8 million to $19.9 million at September 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 September 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 September 30, 2025, compared to $1.5 million as of December 31, 2024.

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

(Dollars in thousands)	2025								2024
	Charge-offs				Recoveries				Charge-offs				Recoveries
Commercial and industrial	$	9			$	8			$	1			$	13
Consumer		586				273				616				321
Commercial real estate		393				-				-				-
Residential real estate		52				25				23				11
	$	1,040			$	306			$	640			$	345

Net charge-offs were $734,000 during the first nine months of 2025, compared to net charge-offs of $295,000 during the same period in 2024. Net charge-offs for checking accounts during the first nine months of 2025 were $206,000 compared to $155,000 for the same period in the prior year. Annualized net loan charge-offs as a percentage of average loans were 0.03% for the first nine months of 2025 compared to 0.02% for the same period in the prior year. Nonperforming loans to total loans (excluding loans held for sale) were 0.69% as of September 30, 2025. Notably, 0.39% 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 $2.3 million and $5.6 million for the three and nine months ended September 30, 2025, compared to the same periods in the prior year. This increase was partly driven by higher service charges and interchange income, which rose due to increased volume from the Merger. Investment commissions and trust income also increased as a result of higher estate settlement fees and customers obtained from the Merger. Additionally, ChoiceOne recognized income from two death benefit claims under bank-owned life insurance policies during the second quarter for an additional $299,000.

Noninterest Expense

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Noninterest expense increased by $10.8 million and $44.0 million for the three and nine months ended September 30, 2025, compared to the same periods in 2024. The year to date increase was largely due to merger-related expenses of $17.4 million during the nine months ended September 30, 2025, compared to $645,000 in the same period in the prior year. Management does not anticipate additional material merger expenses. The remainder of the increase was primarily due to the addition of Fentura on March 1, 2025. ChoiceOne continues to strive to optimize our cost structure while investing in opportunities that enhance our performance and reinforce the value we bring to customers and shareholders.

Income Tax Expense

Income tax expense was $3.6 million and $3.1 million in the three and nine months ended September 30, 2025, compared to income tax expense of $1.9 million and $4.7 million for the same periods in 2024. The effective tax rate was 19.9% and 17.8% for the three and nine months ended September 30, 2025, respectively, compared to 20.8% and 19.4% for the same periods in 2024. The effective tax rate in 2025 is lower than compared to 2024 due to a decrease in disallowed interest expense during 2025.

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FINANCIAL CONDITION

At September 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 $449.6 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 September 30, 2025, total available-for-sale securities amounted to $544.0 million, up from $479.1 million on December 31, 2024. This increase was driven by securities acquired through the Merger and the purchase of $40.6 million of agency mortgage backed securities purchased in conjuncture with $30.4 million in amortizing pay fix swaps. The swaps are designed to amortize with the expected cash flow of the bonds and hold a coupon of 3.52% and a contractual term ending in 2040. Purchases of securities were offset by principal repayments, calls, and maturities. The unrealized loss on securities available for sale was relatively flat compared to December 31, 2024.

Total held to maturity securities on September 30, 2025 were $388.5 million compared to $394.5 million on December 31, 2024. ChoiceOne's held to maturity securities declined during the first nine months of 2025 due to $12.3 million of principal repayments, calls and maturities, which was offset by $4.1 million in securities acquired through the Merger and purchases of securities during the first nine months of 2025.

At September 30, 2025, ChoiceOne had $101.6 million in gross unrealized losses on its investment securities, including $60.5 million in unrealized losses on available for sale securities, $40.6 million in unrealized losses on held to maturity securities, and $496,000 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 $381.3 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 $8.5 million as of September 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:

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		September 30, 2025							December 31, 2024
(Dollars in thousands)	Call Report Codes	Balance			%				Balance			%
Construction & Development Loans	1A2	$	81,476			2.8	%		$	61,740			4.0	%
1-4 Family Loans	1A1, 1C1, 1C2A, 1C2B, 9A		819,428			28.2	%			380,139			24.6	%
Multifamily Loans	1D		154,072			5.3	%			83,766			5.4	%
Owner Occupied CRE Loans	1E1		535,143			18.4	%			325,966			21.1	%
Non-Owner Occupied CRE Loans	1E2		886,114			30.5	%			387,102			25.0	%
Commercial & Industrial Loans	2A2, 4A		341,156			11.7	%			216,376			14.0	%
Farm & Agriculture Loans	1B, 3		52,990			1.8	%			48,246			3.1	%
Consumer & Other Loans	6B, 6C, 6D, 8, 9b2,10B		39,549			1.4	%			42,305			2.7	%
Total Loans		$	2,909,928						$	1,545,640

Average loan balances decreased $8.3 million in the third quarter of 2025, compared to the second quarter of 2025. Core loans, which exclude held for sale loans and loans to other financial institutions, declined by $10.3 million or 1.4% on an annualized basis during the third quarter of 2025 and grew organically by $65.3 million or 4.5% during the twelve months ended September 30, 2025. Core loans grew by $1.4 billion due to the Merger on March 1, 2025.

Loan interest income increased $23.9 million in the third quarter of 2025 compared to the same period in 2024. Interest income for the three months ended September 30, 2025 includes $3.6 million of interest income due to accretion from purchased loans. Of this amount, $1.8 million was calculated using the effective interest rate method of amortization, while the remaining $1.8 million resulted from accretion through unexpected payoffs and paydowns of loans with an associated fair value mark. Estimated interest income due to accretion from purchased loans for the remainder of 2025 and 2026 using the effective interest method of amortization is $2.3 million and $8.2 million, respectively; however, actual results will be dependent on prepayment speeds and other factors. It is estimated that a total of $54.0 million remains to be recognized as interest income due to accretion from purchased loans over the life of the loan portfolio.

Loans to other financial institutions decreased by $37.4 million as of September 30, 2025 compared to December 31, 2024. Loans to other financial institutions consist of a warehouse line of credit used to facilitate mortgage loan originations, with interest rates and balances that fluctuate in line with the national mortgage market.

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, increased by $8.0 million as of September 30, 2025, compared to June 30, 2025. During the third quarter of 2025, non-interest bearing deposits declined by $39.9 million while interest-bearing demand deposits increased by $73.4 million. The shift from non-interest-bearing to interest-bearing demand deposits was partly due to quarter-end timing and fluctuations in business and municipal activity. The growth in interest-bearing demand deposits was primarily concentrated in non-maturity interest-bearing checking and money market accounts. The average balance of non-interest-bearing deposits rose to $930.3 million in the third quarter of 2025, up from $915.6 million in the second quarter of 2025. Deposits, excluding brokered deposits, increased by $1.3 billion as of September 30, 2025, compared to September 30, 2024 largely 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 September 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 $1.2 billion or 33.2% of deposits at September 30, 2025.

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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 $4.1 million for the nine months ended September 30, 2025.

In the three months ended September 30, 2025, compared to the same period in the prior year, ChoiceOne’s cost of deposits to average total deposits increased by 4 basis points, rising from 1.53% to 1.57%, primarily due to higher-cost deposits acquired through the Merger. This increase was partially offset by a decline in CD costs and a reduction in wholesale funding costs. The annualized cost of funds decreased by 10 basis points, from 1.87% to 1.77% in the three months ended September 30, 2025 compared to the same period in the prior year. In the three months ended September 30, 2025, compared to the three months ended June 30, 2025, annualized cost of funds decreased to 1.77% from 1.84%, primarily due to a decrease in higher cost local and brokered CDs.

Interest expense on borrowings for the three months ended September 30, 2025, declined by $489,000 compared to the same period in the prior year. As of September 30, 2025, the total balance of borrowed funds from the FHLB was $198.0 million at a weighted average fixed rate of 4.23%, with $158.0 million due within 12 months and the earliest maturity in October 2025.

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 acquisition of Community Shores and the Merger with Fentura, offset by the merger mark-to-market adjustment.

Shareholders' Equity

As of September 30, 2025, shareholders’ equity was $449.6 million, a significant increase from $260.8 million on December 31, 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. ChoiceOne Bank continues to be “well-capitalized,” with a total risk-based capital ratio of 12.8% as of September 30, 2025, compared to 12.7% on December 31, 2024.

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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
September 30, 2025
ChoiceOne Financial Services Inc.
Total capital (to risk weighted assets)	$	418,645				13.0		%	$	258,279				8.0		%	N/A				N/A
Common equity Tier 1 capital (to risk weighted assets)		333,388				10.3				145,282				4.5			N/A				N/A
Tier 1 capital (to risk weighted assets)		351,888				10.9				193,709				6.0			N/A				N/A
Tier 1 capital (to average assets)		351,888				8.5				166,068				4.0			N/A				N/A
ChoiceOne Bank
Total capital (to risk weighted assets)	$	411,407				12.8		%	$	257,926				8.0		%	$	322,407				10.0		%
Common equity Tier 1 capital (to risk weighted assets)		377,017				11.7				145,083				4.5				209,565				6.5
Tier 1 capital (to risk weighted assets)		377,017				11.7				193,444				6.0				257,926				8.0
Tier 1 capital (to average assets)		377,017				9.1				165,898				4.0				207,372				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 September 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 $17.8 million for the nine months ended September 30, 2025 compared to $24.6 million net cash provided in the same period in 2024. The change was primarily driven by a $15.1 million decrease in other liabilities during the nine months ended September 30, 2025, compared to the same period in 2024, partially offset by a $13.6 million increase in the provision for credit losses over the same timeframe. Net cash provided by investing activities was $224.9 million for the nine months ended September 30, 2025 compared to net cash used in investing activities of $56.3 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 $240.5 million for the nine months ended September 30, 2025, compared to $122.2 million provided in the same period in the prior year. ChoiceOne decreased borrowing by $147.2 million in the first nine months of 2025 compared to an increase of $10.1 million in the same period during the prior year. ChoiceOne had $79.0 million in deposit decline, net of the increase from the Merger, in the first nine months of 2025 compared to an increase of $86.2 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 $198.0 million in outstanding borrowings from the FHLB at a weighted average fixed rate of 4.23%, with the earliest maturity in October 2025 as of September 30, 2025. ChoiceOne had $72.7 million in brokered deposits on September 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 September 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 September 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 nine months ended September 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 third quarter of 2025.

There were no issuer purchases of equity securities during the third 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: November 10, 2025	/s/ Kelly J. Potes
	Kelly J. Potes Chief Executive Officer (Principal Executive Officer)
Date: November 10, 2025	/s/ Adom J. Greenland
	Adom J. Greenland Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

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FAQ

How did ChoiceOne (COFS) perform in Q3 2025?

Net income was $14.7 million with diluted EPS of $0.97. Net interest income reached $37.6 million and the credit loss provision was $0.2 million.

What changed on ChoiceOne’s balance sheet after the Fentura merger?

Total assets were $4.30 billion, loans, net $2.88 billion, and deposits $3.57 billion at September 30, 2025.

What were ChoiceOne’s noninterest income and expenses in Q3 2025?

Noninterest income was $7.1 million, and noninterest expense was $26.2 million, including higher amortization.

How did the merger affect share count and equity for COFS?

The company issued 6,070,836 shares as consideration; shareholders’ equity ended at $449.6 million with 15,017,802 shares outstanding on September 30, 2025.

What is ChoiceOne’s allowance for credit losses (ACL)?

The ACL was $34.8 million at September 30, 2025, reflecting portfolio size and purchased loan accounting.

How many COFS shares were outstanding after quarter‑end?

As of October 31, 2025, there were 15,023,732 shares of common stock outstanding.