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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 25, 2023
ChoiceOne Financial Services, Inc.
(Exact Name of Registrant as
Specified in its Charter)
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Michigan |
000-19202 |
38-2659066 |
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109 E. Division Street |
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Registrant's telephone number, including area code: (616) 887-7366
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02 |
Results of Operations and Financial Condition. |
On October 25, 2023, ChoiceOne Financial Services, Inc. issued the press release attached as Exhibit 99.1 to this Form 8-K, which is here incorporated by reference. This Report and the Exhibit are furnished to, and not filed with, the Commission.
Item 9.01 |
Financial Statements and Exhibits. |
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(d) |
Exhibits: |
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104 |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 hereunto duly authorized.
Dated: |
October 25, 2023 |
CHOICEONE FINANCIAL SERVICES, INC. |
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By: |
/s/ Adom J. Greenland |
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Adom J. Greenland |
EXHIBIT 99.1
News Release
ChoiceOne Reports Third Quarter 2023 Results
Sparta, Michigan – October 25, 2023 – ChoiceOne Financial Services, Inc. ("ChoiceOne", NASDAQ:COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended September 30, 2023.
Financial Highlights
"Our focus has always been on building quality local relationships while delivering top-notch service. The growth in our core loans and local deposits in the third quarter 2023 is a testament to this strategy and the hard work of our experienced team. Asset quality continues to be excellent, and our net interest income has stabilized through the organic growth of earning assets while controlling funding costs. ChoiceOne bank celebrated our 125thanniversary this quarter and we thank our loyal customers and employees for their support and contribution." said Kelly Potes, Chief Executive Officer.
ChoiceOne reported net income of $5,122,000 and $15,968,000 for the three and nine months ended September 30, 2023, compared to $5,813,000 and $16,956,000 for the same periods in 2022. Diluted earnings per share were $0.68 and $2.12 in the three and nine months ended September 30, 2023, compared to $0.77 and $2.26 per share in the same periods in the prior year. The increase in deposit costs during the first nine months of 2023 has negatively impacted earnings, offset by higher interest income from higher interest rates on loans and organic loan growth.
Total assets as of September 30, 2023, increased $90.5 million as compared to June 30, 2023. The asset growth during the third quarter is due to an increase in cash of $67.9 million and an increase in core loans of $60.6 million offset by a decrease in securities of $41.2 million. Asset growth from September 30, 2022 to September 30, 2023 of $210.7 million is due to an increase in cash of $93.2 million and an increase in core loans of $153.6 million or 13.6% offset by a decrease in securities of $52.5 million. ChoiceOne management has intentionally increased liquidity to fund organic loan growth while shifting earning assets into loans as demonstrated by the growth during the three and nine months ended September 30, 2023.
Deposits, excluding brokered deposits, increased by $48.9 million or an annualized 9.6% in the third quarter of 2023 and decreased $72.7 million or 3.4% as of September 30, 2023 compared to September 30, 2022.
1
The decrease in deposits since September 30, 2022 was largely concentrated in the first quarter of 2023 as a result of a combination of customers using cash on hand for debt payoffs, seasonal tax and municipal bond payments, and customers seeking higher rates in money market securities or other investments. Deposits grew in the third quarter of 2023 due to new business, recapture of deposit losses, and some seasonality in municipal balances. ChoiceOne continues to be proactive in managing its liquidity position by using brokered deposits, the Bank Term Funding Program ("BTFP") and FHLB advances to ensure ample liquidity. At September 30, 2023, total available borrowing capacity from all sources was $796.1 million. Uninsured deposits total $724.1 million or 34.7% of deposits at September 30, 2023.
The cost of deposits has increased to 1.36% during the three months ended September 30, 2023, compared to 0.98% and 0.29% for the three months ended June 30, 2023 and September 30, 2022, respectively, due to rising short term interest rates and is expected to continue to increase as deposits reprice and customers migrate to CD products. ChoiceOne is actively managing these costs and expects rates paid on deposits to continue to lag the federal funds rate. Interest expense on borrowings for the three and nine months ended September 30, 2023, increased $2.5 million and $5.0 million, respectively, compared to the same periods in the prior year, due to increase in borrowing amounts and interest rates. Borrowings include $160 million from the BTFP with a fixed rate of 4.71% through May 2024 and $20 million of FHLB borrowings with a fixed rate of 4.88% through July of 2025. This funding structure has helped moderate interest expense increases in the third quarter as rates have risen. Total cost of funds increased to 1.70% in the third quarter of 2023 compared to 1.29% in the second quarter of 2023 and 0.35% in the second quarter of 2022.
No provision for credit losses expense was incurred in the third quarter of 2023. Core loan growth was offset by improvements in the Federal Open Market Committee ("FOMC") forecast for unemployment and GDP growth and a decrease in the unfunded loans and other commitments liability. The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.14% compared to 1.15% on June 30, 2023. Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.05% and nonperforming loans to total loans (excluding loans held for sale) of 0.14%.
With recent news of a strike of United Auto Workers, ChoiceOne performed a review of loans in the automotive sector. ChoiceOne has total outstanding loans to businesses in the automotive sector of $50.2 million or 3.9% of core loans. These are primarily Tier 2 and 3 suppliers, many of which serve multiple industries and manufacturers. The average balance of the loans was $518,000, with no individual loan larger than $3 million. All automotive loans were performing as of September 30, 2023.
ChoiceOne uses interest rate swaps to manage interest rate exposure to certain fixed assets and variable rate liabilities. On September 30, 2023, ChoiceOne had pay-fixed interest rate swaps with a total notional value of $401.0 million, a weighted average coupon of 3.07%, and a fair value of $29.9 million and an average contract length of 8 to 9 years. These derivative instruments increase in value as long-term interest rates rise, which offsets the reduction in equity due to unrealized losses on securities available for sale. Included in the total is $200.0 million of forward starting pay-fixed, receive floating interest rate swaps used to hedge interest bearing liabilities. These forward starting swaps will pay a fixed coupon of 2.75% while receiving SOFR starting in late April 2024. At the current SOFR rate of 5.31%, these forward starting swaps would contribute approximately $427,000 monthly starting in May 2024 which will offset interest expense. In addition, in March 2023, ChoiceOne eliminated all receive-fix, pay floating swap agreements for a cash payment of $4.2 million. The loss is being amortized in interest income with an expense of approximately $285,000 monthly through April 2024, which was the remaining period of the agreements.
Shareholders’ equity totaled $181.2 million as of September 30, 2023, up from $156.7 million as of September 30, 2022. This increase is due to retained earnings increasing $6.8 million due to earnings and a reduction in accumulated other compressive loss (AOCI) of $16.5 million. AOCI has improved compared to September 30, 2022, despite the rise in interest rates, due to the passage of time, the maturity of our securities portfolio, and an offsetting increase in unrealized gain of our pay-fixed swap derivatives. ChoiceOne Bank remains “well-capitalized” with a total risk-based capital ratio of 12.7% as of September 30, 2023, compared to 12.8% on September 30, 2022.
Total noninterest income increased by $657,000 and $537,000 in the three and nine months ended September 30, 2023, compared to the same periods in the prior year. The increase was largely due to losses in the securities markets which occurred during the prior year. Gains on sales of loans was slightly better in the third quarter of 2023 compared to the third quarter of 2022; however, overall volume remains somewhat depressed due to a competitive housing market and higher mortgage rates. ChoiceOne has also seen steady increases in wealth management income after recent investments in the operation, including the opening of a dedicated wealth management office in Sparta, Michigan during the third quarter of 2023.
Total noninterest expense increased $1.0 million or 2.6%, in the nine months ended September 30, 2023 compared to the same period in 2022. The modest increase in total noninterest expense was largely related to inflationary pressures on employee wages and benefits. ChoiceOne continues to monitor expenses and looks to improve our efficiency through automation and use of digital tools. Management continues to seek out ways to manage costs; however, staying ahead of technological advances and retaining top talent continue to be important in maintaining our competitive advantage.
2
About ChoiceOne
ChoiceOne Financial Services, Inc. is a financial holding company headquartered in Sparta, Michigan and the parent corporation of ChoiceOne Bank, Member FDIC. ChoiceOne Bank operates 36 offices in parts of Kent, Lapeer, Macomb, Muskegon, Newaygo, Ottawa, and St. Clair counties. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. For more information, please visit Investor Relations at ChoiceOne’s website at choiceone.com.
Forward-Looking Statements
This release may contain forward-looking statements. 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. These statements reflect current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, ChoiceOne 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 described in Item 1A in ChoiceOne Financial Services, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2022.
For Further Information:
Adom Greenland
Executive Vice President & CFO
(616) 887 - 2334
IR@ChoiceOne.com
3
Condensed Balance Sheets
(Unaudited)
(In thousands) |
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September 30, 2023 |
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June 30, 2023 |
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September 30, 2022 |
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Cash and cash equivalents |
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$ |
144,673 |
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$ |
76,810 |
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$ |
51,494 |
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Securities Held to Maturity |
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414,743 |
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420,549 |
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428,205 |
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Securities Available for Sale |
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507,580 |
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542,932 |
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546,627 |
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Loans held for sale |
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5,222 |
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8,924 |
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8,848 |
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Loans to other financial institutions |
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23,763 |
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38,838 |
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70 |
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Loans, net of allowance for loan losses |
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1,271,165 |
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1,210,808 |
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1,124,944 |
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Premises and equipment |
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29,628 |
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29,085 |
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28,947 |
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Cash surrender value of life insurance policies |
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44,788 |
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44,510 |
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44,033 |
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Goodwill |
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59,946 |
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59,946 |
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59,946 |
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Core deposit intangible |
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2,057 |
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2,304 |
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3,062 |
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Other assets |
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70,631 |
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49,020 |
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67,353 |
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Total Assets |
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$ |
2,574,196 |
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$ |
2,483,726 |
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$ |
2,363,529 |
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Noninterest-bearing deposits |
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$ |
531,962 |
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$ |
544,925 |
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$ |
599,360 |
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Interest-bearing deposits |
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1,551,995 |
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1,490,093 |
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1,557,294 |
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Brokered deposits |
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49,238 |
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51,370 |
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- |
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Borrowings |
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180,000 |
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160,000 |
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- |
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Subordinated debentures |
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35,446 |
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35,385 |
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35,201 |
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Other liabilities |
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44,394 |
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22,713 |
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15,017 |
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Total Liabilities |
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2,393,035 |
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2,304,486 |
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2,206,872 |
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Common stock and paid-in capital, no par value; shares authorized: 15,000,000; shares outstanding: 7,541,187 at September 30, 2023, 7,534,658 at June 30, 2023, and 7,510,036 at September 30, 2022 |
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173,187 |
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172,880 |
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171,975 |
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Retained earnings |
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70,444 |
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67,281 |
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63,664 |
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Accumulated other comprehensive income (loss), net |
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(62,470 |
) |
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(60,921 |
) |
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(78,982 |
) |
Shareholders' Equity |
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181,161 |
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179,240 |
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156,657 |
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Total Liabilities and Shareholders’ Equity |
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$ |
2,574,196 |
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$ |
2,483,726 |
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$ |
2,363,529 |
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4
Condensed Statements of Income
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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(Dollars in thousands, except per share data) |
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September 30, |
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September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Interest income |
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Loans, including fees |
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$ |
17,774 |
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$ |
13,611 |
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$ |
48,625 |
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$ |
38,432 |
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Securities: |
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Taxable |
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5,346 |
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3,972 |
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15,637 |
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11,001 |
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Tax exempt |
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1,420 |
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1,464 |
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4,244 |
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|
4,678 |
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Other |
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1,764 |
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238 |
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2,512 |
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|
314 |
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Total interest income |
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26,304 |
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|
19,285 |
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71,018 |
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|
54,425 |
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Interest expense |
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Deposits |
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7,237 |
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1,563 |
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15,569 |
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|
3,342 |
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Advances from Federal Home Loan Bank |
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272 |
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5 |
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|
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1,498 |
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|
8 |
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Other |
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2,569 |
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|
379 |
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|
4,622 |
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|
1,127 |
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Total interest expense |
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10,078 |
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|
1,947 |
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21,689 |
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4,477 |
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Net interest income |
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16,226 |
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17,338 |
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49,329 |
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|
49,948 |
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Provision for credit losses on loans |
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|
438 |
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|
100 |
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|
332 |
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|
100 |
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Provision for credit losses on unfunded commitments |
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(438 |
) |
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- |
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(557 |
) |
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- |
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Net Provision for credit losses expense |
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- |
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100 |
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(225 |
) |
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100 |
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Net interest income after provision |
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16,226 |
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17,238 |
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49,554 |
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49,848 |
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Noninterest income |
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Customer service charges |
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2,382 |
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2,458 |
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6,920 |
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7,000 |
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Insurance and investment commissions |
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173 |
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|
158 |
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|
541 |
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|
596 |
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Gains on sales of loans |
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|
536 |
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|
432 |
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|
1,479 |
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|
2,123 |
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Net gains (losses) on sales of securities |
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(71 |
) |
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(378 |
) |
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(71 |
) |
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(805 |
) |
Net gains on sales and write downs of other assets |
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13 |
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- |
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|
149 |
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|
172 |
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Earnings on life insurance policies |
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|
278 |
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|
|
259 |
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|
|
810 |
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|
793 |
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Trust income |
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|
197 |
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|
|
174 |
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|
|
577 |
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|
528 |
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Change in market value of equity securities |
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(134 |
) |
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(323 |
) |
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|
(456 |
) |
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(1,006 |
) |
Other |
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|
330 |
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|
|
267 |
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|
|
911 |
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|
922 |
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Total noninterest income |
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3,704 |
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|
3,047 |
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10,860 |
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10,323 |
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Noninterest expense |
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Salaries and benefits |
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8,038 |
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7,668 |
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|
23,958 |
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|
22,811 |
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Occupancy and equipment |
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|
1,427 |
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|
|
1,545 |
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|
4,577 |
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|
4,688 |
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Data processing |
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|
1,724 |
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|
|
1,734 |
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|
5,087 |
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|
5,056 |
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Professional fees |
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|
435 |
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|
559 |
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|
1,675 |
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|
1,628 |
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Supplies and postage |
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|
192 |
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|
184 |
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|
580 |
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|
541 |
|
Advertising and promotional |
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|
269 |
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|
199 |
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|
573 |
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|
478 |
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Intangible amortization |
|
|
247 |
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|
297 |
|
|
|
752 |
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|
901 |
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FDIC insurance |
|
|
270 |
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|
|
195 |
|
|
|
790 |
|
|
645 |
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Other |
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|
1,126 |
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|
1,035 |
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|
3,304 |
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|
3,515 |
|
Total noninterest expense |
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|
13,728 |
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|
|
13,416 |
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|
41,296 |
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|
40,263 |
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Income before income tax |
|
|
6,202 |
|
|
|
6,869 |
|
|
|
19,118 |
|
|
19,908 |
|
Income tax expense |
|
|
1,080 |
|
|
|
1,056 |
|
|
|
3,150 |
|
|
2,952 |
|
|
|
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|
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|
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|
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|
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Net income |
|
$ |
5,122 |
|
|
$ |
5,813 |
|
|
$ |
15,968 |
|
$ |
16,956 |
|
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|
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Basic earnings per share |
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$ |
0.68 |
|
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$ |
0.77 |
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$ |
2.12 |
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$ |
2.26 |
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Diluted earnings per share |
|
$ |
0.68 |
|
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$ |
0.77 |
|
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$ |
2.12 |
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$ |
2.26 |
|
Dividends declared per share |
|
$ |
0.26 |
|
|
$ |
0.25 |
|
|
$ |
0.78 |
|
$ |
0.75 |
|
5
Other Selected Financial Highlights
(Unaudited)
|
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Quarterly |
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Earnings |
|
2023 3rd |
|
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2023 2nd |
|
|
2023 1st |
|
|
2022 4th |
|
|
2022 3rd |
|
|||||
(in thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest income |
|
$ |
16,226 |
|
|
$ |
16,091 |
|
|
$ |
17,012 |
|
|
$ |
17,366 |
|
|
$ |
17,338 |
|
Net provision expense |
|
|
- |
|
|
|
(250 |
) |
|
|
25 |
|
|
|
150 |
|
|
|
100 |
|
Noninterest income |
|
|
3,704 |
|
|
|
3,485 |
|
|
|
3,671 |
|
|
|
3,749 |
|
|
|
3,047 |
|
Noninterest expense |
|
|
13,728 |
|
|
|
13,573 |
|
|
|
13,995 |
|
|
|
13,215 |
|
|
|
13,416 |
|
Net income before federal income tax expense |
|
|
6,202 |
|
|
|
6,253 |
|
|
|
6,663 |
|
|
|
7,750 |
|
|
|
6,869 |
|
Income tax expense |
|
|
1,080 |
|
|
|
1,040 |
|
|
|
1,030 |
|
|
|
1,066 |
|
|
|
1,056 |
|
Net income |
|
|
5,122 |
|
|
|
5,213 |
|
|
|
5,633 |
|
|
|
6,684 |
|
|
|
5,813 |
|
Basic earnings per share |
|
|
0.68 |
|
|
|
0.69 |
|
|
|
0.75 |
|
|
|
0.89 |
|
|
|
0.77 |
|
Diluted earnings per share |
|
|
0.68 |
|
|
|
0.69 |
|
|
|
0.75 |
|
|
|
0.89 |
|
|
|
0.77 |
|
End of period balances |
|
2023 3rd |
|
|
2023 2nd |
|
|
2023 1st |
|
|
2022 4th |
|
|
2022 3rd |
|
|||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross loans |
|
$ |
1,315,022 |
|
|
$ |
1,273,152 |
|
|
$ |
1,214,186 |
|
|
$ |
1,194,616 |
|
|
$ |
1,141,319 |
|
Loans held for sale (1) |
|
|
5,222 |
|
|
|
8,924 |
|
|
|
3,603 |
|
|
|
4,834 |
|
|
|
8,848 |
|
Loans to other financial institutions (2) |
|
|
23,763 |
|
|
|
38,838 |
|
|
|
- |
|
|
|
- |
|
|
|
70 |
|
PPP loans (3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Core loans (gross loans excluding 1, 2, and 3 above) |
|
|
1,286,037 |
|
|
|
1,225,390 |
|
|
|
1,210,583 |
|
|
|
1,189,782 |
|
|
|
1,132,401 |
|
Allowance for loan losses |
|
|
14,872 |
|
|
|
14,582 |
|
|
|
15,065 |
|
|
|
7,619 |
|
|
|
7,457 |
|
Securities available for sale |
|
|
507,580 |
|
|
|
542,932 |
|
|
|
554,306 |
|
|
|
546,896 |
|
|
|
546,627 |
|
Securities held to maturity |
|
|
414,743 |
|
|
|
420,549 |
|
|
|
422,876 |
|
|
|
425,906 |
|
|
|
428,205 |
|
Other interest-earning assets |
|
|
113,402 |
|
|
|
41,032 |
|
|
|
30,999 |
|
|
|
15,447 |
|
|
|
21,744 |
|
Total earning assets (before allowance) |
|
|
2,350,747 |
|
|
|
2,277,665 |
|
|
|
2,222,367 |
|
|
|
2,182,866 |
|
|
|
2,137,895 |
|
Total assets |
|
|
2,574,196 |
|
|
|
2,483,726 |
|
|
|
2,409,886 |
|
|
|
2,385,915 |
|
|
|
2,363,529 |
|
Noninterest-bearing deposits |
|
|
531,962 |
|
|
|
544,925 |
|
|
|
554,699 |
|
|
|
599,579 |
|
|
|
599,360 |
|
Interest-bearing deposits |
|
|
1,551,995 |
|
|
|
1,490,093 |
|
|
|
1,513,429 |
|
|
|
1,518,424 |
|
|
|
1,557,294 |
|
Brokered deposits |
|
|
49,238 |
|
|
|
51,370 |
|
|
|
37,773 |
|
|
|
- |
|
|
|
- |
|
Total deposits |
|
|
2,133,195 |
|
|
|
2,086,388 |
|
|
|
2,105,901 |
|
|
|
2,118,003 |
|
|
|
2,156,654 |
|
Deposits excluding brokered |
|
|
2,083,957 |
|
|
|
2,035,018 |
|
|
|
2,068,128 |
|
|
|
2,118,003 |
|
|
|
2,156,654 |
|
Total subordinated debt |
|
|
35,446 |
|
|
|
35,385 |
|
|
|
35,323 |
|
|
|
35,262 |
|
|
|
35,201 |
|
Total borrowed funds |
|
|
180,000 |
|
|
|
160,000 |
|
|
|
85,000 |
|
|
|
50,000 |
|
|
|
- |
|
Other interest-bearing liabilities |
|
|
32,204 |
|
|
|
11,985 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total interest-bearing liabilities |
|
|
1,848,883 |
|
|
|
1,748,833 |
|
|
|
1,671,525 |
|
|
|
1,603,686 |
|
|
|
1,592,495 |
|
Shareholders' equity |
|
|
181,161 |
|
|
|
179,240 |
|
|
|
168,712 |
|
|
|
168,874 |
|
|
|
156,657 |
|
Average Balances |
|
2023 3rd |
|
|
2023 2nd |
|
|
2023 1st |
|
|
2022 4th |
|
|
2022 3rd |
|
|||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans |
|
$ |
1,278,421 |
|
|
$ |
1,218,860 |
|
|
$ |
1,202,268 |
|
|
$ |
1,169,605 |
|
|
$ |
1,128,679 |
|
Securities |
|
|
1,035,785 |
|
|
|
1,053,191 |
|
|
|
1,059,747 |
|
|
|
1,072,594 |
|
|
|
1,079,584 |
|
Other interest-earning assets |
|
|
128,704 |
|
|
|
41,075 |
|
|
|
19,452 |
|
|
|
14,809 |
|
|
|
45,210 |
|
Total earning assets (before allowance) |
|
|
2,442,910 |
|
|
|
2,313,126 |
|
|
|
2,281,467 |
|
|
|
2,257,008 |
|
|
|
2,253,473 |
|
Total assets |
|
|
2,568,240 |
|
|
|
2,422,567 |
|
|
|
2,391,344 |
|
|
|
2,373,851 |
|
|
|
2,389,550 |
|
Noninterest-bearing deposits |
|
|
534,106 |
|
|
|
534,106 |
|
|
|
566,628 |
|
|
|
605,318 |
|
|
|
593,793 |
|
Interest-bearing deposits |
|
|
1,550,591 |
|
|
|
1,472,990 |
|
|
|
1,530,313 |
|
|
|
1,522,510 |
|
|
|
1,576,240 |
|
Brokered deposits |
|
|
44,868 |
|
|
|
49,679 |
|
|
|
12,762 |
|
|
|
- |
|
|
|
- |
|
Total deposits |
|
|
2,129,565 |
|
|
|
2,056,775 |
|
|
|
2,109,703 |
|
|
|
2,127,828 |
|
|
|
2,170,033 |
|
Total subordinated debt |
|
|
35,413 |
|
|
|
35,352 |
|
|
|
35,290 |
|
|
|
35,230 |
|
|
|
35,168 |
|
Total borrowed funds |
|
|
181,739 |
|
|
|
144,231 |
|
|
|
63,122 |
|
|
|
36,773 |
|
|
|
2,414 |
|
Other interest-bearing liabilities |
|
|
20,480 |
|
|
|
3,763 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total interest-bearing liabilities |
|
|
1,833,091 |
|
|
|
1,706,015 |
|
|
|
1,641,487 |
|
|
|
1,594,513 |
|
|
|
1,613,822 |
|
Shareholders' equity |
|
|
181,219 |
|
|
|
171,912 |
|
|
|
167,952 |
|
|
|
160,284 |
|
|
|
164,758 |
|
6
Performance Ratios |
|
2023 3rd |
|
|
2023 2nd |
|
|
2023 1st |
|
|
2022 4th |
|
|
2022 3rd |
|
|||||
Return on average assets |
|
|
0.80 |
% |
|
|
0.86 |
% |
|
|
0.94 |
% |
|
|
1.13 |
% |
|
|
0.97 |
% |
Return on average equity |
|
|
11.31 |
% |
|
|
12.13 |
% |
|
|
13.42 |
% |
|
|
16.68 |
% |
|
|
14.11 |
% |
Return on average tangible common equity |
|
|
16.55 |
% |
|
|
18.31 |
% |
|
|
20.64 |
% |
|
|
26.63 |
% |
|
|
21.96 |
% |
Net interest margin (fully tax-equivalent) |
|
|
2.70 |
% |
|
|
2.86 |
% |
|
|
3.09 |
% |
|
|
3.15 |
% |
|
|
3.15 |
% |
Efficiency ratio |
|
|
65.74 |
% |
|
|
65.92 |
% |
|
|
65.40 |
% |
|
|
60.15 |
% |
|
|
61.06 |
% |
Cost of funds |
|
|
1.70 |
% |
|
|
1.29 |
% |
|
|
0.79 |
% |
|
|
0.59 |
% |
|
|
0.35 |
% |
Cost of deposits |
|
|
1.36 |
% |
|
|
0.98 |
% |
|
|
0.62 |
% |
|
|
0.47 |
% |
|
|
0.29 |
% |
Cost of interest bearing liabilities |
|
|
2.20 |
% |
|
|
1.69 |
% |
|
|
1.08 |
% |
|
|
0.82 |
% |
|
|
0.48 |
% |
Shareholders' equity to total assets |
|
|
7.04 |
% |
|
|
7.22 |
% |
|
|
7.00 |
% |
|
|
7.08 |
% |
|
|
6.63 |
% |
Tangible common equity to tangible assets |
|
|
4.74 |
% |
|
|
4.83 |
% |
|
|
4.52 |
% |
|
|
4.57 |
% |
|
|
4.07 |
% |
Full-time equivalent employees |
|
|
376 |
|
|
|
380 |
|
|
|
376 |
|
|
|
376 |
|
|
|
383 |
|
Capital Ratios ChoiceOne Financial Services Inc. |
|
2023 3rd |
|
|
2023 2nd |
|
|
2023 1st |
|
|
2022 4th |
|
|
2022 3rd |
|
|||||
Total capital (to risk weighted assets) |
|
|
13.2 |
% |
|
|
13.2 |
% |
|
|
13.5 |
% |
|
|
13.8 |
% |
|
|
13.7 |
% |
Common equity Tier 1 capital (to risk weighted assets) |
|
|
10.4 |
% |
|
|
10.5 |
% |
|
|
10.7 |
% |
|
|
11.1 |
% |
|
|
10.9 |
% |
Tier 1 capital (to risk weighted assets) |
|
|
10.7 |
% |
|
|
10.8 |
% |
|
|
11.0 |
% |
|
|
11.4 |
% |
|
|
11.2 |
% |
Tier 1 capital (to average assets) |
|
|
7.4 |
% |
|
|
7.7 |
% |
|
|
7.7 |
% |
|
|
7.9 |
% |
|
|
7.6 |
% |
Capital Ratios ChoiceOne Bank |
|
2023 3rd |
|
|
2023 2nd |
|
|
2023 1st |
|
|
2022 4th |
|
|
2022 3rd |
|
|||||
Total capital (to risk weighted assets) |
|
|
12.7 |
% |
|
|
12.7 |
% |
|
|
13.0 |
% |
|
|
13.0 |
% |
|
|
12.8 |
% |
Common equity Tier 1 capital (to risk weighted assets) |
|
|
12.0 |
% |
|
|
12.2 |
% |
|
|
12.5 |
% |
|
|
12.5 |
% |
|
|
12.3 |
% |
Tier 1 capital (to risk weighted assets) |
|
|
12.0 |
% |
|
|
12.2 |
% |
|
|
12.5 |
% |
|
|
12.5 |
% |
|
|
12.3 |
% |
Tier 1 capital (to average assets) |
|
|
8.3 |
% |
|
|
8.7 |
% |
|
|
8.7 |
% |
|
|
8.7 |
% |
|
|
8.3 |
% |
Asset Quality |
|
2023 3rd |
|
|
2023 2nd |
|
|
2023 1st |
|
|
2022 4th |
|
|
2022 3rd |
|
|||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loan charge-offs (recoveries) |
|
$ |
148 |
|
|
$ |
67 |
|
|
$ |
28 |
|
|
$ |
(12 |
) |
|
$ |
59 |
|
Annualized net loan charge-offs (recoveries) to average loans |
|
|
0.05 |
% |
|
|
0.02 |
% |
|
|
0.01 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
Allowance for loan losses |
|
$ |
14,872 |
|
|
$ |
14,582 |
|
|
$ |
15,065 |
|
|
$ |
7,619 |
|
|
$ |
7,457 |
|
Unfunded commitment liability |
|
$ |
2,718 |
|
|
$ |
3,156 |
|
|
$ |
2,991 |
|
|
$ |
- |
|
|
$ |
- |
|
Allowance to loans (excludes held for sale) |
|
|
1.14 |
% |
|
|
1.15 |
% |
|
|
1.24 |
% |
|
|
0.64 |
% |
|
|
0.66 |
% |
Non-Accruing loans |
|
$ |
1,670 |
|
|
$ |
1,581 |
|
|
$ |
1,596 |
|
|
$ |
1,263 |
|
|
$ |
1,197 |
|
Nonperforming loans (includes OREO) |
|
$ |
1,792 |
|
|
$ |
1,847 |
|
|
$ |
1,726 |
|
|
$ |
2,666 |
|
|
$ |
2,628 |
|
Nonperforming loans to total loans (excludes held for sale) |
|
|
0.14 |
% |
|
|
0.15 |
% |
|
|
0.14 |
% |
|
|
0.22 |
% |
|
|
0.23 |
% |
Nonperforming assets to total assets |
|
|
0.07 |
% |
|
|
0.07 |
% |
|
|
0.07 |
% |
|
|
0.11 |
% |
|
|
0.11 |
% |
7