SPARTA,
Mich., April 26, 2023 /PRNewswire/ -- ChoiceOne
Financial Services, Inc. ("ChoiceOne", NASDAQ:COFS), the parent
company for ChoiceOne Bank, reported financial results for the
quarter ended March 31, 2023.
Financial Highlights
- ChoiceOne reported net income of $5,633,000 for the three months ended
March 31, 2023, compared to
$6,684,000 and $5,528,000 for the three months ended
December 31, 2022 and March 31, 2022, respectively.
- Diluted earnings per share were $0.75 in the three months ended March 31, 2023, compared to $0.89 and $0.74 for
the three months ended December 31,
2022 and March 31, 2022,
respectively.
- Core loans, which exclude held for sale loans and Paycheck
Protection Program loans ("PPP"), grew organically by $20.8 million or 7.0% on an annualized basis
during the first quarter of 2023 and $191.7
million or 18.8% since March 31,
2022. Loan interest income increased $2.6 million in the first quarter of 2023
compared to the same period in 2022, despite the first quarter of
2022 being aided by $869,000 in PPP
fees and an additional $347,000 in
accretion income.
- Deposits, excluding brokered deposits, decreased by
$77.5 million or 3.6% as of
March 31, 2023 compared to
March 31, 2022. This decrease was
attributed to a combination of customers using cash on hand for
debt payoffs, seasonal tax and municipal bond payments, and
customers seeking higher rates via money market securities with
transfers to the ChoiceOne Wealth department or outside firms. In
the last 12 months over $33.6 million
or 43.4% of the trailing 12 month deposit runoff has been
transferred from bank deposits to the ChoiceOne Wealth
department.
- ChoiceOne continues to be proactive in managing its liquidity
position by using brokered deposits and FHLB advances to ensure
ample liquidity to account for deposit fluctuations. At
March 31, 2023, total available
borrowing capacity from all sources was $405.7 million. ChoiceOne estimates that if
additional collateral is pledged to the FHLB, the Federal Reserve
Discount Window, or the new Bank Term Funding Program, we would
increase available borrowing capacity from all sources to
$819.2 million.
"Growth in our loan portfolio is the result of us acquiring new
relationships and reflects a strong local economy in
Michigan. While deposits have drifted in this quarter, the
ChoiceOne Wealth team has benefited and is expanding our services
to key client relationships. Being proactive with our best
customers has allowed us to deepen relationships and provide more
value than just a higher interest rate," said Kelly Potes, Chief Executive Officer.
ChoiceOne reported net income of $5,633,000 for the three months ended
March 31, 2023, compared to
$6,684,000 and $5,528,000 for the three months ended
December 31, 2022 and March 31, 2022, respectively. Diluted
earnings per share were $0.75 in the
three months ended March 31, 2023,
compared to $0.89 and $0.74 for the three months ended December 31, 2022 and March 31, 2022, respectively. The increase
in deposit costs during the first quarter of 2023 has negatively
impacted earnings, offset by higher interest income from organic
loan growth.
Total assets as of March 31, 2023,
increased $24.0 million as compared
to December 31, 2022 and $33.1 million compared to March 31, 2022. This increase is due to
core loan growth of $20.8 million or
7.0% annualized during the first quarter of 2023. At the same
time ChoiceOne saw deposits, excluding brokered deposits, decline
$49.9 million in the first quarter of
2023 and $77.5 million compared to
March 31, 2022. This decrease was
attributed to a combination of customers using cash on hand for
debt payoffs, seasonal tax and municipal bond payments, and
customers seeking higher rates via money market securities with
transfers to the ChoiceOne Wealth department or outside firms. In
the last twelve months, over $33.6
million or 43.4% of the trailing twelve-month deposit runoff
has been transferred from bank deposits to the ChoiceOne Wealth
department.
The cost of deposits has increased to 0.62% during the three
months ended March 31, 2023 compared
to 0.47% and 0.15% for the three months ended December 31, 2022 and March 31, 2022, respectively, due to rising short
term interest rates and is expected to continue to increase as
deposits reprice. ChoiceOne is actively managing these costs
and expects rates paid on deposits to continue to lag the federal
fund rate. Uninsured deposits total $751,000 or 36% of deposits at March 31, 2023.
In order to ensure ample liquidity ChoiceOne increased borrowed
funds from the FHLB to $85.0 million
and also obtained $37.8 million in
short term brokered deposits at March
31, 2023. Brokered deposits were locked in at below
market rates prior to the latest increase by the Federal
Reserve. Brokered deposits allow us to preserve borrowing
capacity at more accessible funding options. Interest expense
on borrowings for the three months ended March 31, 2023, increased $344,000 as compared to the fourth quarter of
2022 and $740,000 as compared to the
same period in 2022 primarily due to the increase in rates on
borrowings. Total cost of funds increased to 0.79% in
the first quarter of 2023 compared to 0.59% in the fourth quarter
of 2022 and 0.21% in the first quarter of 2022. This increase is
the result of higher deposit costs and increased borrowings.
ChoiceOne continues to be proactive in managing its liquidity
position by using brokered deposits and FHLB advances to ensure
ample liquidity to account for deposit fluctuations. At
March 31, 2023, total available
borrowing capacity from all sources was $405.7 million. ChoiceOne estimates that if
additional collateral is pledged to the FHLB, the Federal Reserve
Discount Window, or the new Bank Term Funding Program, we would
increase available borrowing capacity from all sources to
$819.2 million.
Interest income increased $763,000
in the three months ended March 31,
2023, compared to December 31,
2022, and $3.9 million
compared to the same period in the prior year. Core loans
grew organically by $20.8 million or
7.0% on an annualized basis during the first quarter of 2023 and
$191.7 million or 18.8% since
March 31, 2022. This led to an
increase in loan interest income of $2.6
million in the first quarter of 2023 compared to the same
period in 2022, despite the first quarter of 2022 being aided by
$869,000 in PPP fees and an
additional $347,000 in accretion
income. Interest income from securities increased
$1.3 million in the first three
months of 2023 compared to the first three months of 2022, as a
result of higher yield on securities offset by a $70.9 million decline in the average balance of
securities. The decrease in average balance is due to the
liquidation of $47.2 million in
securities during 2022, with the remainder attributed to paydowns
and a decline in the fair value of available for sale securities.
Fully tax equivalent net interest margin decreased to 3.09% in the
first quarter of 2023 from 3.15% in the fourth quarter in 2022 as
the increase in cost of funds exceeded the increase in income.
On March 31, 2023, the ratio of
the allowance for credit losses to total loans was 1.24% compared
to 0.64% on December 31, 2022.
The liability for expected credit losses on unfunded loans and
other commitments was $3.0 million
and did not exist on December 31,
2022. Both of these increases were attributable to
ChoiceOne's adoption of ASU 2016-13 current expected credit loss
("CECL"). On January 1, 2023,
ChoiceOne adopted ASU 2016-13 CECL which caused an increase in the
allowance for credit losses of $7.2
million. The large increase is partially due to the
current economic environment and the nature of the CECL
calculation. Approximately 20% of this increase is related to the
migration of purchased loans into the portfolio assessed by the
CECL calculation. ChoiceOne also booked a liability for expected
credit losses on unfunded loans and other commitments of
$3.3 million related to the adoption
of CECL guidance. These unfunded loans are open credit lines with
current customers and loans approved by ChoiceOne but not funded.
The increase in the allowance and the cost of the liability
resulted in a decrease in the retained earnings account on our
Consolidated Balance Sheet equal to the after-tax impact, with the
tax impact portion being recorded in deferred taxes in our
Consolidated balance Sheet in accordance with FASB guidance.
Shareholders' equity totaled $168.7
million as of March 31, 2023,
down from $191.1 million as of
March 31, 2022, primarily due to an
increase in the after-tax net unrealized loss on securities
available for sale resulting from higher market interest
rates. ChoiceOne uses interest rate swaps to manage interest
rate exposure to certain fixed assets and variable rate
liabilities. On March 31, 2022
ChoiceOne has pay-fixed interest rate swaps with a total notional
value of $401.0 million. 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. ChoiceOne Bank
remains "well-capitalized" with a total risk-based capital ratio of
13.0% as of March 31, 2023, compared
to 13.3% on March 31, 2022.
Total noninterest income declined $174,000 in the first three months of 2023
compared to the same period in the prior year. $401,000 of this decline is due to the change in
the mortgage sales environment from the prior year. With the
rapid rise in interest rates, refinancing activity has slowed, and
demand has shifted towards adjustable-rate products. This
decline was offset by the change in market value of equity
securities, which saw an increase in the first quarter of 2023
compared to a large decline during the same period of the prior
year. Equity investments include local community bank stocks
and Community Reinvestment Act bond mutual funds. Customer
service charges also increased by $78,000 in the first quarter of 2023 compared to
the same period of 2022, as consumer and business activity
improved.
Total noninterest expense increased $305,000, or 2.2%, in the first quarter of 2023
compared to the same period of 2022. The increase in total
noninterest expense was related to an increase in FDIC insurance
costs and inflationary pressures on employee wages and
benefits. This increase was offset by decreases in other
categories including data processing and fraud losses.
ChoiceOne continues to monitor expenses and looks to improve our
efficiency through automation and use of digital tools. ChoiceOne
launched an enhanced treasury services online platform for business
clients during the first quarter of 2023. This new platform
targets mid-sized businesses and municipalities who require
enhanced reporting, security, and payment capabilities. Management
believes that continuing to invest in our technology and people is
the right way to maintain sustainable growth.
Potes further commented, "We have continued to grow our core
loan portfolio and maintain excellent asset quality in the first
quarter. The recent increase in short term interest rates has
put pressure on our deposits, but we have taken this as an
opportunity to reengage with our customer base and expand the reach
of our Wealth Department. In addition, our yield on earning
assets will continue to improve as our assets reprice over time
which will help offset increased funding costs. Our experienced
team and strong customer relationships are tremendous assets and
will continue to pay dividends throughout 2023."
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.
Condensed Balance
Sheets
(Unaudited)
|
|
(In
thousands)
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
|
March 31,
2022
|
|
Cash and cash
equivalents
|
|
$
|
55,189
|
|
|
$
|
43,943
|
|
|
$
|
89,976
|
|
Securities Held to
Maturity
|
|
|
422,876
|
|
|
|
425,906
|
|
|
|
429,918
|
|
Securities Available
for Sale
|
|
|
554,306
|
|
|
|
546,896
|
|
|
|
657,887
|
|
Loans held for
sale
|
|
|
3,603
|
|
|
|
4,834
|
|
|
|
13,450
|
|
Loans to other
financial institutions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Loans, net of allowance
for loan losses
|
|
|
1,195,518
|
|
|
|
1,182,163
|
|
|
|
1,019,805
|
|
Premises and
equipment
|
|
|
28,633
|
|
|
|
28,232
|
|
|
|
29,678
|
|
Cash surrender value of
life insurance policies
|
|
|
44,241
|
|
|
|
43,978
|
|
|
|
43,520
|
|
Goodwill
|
|
|
59,946
|
|
|
|
59,946
|
|
|
|
59,946
|
|
Core deposit
intangible
|
|
|
2,557
|
|
|
|
2,809
|
|
|
|
3,660
|
|
Other assets
|
|
|
43,017
|
|
|
|
47,208
|
|
|
|
28,938
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
2,409,886
|
|
|
$
|
2,385,915
|
|
|
$
|
2,376,778
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
$
|
554,699
|
|
|
$
|
599,579
|
|
|
$
|
565,657
|
|
Interest-bearing
deposits
|
|
|
1,513,429
|
|
|
|
1,518,424
|
|
|
|
1,579,944
|
|
Brokered
deposits
|
|
|
37,773
|
|
|
|
-
|
|
|
|
-
|
|
Borrowings
|
|
|
85,000
|
|
|
|
50,000
|
|
|
|
-
|
|
Subordinated
debentures
|
|
|
35,323
|
|
|
|
35,262
|
|
|
|
35,078
|
|
Other
liabilities
|
|
|
14,950
|
|
|
|
13,776
|
|
|
|
4,981
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
2,241,174
|
|
|
|
2,217,041
|
|
|
|
2,185,660
|
|
|
|
|
|
|
|
|
|
|
|
Common stock and
paid-in capital, no par value; shares authorized:
15,000,000; shares outstanding: 7,521,749 at March 31, 2023,
7,516,098 at
December 31, 2022 and 7,489,812 at March 31, 2022
|
|
|
172,564
|
|
|
|
172,277
|
|
|
|
171,492
|
|
Retained
earnings
|
|
|
64,026
|
|
|
|
68,394
|
|
|
|
55,988
|
|
Accumulated other
comprehensive income (loss), net
|
|
|
(67,878)
|
|
|
|
(71,797)
|
|
|
|
(36,362)
|
|
Shareholders'
Equity
|
|
|
168,712
|
|
|
|
168,874
|
|
|
|
191,118
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
|
$
|
2,409,886
|
|
|
$
|
2,385,915
|
|
|
$
|
2,376,778
|
|
Condensed Statements
of Income
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
(In thousands, except
per share data)
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
|
March 31,
2022
|
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
Loans, including
fees
|
|
$
|
14,873
|
|
|
$
|
14,391
|
|
|
$
|
12,298
|
|
|
Securities and
other
|
|
|
6,525
|
|
|
|
6,244
|
|
|
|
5,176
|
|
|
Total Interest
Income
|
|
|
21,398
|
|
|
|
20,635
|
|
|
|
17,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
3,276
|
|
|
|
2,503
|
|
|
|
783
|
|
|
Borrowings
|
|
|
1,110
|
|
|
|
766
|
|
|
|
370
|
|
|
Total Interest
Expense
|
|
|
4,386
|
|
|
|
3,269
|
|
|
|
1,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
|
17,012
|
|
|
|
17,366
|
|
|
|
16,321
|
|
|
Provision for loan
losses
|
|
|
25
|
|
|
|
150
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income
After Provision for Loan Losses
|
|
|
16,987
|
|
|
|
17,216
|
|
|
|
16,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Customer service
charges
|
|
|
2,267
|
|
|
|
2,350
|
|
|
|
2,189
|
|
|
Insurance and
investment commissions
|
|
|
196
|
|
|
|
183
|
|
|
|
205
|
|
|
Gains on sales of
loans
|
|
|
403
|
|
|
|
220
|
|
|
|
804
|
|
|
Gains (loss) on sales
of securities
|
|
|
-
|
|
|
|
(4)
|
|
|
|
-
|
|
|
Gains (loss) on sales
of other assets
|
|
|
3
|
|
|
|
(73)
|
|
|
|
171
|
|
|
Trust income
|
|
|
184
|
|
|
|
206
|
|
|
|
178
|
|
|
Earnings on life
insurance policies
|
|
|
263
|
|
|
|
519
|
|
|
|
280
|
|
|
Change in market value
of equity securities
|
|
|
63
|
|
|
|
51
|
|
|
|
(356)
|
|
|
Other income
|
|
|
292
|
|
|
|
297
|
|
|
|
374
|
|
|
Total Noninterest
Income
|
|
|
3,671
|
|
|
|
3,749
|
|
|
|
3,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
|
|
8,083
|
|
|
|
7,580
|
|
|
|
7,606
|
|
|
Occupancy and
equipment
|
|
|
1,643
|
|
|
|
1,501
|
|
|
|
1,625
|
|
|
Data
processing
|
|
|
1,682
|
|
|
|
1,673
|
|
|
|
1,744
|
|
|
Professional
fees
|
|
|
621
|
|
|
|
547
|
|
|
|
510
|
|
|
Core deposit intangible
amortization
|
|
|
252
|
|
|
|
252
|
|
|
|
282
|
|
|
Other
expenses
|
|
|
1,714
|
|
|
|
1,662
|
|
|
|
1,923
|
|
|
Total Noninterest
Expense
|
|
|
13,995
|
|
|
|
13,215
|
|
|
|
13,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Tax
|
|
|
6,663
|
|
|
|
7,750
|
|
|
|
6,476
|
|
|
Income Tax
Expense
|
|
|
1,030
|
|
|
|
1,066
|
|
|
|
948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
5,633
|
|
|
$
|
6,684
|
|
|
$
|
5,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
|
$
|
0.75
|
|
|
$
|
0.89
|
|
|
$
|
0.74
|
|
|
Diluted Earnings Per
Share
|
|
$
|
0.75
|
|
|
$
|
0.89
|
|
|
$
|
0.74
|
|
|
Other Selected
Financial Highlights
(Unaudited)
|
|
|
|
Quarterly
|
|
Earnings
|
|
2023 1st
Qtr.
|
|
|
2022 4th
Qtr.
|
|
|
2022 3rd
Qtr.
|
|
|
2022 2nd
Qtr.
|
|
|
2022 1st
Qtr.
|
|
(in thousands except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
17,012
|
|
|
$
|
17,366
|
|
|
$
|
17,338
|
|
|
$
|
16,289
|
|
|
$
|
16,321
|
|
Provision for loan
losses
|
|
|
25
|
|
|
|
150
|
|
|
|
100
|
|
|
|
-
|
|
|
|
-
|
|
Noninterest
income
|
|
|
3,671
|
|
|
|
3,749
|
|
|
|
3,047
|
|
|
|
3,430
|
|
|
|
3,845
|
|
Noninterest
expense
|
|
|
13,995
|
|
|
|
13,215
|
|
|
|
13,416
|
|
|
|
13,157
|
|
|
|
13,690
|
|
Net income before
federal income tax expense
|
|
|
6,663
|
|
|
|
7,750
|
|
|
|
6,869
|
|
|
|
6,562
|
|
|
|
6,476
|
|
Income tax
expense
|
|
|
1,030
|
|
|
|
1,066
|
|
|
|
1,056
|
|
|
|
947
|
|
|
|
948
|
|
Net income
|
|
|
5,633
|
|
|
|
6,684
|
|
|
|
5,813
|
|
|
|
5,615
|
|
|
|
5,528
|
|
Basic earnings per
share
|
|
|
0.75
|
|
|
|
0.89
|
|
|
|
0.77
|
|
|
|
0.75
|
|
|
|
0.74
|
|
Diluted earnings per
share
|
|
|
0.75
|
|
|
|
0.89
|
|
|
|
0.77
|
|
|
|
0.75
|
|
|
|
0.74
|
|
End of period
balances
|
|
2023 1st
Qtr.
|
|
|
2022 4th
Qtr.
|
|
|
2022 3rd
Qtr.
|
|
|
2022 2nd
Qtr.
|
|
|
2022 1st
Qtr.
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans
|
|
$
|
1,214,186
|
|
|
$
|
1,194,616
|
|
|
$
|
1,141,319
|
|
|
$
|
1,129,439
|
|
|
$
|
1,040,856
|
|
Loans held for sale
(1)
|
|
|
3,603
|
|
|
|
4,834
|
|
|
|
8,848
|
|
|
|
10,628
|
|
|
|
13,450
|
|
Loans to other
financial institutions (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
70
|
|
|
|
37,422
|
|
|
|
-
|
|
PPP loans
(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,758
|
|
|
|
8,476
|
|
Core loans (gross loans
excluding 1, 2, and 3 above)
|
|
|
1,210,583
|
|
|
|
1,189,782
|
|
|
|
1,132,401
|
|
|
|
1,079,631
|
|
|
|
1,018,930
|
|
Allowance for loan
losses
|
|
|
15,065
|
|
|
|
7,619
|
|
|
|
7,457
|
|
|
|
7,416
|
|
|
|
7,601
|
|
Securities available
for sale
|
|
|
554,306
|
|
|
|
546,896
|
|
|
|
546,627
|
|
|
|
582,987
|
|
|
|
657,887
|
|
Securities held to
maturity
|
|
|
422,876
|
|
|
|
425,906
|
|
|
|
428,205
|
|
|
|
429,675
|
|
|
|
429,918
|
|
Other interest-earning
assets
|
|
|
30,999
|
|
|
|
15,447
|
|
|
|
21,744
|
|
|
|
9,532
|
|
|
|
62,945
|
|
Total earning assets
(before allowance)
|
|
|
2,222,367
|
|
|
|
2,182,866
|
|
|
|
2,137,895
|
|
|
|
2,151,633
|
|
|
|
2,191,606
|
|
Total assets
|
|
|
2,409,886
|
|
|
|
2,385,915
|
|
|
|
2,363,529
|
|
|
|
2,360,205
|
|
|
|
2,376,778
|
|
Noninterest-bearing
deposits
|
|
|
554,699
|
|
|
|
599,579
|
|
|
|
599,360
|
|
|
|
578,927
|
|
|
|
565,657
|
|
Interest-bearing
deposits
|
|
|
1,513,429
|
|
|
|
1,518,424
|
|
|
|
1,557,294
|
|
|
|
1,559,577
|
|
|
|
1,579,944
|
|
Brokered
deposits
|
|
|
37,773
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
deposits
|
|
|
2,105,901
|
|
|
|
2,118,003
|
|
|
|
2,156,654
|
|
|
|
2,138,504
|
|
|
|
2,145,601
|
|
Total subordinated
debt
|
|
|
35,323
|
|
|
|
35,262
|
|
|
|
35,201
|
|
|
|
35,140
|
|
|
|
35,078
|
|
Total borrowed
funds
|
|
|
85,000
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
7,000
|
|
|
|
-
|
|
Total interest-bearing
liabilities
|
|
|
1,671,525
|
|
|
|
1,603,686
|
|
|
|
1,592,495
|
|
|
|
1,601,717
|
|
|
|
1,615,022
|
|
Shareholders'
equity
|
|
|
168,712
|
|
|
|
168,874
|
|
|
|
156,657
|
|
|
|
166,460
|
|
|
|
191,118
|
|
Average
Balances
|
|
2023 1st
Qtr.
|
|
|
2022 4th
Qtr.
|
|
|
2022 3rd
Qtr.
|
|
|
2022 2nd
Qtr.
|
|
|
2022 1st
Qtr.
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,202,268
|
|
|
$
|
1,169,605
|
|
|
$
|
1,128,679
|
|
|
$
|
1,076,934
|
|
|
$
|
1,037,646
|
|
Securities
|
|
|
1,059,747
|
|
|
|
1,072,594
|
|
|
|
1,079,584
|
|
|
|
1,098,419
|
|
|
|
1,130,681
|
|
Other interest-earning
assets
|
|
|
19,452
|
|
|
|
14,809
|
|
|
|
45,210
|
|
|
|
40,728
|
|
|
|
36,460
|
|
Total earning assets
(before allowance)
|
|
|
2,281,467
|
|
|
|
2,257,008
|
|
|
|
2,253,473
|
|
|
|
2,216,081
|
|
|
|
2,204,787
|
|
Total assets
|
|
|
2,391,344
|
|
|
|
2,373,851
|
|
|
|
2,389,550
|
|
|
|
2,361,479
|
|
|
|
2,375,864
|
|
Noninterest-bearing
deposits
|
|
|
566,628
|
|
|
|
605,318
|
|
|
|
593,793
|
|
|
|
578,943
|
|
|
|
553,267
|
|
Interest-bearing
deposits
|
|
|
1,530,313
|
|
|
|
1,522,510
|
|
|
|
1,576,240
|
|
|
|
1,555,721
|
|
|
|
1,548,685
|
|
Brokered
deposits
|
|
|
12,762
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
deposits
|
|
|
2,109,703
|
|
|
|
2,127,828
|
|
|
|
2,170,033
|
|
|
|
2,134,664
|
|
|
|
2,101,952
|
|
Total subordinated
debt
|
|
|
35,290
|
|
|
|
35,230
|
|
|
|
35,168
|
|
|
|
35,095
|
|
|
|
35,342
|
|
Total borrowed
funds
|
|
|
63,122
|
|
|
|
36,773
|
|
|
|
2,414
|
|
|
|
5,765
|
|
|
|
10,239
|
|
Total interest-bearing
liabilities
|
|
|
1,641,487
|
|
|
|
1,594,513
|
|
|
|
1,613,822
|
|
|
|
1,596,581
|
|
|
|
1,594,266
|
|
Shareholders'
equity
|
|
|
167,952
|
|
|
|
160,284
|
|
|
|
164,758
|
|
|
|
177,085
|
|
|
|
206,280
|
|
Performance
Ratios
|
|
2023 1st
Qtr.
|
|
|
2022 4th
Qtr.
|
|
|
2022 3rd
Qtr.
|
|
|
2022 2nd
Qtr.
|
|
|
2022 1st
Qtr.
|
|
Return on average
assets
|
|
|
0.94
|
%
|
|
|
1.13
|
%
|
|
|
0.97
|
%
|
|
|
0.95
|
%
|
|
|
0.93
|
%
|
Return on average
equity
|
|
|
13.42
|
%
|
|
|
16.68
|
%
|
|
|
14.11
|
%
|
|
|
12.68
|
%
|
|
|
10.72
|
%
|
Return on average
tangible common equity
|
|
|
20.64
|
%
|
|
|
26.63
|
%
|
|
|
21.96
|
%
|
|
|
18.87
|
%
|
|
|
14.85
|
%
|
Net interest margin
(fully tax-equivalent)
|
|
|
3.09
|
%
|
|
|
3.15
|
%
|
|
|
3.15
|
%
|
|
|
3.02
|
%
|
|
|
3.04
|
%
|
Efficiency
ratio
|
|
|
65.40
|
%
|
|
|
60.15
|
%
|
|
|
61.06
|
%
|
|
|
61.43
|
%
|
|
|
64.37
|
%
|
Cost of
funds
|
|
|
0.79
|
%
|
|
|
0.59
|
%
|
|
|
0.35
|
%
|
|
|
0.25
|
%
|
|
|
0.21
|
%
|
Cost of
deposits
|
|
|
0.62
|
%
|
|
|
0.47
|
%
|
|
|
0.29
|
%
|
|
|
0.19
|
%
|
|
|
0.15
|
%
|
Shareholders' equity to
total assets
|
|
|
7.00
|
%
|
|
|
7.08
|
%
|
|
|
6.63
|
%
|
|
|
7.05
|
%
|
|
|
8.04
|
%
|
Tangible common equity
to tangible assets
|
|
|
4.52
|
%
|
|
|
4.57
|
%
|
|
|
4.07
|
%
|
|
|
4.49
|
%
|
|
|
5.51
|
%
|
Full-time equivalent
employees
|
|
|
376
|
|
|
|
376
|
|
|
|
383
|
|
|
|
380
|
|
|
|
376
|
|
Capital Ratios
ChoiceOne Financial Services Inc.
|
|
2023 1st
Qtr.
|
|
|
2022 4th
Qtr.
|
|
|
2022 3rd
Qtr.
|
|
|
2022 2nd
Qtr.
|
|
|
2022 1st
Qtr.
|
|
Total capital (to risk
weighted assets)
|
|
|
13.5
|
%
|
|
|
13.8
|
%
|
|
|
13.7
|
%
|
|
|
13.8
|
%
|
|
|
14.6
|
%
|
Common equity Tier 1
capital (to risk weighted assets)
|
|
|
10.7
|
%
|
|
|
11.1
|
%
|
|
|
10.9
|
%
|
|
|
11.0
|
%
|
|
|
11.5
|
%
|
Tier 1 capital (to risk
weighted assets)
|
|
|
11.0
|
%
|
|
|
11.4
|
%
|
|
|
11.2
|
%
|
|
|
11.3
|
%
|
|
|
11.9
|
%
|
Tier 1 capital (to
average assets)
|
|
|
7.7
|
%
|
|
|
7.9
|
%
|
|
|
7.6
|
%
|
|
|
7.5
|
%
|
|
|
7.3
|
%
|
Capital Ratios
ChoiceOne Bank
|
|
2023 1st
Qtr.
|
|
|
2022 4th
Qtr.
|
|
|
2022 3rd
Qtr.
|
|
|
2022 2nd
Qtr.
|
|
|
2022 1st
Qtr.
|
|
Total capital (to risk
weighted assets)
|
|
|
13.0
|
%
|
|
|
13.0
|
%
|
|
|
12.8
|
%
|
|
|
12.7
|
%
|
|
|
13.3
|
%
|
Common equity Tier 1
capital (to risk weighted assets)
|
|
|
12.5
|
%
|
|
|
12.5
|
%
|
|
|
12.3
|
%
|
|
|
12.2
|
%
|
|
|
12.8
|
%
|
Tier 1 capital (to risk
weighted assets)
|
|
|
12.5
|
%
|
|
|
12.5
|
%
|
|
|
12.3
|
%
|
|
|
12.2
|
%
|
|
|
12.8
|
%
|
Tier 1 capital (to
average assets)
|
|
|
8.7
|
%
|
|
|
8.7
|
%
|
|
|
8.3
|
%
|
|
|
8.1
|
%
|
|
|
7.9
|
%
|
Asset
Quality
|
|
2023 1st
Qtr.
|
|
|
2022 4th
Qtr.
|
|
|
2022 3rd
Qtr.
|
|
|
2022 2nd
Qtr.
|
|
|
2022 1st
Qtr.
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs
(recoveries)
|
|
$
|
28
|
|
|
$
|
(12)
|
|
|
$
|
59
|
|
|
$
|
185
|
|
|
$
|
87
|
|
Annualized net loan
charge-offs (recoveries) to average loans
|
|
|
0.01
|
%
|
|
|
0.00
|
%
|
|
|
0.02
|
%
|
|
|
0.07
|
%
|
|
|
0.03
|
%
|
Allowance for loan
losses
|
|
$
|
15,065
|
|
|
$
|
7,619
|
|
|
$
|
7,457
|
|
|
$
|
7,416
|
|
|
$
|
7,601
|
|
Unfunded commitment
liability
|
|
|
2,991
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Allowance to loans
(excludes held for sale)
|
|
|
1.24
|
%
|
|
|
0.64
|
%
|
|
|
0.66
|
%
|
|
|
0.66
|
%
|
|
|
0.74
|
%
|
Non-Accruing
loans
|
|
$
|
1,596
|
|
|
$
|
1,263
|
|
|
$
|
1,197
|
|
|
$
|
1,242
|
|
|
$
|
1,167
|
|
Non performing loans
(includes OREO)
|
|
|
1,726
|
|
|
|
2,666
|
|
|
|
2,628
|
|
|
|
2,714
|
|
|
|
4,852
|
|
Nonperforming loans to
total loans (excludes held for sale)
|
|
|
0.14
|
%
|
|
|
0.22
|
%
|
|
|
0.23
|
%
|
|
|
0.24
|
%
|
|
|
0.47
|
%
|
Nonperforming assets to
total assets
|
|
|
0.07
|
%
|
|
|
0.11
|
%
|
|
|
0.11
|
%
|
|
|
0.11
|
%
|
|
|
0.20
|
%
|
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SOURCE ChoiceOne Financial Services, Inc.