SPARTA, Mich., July 24, 2026 /PRNewswire/ -- ChoiceOne Financial Services, Inc. ((", ChoiceOne", , NASDAQ:COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended June 30, 2026.

Highlights

ChoiceOne reported net income of $12.5 million, or $0.83 per diluted share, for the second quarter of 2026, and net income of $26.2 million, or $1.74 per diluted share, for the first six months of 2026. Second quarter results included a pre-tax securities loss of approximately $1.9 million, which reduced diluted earnings per share by approximately $0.10, as ChoiceOne repositioned lower-yielding municipal securities to fund loan growth and improve its interest rate profile.
Core loans increased $87.1 million, or 11.9% annualized, during the second quarter, reflecting continued organic production and the purchase of approximately $40 million of seasoned, high-quality adjustable-rate residential mortgages.
GAAP net interest margin was 3.59% for the second quarter of 2026, compared to 3.63% in the first quarter of 2026 and 3.66% in the second quarter of the prior year, as higher earning asset yields were offset by slightly higher funding costs and lower interest income due to accretion from purchased loans. Deposits, excluding brokered deposits, declined by $55.4 million during the second quarter, primarily reflecting normal seasonal fluctuations in municipal operating balances, while total liquidity and borrowing capacity remained strong.
Asset quality remained strong, with annualized net charge-offs of 0.04% of average loans for the second quarter, while nonperforming loans to total loans, excluding loans held for sale, were 1.07% at June 30, 2026.

"ChoiceOne delivered solid second quarter results, highlighted by loan growth, stable credit quality, and continued capital accretion," said Kelly Potes, Chief Executive Officer. "Our disciplined approach to balance sheet management is improving our earning asset mix and interest rate positioning, while supporting continued momentum through the remainder of 2026."

ChoiceOne reported net income of $12,463,000 and $26,167,000 for the three and six months ended June 30, 2026, respectively, compared to net income of $13,534,000 and a net loss of $372,000 for the three months and six months ended June 30, 2025, respectively. Diluted earnings per share were $0.83 and $1.74 for the three and six months ended June 30, 2026, compared to diluted earnings per share of $0.90 and diluted loss per share of $0.03 for the three and six months ended June 30, 2025, respectively. Second quarter results included a pre-tax securities loss of approximately $1.9 million, which reduced diluted earnings per share by approximately $0.10, as ChoiceOne repositioned lower-yielding municipal securities to fund loan growth and improve its interest rate profile.

As of June 30, 2026, total assets were $4.5 billion, an increase of $146.6 million compared to June 30, 2025. The growth in total assets is primarily attributed to growth in core loans, securities and warehouse mortgage advances. This growth was partially offset by a reduction in the cash balance of $67.6 million during the twelve months ended June 30, 2026.

Core loans, which exclude held for sale loans and mortgage warehouse advances, increased by $87.1 million or an annualized 11.9% during the second quarter of 2026 and grew by $101.5 million or 3.5% during the twelve months ended June 30, 2026. Of this growth approximately $40.0 million was due to a purchase of seasoned, high quality adjustable rate mortgages from another community bank made during the quarter. Loan interest income increased $703,000 in the second quarter of 2026 compared to the first quarter of 2026 and decreased $187,000 compared to the second quarter of 2025. The decrease from the second quarter of 2025 is partially due to a decline in interest income due to accretion from purchased loans during the second quarter of 2026 compared to the second quarter of 2025. Interest income due to accretion from purchased loans was approximately $2.4 million during the second quarter of 2026 compared to $3.5 million for the three months ended June 30, 2025. Interest income due to accretion from purchased loans increased GAAP net interest margin by 24 and 36 basis points in the second quarter of 2026 and the second quarter of 2025, respectively. Of the amount recognized in the second quarter of 2026, $2.0 million was calculated using the effective interest rate method of amortization, while the remaining $433,000 resulted from unexpected payoffs and paydowns of loans with an associated fair value mark. Estimated interest income due to accretion from purchased loans for the remainder of 2026 using the effective interest method of amortization is $3.8 million; however, actual results will be dependent on prepayment speeds and other factors. It is estimated that a total of $48.0 million remains to be recognized as interest income due to accretion from purchased loans over the life of the purchased loans portfolio.

Deposits, excluding brokered deposits, decreased by $55.4 million as of June 30, 2026, compared to March 31, 2026. This decline is largely due to seasonality in municipal deposits as municipal operational balances fluctuate with the timing of tax receipts. Municipal deposits decreased by approximately $95.0 million during the quarter, which is consistent with historical fluctuations. Deposits, excluding brokered deposits, increased by $22.2 million as of June 30, 2026, compared to June 30, 2025. This increase is primarily organic growth in interest bearing and savings accounts offset by a decline in higher interest certificate of deposit accounts. ChoiceOne continues to be proactive in managing its liquidity position by using brokered deposits and short-term FHLB advances to ensure ample liquidity. As of June 30, 2026, the total balance of borrowed funds from the FHLB was $295.0 million at a weighted average rate of 3.80%, with $275.0 million due within 12 months. At June 30, 2026, total available borrowing capacity secured by pledged assets was $1.1 billion. ChoiceOne can increase its borrowing capacity by utilizing unsecured federal fund lines and pledging additional assets. Uninsured deposits totaled $1.2 billion or 33.1% of deposits at June 30, 2026.

In the three months ended June 30, 2026, ChoiceOne's annualized cost of deposits to average total deposits increased four basis points to 1.58% from 1.54% for the three months ended March 31, 2026. The annualized cost of funds increased four basis points to 1.77% for the three months ended June 30, 2026, from 1.73% in the prior quarter, primarily driven by higher rates on interest-bearing demand deposits and savings deposits offset by lower rates on certificates of deposit, borrowings, subordinated debentures, and brokered deposits. The average balance of certificates of deposit declined $14.2 million during the quarter. Interest expense on borrowings increased $58,000 compared to the first quarter of 2026 as average borrowings increased $5.1 million. ChoiceOne's deposit costs may have slight upward pressure as new and repriced deposits carry rates above the existing portfolio average.

ChoiceOne incurred $550,000 provision for credit losses on loans during the second quarter of 2026, due to the increase in loan balances and $309,000 in net charge offs. The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.16% on June 30, 2026 compared to 1.19% and 1.18% on March 31, 2026 and December 31, 2025, respectively. Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.04% for the second quarter of 2026. Nonperforming loans to total loans (excluding loans held for sale) increased to 1.07% as of June 30, 2026 compared to 1.01% as of March 31, 2026. Notably, 0.49% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to certain purchased loans which were identified prior to acquisition as having credit deterioration. In addition, 30.6% of the nonperforming loans carry partial government guarantees from the SBA or USDA.

At June 30, 2026, shareholders' equity was $482.7 million, an increase from $431.8 million on June 30, 2025. ChoiceOne repurchased 35,000 shares of stock for a net cost of $1.1 million in the second quarter of 2026 and 75,116 shares [collectively] during the first quarter of 2026 and the fourth quarter of 2025 for a net cost of $2.2 million under our existing share repurchase plan. The repurchase plan has 265,272 shares remaining to purchase as of June 30, 2026. The repurchase of shares reflects our view that our capital position is healthy and the repurchase of shares is in the best interest of our shareholders. ChoiceOne Bank continues to be "well-capitalized," with a total risk-based capital ratio of 12.9% as of June 30, 2026, compared to 12.4% on June 30, 2025.

Noninterest income for the three months ended June 30, 2026 decreased $1.6 million to $4.9 million compared to $6.5 million for the same period in 2025. The decline was primarily driven by a $1.9 million loss on the sale of securities during the second quarter of 2026, compared to no securities gains or losses in the prior-year period. In late June 2026 ChoiceOne sold approximately $25 million of municipal securities with a tax-equivalent yield of 2.28% for a pre-tax loss of $1.9 million. The sale of securities was undertaken to provide funding for the purchase of adjustable-rate residential mortgages and improve ChoiceOne's overall interest rate profile. Partially offsetting this decline were increases in customer service charges and interchange income and insurance and investment commissions. Compared to the first quarter of 2026, noninterest income declined $876,000, primarily due to the increase in net losses on sales of securities. Noninterest income for the six months ended June 30, 2026 decreased $671,000, to $10.8 million compared to $11.4 million for the same period in 2025.

Noninterest expense for the three months ended June 30, 2026 increased $545,000, or 2.1%, to $26.1 million compared to $25.5 million for the same period in 2025. The increase was primarily attributable to higher salaries and benefits expense, partially offset by lower intangible amortization expense. Compared to the first quarter of 2026, noninterest expense increased $275,000, reflecting higher salaries and benefits expenses and data processing costs, partially offset by lower occupancy and equipment and intangible amortization expenses. Noninterest expense for the six months ended June 30, 2026 decreased $9.3 million, to $51.8 million compared to $61.2 million for the same period in 2025. The decrease was primarily attributable to the absence of $17.4 million of merger-related expenses incurred during the prior-year period. Excluding merger-related expenses, noninterest expense increased due to higher salaries and benefits, occupancy and equipment, data processing, professional fees, and other operating expenses associated with the Company's growth and integration activities. ChoiceOne expects to open a full service branch and lending office in Troy, MI later in 2026. ChoiceOne currently serves customers throughout Southeast Michigan and expects the Troy office to further support commercial lending and treasury management growth initiatives.

ChoiceOne's year to date 2026 tax expense was reduced by $400,000 as a result of purchasing a transferable tax credit that will be applied to 2026 income taxes. Management intends to purchase similar sized transferable tax credits in the remainder of 2026 to reduce tax expense.

"As we enter the second half of 2026, we remain focused on disciplined growth, operational efficiency, and prudent capital management," said Kelly Potes, Chief Executive Officer. "We believe this balanced approach positions ChoiceOne to build on our momentum and create long-term value for our customers, communities, and shareholders."

About ChoiceOne

ChoiceOne Financial Services, Inc. is a financial holding company headquartered in Sparta, Michigan, with assets over $4 billion, and the parent corporation of ChoiceOne Bank. Member FDIC. ChoiceOne Bank operates 54 offices in West, Central and Southeast Michigan. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. ChoiceOne Financial Services, Inc. common stock is quoted on the Nasdaq Capital Market under the symbol "COFS." For more information, please visit Investor Relations at ChoiceOne's website choiceone.bank.

Forward-Looking Statements

This press release contains forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "may," "could," "look forward," "continue", "future", "view" and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements reflect current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, ChoiceOne does not undertake any obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

Risk factors include, but are not limited to, the risk factors described in Item 1A in ChoiceOne's Annual Report on Form 10-K for the year ended December 31, 2025 and in any of ChoiceOne's subsequent SEC filings, which are available on the SEC's website, www.sec.gov.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release includes certain non-GAAP financial measures. ChoiceOne believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand underlying financial performance and condition and trends of ChoiceOne.

Non-GAAP financial measures have inherent limitations. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To compensate for these limitations, non-GAAP measures are used as comparative tools, together with GAAP measures, to assist in the evaluation of operating performance or financial condition. These measures are also calculated using the appropriate GAAP or regulatory components in their entirety and are computed in a manner intended to facilitate consistent period-to-period comparisons. ChoiceOne's method of calculating these non-GAAP measures may differ from methods used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP or in-effect regulatory requirements.

Where non-GAAP financial measures are used, the most directly comparable GAAP or regulatory financial measure, as well as the reconciliation to the most directly comparable GAAP or regulatory financial measure, can be found in the tables to this press release under the heading non-GAAP reconciliation.

Condensed Balance Sheets
(Unaudited)

(In thousands)	June 30, 2026		March 31, 2026		June 30, 2025
Cash and cash equivalents	$	88,649	$	84,218	$	156,280
Equity securities, at fair value		9,497		9,425		9,582
Securities Held to Maturity		383,345		384,339		390,457
Securities Available for Sale		555,571		573,531		479,426
Federal Home Loan Bank stock		15,823		18,562		18,562
Federal Reserve Bank stock		12,554		12,554		12,547
Loans held for sale		3,833		9,976		7,639
Mortgage warehouse advances		53,535		51,187		3,033
Core loans		3,019,246		2,932,110		2,917,759
Total loans held for investment		3,072,781		2,983,297		2,920,792
Allowance for credit losses		(35,738)		(35,496)		(34,798)
Loans, net of allowance for credit losses		3,037,043		2,947,801		2,885,994
Premises and equipment		50,383		48,670		45,667
Cash surrender value of life insurance policies		87,011		86,305		73,673
Goodwill		129,854		129,854		126,730
Intangible assets		27,888		29,464		33,421
Other assets		55,438		59,866		70,274

Total Assets	$	4,456,889	$	4,394,565	$	4,310,252

Noninterest-bearing deposits	$	943,943	$	912,845	$	943,873
Interest-bearing demand deposits		1,356,540		1,428,338		1,322,336
Savings deposits		620,525		624,084		595,981
Certificates of deposit		587,596		598,743		624,209
Brokered deposits		93,228		103,381		106,225
Borrowings		294,850		184,819		198,428
Subordinated debentures		48,646		48,552		48,277
Other liabilities		28,882		23,802		39,162

Total Liabilities		3,974,210		3,924,564		3,878,491

Common stock and paid-in capital, no par value; shares authorized: 30,000,000; shares outstanding: 14,950,472 at June 30, 2026, 14,960,200 at March 31, 2026, and 15,008,864 at June 30, 2025.		396,681		397,498		398,201
Retained earnings		120,135		112,008		82,647
Accumulated other comprehensive income (loss), net		(34,137)		(39,505)		(49,087)
Shareholders' Equity		482,679		470,001		431,761

Total Liabilities and Shareholders' Equity	$	4,456,889	$	4,394,565	$	4,310,252

Condensed Statements of Operations
(Unaudited)

	Three Months Ended						Six Months Ended
(Dollars in thousands, except per share data)	June 30,		March 31,		June 30,		June 30,
	2026		2026		2025		2026		2025
Interest income
Loans, including fees	$	46,346	$	45,642	$	46,533	$	91,988	$	79,174
Securities:
Taxable		5,633		5,492		5,264		11,125		9,994
Tax exempt		1,430		1,451		1,393		2,881		2,802
Other		532		690		735		1,222		1,914
Total interest income		53,941		53,275		53,925		107,216		93,884

Interest expense
Deposits		14,341		13,745		14,840		28,086		25,556
Advances from Federal Home Loan Bank		2,102		2,182		1,659		4,284		3,711
Other		801		706		1,104		1,507		1,984
Total interest expense		17,244		16,633		17,603		33,877		31,251

Net interest income		36,697		36,642		36,322		73,339		62,633
Provision for credit losses on loans		550		-		650		550		13,813
Provision for (reversal of) credit losses on unfunded commitments		-		-		-		-		-
Net Provision for credit losses expense		550		-		650		550		13,813
Net interest income after provision		36,147		36,642		35,672		72,789		48,820

Noninterest income
Customer service charges		1,745		1,656		1,401		3,401		2,582
Interchange income		2,139		1,892		2,083		4,031		3,592
Insurance and investment commissions		720		551		540		1,271		835
Gains on sales of loans		466		408		355		874		799
Net gains (losses) on sales of securities		(1,933)		(203)		-		(2,136)		-
Net gains (losses) on sales and write downs of other assets		97		9		3		106		13
Earnings on life insurance policies		706		584		844		1,290		1,233
Trust income		671		692		596		1,363		1,102
Change in market value of equity securities		59		26		239		85		346
Other		269		200		442		469		923
Total noninterest income		4,939		5,815		6,503		10,754		11,425

Noninterest expense
Salaries and benefits		14,463		14,062		13,731		28,525		24,051
Occupancy and equipment		2,433		2,591		2,432		5,024		4,151
Data processing		2,450		2,290		2,439		4,740		4,438
Communication		531		555		561		1,086		941
Professional fees		1,018		982		947		2,000		1,644
Supplies and postage		294		335		305		629		549
Advertising and promotional		279		264		260		543		516
Intangible amortization		1,577		1,685		1,732		3,262		2,412
FDIC insurance		543		570		550		1,113		1,005
Merger related expenses		-		-		166		-		17,369
Other		2,463		2,442		2,383		4,905		4,095
Total noninterest expense		26,051		25,776		25,506		51,827		61,171

Income (loss) before income tax		15,035		16,681		16,669		31,716		(926)
Income tax expense (benefit)		2,572		2,977		3,135		5,549		(554)

Net income (loss)	$	12,463	$	13,704	$	13,534	$	26,167	$	(372)

Basic earnings (loss) per share	$	0.83	$	0.91	$	0.90	$	1.75	$	(0.03)
Diluted earnings (loss) per share	$	0.83	$	0.91	$	0.90	$	1.74	$	(0.03)
Dividends declared per share	$	0.29	$	0.29	$	0.28	$	0.58	$	0.56

Table 1 - Average Balances and tax-Equivalent Interest Rates (Unaudited)
	Three Months Ended June 30, 2026							Three Months Ended March 31, 2026							Three Months Ended June 30, 2025

(Dollars in thousands)	Average							Average							Average
	Balance		Interest		Rate			Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Loans (1)(3)(4)(5)	$	2,998,144	$	46,364		6.20	%	$	2,979,652	$	45,661		6.21	%	$	2,936,168	$	46,551		6.36	%
Taxable securities (2)		774,014		5,633		2.92			755,718		5,492		2.95			695,546		5,264		3.04
Nontaxable securities (1)		275,477		1,810		2.64			281,295		1,837		2.65			289,061		1,764		2.45
Other		56,036		532		3.81			74,803		690		3.74			63,416		735		4.65
Interest-earning assets		4,103,671		54,339		5.31			4,091,468		53,680		5.32			3,984,191		54,314		5.47
Noninterest-earning assets		311,894							313,152							314,322
Total assets	$	4,415,565						$	4,404,620						$	4,298,513

Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	1,363,149	$	6,562		1.93	%	$	1,404,153	$	6,282		1.81	%	$	1,332,318	$	6,163		1.86	%
Savings deposits		620,744		1,516		0.98			613,837		1,379		0.91			595,362		1,003		0.68
Certificates of deposit		584,423		4,922		3.38			598,616		5,099		3.45			646,247		6,353		3.94
Brokered deposit		135,700		1,341		3.96			100,175		985		3.99			120,720		1,321		4.39
Borrowings		231,263		2,240		3.89			226,192		2,182		3.91			169,257		1,945		4.61
Subordinated debentures		48,597		663		5.47			48,503		661		5.53			48,971		689		5.65
Other		-		-		0.00			4,871		45		3.75			11,763		129		4.39
Interest-bearing liabilities		2,983,876		17,244		2.32			2,996,347		16,633		2.25			2,924,638		17,603		2.41
Demand deposits		927,628							907,453							915,637
Other noninterest-bearing liabilities		27,385							30,425							30,695
Total liabilities		3,938,889							3,934,225							3,870,970
Shareholders' equity		476,676							470,395							427,543
Total liabilities and shareholders' equity	$	4,415,565						$	4,404,620						$	4,298,513

Net interest income (tax- equivalent basis) (Non-GAAP) (1)			$	37,095						$	37,047						$	36,711

Net interest margin (tax- equivalent basis) (Non-GAAP) (1)						3.63	%						3.67	%						3.70	%


(1)	Adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets. The adjustment uses an incremental tax rate of 21%. The presentation of these measures on a tax-equivalent basis is not in accordance with GAAP, but is customary in the banking industry. These non-GAAP measures ensure comparability with respect to both taxable and tax-exempt loans and securities.
(2)	Taxable securities include dividend income from Federal Home Loan Bank and Federal Reserve Bank stock.
(3)	Loans include both mortgage warehouse advances and loans held for sale.
(4)	Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $29.4 million, $27.5 million, and $16.8 million in the second quarter of 2026, the first quarter of 2026 and the second quarter of 2025, respectively.
(5)	Interest on loans included net origination fees and interest income due to accretion from purchased loans. Interest income due to accretion from purchased loans was $2.4 million, $2.7 million and $3.5 million in the second quarter of 2026, the first quarter of 2026 and the second quarter of 2025, respectively.

Other Selected Financial Highlights
(Unaudited)

	Quarterly
Earnings	2026 2nd Qtr.		2026 1st Qtr.		2025 4th Qtr.		2025 3rd Qtr.		2025 2nd Qtr.
(in thousands except per share data)
Net interest income	$	36,697	$	36,642	$	36,840	$	37,597	$	36,322
Net provision expense		550		-		800		200		650
Noninterest income		4,939		5,815		6,097		7,144		6,503
Noninterest expense		26,051		25,776		25,349		26,215		25,506
Net income (loss) before federal income tax expense		15,035		16,681		16,788		18,326		16,669
Income tax expense (benefit)		2,572		2,977		2,921		3,645		3,135
Net income (loss)		12,463		13,704		13,867		14,681		13,534
Basic earnings (loss) per share		0.83		0.91		0.92		0.98		0.90
Diluted earnings (loss) per share		0.83		0.91		0.92		0.97		0.90
Book value per share		32.29		31.42		31.02		29.94		28.77
Tangible book value per share (non-GAAP)		21.73		20.77		20.29		19.39		18.10

End of period balances	2026 2nd Qtr.		2026 1st Qtr.		2025 4th Qtr.		2025 3rd Qtr.		2025 2nd Qtr.
(in thousands)
Gross loans	$	3,076,614	$	2,993,273	$	3,029,219	$	2,916,251	$	2,928,431
Loans held for sale (1)		3,833		9,976		7,185		6,323		7,639
Mortgage warehouse advances (2)		53,535		51,187		58,987		2,483		3,033
Core loans (gross loans excluding 1 and 2 above)		3,019,246		2,932,110		2,963,047		2,907,445		2,917,759
Allowance for credit losses		35,738		35,496		35,550		34,754		34,798
Securities available for sale		555,571		573,531		554,420		544,023		479,426
Securities held to maturity		383,345		384,339		385,193		388,517		390,457
Other interest-earning assets		66,577		76,229		74,857		79,677		110,206
Total earning assets (before allowance)		4,082,107		4,027,372		4,043,689		3,928,468		3,908,520
Total assets		4,456,889		4,394,565		4,410,551		4,296,902		4,310,252
Noninterest-bearing deposits		943,943		912,845		907,007		903,925		943,873
Interest-bearing demand deposits		1,356,540		1,428,338		1,364,887		1,395,724		1,322,336
Savings deposits		620,525		624,084		607,045		588,798		595,981
Certificates of deposit		587,596		598,743		616,180		605,912		624,209
Brokered deposits		93,228		103,381		104,906		72,672		106,225
Total deposits		3,601,832		3,667,391		3,600,025		3,567,031		3,592,624
Deposits excluding brokered		3,508,604		3,564,010		3,495,119		3,494,359		3,486,399
Total subordinated debt		48,646		48,552		48,460		48,368		48,277
Total borrowed funds		294,850		184,819		264,788		197,752		198,428
Other interest-bearing liabilities		-		1		7,689		7,695		8,529
Total interest-bearing liabilities		3,001,385		2,987,918		3,013,955		2,916,921		2,903,985
Shareholders' equity		482,679		470,001		465,353		449,615		431,761

Average Balances	2026 2nd Qtr.		2026 1st Qtr.		2025 4th Qtr.		2025 3rd Qtr.		2025 2nd Qtr.
(in thousands)
Loans	$	2,998,144	$	2,979,652	$	2,961,133	$	2,927,878	$	2,936,168
Securities		1,049,491		1,037,013		1,036,038		990,319		984,607
Other interest-earning assets		56,036		74,803		69,056		79,365		63,416
Total earning assets (before allowance)		4,103,671		4,091,468		4,066,227		3,997,562		3,984,191
Total assets		4,415,565		4,404,620		4,375,527		4,308,289		4,298,513
Noninterest-bearing deposits		927,628		907,453		925,414		930,346		915,637
Interest-bearing deposits		2,568,316		2,616,606		2,552,997		2,583,166		2,573,927
Brokered deposits		135,700		100,175		100,133		91,735		120,720
Total deposits		3,631,644		3,624,234		3,578,544		3,605,247		3,610,284
Total subordinated debt		48,597		48,503		48,411		48,663		48,971
Total borrowed funds		231,263		226,192		255,978		179,122		169,257
Other interest-bearing liabilities		-		4,871		6,311		8,550		11,763
Total interest-bearing liabilities		2,983,876		2,996,347		2,963,830		2,911,236		2,924,638
Shareholders' equity		476,676		470,395		459,423		438,449		427,543

Loan Breakout (in thousands)	2026 2nd Qtr.		2026 1st Qtr.		2025 4th Qtr.		2025 3rd Qtr.		2025 2nd Qtr.
Agricultural	$	49,672	$	47,840	$	56,218	$	51,183	$	47,273
Commercial and Industrial		411,187		369,425		352,556		352,876		351,367
Commercial Real Estate		1,730,214		1,745,410		1,780,396		1,728,774		1,743,541
Consumer		26,121		23,180		26,701		27,328		29,741
Construction Real Estate		25,230		20,897		19,139		18,440		21,508
Residential Real Estate		776,822		725,358		728,037		728,844		724,329
Mortgage Warehouse Advances		53,535		51,187		58,987		2,483		3,033
Gross Loans (excluding held for sale)	$	3,072,781	$	2,983,297	$	3,022,034	$	2,909,928	$	2,920,792

Allowance for credit losses		35,738		35,496		35,550		34,754		34,798

Net loans	$	3,037,043	$	2,947,801	$	2,986,484	$	2,875,174	$	2,885,994

Performance Ratios	2026 2nd Qtr.			2026 1st Qtr.			2025 4th Qtr.			2025 3rd Qtr.			2025 2nd Qtr.

Annualized return on average assets		1.13	%		1.24	%		1.27	%		1.36	%		1.26	%
Annualized return on average equity		10.46	%		11.65	%		12.07	%		13.39	%		12.66	%
Annualized return on average tangible common equity (non-GAAP)		14.10	%		15.95	%		16.66	%		19.08	%		18.26	%
Net interest margin (GAAP)		3.59	%		3.63	%		3.59	%		3.73	%		3.66	%
Net interest margin (fully tax-equivalent) (non-GAAP)		3.63	%		3.67	%		3.63	%		3.77	%		3.70	%
Efficiency ratio		55.86	%		55.99	%		54.12	%		54.76	%		55.32	%
Annualized cost of funds		1.77	%		1.73	%		1.79	%		1.77	%		1.84	%
Annualized cost of deposits		1.58	%		1.54	%		1.57	%		1.57	%		1.65	%
Cost of interest bearing liabilities		2.32	%		2.25	%		2.35	%		2.33	%		2.41	%
Shareholders' equity to total assets		10.83	%		10.70	%		10.55	%		10.46	%		10.02	%
Tangible common equity to tangible assets (non-GAAP)		7.56	%		7.34	%		7.16	%		7.04	%		6.54	%
Annualized noninterest expense to average assets		2.36	%		2.34	%		2.32	%		2.43	%		2.37	%
Loan to deposit		85.42	%		81.62	%		84.14	%		81.76	%		81.51	%
Full-time equivalent employees		577			561			569			573			571

Capital Ratios ChoiceOne Financial Services Inc.	2026 2nd Qtr.			2026 1st Qtr.			2025 4th Qtr.			2025 3rd Qtr.			2025 2nd Qtr.

Total capital (to risk weighted assets)		13.3	%		13.2	%		12.7	%		13.0	%		12.4	%
Common equity Tier 1 capital (to risk weighted assets)		10.7	%		10.6	%		10.2	%		10.3	%		9.8	%
Tier 1 capital (to risk weighted assets)		11.2	%		11.1	%		10.7	%		10.9	%		10.4	%
Tier 1 capital (to average assets)		8.8	%		8.6	%		8.5	%		8.5	%		8.2	%
Tier 1 capital (to total assets)		8.4	%		8.3	%		8.1	%		8.2	%		7.9	%
Commercial Real Estate Loans (non-owner occupied) as a percentage of total capital		249.9	%		262.9	%		279.0	%		275.2	%		288.2	%

Capital Ratios ChoiceOne Bank	2026 2nd Qtr.			2026 1st Qtr.			2025 4th Qtr.			2025 3rd Qtr.			2025 2nd Qtr.

Total capital (to risk weighted assets)		12.9	%		12.9	%		12.5	%		12.8	%		12.4	%
Common equity Tier 1 capital (to risk weighted assets)		11.8	%		11.8	%		11.4	%		11.7	%		11.3	%
Tier 1 capital (to risk weighted assets)		11.8	%		11.8	%		11.4	%		11.7	%		11.3	%
Tier 1 capital (to average assets)		9.3	%		9.2	%		9.1	%		9.1	%		8.9	%
Tier 1 capital (to total assets)		8.9	%		8.9	%		8.7	%		8.8	%		8.6	%
Commercial Real Estate Loans (non-owner occupied) as a percentage of total capital		256.9	%		268.9	%		284.4	%		280.0	%		290.6	%

Asset Quality	2026 2nd Qtr.			2026 1st Qtr.			2025 4th Qtr.			2025 3rd Qtr.			2025 2nd Qtr.
(in thousands)
Net loan charge-offs (recoveries)	$	309		$	53		$	305		$	244		$	418
Annualized net loan charge-offs (recoveries) to average loans		0.04	%		0.01	%		0.04	%		0.03	%		0.06	%
Allowance for credit losses	$	35,738		$	35,496		$	35,550		$	34,754		$	34,798
Unfunded commitment liability	$	1,347		$	1,347		$	1,347		$	1,647		$	1,647
Allowance to loans (excludes held for sale)		1.16	%		1.19	%		1.18	%		1.19	%		1.19	%
Total funds reserved to pay for loans (includes liability for unfunded commitments and excludes held for sale)		1.21	%		1.23	%		1.22	%		1.25	%		1.25	%
Non-Accruing loans	$	30,904		$	27,892		$	27,058		$	17,365		$	16,854
Nonperforming loans (includes OREO)	$	32,773		$	30,177		$	29,582		$	19,940		$	19,296
Nonperforming loans to total loans (excludes held for sale)		1.07	%		1.01	%		0.98	%		0.69	%		0.66	%
Non-Accrual classified as PCD	$	15,102		$	18,210		$	19,007		$	11,393		$	12,017
Nonperforming loans to total loans (excludes held for sale) attributed to PCD		0.49	%		0.61	%		0.63	%		0.39	%		0.41	%
Nonperforming assets to total assets		0.74	%		0.69	%		0.67	%		0.46	%		0.45	%

Non-GAAP Reconciliation
(Unaudited)

NON-GAAP Reconciliation	2026 2nd Qtr.			2026 1st Qtr.			2025 4th Qtr.			2025 3rd Qtr.			2025 2nd Qtr.
Net interest income (tax-equivalent basis) (Non-GAAP)	$	37,095		$	37,047		$	37,232		$	37,994		$	36,711
Net interest margin (fully tax-equivalent)		3.63	%		3.67	%		3.63	%		3.77	%		3.70	%

Reconciliation to Reported Net Interest Income

Net interest income (tax-equivalent basis) (Non-GAAP)	$	37,095		$	37,047		$	37,232		$	37,994		$	36,711

Adjustment for taxable equivalent interest		(398)			(405)			(392)			(397)			(389)

Net interest income (GAAP)	$	36,697		$	36,642		$	36,840		$	37,597		$	36,322
Net interest margin (GAAP)		3.59	%		3.63	%		3.59	%		3.73	%		3.66	%

(dollars in thousands)	2026 2nd Qtr.			2026 1st Qtr.			2025 4th Qtr.			2025 3rd Qtr.			2025 2nd Qtr.
Total assets	$	4,456,889		$	4,394,565		$	4,410,551		$	4,296,902		$	4,310,252
Less: goodwill		129,854			129,854			129,854			126,730			126,730
Less: intangible assets		27,888			29,464			31,149			31,694			33,421
Tangible assets	$	4,299,147		$	4,235,247		$	4,249,548		$	4,138,478		$	4,150,101

Total equity	$	482,679		$	470,001		$	465,353		$	449,615		$	431,761
Less: goodwill		129,854			129,854			129,854			126,730			126,730
Less: intangible assets		27,888			29,464			31,149			31,694			33,421
Tangible common equity	$	324,937		$	310,683		$	304,350		$	291,191		$	271,610
Tangible common equity to tangible assets		7.56	%		7.34	%		7.16	%		7.04	%		6.54	%

(dollars in thousands)	2026 2nd Qtr.			2026 1st Qtr.			2025 4th Qtr.			2025 3rd Qtr.			2025 2nd Qtr.
Net income	$	12,463		$	13,704		$	13,867		$	14,681		$	13,534
Less: intangible amortization (tax affected at 21%)		1,246			1,331			1,330			1,365			1,369
Adjusted net income	$	11,217		$	12,373		$	12,537		$	13,316		$	12,165

Average shareholders' equity	$	476,676		$	470,395		$	459,423		$	438,449		$	427,543
Less: average goodwill		129,854			129,854			127,308			126,730			126,730
Less: average intangible assets		28,696			30,319			31,092			32,599			34,356
Average tangible common equity	$	318,126		$	310,222		$	301,023		$	279,120		$	266,457

Return on average tangible common equity		14.10	%		15.95	%		16.66	%		19.08	%		18.26	%

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SOURCE ChoiceOne Financial Services, Inc.