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ChoiceOne Financial Services' Second Quarter 2026 Results

On July 24, 2026, ChoiceOne Financial Services, Inc. (NASDAQ: COFS), the parent company of ChoiceOne Bank, shared its financial performance for the quarter that ended on June 30, 2026. The report highlights a positive trajectory in net income and loan growth amid a challenging market environment.

Financial Highlights

ChoiceOne recorded a net income of $12.5 million for the second quarter, translating to earnings of $0.83 per diluted share. For the first half of 2026, net income reached $26.2 million or $1.74 per share. Notably, the second quarter figures were impacted by a pre-tax securities loss of approximately $1.9 million, which accounted for a reduction of roughly $0.10 in diluted earnings per share. This repositioning of lower-yielding municipal securities aimed to enhance loan growth and improve the overall interest rate profile.

The firm reported an annualized 11.9% increase in core loans, totaling an increase of $87.1 million during the second quarter. This growth was attributed to both organic production and the acquisition of about $40 million in quality adjustable-rate residential mortgages. ChoiceOne's GAAP net interest margin stood at 3.59%, slightly down from 3.63% in the previous quarter, due to the interplay of higher funding costs and lower interest income.

Asset Quality and Liquidity

Despite a $55.4 million decline in deposits (excluding brokered deposits), which was mostly seasonally driven, the firm maintained strong liquidity, with total liquidity and borrowing capacity remaining robust. The asset quality metrics were notably strong, with annualized net charge-offs of just 0.04% of average loans. As of June 30, 2026, nonperforming loans accounted for 1.07% of total loans, reflecting sound credit management practices.

Kelly Potes, CEO of ChoiceOne, expressed satisfaction over the company's performance: "ChoiceOne delivered solid second quarter results, highlighted by loan growth, stable credit quality, and continued capital accretion. Our disciplined approach to balance sheet management is enhancing our earning asset mix and interest rate positioning, supportive of our momentum through the remainder of 2026."

Year-Over-Year Performance

Comparing the second quarter of 2026 with the same period last year, the company reported a decline in net income from $13.5 million in Q2 2025 to $12.5 million in Q2 2026. Additionally, diluted earnings per share fell from $0.90 to $0.83. However, the increase in core loans and asset management was a significant highlight, indicating strategic growth despite temporary setbacks.

Total assets also rose to approximately $4.5 billion, a $146.6 million increase from the previous year, driven by loan and securities growth. Notably, ChoiceOne's shareholders' equity increased to $482.7 million from $431.8 million a year ago, reflecting a robust capital foundation amid challenging market conditions.

Cost Management and Future Outlook

Looking forward, ChoiceOne aims at maintaining operational efficiency and prudent capital management. With plans to open a full-service branch in Troy, Michigan later in 2026, the company is focused on expanding its service footprint throughout Southeast Michigan.

Despite challenges such as seasonal fluctuations in municipal operating balances, the company is committed to utilizing brokered deposits and short-term Federal Home Loan Bank advances to ensure continued liquidity. As Potes notes, "Our balanced approach positions ChoiceOne to build on our momentum and create long-term value for our customers, communities, and shareholders."

In conclusion, while facing market challenges, ChoiceOne Financial Services showcases resilience and strategic growth, reinforced by solid asset quality and disciplined management, setting a promising outlook for the remainder of the year.

For more information on ChoiceOne Financial Services and to view their complete financial data, visit ChoiceOne's Investor Relations.