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ChoiceOne Financial Services' Q2 2025 Results

On July 25, 2025, ChoiceOne Financial Services, Inc. (NASDAQ: COFS), the holding company for ChoiceOne Bank, announced its financial results for the second quarter ending June 30, 2025. This quarter was particularly notable due to the significant impacts of its merger with Fentura Financial, Inc., which was completed on March 1, 2025. The merger resulted in significant increases across various financial metrics.

Financial Performance

During Q2 2025, ChoiceOne reported a net income of $13.5 million, compared to $6.6 million during the same period last year. This represented an increase driven mainly by the inclusion of Fentura's financials in the new combined entity. However, in the year-to-date performance, the company reported a net loss of $372,000 for the six-month period against a net income of $12.2 million in the same period last year.

Excluding merger-related expenses and provisions for credit losses, the adjusted net income was $13.7 million for Q2 and $23 million for the first half of 2025. The year-over-year growth reflects the successful integration efforts post-merger.

Key Highlights from the Q2 Results

• - Earnings Per Share: Diluted earnings per share (EPS) stood at $0.90 for Q2 2025, compared to $0.87 for the same period in 2024. The diluted loss per share was $0.03 for the first half of the year, contrasting with the earnings per share from the previous year of $1.61.
• - Net Interest Income: ChoiceOne's net interest income escalated to $36.3 million in Q2 2025, significantly higher than $18.4 million during Q2 2024. This surge is attributed to the merger, which added substantial interest income across a broader base.
• - Net Interest Margin: The GAAP net interest margin rose to 3.66%, up from 2.95% in the prior year, highlighting improved profitability of earning assets.
• - Core Loans: Core loans saw an annualized decrease of 0.1% but increased organically by 10% year-over-year, thanks to the merger contributions, with core loans growing by $1.4 billion post-merger.
• - Deposits: ChoiceOne experienced a reduction in deposits, totaling a decline of $98 million compared to the previous quarter due to seasonal fluctuations and some reduction of higher-cost deposits acquired through the merger.

Outlook and Strategy

Kelly Potes, CEO of ChoiceOne, expressed optimism regarding the company's future, stating, "We are pleased to report another outstanding quarter at ChoiceOne, highlighted by record net income and an expansion in our net interest margin. The successful execution of our strategic merger with Fentura has strengthened our market position and our ability to serve communities."

The company aims to deliver long-term value across its customer base, which is expected to grow as integration processes continue. Management has indicated that they do not anticipate significant merger-related expenses in the future, allowing for more focus on operational efficiencies and strategic growth initiatives.

Conclusion

ChoiceOne Financial Services continues to demonstrate resilience and growth following the merger with Fentura. The shifts in financial performance metrics underscore the benefits of this strategic alignment and the company's commitment to enhancing value for its customers, employees, and shareholders. As they navigate through this post-merger phase, the focus remains on delivering strong financial results and further expanding their competitive edge in the financial services market.