CHOICEONE FINANCIAL SERVICES INC

Previous wording

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 as of June 30, 2026, during the twelve months ended June 30, 2026.

Current wording

ChoiceOne reported net income of $14.5 million, or $0.97 per diluted share, for the third quarter of 2026, and net income of $40.7 million, or $2.71 per diluted share, for the first nine months of 2026, compared with net income of $14.7 million, or $0.97 per diluted share, for the third quarter of 2025, and net income of $14.3 million, or $1.05 per diluted share, for the first nine months of 2025. For the nine months ended September 30, 2025, results were impacted by the Merger, which was completed during the first quarter of 2025. As of September 30, 2026, total assets were $4.5 billion, an increase of $162.2 million compared to September 30, 2025. The growth in total assets is primarily attributed to growth in core loans and warehouse mortgage advances.

Previous wording

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 second quarter 2026. 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 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.

Current wording

Core loans, which exclude held for sale loans and mortgage warehouse advances, increased by $33.6 million or an annualized 4.4% during the third quarter of 2026 and grew by $145.4 million or 5.0% during the twelve months ended September 30, 2026. Loan interest income increased $1.7 million in the third quarter of 2026 compared to the second quarter of 2026 and $894,000 compared to the third quarter of 2025. Interest income due to accretion from purchased loans was approximately $2.7 million during the third quarter of 2026 compared to $3.6 million for the three months ended September 30, 2025. Interest income due to accretion from purchased loans increased GAAP net interest margin by 25 and 36 basis points in the third quarter of 2026 and the third quarter of 2025, respectively. Of the amount recognized in the third quarter of 2026, $1.9 million was calculated using the effective interest rate method of amortization, while the remaining $806,000 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 and 2027 using the effective interest method of amortization is $1.8 million and $6.0 million, respectively; however, actual results will be dependent on prepayment speeds and other factors. It is estimated that a total of $45.3 million remains to be recognized as interest income due to accretion from purchased loans over the life of the purchased loans portfolio, with $22.0 million expected to be recognized using the effective interest method over the next five years.

Previous wording

ChoiceOne incurred a $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.

Current wording

ChoiceOne incurred a $900,000 provision for credit losses on loans during the third quarter of 2026, due to the increase in loan balances and $648,000 in net charge offs. The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.16% on September 30, 2026 compared to 1.16% and 1.18% on June 30, 2026 and December 31, 2025, respectively. Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.08% for the third quarter of 2026. Nonperforming loans to total loans (excluding loans held for sale) increased to 1.25% as of September 30, 2026 compared to 1.07% as of June 30, 2026. Notably, 0.40% 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. Although nonperforming assets increased to $38.6 million at quarter end, the portfolio continues to benefit from meaningful credit protection. Approximately 35.5% of the loans are supported by SBA or USDA guarantees, and approximately 34.3% of nonperforming assets consist of residential real estate loans, where strong collateral values and ChoiceOne's historical loss experience have limited realized losses.

Previous wording

The annualized return on average assets and annualized return on average shareholders’ equity were 1.13% and 10.46%, respectively, for the second quarter of 2026, compared to 1.26% and 12.66%, respectively, for the same period in 2025. The annualized return on average assets and annualized return on average shareholders’ equity were 1.19% and 11.04%, respectively, for the six months ended June 30 2026, compared to annualized loss on average assets and annualized loss on average shareholders’ equity of (0.02)% and (0.21)%, respectively, for the same period in 2025.

Current wording

The annualized return on average assets and annualized return on average shareholders’ equity were 1.30% and 12.14%, respectively, for the third quarter of 2026, compared to 1.36% and 13.39%, respectively, for the same period in 2025. The annualized return on average assets and annualized return on average shareholders’ equity were 1.23% and 11.42%, respectively, for the nine months ended September 30 2026, compared to 0.48% and 5.00%, respectively, for the same period in 2025.

Previous wording

Cash dividends of $4.3 million or $0.29 per share were declared in the second quarter of 2026, compared to $4.2 million or $0.28 per share in thesecond quarter of 2025. The cash dividend payout percentage was 34.8% for the second quarter of 2026, compared to 31.1% in the same period in the prior year. Cash dividends declared in the first six months of 2026 were $8.7 million or $0.58 per share, compared to $8.4 million or $0.56 per share in the same period during the prior year. The cash dividend payout percentage was 33.1% for the six months ended June 30, 2026. The Board of Directors’ determination of appropriate cash dividends will be based on, among other things, market conditions and ChoiceOne’s requirements for cash and capital.

Current wording

Cash dividends of $4.3 million or $0.29 per share were declared in the third quarter of 2026, compared to $4.2 million or $0.28 per share in thethird quarter of 2025. The cash dividend payout percentage was 29.7% for the third quarter of 2026, compared to 28.6% in the same period in the prior year. Cash dividends declared in the first nine months of 2026 were $13.0 million or $0.87 per share, compared to $12.6 million or $0.84 per share in the same period during the prior year. The cash dividend payout percentage was 31.9% for the nine months ended September 30, 2026. The Board of Directors’ determination of appropriate cash dividends will be based on, among other things, market conditions and ChoiceOne’s requirements for cash and capital.

Previous wording

Tables 1 and 2 on the following pages provide information regarding interest income and expense for the three and six months ended June 30, 2026 and 2025. Table 1 documents ChoiceOne’s average balances and interest income and expense, as well as the average rates earned or paid on assets and liabilities. Table 2 documents the effect on interest income and expense of changes in volume (average balance) and interest rates. These tables are referred to in the discussion of interest income, interest expense and net interest income.

Current wording

Tables 1 and 2 on the following pages provide information regarding interest income and expense for the three and nine months ended September 30, 2026 and 2025. Table 1 documents ChoiceOne’s average balances and interest income and expense, as well as the average rates earned or paid on assets and liabilities. Table 2 documents the effect on interest income and expense of changes in volume (average balance) and interest rates. These tables are referred to in the discussion of interest income, interest expense and net interest income.

Previous wording

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.

Current wording

Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $33.8 million, $29.4 million, and $17.0 million in the third quarter of 2026, the second quarter of 2026 and the third quarter of 2025, respectively.

Previous wording

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.

Current wording

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 $2.7 million, $2.4 million and $3.6 million in the third quarter of 2026, the second quarter of 2026 and the third quarter of 2025, respectively.

Previous wording

Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $28.6 million and $12.4 million in the six months ended June 30, 2026 and 2025, respectively.

Current wording

Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $30.6 million and $13.7 million in the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Interest on loans included net origination fees and accretion income. Accretion income was $5.1 million and $6.4 million in the six months ended June 30, 2026 and 2025, respectively.

Current wording

Interest on loans included net origination fees and accretion income. Interest income due to accretion from purchased loans was $7.8 million and $10.0 million in the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Net interest income increased $375,000 to $36.7 million for the three months ended June 30, 2026, compared to $36.3 million for the same period in 2025. For the six months ended June 30, 2026, net interest income increased $10.7 million to $73.3 million compared to $62.6 million for the same period in 2025. The increase during both periods was driven primarily by growth in average earning assets, including loans and securities, and a lower cost funding base. These benefits were partially offset by lower yields on earning assets, principally due to the continuing decline in interest income due to accretion from purchased loans and the repricing of variable-rate loans in a lower interest rate environment.

Current wording

Tax equivalent net interest income increased $806,000 to $38.8 million for the three months ended September 30, 2026, compared to $38.0 million for the same period in 2025. For the nine months ended September 30, 2026, net interest income increased $11.5 million to $112.9 million compared to $101.4 million for the same period in 2025. The increase during both periods was driven primarily by growth in average earning assets, including loans and securities, and a lower cost funding base. These benefits were partially offset by lower yields on earning assets, principally due to the continuing decline in interest income due to accretion from purchased loans and the repricing of variable-rate loans in a lower interest rate environment.

Previous wording

Net interest margin was 3.59% for the second quarter of 2026, compared to 3.66% for the second quarter of 2025, while tax-equivalent net interest margin was 3.63% compared to 3.70% in the prior-year quarter. The seven-basis-point decline in both measures was largely attributable to interest income due to accretion from purchased loans, which contributed approximately 24 basis points to the second quarter of 2026 net interest margin, compared to 36 basis points in the second quarter of 2025. Excluding the impact of interest income due to accretion from purchased loans, underlying margin performance remained relatively stable as lower earning asset yields were substantially offset by continued improvement in funding costs.

Current wording

GAAP net interest margin was 3.67% for the third quarter of 2026, compared to 3.73% for the third quarter of 2025. The six-basis-point decline was largely attributable to interest income due to accretion from purchased loans, which contributed approximately 25 basis points to the third quarter of 2026 net interest margin, compared to 36 basis points in the third quarter of 2025. Excluding the impact of interest income due to accretion from purchased loans, underlying margin performance improved by five basis points, as improvement in funding costs were offset by lower earning asset yields.

Previous wording

For the first six months of 2026, net interest margin increased to 3.61% from 3.56% for the same period in 2025, while tax-equivalent net interest margin increased to 3.65% from 3.60% in the same period in 2025. The improvement was primarily driven by a reduction in funding costs and favorable changes in funding mix, including growth in interest-bearing demand deposits and savings deposits and a reduction in higher-cost certificates of deposit. Average earning assets increased $546.4 million, or 15.4% for the first six months of 2026, compared to the prior-year period, while the annualized cost of deposits declined six basis points to 1.55% and the annualized cost of funds declined ten basis points to 1.73%.

Current wording

For the first nine months of 2026, GAAP net interest margin increased one basis point to 3.63% compared to the same period in 2025. The improvement was primarily driven by a reduction in funding costs and favorable changes in funding mix, including growth in interest-bearing demand deposits and savings deposits. Average earning assets increased $412.8 million, or 11.1% for the first nine months of 2026, compared to the prior-year period, while the annualized cost of deposits declined five basis points to 1.55% and the annualized cost of funds declined seven basis points to 1.74%.

Previous wording

The following table presents the annualized cost of deposits and the annualized cost of funds for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025 for the six months ended June 30, 2026 and 2025.

Current wording

The following table presents the annualized cost of deposits and the annualized cost of funds for the three months ended September 30, 2026, June 30, 2026 and September, 2025 and for the nine months ended September 30, 2026 and 2025.

Previous wording

Average loans increased $62.0 million during the second quarter of 2026 and $508.5 million, during the first six months of 2026 compared to the corresponding periods in 2025. The average yield on loans declined 16 basis points during the second quarter of 2026 and 21 basis points during the first six months of 2026 compared to the corresponding periods in 2025, primarily due to lower interest income due to accretion from purchased loans and the repricing of variable-rate loans in a lower interest rate environment. Interest income due to accretion from purchased loans totaled $2.4 million during the second quarter of 2026, compared to $3.5 million in the prior-year quarter, reducing the benefit to net interest margin to 24 basis points from 36 basis points in the prior-year quarter. As of June 30, 2026, approximately $48.0 million of interest income due to accretion from purchased loans remained to be recognized over the life of the purchased loan portfolio.

Current wording

Average loans increased $56.3 million during the third quarter of 2026 compared to the three months ended June 30, 2026 and $126.6 million during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The average yield on loans increased 4 basis points during the third quarter of 2026 compared to the three months ended June 30, 2026, and decreased 15 basis points during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decline in yield for the three months ended September 30, 2026 compared to the same period in 2025 was primarily due to lower interest income due to accretion from purchased loans and the repricing of variable-rate loans in a lower interest rate environment. Interest income due to accretion from purchased loans totaled $2.7 million during the third quarter of 2026, compared to $3.6 million in the three months ended September 30, 2025, reducing the benefit to net interest margin to 25 basis points from 36 basis points in the three months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, approximately $45.3 million of interest income due to accretion from purchased loans remained to be recognized over the life of the purchased loan portfolio.

Previous wording

Interest income on securities increased $415,000 and $1.2 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily attributable to higher average securities balances, which increased $64.9 million and $61.4 million for the three and six months ended June 30, 2026, respectively. Average securities balances increased as the Company redeployed excess liquidity into agency mortgage-backed securities and other investment securities. The average yield earned on securities decreased approximately 2 basis points to 2.84% for the three months ended June 30, 2026 compared to 2.86% for the same period in 2025. For the six months ended June 30, 2026, the average yield earned on securities increased approximately 7 basis points to 2.83% compared to 2.76% for the same period in 2025. Securities income and yields continued to be impacted by lower cash settlements from interest rate swaps that matured or were terminated during late 2025 and early 2026 and had previously provided additional income on portions of the securities portfolio.

Current wording

Interest income on securities increased $243,000 and $1.5 million for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily attributable to higher average securities balances, which increased $30.4 million and $50.1 million for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025. Average securities balances increased as the Company redeployed excess liquidity into agency mortgage-backed securities and other investment securities. The average yield earned on securities increased approximately 1 basis point to 2.86% for the three months ended September 30, 2026 compared to 2.85% for the same period in 2025. For the nine months ended September 30, 2026, the average yield earned on securities increased approximately 6 basis points to 2.84% compared to 2.78% for the same period in 2025. Securities income and yields continued to be impacted by lower cash settlements from interest rate swaps that matured or were terminated during late 2025 and early 2026 and had previously provided additional income on portions of the securities portfolio.

Previous wording

Deposits and borrowings continued to provide stable funding for balance sheet growth while benefiting from the repricing of liabilities in a lower interest rate environment. Average interest-bearing deposits increased during both the three- and six-month periods ended June 30, 2026, led by growth in interest-bearing demand and savings deposits, while higher-cost certificates of deposit declined as a percentage of total funding. As a result, the annualized cost of deposits decreased to 1.58% for the second quarter of 2026 from 1.65% in the second quarter of 2025 and to 1.55% for the first six months of 2026 from 1.61% in the comparable prior-year period.

Current wording

Deposits and borrowings continued to provide stable funding for balance sheet growth while benefiting from the repricing of liabilities in a lower interest rate environment. Average interest-bearing deposits increased during both the three and nine month periods ended September 30, 2026, compared to the three and nine months ended September 30, 2025, led by growth in interest-bearing demand and savings deposits. As a result, the annualized cost of deposits decreased to 1.54% for the third quarter of 2026 from 1.57% in the third quarter of 2025 and to 1.55% for the first nine months of 2026 from 1.60% in the comparable prior-year period.

Previous wording

Interest expense on borrowings and subordinated debentures increased $270,000 for the three months ended June 30, 2026 compared to the same period in 2025. Average balance of borrowings and subordinated debentures increased $61.6 million, which was offset by a 72 point basis point decrease in rate for borrowings and an 18 basis point decrease in rate for subordinated debentures. Interest expense on borrowings and subordinated debentures increased $403,000 for the six months ended June 30, 2026 compared to the same period in 2025. Average balance of borrowings and subordinated debentures increased $51.3 million, which was offset by a 70 point basis point decrease in rate for borrowings and an 6 basis point increase in rate for subordinated debentures.

Current wording

Interest expense on borrowings and subordinated debentures increased $204,000 and $607,000 for the three and nine months ended September 30, 2026 compared to the same period in 2025, respectively. Average balance of borrowings and subordinated debentures increased $40.7 million for the three months ended September 30, 2026, compared to the same period in the prior year, which was offset by a 52 basis point decrease in rate for borrowings and a 29 basis point increase in rate for subordinated debentures during that same time period. Average balance of borrowings and subordinated debentures increased $47.7 million for the nine months ended September 30, 2026, compared to the same period in the prior year, which was offset by a 65 basis point decrease in rate for borrowings and a 13 basis point increase in rate for subordinated debentures during that same time period.

Previous wording

The provision for credit losses on loans was $550,000 for the first six months of 2026 compared to $13.8 million in the same period in 2025. The provision for credit losses in the first six months of 2025 was due primarily to $12.0 million of expense in the first quarter for the acquisition of $1.3 billion of loans purchased without credit deterioration in the Merger. Additional expense was recorded to account for organic growth, changes in qualitative factors, and forecast data used in the allowance for credit losses calculation. The allowance for credit losses also increased by $4.9 million in the first quarter of 2025 as the credit mark on loans purchased with credit deterioration (“PCD loans”) migrated into the reserve.

Current wording

ChoiceOne incurred a $900,000 provision for credit losses on loans during the third quarter of 2026, due to the increase in loan balances and $648,000 in net charge offs. The provision for credit losses on loans was $1.5 million for the first nine months of 2026 compared to $14.0 million in the same period in 2025. The provision for credit losses in the first nine months of 2025 was due primarily to $12.0 million of expense in the first quarter for the acquisition of $1.3 billion of loans purchased without credit deterioration in the Merger.

Previous wording

Charge-offs and recoveries for respective loan categories for the six months ended June 30, 2026 and 2025 were as follows:

Current wording

Charge-offs and recoveries for respective loan categories for the nine months ended September 30, 2026 and 2025 were as follows:

Previous wording

Net charge-offs were $362,000 during the first six months of 2026, compared to net charge-offs of $491,000 during the same period in 2025. Net charge-offs for checking accounts during the first six months of 2026 were $161,000 compared to $132,000 for the same period in the prior year. Annualized net loan charge-offs as a percentage of average loans were 0.04% for the second quarter of 2026 compared to 0.06% for the same period in the prior year. Nonperforming loans to total loans (excluding loans held for sale) were 1.07% as of June 30, 2026 compared to 0.66% for the same period last year. Notably, 0.49% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to PCD loans acquired through the Merger which have a corresponding PCD credit reserve. In addition, 30.6% of the nonperforming loans at June 30, 2026 carry partial government guarantees from the SBA or USDA.

Current wording

Net charge-offs were $1.0 million during the first nine months of 2026, compared to net charge-offs of $734,000 during the same period in 2025. Net charge-offs for checking accounts during the first nine months of 2026 were $295,000 compared to $206,000 for the same period in the prior year. Annualized net loan charge-offs as a percentage of average loans were 0.08% for the third quarter of 2026 compared to 0.03% for the same period in the prior year.

Previous wording

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, Michigan 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.

Current wording

Noninterest expense for the three months ended September 30, 2026 increased $330,000 to $26.5 million, compared to the third quarter of 2025. The increase primarily reflected higher salaries and benefits and data processing expenses, partially offset by lower intangible amortization, occupancy and equipment expense, and lower other operating expenses. Compared with the second quarter of 2026, noninterest expense increased $494,000. For the nine months ended September 30, 2026, noninterest expense decreased $9.0 million compared to the same period in 2025, primarily due to the absence of $17.4 million of merger-related expenses. Excluding those merger-related expenses, the year-over-year increase primarily reflected higher salaries and benefits and other operating costs associated with the Company’s expanded operations.

Previous wording

Income tax expense was $2.6 million in the three months ended June 30, 2026 and $5.5 million in the six months ended June 30, 2026, compared to income tax expense of $3.1 million and $554,000 tax benefit for the same periods in 2025. The tax benefit for 2025 was generated by the loss in the first quarter of 2025 due to expenses related to the Merger. The effective tax rate was 17.1% and 17.5% for the three and six months ended June 30, 2026, respectively, compared to 18.8% and 59.8% for the same periods in 2025. ChoiceOne’s second quarter 2026 tax expense was reduced by a $1.9 million loss on sale of securities.

Current wording

Income tax expense was $3.2 million in the three months ended September 30, 2026 and $8.7 million in the nine months ended September 30, 2026, compared to income tax expense of $3.6 million and $3.1 million for the same periods in 2025. The tax expense for the nine months ended September 30, 2025 was reduced by the loss in the first quarter of 2025 due to expenses related to the Merger. The effective tax rate was 18.0% and 17.7% for the three and nine months ended September 30, 2026, respectively, compared to 19.9% and 17.8% for the same periods in 2025. ChoiceOne’s tax expense for the first nine months of 2026 was reduced by $600,000 as a result of purchasing a transferable tax credit that will be applied to 2026 income taxes. Depending on market conditions, management intends to purchase additional transferable tax credits in the remainder of 2026 to reduce tax expense.

Previous wording

At June 30, 2026, ChoiceOne had consolidated total assets of $4.5 billion, net loans of $3.0 billion, total deposits (excluding brokered deposits) of $3.5 billion and total shareholders' equity of $482.7 million. Asset growth was primarily due to growth in the loan portfolio and increases in the cash surrender value of bank-owned life insurance, partially offset by decreases in investment securities and other assets. The Company’s balance sheet is well-positioned to support continued lending activity, customer deposit relationships, and overall liquidity needs.

Current wording

At September 30, 2026, ChoiceOne had consolidated total assets of $4.5 billion, net loans of $3.1 billion, total deposits (excluding brokered deposits) of $3.6 billion and total shareholders' equity of $469.8 million. Asset growth during the first nine months of 2026 was primarily due to growth in the loan portfolio and increases in the cash surrender value of bank-owned life insurance, partially offset by decreases in investment securities. The Company’s balance sheet is well-positioned to support continued lending activity, customer deposit relationships, and overall liquidity needs.

Previous wording

On June 30, 2026, total available‑for‑sale securities were $555.5 million, compared to $554.4 million at December 31, 2025. The modest increase was primarily driven by the purchase of $45.5 million of securities, $34.2 million of which were agency mortgage-backed securities, partially offset by the sale of $29.5 million of securities and normal portfolio runoff from principal repayments, calls, and maturities.

Current wording

On September 30, 2026, total available‑for‑sale securities ("AFS securities") were $527.3 million, compared to $554.4 million at December 31, 2025. The decrease was primarily driven by the decline in the fair value of securities due to the increase in long term rates during the first nine months of 2026. During the nine months ended September 30, 2026, ChoiceOne purchased $55.3 million of AFS securities, partially offset by sales of $29.5 million, and maturities, paydowns and calls of $23.9 million.

Previous wording

Total held to maturity securities on June 30, 2026 were $383.3 million compared to $385.2 million on December 31, 2025. ChoiceOne's held to maturity securities declined during the first six months of 2026 due to principal repayments, calls and maturities, which was offset by the purchase of $1.9 million of securities during the first six months of 2026.

Current wording

Total held to maturity securities on September 30, 2026 were $376.6 million compared to $385.2 million on December 31, 2025. ChoiceOne's held to maturity securities declined during the first nine months of 2026 due to principal repayments, calls and maturities, which was offset by the purchase of $2.6 million of securities during the first nine months of 2026.

Previous wording

At June 30, 2026, ChoiceOne had $87.7 million in gross unrealized losses on its investment securities, including $48.6 million in unrealized losses on available for sale securities, $39.0 million in unrealized losses on held to maturity securities, and $528,000 in unrealized losses on equity securities. Unrealized losses on corporate and municipal bonds have not been recognized into income because management believes the issuers are of high credit quality, and management does not intend to sell the bonds prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

Current wording

At September 30, 2026, ChoiceOne had $129.4 million in gross unrealized losses on its investment securities, including $76.4 million in unrealized losses on available for sale securities, $52.3 million in unrealized losses on held to maturity securities, and $730,000 in unrealized losses on equity securities. Unrealized losses on corporate and municipal bonds have not been recognized into income because management believes the issuers are of high credit quality, and management does not intend to sell the bonds prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

Previous wording

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 second quarter of 2026.

Current wording

Core loans, which exclude held for sale loans and mortgage warehouse advances, increased by $89.8 million or an annualized 4.0% during the nine months ended September 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 second quarter of 2026. ChoiceOne also generated growth in key commercial loan categories during the nine months ended September 30, 2026, with commercial and industrial loans increasing $50.1 million and owner-occupied commercial real estate loans increasing $43.3 million. These increases were partially offset by declines of $46.2 million in multifamily loans and $18.6 million in non-owner-occupied commercial real estate loans.

Previous wording

Mortgage warehouse advances decreased by $5.5 million as of June 30, 2026 compared to December 31, 2025. Mortgage warehouse advances consist of a warehouse line of credit used to facilitate mortgage loan originations, with interest rates and balances that fluctuate in line with the national mortgage market.

Current wording

Mortgage warehouse advances decreased by $16.8 million as of September 30, 2026 compared to December 31, 2025. Mortgage warehouse advances consist of a warehouse line of credit used to facilitate mortgage loan originations, with interest rates and balances that fluctuate in line with the national mortgage market.

Previous wording

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 second quarter of 2026, 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.

Current wording

Total funds borrowed from the FHLB were $235.0 million at a weighted average rate of 4.01%, with $215.0 million due within 12 months at September 30, 2026. At September 30, 2026, total available borrowing capacity secured by pledged assets was $1.2 billion. ChoiceOne can increase its borrowing capacity by utilizing unsecured federal fund lines and pledging additional assets. Uninsured deposits totaled $1.3 billion or 35.0% of deposits at September 30, 2026.

Previous wording

ChoiceOne recognized a core deposit intangible of $31.0 million related to the Merger in the first quarter of 2025. This intangible asset, valued at 2.78% of Fentura's core deposits, is being amortized over a period of 10 years using the sum-of-years-digits method. This approach reflects the anticipated pattern of economic benefits derived from the core deposits. ChoiceOne recognized core deposit intangible expense of $1.2 million for the three months ended June 30, 2026 and $2.9 million for the six months ended June 30, 2026.

Current wording

ChoiceOne recognized a core deposit intangible of $31.0 million related to the Merger in the first quarter of 2025. This intangible asset, valued at 2.78% of Fentura's core deposits, is being amortized over a period of 10 years using the sum-of-years-digits method. This approach reflects the anticipated pattern of economic benefits derived from the core deposits. ChoiceOne recognized core deposit intangible expense of $1.6 million for the three months ended September 30, 2026 and $4.8 million for the nine months ended September 30, 2026.

Previous wording

In September 2021, ChoiceOne completed a private placement of $32.5 million in aggregate principal amount of 3.25% fixed-to-floating rate subordinated notes due 2031. ChoiceOne also holds $16.2 million in subordinated debentures that were obtained in the acquisition of Community Shores Bank Corporation and the Merger with Fentura, offset by the merger mark-to-market adjustment.

Current wording

In September 2021, ChoiceOne completed a private placement of $32.5 million in aggregate principal amount of 3.25% fixed-to-floating rate subordinated notes due 2031. ChoiceOne also holds $16.2 million in subordinated debentures that were obtained in the acquisition of Community Shores Bank Corporation and the Merger, offset by the merger mark-to-market adjustment.

Previous wording

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.

Current wording

At September 30, 2026, shareholders’ equity totaled $469.8 million, compared with $482.7 million at June 30, 2026 and $449.6 million at September 30, 2025. The decline in the third quarter of 2026 compared to the second quarter of 2026 was primarily attributable to a $22.3 million decline in accumulated other comprehensive income resulting from the effect of higher long-term interest rates on the fair value of the Company’s available-for-sale securities portfolio, partially offset by third-quarter earnings. ChoiceOne repurchased 40,000 and 125,000 shares of stock for a net cost of $1.3 million and $3.9 million for the three and nine months ended September 30, 2026, respectively, under its existing share repurchase plan. The repurchase reflects management’s continued confidence in the Company’s capital position and its commitment to enhancing long-term shareholder value. ChoiceOne Bank continues to be “well-capitalized,” with a total risk-based capital ratio of 12.9% as of September 30, 2026, compared to 12.8% on September 30, 2025.

Previous wording

Liquidity risk deals with ChoiceOne's ability to meet its cash flow requirements. These requirements include depositors desiring to withdraw funds and borrowers seeking credit. Longer-term liquidity needs may be met through core deposit growth, maturities of and cash flows from investment securities, normal loan repayments, advances from the FHLB and the Federal Reserve Bank, brokered certificates of deposit, and income retention. ChoiceOne had $295.0 million in outstanding borrowings from the FHLB at a weighted average fixed rate of 3.80% with $275.0 million due within 12 months as of June 30, 2026. ChoiceOne had $93.2 million in brokered deposits on June 30, 2026. The acceptance of brokered deposits is not limited as long as the Bank is categorized as “well capitalized” under regulatory guidelines. At June 30, 2026, total available borrowing capacity from the FHLB and the Federal Reserve Bank was $1.1 billion.

Current wording

Liquidity risk deals with ChoiceOne's ability to meet its cash flow requirements. These requirements include depositors desiring to withdraw funds and borrowers seeking credit. Longer-term liquidity needs may be met through core deposit growth, maturities of and cash flows from investment securities, normal loan repayments, advances from the FHLB and the Federal Reserve Bank, brokered certificates of deposit, and income retention. ChoiceOne had $235.0 million in outstanding borrowings from the FHLB at a weighted average fixed rate of 4.01% with $215.0 million due within 12 months as of September 30, 2026. ChoiceOne had $67.5 million in brokered deposits on September 30, 2026. The acceptance of brokered deposits is not limited as long as the Bank is categorized as “well capitalized” under regulatory guidelines. At September 30, 2026, total available borrowing capacity from the FHLB and the Federal Reserve Bank was $1.2 billion.