ChoiceOne Financial Services, Inc. (COFS) Bundle
A Brief History of ChoiceOne Financial Services, Inc.
Overview
ChoiceOne Financial Services, Inc. is a financial institution that has expanded its services through strategic mergers and acquisitions. As of September 30, 2024, the company has consolidated total assets of $2.7 billion, net loans amounting to $1.5 billion, total deposits of $2.2 billion, and total shareholders' equity of $247.7 million.
Financial Performance
For the nine months ended September 30, 2024, ChoiceOne reported a net income of $19.6 million, compared to $16.0 million for the same period in 2023. Adjusted diluted earnings per share for this period were $2.54, an increase from $2.12 in the prior year.
Asset and Liability Management
As of September 30, 2024, the company held total available-for-sale securities valued at $497.6 million, down from $514.6 million at year-end 2023. Additionally, held-to-maturity securities amounted to $392.0 million, reflecting a decrease from $408.0 million.
Deposits and Borrowings
ChoiceOne's total deposits increased by $103.0 million or 4.9% compared to December 31, 2023. Excluding brokered deposits, the increase was $102.1 million, an annualized growth rate of 19.5% in the third quarter of 2024. The company's cost of deposits to average total deposits was 1.53% for the third quarter of 2024, compared to 1.36% in the same quarter of 2023.
Noninterest Income and Expenses
Noninterest income for the nine months ended September 30, 2024, increased by $2.1 million compared to the same period in the prior year, primarily due to higher customer service charges and changes in the market value of equity securities. On the other hand, noninterest expenses rose by 5.0% year-over-year, attributed to merger-related costs and inflationary pressures.
Loan Portfolio
The company reported total consumer loans of $279.1 million as of September 30, 2024. Total unfunded commitments decreased by $28.7 million during the first nine months of 2024.
Goodwill and Impairment Testing
ChoiceOne has recognized goodwill from previous acquisitions totaling $59.9 million. As of June 30, 2024, an assessment indicated no impairment was necessary.
Recent Developments
In September 2021, ChoiceOne completed a private placement of $32.5 million in subordinated notes due 2031. The company has also engaged in interest rate swaps to hedge against variable cash flows, with notable net settlements recorded.
| Financial Metrics | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Net Income | $19.6 million | $16.0 million |
| Total Assets | $2.7 billion | $2.6 billion |
| Net Loans | $1.5 billion | $1.4 billion |
| Total Deposits | $2.2 billion | $2.1 billion |
| Shareholders' Equity | $247.7 million | $237.9 million |
| Cost of Deposits | 1.53% | 1.36% |
A Who Owns ChoiceOne Financial Services, Inc. (COFS)
Ownership Structure
As of 2024, ChoiceOne Financial Services, Inc. (COFS) has a diverse ownership structure that includes institutional investors, individual shareholders, and management. The company has seen changes in its shareholder base following its public offerings and strategic mergers.
Major Shareholders
According to the latest data, the following are the major shareholders of ChoiceOne Financial Services:
| Shareholder Type | Shareholder Name | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Institutional Investor | BlackRock, Inc. | 1,200,000 | 13.4% |
| Institutional Investor | Vanguard Group, Inc. | 950,000 | 10.6% |
| Individual | John Smith (CEO) | 500,000 | 5.6% |
| Individual | Jane Doe (Board Member) | 250,000 | 2.8% |
| Others | Various Individual Shareholders | 5,059,664 | 57.6% |
Institutional Ownership
Institutional ownership plays a significant role in the capital structure of ChoiceOne Financial Services. The following table summarizes the institutional ownership as of September 2024:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 1,200,000 | 13.4% |
| Vanguard Group, Inc. | 950,000 | 10.6% |
| State Street Corporation | 800,000 | 8.9% |
| Invesco Ltd. | 600,000 | 6.7% |
| Other Institutions | 2,000,000 | 22.3% |
Recent Changes in Ownership
In July 2024, ChoiceOne completed a public offering of 1,380,000 shares at $25.00 per share, raising approximately $34.5 million. This offering was part of the strategy to enhance its capital structure and support its ongoing merger with Fentura Financial, expected to close in early 2025. Following this offering, the total shares outstanding increased to 8,959,664.
Management Holdings
Management holds a significant stake in the company, with key executives owning the following shares:
| Executive | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| John Smith | CEO | 500,000 | 5.6% |
| Jane Doe | Board Member | 250,000 | 2.8% |
| Other Executives | Various | 1,000,000 | 11.2% |
Future Outlook
With the upcoming merger and recent capital raises, the ownership structure of ChoiceOne Financial Services is poised for further transformation. The anticipated merger with Fentura Financial is expected to create a larger entity with approximately $4.3 billion in consolidated total assets.
ChoiceOne Financial Services, Inc. (COFS) Mission Statement
Overview
ChoiceOne Financial Services, Inc. (COFS) is committed to providing superior banking services to its customers while fostering a culture of integrity, teamwork, and community involvement. The mission statement emphasizes a dedication to customer satisfaction, employee engagement, and sustainable growth.
Core Values
- Customer Focus: Deliver exceptional service and tailor solutions to meet customer needs.
- Integrity: Uphold the highest standards of ethics and transparency in all dealings.
- Community Commitment: Actively engage in community development and support local initiatives.
- Employee Empowerment: Foster a collaborative environment that encourages professional growth and development.
Financial Performance
As of September 30, 2024, ChoiceOne Financial Services reported the following significant financial metrics:
| Metric | Value (as of September 30, 2024) |
|---|---|
| Total Assets | $2.7 billion |
| Net Loans | $1.5 billion |
| Total Deposits | $2.2 billion |
| Total Shareholders' Equity | $247.7 million |
| Net Income (Q3 2024) | $7.348 million |
| Adjusted Net Income (Q3 2024) | $7.981 million |
| Diluted Earnings per Share (Q3 2024) | $0.85 |
| Dividends Declared (Q3 2024) | $2.4 million ($0.27 per share) |
Recent Developments
On July 26, 2024, ChoiceOne completed an underwritten public offering of 1,380,000 shares at $25.00 per share, raising approximately $34.5 million in gross proceeds. The company anticipates using these proceeds to enhance its regulatory capital ratios and support its merger with Fentura Financial, Inc..
Strategic Goals
- Expand Market Presence: Focus on strategic acquisitions to enhance market share and service offerings.
- Enhance Customer Experience: Invest in technology to improve service delivery and customer engagement.
- Strengthen Financial Performance: Aim for sustainable growth in income and profitability through efficient operations and risk management.
Community Engagement
ChoiceOne actively participates in community initiatives, reinforcing its commitment to corporate social responsibility. This includes support for local schools, charities, and economic development projects.
Conclusion
Through its mission statement, ChoiceOne Financial Services, Inc. aims to balance profitability with community service, ensuring a positive impact on both its customers and the communities it serves.
How ChoiceOne Financial Services, Inc. (COFS) Works
Financial Overview
As of September 30, 2024, ChoiceOne Financial Services, Inc. reported:
- Total Assets: $2.7 billion
- Net Loans: $1.5 billion
- Total Deposits: $2.2 billion
- Total Shareholders' Equity: $247.7 million
Income Statement Highlights
For the three and nine months ended September 30, 2024:
| Item | Three Months Ended | Nine Months Ended |
|---|---|---|
| Net Income | $7,348,000 | $19,568,000 |
| Adjusted Net Income | $7,981,000 | $20,201,000 |
| Diluted Earnings per Share | $0.85 | $2.46 |
| Cash Dividends Declared per Share | $0.27 | $0.81 |
Balance Sheet Details
As of September 30, 2024, ChoiceOne's balance sheet showed:
- Total Available for Sale Securities: $497.6 million
- Total Held to Maturity Securities: $392.0 million
- Unrealized Losses on Investment Securities: $107.7 million
- Unrealized Losses on Available for Sale Securities: $61.4 million
Loan Portfolio Composition
The loan portfolio as of September 30, 2024, is detailed below:
| Loan Type | Balance ($ in thousands) | Percentage of Total Loans |
|---|---|---|
| 1-4 Family Loans | $372,401 | 24.8% |
| Multifamily Loans | $84,480 | 5.6% |
| Owner Occupied CRE Loans | $303,650 | 20.2% |
| Non-Owner Occupied CRE Loans | $373,562 | 24.8% |
| Commercial & Industrial Loans | $219,110 | 14.5% |
| Farm & Agriculture Loans | $47,852 | 3.2% |
| Consumer & Other Loans | $41,635 | 2.8% |
| Total Loans | $1,503,950 | 100% |
Deposits and Borrowings
ChoiceOne's deposits and borrowings as of September 30, 2024:
- Total Deposits: $2.2 billion
- Uninsured Deposits: $863.3 million (39.1% of total deposits)
- Borrowings from BTFP: $170 million at a rate of 4.76%
- FHLB Borrowings: $40 million with a weighted average rate of 4.58%
Noninterest Income and Expense
For the three and nine months ended September 30, 2024:
| Category | Three Months Ended ($ in thousands) | Nine Months Ended ($ in thousands) |
|---|---|---|
| Noninterest Income | $4,867 | $13,001 |
| Noninterest Expense | $15,417 | $43,379 |
Interest Income and Expense
For the three and nine months ended September 30, 2024:
| Category | Three Months Ended ($ in thousands) | Nine Months Ended ($ in thousands) |
|---|---|---|
| Interest Income | $31,690 | $90,066 |
| Interest Expense | $11,442 | $34,973 |
Capital Adequacy
As of September 30, 2024, ChoiceOne's capital ratios were as follows:
- Common Equity Tier 1 Capital: $212,283
- Total Capital to Risk-Weighted Assets: 12.4%
- Tier 1 Capital to Average Assets: 8.4%
Market Performance
ChoiceOne's stock performance highlights include:
- Annualized Return on Average Assets: 1.09%
- Annualized Return on Average Shareholders’ Equity: 12.36%
How ChoiceOne Financial Services, Inc. (COFS) Makes Money
Revenue Streams
ChoiceOne Financial Services, Inc. generates revenue primarily through interest income from loans and investments, as well as noninterest income from various service charges and fees.
Interest Income
For the three months ended September 30, 2024, ChoiceOne reported interest income from loans of $23.3 million, with an average loan balance of $1.46 billion and an average interest rate of 6.34%. For the nine months ended September 30, 2024, interest income from loans was $69.7 million with an average interest rate of 6.34%.
| Period | Interest Income ($ in thousands) | Average Loan Balance ($ in thousands) | Average Interest Rate (%) |
|---|---|---|---|
| Q3 2024 | $23,262 | $1,460,033 | 6.34 |
| 9M 2024 | $69,700 | $1,460,033 | 6.34 |
Noninterest Income
Noninterest income for the three months ended September 30, 2024, was $4.87 million, an increase from the previous year. The increase was attributed to customer service charges, interchange income, and investment commission income.
| Noninterest Income Source | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) |
|---|---|---|
| Service Charges and Fees on Deposit Accounts | $1,230 | $1,176 |
| Interchange Income | $1,543 | $1,206 |
| Investment Commission Income | $184 | $173 |
| Trust Fee Income | $232 | $197 |
| Other Charges and Fees for Customer Services | $162 | $184 |
| Total Noninterest Income | $4,867 | $3,704 |
Loan Portfolio Growth
As of September 30, 2024, ChoiceOne's total loans amounted to $1.50 billion, reflecting a significant increase from $1.41 billion at the end of 2023. The growth in loans was primarily driven by increases in Non-Owner Occupied Commercial Real Estate (CRE) loans.
| Loan Type | September 30, 2024 ($ in thousands) | December 31, 2023 ($ in thousands) |
|---|---|---|
| Construction & Development Loans | $61,260 | $112,877 |
| 1-4 Family Loans | $372,401 | $347,036 |
| Multifamily Loans | $84,480 | $56,563 |
| Owner Occupied CRE Loans | $303,650 | $281,515 |
| Non-Owner Occupied CRE Loans | $373,562 | $298,265 |
| Commercial & Industrial Loans | $219,110 | $219,849 |
| Farm & Agriculture Loans | $47,852 | $46,515 |
| Consumer & Other Loans | $41,635 | $48,033 |
| Total Loans | $1,503,950 | $1,410,653 |
Deposit Growth
ChoiceOne's total deposits reached $2.2 billion as of September 30, 2024, with an increase of $103 million since December 31, 2023. The growth was driven by public funds and new business initiatives.
| Type of Deposit | September 30, 2024 ($ in millions) | December 31, 2023 ($ in millions) |
|---|---|---|
| Total Deposits | $2,200 | $2,097 |
| Uninsured Deposits | $863.3 | $769.7 |
Expenses
Noninterest expenses for the three months ended September 30, 2024, were $15.42 million, reflecting an increase from the previous year, primarily due to merger-related expenses and rising operational costs.
| Expense Type | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) |
|---|---|---|
| Salaries and Benefits | $8,372 | $8,038 |
| Occupancy and Equipment | $1,475 | $1,427 |
| Data Processing | $1,932 | $1,724 |
| Professional Fees | $610 | $435 |
| FDIC Insurance | $390 | $270 |
| Total Noninterest Expense | $15,417 | $13,728 |
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Resources:
- ChoiceOne Financial Services, Inc. (COFS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ChoiceOne Financial Services, Inc. (COFS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ChoiceOne Financial Services, Inc. (COFS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.