Key Highlights

  • Net income was USD 14.5 million, or USD 0.97 per diluted share, flat per share from a year earlier.
  • Net interest Margin widened 8 basis points to 3.67% from 3.59% in the second quarter of 2026.
  • Core loans grew USD 33.6 million, or 4.4% annualized, while deposits excluding brokered balances rose USD 95.7 million.
  • Annualized net charge-offs were 0.08% of average loans, and nonperforming loans stood at 1.25% of total loans.

Earnings Hold Steady

ChoiceOne Financial Services, Inc. (NASDAQ:COFS) reported third-quarter 2026 Net Income of USD 14.5 million, or USD 0.97 per diluted share, compared with USD 14.7 million, or USD 0.97, a year earlier. Nine-month net income was USD 40.7 million, or USD 2.71 per share, versus USD 14.3 million, or USD 1.05, when results were affected by the first-quarter 2025 Acquisition of Fentura Financial.

Chief executive Kelly Potes credited margin expansion and net interest income growth to disciplined Balance Sheet management and continued Loan growth. Larger loan balances supported net interest income, while the Fentura acquisition distorts the nine-month comparison.

Margin, Loans and Deposits

GAAP net interest margin rose to 3.67%, reflecting loan growth and steady funding costs. Loan interest income increased USD 1.7 million from the second quarter and USD 894,000 from a year earlier. Accretion from purchased loans contributed about USD 2.7 million, adding 25 basis points to the margin, compared with USD 3.6 million and 36 basis points in the prior-year quarter. Excluding that accretion, the margin was about 3.42%, and the contribution from purchased loans has declined by 11 basis points from a year earlier.

Core loans, which exclude held-for-sale loans and Mortgage Warehouse advances, grew USD 145.4 million, or 5.0%, over twelve months. Deposits excluding brokered balances grew an annualized 10.9% in the quarter and 3.1% over twelve months. Total Assets were USD 4.5 billion, up USD 162.2 million from a year earlier, primarily on core loans and warehouse mortgage advances, which are excluded from the core loan figure.

Asset Quality and Accretion Schedule

Nonperforming loans to total loans, excluding loans held for sale, were 1.25%, of which 0.40% is attributed to purchased loans identified before acquisition as Credit deteriorated. Net charge-offs were 0.08% of average loans on an annualized basis, and the company described asset quality as strong. The nonperforming ratio is measured against total loans excluding loans held for sale.

Estimated accretion income from purchased loans using the effective interest method is USD 1.8 million for the rest of 2026 and USD 6.0 million in 2027, with about USD 45.3 million remaining in total. Of the third-quarter amount, USD 1.9 million came from scheduled amortization and USD 806,000 from unexpected payoffs and paydowns.

Factors Behind the Next Quarter

Core loan growth of 5.0% over twelve months compares with deposit growth of 3.1% excluding brokered balances. Management stated it believes the company can build on margin momentum through the remainder of 2026. Items to follow include the pace of purchased loan accretion, the trend in nonperforming loans and deposit growth outside brokered funding.