Executive Summary

Q3 2025 delivered strong, merger‑driven operating momentum: diluted EPS rose to $0.97, up vs $0.90 in Q2 2025 and $0.85 in Q3 2024, with GAAP NIM expanding to 3.73% on higher net interest income and accretion from purchased loans . Versus S&P Global consensus, EPS beat by $0.11 at $0.97 vs $0.86*, and S&P-standardized revenue exceeded by ~$2.4M at $44.54M vs $42.15M* (3 estimates for EPS; 2 for revenue). Values retrieved from S&P Global.*
Integration tailwinds persisted: net interest income rose to $37.6M (+85.7% y/y), aided by ~$3.6M accretion from purchased loans; cost of funds improved to 1.77%, while efficiency ratio improved y/y to 54.76% .
Balance sheet quality remained solid: ACL/loans steady at 1.19%; NPLs/loans at 0.69% with 0.39% tied to PCD loans; uninsured deposits at 33.2% with $1.2B contingent borrowing capacity .
Near-term catalysts: sustained NIM improvement and swap hedging discipline, accretion income visibility ($2.3M remainder 2025; $8.2M 2026 effective interest), and cost discipline post-merger; watch mix shift toward interest-bearing deposits and modest core loan contraction in Q3 .

What Went Well and What Went Wrong

What Went Well
- NIM and NII expansion: GAAP NIM improved to 3.73% (3.17% a year ago); net interest income rose to $37.6M (vs $20.2M y/y), with purchased loan accretion adding 36 bps to NIM and ~$3.6M to loan interest income .
- Operating leverage: Efficiency ratio improved to 54.76% vs 60.80% in Q3 2024 as revenue scale from the merger outpaced expense growth; noninterest income also increased y/y by $2.3M .
- Management confidence on integration: “With the Merger behind us, our team is focused on serving our clients and growing our core business” — CEO Kelly Potes .
What Went Wrong
- Core loan growth paused: core loans declined $10.3M in Q3 (1.4% annualized), despite 12‑month organic growth of $65.3M (+4.5%) .
- Deposit mix shift pressured funding: noninterest-bearing deposits fell $39.9M q/q while interest-bearing demand rose $73.4M; uninsured deposits increased to 33.2% (from 29.6% in Q2), though average noninterest-bearing balances increased sequentially .
- Credit and NPL optics: NPLs/loans rose to 0.69% (0.19% a year ago), largely from acquired PCD loans (0.39% of loans), requiring continued monitoring though net charge-offs remained low at 0.03% annualized .

Financial Results

Headline results and estimates (periods in chronological order; consensus is S&P Global):

Metric	Q3 2024	Q2 2025	Q3 2025 Actual	Q3 2025 Consensus
Diluted EPS ($)	$0.85	$0.90	$0.97	$0.86* (3 est.)
Total operating revenue ($M) (NII + Noninterest)	$25.12	$42.83	$44.74	$42.15M* (2 est.)
Net interest margin (GAAP)	3.17%	3.66%	3.73%	N/A
Efficiency ratio	60.80%	55.32%	54.76%	N/A

S&P Global standardized revenue and EPS figures marked with . Values retrieved from S&P Global.

Profit and loss components:

Metric ($M)	Q3 2024	Q2 2025	Q3 2025
Net interest income	$20.25	$36.32	$37.60
Noninterest income	$4.87	$6.50	$7.14
Noninterest expense	$15.42	$25.51	$26.22
Provision for credit losses on loans	$0.43	$0.65	$0.20
Net income	$7.35	$13.53	$14.68
Dividends per share ($)	$0.27	$0.28	$0.28

Balance sheet and ratios:

Metric	Q3 2024	Q2 2025	Q3 2025
Total assets ($B)	$2.73	$4.31	$4.30
Total deposits ($B)	$2.21	$3.59	$3.57
Noninterest-bearing deposits ($B)	$0.52	$0.94	$0.90
Brokered deposits ($M)	$6.63	$106.23	$72.67
FHLB borrowings ($M)	$210.0	$198.4	$197.8
Cost of funds (annualized)	1.87%	1.84%	1.77%
ACL/loans	1.10%	1.19%	1.19%
NPLs/loans	0.19%	0.66%	0.69%
Uninsured deposits (% of total)	N/A	29.6%	33.2%

Loan composition (end of period, $M):

Category	Q3 2024	Q2 2025	Q3 2025
Commercial real estate	$862.8	$1,743.5	$1,728.8
Residential real estate	$279.1	$724.3	$728.8
Commercial & industrial	$229.2	$351.4	$352.9
Construction real estate	$14.6	$21.5	$18.4
Agricultural	$49.1	$47.3	$51.2
Consumer	$30.7	$29.7	$27.3
Loans to other financial institutions	$38.5	$3.0	$2.5

KPIs and operating metrics:

KPI	Q3 2024	Q2 2025	Q3 2025
ROAA (annualized)	1.09%	1.26%	1.36%
ROATCE (annualized)	16.29%	18.26%	19.08%
Net charge-offs (annualized to avg loans)	0.02%	0.06%	0.03%
NIM contribution from accretion (bps)	2.75 bps (approx., $0.275M)	36 bps	36 bps
Accretion income (quarter, $M)	$0.275	$3.5	$3.6

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Merger-related expenses	FY 2025 (2H)	“Do not anticipate material merger expenses going forward” (Q2)	“No merger expenses in Q3; do not anticipate additional material merger expenses” (Q3)	Maintained
Purchased loan accretion (effective interest method)	Remainder of 2025	~$4.1M (as of Q2)	~$2.3M (as of Q3)	Lower as time elapsed/updated
Purchased loan accretion (effective interest method)	FY 2026	N/A	~$8.2M	New disclosure
Total remaining accretable yield from purchased loans	Life of portfolio	~$59.8M (as of Q1, broader estimate)	~$51.1M	Updated lower with runoff
Deposit costs outlook	Forward	If rates decline, anticipate further reductions in deposit costs (Q2)	Not reiterated; cost of funds fell to 1.77% in Q3	Implicitly maintained
Quarterly dividend	Ongoing	$0.28 (Q2 2025)	$0.28 (Q3 2025)	Maintained

Earnings Call Themes & Trends

Note: We did not find a Q3 2025 earnings call transcript; MarketBeat listed “Conference Call Date: N/A” for 10/24/2025 release .

Topic	Previous Mentions (Q1 2025 and Q2 2025)	Current Period (Q3 2025)	Trend
Merger integration and synergy benefits	Q1: Merger completed; expect synergies; adjusted EPS $0.86 excluding merger items . Q2: Record net income, NIM expansion from merger; integration progress .	“Merger behind us”; focus on core growth; no additional material merger expenses anticipated .	Positive, stable execution
Net interest margin trajectory	Q1 NIM 3.43% (+); accretion +37 bps . Q2 NIM 3.66%; accretion +36 bps .	NIM 3.73%; accretion +36 bps; NII up sharply y/y .	Improving
Funding costs and deposit mix	Q1: Deposit cost 1.59%; outlook: further declines if rates fall . Q2: Cost of funds 1.84% with mitigation; deposit costs down y/y .	Cost of funds 1.77%; noninterest-bearing down q/q; interest-bearing demand up; uninsured deposits 33.2% .	Improving cost, mixed mix
Hedging with interest rate swaps	Q1: $351M notional; asset sensitive . Q2: $351M notional; $1.3M settlements .	$381.3M notional; added $30.4M pay‑fix swaps vs new MBS; $1.3M settlements .	Increased hedging activity
Asset quality	Q1 NPLs/loans 0.65%, PCD 0.44% . Q2 0.66%, PCD 0.41% .	0.69%, PCD 0.39%; NCOs 0.03% annualized .	Slight uptick, stable losses
CRE concentration vs. capital	Bank CRE/non‑owner occupied as % of total capital: 303.9% (Q1) ; 290.6% (Q2) .	280.0% (Q3) .	Improving

Management Commentary

Strategic focus and integration: “ChoiceOne continues to deliver exceptional results, driven by the strength of our strategic merger with Fentura and a focus on serving our communities” — Kelly Potes, CEO .
Post-merger priorities: “With the Merger behind us, our team is focused on serving our clients and growing our core business” — Kelly Potes, CEO .
Cost discipline and performance: “ChoiceOne continues to strive to optimize our cost structure while investing in opportunities that enhance our performance” .

Q&A Highlights

No Q3 2025 earnings call transcript was located, and MarketBeat listed “Conference Call Date: N/A” for the 10/24/2025 announcement . As such, no management Q&A themes or clarifications were available from a call.

Estimates Context

EPS: $0.97 actual vs $0.86 consensus (beat by $0.11); 3 estimates. Values retrieved from S&P Global.
Revenue (S&P-standardized): $44.54M actual vs $42.15M consensus (beat by ~$2.4M); 2 estimates. Values retrieved from S&P Global.
Implications: The beat reflects higher‑than‑modeled NIM and NII from merger scale and accretion ($3.6M), plus stronger noninterest income. Estimate revisions may trend higher for NIM/NII run‑rate and fee income, while funding mix (shift to interest‑bearing) and NPL optics could temper forward margin expansion assumptions .

Key Takeaways for Investors

Integration delivering: Better NIM (3.73%) and efficiency (54.8%) underscore synergy capture and revenue scale; continued swap hedging supports NII stability across rate scenarios .
Accretion visibility: ~$2.3M (remainder 2025) and ~$8.2M (2026) effective‑interest accretion provide earnings cushion; $51.1M accretable remains over loan life, with variability tied to prepayments .
Funding mix to watch: q/q drop in noninterest‑bearing and higher uninsured deposits (33.2%) warrant monitoring, though capacity of ~$1.2B in secured lines provides liquidity backstop .
Asset quality stable, but acquired PCD loans drive NPL optics: NPLs/loans at 0.69% with 0.39% from PCD; charge‑offs minimal at 0.03% annualized .
Capital remains sound: Bank total risk‑based capital at 12.8% (“well‑capitalized”), even with larger CRE exposure; TCE/TA at 7.04% .
Dividend sustained: $0.28/share maintained; payout covered by growing earnings power post‑merger .
Near‑term setup: Continued NIM tailwinds and accretion can support EPS trajectory; investors should track core loan growth resumption, deposit mix normalization, and progress reducing brokered balances to enhance funding costs .

References and Sources:

Q3 2025 8‑K and Exhibit 99.1 press release: ; .
Q2 2025 press release: .
Q1 2025 press release: .
MarketBeat (conference call N/A): https://www.marketbeat.com/earnings/reports/2025-10-24-choiceone-financial-services-inc-stock/

S&P Global consensus and actuals (asterisked values in tables and Estimates Context) are Values retrieved from S&P Global.*

CHOICEONE FINANCIAL SERVICES INC (COFS)·Q3 2025 Earnings Summary