Choiceone Financial Services, Inc. · NASDAQ:COFS
Choiceone Financial Services — Investor Presentation (November 2022)
22 slides from Choiceone Financial Services's investor presentation, Nov 8, 2022
Slide 1: Slide 1
Slide 2: Disclaimer
• Forward Looking Statements. This presentation contains forward - looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and ChoiceOne Financial Services, Inc. These statements are n
Slide 3: Company Highlights
3 3 Company Highlights Numbers based on ChoiceOne internal data as of 9/30/2022 except where specifically identified. (1) See Non - GAAP reconciliation • As of September 30, 2022, COFS regulatory capital ratios: Leverage (7.6%), Tier 1 Risk - Based (11.2%) and Total Risk Based (13.7% ) • For the nin
Slide 4: Vision and mission
4 4 Our vision is to be the best bank in Michigan. Our mission is to provide superior service, quality advice, and show utmost respect to everyone we meet.
Slide 5: Company Profile
5 5 ChoiceOne Financial Services, Inc . (“COFS”) was incorporated in 1986 as a Michigan corporation . ChoiceOne Bank was founded in 1898 (then called Sparta State Bank) in Sparta, MI at the corner of Division and Union Street . Over its more than 120 - year history, COFS has grown significantly, due
Slide 6: Awards & Accomplishments
6 6 Five Star Bank ( Bauer Financial – 2020 ) Award Nominee ( West MI Hispanic Chamber of Commerce – 2018 ) Source: COFS website Awards & Accomplishments With an abundance of accolades & awards, ChoiceOne Bank has been recognized as a top - tier community bank in Michigan and in the banking industry
Slide 7: Leadership team
7 7 Mr. Peter Batistoni has serves as Senior Vice President and Senior Lender of ChoiceOne Bank. Before then, he served as Senior Vice President and Senior Lender at Lakestone Bank & Trust, beginning in December 2016 and 2018 respectively. Prior to his employment there, he worked for Citizens State
Slide 8: Leadership team
8 8 Ms. Shelly M. Childers has served as Senior Vice President and Chief Information Officer at ChoiceOne Bank since 2019. Prior to that Ms. Childers was the Senior Vice President and Chief Information Officer at Lakestone Bank and Trust. Ms. Childers has over 25 years of experience leading both the
Slide 9: Geographic Footprint
9 9 GRAND RAPIDS - KENTWOOD, MI Locations 10 Deposits $771,446 Market Share 2.46% Market Rank 10 SOUTHEASTERN MI (DETROIT MSA) Locations 13 Deposits $825,585 Market Share 0.41% Market Rank 13 MUSKEGON, MI Locations 5 Deposits $377,822 Market Share 17.15% Market Rank 3 Other, MI (1) Locations 3 Depos
Slide 10: Transaction Overview / M&A History
10 10 Transaction Overview Deal Profile (Announcement) Target Operating Metrics (Quarter Before Announcement) Target Target City, State Announcement Date Deal Value ($M) Consideration Total Assets Gross Loans LTM ROAA Muskegon, MI 1/6/2020 $21.9 76.5% Stock / 23.5% Cash $185.1 $147.2 0.49% Lapeer, M
Slide 11: Financial Summary
Financial Summary
Slide 12: Historic Balance Sheet Growth – COFS
12 12 Note: All dollars in thousands (1) Includes $138.0 million, $33.1 million and $0 million in PPP loans in 2020, 2021 and Q3 2022, respectively. All PPP loans a re assumed to be deposits for "Total Deposits" graphic. (2) Core loans - exclude Paycheck Protection Program (“PPP”) loans, held for sa
Slide 13: Loan and deposit commentary
13 13 0 0.5 1 1.5 2 2.5 3 3.5 Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Q3 17 Q1 18 Q3 18 Q1 19 Q3 19 Q1 20 Q3 20 Q1 21 Q3 21 Q1 22 Q3 22 Target Federal Funds Rate Cost of Interest Bearing Deposits Loan Commentary : ▪ History of successful small business and agriculture lending ▪ Strong commercial and industria
Slide 14: Investment Portfolio – COFS
14 14 Commercial Mortgage Backed 26% Mortgage - Backed 18% Asset - Backed Securities 2% Corporate 2% State and MUNI - Tax Exempt 26% State and MUNI - Taxable 18% US Treasury Bonds and Agency 8% Numbers based on ChoiceOne internal data as of 9/30/2022 except where specifically identified. (1) See thi
Slide 15: Financial Performance Trends – COFS
15 15 Financial Performance Trends – COFS Profitability metrics have improved following the integration of M&A deals in 2019 and 2020; the efficiency ratio was 62.29% for 2022, partly offsetting the effects of NIM compression over the same period Efficiency Ratio NIM (1) ROAE ROAA 0.98% 1.15% 0.85%
Slide 16: Noninterest Income – COFS
16 16 Gain on Sale of Loans Service Charges Brokerage Fees Trust Revenue BOLI Revenue Other Fees Gain on Sale of Loans Service Charges BOLI Revenue Trust Revenue Brokerage Fees Other Fees Gain on Sale of Loans Service Charges BOLI Revenue Trust Revenue Brokerage Fees Other Fees 36% 4% 4% 4% 6% 46% 5
Slide 17: Loan Loss Reserve and Credit Mark Build – COFS
17 17 Note: All dollars in Graph are in thousands (1) Remaining Credit Mark related to the mark against loans acquired in the County Bank Corp. and Community Shores Bank Corporati on transactions Loan Loss Reserve and Credit Mark Build – COFS COFS has an ALLL balance of $7.5 million and a $1.8 milli
Slide 18: Asset Quality
18 18 Asset Quality Historically strong credit metrics Net Charge - Offs / Average Loans NPLs/ Loans NPAs (Excl. Restructured Loans) / Total Assets NPAs/ Total Assets 0.19% 0.24% 0.28% 0.35% 0.07% 0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 2017A 2018A 2019A 2020A 2021A Q32022 YTD 0.
Slide 19: Earnings Per Share - COFS
19 19 Earnings Per Share - COFS Tax rate of 21% is assumed for net impact of taxes 1. Non - GAAP Financial Measure Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Basic Earnings Per Share Net income $ 5,813 $ 5,615 $ 5,528 $ 5,013 $ 5,749 $ 5,043 $ 6,238 Weighted average common shares outsta
Slide 20: COFS Trades on the NASDAQ
C OF S T R ADES ON TH E NAS D A Q ® Market Makers in ChoiceOne Stock D. A. Davidson & Co. Nick Bi cking 800.394.9230 Raymond James & Associates Anthony LanFranca 312.655.2961 Stifel, Nicolaus & Company, Inc. Paul Drueke 616.224.1553 Stock Registrar & Transfer Agent Continental Stock Transfer & Trust
Slide 21: Appendix: non-GAAP reconciliation
21 21 (1) Adjusted to a fully tax - equivalent basis to facilitate comparison to the taxable interest - earning assets. The adjustment use s an incremental tax rate of 21%. The presentation of these measures on a tax - equivalent basis is not in accordance with GAAP, but is customary in the banking
Slide 22: Appendix: non-GAAP reconciliation
22 22 1) Adjusted to a fully tax - equivalent basis to facilitate comparison to the taxable interest - earning assets. The adjustment uses an incremental tax rate of 21%. The presentation of these measures on a tax - equivalent basis is not in accordance with GAAP, but is customary in the banking in
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