Choiceone Financial Services, Inc. · NASDAQ:COFS
Choiceone Financial Services — Q3 2024 Earnings Presentation
29 slides from Choiceone Financial Services's earnings presentation, Nov 4, 2024
Slide 1: Investor Presentation Third Quarter 2024
INVESTOR PRESENTATION THIRD QUARTER 2024
Slide 2: Forward-Looking Statements
2 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 . Words such as “anticipates,” “believes,” “es
Slide 3: Vision and Mission
3 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 4: Company Profile
4 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified Note: All dollars in millions COMPANY PROFILE ChoiceOne Bank maintains the community feel of a small - town bank with the technological capabilities and product offerings of a larger bank ChoiceOn
Slide 5: Awards & Accomplishments
5 Mastercard Doing Well By Doing Good ( Segment Award – 2022) 2024 dotCOMM Awards choiceone.bank GOLD AWARD Honoring Excellence in Web Creativity and Digital Communication Partner of the Michigan Community Fund ( Recognized for Supporting Affordable Housing – 2023) Financial Literacy Award (Michigan
Slide 6: Management Team
6 MANAGEMENT TEAM Mr . Michael J . Burke Jr . has served as President at ChoiceOne since May 2020 and oversees lending and operations . Previously, he served as President, CEO, COO and Director at Lakestone Bank & Trust which was merged into ChoiceOne . Mr . Burke is highly involved in organizations
Slide 7: Management Team (Cont.)
7 MANAGEMENT TEAM (CONT.) Mr . Jamula has served as the Senior Vice President of Wealth Management since 2021 . Mr . Jamula has over 28 years of banking experience, which includes sales leadership positions at TCF Bank, Chemical Bank and Fifth Third Bank covering Wealth Management and Private Bankin
Slide 8: Geographic Footprint
8 Source: S&P Capital IQ Pro, as of 6/30/2024 Note: All dollars in thousands (1) Other MI includes branches not located in an MSA, including those in the cities of Fremont, Grant and Newaygo GEOGRAPHIC FOOTPRINT GRAND RAPIDS - KENTWOOD, MI 11 Locations $767,298 Deposits 2.57% Market Share 10 Market
Slide 9: M&A History
9 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified Note: All dollars in millions, unless otherwise noted; deals sorted by announcement date M&A HISTORY COFS has completed three whole bank M&A deals, most recently, the merger of equals with County
Slide 10: Financial Summary
FINANCIAL SUMMARY
Slide 11: Historic Balance Sheet Growth – COFS
11 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 exc. where spec. identified; Note: All dollars in thousands (1) Includes $138.0 million, $33.1 million and $0 in PPP loans in 2020, 2021 and 2022, respectively (2) Core loans - exclude Paycheck Protection Program (“PPP”) loans, held
Slide 12: Attractive Deposit Mix – ChoiceOne Bank
12 ▪ Diverse local deposit franchise of retail, business, and municipal accounts ▪ Launched new treasury management platform in 2023 with best - in - class functionality ▪ At 9/30/2024 Non - interest - bearing deposit base of $521.1 million or 24% of deposits ▪ 39.1% of total deposits exceed the FDI
Slide 13: Attractive Deposit Mix – ChoiceOne Bank (Cont.)
13 2.50% 5.00% 0.90% 2.01% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Q1 15 Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Q1 21 Q1 22 Q1 23 Q1 24 Fed Funds Upper Bound Cost of Interest Bearing Deposits Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 NIB Deposits IB Deposits Source: Numbers based on ChoiceOne internal data a
Slide 14: Attractive Loan Mix – ChoiceOne Bank
14 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified Note: All dollars in thousands; yields are annualized on a quarterly basis (1) Detail by types per call report codes ATTRACTIVE LOAN MIX – CHOICEONE BANK ▪ Strong commercial real estate portfolio
Slide 15: Non-Owner Occupied Commercial Real Estate
15 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified (1) Detail by types per purpose code for call report code 1E2 loans NON - OWNER OCCUPIED COMMERCIAL REAL ESTATE ▪ Diversified local CRE portfolio with average loan size of $1.2 million. ▪ 20% of
Slide 16: Investment Portfolio – COFS
16 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified (1) Securities portfolio breakdown is by book value and excludes equity securities (2) Reported value of securities: Available for sale, at fair value and held to maturity, at amortized cost net
Slide 17: Interest Rate Swaps
17 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified Note: All dollars in thousands (1) Derivatives income impact assumes a SOFR rate of 4.83% in perpetuity. For each 25 - basis point increase or decrease in SOFR rate from 4.83% projected quarterly
Slide 18: Financial Performance Metrics – COFS
18 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified (1) Net interest margin (tax - equivalent basis). See Non - GAAP reconciliation (2) Annualized quarter data (3) Adjusted for Merger related expenses. See Non - GAAP reconciliation FINANCIAL PERFO
Slide 19: Non-Interest Income – COFS
19 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified Note: Non - interest Income amounts exclude gain (losses) on sale of securities, other assets, and changes in value of equity secu rities NON - INTEREST INCOME – COFS Diversified sources of non -
Slide 20: Asset Quality – COFS
20 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified (1) Excluding held for sale loans (2) Annualized quarter data ASSET QUALITY – COFS Historically strong credit metrics Net Charge - Offs / Average Loans (2) NPLs / Loans (1) Texas Ratio NPAs / Tot
Slide 21: Capital
21 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified (1) See Non - GAAP Reconciliation CAPITAL Regulatory Ratios Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 ChoiceOne Financial Services, Inc. Total capital (to risk weigh
Slide 22: COFS Trades on the NASDAQ
22 C OF S T R ADES ON TH E NAS D A Q ® ChoiceOne trades on the NASDAQ S t ock E x change under its s ymbol, “COFS” Market Makers in ChoiceOne Stock D. A. Davidson & Co. Nick Bicking 800.394.9230 Eugene Bodo Managing Director, Institutional Equity Sales Janney Montgomery Scott, LLC O 215 665 - 6566,
Slide 23: Other Selected Highlights – COFS
23 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified (1) See Non - GAAP Reconciliation OTHER SELECTED HIGHLIGHTS – COFS Performance Ratios 2022 3rd Qtr. 2022 4th Qtr. 2023 1st Qtr. 2023 2nd Qtr. 2023 3rd Qtr. 2023 4th Qtr. 2024 1st Qtr. 2024 2nd Qt
Slide 24: Appendix: Non-GAAP Reconciliation
24 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified * Adjusted non - interest expense adjusted for certain non - cash items. ** Adjusted total income is the sum of net interest income and non - interest income adjusted for certain non - cash items
Slide 25: Appendix: Non-GAAP Reconciliation
25 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified APPENDIX NON - GAAP RECONCILIATION (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 o
Slide 26: Appendix: Non-GAAP Reconciliation
26 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified APPENDIX NON - GAAP RECONCILIATION (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 o
Slide 27: Appendix: Non-GAAP Reconciliation
27 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified APPENDIX NON - GAAP RECONCILIATION (dollars in thousands) Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Shareholders' equity 156,657$ 168,874$ 168,712$ 179,240$ 181,161$
Slide 28: Appendix: Quarterly Average Balances and Tax-Equivalent Interest Rates
28 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified APPENDIX QUARTERLY AVERAGE BALANCES AND TAX - EQUIVALENT INTEREST RATES (1) Adjusted to a fully tax - equivalent basis to facilitate comparison to the taxable interest - earning assets. The adjus
Slide 29: Appendix: Loans by Loan Category
29 Source: Numbers based on ChoiceOne internal data as of 9/30/2024 except where specifically identified Note: Excludes loans held for sale APPENDIX LOANS BY LOAN CATEGORY (Dollars in thousands) Loans: Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Agricultural $ 63,347 $ 64
Choiceone Financial Services — Q3 2024 Earnings Presentation on 6ix