Choiceone Financial Services, Inc. · NASDAQ:COFS
Choiceone Financial Services — Q1 2024 Earnings Presentation
28 slides from Choiceone Financial Services's earnings presentation, May 7, 2024
Slide 1: Investor Presentation First Quarter 2024
INVESTOR PRESENTATION FIRST 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 3/31/2024 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 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. Award Nominee ( West MI Hispanic Chamber of Commerce – 2018 ) ChoiceOne has a special culture, one that is driven by innovati
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.) Ms . Heather D . Brolick has been Chief Human Resources Officer of ChoiceOne Bank since October 2020 following its acquisition of Community Shores Bank Corporation . Ms . Brolick served as Director, President and Chief Executive Officer of Community Shores Bank Corporation
Slide 8: Geographic Footprint
8 Source: S&P Capital IQ Pro, as of 6/30/2023 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 10 Locations $755,651 Deposits 2.57% Market Share 11 Market
Slide 9: COFS M&A History
9 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified Note: All dollars in millions, unless otherwise noted; deals sorted by announcement date (1) Excludes $138.0 million and $33.1 million in PPP loans in 2020, 2021 respectively M&A HISTORY COFS has
Slide 10: Financial Summary
FINANCIAL SUMMARY
Slide 11: Historic Balance Sheet Growth – COFS
11 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 exc. where spec. identified; Note: All dollars in thousands (1) Includes $138.0 million, $33.1 million and $0 million in PPP loans in 2020, 2021 and 2022, respectively 2) excluding brokered deposits of $23.4 million and $ 41.9 milli
Slide 12: Attractive Deposit Mix – ChoiceOne Bank
12 Business - Transactional 26% Business - Savings 11% Retail - Transactional 21% Retail - Savings 23% Public Funds - Transactional 12% Public Funds - Savings 7% Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified Note: All dollars in thousands (1) S
Slide 13: Attractive Deposit Mix – ChoiceOne Bank (cont.)
13 0.20% 2.16% 0.25% 5.50% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Q4 2021 Q1 2024 Current Cycle to date Cost of IB Deposits Fed Funds Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 NIB Deposits IB Deposits Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identif
Slide 14: Attractive Loan Mix – ChoiceOne Bank
14 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 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: Investment Portfolio – COFS
15 Commercial Mortgage Backed 24% Mortgage - Backed 15% Asset - Backed Securities 1% Corporate 2% State and MUNI - Tax Exempt 30% State and MUNI - Taxable 18% US Treasury Bonds and Agency 10% Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified (1) Se
Slide 16: Interest Rate Swaps
16 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified Note: All dollars in thousands (1) Derivatives income impact assumes a SOFR rate of 5.31% in perpetuity INTEREST RATE SWAPS ChoiceOne uses interest rate swaps as part of our interest rate risk ma
Slide 17: Financial Performance Metrics – COFS
17 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified (1) Net interest margin (tax - equivalent basis). See Non - GAAP reconciliation FINANCIAL PERFORMANCE METRICS – COFS Efficiency Ratio & Noninterest Expense to Average Assets NIM (1) ROAE ROAA 0.9
Slide 18: Non-Interest Income – COFS
18 Gain on Sale of Loans Service Charges Wealth BOLI Revenue Other Fees Gain on Sale of Loans Service Charges Wealth BOLI Revenue Other Fees Gain on Sale of Loans Service Charges Wealth BOLI Revenue Other Fees Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically
Slide 19: Asset Quality – COFS
19 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 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 NPLs / Loans (1) Texas Ratio NPAs / Total A
Slide 20: Strong Risk Management
20 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified STRONG RISK MANAGEMENT ▪ ChoiceOne uses interest rate swaps as part of our interest rate risk management strategy . ChoiceOne has pay - fixed interest rate swaps with a total notional value of $
Slide 21: Capital
21 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified (1) See Non - GAAP Reconciliation CAPITAL Regulatory Ratios Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 ChoiceOne Financial Services Inc. 13.3% 13.0% 13.2% 13.2% 13.5% 13.8% 1
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 Raymond James & Associates Anthony LanFranca 312.655.2961 Stock Registrar & Transfer Agent Continental St
Slide 23: Other Selected Highlights – COFS
23 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified (1) See Non - GAAP Reconciliation OTHER SELECTED HIGHLIGHTS – COFS Quarterly 2024 1st Qtr. 2023 4th Qtr. 2023 3rd Qtr. 2023 2nd Qtr. 2023 1st Qtr. 2022 4th Qtr. 2022 3rd Qtr. 2022 2nd Qtr. Perfor
Slide 24: Appendix: Non-GAAP Reconciliation
24 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 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 25: Appendix: Non-GAAP Reconciliation
25 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 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 3/31/2024 except where specifically identified APPENDIX NON - GAAP RECONCILIATION Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 (dollars in thousands) $ 206,756 $ 195,634 $ 181,161 $ 179,240 $ 168,712 $ 168,874 $ 156,657 $ 1
Slide 27: Appendix: Quarterly Table One
27 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified APPENDIX QUARTERLY TABLE ONE (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%.
Slide 28: Appendix: Loans by Loan Category
28 Source: Numbers based on ChoiceOne internal data as of 3/31/2024 except where specifically identified Note: Excludes loans held for sale APPENDIX LOANS BY LOAN CATEGORY (Dollars in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Loans: $ 41,950 $ 49,211 $ 43,290 $ 40,68
Choiceone Financial Services — Q1 2024 Earnings Presentation on 6ix