EXHIBIT 99.1
News Release
| Contact: | Tom Lampen, ChoiceOne Bank
(616) 887-2337
tlampen@choiceone.com |
ChoiceOne Financial Announces Earnings For Second Quarter of 2016
Sparta, Michigan – July 27, 2016 – ChoiceOne Financial Services, Inc. (OTC:COFS), the parent company for ChoiceOne Bank, reported net income of $1,445,000 for the second quarter of 2016 compared to $1,431,000 in the same period in 2015. Earnings per share were $0.43 in the second quarter of 2016 compared to $0.43 in the second quarter of the prior year. Net income for the first six months of 2016 was $2,719,000 or $0.82 per share, compared to $3,073,000 or $0.93 per share in the first half of 2015.
Upon the retirement of James Bosserd on June 1, 2016, Kelly Potes assumed the role of Chief Executive Officer of ChoiceOne Financial Services, Inc. and ChoiceOne Bank. Mr. Potes also remains President of both organizations.
“We are excited to announce our strongest second quarter ever just months after the opening of a new loan production office in downtown Grand Rapids,” said Mr. Potes. “We have also continued to grow earning assets and net interest margin year over year, along with achieving strong results in loan and security sales during the second quarter of 2016.”
Total assets as of June 30, 2016, increased to $590 million, compared to $568 million as of December 31, 2015. Securities grew $7.1 million and loans grew $5.7 million in the second quarter of 2016 as ChoiceOne emphasized growth in earning assets. Net loans increased $21.4 million from second quarter 2015 to second quarter 2016. Total deposits declined by $16.0 million in the second quarter of 2016; however, balances were up $41 million when compared to second quarter 2015. Borrowings increased $25.9 million in the second quarter of 2016 to offset the deposit decline and to provide funding for earning assets.
Growth in both loans and securities caused increases in interest income of $205,000 in the second quarter of 2016 and $380,000 in the first half of 2016 compared to the same periods in the prior year. Increased activity in sales of loans and securities caused noninterest income to grow $200,000 in the second quarter of 2016 compared to the same quarter in 2015. Noninterest income was down $251,000 in the first half of 2016 compared to the same period in the prior year as a result of a $304,000 death benefit recognized on a bank owned life insurance policy in the first quarter of 2015. Noninterest expense increased $416,000 in the second quarter and $653,000 in the first six months of 2016 compared to the same periods in the prior year. The expense growth was due in part to expansion and additional salary costs tied to the development of the new Grand Rapids loan production office. Other staffing increases also affected salaries and benefits in the first half of 2016 compared to the first half of 2015.
“I am pleased with the overall growth trends of ChoiceOne,” said Potes. “We believe that our commitment to community banking will continue to bring benefits to our customers, our staff and our shareholders.”
About ChoiceOne
ChoiceOne Financial Services, Inc. is a financial holding company headquartered in Sparta, Michigan and the parent corporation of ChoiceOne Bank, Member FDIC. ChoiceOne Bank operates 12 full service offices and one loan production office in parts of Kent, Ottawa, Muskegon, and Newaygo Counties. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. ChoiceOne Financial Services, Inc. common stock is quoted on the OTC under the symbol “COFS.” For more information, please visit Investor Relations at ChoiceOne’s website at www.choiceone.com.
Forward-Looking Statements
This press release contains forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “may,” “could,” “look forward,” “continue” and variations of such words and similar expressions are intended to identify such forward-looking statements. Management’s determination of the provision and allowance for loan losses, the carrying value of goodwill and loan servicing rights, and the fair value of investment securities (including whether any impairment on any investment security is temporary or other than temporary and the amount of any impairment) and management’s assumptions concerning pension and other postretirement benefit plans involve judgments that are inherently forward-looking. These statements reflect management’s current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, ChoiceOne undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
Risk factors include, but are not limited to, the risk factors described in Item 1A in ChoiceOne Financial Services, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015. These and other factors are representative of the risk factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
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EDITORS NOTE: Media interviews with ChoiceOne Bank executives are available by calling Tom Lampen at (616)887-2337 or tlampen@choiceone.com. Electronic versions of bank official headshots are also available.
Condensed Balance Sheets
(Unaudited)
| (In thousands) | 6/30/2016 | | 3/31/2016 | | 12/31/2015 | | 6/30/2015 |
| Cash and Cash Equivalents | $ | 13,466 | | $ | 12,572 | | $ | 11,188 | | $ | 15,391 |
| Securities | | 178,360 | | | 171,238 | | | 163,323 | | | 153,860 |
| Loans Held For Sale | | 2,734 | | | 1,507 | | | 4,957 | | | 2,833 |
| Loans, Net of Allowance For Loan Losses | | 352,946 | | | 347,219 | | | 345,110 | | | 331,587 |
| Premises and Equipment | | 11,872 | | | 12,008 | | | 12,119 | | | 11,811 |
| Cash Surrender Value of Life Insurance Policies | | 12,438 | | | 12,348 | | | 12,261 | | | 12,084 |
| Goodwill and Other Intangible Assets | | 13,883 | | | 13,969 | | | 14,108 | | | 14,280 |
| Other Assets | | 4,724 | | | 7,997 | | | 4,680 | | | 5,138 |
| | | | | | | | | | | | |
| Total Assets | $ | 590,423 | | $ | 578,858 | | $ | 567,746 | | $ | 546,984 |
| | | | | | | | | | | | |
| Noninterest-bearing Deposits | $ | 124,134 | | $ | 121,514 | | $ | 122,937 | | $ | 114,604 |
| Interest-bearing Deposits | | 339,687 | | | 358,338 | | | 351,759 | | | 308,184 |
| Borrowings | | 50,695 | | | 24,779 | | | 20,792 | | | 52,913 |
| Other Liabilities | | 3,510 | | | 2,801 | | | 2,416 | | | 3,179 |
| | | | | | | | | | | | |
| Total Liabilities | | 518,026 | | | 507,432 | | | 497,904 | | | 478,880 |
| | | | | | | | | | | | |
| Shareholders’ Equity | | 72,397 | | | 71,426 | | | 69,842 | | | 68,104 |
| | | | | | | | | | | | |
| Total Liabilities and Shareholders’ Equity | $ | 590,423 | | $ | 578,858 | | $ | 567,746 | | $ | 546,984 |
Condensed Statements of Income
(Unaudited)
| | Quarter Ended | | Six Months Ended |
| (In Thousands, Except Per Share Data) | 6/30/2016 | | 6/30/2015 | | 6/30/2016 | | 6/30/2015 |
| Interest Income | | | | | | | | | | | |
| Loans, including fees | $ | 4,087 | | $ | 3,988 | | $ | 8,083 | | $ | 7,930 |
| Securities and other | | 950 | | | 844 | | | 1,875 | | | 1,648 |
| Total Interest Income | | 5,037 | | | 4,832 | | | 9,958 | | | 9,578 |
| | | | | | | | | | | | |
| Interest Expense | | | | | | | | | | | |
| Deposits | | 199 | | | 215 | | | 408 | | | 440 |
| Borrowings | | 48 | | | 38 | | | 80 | | | 69 |
| Total Interest Expense | | 247 | | | 253 | | | 488 | | | 509 |
| | | | | | | | | | | | |
| Net Interest Income | | 4,790 | | | 4,579 | | | 9,470 | | | 9,069 |
| Provision for Loan Losses | | — | | | — | | | — | | | 100 |
| | | | | | | | | | | | |
Net Interest Income After Provision
for Loan Losses | |
4,790 | | |
4,579 | | |
9,470 | | |
8,969 |
| | | | | | | | | | | | |
| Noninterest Income | | | | | | | | | | | |
| Customer service charges | | 1,030 | | | 1,062 | | | 1,990 | | | 2,045 |
| Insurance and investment commissions | | 226 | | | 292 | | | 449 | | | 633 |
| Gains on sales of loans | | 419 | | | 309 | | | 838 | | | 812 |
| Gains on sales of securities | | 156 | | | 8 | | | 226 | | | 53 |
| Earnings on life insurance policies | | 89 | | | 87 | | | 177 | | | 475 |
| Other Income | | 131 | | | 93 | | | 214 | | | 127 |
| Total Noninterest Income | | 2,051 | | | 1,851 | | | 3,894 | | | 4,145 |
| | | | | | | | | | | | |
| Noninterest Expense | | | | | | | | | | | |
| Salaries and benefits | | 2,565 | | | 2,214 | | | 4,976 | | | 4,513 |
| Occupancy and equipment | | 692 | | | 592 | | | 1,333 | | | 1,188 |
| Data processing | | 538 | | | 579 | | | 1,097 | | | 1,132 |
| Professional fees | | 232 | | | 236 | | | 468 | | | 513 |
| Other expenses | | 874 | | | 864 | | | 1,824 | | | 1,699 |
| Total Noninterest Expense | | 4,901 | | | 4,485 | | | 9,698 | | | 9,045 |
| | | | | | | | | | | | |
| Income Before Income Tax | | 1,940 | | | 1,945 | | | 3,666 | | | 4,069 |
| Income Tax Expense | | 495 | | | 514 | | | 947 | | | 996 |
| | | | | | | | | | | | |
| Net Income | $ | 1,445 | | $ | 1,431 | | $ | 2,719 | | $ | 3,073 |
| | | | | | | | | | | | |
| Basic Earnings Per Share | $ | 0.43 | | $ | 0.43 | | $ | 0.82 | | $ | 0.93 |
| Diluted Earnings Per Share | $ | 0.43 | | $ | 0.43 | | $ | 0.82 | | $ | 0.93 |
