ChoiceOne reported net income of $1,021,000 for the third quarter of 2019
Total assets grew to $663.6 million as of September 30, 2019
Net loans have increased 1.4% from September 30, 2018 to September 30, 2019
ChoiceOne Financial Services, the parent company for ChoiceOne Bank and, as of October 1, 2019, Lakestone Bank and Trust, reported financial results for the third quarter ended September 30, 2019.
The reported results for the third quarter of 2019 do not include financial results for County Bank Corp., which was merged with and into ChoiceOne on October 1, 2019.
ChoiceOne reported net income of $1,021,000 for the third quarter of 2019 compared to $2,014,000 in the same period in 2018.
Diluted earnings per share were $0.28 in the third quarter of 2019 compared to $0.55 per share in the third quarter of the prior year.
Excluding $621,000 in tax-effected merger expenses, net income for the third quarter of 2019 amounted to $1,642,000 or $0.45 per diluted share.
Total assets grew to $663.6 million as of September 30, 2019, compared to $650.4 million as of September 30, 2018.
Net loans have increased 1.4% from September 30, 2018 to September 30, 2019, but with higher interest rates on new loans, ChoiceOne saw total loan interest income growth of 9% in the first nine months of 2019 compared to the same period in 2018.
Total deposits grew $29.7 million or 5.5% from September 30, 2018 to September 30, 2019.
The interest cost of deposits and other funding increased roughly 86% in the first nine months of 2019 compared to the same period in 2018, which offset some of the increase in total interest income in the first nine months of 2019 compared to the first nine months of 2018.
ChoiceOne charged-off a portion of a large borrower relationship that deteriorated in 2019 which led to a net charge-offs balance of $577,000 for the first nine months of 2019.
Total noninterest income increased $500,000 in the first nine months of 2019 compared to the same period in the prior year.
Gains on sales of loans increased in the second quarter of 2019 and have grown further in the third quarter of 2019 as long-term interest rates fell.
Income from gains on sales of loans was up $601,000 in the first nine months of 2019 compared to the first nine months of 2018.
Income from customer service charges was down slightly in the third quarter and first nine months of 2019 compared to the same periods in 2018.
A decline in the market value of equity securities held by ChoiceOne occurred in the third quarter of 2019 in contrast to an increase in the value that was experienced in the same period in the prior year.
The current period decline represented a reversal of market value increases recorded in the first two quarters of 2019.
Total noninterest expense increased $2.3 million in the first nine months of 2019 compared to the same period in 2018.
Much of the increase was caused by expenses related to the strategic merger between ChoiceOne Financial Services and County Bank Corp.
The merger, which was completed on October 1, 2019, created an approximately $1.3 billion-asset bank holding company with 29 offices in West and Southeastern Michigan making it the 12th largest bank holding company in Michigan based on asset size.
ChoiceOne Bank and Lakestone Bank and Trust are expected to consolidate in the second quarter of 2020.
ChoiceOne incurred merger related expenses in the amount of $763,000 during the third quarter of 2019 and $1.4 million in the first nine months of 2019 year to date.
A component of the additional expense increase was related to the opening of two additional branches in the fourth quarter of 2018. ■