Company Quick10K Filing
ChoiceOne Financial Services
Price25.89 EPS2
Shares4 P/E16
MCap95 P/FCF17
Net Debt-17 EBIT10
TEV78 TEV/EBIT8
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-14
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-03-16
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-18
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-14
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-03-29
10-Q 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-10
10-Q 2017-03-31 Filed 2017-05-12
10-K 2016-12-31 Filed 2017-03-27
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-12
10-Q 2016-03-31 Filed 2016-05-13
10-K 2015-12-31 Filed 2016-03-28
10-Q 2015-09-30 Filed 2015-11-12
10-Q 2015-06-30 Filed 2015-08-12
10-Q 2015-03-31 Filed 2015-05-13
10-K 2014-12-31 Filed 2015-03-13
10-Q 2014-09-30 Filed 2014-11-12
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-05-13
10-K 2013-12-31 Filed 2014-03-31
10-Q 2013-09-30 Filed 2013-11-13
10-Q 2013-06-30 Filed 2013-08-14
10-K 2012-12-31 Filed 2013-03-29
10-Q 2012-09-30 Filed 2012-11-14
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-14
10-K 2011-12-31 Filed 2012-03-28
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-12
10-Q 2011-03-31 Filed 2011-05-16
10-K 2010-12-31 Filed 2011-03-28
10-Q 2010-09-30 Filed 2010-11-15
10-Q 2010-06-30 Filed 2010-08-16
10-Q 2010-03-31 Filed 2010-05-17
10-K 2009-12-31 Filed 2010-03-30
8-K 2020-07-01 M&A, Exhibits
8-K 2020-06-30 Earnings
8-K 2020-06-17
8-K 2020-05-29
8-K 2020-05-14
8-K 2020-04-27
8-K 2020-02-06
8-K 2020-02-04
8-K 2020-01-03
8-K 2019-10-25
8-K 2019-10-01
8-K 2019-09-18
8-K 2019-09-16
8-K 2019-08-28
8-K 2019-07-24
8-K 2019-07-02
8-K 2019-05-22
8-K 2019-05-20
8-K 2019-04-24
8-K 2019-03-22
8-K 2019-03-22
8-K 2019-03-04
8-K 2019-01-28
8-K 2019-01-23
8-K 2018-10-24
8-K 2018-10-24
8-K 2018-07-25
8-K 2018-06-27
8-K 2018-05-23
8-K 2018-05-21
8-K 2018-04-25
8-K 2018-01-24
8-K 2018-01-24

COFS 10Q Quarterly Report

Part I.  Financial Information
Item 1.  Financial Statements.
Note 1 – Summary of Significant Accounting Policies
Note 2 – Securities
Note 3 – Loans and Allowance for Loan Losses
Note 4 – Earnings per Share
Note 5 – Financial Instruments
Note 6 – Fair Value Measurements
Note 7 – Revenue From Contracts with Customers
Note 8 – Business Combination
Item 2.  Management’S Discussion and Analysis of Financial Condition and Results of Operations.
Item 4.  Controls and Procedures.
Part II.  Other Information
Item 1.  Legal Proceedings.
Item 1A.  Risk Factors.
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
Item 5. Other Information
Item 6.  Exhibits
EX-31.1 ex_191795.htm
EX-31.2 ex_191796.htm
EX-32.1 ex_191797.htm

ChoiceOne Financial Services Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
67554040527013502012201420172020
Assets, Equity
2.11.71.30.80.40.02016201720182020
Rev, G Profit, Net Income
20112-7-16-252012201420172020
Ops, Inv, Fin

cofs20200630_10q.htm
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 10-Q

 

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

 

For the quarterly period ended June 30, 2020

 

 

Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

 

For the transition period from                 to                

 

Commission File Number: 000-19202

 

ChoiceOne Financial Services, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Michigan
(State or Other Jurisdiction of
Incorporation or Organization)

38-2659066
(I.R.S. Employer Identification No.)

 

 

109 East Division
Sparta, Michigan

(Address of Principal Executive Offices)


49345
(Zip Code)

 

 

(616) 887-7366
(Registrant’s Telephone Number, including Area Code)

 

Indicate by checkmark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes ☒        No ☐

 

Indicate by check mark whether the registrant has submitted electronically , every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 

Yes ☒        No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☒

 

 

Non-accelerated filer ☐

Smaller reporting company 

 

 

Emerging growth company 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes         No ☒

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock

COFS

NASDAQ Capital Market

 

As of July 31, 2020, the Registrant had outstanding 7,787,332 shares of common stock.

 



 

 

 

 

PART I.  FINANCIAL INFORMATION

 

Item 1.  Financial Statements.

 

ChoiceOne Financial Services, Inc.
CONSOLIDATED BALANCE SHEETS

 

  

June 30,

  

December 31,

 

(Dollars in thousands)

 

2020

  

2019

 
  

(Unaudited)

  

(Audited)

 

Assets

        

Cash and due from banks

 $66,541  $59,308 

Time deposits in other financial institutions

  250   250 

Cash and cash equivalents

  66,791   59,558 
         

Equity securities at fair value (Note 2)

  2,905   2,851 

Securities available for sale (Note 2)

  372,525   339,579 

Federal Home Loan Bank stock

  3,524   3,524 

Federal Reserve Bank stock

  2,947   2,934 

Loans held for sale

  10,860   3,095 

Loans to other financial institutions

  49,895   51,048 

Loans (Note 3)

  907,993   802,048 

Allowance for loan losses (Note 3)

  (5,750)  (4,057)

Loans, net

  902,243   797,991 
         

Premises and equipment, net

  23,779   24,265 

Other real estate owned, net

  854   929 

Cash value of life insurance policies

  32,363   31,979 

Goodwill

  52,593   52,870 

Core deposit intangible

  5,299   6,006 

Other assets

  18,501   9,499 

Total assets

 $1,545,079  $1,386,128 
         

Liabilities

        

Deposits – noninterest-bearing

 $392,086  $287,460 

Deposits – interest-bearing

  932,222   867,142 

Total deposits

  1,324,308   1,154,602 
         

Borrowings

  10,179   33,198 

Other liabilities

  7,969   6,189 

Total liabilities

  1,342,456   1,193,989 
         

Shareholders' Equity

        

Preferred stock; shares authorized: 100,000; shares outstanding: none

  -   - 

Common stock and paid-in capital, no par value; shares authorized: 12,000,000; shares outstanding: 7,261,605 at June 30, 2020 and 7,245,088 at December 31, 2019

  162,862   162,610 

Retained earnings

  32,835   28,051 

Accumulated other comprehensive income, net

  6,926   1,478 

Total shareholders’ equity

  202,623   192,139 

Total liabilities and shareholders’ equity

 $1,545,079  $1,386,128 

 

 

See accompanying notes to interim consolidated financial statements. 

 

2

 

 

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 

(Dollars in thousands, except per share data)

 

June 30,

   

June 30,

 
   

2020

   

2019

   

2020

   

2019

 

Interest income

                               

Loans, including fees

  $ 10,821     $ 5,390     $ 21,063     $ 10,670  

Securities:

                               

Taxable

    1,557       767       3,414       1,527  

Tax exempt

    478       358       846       727  

Other

    7       39       201       107  

Total interest income

    12,863       6,554       25,524       13,031  
                                 

Interest expense

                               

Deposits

    898       924       2,283       1,775  

Advances from Federal Home Loan Bank

    81       115       217       230  

Other

    5       14       7       29  

Total interest expense

    984       1,053       2,507       2,034  
                                 

Net interest income

    11,879       5,501       23,017       10,997  

Provision for loan losses

    1,000       -       1,775       -  

Net interest income after provision for loan losses

    10,879       5,501       21,242       10,997  
                                 

Noninterest income

                               

Customer service charges

    1,402       1,148       3,247       2,181  

Insurance and investment commissions

    153       74       279       137  

Gains on sales of loans

    2,996       489       4,739       735  

Net gains on sales of securities

    1,341       2       1,343       3  

Net gains on sales and write-downs of other assets

    3       2       5       15  

Earnings on life insurance policies

    192       95       384       191  

Trust income

    202       -       372       -  

Change in market value of equity securities

    443       80       54       266  

Other

    19       139       260       258  

Total noninterest income

    6,751       2,029       10,683       3,786  
                                 

Noninterest expense

                               

Salaries and benefits

    6,359       2,870       11,487       5,647  

Occupancy and equipment

    1,359       741       2,629       1,512  

Data processing

    1,568       582       3,052       1,138  

Professional fees

    914       678       1,676       1,195  

Supplies and postage

    282       75       507       175  

Advertising and promotional

    144       108       292       152  

Intangible amortization

    354       -       707       -  

FDIC insurance

    69       45       137       88  

Other

    1,101       663       2,079       1,189  

Total noninterest expense

    12,150       5,762       22,566       11,096  
                                 

Income before income tax

    5,480       1,768       9,359       3,687  

Income tax expense

    1,050       281       1,675       564  
                                 

Net income

  $ 4,430     $ 1,487     $ 7,684     $ 3,123  
                                 

Basic earnings per share (Note 4)

  $ 0.61     $ 0.41     $ 1.06     $ 0.86  

Diluted earnings per share (Note 4)

  $ 0.61     $ 0.41     $ 1.06     $ 0.86  

Dividends declared per share

  $ 0.20     $ 0.20     $ 0.40     $ 0.40  

 

See accompanying notes to interim consolidated financial statements. 

 

3

 

 

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

 

  

Three Months Ended

  

Six Months Ended

 

(Dollars in thousands)

 

June 30,

  

June 30,

 
  

2020

  

2019

  

2020

  

2019

 

Net income

 $4,430  $1,487  $7,684  $3,123 
                 

Other comprehensive income:

                

Changes in net unrealized gains on investment securities available for sale, net of tax expense of $1,272 and $549 for the three months ended June 30, 2020 and June 30, 2019, respectively. Changes in net unrealized gains (losses) on investment securities available for sale, net of tax expense of $1,730 and $872 for the six months ended June 30, 2020 and June 30, 2019, respectively

  4,785   2,067   6,509   3,282 
                 

Reclassification adjustment for realized gain on sale of investment securities available for sale included in net income, net of tax expense of $281 and $0 for the three months ended June 30, 2020 and June 30, 2019, respectively. Reclassification adjustment for realized gain on sale of investment securities available for sale included in net income, net of tax expense of $282 and $1 for the six months ended June 30, 2020 and June 30, 2019, respectively

  (1,060)  (1)  (1,061)  (2)
                 

Other comprehensive income, net of tax

  3,725   2,066   5,448   3,280 
                 

Comprehensive income

 $8,155  $3,553  $13,132  $6,403 

 

See accompanying notes to interim consolidated financial statements. 

 

4

 

 

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the three months ended June 30

 

              

Accumulated

     
      

Common

      

Other

     
      

Stock and

      

Comprehensive

     
  

Number of

  

Paid in

  

Retained

  

Income/(Loss),

     

(Dollars in thousands, except per share data)

 

Shares

  

Capital

  

Earnings

  

Net

  

Total

 
                     

Balance, April 1, 2019

  3,619,510  $54,621  $27,598  $482  $82,701 
                     

Net income

          1,487       1,487 

Other comprehensive income

              2,066   2,066 

Shares issued

  3,253   12           12 

Effect of employee stock purchases

      3           3 
Stock options exercised and issued (1)  3,390   46           46 

Stock-based compensation expense

      64           64 

Restricted stock units issued

  6,764   10           10 

Cash dividends declared ($0.20 per share)

          (726)      (726)
                     

Balance, June 30, 2019

  3,632,917  $54,756  $28,359  $2,548  $85,663 
                     
                     

Balance, April 1, 2020

  7,249,533  $162,745  $29,856  $3,201  $195,802 
                     

Net income

          4,430       4,430 

Other comprehensive income

              3,725   3,725 

Shares issued

  5,466   55           55 

Effect of employee stock purchases

      3           3 
Stock options exercised and issued (1)  6,241   9           9 

Stock-based compensation expense

      50           50 

Restricted stock units issued

  365               - 

Cash dividends declared ($0.20 per share)

          (1,451)      (1,451)
                     

Balance, June 30, 2020

  7,261,605  $162,862  $32,835  $6,926  $202,623 

 

 

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the six months ended June 30

 

              

Accumulated

     
      

Common

      

Other

     
      

Stock and

      

Comprehensive

     
  

Number of

  

Paid in

  

Retained

  

Income/(Loss),

     

(Dollars in thousands, except per share data)

 

Shares

  

Capital

  

Earnings

  

Net

  

Total

 
                     

Balance, January 1, 2019

  3,616,483  $54,523  $26,686  $(732) $80,477 
                     

Net income

          3,123       3,123 

Other comprehensive income

              3,280   3,280 

Shares issued

  5,257   59           59 

Effect of employee stock purchases

      7           7 

Stock options exercised and issued (1)

  3,390   46           46 
Stock-based compensation expense      121           121 
Restricted stock units issued  7,787               - 

Cash dividends declared ($0.40 per share)

          (1,450)      (1,450)
                     

Balance, June 30, 2019

  3,632,917  $54,756  $28,359  $2,548  $85,663 
                     
                     

Balance, January 1, 2020

  7,245,088  $162,610  $28,051  $1,478  $192,139 
                     

Net income

          7,684       7,684 

Other comprehensive income

              5,448   5,448 

Shares issued

  9,122   161           161 

Effect of employee stock purchases

      7           7 
Stock options exercised and issued (1)  7,030   9           9 

Stock-based compensation expense

      75           75 
Restricted stock units issued  365               - 

Cash dividends declared ($0.40 per share)

          (2,900)      (2,900)
                     

Balance, June 30, 2020

  7,261,605  $162,862  $32,835  $6,926  $202,623 

 

(1) The amount shown represents the number of shares issued in cashless transactions where some taxes are netted on a portion of the exercises. 

 

See accompanying notes to interim consolidated financial statements. 

 

5

 

 

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

   

Six Months Ended

 

(Dollars in thousands)

 

June 30,

 
   

2020

   

2019

 

Cash flows from operating activities:

               

Net income

  $ 7,684     $ 3,123  

Adjustments to reconcile net income to net cash from operating activities:

               

Provision for loan losses

    1,775       -  

Depreciation

    1,386       700  

Amortization

    2,021       445  

Compensation expense on employee and director stock purchases, stock options, and restricted stock units

    183       145  

Net gains on sales of securities

    (1,343 )     (3 )

Net change in market value of equity securities

    (54 )     (266 )

Gains on sales of loans

    (4,739 )     (735 )

Loans originated for sale

    (101,844 )     (11,166 )

Proceeds from loan sales

    97,601       10,110  

Earnings on bank-owned life insurance

    (384 )     (191 )

(Gains)/losses on sales of other real estate owned

    (3 )     (15 )

Proceeds from sales of other real estate owned

    139       104  
Costs capitalized to other real estate     (19 )     -  

Deferred federal income tax (benefit)/expense

    (307 )     94  

Net change in:

               

Other assets

    (8,564 )     160  

Other liabilities

    1,169       (49 )

Net cash (used in)/provided by operating activities

    (5,299 )     2,456  
                 

Cash flows from investing activities:

               

Sales of securities available for sale

    92,979       -  

Maturities, prepayments and calls of securities available for sale

    26,635       17,581  

Purchases of securities available for sale

    (144,856 )     (9,755 )

Purchase of Federal Reserve Bank stock

    -       (1 )

Loan originations and payments, net

    (105,154 )     3,457  

Additions to premises and equipment

    (928 )     (323 )

Net cash (used in)/provided by investing activities

    (131,324 )     10,959  
                 

Cash flows from financing activities:

               

Net change in deposits

    169,706       (15,239 )

Net change in fed funds purchased

    -       (2,800 )

Proceeds from borrowings

    10,000       75,000  

Payments on borrowings

    (33,019 )     (75,017 )

Issuance of common stock

    69       88  

Cash dividends

    (2,900 )     (1,450 )

Net cash provided by/(used in) financing activities

    143,856       (19,418 )
                 

Net change in cash and cash equivalents

    7,233       (6,003 )

Beginning cash and cash equivalents

    59,558       19,690  
                 

Ending cash and cash equivalents

  $ 66,791     $ 13,687  
                 

Supplemental disclosures of cash flow information:

               

Cash paid for interest

  $ 2,672     $ 2,043  

Cash paid for income taxes

    1,351       185  

Loans transferred to other real estate owned

    42       347  

 

See accompanying notes to interim consolidated financial statements.

 

6

 

ChoiceOne Financial Services, Inc.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

The consolidated financial statements include ChoiceOne Financial Services, Inc. ("ChoiceOne"), its wholly-owned subsidiary, ChoiceOne Bank (the "Bank"), and ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. For periods after September 30, 2019, the consolidated financial statements also included ChoiceOne's wholly owned subsidiary, Lakestone Bank & Trust and Lakestone Bank & Trust's wholly-owned subsidiary, Lakestone Financial Services, Inc., as a result of the merger of County Bank Corp. with and into ChoiceOne. Lakestone Bank & Trust was consolidated with and into ChoiceOne Bank on May 15, 2020. Intercompany transactions and balances have been eliminated in consolidation.

 

The consolidated unaudited financial statements and notes thereto have been prepared in accordance with generally accepted accounting principles for interim financial information, prevailing practices within the banking industry and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

The accompanying unaudited consolidated financial statements and notes thereto reflect all adjustments ordinary in nature which are, in the opinion of management, necessary for a fair presentation of the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, the Consolidated Statements of Income for the three- and six-month periods ended June 30, 2020 and June 30, 2019, the Consolidated Statements of Comprehensive Income for the three- and six-month periods ended June 30, 2020 and June 30, 2019, the Consolidated Statements of Changes in Shareholders’ Equity for the three- and six-month periods ended June 30, 2020 and June 30, 2019, and the Consolidated Statements of Cash Flows for the six month periods ended June 30, 2020 and June 30, 2019. Operating results for the six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

 

The accompanying consolidated financial statements should be read in conjunc