ChoiceOne Financial Services, Inc. (COFS): ANSOFF MATRIX [Dec-2025 Updated]

Honestly, after the recent Fentura merger, ChoiceOne Financial Services, Inc. (COFS) has the scale to really move, but the question is where to aim that energy. You're looking at a clear roadmap here, moving from immediate fixes, like aggressively cross-selling wealth management to new customers and stabilizing that 33.2% uninsured deposit ratio through high-yield offers, to bigger swings like testing commercial lending in Chicago or even acquiring a niche FinTech. We've mapped out the four core growth paths-from deepening your hold in Michigan to exploring entirely new business lines-so you can see exactly where the near-term opportunities are versus the more aggressive, long-term plays. Dive in below to see the specific actions we need to greenlight.

ChoiceOne Financial Services, Inc. (COFS) - Ansoff Matrix: Market Penetration

You're looking at how ChoiceOne Financial Services, Inc. (COFS) can grow by selling more of its existing products into its current markets, especially after the big Fentura Financial merger that closed on March 1, 2025. The goal here is deep penetration across the now expanded 56-office Michigan footprint.

One immediate action is to aggressively cross-sell wealth management services to the newly integrated Fentura customer base. While we don't have a specific wealth management revenue line item, we know the overall noninterest income is a focus area, having increased by $2.3 million year-over-year for the three months ended September 30, 2025. This growth suggests success in fee-based services, which is what wealth management contributes to. The total revenue for that quarter hit $44.74 million, beating estimates.

To stabilize the funding base, you need to launch a high-interest savings campaign. This is critical because, as of the third quarter of 2025, the uninsured deposit ratio climbed to 33.2%, up from 29.6% in the second quarter. That shift in the deposit mix-where noninterest-bearing deposits fell $39.9 million quarter-over-quarter while interest-bearing demand rose $73.4 million-shows customers are seeking yield, and you need to capture that demand internally rather than losing it. You have a liquidity backstop of about $1.2 billion in contingent borrowing capacity, but attracting stable core deposits is always better.

To get the loan book moving again, offering a 90-day no-pay auto loan special makes sense. Core loans actually declined by $10.3 million in the third quarter, representing a 1.4% annualized contraction, even though the 12-month organic growth was $65.3 million or 4.5%. You need to reignite that core loan engine immediately. Honestly, that quarterly dip needs a sharp, targeted response.

The market penetration strategy also involves better marketing across the expanded territory. You should increase digital marketing spend to drive customer acquisition within the 56-office Michigan footprint. This expanded footprint, which resulted from the March 2025 merger that added approximately $1.8 billion in assets, now covers key areas in West and Southeastern Michigan, giving you a larger base to market into. The total asset base is now over $4.3 billion.

Finally, retraining staff to improve sales of noninterest income products like credit/debit card services is a direct lever. The Q2 2025 report noted that noninterest income increased partly due to higher credit and debit card fees from the merger volume. Focusing on this area, alongside wealth management, directly supports the $2.3 million year-over-year noninterest income increase seen in Q3 2025.

Here's a quick look at the key metrics driving these penetration decisions as of September 30, 2025:

The focus on cross-selling and fee income is supported by the fact that the efficiency ratio improved to 54.76% in Q3 2025 from 60.80% in Q3 2024, showing that revenue scale from the merger is outpacing expense growth.

You'll want to track the success of the savings campaign against the uninsured deposit ratio weekly. Finance: draft the projected impact of a 90-day no-pay auto loan promotion on Q4 core loan growth by next Tuesday.

ChoiceOne Financial Services, Inc. (COFS) - Ansoff Matrix: Market Development

Target contiguous counties in Northern Indiana for digital-only banking services initially.

ChoiceOne Financial Services, Inc. operates as a holding company for ChoiceOne Bank, headquartered in Sparta, Michigan. Before the Fentura merger, ChoiceOne Bank operated 35 offices in parts of Kent, Ottawa, Muskegon, and Newaygo Counties. Following the March 1, 2025, merger, the combined entity has 56 offices across West, Central, and Southeastern Michigan, with total assets exceeding $4 billion, reaching approximately $4.3 billion as of June 30, 2025.

Open a loan production office (LPO) in a major metropolitan area like Chicago to test out-of-state commercial lending.

The combined ChoiceOne Financial Services, Inc. has the capacity to support this test, having reported total assets of $4.3 billion as of June 30, 2025. The core loan portfolio grew organically by $40.1 million in Q1 2025.

Acquire a small, non-Michigan community bank to replicate the $1.8 billion asset growth from the 2025 Fentura merger.

The Fentura merger, effective March 1, 2025, added approximately $1.8 billion in total assets to ChoiceOne Financial Services, Inc. The combined entity's assets stand at $4.3 billion as of June 30, 2025. The pre-merger ChoiceOne asset base was approximately $2.6 billion.

Use the existing technology-driven platforms to offer mortgage origination services across the Midwest region.

ChoiceOne Financial Services, Inc. developed the Metriciti commercial lending platform internally over the past four years, which is now offered through reseller DPT Solutions nationwide. The company's digital capabilities include online loan applications and online account openings.

Focus on agricultural lending expansion into new, rural Michigan markets.

The post-merger footprint covers 56 offices across Michigan. The GAAP net interest margin rose to 3.66% in Q2 2025, up from 2.95% in Q2 2024. ChoiceOne Financial Services, Inc. reported Q3 2025 EPS of $0.97.

Here's a look at the scale supporting this Market Development strategy:

The existing technology stack supports expansion efforts with features like:

• Online loan applications.
• Online account openings.
• Mobile banking with industry-leading 2FA security.
• A robust API framework.
• Metriciti commercial lending platform.

The company is positioned to scale using its enhanced retail network, which includes digital and branch banking.

ChoiceOne Financial Services, Inc. (COFS) - Ansoff Matrix: Product Development

You're looking at how to grow ChoiceOne Financial Services, Inc. (COFS) by developing new products for existing markets, so let's map out the specific financial targets and current realities for these initiatives.

Develop a specialized commercial real estate loan product with a higher interest rate floor.

• Focus on the Commercial Real Estate segment, which stood at $901.13 million at the end of Q4 2024.
• The total loan portfolio expanded significantly, with the merger adding $1.4 billion in loans as of March 1, 2025.
• Organic core loan growth slowed to 4.5% over the twelve months ending September 30, 2025, indicating a need for higher-yield product penetration.
• The GAAP Net Interest Margin (NIM) for Q3 2025 was 3.73%, showing room to price specialized risk higher.

Launch a premium business checking account with advanced treasury management tools for a new fee.

• This targets Noninterest Income, which was $6.50 million in Q2 2025.
• In Q3 2025, noninterest-bearing deposits declined by $39.9 million quarter-over-quarter, while interest-bearing demand deposits rose by $73.4 million.
• The shift suggests clients are moving balances to earn interest, making a premium, fee-based account attractive for retaining and monetizing those balances.
• Total Noninterest Income increased by $3.3 million for the six months ended June 30, 2025, compared to the prior year.

Introduce a proprietary robo-advisory service to scale wealth management to mass-affluent clients.

• Trust income saw an increase due to higher estate settlement fees and customers obtained from the Merger.
• Shareholders' equity stood at $431.8 million as of June 30, 2025.
• The company already staffs Loan Offices with mortgage lenders and has a dedicated Wealth Management Office in Sparta, Michigan, opened in 2023.
• The subsidiary 109 Technologies, LLC, organized in 2023, is intended to own intellectual property for a fintech product licensed to third-party banks.

Create a new loan restructuring program to proactively manage the 0.69% nonperforming loan ratio.

• The Nonperforming Loans (NPL) to total loans ratio was 0.69% as of September 30, 2025.
• Of that, 0.39% of the NPL ratio is attributed to loans purchased with credit deterioration (PCD) through the Merger.
• Annualized net loan charge-offs (NCOs) remained minimal at 0.03% for the third quarter of 2025.
• The Allowance for Credit Losses (ACL) to total loans was 1.19% on September 30, 2025.

Offer a defintely unique, high-yield certificate of deposit (CD) to attract large, stable deposits.

• Uninsured deposits totaled $1.2 billion or 33.2% of deposits at September 30, 2025.
• Deposits, excluding brokered deposits, increased by $8.0 million from June 30, 2025, to September 30, 2025.
• The total available borrowing capacity secured by pledged assets was $1.2 billion at September 30, 2025.

Here's a quick look at the balance sheet context for these product initiatives:

The accretion income visibility provides a cushion, with an estimated $2.3 million remaining to be recognized in interest income for the remainder of 2025.

• Estimated interest income due to accretion from purchased loans for 2026 is $8.2 million.
• Total estimated accretable income over the life of the loan portfolio is $51.1 million.

Finance: draft 13-week cash view by Friday.

ChoiceOne Financial Services, Inc. (COFS) - Ansoff Matrix: Diversification

You're looking at how ChoiceOne Financial Services, Inc. can move beyond its core Michigan banking footprint and existing insurance agency to generate new revenue streams. This is about moving into new markets or new product types entirely, which is the riskiest quadrant of the Ansoff Matrix.

The current business is heavily concentrated, with ChoiceOne Bank operating 56 offices across West, Central, and Southeast Michigan, and its business primarily concentrated in the banking segment, even with its subsidiary, ChoiceOne Insurance Agencies, Inc., which is an independent agency headquartered in Sparta, Michigan. As of June 30, 2025, ChoiceOne Financial Services, Inc. held total assets of $4.3 billion.

Here are the specific diversification vectors we need to map out:

• - Acquire a regional FinTech specializing in niche lending, like medical or dental practice financing.
• - Establish a separate subsidiary for specialized commercial insurance, going beyond the current ChoiceOne Insurance Agencies, Inc. scope.
• - Invest in a non-bank asset management firm to diversify fee income streams outside of Michigan.
• - Expand the mortgage warehouse line of credit business, which saw a $33.5 million reduction in Q2 2025, into a national correspondent model.
• - Launch a private equity fund focused on local Michigan small business growth and succession planning.

The existing noninterest income stream, which includes the insurance agency's contribution, provides a baseline for fee-based diversification. For the quarter ended June 30, 2025, total noninterest income was $6.50 million. This was an increase of $2.4 million compared to the same period in 2024, partly driven by higher credit and debit card fees and trust income from the recent merger.

The mortgage warehouse line of credit, classified as loans to other financial institutions, has shown a strategic contraction, which presents an opportunity for a pivot rather than just a continuation. As of June 30, 2025, there was a $33.5 million reduction in loans to other financial institutions compared to June 30, 2024.

Here's a quick look at the current state of the related business lines that inform these diversification targets:

Moving into a national correspondent model for the warehouse line directly addresses the geographic limitation of the current business, which is concentrated in Michigan. Similarly, investing in a non-bank asset management firm creates a new product line outside the core banking/insurance agency structure, which currently sees trust income rise from estate settlement fees.

The potential for specialized commercial insurance requires a clear expansion beyond the current independent agency model, which is headquartered in Sparta, Michigan. To be fair, the existing insurance subsidiary is already a separate entity, so the move is about specialization and scope expansion, not just establishment.

The launch of a private equity fund for Michigan small business growth would be a new product line, but one that keeps the focus local, contrasting with the national correspondent model idea.

Finance: draft the projected capital allocation for the FinTech acquisition by next Tuesday.