ChoiceOne Financial Services, Inc. (COFS): Business Model Canvas [Dec-2025 Updated]

You're looking to quickly grasp the engine driving ChoiceOne Financial Services, Inc. after they significantly scaled up by acquiring Fentura in March 2025. Honestly, this isn't the same regional bank it was; with total assets now hitting around $4.3 billion across Michigan, the strategic map has fundamentally changed. As an analyst who's seen plenty of bank mergers, I've distilled their current operations-from deposit gathering to wealth management-into this Business Model Canvas so you can see exactly where the value is created and where the near-term risks lie. Dive in below to see the nine blocks defining their post-merger defintely reality.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Key Partnerships

You're looking at the core external relationships ChoiceOne Financial Services, Inc. (COFS) relies on to deliver its value proposition, especially after the major merger activity in early 2025. These aren't just vendor relationships; they are strategic alignments that bring specialized capabilities to ChoiceOne Wealth Management and support its balance sheet.

The partnership with Ameriprise Financial is a key component of the wealth management offering. ChoiceOne Bank transitioned its investment program to the Ameriprise Financial Institutions Group (AFIG) on August 4, 2025. This move consolidated the investment program from The State Bank, resulting in the combined ChoiceOne Wealth Management practice overseeing approximately $780 million in assets. This relationship is structured as a revenue sharing agreement, providing ChoiceOne clients access to Ameriprise's suite of solutions, including personalized advice and digital capabilities.

For managing liquidity and capital, the relationship with the Federal Home Loan Bank (FHLB) remains a critical funding backstop. While specific utilization figures for 2025 aren't immediately available, ChoiceOne Financial Services maintained a total available borrowing capacity of $837.2 million secured by pledged assets as of December 31, 2024, which serves as the foundation for this liquidity support.

ChoiceOne Insurance Agencies, Inc. acts as the conduit for partnerships with various insurance carriers. This structure allows ChoiceOne Bank to offer insurance products directly to its client base through an established agency framework. The total assets of ChoiceOne Financial Services, Inc. stood at approximately $4.3 billion as of June 30, 2025, providing a substantial client base for these insurance offerings.

The internal development of 109 Technologies, LLC, a wholly owned subsidiary organized in 2023, is designed to create a distinct revenue stream through technology licensing. This entity holds intellectual property for a fintech product intended for licensing to third-party banks and bank holding companies. As of September 30, 2025, ChoiceOne Financial Services reported trailing twelve-month revenue of $143M, part of which is expected to eventually be supplemented by this licensing activity.

Here's a quick look at the structure and scale related to these key external dependencies:

The operational structure supporting these partnerships involves specific personnel counts and capital positioning:

• ChoiceOne Wealth Management includes 10 financial advisors and two support staff members working with Ameriprise Financial.
• Shareholders' equity stood at $449.6 million as of September 30, 2025, reflecting capital strength supporting these relationships.
• The total risk-based capital ratio was 12.8% at September 30, 2025.

Finance: draft Q4 2025 liquidity forecast incorporating FHLB utilization assumptions by next Tuesday.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Key Activities

You're looking at the core engine of ChoiceOne Financial Services, Inc. after the big Fentura Financial merger. The key activities revolve around integrating the new footprint while managing the balance sheet actively.

Commercial, consumer, and agricultural lending remains central. ChoiceOne Bank focuses on extending credit across its expanded Michigan footprint. While core loans saw a modest contraction, declining by $10.3 million or an annualized 1.4% in the third quarter of 2025, the organic loan growth over the twelve months ending September 30, 2025, was $65.3 million, representing a 4.5% increase. The total loans acquired in the Merger were approximately $1.4 billion as of March 1, 2025. The total assets of the combined entity reached approximately $4.3 billion as of the third quarter of 2025. This lending activity is a primary driver of interest income.

The post-merger integration of Fentura Financial/The State Bank was a massive undertaking, effectively completed in the first quarter of 2025. The merger was effective March 1, 2025, and the consolidation of The State Bank into ChoiceOne Bank was completed on March 14, 2025. This integration resulted in merger-related expenses, net of taxes, totaling $13.9 million for the nine months ended September 30, 2025. Furthermore, a merger-related provision for credit losses, net of taxes, of $9.5 million was recorded during the first quarter of 2025. The combined organization operates 56 offices across West, Central, and Southeast Michigan.

Deposit gathering and treasury management services are critical for funding those loans. Deposits, excluding brokered deposits, increased by $1.3 billion as of September 30, 2025, compared to September 30, 2024, largely due to the acquisition. At September 30, 2025, uninsured deposits stood at $1.2 billion, which was 33.2% of total deposits. Management actively manages funding costs; the cost of funds decreased to 1.77% in the third quarter of 2025, down from 1.87% in the same period of the prior year. You can see the shift in deposit composition below.

ChoiceOne Financial Services, Inc. actively engages in managing interest rate risk using interest rate swaps to hedge exposure on fixed-rate assets and variable-rate liabilities. As of September 30, 2025, the company held pay-fixed interest rate swaps with a total notional value of $381.3 million. These swaps carried a weighted average coupon of 3.15%, had a fair value of $6.8 million, and an average remaining contract length of 7.2 years. Settlements from these swaps amounted to $1.3 million for the third quarter of 2025. This hedging strategy is designed to move inversely to the unrealized losses on the available-for-sale securities portfolio as rates change.

The activity of providing wealth management and trust services is integrated into the overall noninterest income generation. While specific segment revenue isn't isolated in the latest reports, noninterest income did increase year-over-year by $2.3 million in the third quarter of 2025, showing growth in fee-based activities post-merger. The bank offers these services through its subsidiary structure, complementing its core lending and deposit functions.

Here's a quick look at the key financial metrics tied to these activities as of September 30, 2025:

• GAAP Net Interest Income (NII): $37.6 million for Q3 2025.
• GAAP Net Interest Margin (NIM): Expanded to 3.73% for Q3 2025.
• Accretion from purchased loans added 36 basis points to NIM in Q3 2025.
• Estimated remaining accretion income over the loan life: $51.1 million.
• Shareholders' Equity: $449.6 million as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Key Resources

When you look at the foundation of ChoiceOne Financial Services, Inc. (COFS), the Key Resources section of the canvas is dominated by the balance sheet strength and physical footprint gained from the recent Fentura Financial, Inc. merger. This isn't just about having money; it's about the regulatory standing and geographic reach that underpins every service they offer.

The sheer scale of the balance sheet is a primary resource. As of the end of the third quarter of 2025, ChoiceOne Financial Services, Inc. reported total assets of approximately $4.3 billion. This growth, largely fueled by the March 1, 2025, Merger, provides the capacity for increased commercial and consumer lending, which is the core of their business.

This expanded asset base is supported by a strong capital position. ChoiceOne Bank continues to be designated as "well-capitalized," reporting a total risk-based capital ratio of 12.8% as of September 30, 2025. That ratio, while slightly down from the prior year due to the merger's impact, still signifies robust financial health for a bank of this size in the current environment.

The physical presence is another critical asset. The combination of ChoiceOne Bank and The State Bank now results in a network of 56 full-service offices spread across West, Central, and Southeastern Michigan. This extensive physical footprint, combined with their digital offerings, is how they deliver their value proposition locally.

The accounting from the 2025 transaction also leaves behind specific intangible assets that represent the value of the acquired customer relationships. Specifically, the Core Deposit Intangible stands at $31.0 million. This number reflects the premium paid for the stable, low-cost funding base acquired in the deal, which is a key component of future net interest income generation.

Of course, the numbers only tell part of the story. The human capital is what makes the network function. You have to consider the expertise brought over from The State Bank team, which expanded ChoiceOne's reach into new counties like Genesee, Jackson, and Saginaw. That local market knowledge is invaluable for underwriting and community engagement.

Here's a quick snapshot of the core quantitative resources as of late 2025:

The integration of the two organizations means that the human capital now includes seasoned professionals from both legacy banks, which is vital for realizing the expected efficiencies. If onboarding the new teams takes longer than expected, defintely, the realization of these resource benefits slows down.

Finance: draft 13-week cash view by Friday.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Value Propositions

You're looking at the core reasons clients choose ChoiceOne Financial Services, Inc. over other options. It boils down to a specific blend of local presence and broad capability.

ChoiceOne Financial Services, Inc. delivers full-service community banking with a local focus. This isn't a distant corporate entity; it's a Michigan-centric operation. The combined organization, post-merger, manages total assets exceeding $4 billion as of September 30, 2025. The physical footprint supports this local commitment, operating 56 offices across Michigan.

The value extends to comprehensive financial solutions: banking, wealth, insurance. ChoiceOne Bank provides the core services-time, savings, and demand deposits, alongside commercial and consumer loans. Furthermore, the firm offers investment products and insurance through its subsidiary, ChoiceOne Insurance Agencies, Inc..

You get personalized service combined with modern digital tools. This means the high-touch relationship you expect from a community bank is backed by modern infrastructure, such as the partnership to offer Metriciti, a commercial lending platform built for community banking.

A key differentiator is the strong asset quality. This is not just talk; the numbers back up prudent lending. The annualized net loan charge-offs to average loans stood at a very low 0.03% as of September 30, 2025. The nonperforming loans to total loans ratio was 0.69% at the same date.

For your more complex needs, ChoiceOne Financial Services, Inc. offers high-touch advisory for commercial and wealth clients. This advisory strength is supported by solid operational performance, with a GAAP Net Interest Margin reaching 3.73% in the third quarter of 2025. The firm posted net income of $14,681,000 for the third quarter of 2025, excluding merger-related items.

Here is a quick look at the financial metrics that underpin these value propositions as of late 2025:

You can see the commitment to quality through the firm's capital position, with a total risk-based capital ratio of 12.8% as of September 30, 2025.

The value proposition is further supported by:

• Diluted Earnings Per Share (EPS) of $0.97 for Q3 2025.
• Efficiency Ratio improvement to 54.76% year-over-year in Q3 2025.
• Uninsured deposits at 33.2% of total deposits, with a liquidity backstop of approximately $1.2 billion in secured lines.
• Shareholders' equity totaled $431.8 million as of June 30, 2025.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Customer Relationships

You're looking at how ChoiceOne Financial Services, Inc. (COFS) connects with and keeps its customers, especially after the big March 1, 2025, merger with Fentura Financial, Inc. The core of their approach is maintaining that community bank feel, even as they've grown to control total consolidated deposits of approximately $\text{3.6 billion}$ in Michigan as of September 30, 2025.

Dedicated relationship management for commercial clients.

ChoiceOne Financial Services, Inc. continues to emphasize full relationship banking, focusing heavily on local commercial clients. They pair modern technology, like their Treasury Management program offering cash management and fraud prevention, with personalized service tailored to each business. This focus is key to retaining and growing their commercial loan book, which saw core loans grow organically by $\text{40.1 million}$ or $\text{10.6%}$ on an annualized basis in the first quarter of 2025.

Here's a quick look at the scale of their commercial and retail relationship footprint as of late 2025:

Community-focused, high-touch service model.

The high-touch model is deeply rooted in the heritage they brought into the combined entity-both ChoiceOne Bank and the acquired State Bank were $\text{126-year-old}$ community banks dedicated to community engagement. This translates to a service style where you likely deal with familiar faces. The merger itself added significant scale, but management has been focused on leveraging operational efficiencies while maintaining this local commitment across their expanded network in West, Central, and Southeast Michigan.

Multi-channel support: in-person, online, and video meetings.

While the emphasis remains on the personal touch, ChoiceOne Financial Services, Inc. uses technology-driven platforms to enhance efficiency and the banking experience. The $\text{56}$ offices provide the in-person channel, and the bank offers a range of financial services, implying standard online and mobile banking access for day-to-day transactions. The commitment to personalized service suggests that for complex needs, you can expect access to bankers for scheduled online or video meetings, though specific adoption metrics for video meetings aren't publically available. Still, the goal is to deliver an improved banking experience for clientele.

Trust-based advisory for wealth and estate planning.

For clients needing more specialized services, ChoiceOne Financial Services, Inc. has a wealth management division. This division delivers investment advisory, trust, and estate planning services. The success of integrating new relationships is evident in the financial results; for instance, trust income increased as a result of higher estate settlement fees and customers obtained through the March 2025 Merger. This indicates that the advisory services are actively being utilized by the newly combined customer base, building that trust-based relationship in high-value areas.

You should track the organic growth in deposits, which was $\text{48.7 million}$ in Q1 2025, as a direct indicator of new, non-merger-related customer acquisition success.

Finance: draft a 13-week cash view by Friday.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Channels

You're looking at how ChoiceOne Financial Services, Inc. (COFS) connects its value proposition to its customers as of late 2025, post-merger with Fentura. The channels are a mix of traditional physical presence and modern digital access, all anchored in Michigan.

The primary physical touchpoint is the expanded branch network, which solidified after the March 2025 consolidation. ChoiceOne Financial Services, Inc. now operates a 56 office footprint across West, Central, and Southeast Michigan. This scale is a direct result of the merger, moving the company to approximately $4.3 billion in assets. The combined entity is now the third largest publicly traded bank holding company headquartered in Michigan based on asset size.

The physical network is supported by specialized, non-branch sales/lending locations and self-service technology:

• - Physical branch network of 56 offices.
• - Loan Production Offices (LPOs).
• - Automated Teller Machines (ATMs).

Before the merger, ChoiceOne Bank operated 3 loan production offices, and The State Bank operated 1 loan production center. The combined entity's total physical footprint is now reported as 56 offices, which encompasses the branch network.

For self-service and digital access, ChoiceOne Financial Services, Inc. relies on its established digital infrastructure. This includes:

• - Online and mobile banking platforms.

The digital capabilities are also leveraged through its wealth management channel, which recently transitioned its service provider. This channel is now branded as ChoiceOne Wealth Management, operating as a financial advisory practice under Ameriprise Financial Services, LLC, following a transition from Osaic Institutions, Inc. in August 2025.

Here are the concrete numbers detailing the direct financial advisor channel:

This Ameriprise partnership gives ChoiceOne clients access to services like personalized advice, financial planning, robust investment products, and digital capabilities for advisor interaction.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Customer Segments

You're looking at the customer base for ChoiceOne Financial Services, Inc. following the major integration with Fentura Financial, Inc. and The State Bank, which closed in March 2025. The resulting entity, with total assets of $4.3 billion as of September 30, 2025, serves a mix of retail and commercial clients primarily across Michigan.

The core of the business model relies on attracting and deploying deposits from these segments. Total deposits, excluding brokered deposits, grew by $1.3 billion year-over-year as of September 30, 2025, largely due to the merger. A significant portion of this funding base, $1.2 billion, represented uninsured deposits as of that date, making deposit retention a key focus.

The loan portfolio, which includes $1.4 billion acquired in the merger, is structured to serve these distinct customer groups. The overall loan-to-deposit ratio stood at 80.21% at March 31, 2025, showing how the acquired deposits are being put to work. Organic core loan growth over the twelve months ending September 30, 2025, was $65.3 million, representing a 4.5% increase, though Q3 2025 saw a slight contraction of $10.3M in core loans.

Here is a breakdown of how the customer segments map to the business activities and associated financial metrics:

The business actively manages its funding mix, which directly relates to the consumer and business deposit base. The cost of funds improved to 1.77% in Q3 2025. You should note the composition of the loan book, as the acquired loans from the merger are still being accounted for; 0.39% of total loans as of September 30, 2025, were Purchased Credit Deteriorated (PCD) loans.

The bank's operational focus is clearly on integrating the expanded franchise across Michigan. The successful merger added approximately $1.4 billion in loans and $1.4 billion in deposits. This scale is what supports the current lending appetite across these customer groups.

• Organic core loan growth in the twelve months ended March 31, 2025, was $157.3 million (11.3%).
• The allowance for credit losses to total loans ratio was 1.19% on June 30, 2025.
• The company reported diluted EPS of $0.97 for Q3 2025.

Finance: draft 13-week cash view by Friday.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Cost Structure

You're looking at the cost side of ChoiceOne Financial Services, Inc. post-merger, which is heavily influenced by integrating the Fentura operations. The cost structure is dominated by funding costs and the one-time cleanup from the March 1, 2025, acquisition.

The primary cost driver remains the interest paid to depositors and wholesale lenders. For the three months ending September 30, 2025, the annualized cost of funds settled at 1.77%. This is a slight improvement from the annualized cost of funds of 1.84% seen in the second quarter of 2025. To be fair, the cost of deposits is structurally higher post-merger, as the annualized cost of deposits to average total deposits increased by 9 basis points from June 30, 2024, to June 30, 2025. On the wholesale side, interest expense on borrowings for the three months ended June 30, 2025, actually declined by $536,000 compared to the same period in 2024, showing some success in managing that funding source.

Personnel and infrastructure costs are now spread across a larger footprint. ChoiceOne Financial Services, Inc. operates 56 offices across West, Central, and Southeast Michigan. While we don't have the exact 2025 personnel expense figure, the overall cost management efficiency is reflected in the operational leverage achieved.

The merger created a significant, but largely contained, expense spike. Merger-related expenses, net of taxes, totaled $13.9 million for the nine months ended September 30, 2025. Management has stated they do not anticipate additional material merger expenses going forward, which is a key signal for cost normalization. This one-time cost is separate from the ongoing regulatory environment, which includes FDIC insurance costs, though a specific 2025 figure for that line item isn't isolated here.

Here's a quick look at how costs are being managed relative to revenue, using the efficiency ratio as a key indicator:

The technology and infrastructure investment is baked into the overall noninterest expense, which increased by $44.0 million for the nine months ended September 30, 2025, compared to the same period in 2024, with the merger expenses being the primary driver of that increase.

You should watch the trend in deposit costs closely, as the shift in funding mix is a constant pressure point. For instance, in Q3 2025, noninterest-bearing deposits declined quarter-over-quarter, while interest-bearing demand deposits increased by $73.4 million.

• Personnel Cost Component: Tied to 56 offices.
• Technology Investment: Not separately quantified in public filings for 2025.
• Regulatory/FDIC Costs: Included in the overall Noninterest Expense base.
• Core Deposit Intangible Expense (March 2025): $470,000 for the month of March 2025.

Finance: draft 13-week cash view by Friday.

ChoiceOne Financial Services, Inc. (COFS) - Canvas Business Model: Revenue Streams

You're looking at how ChoiceOne Financial Services, Inc. (COFS) brings in the money, and honestly, it's what you'd expect from a bank that just completed a major merger. The biggest driver, by far, is the interest they earn on their assets, which is Net Interest Income (NII). This is the core engine. The growth here is significant, largely due to the assets acquired in the March 1, 2025, merger.

Here's a quick look at the key revenue pieces for the third quarter of 2025, which really shows where the money is coming from right now:

Net Interest Income from loans was reported at $37.6 million for the third quarter of 2025, a big jump from $20.2 million in Q3 2024. A part of that NII story includes accretion income from purchased loans, which added about $3.6 million to loan interest income in that quarter alone. Also, the GAAP Net Interest Margin (NIM) expanded to 3.73% in Q3 2025, up from 3.17% the year prior.

Noninterest income is the second bucket, and it saw a year-over-year increase of $2.3 million for the three months ending September 30, 2025. This fee-based revenue stream is made up of several things, like interchange income from card volume and service fees. You should keep an eye on the components that make up this stream:

• Interchange income, driven by increased volume post-merger.
• Credit and debit card fees, which rose due to increased volume.
• Loan origination and mortgage servicing fees (implied component).

Wealth management and trust fees contribute as well. While the latest AUM figure I have for your model is $780M, trust income specifically increased due to higher estate settlement fees and new customers brought in by the Merger. This is a steady, relationship-based revenue stream that complements the core lending business. To be defintely clear, the actual AUM figure as of late 2025 should be verified against the latest 10-Q, but we are using the $780M figure you provided for this canvas section.

Finally, insurance commissions from ChoiceOne Insurance Agencies are part of the noninterest income mix, though specific commission dollar amounts aren't broken out separately in the high-level summaries. These agency commissions, along with loan fees, provide diversification away from pure interest rate risk. Finance: draft the Q4 2025 revenue projection based on the Q3 run-rate by Monday.