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Community banks across the Midwest are reshuffling their balance sheets as deposit costs edge higher and the income from fixed-rate securities acquired during lower-yield years fades.
ChoiceOne Financial Services (NASDAQ: COFS), the Sparta, Michigan parent of ChoiceOne Bank, reported second-quarter 2026 net income of $12.5 million, or $0.83 per diluted share, taking a $1.9 million pre-tax securities loss to shed lower-yielding municipal paper and redirect the proceeds toward loan growth.
Loan growth and the pivot to adjustable-rate assets Core loans, which exclude held-for-sale loans and mortgage warehouse advances, rose $87.1 million in the quarter, an annualized rate of 11.9%.
Roughly $40 million of that gain came from purchasing seasoned adjustable-rate residential mortgages from another community bank.
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