The lender posted net income of $12.5 million, or 83 cents a share, compared with $13.5 million, or 90 cents a share, during the same period last year. This contraction was driven primarily by a $1.9 million pretax loss incurred from selling roughly $25 million in municipal securities late in the quarter. According to the company, this move was intended to rebalance its interest-rate profile and fund the acquisition of adjustable-rate residential mortgages.
In section Market Quotes
ChoiceOne Shares Slide as Securities Sell-Off Dents Quarterly Profit
Shares of Sparta-based ChoiceOne Financial Services dropped 5% to $32.08 on Friday after the bank reported a second-quarter profit decline. The dip, which erased a portion of the stock's 10% year-to-date gain, followed a strategic decision to offload low-yielding municipal bonds that ultimately weighed on the bottom line.
While noninterest income fell 24% to $4.9 million due to the securities sale, net interest income saw a marginal 1% increase to $36.7 million. The bank also reported an $87.1 million expansion in core loans, bolstered by the purchase of $40 million in high-quality residential debt. Chief Executive Kelly Potes noted that the firm remains committed to disciplined growth and capital management as it pivots toward the second half of the year.
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