What ChoiceOne Financial Services, Inc. told the SEC could break it.

As a holding company separate from ChoiceOne Bank, the Company receives substantially all of its revenue from bank dividends, which fund its common-stock dividends, but those dividends are limited by state and federal law (generally to undistributed net income for the current and prior two years) — only ~$41.1 million was available for the Bank to pay to the Company at year-end 2025 without regulatory approval above the capital-conservation buffer — so restrictions on bank dividends would constrain holding-company liquidity and shareholder distributions.

“At December 31, 2025, approximately $ 41.1 million was available for the Bank to pay dividends to ChoiceOne assuming regulatory approval of any amount in excess of the applicable capital conservation buffer.”

ChoiceOne is subject to extensive federal and state bank regulation by the Federal Reserve Board, FDIC and Michigan DIFS, plus the USA PATRIOT Act, Bank Secrecy Act, OFAC sanctions, the Dodd-Frank Act and fair-lending/anti-redlining and privacy laws, and capital requirements; current laws are subject to change, and new regulation, enforcement remedies (capital directives, deposit-insurance termination, brokered-deposit limits) or shifts in Federal Reserve monetary policy could materially affect its operations and growth.

“We are subject to extensive government regulation under both federal and state law. We are subject to regulation by the Federal Reserve Board, the FDIC and the DIFS, in addition to other regulatory and self-regulatory organiz”

ChoiceOne operates primarily in Michigan, with a significant portion of revenue from Michigan customers and no operations outside the U.S., and its loan book (grown $1.4B via the March 1, 2025 merger, concentrated in Non-Owner-Occupied CRE +$530.7M and 1-4 family +$495.7M) is tied to that single-state economy; a Michigan downturn from inflation, recession, trade tariffs/policy, or unemployment could cut loan and deposit demand and raise credit losses.

“An economic downturn within Michigan caused by inflation, recession or a recessionary environment, trade tariffs, trade policy or retaliatory measures by trade partners, unemployment, changes in financial or capital markets or other factors, could negatively impact household and corporate incomes.”

ChoiceOne relies on third-party service providers for certain components of its business activity, and if these vendors experience difficulties or terminate their services and the company cannot replace them with other providers, its operations could be interrupted, causing operational losses or business interruptions.

“Our reliance on third party vendors could cause operational losses or business interruptions. We rely on third party service providers for certain components of our business activity. If these third party service providers experience difficulties or terminate their services and we are unable to replace them with other service providers, our operations could be interrupted.”