Company: COFS
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0000950170-25-036839
Chunk: 83

Company: CHOICEONE FINANCIAL SERVICES INC
Filing Date: 2025-03-11
Form: 10-K
Item: Item 8
Chunk 83
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. Loans held for sale are reported at the lower of cost or market, on an aggregate basis.Interest income on loans is reported on the interest method and includes amortization of net deferred loan fees and costs over the estimated loan term. Interest on loans is accrued based upon the principal balance outstanding. The accrual of interest is discontinued at the time at which loans are 90 days past due unless the loan is secured by sufficient collateral and is in the process of collection. Past due status is based on the contractual terms of the loan. Loans are placed into nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. Interest accrued but not received is reversed against interest income when the loans are placed into nonaccrual status. Interest received on such loans is applied to principal until qualifying for return to accrual. Loans are returned to accrual basis when all the principal and interest amounts contractually due are brought current and future payment is reasonably assured.  Accrued interest receivable totaled $5.1 million and $4.8 million at December 31, 2024, and 2023, respectively, and was reported in other assets on the consolidated balance sheets and is excluded in the estimate of credit losses.   

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Purchased financial assets without credit deterioration have been recorded at the acquisition date fair value.  Additionally, an allowance is recorded with a corresponding charge to credit loss expense in the reporting period in which the acquisition occurs.  For assets purchased with credit deterioration, an allowance is recorded with a corresponding increase to the amortized cost basis of the financial asset as of the acquisition date.  No financial assets were purchased since the initiation of CECL on January 1, 2023.Loans to Other Financial InstitutionsLoans to other financial institutions are made up of purchased participating interests in individual advances under a warehouse line of credit used to facilitate funding of residential mortgage loan originations at other financial institutions. The loans are short-term in nature and are designed to provide funding for the time period between the loan origination and its subsequent sale in the secondary market by the originating financial institution at which time our advances are paid off.  These advances earn interest based on the warehouse line of credit terms from the time the advance is funded to when the advance is paid off.   Allowance for Credit Losses (“ACL”) The ACL is a valuation allowance for expected credit losses. The ACL is increased by the provision for credit losses and decreased by loans charged off less any recover