CHOICEONE FINANCIAL SERVICES INC Goodwill & Intangibles Disclosure

Note 6 - Goodwill and Acquired Intangible Assets

Goodwill

Goodwill is not amortized but is evaluated annually for impairment and on an interim basis if events or changes in circumstances indicate that goodwill might be impaired. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit’s fair value. Accounting pronouncements allow a company to first perform a qualitative assessment for goodwill prior to a quantitative assessment. If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, then a quantitative assessment must be performed. If not, there is no further assessment required. The Company acquired Valley Ridge Financial Corp. in 2006, County Bank Corp in 2019, Community Shores in 2020, and Fentura in 2025, which resulted in the recognition of goodwill of $13.7 million, $38.9 million, $7.3 million and $69.9 million, respectively.

ChoiceOne engaged a third party valuation firm to assist in performing a quantitative analysis of goodwill as of June 30, 2024 ("the measurement date"). In deriving the fair value of the reporting unit (the Bank), the third-party firm assessed general economic conditions and outlook; industry and market considerations and outlook; the impact of recent events to financial performance; the market price of ChoiceOne’s common stock and other relevant events. In addition, the valuation relied on financial projections through 2029 and growth rates prepared by management. Based on the valuation prepared, it was determined that ChoiceOne's estimated fair value of the reporting

unit at the measurement date was greater than its book value and impairment of goodwill was not required. Although the Company’s stock price did not exceed its book value as of June 30, 2025, management noted multiple dates both before and after the measurement date on which the stock price did exceed book value. Accordingly, management does not consider the measurement date market price to be indicative of a sustained decline in the Company’s fair value, and no indicators of goodwill impairment were identified. No material changes and no triggering events have occurred that indicated impairment from the measurement date through December 31, 2025.

Acquired Intangible Assets

The core deposit intangible from the Fentura, County and Community Shores mergers is being amortized on a sum-of-the-years digits basis over ten years, ten years and eight years, respectively. Amortization expense was $5,258,000 in 2025, $757,000 in 2024, and $955,000 in 2023. The estimated amortization expense for the next five years ending December 31 is as follows (dollars in thousands):

The customer list intangible from the Fentura merger is being amortized on the sum-of-the-years digits basis over ten years. Amortization expense was $565,000 in 2025 with no expense in prior years. The estimated amortization expense for the next five years ending December 31 is as follows (dollars in thousands):