10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K

(X)	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the fiscal year ended December 31, 2008
(   )	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from__________________ to __________________

Commission File Number: 000-19202

ChoiceOne Financial Services, Inc.
(Exact Name of Registrant as Specified in its Charter)

Michigan (State or Other Jurisdiction of Incorporation or Organization)	38-2659066 (I.R.S. Employer Identification No.)
109 East Division Street, Sparta, Michigan (Address of Principal Executive Offices)	49345 (Zip Code)

(616) 887-7366
(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934:

Common Stock
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes           No   X  

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes           No   X  

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes   X     No        

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  (__)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	Accelerated filer
Non-accelerated filer	Smaller reporting company    X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes         No   X     

As of June 30, 2008, the aggregate market value of common stock held by non-affiliates of the Registrant was $29.1 million. This amount is based on an average bid price of $9.00 per share for the Registrant's stock as of such date.

As of February 28, 2009, the Registrant had 3,247,430 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part I, Item 1, and Part II, Items 5 through 9A(T) incorporate by reference portions of the Registrant's Annual Report to Shareholders for the year ended December 31, 2008.

Part III, Items 10 through 14 incorporate by reference portions of the Registrant's Definitive Proxy Statement for the Registrant's Annual Meeting of Shareholders to be held April 30, 2009.

FORWARD-LOOKING STATEMENTS

This report and the documents incorporated into this report contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and the Registrant itself. Words such as "anticipates," "believes," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "may," "could," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, the Registrant undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

Risk factors include, but are not limited to, the risk factors disclosed in Item 1A of this report, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior as well as their abilities to repay loans; changes in the local and national economies; changes in market conditions; the possibility that anticipated cost savings and revenue enhancements from the merger with Valley Ridge Financial Corp. may not be realized in full or at all or within the expected time frames; the level and timing of asset growth; local and global uncertainties such as acts of terrorism and military actions; and current uncertainties and fluctuations in the financial markets and stocks of financial services providers due to concerns about credit availability and concerns about the Michigan economy in particular. These are representative of the risk factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

PART I

Item 1. Business

General
ChoiceOne Financial Services, Inc. (the "Registrant") is a one-bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Registrant was incorporated on February 24, 1986, as a Michigan corporation. The Registrant was formed to create a bank holding company for the purpose of acquiring all of the capital stock of ChoiceOne Bank (formerly Sparta State Bank), which became a wholly owned subsidiary of the Registrant on April 6, 1987. The Registrant's only subsidiary and significant asset as of December 31, 2008, was ChoiceOne Bank (the "Bank"). Effective January 1, 1996, the Bank acquired all of the outstanding common stock of ChoiceOne Insurance Agencies, Inc. (formerly Bradford Insurance Centre, Ltd.), an independent insurance agency headquartered in Sparta, Michigan (the "Insurance Agency"). Effective January 1, 2002, the Bank formed ChoiceOne Mortgage Company of Michigan (the "Mortgage Company"). In December 2008, the operations of the Mortgage Company were consolidated into the Bank and the Mortgage Company subsidiary was eliminated. The Bank also owns a 25% interest in a non-banking corporation, West Shore Computer Services, Inc., a data processing firm located in Scottville, Michigan. Effective November 1, 2006, the Registrant merged with Valley Ridge Financial Corp. ("VRFC"), a single-bank holding company for Valley Ridge Bank ("VRB"). In the merger, the Registrant issued shares of its common stock in exchange for all outstanding shares of VRFC. In December 2006, VRB was consolidated into the Bank.

2

The Registrant's business is primarily concentrated in a single industry segment - banking. The Bank is a full-service banking institution that offers a variety of deposit, payment, credit and other financial services to all types of customers. These services include time, savings, and demand deposits, safe deposit services, and automated transaction machine services. Loans, both commercial and consumer, are extended primarily on a secured basis to corporations, partnerships and individuals. Commercial lending covers such categories as business, industry, agricultural, construction, inventory and real estate. The Bank's consumer loan department makes direct and indirect loans to consumers and purchasers of residential and real property. The Mortgage Company originated and sold a full line of conventional type mortgage loans for 1-4 family and multi-family residential real estate properties. No material part of the business of the Registrant or the Bank is dependent upon a single customer or very few custo mers, the loss of which would have a materially adverse effect on the Registrant.

The Bank's primary market area lies within portions of Kent, Muskegon, Newaygo and Ottawa counties in Michigan in the communities where the Bank's offices are located. Currently the Bank serves these markets through thirteen full-service offices. The Registrant and the Bank have no foreign assets or income.

The principal source of revenue for the Registrant and the Bank is interest and fees on loans. On a consolidated basis, interest and fees on loans accounted for 74%, 70%, and 73% of total revenues in 2008, 2007, and 2006, respectively. Interest on securities accounted for 12%, 11%, and 12% of total revenues in 2008, 2007, and 2006, respectively.

The Consolidated Financial Statements incorporated by reference in Part II, Item 8 contain information concerning the financial position and results of operations of the Registrant.

Competition
The Bank's competition primarily comes from other financial institutions located within Kent, Muskegon, Newaygo, and Ottawa counties in western Michigan. There are a number of larger commercial banks within the Bank's primary market area. The Bank also competes with a large number of other financial institutions, such as savings and loan associations, insurance companies, consumer finance companies, credit unions and commercial finance and leasing companies for deposits, loans and service business. Money market mutual funds, brokerage houses and nonfinancial institutions provide many of the financial services offered by the Bank. Many of these competitors have substantially greater resources than the Bank. The principal methods of competition for financial services are price (the rates of interest charged for loans, the rates of interest paid for deposits and the fees charged for services) and the convenience and quality of services rendered to customers.

Supervision and Regulation
Banks and bank holding companies are extensively regulated. The Registrant is subject to supervision and regulation by the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"). The Registrant's activities are generally limited to owning or controlling banks and engaging in such other activities as the Federal Reserve Board may determine to be closely related to banking. Prior approval of the Federal Reserve Board, and in some cases various other government agencies, is required for the Registrant to acquire control of any additional bank holding companies, banks or other operating subsidiaries.

The Bank is chartered under state law and is subject to regulation by the Michigan Office of Financial and Insurance Regulation. State banking laws place restrictions on various aspects of banking, including permitted activities, loan interest rates, branching, payment of dividends and capital and surplus requirements. The Bank is a member of the Federal Reserve System and is also subject to regulation by the Federal Reserve Board. The Bank's deposits are insured by the Federal Deposit Insurance Corporation (the "FDIC") to the extent provided by law. The Bank became a member of the Federal Home Loan Bank system in March 1993. This provides certain advantages to the Bank, including favorable borrowing rates for certain funds.

The Registrant is a legal entity separate and distinct from the Bank. There are legal limitations on the extent to which the Bank can lend or otherwise supply funds to the Registrant. In addition, payment of dividends to the Registrant by the Bank is subject to various state and federal regulatory limitations.

3

Under Federal Reserve Board policy, the Registrant is expected to act as a source of financial strength to the Bank and to commit resources to support it. The FDIC formed the Deposit Insurance Fund ("DIF") in accordance with the Federal Deposit Insurance Reform Act of 2005 ("Reform Act"). The FDIC will maintain the insurance reserves of the DIF by assessing depository institutions an insurance premium.

The FDIC adopted final regulations that implemented the Reform Act to create a stronger and more stable insurance system. The final regulations enable the FDIC to tie each depository institution's DIF insurance premiums both to the balance of insured deposits, as well as to the degree of risk the institution poses to the DIF. In addition, the FDIC has new flexibility to manage the DIF's reserve ratio within a range, which in turn may help prevent sharp swings in assessment rates that were possible under the design of the former system. Under the new risk-based assessment system, the FDIC will evaluate each depository institution's risk based on three primary sources of information: supervisory ratings for all insured institutions, financial ratios for most institutions, and long-term debt issuer ratings for large institutions that have them. Neither the Registrant nor the Bank has a long-term debt issuer rating. The ability to differentiate on the basis of risk will improve incentives for effective risk m anagement and will reduce the extent to which safer banks subsidize riskier ones.

The 2008 DIF rates for nearly all depository institutions varied between five and seven cents for every $100 of deposits. However, as part of the Reform Act, Congress provided credits to institutions that paid high premiums in the past to bolster the FDIC's insurance reserves to offset a portion of DIF insurance reserve assessments. The Registrant used assessment credits to offset approximately $13,000 of the premiums that were assessed for the 2008 calendar year.

The Deposit Insurance Funds Act of 1996 authorized the Financing Corporation ("FICO") to impose periodic assessments on all depository institutions. The purpose of these periodic assessments is to spread the cost of the interest payments on the outstanding FICO bonds issued to recapitalize the Savings Association Insurance Fund ("SAIF") over a larger number of institutions. Until the change in the law, only SAIF member institutions bore the cost of funding these interest payments.

Banks are subject to a number of federal and state laws and regulations, which have a material impact on their business. These include, among others, minimum capital requirements, state usury laws, state laws relating to fiduciaries, the Truth in Lending Act, the Truth in Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Expedited Funds Availability Act, the Community Reinvestment Act, the Real Estate Settlement Procedures Act, the USA PATRIOT Act, the Bank Secrecy Act, electronic funds transfer laws, redlining laws, predatory lending laws, antitrust laws, environmental laws, money laundering laws and privacy laws. The instruments of monetary policy of authorities, such as the Federal Reserve Board, may influence the growth and distribution of bank loans, investments and deposits, and may also affect interest rates on loans and deposits. These policies may have a significant effect on the operating results of banks.

Bank holding companies may acquire banks and other bank holding companies located in any state in the United States without regard to geographic restrictions or reciprocity requirements imposed by state banking law. Banks may also establish interstate branch networks through acquisitions of and mergers with other banks. The establishment of de novo interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) is allowed only if specifically authorized by state law.

Michigan banking laws do not significantly restrict interstate banking. The Michigan Banking Code permits, in appropriate circumstances and with the approval of the Office of Financial and Insurance Regulation, (1) acquisition of Michigan banks by FDIC-insured banks, savings banks or savings and loan associations located in other states, (2) sale by a Michigan bank of branches to an FDIC-insured bank, savings bank or savings and loan association located in a state in which a Michigan bank could purchase branches of the purchasing entity, (3) consolidation of Michigan banks and FDIC-insured banks, savings banks or savings and loan associations located in other states having laws permitting such consolidation, (4) establishment of branches in Michigan by FDIC-insured banks located in other states, the District of Columbia or U.S. territories or protectorates having laws permitting a Michigan bank to establish a branch in such jurisdiction, and (5) establishment by foreign banks of branches located in Michig an.

4

Effects of Compliance With Environmental Regulations
The nature of the business of the Bank is such that it holds title, on a temporary or permanent basis, to a number of parcels of real property. These include properties owned for branch offices and other business purposes as well as properties taken in or in lieu of foreclosure to satisfy loans in default. Under current state and federal laws, present and past owners of real property may be exposed to liability for the cost of clean up of environmental contamination on or originating from those properties, even if they are wholly innocent of the actions that caused the contamination. These liabilities can be material and can exceed the value of the contaminated property. Management is not presently aware of any instances where compliance with these provisions will have a material effect on the capital expenditures, earnings or competitive position of the Registrant or the Bank, or where compliance with these provisions will adversely affect a borrower's ability to comply with the terms of loan contracts.

Employees
As of February 28, 2009, the Registrant, the Bank and the Insurance Agency employed 143 employees, of which 116 were full-time employees. The Registrant, Bank, and Insurance Agency believe their relations with their employees are good.

Statistical Information
Additional statistical information describing the business of the Registrant appears on the following pages and in Management's Discussion and Analysis of Financial Condition and Results of Operations incorporated by reference in Item 7 of this report and in the Consolidated Financial Statements and the notes thereto incorporated by reference in Item 8 of this report.

The following statistical information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and notes thereto incorporated by reference in this report.

Securities Portfolio
The carrying value of securities categorized by type at December 31 was as follows:

(Dollars in thousands)

		2008		2007		2006
U.S. Government and federal agency	$	14,221	$	15,952	$	18,164
State and municipal		49,066		46,486		35,651
Mortgage-backed		11,902		14,423		19,842
Corporate		198		1,251		2,254
Equity securities		1,981		5,044		1,525
Total	$	77,368	$	83,156	$	77,436

The Registrant did not hold investment securities from any one issuer at December 31, 2008, that were greater than 10% of the Registrant's shareholders' equity, exclusive of U.S. Government and U.S. Government agency securities.

Presented below is the fair value of securities as of December 31, 2008 and 2007, a schedule of maturities of securities as of December 31, 2008, and the weighted average yields of securities as of December 31, 2008.

(Dollars in thousands)

				Securities maturing within:
		Less than 1 Year		1 Year - 5 Years		5 Years - 10 Years		More than 10 Years		Fair Value at Dec. 31, 2008		Fair Value at Dec. 31, 2007
U.S. Government and
federal agency	$	10,136	$	3,081	$	1,004	$	-	$	14,221	$	15,952
State and municipal		14,793		19,007		13,952		1,314		49,066		46,486
Mortgage-backed securities		1,086		8,447		1,715		654		11,902		14,423
Corporate		198		-		-		-		198		1,251
Total debt securities		26,213		30,535		16,671		1,968		75,387		78,112
Equity securities (1)		1,050		431		-		500		1,981		5,044
Total securities	$	27,263	$	30,966	$	16,671	$	2,468	$	77,368	$	83,156

5

			Weighted average yields:
U.S. Government and
federal agency	4.92	%	5.02	%	4.59	%	-	%	4.92	%
State and municipal (2)	6.57		6.14		6.07		6.26		6.25
Corporate	5.30		-		-		-		5.30
Mortgage-backed securities	6.22		4.89		4.46		4.79		4.95
Equity securities (2)	6.26		-		-		5.50		5.89

______________

(1)	Equity securities are preferred and common stocks with no stated maturity.
(2)	The yield is computed on a fully tax-equivalent basis at an incremental tax rate of 34%.

Loan Portfolio
The Bank's loan portfolio categorized by loan type (excluding loans held for sale) as of December 31 is presented below.

(Dollars in thousands)

		2008		2007		2006		2005		2004
Agricultural	$	23,408	$	24,765	$	23,606	$	10,203	$	8,686
Commercial and industrial		57,587		51,242		51,419		37,439		32,934
Consumer		16,047		15,939		15,589		11,820		13,250
Real estate - commercial		123,952		125,960		123,743		51,453		47,901
Real estate - construction		2,026		4,048		4,740		7,466		6,661
Real estate - residential		102,957		106,404		112,534		67,187		63,846
Total loans, gross	$	325,977	$	328,358	$	331,631	$	185,568	$	173,278

Maturities and Sensitivities of Loans to Changes in Interest Rates
The following schedule presents the maturities of loans (excluding residential real estate and consumer loans) as of December 31, 2008. All loans over one year in maturity (excluding residential real estate and consumer loans) are also presented classified according to the sensitivity to changes in interest rates as of December 31, 2008.

(Dollars in thousands)

Loan Type		Less than 1 Year		1 Year - 5 Years		More than 5 Years		Total
Agricultural	$	10,793	$	8,269	$	5,703	$	23,408
Commercial and industrial		22,269		24,402		4,572		57,587
Real estate - commercial		46,110		72,254		7,596		123,952
Real estate - construction		4,048		-		-		2,026
Totals	$	83,220	$	104,924	$	17,871	$	206,973
Loan Sensitivity to Changes in Interest Rates		Less than 1 Year		1 Year - 5 Years		More than 5 Years		Total
Loans with fixed interest rates	$	40,186	$	104,343	$	17,871	$	162,401
Loans with floating or adjustable interest rates		43,034		581		-		43,615
Totals	$	83,220	$	104,924	$	17,871	$	206,973

(1) Loan maturities are classified according to the contractual maturity date or the anticipated amortization period, whichever is appropriate. The anticipated amortization period is used in the case of loans where a balloon payment is due before the end of the loan's normal amortization period. At the time the balloon payment is due, the loan can either be rewritten or payment in full can be requested. The decision regarding whether the loan will be rewritten or a payment in full will be requested will be based upon the loan's payment history, the borrower's current financial condition, and other relevant factors.

6

Risk Elements
The following loans were classified as nonperforming as of December 31:

(Dollars in thousands)

	2008	2007	2006	2005	2004
Loans accounted for on a non-accrual basis	$  8,305	$  5,605	$  6,420	$  934	$  795
Accruing loans which are contractually past due 90      days or more as to principal or interest payments	333	188	278	32	11
Loans defined as "troubled debt restructurings"	605	-	24	-	16
Totals	$  9,243	$  5,793	$  6,722	$  966	$  822

A loan is placed on nonaccrual status at the point in time at which the collectibility of principal or interest is considered doubtful.

The table below illustrates interest forgone and interest recorded on nonperforming loans for the years presented.

(Dollars in thousands)

	2008	2007	2006	2005	2004
Interest on non-performing loans which would have      been earned had the loans been in an accrual or      performing status	$  442	$  383	$  184	$  33	$  32
Interest on non-performing loans that was actually      recorded when received	$    -	$    -	$  47	$  21	$  18

Potential Problem Loans
At December 31, 2008, there were $17.9 million of loans not disclosed above where some concern existed as to the borrowers' abilities to comply with original loan terms. Specific loss allocations totaling $440,000 from the allowance for loan losses had been allocated for all nonperforming and potential problem loans as of December 31, 2008. However, the entire allowance for loan losses is also available for these potential problem loans.

Loan Concentrations
As of December 31, 2008, there was no concentration of loans exceeding 10% of total loans that is not otherwise disclosed as a category of loans in the loan portfolio listing in Note 4 to the Consolidated Financial Statements incorporated by reference in Item 8 of this report.

Other Interest-Bearing Assets
As of December 31, 2008, there were no other interest-bearing assets requiring disclosure.

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Summary of Loan Loss Experience
The following schedule presents a summary of activity in the allowance for loan losses for the periods shown and the percentage of net charge-offs during each period to average gross loans outstanding during the period.

(Dollars in thousands)		2008		2007		2006		2005		2004
Balance at January 1	$	3,600	$	3,569	$	1,963	$	1,739	$	1,974
Charge-offs:
Agricultural		-		33		-		-		-
Commercial and industrial		1,193		599		221		72		689
Consumer		567		635		200		162		144
Real estate - commercial		816		841		-		25		66
Real estate - construction		-		-		-		20		-
Real estate - residential		1,252		191		92		120		41
Total charge-offs		3,828		2,299		513		399		940
Recoveries:
Agricultural		-		3		-		-		-
Commercial and industrial		60		27		51		47		58
Consumer		252		254		117		81		182
Real estate - commercial		35		1		-		-		-
Real estate - construction		-		-		-		-		-
Real estate - residential		6		10		-		-		-
Total recoveries		353		295		168		128		240
Net charge-offs		3,475		2,004		345		271		700
Transfer of allowance from VRFC		-		-		1,751		-		-
Additions charged to operations (1)		3,475		2,035		200		495		465
Balance at December 31	$	3,600	$	3,600	$	3,569	$	1,963	$	1,739

Ratio of net charge-offs during the period to
     average loans outstanding during the
     period

1.06

%

0.61

%

0.17

%

0.15

%

0.41

%

 (1) Additions to the allowance for loan losses charged to operations during the periods shown were based on management's judgment after considering factors such as loan loss experience, evaluation of the loan portfolio, and prevailing and anticipated economic conditions. The evaluation of the loan portfolio is based upon various risk factors such as the financial condition of the borrower, the value of collateral and other considerations, which, in the opinion of management, deserve current recognition in estimating loan losses.

The following schedule presents an allocation of the allowance for loan losses to the various loan categories as of the years ended December 31.

(Dollars in thousands)

		2008		2007		2006		2005		2004
Agricultural	$	242	$	397	$	314	$	202	$	169
Commercial and industrial		616		873		1,160		1,060		939
Consumer		351		489		289		195		123
Real estate - commercial		996		886		1,029		254		265
Real estate - construction		5		10		12		19		32
Real estate - residential		1,124		881		575		229		181
Unallocated		266		64		190		4		30
Total allowance	$	3,600	$	3,600	$	3,569	$	1,963	$	1,739

The decrease in the allowance allocation to agricultural loans from 2007 to 2008 was based on the limited charge-off activity experienced by this loan category. The decrease in the allocation to commercial and industrial loans in 2008

8

was due to a reduction in specific allowance allocations to this loan category from $571,000 as of December 31, 2007 to $75,000 as of December 31, 2008. Approximately $425,000 of the specific allocations as of end of 2007 was charged off during 2008. The increase in the allocation to commercial real estate loans in 2008 was caused by an increase in specific allowance allocation from $283,000 at end of 2007 to $470,000 at end of 2008. The growth in the allowance allocation to residential real estate mortgage loans resulted from the increase in charge-offs in this loan category during 2008 which indicated a higher level of risk in this loan category than in prior years. The decrease in the allowance allocation to consumer loans in 2008 was based on the decline in net charge-offs during the year. The increase in the total allowance in 2006 was related to the allowance of $1,751,000 acquired from the merger with VRFC in November 2006.

Management periodically reviews the assumptions, loss ratios and delinquency trends in estimating the appropriate level of its allowance for loan losses and believes the unallocated portion of the total allowance is sufficient at December 31, 2008.

The following schedule presents the stratification of the loan portfolio by category, based on the amount of loans outstanding as a percentage of total loans for the respective years ended December 31.

	2008		2007		2006		2005		2004
Agricultural	7	%	8	%	6	%	6	%	5	%
Commercial and industrial	18		16		20		20		19
Consumer	5		5		6		6		7
Real estate - commercial	38		38		28		28		28
Real estate - construction	1		1		4		4		4
Real estate - residential	31		32		36		36		37
Total	100	%	100	%	100	%	100	%	100	%

Deposits
The following schedule presents the average deposit balances by category and the average rates paid thereon for the respective years.

(Dollars in thousands)

		2008				2007				2006
Noninterest-bearing demand	$	53,638	-		$	51,695	-		$	27,611	-
Interest-bearing demand		89,035	1.45	%		90,804	2.43	%		56,617	2.64	%
Savings		30,554	0.46	%		28,097	0.50	%		11,524	0.50	%
Certificates of deposit		173,963	4.31	%		187,648	4.86	%		126,535	4.45	%
Total	$	347,190	2.57	%	$	358,244	3.20	%	$	222,287	3.23	%

The following table illustrates the maturities of certificates of deposits issued in denominations of $100,000 or more as of December 31, 2008.

(Dollars in thousands)

Maturing in less than 3 months	$	32,986
Maturing in 3 to 6 months		14,952
Maturing in 6 to 12 months		13,969
Maturing in more than 12 months		14,664
Total	$	76,571

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Short-Term Borrowings
Federal funds purchased by the Registrant are unsecured overnight borrowings from correspondent banks. Federal funds purchased are due the next business day. The table below provides additional information regarding these short-term borrowings:

(Dollars in thousands)

		2008			2007			2006
Outstanding balance at December 31	$	-		$	-		$	460
Average interest rate at December 31		-	%		-	%		5.37	%
Average balance during the year	$	804		$	3,956		$	2,585
Average interest rate during the year		1.72	%		4.99	%		4.84	%
Maximum month end balance during the year	$	5,622		$	12,255		$	9,987

Repurchase agreements are advances by Bank customers that are not covered by federal deposit insurance. These agreements are direct obligations of the Registrant and are secured by securities held in safekeeping at a correspondent bank. The table below provides additional information regarding these short-term borrowings:

(Dollars in thousands)

		2008			2007			2006
Outstanding balance at December 31	$	18,786		$	21,710		$	15,013
Average interest rate at December 31		2.13	%		3.79	%		3.58	%
Average balance during the year	$	18,632		$	16,090		$	6,492
Average interest rate during the year		2.93	%		3.50	%		2.63	%
Maximum month end balance during the year	$	19,754		$	21,811		$	15,013

Advances from the Federal Home Loan Bank ("FHLB") with original repayment terms less than one year are considered short-term borrowings for the Registrant. These advances are secured by residential real estate mortgage loans and U.S. government agency securities. The advances have maturities ranging from 3 months to 11 months from the date of issue.

The table below provides additional information regarding these short-term borrowings:

(Dollars in thousands)

		2008			2007			2006
Outstanding balance at December 31	$	12,000		$	5,000		$	-
Average interest rate at December 31		0.60	%		4.12	%		-	%
Average balance during the year	$	6,923		$	1,583		$	8,833
Average interest rate during the year		2.11	%		5.12	%		5.13	%
Maximum month end balance during the year	$	12,000		$	5,000		$	15,000

There were no other categories of short-term borrowings whose average balance outstanding exceeded 30% of shareholders' equity in 2008, 2007, or 2006.

Return on Equity and Assets
The following schedule presents the Registrant's ratios for the years ended December 31:

	2008		2007		2006
Return on assets (net income divided by average total assets)	0.31	%	0.77	%	0.72	%
Return on equity (net income divided by average equity)	2.69	%	6.86	%	7.63	%
Dividend payout ratio (dividends declared per share divided      by net income per share)	153.45	%	61.45	%	66.91	%
Equity to assets ratio (average equity divided by average total assets)	11.47	%	11.22	%	9.48	%

10

Item 1A. Risk Factors

The Registrant is subject to many risks and uncertainties. Although the Registrant seeks ways to manage these risks and develop programs to control those that management can, the Registrant cannot predict the future. Actual results may differ materially from management's expectations. Some of these significant risks and uncertainties are discussed below. The risks and uncertainties described below are not the only ones that the Registrant faces. Additional risks and uncertainties of which the Registrant is unaware, or that it currently deems immaterial, also may become important factors that affect the Registrant and its business. If any of these risks were to occur, the Registrant's business, financial condition or results of operations could be materially and adversely affected.

Investments in the Registrant's common stock involve risk.

The market price of the Registrant's common stock may fluctuate significantly in response to a number of factors, including:

• Variations in quarterly or annual operating results

• Changes in interest rates

• New developments in the banking industry

• Regulatory actions

• Volatility of stock market prices and volumes

• Changes in market valuations of similar companies

• New litigation or contingencies or changes in existing litigation or contingencies

• Changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies

• Rumors or erroneous information

• Credit and capital availability

Asset quality could be less favorable than expected.

A significant source of risk for the Registrant arises from the possibility that losses will be sustained because borrowers, guarantors and related parties may fail to perform in accordance with the terms of their loan agreements. Most loans originated by the Registrant are secured, but some loans are unsecured depending on the nature of the loan. With respect to secured loans, the collateral securing the repayment of these loans includes a wide variety of real and personal property that may be insufficient to cover the obligations owed under such loans. Collateral values may be adversely affected by changes in prevailing economic, environmental and other conditions, including declines in the value of real estate, changes in interest rates, changes in monetary and fiscal policies of the federal government, terrorist activity, environmental contamination and other external events. In addition, collateral appraisals that are out of date or that do not meet industry recognized standards may create the impres sion that a loan is adequately collateralized when in fact it is not.

General economic conditions in the state of Michigan could be less favorable than expected.

The Registrant is affected by general economic conditions in the United States, although most directly within Michigan. A further economic downturn within Michigan could negatively impact household and corporate incomes. This impact may lead to decreased demand for both loan and deposit products and increase the number of customers who fail to pay interest or principal on their loans.

Volatility and disruptions in the functioning of the financial markets and related liquidity issues could continue or worsen and, therefore, may adversely impact the Registrant's business, financial condition and results of operations.

The financial markets have been experiencing volatility and disruption in recent periods. The impact of this situation, together with concerns regarding the financial strength of financial institutions, has led to distress in financial markets and issues relating to liquidity among financial institutions. As a result of concern about the stability of the financial markets generally, the resulting credit availability issues, lack of confidence in the financial sector, increased volatility in the financial markets and reduced business activity could have a material adverse effect on the Registrant's ability to access capital and manage liquidity. If current levels of financial market volatility and disruption continue or worsen, there can be no assurance that the Registrant's business, financial condition and results of operations will not be materially and adversely impacted. There can be no assurances that recently enacted legislation, such as the Emergency Economic Stabilization Act of 2008, and actions taken by the United States Department of the Treasury and the FDIC for the purpose of stabilizing the financial markets will achieve their intended effects, and the impact of such legislation and regulatory programs on the Registrant cannot reliably be determined at this time.

11

If the Registrant does not adjust to changes in the financial services industry, its financial performance may suffer.

The Registrant's ability to maintain its financial performance and return on investment to shareholders will depend in part on its ability to maintain and grow its core deposit customer base and expand its financial services to its existing customers. In addition to other banks, competitors include credit unions, securities dealers, brokers, mortgage bankers, investment advisors and finance and insurance companies. The increasingly competitive environment is, in part, a result of changes in the economic environment within the state of Michigan, regulation, changes in technology and product delivery systems and the accelerating pace of consolidation among financial service providers. New competitors may emerge to increase the degree of competition for the Registrant's customers and services. Financial services and products are also constantly changing. The Registrant's financial performance will also depend in part upon customer demand for the Registrant's products and services and the Registrant's ability to develop and offer competitive financial products and services.

Changes in interest rates could reduce the Registrant's income and cash flow.

The Registrant's income and cash flow depends, to a great extent, on the difference between the interest earned on loans and securities, and the interest paid on deposits and other borrowings. Market interest rates are beyond the Registrant's control, and they fluctuate in response to general economic conditions and the policies of various governmental and regulatory agencies including, in particular, the Federal Reserve Board. Changes in monetary policy, including changes in interest rates and interest rate relationships, will influence the origination of loans, the purchase of investments, the generation of deposits and the rate received on loans and securities and paid on deposits and other borrowings.

Additional risks and uncertainties could have a negative effect on financial performance.

Additional factors could have a negative effect on the financial performance of the Registrant and the Registrant's common stock. Some of these factors are financial market conditions, changes in financial accounting and reporting standards, new litigation or changes in existing litigation, regulatory actions and losses.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The offices of the Bank and Insurance Agency as of February 28, 2009, were as follows:

Registrant's, Bank's and Insurance Agency's main office:
     109 East Division, Sparta, Michigan
     Office is owned by the Bank and comprises 24,000 square feet.

Bank's branch office:
     416 West Division, Sparta, Michigan
     Office is leased by the Bank and comprises 3,000 square feet.

Bank's branch office:
     4170 - 17 Mile Road, Cedar Springs, Michigan
     Office is owned by the Bank and comprises 3,000 square feet.

Bank's branch office:
     6795 Courtland Drive, Rockford, Michigan
     Office is owned by the Bank and comprises 2,400 square feet.

Bank's branch office:
     5050 Alpine Avenue NW, Comstock Park, Michigan
     Office is owned by the Bank and comprises 2,400 square feet.

12

Bank's branch office:
     450 West Muskegon, Kent City, Michigan
     Office is owned by the Bank and comprises 27,300 square feet.

Bank's branch office:
     3069 Slocum Road, Ravenna, Michigan
     Office is owned by the Bank and comprises 4,800 square feet.

Bank's branch office:
     5475 East Apple Avenue, Muskegon, Michigan
     Office is owned by the Bank and comprises 4,800 square feet.

Bank's branch office:
     661 West Randall, Coopersville, Michigan
     Office is owned by the Bank and comprises 4,800 square feet.

Bank's branch office:
     10 West Main Street, Grant, Michigan
     Office is owned by the Bank and comprises 4,800 square feet.

Bank's branch office:
     246 West River Valley Drive, Newaygo, Michigan
     Office is owned by the Bank and comprises 1,800 square feet.

Bank's branch office:
     47 South Charles Street, White Cloud, Michigan
     Office is leased by the Bank and comprises 1,800 square feet.

Bank's branch office:
     1423 West Main Street, Fremont, Michigan
     Office is owned by the Bank and comprises 1,600 square feet.

The Registrant operates its business at the main office of the Bank. The Registrant did not own any properties as of February 28, 2009. The Registrant, Bank and Insurance Agency believe that their offices are suitable and adequate for their future needs and are in good condition. The Registrant's management believes all offices are adequately covered by property insurance.

Item 3. Legal Proceedings

As of December 31, 2008, there are no significant pending legal proceedings to which the Registrant or the Bank is a party or to which any of their properties are subject, except for legal proceedings arising in the ordinary course of business. In the opinion of management, pending legal proceedings will not have a material effect on the consolidated financial condition of the Registrant.

 Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during the quarter ended December 31, 2008.

13

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The information under the caption "Stock Information" on pages 1 and 2 of the Registrant's Annual Report to Shareholders for the year ended December 31, 2008, is incorporated herein by reference.

On October 29, 2008, the Registrant issued 1,168 shares of common stock to its directors pursuant to the Directors' Stock Purchase Plan for an aggregate cash price of $11,000. The Registrant relied on the exemption contained in Section 4(6) of the Securities Act of 1933 in connection with this sale.

ISSUER PURCHASES OF EQUITY SECURITIES

There were no issuer purchases of equity securities during the three-month period ended December 31, 2008.

On July 21, 2004, the Board of Directors authorized the Registrant to repurchase 50,000 shares under a publicly announced repurchase plan. The Board of Directors authorized an additional repurchase plan on July 26, 2007 to buy back 100,000 shares. There is no stated expiration date.

Item 6. Selected Financial Data

The information under the caption "Selected Financial Data" on page 3 of the Registrant's Annual Report to Shareholders for the year ended December 31, 2008, is incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," including all subheadings, on pages 4 through 15, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2008, is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The information under the subheading "Liquidity and Interest Rate Risk" under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 13 through 15, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2008, is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

The Report of Independent Registered Public Accounting Firm, Consolidated Financial Statements, and Notes to Consolidated Financial Statements on pages 17 through 40, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2008, are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A(T). Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Registrant's management, including the Chief Executive Officer and principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on and as of the time of that evaluation, the Registrant's management, including the Chief Executive Officer and principal financial officer, concluded that the Registrant's disclosure controls and procedures were effective as of the end of the period covered by this report. There was no change in the Registrant's internal control over financial reporting that occurred during the three

14

months ended December 31, 2008 that has materially affected, or that is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Management's Report on Internal Control over Financial Reporting on page 17 of the Registrant's Annual Report to Shareholders for the year ended December 31, 2008 is here incorporated by reference.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information under the captions "ChoiceOne's Board of Directors and Executive Officers," "Related Matters - Section 16(a) Beneficial Ownership Reporting Compliance" and "Corporate Governance" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 30, 2009, is incorporated herein by reference.

The Registrant has adopted a Code of Ethics for Executive Officers and Senior Financial Officers, which applies to the Chief Executive Officer and the Chief Financial Officer, as well as all other senior financial and accounting officers. The Code of Ethics is posted on the Registrant's website at "www.choiceone.com." The Registrant intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of the Code of Ethics by posting such information on its website at "www.choiceone.com."

Item 11. Executive Compensation

The information under the captions "Executive Compensation" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 30, 2009, is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information under the caption "Ownership of ChoiceOne Common Stock" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 30, 2009, is incorporated herein by reference.

The following table presents information regarding the equity compensation plans both approved and not approved by shareholders at December 31, 2008:

	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved      by security holders	49,232	$  16.46	112,246
Equity compensation plans not      approved by security holders	- -	- -	29,613
Total	49,232	$  16.46	141,859

Equity compensation plans approved by security holders include the Amended and Restated Executive Stock Incentive Plan and the Employee Stock Purchase Plan.

Shareholders at the Registrant's 2002 Annual Meeting approved the Amended and Restated Executive Stock Incentive Plan. Key employees of the Registrant and its subsidiaries, as the Personnel and Benefits Committee of the Board of Directors may select from time to time, are eligible to receive awards under this Plan. Incentive awards may

15

be stock options, stock appreciation rights or stock awards. The Plan provides for a maximum of 135,545 shares of the Registrant's common stock, subject to adjustments for certain changes in the capital structure of the Registrant. New awards for up to 86,313 shares may be made under this Plan.

The number of shares available for issuance under the Plan is equal to the number determined by the following formula: (a) for the initial plan year, 5% of the total number of shares of common stock outstanding at the time the Plan became effective; plus (b) in each subsequent plan year, an additional number of shares of common stock not to exceed 2% of the number of shares of common stock outstanding as reported in the Registrant's Annual Report on Form 10-K for the fiscal year ending immediately before such plan year such that at the beginning of each plan year after the initial plan year there shall be available, in addition to any amount of shares remaining from the 5% authorization for the initial plan year, a minimum number of shares equal to 2% of the number of shares of common stock outstanding; plus (c) there shall be carried forward and available for additional awards certain shares that are either unused, canceled or surrendered in connection with incentive awards.

Shareholders at the 2002 Annual Meeting approved the Employee Stock Purchase Plan. This Plan allows employees to purchase the Registrant's common stock at a 15% discount from the average bid price for the Registrant's common stock. Employees who elect to participate in the plan can purchase shares of the Registrant's common stock on a quarterly basis. The Plan provides for a maximum of 55,125 shares of the Registrant's common stock, subject to adjustments for certain changes in the capital structure of the Registrant. New issuances for up to 25,933 shares may be made under this Plan.

Equity compensation plans not approved by security holders consist of the Directors' Stock Purchase Plan. The Plan is designed to provide directors of the Registrant the option of receiving their fees in the Registrant's stock. Directors who elect to participate in the Plan may elect to contribute to the Plan twenty-five, fifty, seventy-five or one hundred percent of their board of director fees and one hundred percent of their director committee fees earned as directors of the Registrant. Contributions to the Plan are made by the Registrant on behalf of each electing participant. Plan participants may terminate their participation in the Plan at any time by written notice of withdrawal to the Registrant. Participants will cease to be eligible to participate in the Plan when they cease to serve as directors of the Registrant. Shares are distributed to participants on a quarterly basis. The Plan provides for a maximum of 72,978 shares of the Registrant's common stock, subject to adjustments for certain cha nges in the capital structure of the Registrant. New issuances for up to 29,613 shares may be made under this Plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information under the captions "Related Matters - Certain Relationships and Related Transactions" and "Corporate Governance" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 30, 2009, is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information under the caption "Related Matters - Independent Certified Public Accountants" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 30, 2009, is incorporated herein by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)	(1)	Financial Statements. The following financial statements and independent auditors' reports are filed as part of this report:
			Consolidated Balance Sheets at December 31, 2008 and 2007.
			Consolidated Statements of Income for the years ended December 31, 2008, 2007, and 2006.

16

Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2008, 2007, and 2006.

Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007, and 2006.

Notes to Consolidated Financial Statements.

Report of Independent Registered Public Accounting Firm dated March 17, 2009.

	The consolidated financial statements, notes to consolidated financial statements and independent auditors' report dated March 17, 2009 listed above are incorporated by reference in Item 8 of this report from the Registrant's Annual Report to Shareholders for the year ended December 31, 2008.
(2)	Financial Statement Schedules. None.

(b) Exhibits. The following exhibits are filed as part of this report:

Exhibit	Document
3.1	Amended and Restated Articles of Incorporation of the Registrant. Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended June 30, 2008. Here incorporated by reference.
3.2	Bylaws of the Registrant as currently in effect and any amendments thereto.
4	Advances, Pledge and Security Agreement between ChoiceOne Bank and the Federal Home Loan Bank of Indianapolis. Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2007. Here incorporated by reference.
10.1	Employment Agreement with James A. Bosserd. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.2	Amended and Restated Executive Stock Incentive Plan. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2005. Here incorporated by reference.
10.3	Directors' Stock Purchase Plan. (1)
10.4	Consulting and Noncompetition Agreement with Richard L. Edgar. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.5	Consulting and Noncompetition Agreement with Robert Karpinski. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.6	Noncompetition Agreement with Ronald Hansen. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.7	Retention Bonus Agreement with Michael McHugh. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.8	Former Valley Ridge Executive Employee Salary Continuation Agreements, as amended. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2007. Here incorporated by reference.
10.9	Former Valley Ridge Directors' Deferred Compensation Plan and Agreement. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2006. Here incorporated by reference.
13	Annual Report to Shareholders for the year ended December 31, 2008.
21	Subsidiaries of the Registrant.

17

23	Consent of Independent Registered Public Accounting Firm for fiscal years ended December 31, 2008, 2007, and 2006.
24	Powers of Attorney.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Treasurer.
32	Certification pursuant to 18 U.S.C. § 1350.

______________________

(1) This agreement is a management contract or compensation plan or arrangement to be filed as an exhibit to this Form 10-K.

Copies of any exhibits will be furnished to shareholders upon written request. Requests should be directed to: Thomas L. Lampen, Treasurer, ChoiceOne Financial Services, Inc., 109 East Division, Sparta, Michigan, 49345.

18

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ChoiceOne Financial Services, Inc.
By:	/s/ James A. Bosserd	March 31, 2009
	James A. Bosserd President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ James A. Bosserd	President and Chief Executive Officer and Director (Principal Executive Officer)	March 31, 2009
James A. Bosserd
/s/ Thomas L. Lampen	Treasurer (Principal Financial and Accounting Officer)	March 31, 2009
Thomas L. Lampen
*/s/ Jon E. Pike	Chairman of the Board and Director	March 31, 2009
Jon E. Pike
*/s/ Jerome Arends	Director	March 31, 2009
Jerome Arends
*/s/ Frank G. Berris	Director	March 31, 2009
Frank G. Berris
*/s/ K. Timothy Bull	Director	March 31, 2009
K. Timothy Bull
*/s/ William F. Cutler, Jr.	Director	March 31, 2009
William F. Cutler, Jr.
*/s/ Richard L. Edgar	Director	March 31, 2009
Richard L. Edgar
*/s/ Stuart Goodfellow	Director	March 31, 2009
Stuart Goodfellow
*/s/ Gary Gust	Director	March 31, 2009
Gary Gust
*/s/ Paul L. Johnson	Director	March 31, 2009
Paul L. Johnson
*/s/ Dennis C. Nelson	Director	March 31, 2009
Dennis C. Nelson
*/s/ Nels W. Nyblad	Director	March 31, 2009
Nels W. Nyblad

19

*/s/ Donald VanSingel	Director	March 31, 2009
Donald VanSingel

*By	/s/ Thomas L. Lampen
	Attorney-in-Fact

20

EXHIBIT INDEX

Exhibit	Document
3.1	Amended and Restated Articles of Incorporation of the Registrant. Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended June 30, 2008. Here incorporated by reference.
3.2	Bylaws of the Registrant as currently in effect and any amendments thereto.
4	Advances, Pledge and Security Agreement between ChoiceOne Bank and the Federal Home Loan Bank of Indianapolis. Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2007. Here incorporated by reference.
10.1	Employment Agreement with James A. Bosserd. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.2	Amended and Restated Executive Stock Incentive Plan. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2005. Here incorporated by reference.
10.3	Directors' Stock Purchase Plan. (1)
10.4	Consulting and Noncompetition Agreement with Richard L. Edgar. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.5	Consulting and Noncompetition Agreement with Robert Karpinski. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.6	Noncompetition Agreement with Ronald Hansen. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.7	Retention Bonus Agreement with Michael McHugh. (1) Previously filed as an exhibit to the Registrant's Form 8-K Current Report for November 1, 2006. Here incorporated by reference.
10.8	Former Valley Ridge Executive Employee Salary Continuation Agreements, as amended. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2007. Here incorporated by reference.
10.9	Former Valley Ridge Directors' Deferred Compensation Plan and Agreement. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2006. Here incorporated by reference.
13	Annual Report to Shareholders for the year ended December 31, 2008.
21	Subsidiaries of the Registrant.
23	Consent of Independent Registered Public Accounting Firm for fiscal years ended December 31, 2008, 2007, and 2006.
24	Powers of Attorney.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Treasurer.
32	Certification pursuant to 18 U.S.C. § 1350.

______________________

(1) This agreement is a management contract or compensation plan or arrangement to be filed as an exhibit to this Form 10-K.

21

EX-3.2

Exhibit 3.2

BYLAWS

OF

CHOICEONE FINANCIAL SERVICES, INC.
(As amended through August 12, 1998)

ARTICLE I

SHAREHOLDERS

          Section 1.  Time and Place of Meetings.  Shareholder meetings shall be held at the Corporation's principal executive office during regular business hours or at such other time and place as the Board of Directors determines.

          Section 2.  Annual Meetings of Shareholders.  An annual meeting of shareholders shall, unless action to be taken at the meeting is instead taken by written consent as permitted by law, be held on the fourth Tuesday of April (or the next business day if that Tuesday is a holiday) after the end of the Corporation's fiscal year at the time designated in the notice of the meeting or at such other date and time as the Board of Directors determines.

          Section 3.  Special Meetings.  A special meeting of shareholders may be called by the Board of Directors, the Chairperson of the Board, the President or by shareholders holding, in the aggregate, not less than 10% of all shares entitled to vote at a meeting. Upon delivery to the President or the Secretary of a written instrument setting forth the date and purposes of the meeting, signed by an officer or director on behalf of the Board of Directors, the Chairperson, or the President, or by holders of a sufficient number of shares, notice of the meeting shall be given to each shareholder entitled to vote at the meeting.

          Section 4.  Notice of Meetings.  Written notice of the date, time, place, and purposes of a shareholder meeting shall be given not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, to each shareholder of record entitled to vote at the meeting. Notice of the purposes of the meeting shall include notice of any shareholder proposals that are proper subjects for shareholder action and are intended to be presented by shareholders who have notified the Corporation in writing of their intention to present the proposals at the meeting in accordance with these Bylaws.

          Section 5.  Shareholder Proposals.   Except as otherwise provided by statute, the Articles of Incorporation, or these Bylaws:

          (a)          No matter may be presented for shareholder action at an annual or special meeting of shareholders unless such matter is: (i) specified in the notice of the meeting (or any supplement to the notice) given by or at the direction of the Board of Directors; (ii) otherwise presented at the meeting by or at the direction of the Board of Directors; (iii) properly presented for action at the meeting by a shareholder in accordance with the notice provisions set forth in this Section and any other applicable requirements; or (iv) a procedural matter presented, or accepted for presentation, by the chairperson of the meeting in his or her sole discretion.

          (b)          For a matter to be properly presented by a shareholder, the shareholder must have given timely notice of the matter in writing to the Secretary of the Corporation. To be timely, the notice must be delivered to or mailed to and received at the principal executive offices of the Corporation not less than 120 calendar days prior to the date corresponding to the date of the Corporation's proxy statement or notice of meeting released to shareholders in connection with the last preceding annual meeting of shareholders in the case of an annual meeting (unless the Corporation did not hold an annual meeting within the last year, or if the date of the upcoming annual meeting changed by more than 30 days from the date of the last preceding meeting, then the notice must be delivered or mailed and received not more than seven days after the earlier of the date of the notice of the meeting or public disclosure of the date of the meeting), and not mo re than seven days after the earlier of the date of the notice of the meeting or public disclosure of the date of the meeting in the case of a special meeting. The notice by the shareholder must set forth: (i) a brief description of the matter the shareholder desires to present for shareholder action; (ii) the name and record address of the shareholder proposing the matter for shareholder action; (iii) the class and number of shares of capital stock of the Corporation that are beneficially owned by the shareholder; and (iv) any material interest of the shareholder in the matter proposed for shareholder action.

          (c)          The shareholder proposal, together with any accompanying supporting statement, shall not in the aggregate exceed 500 words. Except to the extent that a shareholder proposal submitted pursuant to this Section is not made available at the time of mailing, the notice of the purposes of the meeting shall include the name and address of and the number of shares of the voting security held by the proponent of each shareholder proposal.

          (d)          A shareholder may submit matters and proposals for shareholder action at any annual or special shareholder meeting if the matters and proposals are of general concern to, and are proper subjects for action by, the shareholders. A submitted proposal or matter may not be presented for shareholder action if it: (i) relates to the enforcement of a personal claim or the redress of a personal grievance against the Corporation, its management or any other person; (ii) consists of a recommendation, request or mandate that action be taken with respect to a matter, including a general economic, political, racial, religious, social or similar cause, that is not significantly related to the Corporation's business or is not within the Corporation's power to effectuate; (iii) has, at the shareholder's request, previously been submitted in either of the last two annual share-

- -2- holder meetings and the shareholder has failed to present the proposal, in person or by proxy, for action at the meeting; (iv) is substantially similar to a matter or proposal presented within the preceding five calendar years: (x) if it was submitted once during the past five annual meetings and it received less than 3% of the total votes cast, or (y) if it was submitted twice during the past five annual meetings and it received less than 6% of the total votes cast at the time of its second submission, or (z) if it was submitted three times during such period and it received less than 10% of the votes cast at the time of its third submission (if any of (x), (y) or (z) apply, the proposal may not be submitted for three years after the latest previous submission); or (v) consists of a recommendation or request that the management take action with respect to a matter relating to the conduct of the Corporation's ordinary business operations.

          (e)          Notwithstanding the above, if the Corporation is subject to the solicitation rules and regulations of the Securities Exchange Act of 1934, as amended, and the shareholder desires to require the Corporation to include the shareholder's proposal in the Corporation's proxy materials, matters and proposals submitted for inclusion in the Corporation's proxy materials shall be governed by those rules and regulations.

          Section 6.  Adjournments.  If a meeting is adjourned, it is not necessary to give notice of the adjourned meeting if (i) the date, time, and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and (ii) at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. If after the adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given in accordance with Section 4 above.

          Section 7.  Waiver of Notice.  A shareholder or a shareholder's attorney-in-fact may waive the shareholder's right to notice before or after a meeting by a signed waiver of notice. A shareholder's attendance at a meeting will result in a waiver of objection to:

          (a)          lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and

          (b)          consideration of a particular matter at the meeting that is not within the purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

          Section 8.  List of Shareholders Entitled to Vote.  The officer or agent having charge of the stock transfer books for shares of the Corporation shall make and certify a complete list of the shareholders entitled to vote at a shareholder meeting or any adjournment thereof. The list shall be:

          (a)          arranged alphabetically within each class and series, with the address of, and the number of shares held by, each shareholder;

          (b)          produced at the time and place of the meeting;

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          (c)          subject to inspection by any shareholder at any time during the meeting; and

          (d)          prima facie evidence as to who are the shareholders entitled to examine the list or to vote at the meeting.

Failure to comply with the requirements of this Section shall not affect the validity of an action taken at the meeting before a shareholder makes a demand to comply with the requirements.

          Section 9.  Quorum.  Unless a greater quorum is required by the Articles of Incorporation, these Bylaws or statute, shares entitled to cast a majority of the votes at a shareholder meeting constitute a quorum at the meeting. The shareholders present in person or by proxy at the meeting are counted for the purpose of determining a quorum. Once a quorum is present, business may be conducted until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Whether or not a quorum is present, the meeting may be adjourned by a vote of the shares present. When the holders of a class or series of shares are entitled to vote separately on an item of business, each class or series must have a quorum, as determined by this Section, for the purpose of transacting the item of business.

          Section 10.  Voting Rights.  Except as otherwise provided by statute or the Articles of Incorporation, each share is entitled to one vote on each matter submitted to a vote.

          Section 11.  Vote Required.  An action, other than the election of directors, to be taken by shareholder vote shall be authorized by a majority of the votes cast by shareholders entitled to vote on the action, unless a greater vote is required by statute, the Articles of Incorporation, or these Bylaws. Unless the Articles of Incorporation provide otherwise, directors shall be elected by a plurality of votes cast. Shareholders may not cumulate their votes.

          Section 12.  Class Voting.  If the Articles of Incorporation provide that a class of shares or a series of a class shall vote as a class, either generally or to authorize one or more specified actions, such voting as a class or series shall be in addition to any other required vote. Where voting as a class or series is required on an action other than the election of directors, the action shall be authorized by a majority of the votes cast by the holders of the class or series entitled to vote on the action, unless a greater vote is required by statute or the Articles of Incorporation.

          Section 13.  Electronic Participation in Meeting.  A shareholder may participate in a shareholder meeting by a conference telephone or by other similar communications equipment through which all persons participating in the meeting may communicate with the other participants, if all participants are advised of the communications equipment and the names of the participants in the meeting are disclosed to all participants. Such participation in a meeting constitutes presence in person at the meeting.

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          Section 14.  Conduct of Meetings.  Shareholder meetings shall be conducted as follows:

          (a)          The chairperson of the meeting shall determine the order of business and shall have the authority to establish rules for the conduct of the meeting. Any rules adopted for, and the conduct of, the meeting shall be fair to shareholders.

          (b)          The chairperson of the meeting shall announce at the meeting when the polls close for each matter voted upon. If no announcement is made, the polls shall close upon the final adjournment of the meeting. After the polls close, no ballots, proxies, or votes nor any revocations or changes to ballots, proxies, or votes may be accepted.

          (c)          If disorder arises that prevents the continuation of the business of the meeting, the chairperson may adjourn the meeting.

          (d)          The chairperson may require any person who is not a shareholder of record or holding a proxy to leave the meeting.

          Section 15. Business Transacted.  The business effectively transacted at a shareholder meeting shall be confined to the following:

          (a)          any matter specified in the notice or reasonably related to a matter specified in the notice; and

          (b)          any matter (i) the consideration of which is not objected to by any shareholder attending the meeting, and (ii) notice of which is waived by all shareholders not attending the meeting.

          Section 16.  Action Without a Meeting.  Any action required or permitted to be taken at a shareholder meeting may be taken without a meeting, without prior notice, and without a vote if, before or after the action, all the shareholders entitled to vote at the meeting consent in writing.

          Section 17.  Record Date.

          (a)          For the purpose of determining shareholders entitled to notice of and to vote at a shareholder meeting or an adjournment of a meeting, the Board of Directors may fix a record date, which may not precede the date on which the Board adopts the resolution fixing the record date. The date may not be more than 60 nor less than 10 days before the date of the meeting. If a record date is not fixed, the record date for determination of shareholders entitled to notice of or to vote at a shareholder meeting shall be the close of business on the day next preceding the day on which notice is given or, if no notice is given, the day next preceding the day on which the meeting is held. When a determination of shareholders of record entitled to notice of or to vote at a shareholder meeting is made as

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provided in this Section, the determination applies to any adjournment of the meeting, unless the Board of Directors fixes a new record date under this Section for the adjourned meeting.

          (b)          For the purpose of determining shareholders entitled to express consent to or to dissent from a proposal without a meeting, the Board of Directors may fix a record date, which may not be more than 60 days before effectuation of the action proposed to be taken. If a record date is not fixed and prior action by the Board of Directors is required with respect to the corporate action to be taken without a meeting, the record date is the close of business on the day on which the Board resolution is adopted. If a record date is not fixed and prior Board action is not required, the record date is the first date on which a signed written consent is delivered to the Corporation as provided in these Bylaws.

          (c)          For the purpose of determining shareholders entitled to receive payment of a share dividend or distribution, or allotment of a right, or for the purpose of any other action, the Board of Directors may fix a record date, which may not precede the date on which the Board adopts the resolution fixing the record date. The date may not be more than 60 days before the payment of the share dividend or distribution, allotment of a right, or other action. If a record date is not fixed, the record date is the close of business on the day on which the Board resolution relating to the corporate action is adopted.

          Section 18.  Proxies.  A shareholder entitled to vote at a shareholder meeting or to express consent or dissent without a meeting may authorize one or more other persons to act for the shareholder by proxy only by the following methods:

          (a)          The execution of a writing authorizing another person or persons to act for the shareholder as proxy. Execution may be accomplished by the shareholder or by an authorized officer, director, employee, or agent of the shareholder by either signing the writing or causing his or her signature to be affixed to the writing by any reasonable means including, without limitation, facsimile signature;

          (b)          Transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will hold the proxy or to a proxy solicitation firm, proxy support service organization, or similar agent fully authorized by the person who will hold the proxy to receive that transmission. Any telegram, cablegram, or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram, or other electronic transmission was authorized by the shareholder. If a telegram, cablegram, or other electronic transmission is determined to be valid, the inspectors, or, if there are no inspectors, the persons making the determination shall specify the information upon which they relied.

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                    A copy, facsimile telecommunication, or other reliable reproduction of the writing or transmission created pursuant to subsections (a) or (b) may be substituted or used in lieu of the original writing or transmission for any purpose for which the original writing or transmission could be used, if the copy, facsimile telecommunication, or other reproduction is a complete reproduction of the entire original writing or transmission.

                    A proxy is not valid after the expiration of three years from its date unless otherwise provided in the proxy. A proxy must be filed with the Corporation at or before the meeting.

ARTICLE II

DIRECTORS

          Section 1.  Number and Term of Directors.  Except as otherwise provided in the Articles of Incorporation, the Board of Directors shall consist of one or more directors as determined initially by the incorporator(s) and, thereafter, from time to time by the Board of Directors. Except as otherwise provided in the Articles of Incorporation, a number of directors equal to the number whose term expires at the time of the meeting shall be elected at each annual shareholder meeting and each director shall hold office until the third succeeding annual shareholder meeting and until a successor is elected and qualified. If shareholders of any class or series of shares have the exclusive right to elect one or more directors, those directors may be elected only by the vote of those shareholders.

          Section 2.  Mandatory Retirement. No director may continue to serve on the Board of Directors after reaching 70 years of age.

          Section 3.  Resignation.  A director may resign by written notice to the Corporation. A resignation is effective upon its receipt by the Corporation or at a later time specified in the notice.

          Section 4.  Powers.  The Corporation's business and affairs shall be managed by or under the direction of the Board of Directors, except as otherwise provided by statute or the Articles of Incorporation.

          Section 5.  Directors' Compensation.  The Board of Directors, by affirmative vote of a majority of directors in office and irrespective of any personal interest of any of them, may establish reasonable compensation for a director's services to the Corporation as a director or officer. Directors may also be reimbursed for their expenses, if any, of attendance at each meeting of the Board or a committee.

          Section 6.  Regular Meetings.  Regular meetings of the Board of Directors shall be held at the date, time, and place that the Board determines. A notice to directors is not required for a regular meeting, except that, when the Board establishes or thereafter changes the schedule of regular meetings, or changes the date, time, or place of a previously scheduled regular meeting,

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notice of the action shall be given to each director who was absent from the meeting at which the action was taken.

          Section 7.  Special Meetings.  The Chairperson, the President, or directors constituting at least one-third of the directors then in office may call a special meeting of the Board of Directors by giving notice to each director.

          Section 8.  Notice of Meetings.  Except as otherwise provided by these Bylaws, notice of the date, time, and place of each meeting of the Board of Directors shall be given to each director by either of the following methods:

          (a)          by mailing a written notice of the meeting to the address that the director designates or, in the absence of designation, to the last known address of the director, at least five days before the date of the meeting; or

          (b)          by delivering a written notice of the meeting to the director at least one full business day before the meeting, personally or by telecopier or telex, to the director's last known office or home.

          Section 9.  Waiver of Notice.  A director's attendance at or participation in a meeting waives any required notice to the director of the meeting, unless, at the beginning of the meeting or promptly upon the director's arrival, the director objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to any action taken at the meeting. A director may waive notice in writing before or after a meeting.

          Section 10.  Purpose of Meetings.  Neither the business to be transacted nor the purpose of a regular or special meeting need be specified in the notice or waiver of notice of the meeting. If the purpose is stated in the notice, the business transacted at the meeting is not limited to the purpose stated.

          Section 11.  Quorum and Required Vote.  A majority of the directors then in office, or of the members of a committee of the Board of Directors, constitutes a quorum for the transaction of business, unless the Articles of Incorporation, these Bylaws or, in the case of a committee, the Board resolution establishing the committee, provide for a larger or smaller number. The vote of the majority of members present at a meeting at which a quorum is present constitutes the action of the Board or of the committee, unless the vote of a larger number is required by statute, the Articles of Incorporation, these Bylaws, or, in the case of a committee, the Board resolution establishing the committee.

          Section 12.  Action by Written Consent.  Action required or permitted to be taken under authorization voted at a meeting of the Board of Directors or a committee of the Board may be taken without a meeting if, before or after the action, all members of the Board then in office or of the committee consent to the action in writing. The written consents shall be filed with the minutes of the Board or committee. The consent has the same effect as a vote of the Board or committee for all purposes.

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          Section 13.  Electronic Participation in Meeting.  A member of the Board of Directors or of a committee of the Board may participate in a meeting by means of conference telephone or similar communications equipment through which all persons participating in the meeting can communicate with each other. Such participation in a meeting constitutes presence in person at the meeting. A director must be permitted to participate in a meeting by such means if the director so requests.

          Section 14.  Committees of Directors.  The Board of Directors may designate one or more committees consisting of one or more directors. The Board may designate one or more directors as alternate members of a committee, who may replace an absent or disqualified member at a meeting of the committee. Unless prohibited by the Board resolution creating the committee, in the absence or disqualification of a committee member, the committee members present at a meeting and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another director to act at the meeting in the place of the absent or disqualified member. A committee, to the extent provided in the Board resolution creating the committee, may exercise all of the Board's power and authority in the management of the business and affairs of the Corporation, except that a committee may not: (i) amend the Articles of Incorporation, except that a committee may prescribe the relative rights and preferences of a series of a class of shares for which the Board of Directors has such authority under the Articles of Incorporation; (ii) adopt an agreement of merger or consolidation; (iii) recommend to shareholders the sale, lease, or exchange of all or substantially all of the Corporation's property and assets; (iv) recommend to the shareholders a dissolution of the Corporation or a revocation of a dissolution; (v) amend the Bylaws of the Corporation; or (vi) fill vacancies in the Board of Directors.  Unless a resolution of the Board of Directors expressly so provides, a committee may not declare a distribution or dividend or authorize the issuance of stock. A committee exists, and each member serves, at the pleasure of the Board. A committee may establish a time and place for regular meetings, for which no notice is required, except that, if the committee changes the date, time, or place of a regular meeting, notice of the change shall be given to each member who was absent from the meeting at which the change was made. Otherwise, a notice of a committee meeting shall be given in the same manner as a notice of a Board meeting.

          Section 16. Miscellaneous Powers of the Directors. Unless the Articles of Incorporation provide otherwise, the Board of Directors may adopt one or more of the following amendments to the Corporation's Articles of Incorporation without shareholder action:

          (a)          Extend the duration of the Corporation if it was incorporated at a time when limited duration was required by law;

          (b)          Delete the names and addresses of the initial directors;

          (c)          Delete the name and address of the initial resident agent or registered office, if a statement of change is on file with the administrator;

          (d)          Change each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the Corporation has only shares of that class outstanding;

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          (e)          Adopt and file an amendment of the Articles of Incorporation eliminating a series of shares if there are no outstanding shares of the series, no outstanding shares or bonds convertible into shares of the series, or other rights, options, or warrants issued by the Corporation that could require issuing shares of the series;

          (f)          Change the Corporation name by substituting the word "corporation," "incorporation," "company," "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," for a similar word or abbreviation in the corporate name, or by adding, deleting, or changing a geographical attribution for the Corporation name.

          (g)          Any other change that the Michigan Business Corporation Act expressly permits the Board of Directors to make without shareholder action.

ARTICLE III

OFFICERS

          Section 1.  Appointment.  The Board of Directors, at its first meeting following the annual shareholder meeting, shall appoint a Chairperson, President, Secretary, and Treasurer and may elect from their number one or more Vice Chairpersons. The Chairperson and the President shall be members of the Board. The Board may also appoint one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers and agents that it deems necessary. The Board of Directors need not appoint or elect an officer to an office that is already filled and whose specified term has not expired. The same person may hold two or more offices, but an officer may not execute, acknowledge or verify an instrument in more than one capacity if the instrument is required by law, the Articles of Incorporation, or these Bylaws to be executed, acknowledged, or verified by two or more officers.

          Section 2.  Term, Removal, and Vacancies.  An officer shall hold office for the term the Board specifies upon election or appointment and until a successor is elected or appointed and qualified, or until the officer's death, resignation, or removal. The Board may remove an officer with or without cause. An officer may resign by written notice to the Corporation. The resignation is effective upon its receipt by the Corporation or at a later date specified in the notice.

          Section 3.  Chairperson of the Board.  The Chairperson of the Board shall preside when present at all meetings of the shareholders and the Board of Directors. The Chairperson shall perform any other duties and exercise any other authority that the Board prescribes and, unless otherwise provided by Board resolution, is an ex officio member of all committees. Except where by law the signature of the President is required, the Chairperson possesses the same power and authority as the President to make and execute contracts, instruments, papers, and documents of every kind in the name of and on behalf of the Corporation.

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          Section 4.  Vice Chairperson of the Board.  During the unavailability or disability of the Chairperson, or while that office is vacant, the Vice Chairpersons, in the order the Board designates, may exercise all of the powers and discharge all of the duties of the Chairperson. A Vice Chairperson shall perform any other duties that the Board prescribes.

          Section 5.  President.  The President shall be the Corporation's chief executive officer and have the general control and management of its business, under the direction of the Board. The President shall ensure that all orders and resolutions of the Board are carried into effect. Unless the Board specifically provides otherwise, the President shall be an ex officio member of all committees. The President shall perform all duties incident to the office of President and other duties that the Board prescribes. The President may make and execute contracts, instruments, papers, and documents of every kind in the name and on behalf of the Corporation, except when the Board specifies the same to be done by another officer or agent. During the absence or disability of the Chairperson and the Vice Chairpersons, or while those offices are vacant, the President shall preside over all meetings of the Board of Directors and the sharehol ders and perform all of the duties and have all of the power and authority of the Chairperson.

          Section 6.  Vice Presidents.  The Board may designate one or more Vice Presidents to perform the duties and exercise the authority of the President during the President's absence or disability. Each Vice President shall perform other duties that the President assigns or the Board prescribes.

          Section 7.  Secretary.  The Secretary shall cause to be recorded and maintained minutes of all meetings of the Board, Board committees, and shareholders. The Secretary shall cause to be given all notices required by law, these Bylaws, or resolution of the Board and shall perform other duties that the President assigns or the Board prescribes.

          Section 8.  Treasurer.  The Treasurer shall cause to be kept in books belonging to the Corporation a full and accurate account of all receipts, disbursements, and other financial transactions of the Corporation. The Treasurer shall perform other duties that the President assigns or the Board prescribes.

          Section 9.  Assistant Secretaries and Assistant Treasurers.  An Assistant Secretary or an Assistant Treasurer may perform any duty or exercise any authority of the Secretary or Treasurer, respectively. An Assistant Secretary or Assistant Treasurer also shall perform duties that the Secretary or the Treasurer, respectively, or the President assigns or that the Board prescribes.

          Section 10.  Other Officers.  The Board of Directors may appoint other officers to perform duties and exercise authority that the President assigns or the Board prescribes.

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ARTICLE IV

SUBSIDIARIES AND DIVISIONS

          Section 1.  Divisional Officers.  The Board of Directors or the President may appoint divisional officers. The Board of Directors or the President may withdraw a divisional officer's title at any time and without cause. A divisional officer may, but need not, be a director or an executive officer of the Corporation. A divisional officer shall perform duties and exercise authority that the President assigns or the Board prescribes.

          Section 2.  Subsidiary Directors.  The Corporation may cause to be elected to the board of directors of a subsidiary corporation such persons as it determines, any of whom may, but need not, be directors, executive officers, or other employees or agents of the Corporation. The Board of Directors or the President may instruct the directors of a subsidiary corporation as to the manner in which they are to vote upon any issue properly coming before them as the directors of the subsidiary corporation, and such directors shall have no liability to the Corporation as the result of any action taken in accordance with those instructions.

          Section 3.  Divisional and Subsidiary Officers Not Executive Officers.  A divisional officer or officer of a subsidiary corporation shall not, by virtue of holding office, be deemed to be an executive officer of the Corporation, nor shall a divisional officer or officer of a subsidiary corporation (unless also a director or executive officer of the Corporation) be entitled to have access to any files, records, or other information relating to the Corporation or its business and finances or to attend or receive the minutes of meetings of the Board of Directors or a committee of the Corporation, except as and to the extent that the Board of Directors or the President expressly authorize.

ARTICLE V

INDEMNIFICATION

          Section 1.  Indemnification in Action by Third Party.  The Corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding (other than an action by or in the right of the Corporation), whether civil, criminal, administrative, or investigative and whether formal or informal, by reason of the fact that the person is or was a director, officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, whether for profit or not for profit, against expenses (including attorney fees), judgments, penalties, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit, or proceeding if the per son acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation or its shareholders and, with respect to a criminal action or proceeding, the person had no reasonable cause to believe his or her conduct was unlawful. The termination of an action, suit, or proceeding by judgment, order, settlement,

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conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner that the person reasonably believed to be in or not opposed to the best interests of the Corporation or its shareholders and, with respect to a criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

          Section 2.  Indemnification in Action by or in Right of the Corporation.  The Corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, whether for profit or not for profit, against expenses, including attorney fees and amounts paid in settlement actually and reasonably incurred by the person in connection with the action or suit, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best inter ests of the Corporation or its shareholders. Indemnification shall not be made for a claim, issue, or matter in which the person shall have been found liable to the Corporation except to the extent authorized by statute.

          Section 3.  Expenses.  To the extent that a director, officer, employee, or agent of the Corporation has been successful on the merits or otherwise in defense of an action, suit, or proceeding referred to in Section 1 or 2 of this Article, or in defense of a claim, issue, or matter in the action, suit, or proceeding, the Corporation shall indemnify that person against actual and reasonable expenses, including attorney fees that person incurred in connection with the action, suit, or proceeding and an action, suit, or proceeding brought to enforce the mandatory indemnification provided in this Section.

          Section 4.  Determination, Evaluation, and Authorization of Indemnification.

          (a)          Except as otherwise provided in Subsection (e) or unless ordered by a court, the Corporation shall make an indemnification under Section 1 or 2 of this Article only upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 1 or 2 of this Article and upon an evaluation of the reasonableness of expenses and amounts paid in settlement. This determination and evaluation may be made in any of the following ways:

          (1)          By a majority vote of a quorum of the Board of Directors consisting of directors who are not parties or threatened to be made parties to the action, suit, or proceeding.

          (2)          If a quorum cannot be obtained under Subsection (1) above, by majority vote of a committee duly designated by the Board and consisting solely of two or more directors not at the time parties or threatened to be made parties to the action, suit, or proceeding.

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          (3)          By independent legal counsel in a written opinion, which counsel shall be selected in one of the following ways:

          (A)          By the Board or its committee in the manner prescribed in Subsections (1) or (2) above.

          (B)          If a quorum of the Board cannot be obtained under Subsection (1) above and a committee cannot be designated under Subsection (2) above, by the Board.

          (4)          By all independent directors (as that term is defined in the Michigan Business Corporation Act) who are not parties or threatened to be made parties to the action, suit, or proceeding.

          (5)          By the shareholders, but shares held by directors, officers, employees, or agents who are parties or threatened to be made parties to the action, suit, or proceeding may not be voted.

          (b)          In the designation of a committee under Subsection (a)(2) or in the selection of independent legal counsel under Subsection (a)(3)(B), all directors may participate.

          (c)          If a person is entitled to indemnification under Section 1 or 2 for a portion of expenses, including reasonable attorney fees, judgments, penalties, fines, and amounts paid in settlement, but not for the total amount, the Corporation may indemnify the person for the portion of the expenses, judgments, penalties, fines, or amounts paid in settlement for which the person is entitled to be indemnified.

          (d)           The Corporation shall authorize payment of indemnification under this Section in one of the following ways:

          (1)          By the Board in one of the following ways:

          (A)           If there are two or more directors who are not parties or threatened to be made parties to the action, suit, or proceeding, by a majority vote of all directors who are not parties or threatened to be made parties, a majority of whom shall constitute a quorum for this purpose.

          (B)           By a majority of the members of a committee of two or more directors who are not parties or threatened to be made parties to the action, suit, or proceeding.

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          (C)           If the Corporation has one or more independent directors who are not parties or threatened to be made parties to the action, suit, or proceeding, by a majority vote of all independent directors who are not parties or are threatened to be made parties, a majority of whom shall constitute a quorum for this purpose.

          (D)           If there are no independent directors and less than two directors who are not parties or threatened to be made parties to the action, suit, or proceedings, by the vote necessary for action by the Board in accordance with Section 523 of the Michigan Business Corporation Act, in which authorization all directors may participate.

          (2)          By the shareholders, but shares held by directors, officers, employees, or agents who are parties or threatened to be made parties to the action, suit, or proceeding may not be voted on the authorization.

          (e)          To the extent that the Articles of Incorporation include a provision eliminating or limiting the liability of a director pursuant to Section 209(1)(c) of the Michigan Business Corporation Act, the Corporation may indemnify a director for the expenses and liabilities described in this Subsection without a determination that the director has met the standard of conduct set forth in Sections 1 or 2 of this Article, but no indemnification shall be made except to the extent authorized in Section 564c of the Michigan Business Corporation Act if the director received a financial benefit to which he or she was not entitled, intentionally inflicted harm on the Corporation or its shareholders, violated Section 551 of the Michigan Business Corporation Act, or intentionally committed a criminal act. In connection with an action or suit by or in the right of the Corporation as described in Section 2 of this Article, indemnification u nder this Subsection shall be for expenses, including attorneys' fees, actually and reasonably incurred. In connection with an action, suit, or proceeding other than an action, suit, or proceeding by or in the right of the Corporation, as described in Section 1 of this Article, indemnification under this Subsection shall be for expenses, including attorneys' fees, actually and reasonably incurred, and for judgments, penalties, fines, and amounts paid in settlement actually and reasonably incurred.

          Section 5.  Advances.

          (a)          The Corporation may pay or reimburse the reasonable expenses incurred by a director, officer, employee, or agent who is a party or threatened to be made a party to an action, suit, or proceeding before final disposition of the proceeding if both of the following apply:

          (1)          The person furnishes the Corporation a written affirmation of the person's good faith belief that he or she has met

- -15-

the applicable standard of conduct set forth in Section 1 or 2 of this Article.

          (2)          The person furnishes the Corporation a written undertaking, executed personally or on the person's behalf, to repay the advance if it is ultimately determined that the person did not meet the standard of conduct set forth in Section 1 or 2 of this Article.

          (b)          The undertaking required by Subsection (a)(2) above must be an unlimited general obligation of the person, but need not be secured and may be accepted without reference to the financial ability of the person to make repayment.

          (c)          Determinations and evaluations under this Section shall be made in the manner specified in Section 4(a) above, and authorizations shall be made in the manner specified in Section 4(d) above.

          (d)          A provision in the Articles of Incorporation or Bylaws, a resolution of the Board or shareholders, or an agreement making indemnification mandatory shall also make the advancement of expenses mandatory unless the provision, resolution, or agreement specifically provides otherwise.

          Section 6.  Other Indemnification Agreements.  The indemnification or advancement of expenses provided by this Article is not exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the Articles of Incorporation, these Bylaws, or a contractual agreement. The total amount of expenses advanced or indemnified from all sources combined may not exceed the amount of actual expenses incurred by the person seeking indemnification or advancement of expenses. The indemnification provided in Sections 1 to 6 of this Article continues as to a person who ceases to be a director, officer, employee, or agent and shall inure to the benefit of the person's heirs, executors, and administrators.

          Section 7.  Insurance.  The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against the person and incurred by the person in any such capacity or arising out of the person's status as such, whether or not the Corporation would have power to indemnify the person against the liability under Sections 1 to 6 of this Article. To the extent that the Articles of Incorporation include a provision eliminating or limiting the liability of a director pursuant to Section 209(1)(c) of the Michigan Business Corporation Act, the Corporation may purchase insurance on behalf of a director from an insurer owned by the Corporation, but insurance purchased from that insurer may insure a director against monetary liability to the Corporation or its shareholders only to the extent that the Corporation could indemnify the director under Section 4(e).

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          Section 8.  Constituent Corporation.  For the purposes of this Article, "Corporation" includes all constituent corporations absorbed in a consolidation or merger and the resulting or surviving corporation, so that a person who is or was a director, officer, employee, or agent of the constituent corporation or is or was serving at the request of the constituent corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise whether for profit or not shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as the person would if the person had served the resulting or surviving corporation in the same capacity.

ARTICLE VI

SHARE CERTIFICATES AND TRANSFERS

          Section 1.  Share Certificates: Required Signatures.  Except as otherwise required by the Articles of Incorporation or these Bylaws and permitted by statute, shares of the Corporation's stock shall be represented by certificates. Each certificate must be signed by one of the following: the Chairperson, a Vice Chairperson, the President, or a Vice President. Share certificates may be sealed with the seal of the Corporation or a facsimile of the seal. The signatures of the officers may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or its employee. The Corporation may issue a certificate even though the officer who has signed or whose facsimile signature has been placed upon the certificate ceases to be an officer before the certificate is issued.

          Section 2.  Replacement of Certificates.  The Corporation shall issue a new certificate for shares in place of a certificate alleged to have been lost or destroyed. The Board of Directors may require the owner of the lost or destroyed certificate, or his legal representative, to give the Corporation a bond or other security and/or execute an indemnity agreement sufficient to indemnify the Corporation against any claim that may be made against it on account of the lost or destroyed certificate or the issuance of a replacement certificate.

          Section 3.  Registered Shareholders.  The Corporation may treat the registered holder of a share as the absolute owner of the share and shall not be bound to recognize any equitable interest in or other claim to the share by any other person, whether or not the Corporation has actual notice of the interest or claim, except as otherwise provided by law.

          Section 4.  Transfer Agent and Registrar.  The Board of Directors may appoint a transfer agent and a registrar for the transfer and registration of its securities.

          Section 5.  Transfer of Shares.  A sale, assignment, exchange, conveyance, gift, pledge, hypothecation, or other transfer of shares of the Corporation's stock, whether by operation of law or otherwise, shall not be effective as to the Corporation until recorded on the Corporation's stock transfer books.

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ARTICLE VII

GENERAL PROVISIONS

          Section 1.  Dividends or Other Distributions.  By action of the Board of Directors, the Corporation may declare and pay dividends or make other distributions as permitted by law.

          Section 2.  Voting of Securities.  Unless the Board directs otherwise, the Chairperson or the President, or, during their absence or disability, the Vice Presidents in the order that the Board designates, may on behalf of the Corporation attend and vote (or execute in the name or on behalf of the Corporation a consent in writing in lieu of a meeting of shareholders or a proxy authorizing an agent or attorney-in-fact for the Corporation to attend and vote) at any meeting of security holders of any corporation in which the Corporation holds securities. At such meetings such person may exercise all rights incident to the ownership of such securities which the Corporation might exercise if present. The Board may confer this voting power upon any other person.

          Section 3.  Checks.  The Corporation's checks, drafts, and orders for the payment of money shall be signed in the name of the Corporation in the manner and by the persons that the Board of Directors designates.

          Section 4.  Signing of Instruments.  When the Board or these Bylaws authorize the signing of a contract, conveyance, or other instrument without specification of the signing officer, the Chairperson, the President, any Vice President, the Secretary, or the Treasurer may sign in the name and on behalf of the Corporation and may affix the corporate seal to the instrument. The Board may authorize other officers and agents to sign instruments in the name and on behalf of the Corporation.

          Section 5.  Corporate Books and Records.  The Corporation shall keep books and records of account and minutes of the proceedings of its shareholders, Board of Directors, and executive committee, if any. The books, records, and minutes may be kept outside the State of Michigan. The Corporation shall keep at its registered office, or at the office of its transfer agent within or without the State of Michigan, records containing the names and addresses of all shareholders, the number, class and series of shares held by each, and the dates when they respectively became holders of record. Any of the books, records, or minutes may be in written form or in any other form capable of being converted into written form within a reasonable time. The Corporation shall convert into written form without charge any record not in written form, unless otherwise requested by a person entitled to inspect the record.

          Section 6.  Seal.  The Corporation may have a seal in the form that the Board of Directors determines. The seal may be used by causing it or a facsimile to be affixed, impressed, or reproduced.

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ARTICLE VIII

AMENDMENTS

                    The shareholders or the Board of Directors may amend or repeal these Bylaws or adopt new bylaws, unless the Articles of Incorporation or these Bylaws provide that the power to adopt new bylaws is reserved exclusively to the shareholders or that the Board may not alter or repeal these Bylaws or any particular bylaw. Amendment of these Bylaws by the Board requires the vote of a majority of the directors then in office.

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EX-10.3

Exhibit 10.3

CHOICEONE FINANCIAL SERVICES, INC.
DIRECTORS' STOCK PURCHASE PLAN

Warner Norcross & Judd LLP
900 Old Kent Building
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503-2489

CHOICEONE FINANCIAL SERVICES, INC.
DIRECTORS' STOCK PURCHASE PLAN

TABLE OF CONTENTS

			Page
ARTICLE 1		Establishment and Purposes of Plan	1
	1.1	Establishment of Plan; Purposes of Plan	1
	1.2	Effective Date	1
	1.3	Number of Shares of Stock	1
ARTICLE 2		Definitions	1
	2.1	Committee	1
	2.2	Common Stock	1
	2.3	Company	1
	2.4	Director's Fee	1
	2.5	Market Value	2
	2.6	Participant	2
	2.7	Plan	2
ARTICLE 3		Administration	2
	3.1	Power and Authority	2
	3.2	Delegation of Powers; Employment of Advisers	2
	3.3	Indemnification of Committee Members	2
ARTICLE 4		Participation	3
	4.1	Eligibility to Participate	3
ARTICLE 5		Elective Payment of Director's Fees in Common Stock	3
	5.1	Payment of Directors Fees	3
	5.2	Prior Election	3
	5.3	Timing of Payments	3
	5.4	Vesting	3
ARTICLE 6		General Provisions	4
	6.1	Amendment; Termination	4
	6.2	Rights Not Assignable	4
	6.3	Unsecured Creditor Status	4
	6.4	No Trust or Fiduciary Relationship	4
	6.5	Construction	4
	6.6	Disputes	4
	6.7	Unfunded Plan	5
	6.8	Self-Employment Taxes	5
	6.9	Right of Company to Replace Directors	5
	6.10	Governing Law; Severability	5

i

CHOICEONE FINANCIAL SERVICES, INC.
DIRECTORS' STOCK PURCHASE PLAN

ARTICLE 1

Establishment and Purposes of Plan

          1.1          Establishment of Plan; Purposes of Plan. The Company hereby establishes the ChoiceOne Financial Services, Inc. Directors' Stock Purchase Plan. The purposes of the Plan are to provide an opportunity and means by which directors can increase their financial interest in the Company, and thereby increase their personal interest in the Company's continued success, through the payment of directors' fees in Company Common Stock.

          1.2          Effective Date. The "Effective Date" of the Plan is July 15, 1998. Each Plan provision applies until the effective date of an amendment of that provision.

          1.3          Number of Shares of Stock. Subject to appropriate adjustment as required in connection with any change in the capital structure of the Company, a maximum of 50,000 shares of Common Stock shall be available under the Plan.

ARTICLE 2

Definitions

          2.1          Committee. "Committee" means the Personnel and Benefits Committee of the Board of Directors or such other committee as the Board of Directors shall designate to administer the Plan. The Committee shall consist of at least two members of the Board, and all of its members shall be "non-employee directors" as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended.

          2.2          Common Stock. "Common Stock" means the common stock, without par value, of ChoiceOne Financial Services, Inc.

          2.3          Company. "Company" means ChoiceOne Financial Services, Inc.

          2.4          Director's Fee. "Director's Fee" means the amount of income payable to a Participant for service as a director, including payments for attendance at meetings of the Board of Directors or meetings of committees of the Board of Directors, and any retainer fee paid to members of the Board of Directors.

1

          2.5          Market Value. "Market Value" means the mean of the bid and asked prices of shares of Common Stock reported by the Company' s market makers on the applicable date, or if the market is closed on that date, the last preceding date on which the market was open for trading.

          2.6          Participant. "Participant" means any individual who is participating in the Plan.

          2.7          Plan. "Plan" means the ChoiceOne Financial Services, Inc. Directors' Stock Purchase Plan, as such plan may be amended, administered or interpreted from time to time.

ARTICLE 3

Administration

          3.1          Power and Authority. The Committee shall administer the Plan, shall have full power and authority to interpret the provisions of the Plan, and shall have full power and authority to supervise the administration of the Plan. All determinations, interpretations and selections made by the Committee regarding the Plan shall be final and conclusive. The Committee shall hold its meetings at such times and places as it deems advisable. Action may be taken by a written instrument signed by a majority of the members of the Committee, and any action so taken shall be fully as effective as if it had been taken at a meeting duly called and held. The Committee shall make such rules and regulations for the conduct of its business as it deems advisable. The members of the Committee shall not be paid any additional fees for their services.

          3.2          Delegation of Powers; Employment of Advisers. The Committee may delegate to any agent such duties and powers, both ministerial and discretionary, as it deems appropriate except those that may not be delegated by law or regulation. In administering the Plan, the Committee may employ attorneys, consultants, accountants or other persons, and the Company and the Committee shall be entitled to rely upon the advice, opinions or valuation of any such persons. All usual and reasonable expenses of the Committee shall be paid by the Company.

          3.3          Indemnification of Committee Members. Each person who is or shall have been a member of the Committee shall be indemnified and held harmless by the Company from and against any cost, liability or expense imposed or incurred in connection with such person's or the Committee's taking or failing to take any action under the Plan. Each such person shall be justified in relying on information furnished in connection with the Plan's administration by any appropriate person or persons.

2

ARTICLE 4

Participation

          4.1          Eligibility to Participate. A director shall be eligible to become a Participant in the Plan on the first day of the individual's term as a director.

ARTICLE 5

Elective Payment of Director's Fees in Common Stock

          5.1          Payment of Director' s Fees. A Participant may elect to receive payment of 25%, 50%, 75% or 100% of Director's Fees in the form of Common Stock. On each quarterly payment date, the Participant shall receive a number of shares of Common Stock (rounded to the nearest whole share) determined by dividing the dollar amount of fees payable that the director has elected to receive in Common Stock by the Market Value of Common Stock on the day before the quarterly payment date.

          5.2          Prior Election. The election to receive Director's Fees in the form of Common Stock shall be made by the Participant on a form provided for that purpose prior to a quarterly payment date. The election shall continue in effect until revoked or modified for a subsequent quarterly payment date by the Participant.

          5.3          Timing of Payments. Payment shall be made to the Participant on each January 1, April 1, July 1, October 1 or such other dates on which the Director's Fees would have been payable to the Participant if the Participant had not made an election to receive Director' s Fees in the form of Common Stock.

          5.4          Vesting. The right to receive shares of Common Stock equal to the quotient of Director' s Fees payable divided by the Market Value of Common Stock on the quarterly payment date shall not be subject to forfeiture for any reason.

ARTICLE 6

General Provisions

          6.1          Amendment; Termination. The Company reserves the right to amend the Plan prospectively or retroactively, in whole or in part, or to terminate the Plan, provided that no change or amendment may be made more than once every six months and that an amendment or termination may not reduce or revoke shares of Common Stock accrued and the amounts represented by them

3

promised to be paid to Participants as of the later of the date of adoption of the amendment or the effective date of the amendment or termination.

          6.2          Rights Not Assignable. Amounts promised under the Plan shall not be subject to assignment, conveyance, transfer, anticipation, pledge, alienation, sale, encumbrance or charge, whether voluntary or involuntary, by the Participant, even if directed under a qualified domestic relations order or other divorce order. An interest in any amount shall not provide collateral or security for a debt of a Participant or be subject to garnishment, execution, assignment, levy or to another form of judicial or administrative process or to the claim of a creditor of a Participant through legal process or otherwise. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or to otherwise dispose of benefits payable, before actual receipt of the benefits, or a right to receive benefits, shall be void and shall not be recognized.

          6.3          Unsecured Creditor Status. A Participant shall be an unsecured general creditor of the Company as to the payment of any benefit under the Plan. The right of any Participant to be paid the amount promised in the Plan shall be no greater than the right of any other general, unsecured creditor of the Company.

          6.4          No Trust or Fiduciary Relationship. Nothing contained in the Plan shall be deemed to create a trust or fiduciary relationship of any kind for the benefit of any Participant.

          6.5          Construction. The singular includes the plural, and the plural includes the singular, unless the context clearly indicates the contrary. Capitalized terms (except those at the beginning of a sentence or part of a heading) have the meaning specified in the Plan. If a capitalized term is not defined in the Plan, the term shall have the general, accepted meaning of the term.

          6.6          Disputes. In the event that a dispute arises regarding the eligibility to participate in the Plan or any other matter relating to Plan participation, such dispute shall be made to the Committee. The determination by the Committee with respect to such disputes shall be final and binding on all parties. In the event that a dispute arises regarding the amount of any benefit payment under the Plan that is not related to Participant eligibility disputes, the Committee may appoint a qualified independent certified public accountant to determine the amount of payment and such determination shall be final and binding on all parties.

          6.7          Unfunded Plan. This shall be an unfunded plan within the meaning of the Internal Revenue Code of 1986, as amended. Benefits provided in the Plan constitute only an unsecured contractual promise to pay in accordance with the terms of the Plan by the Company.

          6.8          Self-Employment Taxes. To the extent that amounts paid under the Plan are deemed to be net earnings from self-employment, each director shall be responsible for any taxes payable under federal, state or local law.

4

          6.9          Right of Company to Replace Directors. Neither the action of the Company in establishing the Plan, nor any provision of the Plan, shall be construed as giving any director the right to be retained as a director, or any right to any payment whatsoever except to the extent of the benefits provided for by the Plan. The Company expressly reserves the right at any time to replace or fail to renominate any director without any liability for any claim against the Company for any payment whatsoever except to the extent provided for in the Plan. The Company has no obligation to create any other or subsequent deferred compensation plan for directors.

          6.10          Governing Law; Severability. The Plan shall be construed, regulated and administered under the laws of the State of Michigan. If any provisions of the Plan shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the remaining provisions of the Plan, and the Plan shall be deemed to be modified to the least extent possible to make it valid and enforceable in its entirety.

5

EX-13

EXHIBIT 13

CHOICEONE FINANCIAL SERVICES, INC.

2008

ANNUAL REPORT TO SHAREHOLDERS

CHOICEONE FINANCIAL SERVICES, INC.

2008 Annual Report to Shareholders

Contents
To Our Shareholders	1
About ChoiceOne Financial Services, Inc	1
Stock Information	1
Selected Financial Data	3
Management's Discussion and Analysis of Financial Condition and Results of Operations	4
Management's Report on Internal Control Over Financial Reporting	17
Report of Independent Registered Public Accounting Firm	18
Consolidated Financial Statements	19
Notes to Consolidated Financial Statements	23
Corporate and Shareholder Information	45
Directors and Officers	46

TO OUR SHAREHOLDERS

This 2008 Annual Report to Shareholders contains our audited financial statements, detailed financial review and all of the information that regulations of the Securities and Exchange Commission (the "SEC") require to be presented in annual reports to shareholders. For legal purposes, this is the ChoiceOne Financial Services, Inc. 2008 Annual Report to Shareholders. Although attached to our proxy statement, this report is not part of our proxy statement, is not considered to be soliciting material and is not considered to be filed with the SEC except to the extent that it is expressly incorporated by reference in a document filed with the SEC. Shareholders who would like to receive even more detailed information than that contained in this 2008 Annual Report to Shareholders are invited to request our Annual Report on Form 10-K.

Our Annual Report on Form 10-K for the year ended December 31, 2008, including the financial statements and financial statement schedules, will be provided to any shareholder, without charge, upon written request to Mr. Thomas Lampen, Treasurer, ChoiceOne Financial Services, Inc., 109 East Division Street, Sparta, Michigan 49345.

ABOUT CHOICEONE FINANCIAL SERVICES, INC.

ChoiceOne Financial Services, Inc. is a single-bank holding company. Its principal banking subsidiary, ChoiceOne Bank (Sparta, Michigan), primarily serves communities in portions of Kent, Muskegon, Newaygo, and Ottawa counties in Michigan where the Bank's offices are located and the areas immediately surrounding those communities. Currently the Bank serves those markets through thirteen full-service offices. ChoiceOne Insurance Agencies, Inc. is a wholly-owned subsidiary of ChoiceOne Bank and sells insurance and investment products. ChoiceOne Mortgage Company of Michigan, a wholly-owned subsidiary of ChoiceOne Bank, was formed on January 1, 2002 and has been engaged in mortgage lending. As of December 31, 2008, ChoiceOne consolidated the operations of ChoiceOne Mortgage Company of Michigan into ChoiceOne Bank and eliminated the separate mortgage company subsidiary.

ChoiceOne's business is primarily concentrated in a single industry segment - banking. ChoiceOne Bank is a full-service banking institution that offers a variety of deposit, payment, credit and other financial services to all types of customers. These services include time, savings, and demand deposits, safe deposit services, and automated transaction machine services. Loans, both commercial and consumer, are extended primarily on a secured basis to corporations, partnerships and individuals. Commercial lending covers such categories as business, industry, agricultural, construction, inventory and real estate. ChoiceOne Bank's consumer loan department and ChoiceOne Mortgage Company of Michigan (through December 31, 2008) make direct loans to consumers and purchasers of residential property.

The principal source of revenue for ChoiceOne is interest and fees on loans. On a consolidated basis, interest and fees on loans accounted for 74%, 70%, and 73% of total revenues in 2008, 2007, and 2006, respectively. Interest from securities accounted for 12%, 11%, and 12% of total revenues in 2008, 2007, and 2006, respectively.

STOCK INFORMATION

Several brokers trade ChoiceOne's common shares in the over-the-counter bulletin board market. There is no well-established public trading market for the shares and trading activity is infrequent. ChoiceOne's trading volume and recent share price information can be viewed under the symbol 'COFS.OB' on certain financial websites.

The range of high and low bid prices for shares of common stock for each quarterly period during the past two years is as follows:

	2008		2007
	Low	High	Low	High
First Quarter	$ 10.65	$13.95	$ 16.25	$ 17.80
Second Quarter	9.00	13.25	15.05	17.25
Third Quarter	8.50	11.50	13.65	16.25
Fourth Quarter	7.10	10.75	11.05	16.00

The prices listed above are over-the-counter market quotations reported to ChoiceOne by its market makers listed in this annual report. The over-the-counter market quotations reflect inter-dealer prices without retail markup, markdown or commission and may not necessarily represent actual transactions.

As of February 27, 2009, there were 3,247,430 shares of ChoiceOne Financial Services, Inc. common stock issued and outstanding. As of February 27, 2009, there were 844 shareholders of record of ChoiceOne Financial Services, Inc. common stock.

1

The following table summarizes cash dividends declared per share of common stock during 2008 and 2007:

	2008	2007
First Quarter	$ 0.17	$ 0.17
Second Quarter	0.17	0.17
Third Quarter	0.17	0.17
Fourth Quarter	0.17	0.17
Total	$ 0.68	$ 0.68

ChoiceOne's principal source of funds to pay cash dividends is the earnings and dividends paid by ChoiceOne Bank. ChoiceOne Bank is restricted in its ability to pay cash dividends under current banking regulations. See Note 23 to the consolidated financial statements for a description of these restrictions. Based on information presently available, management expects ChoiceOne to declare and pay regular quarterly cash dividends in 2009, although the amount of the quarterly dividends could be reduced depending upon market conditions and ChoiceOne's requirements for cash and capital, among other things.

2

ChoiceOne Financial Services, Inc.
SELECTED FINANCIAL DATA

(Dollars in thousands)

		2008			2007			2006			2005			2004
For the year
Net interest income	$	15,331		$	15,143		$	8,748		$	8,045		$	7,672
Provision for loan losses		3,475			2,035			200			495			465
Noninterest income		4,083			6,481			2,877			2,580			2,570
Noninterest expense		14,711			15,070			8,698			7,184			7,228
Income before income taxes		1,228			4,519			2,727			2,946			2,549
Income tax expense/(benefit)		(207	)		939			639			780			695
Net income		1,435			3,580			2,088			2,166			1,854
Cash dividends declared		2,202			2,200			1,397			1,105			1,065
Per share *
Basic earnings	$	0.44		$	1.11		$	1.09		$	1.31		$	1.13
Diluted earnings		0.44			1.10			1.09			1.31			1.13
Cash dividends declared		0.68			0.68			0.68			0.67			0.65
Shareholders' equity (at year end)		16.08			16.45			15.85			13.16			12.77
Average for the year
Securities	$	85,086		$	84,059		$	57,407		$	44,741		$	42,361
Gross loans		326,420			328,335			205,851			180,100			170,045
Deposits		347,190			358,244			222,287			173,419			156,837
Federal Home Loan Bank advances		38,803			27,061			26,073			32,765			36,652
Shareholders' equity		53,411			52,205			27,349			21,338			20,753
Assets		465,741			465,143			288,407			237,864			223,742
At year end
Securities	$	81,941		$	87,725		$	81,417		$	47,211		$	47,858
Gross loans		325,977			328,358			331,631			185,832			173,559
Deposits		346,998			351,844			366,380			182,112			167,066
Federal Home Loan Bank advances		39,957			35,933			23,908			30,750			34,250
Shareholders' equity		52,185			53,142			51,519			21,717			21,069
Assets		463,551			470,155			466,650			248,110			232,285
Selected financial ratios
Return on average assets		0.31	%		0.77	%		0.72	%		0.91	%		0.83	%
Return on average shareholders' equity		2.69			6.86			7.63			10.15			8.93
Cash dividend payout as a percentage
of net income		153.45			61.45			66.91			51.02			57.44
Shareholders' equity to assets (at year end)		11.26			11.30			11.04			8.75			9.07

*  Per share amounts are retroactively adjusted for the effect of stock dividends and stock splits.

In November 2006, ChoiceOne merged with Valley Ridge Financial Corp. Accordingly, two months of combined operations are included in the 2006 results of operations and all assets acquired and liabilities assumed from Valley Ridge Financial Corp. are included in the 2006 year-end balance sheet. See Note 2 to the consolidated financial statements for information concerning the merger.

3

ChoiceOne Financial Services, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is designed to provide a review of the consolidated financial condition and results of operations of ChoiceOne Financial Services, Inc. ("ChoiceOne" or the "Company"), and its wholly-owned subsidiaries, ChoiceOne Bank (the "Bank"), ChoiceOne Insurance Agencies, Inc. (the "Insurance Agency"), and ChoiceOne Mortgage Company of Michigan (the "Mortgage Company"). As of December 31, 2008, ChoiceOne consolidated the operations of the Mortgage Company into the Bank and eliminated the mortgage company subsidiary. This discussion should be read in conjunction with the consolidated financial statements and related footnotes.

FORWARD-LOOKING STATEMENTS

This discussion and other sections of this annual report contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and ChoiceOne itself. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "may," "could," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, ChoiceOne undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

Risk factors include, but are not limited to, the risk factors discussed in Item 1A of the Company's Annual Report on Form 10-K; changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior as well as their abilities to repay loans; changes in the local and national economies; changes in market conditions; the possibility that anticipated cost savings and revenue enhancements from the merger with Valley Ridge Financial Corp. may not be realized in full or at all or within the expected time frames; the level and timing of asset growth; various other local and global uncertainties such as acts of terrorism and military actions; and current uncertainties and fluctuations in the financial markets and stocks of financial services providers due to concerns about credit availability and concerns about the Michigan economy in particular. These are representative of the risk factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The purpose of this section of the annual report is to provide a narrative discussion about the Company's financial condition and results of operations during 2008. Management's discussion and analysis of financial condition and results of operations as well as disclosures found elsewhere in the annual report are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the allowance for loan losses and loan servicing rights. Actual results could differ from those estimates.

Securities
Securities available for sale may be sold prior to maturity due to changes in interest rate, prepayment risks, yield, availability of alternative investments, liquidity needs, credit rating changes, or other factors. Securities classified as available for sale are reported at their fair value. Declines in the fair value of securities below their cost that are considered to be "other than temporary" are recorded as losses in the income statement. In estimating whether a fair value decline is considered to be "other than temporary," management considers the length of time and extent that the security's fair value has been less than its carrying value, the financial condition and near term prospects of the issuer, and the Bank's ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Market values for securities available for sale are obtained from outside sources and applied to individual securities within the portfolio. The difference between the amortized cost and the fair value of securities is recorded as a valuation adjustment and reported net of tax effect in other comprehensive income.

Allowance for Loan Losses
The allowance for loan losses is maintained at a level believed adequate by management to absorb probable incurred losses inherent in the consolidated loan portfolio. Management's evaluation of the adequacy of the allowance is an estimate based on reviews of

4

individual loans, assessments of the impact of current economic conditions on the portfolio and historical loss experience of seasoned loan portfolios.

Management believes the accounting estimate related to the allowance for loan losses is a "critical accounting estimate" because (1) the estimate is highly susceptible to change from period to period because of assumptions concerning the changes in the types and volumes of the portfolios and current economic conditions and (2) the impact of recognizing an impairment or loan loss could have a material effect on the Company's assets reported on the balance sheet as well as its net income.

Loan Servicing Rights
Loan servicing rights represent the estimated value of servicing loans that are sold with servicing retained by ChoiceOne. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Management's accounting treatment of loan servicing rights is estimated based on current prepayment speeds that are typically market driven.

Management believes the accounting estimate related to loan servicing rights is a "critical accounting estimate" because (1) the estimate is highly susceptible to change from period to period because of significant changes within long-term interest rates affecting the prepayment speeds for current loans being serviced and (2) the impact of recognizing an impairment loss could have a material effect on ChoiceOne's net income. Management has obtained a third-party valuation of its loan servicing rights to corroborate its current carrying value at the end of each reporting period.

Goodwill
Generally accepted accounting principles require that the fair value of the assets and liabilities of an acquired entity be recorded at their fair value on the date of acquisition. The fair values are determined using both internal computations and information obtained from outside parties when deemed necessary. The net difference between the price paid for the acquired company and the net value of its balance sheet is recorded as goodwill. Statement of Financial Accounting Standards Number 142, Goodwill and Other Intangible Assets (SFAS 142) requires that goodwill be evaluated for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Taxes
Income taxes includes both a current and deferred portion. Deferred tax assets and liabilities are recorded to account for differences in the timing of the recognition of revenues and expenses for financial reporting and tax purposes. Statement of Financial Accounting Standards Number 109, Accounting for Income Taxes (SFAS 109) requires that deferred tax assets be reviewed to determine whether a valuation allowance should be established using a "more likely than not" standard. Based on its review of ChoiceOne's deferred tax assets as of December 31, 2008, management determined that no valuation allowance was necessary.

MERGER WITH VALLEY RIDGE FINANCIAL CORP.

On November 1, 2006, ChoiceOne merged with Valley Ridge Financial Corp. ("VRFC"). At the time of the merger, VRFC was roughly equal in size in terms of assets with ChoiceOne. The 2006 results of operations include two months of combined financial results after the close of the merger and the 2006 year-end balance sheet includes all of the assets acquired and all of the liabilities assumed from VRFC in the merger. Therefore, a comparison of 2008 and 2007 financial condition and results of operations to 2006 financial condition and results of operations is materially affected as a result of the merger. For more detailed information concerning the merger, see Note 2 to the consolidated financial statements.

RESULTS OF OPERATIONS

Summary

(Dollars in thousands)		Year ended December 31
		2008			2007			2006
Net interest income	$	15,331		$	15,143		$	8,748
Provision for loan losses		(3,475	)		(2,035	)		(200	)
Noninterest income		4,083			6,481			2,877
Noninterest expense		(14,711	)		(15,070	)		(8,698	)
Income tax (expense)/benefit		207			(939	)		(639	)
Net income	$	1,435		$	3,580		$	2,088

	2008		2007		2006
Return on average assets	0.31	%	0.77	%	0.72	%
Return on average equity	2.69	%	6.86	%	7.63	%

5

Net income for 2008 was $1,435,000, which represented a $2.1 million or 60% decrease from 2007. The decrease in net income was due to an elevated provision for loan losses in 2008 as well as a lower level of noninterest income compared to the prior year. The increased provision for loan losses was primarily due to a higher level of charge-offs in 2008 than in 2007. The reduction in noninterest income in 2008 compared to 2007 was principally due to nonrecurring events in both years. Noninterest income in 2007 included a gain of $875,000 from the sale of ChoiceOne's property and casualty lines of business in October 2007. As a result of the sale, insurance commission income was $522,000 lower in 2008 than in 2007. Noninterest income was affected in 2008 by a $435,000 loss recognized upon the conversion of a money market preferred security to preferred stock. Noninterest income was also affected by a $432,000 loss on a money market preferred security when its decline in market value was considered to be an o ther than temporary impairment. The effect of the increase in the provision for loan losses and the decrease in noninterest income was partially offset by a reduction in noninterest expense in 2008 compared to 2007. The noninterest expense change was caused by reduced expenses from the sale of the property and casualty lines of business in late 2007.

Net income for 2007 was $3,580,000 or $1.5 million higher than net income for 2006. The increase in net income from 2006 was primarily due to a complete year of combined results after the VRFC merger that was completed in November 2006. A contributing factor to the increase in noninterest income was a nonrecurring pre-tax gain of $875,000 recognized during 2007 from the sale of ChoiceOne's property and casualty insurance lines of business. Offsetting these increases was growth in expense for the provision for loan losses of $1.8 million compared to the prior year. The increased provision was a result of increased charge-offs experienced during 2007, deterioration in certain commercial credits, and continued concerns regarding the Michigan economy. Noninterest expense was impacted by a full year of amortization of the core deposit intangible and other intangible assets in 2007, which caused expense related to these assets to be $498,000 in 2007 compared to $77,000 in 2006.

Dividends
Cash dividends of $2,202,000 or $0.68 per common share were declared in 2008, compared to $2,200,000 or $0.68 per common share in 2007 and $1,397,000 or $0.68 per common share in 2006. The increase in dividend dollars from 2006 to 2007 was due to the 1.6 million shares of common stock issued in November 2006 in connection with the merger with VRFC. The dividend yield on ChoiceOne's common stock was 6.50% in 2008, compared to 4.38% in 2007 and 3.78% in 2006. The cash dividend payout as a percentage of net income was 153% in 2008, compared to 61% in 2007 and 67% in 2006.

ChoiceOne's principal source of funds to pay cash dividends is the earnings of the Bank. The availability of these earnings is dependent upon the capital needs, regulatory constraints and other factors involving the Bank. Regulatory constraints include the maintenance of minimum capital ratios and limits based on net income and retained earnings of the Bank for the past three years. ChoiceOne expects to pay quarterly cash dividends in 2009 to shareholders based on the actual earnings of the Bank, which may be less than dividends paid in prior years.

6

Table 1 - Average Balances and Tax-Equivalent Interest Rates

(Dollars in thousands)

					Year ended December 31
	2008				2007				2006
	Average Balance	Interest	Rate		Average Balance	Interest	Rate		Average Balance	Interest	Rate
Assets
Loans (1) (2)	$ 326,420	$ 22,677	6.95	%	$ 328,335	$ 24,839	7.57	%	$ 205,851	$ 14,907	7.24	%
Taxable securities (3)	39,160	2,105	5.38		43,525	2,237	5.14		36,032	1,598	4.43
Tax-exempt securities (1)	45,926	2,609	5.68		40,534	2,507	6.18		21,375	1,327	6.21
Other	2,527	66	2.61		1,472	79	5.39		1,752	97	5.54
Interest-earning assets	414,033	27,457	6.63		413,866	29,662	7.17		265,010	17,929	6.77
Noninterest-earning assets (4)	51,708				51,277				23,397
Total assets	$ 465,741				$ 465,143				$ 288,407
Liabilities and Shareholders' Equity    Interest-bearing
demand deposits	$  89,035	1,295	1.45	%	$  90,804	2,204	2.43	%	$  56,617	1,492	2.64	%
Savings deposits	30,554	140	0.46		28,097	139	0.50		11,524	58	0.50
Certificates of deposit	173,963	7,497	4.31		187,648	9,113	4.86		126,535	5,637	4.45
Advances from FHLB	38,803	1,704	4.39		27,061	1,405	5.19		26,073	1,182	4.53
Other	19,928	567	2.85		20,069	761	3.79		9,750	328	3.36
Interest-bearing liabilities	352,283	11,203	3.18		353,679	13,622	3.85		230,499	8,697	3.77
Demand deposits	53,638				51,695				27,611
Other noninterest-bearing       liabilities	6,409				7,564				2,948
Total liabilities	412,330				412,938				261,058
Shareholders' equity	53,411				52,205				27,349
Total liabilities and          shareholders' equity	$ 465,741				$ 465,143				$ 288,407
Net interest income    (tax-equivalent basis) -    interest spread		16,254	3.45	%		16,040	3.32	%		9,232	3.00	%
Tax-equivalent adjustment (1)		(923	)			(897	)			(484	)
Net interest income		$ 15,331				$ 15,143				$  8,748
Net interest income as a    percentage of earning assets    (tax-equivalent basis)			3.93	%			3.88	%			3.48	%

(1)	Interest on nontaxable securities and loans has been adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets. The adjustment uses an incremental tax rate of 34% for the years presented.
(2)	Interest on loans included net origination fees charged on loans of approximately $758,000, $739,000, and $402,000 in 2008, 2007, and 2006, respectively.
(3)	Interest on taxable securities includes dividends on Federal Home Loan Bank and Federal Reserve Bank stock.
(4)	Noninterest-earning assets include loans on a nonaccrual status, which averaged approximately $7,075,000, $6,063,000, and $1,844,000 in 2008, 2007, and 2006, respectively.

Net Interest Income
As shown in Tables 1 and 2, tax-equivalent net interest income increased $214,000 in 2008 compared to 2007. The reasons for the increase were evenly split between small amounts due to the relationship between average interest-earning assets and interest-bearing liabilities and a slightly larger net interest spread. Average interest-earning assets grew $167,000 in 2008 compared to 2007, while average interest-bearing liabilities declined $1,396,000 when comparing the two years. The growth in assets and reduction of liabilities caused an increase of $108,000 in net interest income in 2008 compared to 2007. ChoiceOne's net interest spread increased by 13 basis points in 2008 compared to 2007, which contributed $106,000 toward the increase in net interest income in 2008. The

7

decline in general market interest rates in 2008 caused almost all of the rates earned on assets and paid on liabilities to be lower than in the prior year.

The average balance of loans declined $1.9 million in 2008 compared to 2007. This decline, coupled with a 62 basis point decrease in the average rate earned on loans, caused interest income on loans to fall $2.2 million in 2008 compared to 2007. Interest income from loans included $659,000 in 2008 of accretion income from purchase accounting adjustments on loans acquired from the merger with VRFC in November 2006, compared to $327,000 in 2007. The average balance of total securities rose by $1.0 million in 2008 compared to the prior year. Interest income from securities was virtually unchanged as the effect of the balance growth was offset by overall lower average rates earned. A decrease in the average rates earned on other interest-earning assets (primarily federal funds sold) was partially offset by average balance growth and resulted in a small decrease in interest income.

The average balance of interest-bearing demand deposits decreased $1.8 million in 2008 compared to 2007. The effect of this decrease along with a 98 basis point decrease in the average rate paid caused interest expense to be $909,000 lower in 2008 than in the prior year. The effect of growth in the average balance of savings deposits was virtually offset by a small decline in the average rate paid in 2008 compared to 2007. The average balance of certificates of deposit was $13.7 million lower in 2008 than in 2007. The certificates of deposit change was caused by a $15.8 million reduction in the average balance of brokered certificates of deposit from 2007 to 2008. ChoiceOne replaced the more expensive brokered funding with less costly local deposits and advances from the Federal Home Loan Bank. A decrease of $1,616,000 in interest expense from certificates of deposit was caused by the average balance decrease mentioned above as well as a 55 basis point reduction in the average rate paid from 2007 to 2008. Interest expense from Federal Home Loan Bank advances was $299,000 higher in 2008 than in 2007 due to growth of $11.7 million in the average balance of advances, which was partially offset by the effect of an 80 basis point drop in the average rate paid. Interest expense paid on other interest-bearing liabilities fell $194,000 in 2008 compared to 2007 due to both a small decrease in the average balance and a 94 basis point decline in the average rate paid.

ChoiceOne's net interest income spread was 3.45% (shown in Table 1) for 2008, compared to 3.32% in 2007. The average yield received on interest-earning assets in 2008 decreased 54 basis points to 6.63% while the average rate paid on interest-bearing liabilities in 2008 fell 67 basis points to 3.18%.

Table 2 - Changes in Tax-Equivalent Net Interest Income

(Dollars in thousands)

	Year ended December 31
	2008 Over 2007									2007 Over 2006
	Total			Volume			Rate			Total			Volume			Rate
Increase (decrease) in interest income (1)
Loans (2)	$	(2,162	)	$	(143	)	$	(2,019	)	$	9,932		$	9,238		$	694
Taxable securities		(132	)		(231	)		99			639			362			277
Tax-exempt securities (2)		102			315			(213	)		1,180			1,185			(5	)
Other		(13	)		40			(53	)		(18	)		(15	)		(3	)
Net change in tax-equivalent income		(2,205	)		(19	)		(2,186	)		11,733			10,770			963
Increase (decrease) in interest expense (1)
Interest-bearing transaction accounts		(909	)		(42	)		(867	)		712			838			(126	)
Savings deposits		1			13			(12	)		81			82			(1	)
Certificates of deposit		(1,616	)		(633	)		(983	)		3,476			2,929			547
Advances from Federal Home Loan Bank		299			540			(241	)		223			46			177
Other		(194	)		(5	)		(189	)		433			387			46
Net change in interest expense		(2,419	)		(127	)		(2,292	)		4,925			4,282			643
Net change in tax-equivalent          net interest income	$	214		$	108		$	106		$	6,808		$	6,488		$	320

(1)

The volume variance is computed as the change in volume (average balance) multiplied by the previous year's interest rate. The rate variance is computed as the change in interest rate multiplied by the previous year's volume (average balance). The change in interest due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

(2)

Interest on tax-exempt securities and loans has been adjusted to a fully tax-equivalent basis using an incremental tax rate of 34% for the years presented.

8

Tax-equivalent net interest income increased $6,808,000 in 2007 compared to 2006. Most of the income increase resulted from growth in earning assets of $149 million due to the merger with VRFC in November 2006. An improvement of 32 basis points in the net interest spread also contributed to the income expansion. A decreased reliance on brokered certificates of deposit during 2007 aided the interest spread. Interest income included $327,000 in 2007 of accretion income from purchase accounting adjustments on loans acquired from the merger with VRFC in November 2006, compared to $60,000 in 2006.

Management anticipates that the level of net interest income in 2009 will depend upon the Bank's ability to grow or maintain loan balances as well as its ability to do the same with its base of core deposits. Growth in earning assets may prove to be difficult in 2009 given the continued weakness in the Michigan economy. Additionally, if general market interest rates continue to remain at a relatively low level it may have an impact on ChoiceOne's net interest spread as new activity, maturities, and payments may have differing impacts on interest-earning assets and interest-bearing liabilities.

Allowance and Provision For Loan Losses
Information regarding the allowance and provision for loan losses can be found in Table 3 below:

Table 3 - Provision and Allowance For Loan Losses

(Dollars in thousands)

		2008			2007			2006			2005			2004
Allowance for loan losses at beginning of year	$	3,600		$	3,569		$	1,963		$	1,739		$	1,974
Charge-offs:
Agricultural		-			33			-			-			-
Commercial and industrial		1,193			599			221			72			689
Real estate - commercial		816			841			-			25			66
Real estate - construction		-			-			-			20			-
Real estate - residential		1,252			191			92			120			41
Consumer		567			635			200			162			144
Total		3,828			2,299			513			399			940
Recoveries:
Agricultural		-			3			-			-			-
Commercial and industrial		60			27			51			47			58
Real estate - commercial		35			1			-			-			-
Real estate - construction		-			-			-			-			-
Real estate - residential		6			10			-			-			-
Consumer		252			254			117			81			182
Total		353			295			168			128			240
Net charge-offs		3,475			2,004			345			271			700
Provision for loan losses		3,475			2,035			200			495			465
Allowance for loan losses acquired from VRFC		-			-			1,751			-			-
Allowance for loan losses at end of year	$	3,600		$	3,600		$	3,569		$	1,963		$	1,739
Allowance for loan losses as a percentage of:
Total loans as of year end		1.10	%		1.10	%		1.08	%		1.06	%		1.00	%
Nonaccrual loans, accrual loans past due 90       days or more and troubled debt       restructurings		39	%		62	%		53	%		203	%		212	%
Ratio of net charge-offs to average total loans
outstanding during the year		1.06	%		0.61	%		0.17	%		0.15	%		0.41	%
Loan recoveries as a percentage of prior year's
charge-offs		15	%		58	%		42	%		14	%		24	%

As shown in Table 3, the provision for loan losses was $1,440,000 higher in 2008 than in 2007. The higher provision level resulted from an increase of $1,471,000 in net charge-offs experienced in 2008 compared to 2007. Net charge-offs of commercial and

9

industrial loans were $1,133,000 in 2008, which represented an increase of $561,000 from 2007. Approximately $417,000 of the commercial and industrial charge-offs in 2008 was related to one borrower who committed fraud. Residential real estate loan net charge-offs were $1,246,000 in 2008, which represented an increase of $1,065,000 from 2007. Residential charge-offs were comprised of a number of small loans with approximately 73% of charge-off dollars coming from first mortgage loans and 27% from second mortgage loans. None of the residential charge-offs in 2008 were related to sub-prime mortgage loans. The elevated residential charge-off level in 2008 was due to the deteriorating economic conditions in ChoiceOne's market areas and the impact upon borrowers' abilities to make their loan payments. The allowance for loan losses as a percentage of total loans was 1.10% at both the end of 2008 and 2007. The coverage ratio of the allowance for loan losses to nonperforming loans declined from 62% as of December 31 , 2007 to 39% as of December 31, 2008. ChoiceOne had $545,000 of specific allowance allocations for problem loans as of the end of 2008, compared to $854,000 as of the prior year end. Management believes the specific reserves allocated to certain problem loans at the end of 2008 and 2007 are reasonable based on the circumstances surrounding each particular borrower.

The following schedule presents an allocation of the allowance for loan losses to the various loan categories as of the years ended December 31:

(Dollars in thousands)

		2008		2007		2006		2005		2004
Agricultural	$	242	$	397	$	314	$	202	$	169
Commercial and industrial		616		873		1,160		1,060		939
Real estate - commercial		996		886		1,029		254		265
Real estate - construction		5		10		12		19		32
Real estate - residential		1,124		881		575		229		181
Consumer		351		489		289		195		123
Unallocated		266		64		190		4		30
Total allowance for loan losses	$	3,600	$	3,600	$	3,569	$	1,963	$	1,739

The decrease in the allowance allocation to agricultural loans from 2007 to 2008 was based on the limited charge-off activity experienced by this loan category. The decrease in the allocation to commercial and industrial loans in 2008 was due to a reduction in specific allowance allocations to this loan category from $571,000 as of December 31, 2007 to $75,000 as of December 31, 2008. Approximately $425,000 of the decrease in specific allocations during 2008 was caused by loans that were charged off during 2008. The increase in the allocation to commercial real estate loans in 2008 was caused by an increase in specific allowance allocations from $283,000 at the end of 2007 to $470,000 at the end of 2008. The growth in the allowance allocation to residential real estate mortgage loans resulted from the increase in charge-offs in this loan category during 2008, which indicated a higher level of risk in this loan category than in prior years. The decrease in the allowance allocation to consumer loans in 2008 was based on the decline in net charge-offs during the year. The increase in the total allowance in 2006 was related to the allowance of $1,751,000 acquired from the merger with VRFC in November 2006.

Management maintains the allowance at a level at which it believes adequately provides for losses inherent in the loan portfolio. Such losses are estimated by a variety of factors, including specific examination of certain borrowing relationships and consideration of historical losses incurred on certain types of credits. Management focuses on early identification of problem credits through ongoing reviews by management and the independent loan review function. Based on the current state of the economy and a recent review of the loan portfolio, management believes that the allowance for loan losses as of December 31, 2008 is adequate. As charge-offs, changes in the level of nonperforming loans, and changes within the composition of the loan portfolio occur, the provision and allowance for loan losses will be reviewed by the Bank's management and adjusted as necessary.

Noninterest Income
Total noninterest income decreased $2,398,000 or 37% in 2008 compared to 2007. Insurance and investment commission income declined $368,000 in 2008 compared to 2007. The decrease in commission income was due to the sale of ChoiceOne's property and casualty insurance lines of business in October 2007, which caused insurance commission income to be $522,000 lower in 2008 than in the prior year. The sale of the insurance lines of business caused an $875,000 gain to be recorded in the fourth quarter of 2007. Gains on sales of loans decreased $72,000 in 2008 compared to 2007 due to a lower volume of residential mortgage loans sold into the secondary market. The $401,000 loss on sales of securities in 2008 was due to $435,000 loss recognized when a money market preferred security was converted to preferred stock. The $432,000 loss on other than temporary impairment of securities resulted when a decline in the market value of another money market preferred security was considered to be other than temporary. A decre ase of $150,000 in other noninterest income in 2008 compared to 2007 was caused by a number of small items.

10

Total noninterest income increased $3.6 million or 125% in 2007 compared to 2006. Customer service charges on deposit accounts were up $1.9 million primarily due to a full year of combined results from the merger with VRFC. An expanded overdraft program was also offered to banking customers beginning in January 2007 which enhanced service charges for the last three quarters of 2007. Insurance and investment commissions increased by $306,000 in 2007 compared to 2006 primarily from the acquisition of a book of business from an investment agent affiliated with VRFC. This book of business was purchased from the agent in January 2007 and the premium paid is being amortized over a 10-year period. The gain on the sale of an insurance book of business was related to the sale of ChoiceOne's property and casualty insurance lines of business. The sale was recorded in October 2007 and a nonrecurring pre-tax gain of $875,000 was recognized. Gains on sales of loans were up slightly due to a higher volume of residential real estate loans originated for sale. Earnings on life insurance policies increased $215,000 in 2007 due to ChoiceOne acquiring $5.7 million of bank-owned life insurance policies in the merger with VRFC. Miscellaneous other noninterest income was up $194,000 in 2007 compared to 2006 as a result of increased check printing fees, ATM surcharge fees, safe deposit box fees, certificate of deposit withdrawal penalties and credit card fees resulting from more activity due to the merger with VRFC. These were offset by a $147,000 decrease in profit-sharing income resulting from the sale of the insurance lines of business.

Management estimates that noninterest income may increase in 2009 if losses on sales of securities are lower than the amount experienced in 2008. In addition, management plans to continue its emphasis of growth of checking and savings deposit accounts in 2009, which could cause an increase in deposit service charges.

Noninterest Expense
Total noninterest expense decreased $359,000 or 2% in 2008 compared to 2007. Salaries and benefits expense was $569,000 lower in 2008 than in 2007. Much of the reduction was due to the sale of ChoiceOne's property and casualty lines of business in October 2007, which eliminated the ongoing compensation costs related to this activity. Salaries and benefits expense was also impacted by a $175,000 decrease in bonus expense from 2007 to 2008. Data processing expense declined $84,000 in 2008 compared to 2007, which was primarily due to new contracts in 2008 for processing of automatic teller machine transactions. The increase in professional fees of $56,000 in 2008 compared to the prior year was due to higher levels of legal fees related to loan matters and higher audit and tax fees. Advertising and promotional expense was $154,000 lower in 2008 than in 2007 as ChoiceOne cut expenses in all advertising categories. An increase of $204,000 in FDIC insurance expense was caused by assessment credits from the FDIC tha t the Bank used in 2007 being fully utilized in January 2008. Other noninterest expense grew $187,000 in 2008 compared to the prior year. Foreclosed asset and loan collection expenses were up $209,000 in 2008 due to problem loans. Training expense was $109,000 higher in 2008 than in the prior year as an outside consultant was used for management, customer service, and sales training.

Total noninterest expense increased $6.4 million or 73% in 2007 compared to 2006. Growth in salaries and benefits expense of $3.0 million in 2007 compared to 2006 was due to the merger with VRFC. ChoiceOne added 80 full-time equivalent employees in November 2006. As a result, 2006 compensation expense included only two months of payroll cost for former VRFC personnel. Occupancy expense increased $889,000 in 2007 compared to 2006 due to a full year of combined operations after the VRFC merger. Nine offices were acquired in the merger with VRFC in November 2006. One of these offices was closed in early 2007 and sold due to its proximity to two other offices of ChoiceOne. Data processing costs were $758,000 higher in 2007 compared to 2006 which only included 2 months of combined results after the merger. The merger with VRFC more than doubled the number of loan and deposit accounts on the Bank's data processing system and other data processing costs such as amortization of software licenses, Internet banking charges, remote item capture costs and automated teller machine (ATM) costs have increased due to more customers, employees, and ATMs as a result of the merger. Professional fees were $156,000 higher in 2007 than in 2006, partly as a result of increased foreclosure related expenses. Supplies and postage expense increased $239,000 in 2007 over the prior year as a result of the VRFC merger. Stationary, envelopes, receipts, and other items were purchased to provide stock for the nine banking locations acquired in the merger with VRFC. Postage expense was higher due to the number of customer accounts more than doubling which increased the number of statements, notices and advices generated for customers. Advertising and promotional expense increased by $195,000 in 2007 compared to the prior year. ChoiceOne launched a detailed branding campaign in early 2007 and promoted a deposit switch campaign during 2007. Intangible asset amortization of $498,000 in 2007 represented twelve months of amortization of intangibl e assets acquired as part of the VRFC merger, compared to 2006 which included $77,000 of amortization for the last two months of the year. Other noninterest expenses such as insurance costs, correspondent bank charges, and courier expense increased in 2007 compared to the prior year as a result of the merger with VRFC. Foreclosed asset expenses also increased $74,000 in 2007 compared to 2006 as a result of an increase in the number of foreclosed real estate properties.

Management projects that future noninterest expense may increase due to projected increases in FDIC insurance premiums in 2009. ChoiceOne's FDIC insurance expense, which was $267,000 in 2008, is expected to more than double in 2009 due to current conditions in the banking industry and the FDIC's plan to recapitalize the insurance fund. Legal fees and foreclosed real estate costs may continue to increase if asset quality deteriorates and additional resources are necessary for collection and foreclosure.

11

Income Taxes
Income taxes produced a benefit of $207,000 in 2008, compared to expenses of $939,000 in 2007 and $639,000 in 2006. The decrease in tax expense in 2008 was caused by a $3,291,000 decline in income before income tax in 2008 compared to the prior year. Tax exempt interest income was also slightly higher in 2008 than in 2007. The increase in tax expense in 2007 compared to 2006 was due to increased income before income tax, which was partially offset by growth in tax exempt interest income and earnings on bank-owned life insurance.

FINANCIAL CONDITION

Securities
(Dollars in thousands)

		2008		2007
U.S. Government and federal agency	$	14,221	$	15,952
State and municipal		49,066		46,486
Mortgage-backed		11,902		14,423
Corporate		198		1,251
Equity securities		1,981		5,044
Total	$	77,368	$	83,156

The securities available for sale portfolio decreased $5.8 million or 7% from December 31, 2007 to December 31, 2008. ChoiceOne purchased a mix of government agency, municipal, and mortgage-backed securities totaling $20.6 million during 2008 to replace securities that matured or were called. Approximately $17.3 million in various securities were called or matured in 2008. Principal payments for municipal and mortgage-backed securities totaling $4.9 million were received during 2008. Various securities totaling approximately $2.5 million were sold during 2008 for net losses totaling $401,000. The Bank's Investment Committee continues to monitor the portfolio and purchases securities when deemed prudent. Also, certain securities are sold under agreements to repurchase and management plans to continue this practice as a low-cost source of funding.

Equity securities included Money Market Preferred Securities (MMPs) of $1,050,000, trust preferred securities of $500,000, and preferred stock of $431,000 as of December 31, 2008. Equity securities included MMPs of $4,500,000, trust preferred securities of $500,000, and common stock of $44,000 as of December 31, 2007. The decrease in the MMPs balance during 2008 was caused by sales of $1,700,000, a conversion from an MMP to preferred stock of $800,000, and write-downs of MMP market values of $950,000. A recognized loss of $435,000 was recorded upon the conversion of an MMP to preferred stock due to a reduction in its market value at the time of conversion. An other than temporary impairment adjustment of $432,000 comprised part of the MMP write-downs. This was related to an MMP that had a reduction in its market value and is expected to convert to preferred stock in early 2009. The remaining $518,000 of MMP write-downs in 2008 were recorded to other comprehensive income. It was related to an MMP for which auctions are still being held and its decline in market value is not considered to be other than temporary.

Management will continue to monitor its equity securities closely in 2009. All of the securities are still performing and regular interest payments are being received. However, the current economic climate may continue to have a depressing impact on the market values of these securities through 2009.

Loans
The Bank's loan portfolio as of December 31 was as follows:

(Dollars in thousands)

		2008		2007
Agricultural	$	23,408	$	24,765
Commercial and industrial		57,587		51,242
Consumer		16,047		15,939
Real estate - commercial		123,952		125,960
Real estate - construction		2,026		4,048
Real estate - residential		102,957		106,404
Total loans	$	325,977	$	328,358

The loan portfolio (excluding loans held for sale) decreased approximately $2.4 million or 1% from December 31, 2007 to December 31, 2008. Overall loan demand was sluggish in 2008 as the uncertain economy in Michigan affected the willingness of borrowers to assume debt. Reduced real estate values also made it more difficult for borrowers to have the ability to qualify for loans. The balance of real estate loans in the commercial, construction, and residential categories fell a total of $7.5 million during 2008. Residential real estate loans were affected particularly by falling home values. The decline in real estate loans was partially offset by $6.3 million of

12

growth in commercial and industrial loans. Growth in this loan category was primarily due to less competition from larger banks in certain ChoiceOne market areas.

Management anticipates loan demand in 2009 will depend upon the stability of the local and state economies and the confidence level of business and personal borrowers. The Bank intends to continue its calling program with commercial customers in its market areas.

Information regarding impaired loans can be found in Note 6 to the consolidated financial statements included in this report. In addition to its review of the loan portfolio for impaired loans, management also monitors various nonperforming loans. Nonperforming loans are comprised of (1) loans accounted for on a nonaccrual basis; (2) loans, not included in nonaccrual loans, which are contractually past due 90 days or more as to interest or principal payments; and (3) loans, not included in nonaccrual or past due 90 days or more, which are considered troubled debt restructurings.

The balances of these nonperforming loans as of December 31 were as follows:

(Dollars in thousands)

		2008		2007
Loans accounted for on a nonaccrual basis	$	8,305	$	5,605
Loans contractually past due 90 days
or more as to principal or interest payments		333		188
Loans considered troubled debt restructurings		605		-
Total	$	9,243	$	5,793

At December 31, 2008, nonaccrual loans included $5,836,000 in commercial and industrial and commercial real estate loans, $2,450,000 in residential real estate loans, and $19,000 in consumer loans. At the end of the prior year, nonaccrual loans were comprised of $3,003,000 in commercial and industrial and commercial real estate loans, $2,401,000 in residential real estate loans, and $201,000 in consumer loans. Approximately $2.4 million of the increase in nonaccrual commercial loans was comprised of two borrowers, of which $1.1 million was transferred out of nonaccrual loans to other real estate in January 2009. The overall increase in nonaccrual loans was due to the weakened economy and its impact on borrowers' abilities to make loan payments. Nonaccrual loans included $2.5 million of loans that had been foreclosed upon and were in process of redemption as of the end of 2008, compared to $1.6 million as of the end of 2007. Restructured loans include four commercial loans as of December 31, 2008 for which loan terms have been modified. These loans were in compliance with their modified terms as of the end of 2008.

Management also maintains a list of loans that are not classified as nonperforming loans but where some concern exists as to the borrowers' abilities to comply with the original loan terms. These loans totaled $17.9 million as of December 31, 2008, compared to $14.5 million as of December 31, 2007.

Goodwill
Management normally performs a review of goodwill on an annual basis as of the end of June. The review was updated as of December 31, 2008 due to market conditions that had a downward impact on the market value of bank stocks. Management reviewed acquisition values of Midwest area banks during the year of 2008. The average acquisition value for this time period was 180% of tangible book value, compared to ChoiceOne's book value which was 149% of tangible book value as of the end of 2008. As a result, management believed that no impairment of ChoiceOne's goodwill existed as of December 31, 2008.

Deposits and Other Funding Sources
Total deposits decreased $4.8 million or 1% from December 31, 2007 to December 31, 2008. The balance of local deposits fell $6.8 million during 2008, while the balance of brokered certificates of deposit grew $2.0 million. The majority of the local deposit decrease was caused by a $5.4 million decline in local certificates of deposit in 2008. The decline was caused by the Bank's unwillingness to match interest rates offered by certain competitors in the Bank's market areas. A decrease of $7.5 million in checking account balances in 2008 was partially offset by growth of $6.1 million in savings deposits. The Bank developed a new saving product in 2008 that was very well received by depositors.

Securities sold under agreements to repurchase declined $2.9 million during 2008. The decline was due to a lower balance in sweep repurchase accounts used by the Bank's local customers. Advances from the Federal Home Loan Bank ("FHLB") increased $4.0 million in 2008 as the interest rates offered were lower than other alternative sources of funding. A blanket collateral agreement covering residential real estate loans was pledged against all outstanding advances at the end of 2008. Approximately $9.7 million of advances were available as of December 31, 2008 based on the collateral pledged.

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In 2009, management will continue to focus its marketing efforts towards growing local deposits. If local deposit growth is insufficient to support asset growth during 2008, management believes that FHLB advances, repurchase agreements and brokered certificates of deposit can address corresponding funding needs.

Shareholders' Equity
Total shareholders' equity decreased $957,000 or 2% from December 31, 2007 to December 31, 2008. The reduction in equity resulted primarily from dividends paid and a decrease in accumulated other comprehensive income, offset by the current year's net income and proceeds from the issuance of ChoiceOne's stock. ChoiceOne did not repurchase any of its common stock in 2008, in contrast to 2007, when 32,700 shares were repurchased. Shares of common stock may be repurchased in the future if management deems it to be a prudent use of capital.

Note 23 to the consolidated financial statements presents regulatory capital information for the Bank at the end of 2008 and 2007. The Bank's capital ratios decreased slightly from December 31, 2007 to December 31, 2008 due to the reduction in the shareholders' equity balance during 2008. Management will monitor these capital ratios closely during 2009 as they relate to asset growth and earnings retention. ChoiceOne's Board of Directors and management do not plan to allow capital to decrease below those levels necessary to be considered "well capitalized" by regulatory guidelines. The Board of Directors and management believe that ChoiceOne's capital level as of December 31, 2008 is adequate for the foreseeable future.

Table 4 - Contractual Obligations

The following table discloses information regarding the maturity of ChoiceOne's contractual obligations at December 31, 2008:

(Dollars in thousands)

	Payment Due By Period
Contractual Obligations		Total		Less than 1 year		1-3 Years		3-5 Years		More than 5 Years
Time deposits	$	177,611	$	118,702	$	47,455	$	11,398	$	56
Repurchase agreements		18,786		13,286		500		5,000		-
Advances from Federal Home Loan Bank		39,957		18,475		13,482		8,000		-
Operating leases		89		56		33		-		-
Total	$	236,443	$	150,519	$	61,470	$	24,398	$	56

Liquidity and Interest Rate Risk
Net cash from operating activities was $7.2 million for 2008 compared to $6.5 million for 2007. The effect of the decline in net income in 2008 was offset by an increased provision for loan losses and a larger loss on sales and impairment of securities in 2008 than in 2007. The cash used in investing activities was $5.1 million less in 2008 than in 2007. The change was caused by a $9.3 million decrease in the funds used for net purchases of securities in 2008, partially offset by a $5.1 million decrease in net loan originations and payments. Net cash flows used in financing activities were $5.8 million in 2008, compared to $1.1 million provided by financing activities in 2007. The fluctuation was due to a decrease of $8.0 million in net proceeds less payments on FHLB advances. A smaller decrease in deposits in 2008 than in 2007 was offset by a decrease in repurchase agreements in 2008 compared to growth in 2007.

ChoiceOne's primary market risk exposure occurs in the form of interest rate risk. Liquidity risk also can have an impact but to a lesser extent. ChoiceOne's business is transacted in U.S. dollars with no foreign exchange risk exposure. Agricultural loans comprise a small portion of ChoiceOne's total assets. Management believes that ChoiceOne's exposure to changes in commodity prices is insignificant.

Management believes that the current level of liquidity is sufficient to meet the Bank's normal operating needs. This belief is based upon the availability of deposits from both the local and national markets, maturities of securities, normal loan repayments, income retention, federal funds purchased lines from correspondent banks, and advances available from the Federal Home Loan Bank. Liquidity risk deals with ChoiceOne's ability to meet its cash flow requirements. These requirements include depositors desiring to withdraw funds and borrowers seeking credit. Relatively short-term liquid funds exist in the form of lines of credit to purchase federal funds at four of the Bank's correspondent banks. As of December 31, 2008, the amount of federal funds available for purchase from the Bank's correspondent banks totaled approximately $24 million. ChoiceOne had no federal funds purchased at the end of 2008 or 2007. The Bank also has a line of credit secured by ChoiceOne's commercial loans with the Federal Rese rve Bank of Chicago for $74 million, which is designated for nonrecurring short-term liquidity needs. Longer-term liquidity needs may be met through local deposit growth, maturities of securities, normal loan repayments, advances from the Federal Home Loan Bank, brokered certificates of deposit, and income retention. Approximately $9.7 million of borrowing capacity was available from the Federal Home Loan Bank based on residential real estate loans pledged as collateral at year-end 2008. The acceptance of brokered certificates of deposit is not limited as long as the Bank's capital to assets ratio is considered to be "well capitalized" under regulatory guidelines.

14

Interest rate risk is related to liquidity because each is affected by maturing assets and sources of funds. ChoiceOne's Asset/Liability Management Committee (the "ALCO") attempts to stabilize the interest rate spread and avoid possible adverse effects when unusual or rapid changes in interest rates occur. The ALCO uses a simulation model to measure the Bank's interest rate risk. The model incorporates changes in interest rates on rate-sensitive assets and liabilities. The degree of rate sensitivity is affected by prepayment assumptions that exist in the assets and liabilities. One method the ALCO uses of measuring interest rate sensitivity is the ratio of rate-sensitive assets to rate-sensitive liabilities. An asset or liability is considered to be rate-sensitive if it matures or otherwise reprices within a given time frame.

Table 5 documents the maturity or repricing schedule for ChoiceOne's rate-sensitive assets and liabilities for selected time periods.

Table 5 - Maturities and Repricing Schedule

(Dollars in thousands)

		As of December 31, 2008
		0-3 Months			3-12 Months			1-5 Years			Over 5 Years		Total
Assets
Federal funds sold	$	1,908		$	-		$	-		$	-	$	1,908
Securities available for sale		3,445			6,843			24,499			42,581		77,368
Federal Home Loan Bank stock		-			3,304			-			-		3,304
Federal Reserve Bank stock		-			-			1,269			-		1,269
Loans held for sale		316			-			-			-		316
Loans		88,800			72,318			133,725			31,134		325,977
Cash surrender value of life insurance policies		-			-			8,873			-		8,873
Rate-sensitive assets		94,469			82,465			168,366			73,715		419,015
Liabilities
Interest-bearing checking deposits		35,213			-			-			-		35,213
Savings deposits		32,764			-			-			-		32,764
Money market deposits		46,899			-			-			-		46,899
Certificates of deposit		53,316			65,386			58,853			56		177,611
Repurchase agreements		13,338			-			5,448			-		18,786
Advances from Federal Home Loan Bank		9,620			8,880			21,457			-		39,957
Rate-sensitive liabilities		191,150			74,266			85,758			56		351,230
Rate-sensitive assets less rate-sensitive liabilities:
Asset (liability) gap for the period	$	(96,681	)	$	8,199		$	82,608		$	73,659	$	67,785
Cumulative asset (liability) gap	$	(96,681	)	$	(88,482	)	$	(5,874	)	$	67,785

Under this method, the ALCO measures interest rate sensitivity by focusing on the one-year repricing gap. ChoiceOne's ratio of rate-sensitive assets to rate-sensitive liabilities that matured or repriced within a one-year time frame was 67% at December 31, 2008, compared to 62% at December 31, 2007. Table 5 above shows the entire balance of interest-bearing demand deposits, savings deposits, money market deposits, and overnight repurchase agreements in the shortest repricing term. Although these categories have the ability to reprice immediately, management has some control over the actual timing or extent of the changes in interest rates on these liabilities. The ALCO plans to continue to monitor the ratio of rate-sensitive assets to rate-sensitive liabilities on a quarterly basis in 2009. As interest rates change during 2009, the ALCO will attempt to match its maturing assets with corresponding liabilities to maximize ChoiceOne's net interest income.

Another method the ALCO uses to monitor its interest rate sensitivity is to subject rate-sensitive assets and liabilities to interest rate shocks. At December 31, 2008, management used a simulation model to subject its assets and liabilities to an immediate 300 basis point increase and an immediate 300 basis point decrease in interest rates. The maturities of loans and mortgage-backed securities were affected by certain prepayment assumptions. Maturities for interest-bearing core deposits were based on an estimate of the period over which they would be outstanding. The maturities of advances from the Federal Home Loan Bank were based on their contractual maturity dates. In the case of variable rate assets and liabilities, repricing dates were used to determine their values. The simulation model measures the effect of immediate interest rate changes on both net interest income and shareholders' equity. ChoiceOne's Interest Rate Risk Policy states that the changes in interest rates cannot cause net interest income to decrease more than 10% if rates are instantaneously shocked 200 basis points upward or downward. ChoiceOne's Interest Rate Risk Policy states that the changes in interest rates cannot cause the market value of shareholders' equity to decrease more than 20% if rates are instantaneously shocked 200 basis points upward or downward.

15

Table 6 provides an illustration of hypothetical interest rate changes as of December 31, 2008 and 2007, respectively:

Table 6 - Sensitivity to Changes in Interest Rates

		2008
(Dollars in thousands)		Net Interest Income	Percent Change			Market Value of Equity	Percent Change
Change in Interest Rates
300 basis point rise	$	16,279	+ 5	%	$	53,676	- 18	%
200 basis point rise		16,040	+ 3	%		57,190	- 12	%
100 basis point rise		15,797	+ 2	%		61,001	- 6	%
Base rate scenario		15,552	-	%		65,086	-	%
100 basis point decline		14,796	- 5	%		69,594	+ 6	%
200 basis point decline		14,053	- 10	%		74,283	+ 14	%
300 basis point decline		14,053	- 10	%		79,119	+ 22	%

		2007
(Dollars in thousands)		Net Interest Income	Percent Change			Market Value of Equity	Percent Change
Change in Interest Rates
300 basis point rise	$	17,229	+ 7	%	$	49,997	- 20	%
200 basis point rise		16,833	+ 5	%		53,862	- 14	%
100 basis point rise		16,436	+ 2	%		58,070	- 7	%
Base rate scenario		16,053	-	%		62,686	-	%
100 basis point decline		15,662	- 2	%		66,585	+ 6	%
200 basis point decline		15,229	- 5	%		71,366	+ 14	%
300 basis point decline		14,695	- 8	%		76,445	+ 22	%

As of both December 31, 2008 and December 31, 2007, the Bank was within its guidelines for immediate rate shocks up and down for both net interest income and the market value of shareholder's equity. The ALCO plans to continue to monitor the effect of changes in interest rates on both net interest income and shareholders' equity and will make changes in the duration of its rate-sensitive assets and rate-sensitive liabilities where necessary.

16

ChoiceOne Financial Services, Inc.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of ChoiceOne Financial Services, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting that is designed to produce reliable financial statements in conformity with United States generally accepted accounting principles. The system of internal control over financial reporting as it relates to the financial statements is evaluated for effectiveness by management and tested for reliability through a program of internal audits. Actions are taken to correct potential deficiencies as they are identified. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statemen t preparation.

Management assessed the effectiveness of the Company's system of internal control over financial reporting as of December 31, 2008, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Management's assessment is based on the criteria for effective internal control over financial reporting as described in "Internal Control - Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management has concluded that, as of December 31, 2008, its system of internal control over financial reporting was effective and meets the criteria of the "Internal Control - Integrated Framework." This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange C ommission that permit the Company to provide only management's report in this annual report.

James A. Bosserd President and Chief Executive Officer	Thomas L. Lampen Treasurer
March 24, 2009	March 24, 2009

17

Plante & Moran, PLLC
Suite 400
634 Front Avenue N.W.
Grand Rapids, MI 49504
Tel: 616.774.8221
Fax: 616.774.0702
plantemoran.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors
of ChoiceOne Financial Services, Inc., Sparta, Michigan

We have audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of ChoiceOne Financial Services, Inc. as of December 31, 2008, 2007, and 2006, and the related consolidated statements of income, changes in shareholders' equity and cash flows for the years then ended appearing in the Annual Report enclosed with the proxy statement for the annual meeting of shareholders, not appearing herein; and in our audit report dated March 24, 2009, we expressed an unqualified opinion on those consolidated financial statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presenta tion. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ChoiceOne Financial Services, Inc. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years ended December 31, 2008, 2007, and 2006, in conformity with U.S. generally accepted accounting principles.

Plante & Moran, PLLC

Grand Rapids, Michigan
March 24, 2009

18

ChoiceOne Financial Services, Inc.
CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

		December 31
		2008			2007
Assets
Cash and due from banks	$	9,252		$	10,923
Federal funds sold		1,908			217
Cash and cash equivalents		11,160			11,140
Securities available for sale		77,368			83,156
Federal Home Loan Bank stock		3,304			3,304
Federal Reserve Bank stock		1,269			1,265
Loans held for sale		316			100
Loans		325,977			328,358
Allowance for loan losses		(3,600	)		(3,600	)
Loans, net		322,377			324,758
Premises and equipment, net		11,745			11,865
Other real estate owned, net		3,692			1,509
Loan servicing rights, net		580			792
Cash value of life insurance policies		8,873			8,538
Intangible assets, net		3,537			4,031
Goodwill		13,728			13,728
Other assets		5,602			5,969
Total assets	$	463,551		$	470,155
Liabilities
Deposits - noninterest-bearing	$	54,511		$	54,355
Deposits - interest-bearing		292,487			297,489
Total deposits		346,998			351,844
Repurchase agreements		18,786			21,710
Advances from Federal Home Loan Bank		39,957			35,933
Other liabilities		5,625			7,526
Total liabilities		411,366			417,013
Shareholders' Equity
Preferred stock; shares authorized: 100,000; shares outstanding: none		-			-
Common stock and paid-in capital, no par value; shares authorized: 7,000,000;         shares outstanding: 3,246,109 in 2008 and 3,229,814 in 2007		46,171			45,956
Retained earnings		5,898			6,665
Accumulated other comprehensive income, net		116			521
Total shareholders' equity		52,185			53,142
Total liabilities and shareholders' equity	$	463,551		$	470,155

See accompanying notes to consolidated financial statements.

19

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

		Years ended December 31
		2008			2007			2006
Interest income
Loans, including fees	$	22,641		$	24,794		$	14,874
Securities
Taxable		2,105			2,237			1,598
Tax exempt		1,722			1,655			876
Other		66			79			97
Total interest income		26,534			28,765			17,445
Interest expense
Deposits		8,932			11,456			7,187
Advances from Federal Home Loan Bank		1,704			1,405			1,182
Other borrowings		567			761			328
Total interest expense		11,203			13,622			8,697
Net interest income		15,331			15,143			8,748
Provision for loan losses		3,475			2,035			200
Net interest income after provision for loan losses		11,856			13,108			8,548
Noninterest income
Customer service charges		3,280			3,321			1,450
Insurance and investment commissions		769			1,137			831
Gain on sale of insurance book of business		-			875			-
Gains on sales of loans		215			287			234
Gains (losses) on sales of securities		(401	)		13			(66	)
Loss on other than temporary impairment of securities		(432	)		-			-
Gains (losses) on sales of other assets		(204	)		(149	)		(160	)
Earnings on life insurance policies		373			364			149
Other income		483			633			439
Total noninterest income		4,083			6,481			2,877
Noninterest expense
Salaries and benefits		7,140			7,709			4,664
Occupancy and equipment		2,163			2,190			1,301
Data processing		1,386			1,470			712
Professional fees		645			589			433
Supplies and postage		537			505			266
Advertising and promotional		152			306			111
Intangible asset amortization		494			498			77
FDIC insurance		267			63			26
Other expense		1,927			1,740			1,108
Total noninterest expense		14,711			15,070			8,698
Income before income tax		1,228			4,519			2,727
Income tax expense/(benefit)		(207	)		939			639
Net income	$	1,435		$	3,580		$	2,088
Comprehensive income	$	1,030		$	4,120		$	2,368
Basic earnings per common share	$	0.44		$	1.11		$	1.09
Diluted earnings per common share	$	0.44		$	1.10		$	1.09
Dividends declared per common share	$	0.68		$	0.68		$	0.68

See accompanying notes to consolidated financial statements.

20

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Dollars in thousands, except per share data)

	Number of Shares		Common Stock and Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net		Total
Balance, January 1, 2006	1,649,940		$  17,422		$  4,594		$    (299	)	$  21,717
Comprehensive income:
Net income					2,088				2,088
Net change in unrealized gain (loss) on
securities available for sale							280		280
Total comprehensive income									2,368
Shares issued	19,894		339						339
Shares issued in merger with Valley Ridge
Financial Corp.	1,585,482		28,538						28,538
Shares repurchased	(4,687	)	(84	)					(84	)
Change in ESOP repurchase obligation			4						4
Effect of stock options granted			24						24
Effect of employee stock purchases			10						10
Cash dividends declared ($0.68 per share)					(1,397	)			(1,397	)
Balance, December 31, 2006	3,250,629		$  46,253		$  5,285		$    (19	)	$  51,519
Comprehensive income:
Net income					3,580				3,580
Net change in unrealized gain (loss) on
securities available for sale							384		384
Net change in funded status of post-
retirement benefit plan							156		156
Total comprehensive income									4,120
Shares issued	11,885		169						169
Shares repurchased	(32,700	)	(537	)					(537	)
Change in ESOP repurchase obligation			28						28
Effect of stock options granted			31						31
Effect of employee stock purchases			12						12
Cash dividends declared ($0.68 per share)					(2,200	)			(2,200	)
Balance, December 31, 2007	3,229,814		$  45,956		$  6,665		$   521		$  53,142
Comprehensive income:
Net income					1,435				1,435
Net change in unrealized gain (loss) on
securities available for sale							(442	)	(442	)
Net change in funded status of post-
retirement benefit plan							37		37
Total comprehensive income									1,030
Shares issued	16,295		147						147
Change in ESOP repurchase obligation			23						23
Effect of stock options granted			33						33
Effect of employee stock purchases			12						12
Cash dividends declared ($0.68 per share)					(2,202	)			(2,202	)
Balance, December 31, 2008	3,246,109		$  46,171		$  5,898		$   116		$  52,185

See accompanying notes to consolidated financial statements.

21

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

		Years ended December 31
		2008			2007			2006
Cash flows from operating activities:
Net income	$	1,435		$	3,580		$	2,088
Adjustments to reconcile net income to net cash from operating      activities:
Provision for loan losses		3,475			2,035			200
Depreciation		844			832			587
Amortization		996			978			531
Compensation expense on stock options and employee purchases		45			43			34
Losses (gains) on sales of securities		401			(13	)		66
Loss on other than temporary impairment of securities		432			-			-
Gains on sales of loans		(215	)		(287	)		(234	)
Loans originated for sale		(12,249	)		(15,700	)		(15,187	)
Proceeds from loan sales		12,198			16,015			15,386
Earnings on bank-owned life insurance		(373	)		(364	)		(149	)
Losses on sales of other real estate owned		213			162			196
Proceeds from sales of other real estate owned		1,065			1,241			313
Net change in:
Other assets		577			141			(2,071	)
Other liabilities		(1,614	)		(2,149	)		(8,926	)
Net cash from operating activities		7,230			6,514			(7,166	)
Cash flows from investing activities:
Sales of securities available for sale		2,540			3,897			16,982
Maturities, prepayments and calls of securities available for sale		22,206			23,196			7,156
Purchases of securities available for sale		(20,603	)		(32,294	)		(22,223	)
Purchase of Federal Reserve Bank stock		(4	)		(588	)		-
Loan originations and payments, net		(4,760	)		371			421
Additions to premises and equipment		(764	)		(528	)		(301	)
Purchase of investment book of business		-			(347	)		-
Purchase of bank-owned life insurance		-			(150	)		-
Cash received in merger with Valley Ridge Financial Corp		-			-			19,995
Net cash from investing activities		(1,385	)		(6,443	)		22,030
Cash flows from financing activities:
Net change in deposits		(4,846	)		(14,536	)		14,104
Net change in repurchase agreements		(2,924	)		6,697			(691	)
Net change in federal funds purchased		-			(460	)		(3,939	)
Proceeds from Federal Home Loan Bank advances		50,000			31,000			68,000
Payments on Federal Home Loan Bank advances		(46,000	)		(19,000	)		(86,250	)
Issuance of common stock		147			169			339
Repurchase of common stock		-			(537	)		(84	)
Cash dividends and fractional shares from stock dividends		(2,202	)		(2,200	)		(1,397	)
Net cash from financing activities		(5,825	)		1,133			(9,918	)
Net change in cash and cash equivalents		20			1,204			4,946
Beginning cash and cash equivalents		11,140			9,936			4,990
Ending cash and cash equivalents	$	11,160		$	11,140		$	9,936
Supplemental disclosures:
Cash paid for interest	$	11,519		$	13,971		$	8,342
Cash paid for income taxes		575			945			910
Loans transferred to other real estate owned		3,666			898			1,093

See accompanying notes to consolidated financial statements.

22

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies

Principles of Consolidation
The consolidated financial statements include ChoiceOne Financial Services, Inc., its wholly-owned subsidiary, ChoiceOne Bank, and ChoiceOne Bank's wholly-owned subsidiaries, ChoiceOne Mortgage Company of Michigan, and ChoiceOne Insurance Agencies, Inc., (together referred to as "ChoiceOne"). Intercompany transactions and balances have been eliminated in consolidation.

Nature of Operations
ChoiceOne Bank (the "Bank") is a full-service community bank that offers commercial, consumer, and real estate loans as well as traditional demand, savings and time deposits to both commercial and consumer clients in portions of Kent, Muskegon, Newaygo, and Ottawa counties in Michigan. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and real estate. Commercial loans are expected to be repaid from the cash flows from operations of businesses. Real estate loans are collateralized by either residential or commercial real estate.

ChoiceOne Mortgage Company of Michigan (the "Mortgage Company") originated and sold a full line of conventional type mortgage loans for 1-4 family and multi-family residential real estate properties. It also originated second mortgages on residential real estate with home equity term loans and lines of credit. Effective December 31, 2008, ChoiceOne consolidated the operations of the Mortgage Company into the Bank and eliminated the mortgage company subsidiary.

ChoiceOne Insurance Agencies, Inc. (the "Insurance Agency") is a wholly-owned subsidiary of the Bank. The Insurance Agency sells insurance policies such as life and health for both commercial and consumer clients. The Insurance Agency also offers alternative investment products such as annuities and mutual funds through a registered broker.

Together, the Bank, the Mortgage Company, and the Insurance Agency, account for substantially all of ChoiceOne's assets, revenues and operating income.

Use of Estimates
To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, ChoiceOne's management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Actual results may differ from these estimates. Estimates associated with the allowance for loan losses, core deposit intangible assets, loan servicing rights, goodwill, and fair values of certain financial instruments are particularly susceptible to change.

Cash and Cash Equivalents
Cash and cash equivalents are defined to include cash on hand, demand deposits with other banks, and federal funds sold. Cash flows are reported on a net basis for customer loan and deposit transactions, deposits with other financial institutions, and short-term borrowings with original terms of 90 days or less.

Securities
Securities are classified as available for sale because they might be sold before maturity. Securities classified as available for sale are carried at fair value, with unrealized holding gains and losses reported separately in the accumulated other comprehensive income or loss section of shareholders' equity, net of tax effect. Restricted investments in Federal Reserve Bank stock and Federal Home Loan Bank stock are carried at cost. Equity securities consist of investments in preferred stock, trust-preferred securities, and investments in common stock of other financial institutions.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized using the level-yield method without anticipating prepayments. Gains or losses on sales are recorded on the trade date based on the amortized cost of the security sold.

Declines in the fair value of securities below their cost that are other than temporary are reflected as recognized losses. In estimating other than temporary losses, management considers: the length of time and extent that fair value has been less than cost, the financial condition and near-term prospects of the issuer, and ChoiceOne's ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value.

23

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. 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 commercial loans are 90 days past due unless the loan is secured by sufficient collateral and in the process of collection. Interest on consumer or real estate secured loans is discontinued at the time at which the loan is 120 days past due unless the credit is secured by sufficient collateral and in the process of collection. Past due status is based on the contractual terms of the loan. In all cases, 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 qualify ing 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.

Allowance for Loan Losses
The allowance for loan losses is a valuation allowance for probable incurred credit losses. The allowance is increased by the provision for loan losses and decreased by loans charged off less any recoveries of charged off loans. Management estimates the allowance balance required based on past loan loss experience, the nature and volume of the loan portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management's judgment, should be charged off. Loan losses are charged against the allowance when management believes the collectibility of a loan balance is not possible.

The allowance consists of general and specific components. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful.

A loan is impaired when full payment under the loan terms is not expected. Commercial loans are evaluated for impairment on an individual loan basis. If a loan is considered impaired, a portion of the allowance for loan losses is allocated to the loan so that it is reported, net, at the present value of estimated future cash flows using the loan's existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans such as consumer and real estate mortgage loans are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation. Land is carried at cost. Land improvements are depreciated using the straight-line method with useful lives ranging from 7 to 15 years. Building and related components are depreciated using the straight-line method with useful lives ranging from 5 to 39 years. Leasehold improvements are depreciated over the shorter of the estimated life or the lease term. Furniture and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 7 years. Fixed assets are periodically reviewed for impairment when events indicate their carrying amounts may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Other Real Estate Owned
Real estate properties acquired in the collection of a loan are initially recorded at fair value at acquisition establishing a new cost basis. Any reduction to fair value from the carrying value of the related loan is accounted for as a loan loss. After acquisition, a valuation allowance reduces the reported amount to the lower of the initial amount or fair value less costs to sell. Expenses to repair or maintain properties are included within other noninterest expenses. Gains and losses upon disposition and changes in the valuation allowance are reported net within other noninterest income.

Loan Servicing Rights
Servicing rights represent the allocated value of servicing rights on loans sold with servicing retained. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, as to geographic and prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics when available or based upon discounted cashflows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance.

24

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill
Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of the acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified.

Loan Commitments and Related Financial Instruments
Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet financing needs of customers. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Employee Benefit Plans
ChoiceOne's 401(k) plan allows participants to contribute up to the IRS maximum. Contributions from ChoiceOne to its 401(k) plan are discretionary. ChoiceOne also allows retired employees to participate in its health insurance plan. Employees who have attained age 55 and completed at least ten years of service to ChoiceOne are eligible to participate as a retiree until they are eligible for Medicare. These postretirement benefits are accrued during the years in which the employee provides service.

Employee Stock Ownership Plan
The cost of shares issued to the Employee Stock Ownership Plan (the "ESOP") but not yet allocated to participants is presented as a reduction of shareholders' equity. Compensation expense is recorded based on the market price of the shares as they are committed to be released for allocation to participant accounts. The difference between the market price and the cost of shares committed to be released is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings while dividends on unallocated ESOP shares are reflected as a reduction of debt and accrued interest. Upon distribution of shares to a participant, the participant has the right to require the Company to purchase his or her shares at fair value in accordance with the terms and conditions of the ESOP. As such, these shares are not classified in shareholders' equity as permanent equity.

Income Taxes
Income tax expense is the sum of the current year income tax due and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

Earnings Per Share
Basic earnings per common share ("EPS") is based on weighted-average common shares outstanding. The weighted-average number of shares used in the computation of basic and diluted EPS includes shares allocated to the ESOP. Diluted EPS further assumes issue of any dilutive potential common shares issuable under stock options. Earnings and dividends per share are restated for stock dividends and splits through the issue date of the financial statements.

Comprehensive Income
Comprehensive income consists of net income and other comprehensive income or loss. Other comprehensive income or loss includes unrealized gains and losses on securities available for sale, net of tax, and changes in the funded status of postretirement plans which are also recognized as a separate component of shareholders' equity.

Loss Contingencies
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that there are any such matters that may have a material effect on the financial statements.

Cash Restrictions
Cash on hand or on deposit with the Federal Reserve Bank of $172,000 and $3,416,000 was required to meet regulatory reserve and clearing requirements at December 31, 2008 and 2007, respectively. The balance in excess of the amount required was interest-bearing as of December 31, 2008. The balance as of December 31, 2007 did not earn interest.

25

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Dividends
Dividends issued in stock are reported by transferring the market value of the stock issued from retained earnings to common stock and additional paid-in capital. Fractional shares resulting from stock dividends are paid in cash.

Stock-Based Compensation
ChoiceOne records stock-based compensation cost using the fair value method. Compensation costs related to stock options granted is disclosed in Note 16.

Dividend Restrictions
Banking regulations require the maintenance of certain capital levels and may limit the amount of dividends that may be paid by the Bank to ChoiceOne (see Note 23).

Fair Value of Financial Instruments
Fair values of financial instruments are estimated using relevant market information and other assumptions, which are more fully documented in Note 20 to the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Operating Segments
While ChoiceOne's management monitors the revenue streams of various products and services for the Bank, Insurance Agency and Mortgage Company, operations and financial performance are evaluated on a company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated into one reportable operating segment.

Adoption of New Accounting Standards
Statement of Financial Accounting Standards Number 157, Fair Value Measurements (SFAS 157)
SFAS 157 clarifies the definition of fair value, establishes a framework for measuring fair value, and expands the disclosures on fair value measurements. It applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. ChoiceOne has determined that the impact of adopting SFAS 157 did not have a material impact on its consolidated financial statements. Disclosures required under SFAS 157 have been included as Note 21 to the consolidated financial statements.

Reclassifications
Certain amounts presented in prior year consolidated financial statements have been reclassified to conform to the current year's presentation.

Note 2 - Merger

On November 1, 2006, ChoiceOne completed a merger with Valley Ridge Financial Corp. ("VRFC"), parent company of Valley Ridge Bank ("VRB"). On December 7, 2006, Valley Ridge Bank was consolidated into ChoiceOne Bank, and Valley Ridge Mortgage Company ("VRMC") was merged into ChoiceOne Mortgage Company of Michigan. The merger was accounted for using the purchase method of accounting, and accordingly, the purchase price was allocated to the assets acquired and the liabilities assumed based upon the estimated fair values as of the date of the merger.

The aggregate purchase price was $28.5 million including merger costs. The purchase price was determined using ChoiceOne's market price of common stock as of November 1, 2006. ChoiceOne issued a total of 1,585,482 shares of its common stock to former shareholders of VRFC.

26

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the estimated fair values of the consolidated assets acquired and the liabilities assumed at the date of the merger with VRFC:

(Dollars in thousands)		Fair Value
Cash and cash equivalents	$	19,995
Securities		34,446
Federal Reserve Bank and Federal Home Loan Bank stock		1,560
Loans, net		146,171
Premises and equipment		6,312
Cash surrender value of bank-owned life insurance		5,713
Loan servicing rights		635
Core deposit intangible		4,134
Other intangible assets		125
Goodwill		14,280
Other assets		1,463
Total assets acquired	$	234,834
Deposits	$	170,164
Advances from Federal Home Loan Bank		11,404
Repurchase agreements		8,565
Other liabilities		16,163
Total liabilities assumed	$	206,296
Net assets acquired	$	28,538

The purchase accounting fair value adjustments are being amortized under various methods and over the estimated lives of the corresponding assets and liabilities. Goodwill recorded from the merger amounted to $14.3 million. A core deposit intangible asset of $4.1 million was recorded as part of the deposits assumed and is being amortized on a straight-line method over a period of 10 years. Goodwill recorded from the merger is not deductible for federal tax purposes.

The following pro forma disclosures, including the effect of purchase accounting adjustments, depict the results of operations for the year of 2006 as though the merger with VRFC had taken place as of January 1, 2006:

(Dollars in thousands, except per share data)

Net interest income	$	15,833
Noninterest income		5,195
Total income		21,028
Provision for loan losses		350
Noninterest expense		15,954
Income taxes		1,166
Net income	$	3,558
Basic earnings per common share	$	1.02
Diluted earnings per common share	$	1.02

27

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - Securities

The fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at December 31 were as follows:

		2008
(Dollars in thousands)		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
U.S. Government and federal agency	$	14,221	$	222	$	-
State and municipal		49,066		529		(611	)
Mortgage-backed		11,902		253		(56	)
Corporate		198		-		(1	)
Equity securities		1,981		66		(518	)
Total	$	77,368	$	1,070	$	(1,186	)

		2007
(Dollars in thousands)		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
U.S. Government and federal agency	$	15,952	$	215	$	(1	)
State and municipal		46,486		372		(186	)
Mortgage-backed		14,423		191		(35	)
Corporate		1,251		-		(25	)
Equity securities		5,044		22		-
Total	$	83,156	$	800	$	(247	)

Information regarding sales of securities available for sale follows:
(Dollars in thousands)

		2008		2007		2006
Proceeds from sales of securities	$	2,540	$	3,897	$	16,982
Gross realized gains		39		23		102
Gross realized losses		440		10		168
Loss on other than temporary impairment		432		-		-

Contractual maturities of securities available for sale at December 31, 2008 were as follows:

(Dollars in thousands)		Fair Value
Due within one year	$	25,127
Due after one year through five years		22,088
Due after five years through ten years		14,956
Due after ten years		1,314
Total debt securities		63,485
Mortgage-backed securities, not due at a specific date		11,902
Equity securities		1,981
Total	$	77,368

Various securities were pledged as collateral for securities sold under agreements to repurchase and for Treasury, Tax, and Loan accounts. The carrying amount of securities pledged as collateral at December 31 was as follows:

(Dollars in thousands)

		2008		2007
Securities pledged for securities sold under agreements to repurchase	$	19,309	$	29,171
Securities pledged for Treasury, Tax, and Loan accounts		529		537
Total securities pledged as collateral	$	19,838	$	29,708

28

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities with unrealized losses at year-end 2008 and 2007, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, were as follows:

(Dollars in thousands)		2008
		Less than 12 months					More than 12 months					Total
		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
State and municipal	$	15,103	$	(526	)	$	2,427	$	(85	)	$	17,530	$	(611	)
Mortgage-backed		1,959		(47	)		194		(9	)		2,153		(56	)
Corporate		-		-			198		(1	)		198		(1	)
Equity		482		(518	)		-		-			482		(518	)
Total temporarily impaired	$	17,544	$	(1,091	)	$	2,819	$	(95	)	$	20,363	$	(1,186	)

(Dollars in thousands)		2007
		Less than 12 months					More than 12 months					Total
		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Government and federal    agency	$	1,000	$	- -		$	999	$	(1	)	$	1,999	$	(1	)
State and municipal		6,401		(143	)		4,280		(43	)		10,681		(186	)
Mortgage-backed		-		-			2,531		(35	)		2,531		(35	)
Corporate		376		(2	)		677		(23	)		1,053		(25	)
Total temporarily impaired	$	7,777	$	(145	)	$	8,487	$	(102	)	$	16,264	$	(247	)

Equity securities as of December 31, 2008 included Money Market Preferred auction rate securities (MMP) of $1,050,000, trust preferred securities of $500,000, and preferred stock of $431,000. The preferred stock was obtained in November 2008 as the collateral supporting an MMP that was unwound. A loss of $435,000 was recorded upon the receipt of the preferred stock because its market value was less than the carrying value of the MMP. Its market value became the new cost basis of the preferred stock. As of December 31, 2008, an MMP with a fair value of $568,000 (par of $1,000,000) was expected to unwind in the first quarter of 2009, which will result in the receipt of additional preferred stock. Management recorded a $432,000 impairment loss on the MMP in December 2008 when the decline in its market value was deemed to be other than temporary. One remaining MMP had a write-down of $518,000 that was recorded to other comprehensive income in 2008. Auctions are still being held for this MMP and its decline in market value is not considered to be other than temporary.

ChoiceOne evaluates all securities for other than temporary impairment at least on a semi-annual basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of ChoiceOne to retain its investment in the issue for a period of time sufficient to allow for any anticipated recovery in fair value. Except for the impairment described in the previous paragraph, no other than temporary impairments were recorded in 2008 or 2007.

Note 4 - Loans

The Bank's loan portfolio as of December 31 was as follows:

(Dollars in thousands)

		2008			2007
Agricultural	$	23,408		$	24,765
Commercial and industrial		57,587			51,242
Consumer		16,047			15,939
Real estate - commercial		123,952			125,960
Real estate - construction		2,026			4,048
Real estate - residential		102,957			106,404
Loans, gross		325,977			328,358
Allowance for loan losses		(3,600	)		(3,600	)
Loans, net	$	322,377		$	324,758

29

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - Mortgage Banking

Activity during the year was as follows:

(Dollars in thousands)

		2008		2007		2006
Loans originated for resale, net of principal payments	$	12,249	$	15,700	$	15,187
Proceeds from loan sales		12,198		16,015		15,386
Net gains on sales of loans held for sale		215		287		234
Loan servicing fees, net of amortization		67		85		53

Loans serviced for others are not reported as assets in the accompanying consolidated balance sheets. The unpaid principal balances of these loans were $120.6 million and $130.8 million at December 31, 2008 and 2007, respectively. The Bank maintains custodial escrow balances in connection with these serviced loans; however, such escrows were immaterial at December 31, 2008 and 2007.

Activity for loan servicing rights was as follows:

(Dollars in thousands)

		2008			2007			2006
Balance, beginning of year	$	792		$	992		$	445
Capitalized		51			108			63
Amortization		(263	)		(308	)		(151	)
Acquisition of servicing rights from VRMC		-			-			635
Balance, end of year	$	580		$	792		$	992

The fair value of loan servicing rights was $1,405,000 and $1,309,000 as of December 31, 2008 and 2007, respectively. Consequently, a valuation allowance was not necessary at year-end 2008 or 2007. The fair value of servicing rights at December 31, 2008 was determined using a discount rate of 7.9% and prepayment speeds ranging from 0% to 14%. The fair value of servicing rights at December 31, 2007 was determined using a discount rate of 8.3% and prepayment speeds ranging from 4% to 30%.

Note 6 - Allowance for Loan Losses

Activity in the allowance for loan losses was as follows:

(Dollars in thousands)

		2008			2007			2006
Balance, beginning of year	$	3,600		$	3,569		$	1,963
Provision charged to expense		3,475			2,035			200
Recoveries credited to the allowance		353			295			168
Transfer of allowance from VRB and VRMC		-			-			1,751
Loans charged off		(3,828	)		(2,299	)		(513	)
Balance, end of year	$	3,600		$	3,600		$	3,569

Information regarding nonperforming loans for the years ended December 31 follows:

(Dollars in thousands)

		2008		2007
Nonaccrual loans	$	8,305	$	5,605
Loans past due over 90 days still on accrual		333		188
Restructured loans		605		-
Total	$	9,243	$	5,793

30

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nonperforming loans includes both smaller balance homogenous loans that are collectively evaluated for impairment and loans individually classified as impaired loans. Information regarding impaired loans as of and for the year ended December 31 follows:

(Dollars in thousands)

		2008		2007		2006
Loans with no allowance allocated at year end	$	5,576	$	7,381	$	5,030
Loans with allowance allocated at year end		2,087		2,160		1,807
Amount of allowance for loan losses allocated at year end		520		854		942
Average balance during the year		5,540		7,026		2,627
Interest income recognized thereon		142		237		258
Cash-basis interest income recognized		1		12		31

Note 7 - Premises and Equipment

As of December 31, premises and equipment consisted of the following:

(Dollars in thousands)

		2008			2007
Land and land improvements	$	3,576		$	3,539
Leasehold improvements		47			47
Buildings		10,110			9,828
Furniture and equipment		3,650			3,244
Total cost		17,383			16,658
Accumulated depreciation		(5,638	)		(4,793	)
Premises and equipment, net	$	11,745		$	11,865

Depreciation expense was $844,000, $832,000, and $587,000 for 2008, 2007 and 2006, respectively.

The Bank leases certain branch properties and automated-teller machine locations in its normal course of business. Rent expense totaled $70,000, $69,000, and $49,000 for 2008, 2007 and 2006, respectively. Rent commitments under non-cancelable operating leases were as follows, before considering renewal options that generally are present (dollars in thousands):

2009	$	56
2010		33
Total	$	89

Note 8 - Goodwill and Intangible Assets

Goodwill

The change in the balance for goodwill during the year was as follows:

(Dollars in thousands)

		2008		2007
Beginning of year	$	13,728	$	14,280
Adjustment of market value of land, buildings, and other real estate		-		(897	)
Adjustment of taxes payable		-		446
Adjustment of accrued postretirement benefit obligation		-		(126	)
Other		-		25
End of year	$	13,728	$	13,728

Changes in the other category above in 2007 were comprised of legal fees and other costs related to the merger with VRFC.

Statement of Financial Accounting Standards Number 142, Goodwill and Other Intangible Assets (SFAS 142) requires that goodwill be evaluated for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that the

31

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

carrying value may not be recoverable. ChoiceOne performed its annual evaluation of goodwill for impairment as of June 30, 2008 and determined that no impairment existed. As a result of market conditions that caused the market value of bank stocks to decline in the second half of 2008, the evaluation was updated as of December 31, 2008. Based on the testing performed, which included review of acquisition values of Midwest area banks during 2008, no impairment of goodwill was deemed to exist as of December 31, 2008.

Acquired Intangible Assets

Information for acquired intangible assets at December 31 follows:

(Dollars in thousands)

		2008				2007
		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Core deposit intangible	$	4,134	$	896	$	4,134	$	483
Other intangible assets		473		174		473		93
Totals	$	4,607	$	1,070	$	4,607	$	576

Other intangible assets increased by $347,000 in 2007 as a result of the acquisition of a book of business from an investment agent affiliated with VRFC.

The core deposit intangible is being amortized on a straight-line basis over ten years and other intangible assets are being amortized over periods ranging from two to ten years. Aggregate amortization expense was $494,000, $498,000 and $77,000 for 2008, 2007 and 2006, respectively. The estimated amortization expense for the next five years ending December 31 is as follows:

(Dollars in thousands)

		Core Deposit Intangible		Other Intangible Assets		Total
2009	$	413	$	55	$	468
2010		413		35		448
2011		413		35		448
2012		413		35		448
2013		413		35		448
Thereafter		1,173		104		1,277
Total	$	3,238	$	299	$	3,537

Note 9 - Other Real Estate Owned

Other real estate owned represents residential and commercial properties owned and is reported net of a valuation allowance. Activity within other real estate owned was as follows:

(Dollars in thousands)

		2008			2007
Balance, beginning of year	$	1,509		$	1,774
Transfers from loans		3,666			898
Reclassification from land and buildings		-			240
Sales		(1,278	)		(1,307	)
Write-downs		(205	)		(96	)
Balance, end of year	$	3,692		$	1,509

32

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Activity in the valuation allowance on other real estate owned was as follows:

(Dollars in thousands)

		2008			2007			2006
Balance, beginning of year	$	30		$	223		$	84
Write-downs charged to expense		196			106			155
Deletions from sales of other real estate owned		(20	)		(299	)		(16	)
Balance, end of year	$	206		$	30		$	223

Note 10 - Deposits

Scheduled maturities of certificates of deposit at December 31 were as follows:

(Dollars in thousands)

2009	$	118,702
2010		39,515
2011		7,940
2012		7,540
2013		3,858
2014		56
Total	$	177,611

The Bank had certificates of deposit issued in denominations of $100,000 or greater totaling $76.6 million and $67.8 million at December 31, 2008 and 2007, respectively. The Bank had brokered certificates of deposit totaling $19.7 million at December 31, 2008 compared to $17.7 million at December 31, 2007. As of December 31, 2008, the weighted average interest rate on these brokered certificates of deposit was 2.84% with maturities ranging from January 2009 to June 2010.

Note 11 - Repurchase Agreements

Securities sold under agreements to repurchase are advances to the Bank by customers or another bank. These agreements are direct obligations of the Bank and are secured by securities held in safekeeping at a correspondent bank. Most repurchase agreements with Bank customers mature daily. The Bank had $1,173,000 of term repurchase agreements with Bank customers as of December 31, 2008 that matures in 2009 and 2010. At year-end 2008 the Bank had a $5 million structured repurchase agreement with a correspondent bank maturing on July 31, 2012 with a fixed interest rate of 4.55%. The repurchase agreement is putable by the correspondent quarterly starting July 1, 2009. Information regarding repurchase agreements follows:

(Dollars in thousands)

		2008			2007
Outstanding balance at December 31	$	18,786		$	21,710
Average interest rate at December 31		2.13	%		3.79	%
Average balance during the year	$	18,632		$	16,090
Average interest rate during the year		2.93	%		3.50	%
Maximum month end balance during the year	$	19,754		$	21,811

33

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12 - Federal Home Loan Bank Advances

At December 31, advances from the Federal Home Loan Bank (the "FHLB") were as follows:

(Dollars in thousands)

		2008		2007
Maturities ranging from March 2009 to January 2013, fixed interest rates ranging from 2.54% to 5.95%, with an average rate of 4.69%	$	27,957
Maturities ranging from May 2008 to December 2010, fixed interest rates ranging from 2.48% to 5.95%, with an average rate of 4.68%			$	30,933
Maturities ranging from February 2009 to June 2009, floating interest rates ranging from 0.46% to 0.65%, with an average rate of 0.60%		12,000
Maturity of March 2008, floating interest rate, with an average rate of 4.12%				5,000
Total advances outstanding at year-end	$	39,957	$	35,933

Penalties are charged on fixed rate advances that are paid prior to maturity. No fixed rate advances were paid prior to maturity in 2008, 2007 or 2006. An advance maturing in 2012 may be converted to a variable rate by the FHLB. If the FHLB exercises its option the Bank may prepay the advance without penalty. Advances were secured by residential real estate loans with a carrying value of approximately $77.5 million at December 31, 2008 and by residential real estate loans with a carrying value of approximately $62.7 million at December 31, 2007. Based on this collateral, the Bank was eligible to borrow an additional $9.7 million at year-end 2008. The scheduled maturities of advances from the Federal Home Loan Bank at December 31, 2008 were as follows (dollars in thousands):

2009	$	18,475
2010		13,482
2012		5,000
2013		3,000
Total	$	39,957

Note 13 - Income Taxes

Information as of December 31 and for the year follows:

(Dollars in thousands)

		2008			2007		2006
Provision for Income Taxes
Current federal income tax expense	$	437		$	665	$	780
Deferred federal income tax expense/(benefit)		(644	)		274		(141	)
Income tax expense/(benefit)	$	(207	)	$	939	$	639

34

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		2008			2007			2006
Reconciliation of Income Tax Provision to Statutory Rate
Income tax computed at statutory federal rate of 34%	$	418		$	1,537		$	927
Tax exempt interest income		(644	)		(569	)		(323	)
Tax exempt earnings on bank-owned life insurance		(126	)		(124	)		(51	)
Nondeductible interest expense		72			86			49
Other items		73			9			37
Income tax expense/(benefit)	$	(207	)	$	939		$	639
Effective income tax rate		(17	)%		21	%		23	%

Components of Deferred Tax Assets and Liabilities		2008			2007
Deferred tax assets:
Allowance for loan losses	$	908		$	919
Capital losses on equity securities		295			-
Purchase accounting adjustments from merger with VRFC		328			621
Deferred compensation		522			593
Alternative minimum tax credit carryforward		241			-
Postretirement benefits obligation		47			68
Nonaccrual loan interest		128			60
Write downs on other real estate owned		70			10
Unrealized losses on securities available for sale		40			-
Other		113			86
Total deferred tax assets		2,692			2,357
Deferred tax liabilities:
Purchase accounting adjustments from merger with VRFC		1,236			2,457
Depreciation		1,252			297
Unrealized gains on securities available for sale		-			188
Loan servicing rights		138			178
Stock dividends from Federal Home Loan Bank stock		111			111
Prepaid expenses		84			88
Investment in West Shore Computer Services		45			47
Other		-			16
Total deferred tax liabilities		2,866			3,382
Net deferred tax assets (liabilities)	$	(174	)	$	(1,025	)

A deferred tax asset of $295,000 was recorded as a result of a losses recorded on two of ChoiceOne's Money Market Preferred auction rate securities (MMP) in 2008. If ChoiceOne sells these securities, any loss sustained would be considered a capital loss, which would need to be recovered through offsetting capital gains. ChoiceOne's management has identified tax strategies that could be used to generate capital gains to offset capital losses, if the value of these securities does not recover. Management has not decided if, or when, it would implement these tax strategies.

A valuation allowance related to deferred taxes is recognized when it is considered more likely than not that part or all of the deferred tax benefits will not be realized. Management has determined that no such allowance was required at December 31, 2008 and 2007.

35

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 - Related Party Transactions

Loans to executive officers, directors and their affiliates were as follows at December 31:

(Dollars in thousands)

		2008			2007
Balance, beginning of year	$	5,322		$	3,275
New loans		2,190			2,734
Repayments		(1,246	)		(687	)
Balance, end of year	$	6,266		$	5,322

Deposits from executive officers, directors, and their affiliates were $9.9 million and $8.1 million at December 31, 2008 and 2007, respectively.

Note 15 - Employee Benefit Plans

401(k) Plan:
The 401(k) plan allows employees to contribute up to the IRS maximum. Matching company contributions to the plan are discretionary. Expense of this plan was $141,000, $113,000, and $94,000 in 2008, 2007, and 2006, respectively.

Employee Stock Ownership Plan:
Employees participate in an Employee Stock Ownership Plan (the "ESOP"). ChoiceOne makes discretionary contributions to the ESOP. Shares of ChoiceOne common stock are allocated to participants based on relative compensation earned and compensation expense is recorded when allocated. Dividends on allocated shares increase the participant accounts. Participants become fully vested upon completing six years of qualifying service. Participants receive the shares at the end of employment. A participant may require stock received to be repurchased by ChoiceOne at any time. ChoiceOne did not contribute to the ESOP nor was any expense recorded in 2008, 2007, or 2006.

Shares held by the ESOP as of December 31 were as follows:

(Dollars in thousands)

		2008		2007		2006
Shares allocated to participants		5,355		5,355		5,355
Shares unallocated		-		-		-
Total shares of ChoiceOne stock held by ESOP		5,355		5,355		5,355
Fair value of allocated shares, subject to repurchase obligation,    recorded in other liabilities	$	44	$	67	$	95

Postretirement Benefits Plan:
ChoiceOne maintains an unfunded postretirement health care plan, which permits employees (and their dependents) the ability to participate upon retirement from ChoiceOne. ChoiceOne does not pay any portion of the health care premiums charged to its retired participants. A liability has been accrued for the obligation under this plan. ChoiceOne incurred postretirement benefit expense of negative $6,000 in 2008 and positive $25,000 in 2007. The postretirement obligation liability was $139,000 as of December 31, 2008 and $201,000 as of December 31, 2007.

Deferred Compensation Plans:
A deferred director compensation plan covers former directors of Valley Ridge Bank. Under the plan, ChoiceOne pays each former director the amount of director fees deferred plus interest at rates ranging from 3.90% to 5.84% over various periods as elected by each director. The payout periods range from 1 month to 10 years beginning with the individual's termination of service. A liability has been accrued for the obligation under this plan. ChoiceOne incurred deferred compensation plan expense of $49,000 in 2008 and $56,000 in 2007. The deferred compensation liability was $802,000 as of December 31, 2008 and $1,106,000 as of December 31, 2007.

A supplemental retirement plan covers four former executive officers of Valley Ridge Bank. Under the plan, ChoiceOne pays these individuals a specific amount of compensation plus interest at 7.50% over a 15-year period commencing upon early retirement age (as

36

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

defined in the plan) or normal retirement age (as defined in the plan). A liability has been accrued for the obligation under this plan. ChoiceOne incurred deferred compensation plan expense of $104,000 in 2008 and $10,000 in 2007. Deferred compensation liabilities of $734,000 and $638,000 were outstanding as of December 31, 2008 and December 31, 2007, respectively.

Note 16 - Stock Options

Options to buy stock are granted to key employees under an incentive stock option plan to provide them with an additional equity interest in ChoiceOne. The plan provides for the issuance of up to 135,545 shares of common stock. ChoiceOne recognized compensation expense of $33,000 in 2008, $31,000 in 2007, and $24,000 in 2006 in connection with stock options that vested for current participants during these years. The maximum option term is 10 years and options vest over 3 years. At December 31, 2008, there were 86,313 options available for future grants.

A summary of the activity in the plan follows:

	2008		2007			2006
	Shares	Weighted average exercise price	Shares		Weighted average exercise price	Shares	Weighted average exercise price
Options outstanding, beginning of year	37,732	$17.36	30,414		$17.27	23,714	$16.82
Options granted	11,500	13.50	9,500		17.95	6,700	18.85
Options exercised	-	-	-		-	-	-
Options forfeited or expired	-	-	(2,182	)	18.77	-	-
Options outstanding, end of year	49,232	$16.46	37,732		$17.36	30,414	$17.27
Options exercisable at December 31	34,357	$16.89	25,901		$16.75	19,877	$16.15

The range of prices for options outstanding and exercisable at the end of 2008 ranged from $13.04 to $21.43 per share. The weighted average remaining contractual life of options outstanding and exercisable at the end of 2008 was approximately 5.9 years. The exercise price of all options outstanding was higher than ChoiceOne's closing stock price as of the end of 2008. As a result, the aggregate intrinsic value of both options outstanding and options exercisable was $0 as of December 31, 2008. The numbers of options, weighted average exercise prices, and fair value of options granted have been adjusted for all stock dividends and splits. Information pertaining to options outstanding at December 31, 2008 was as follows:

Exercise price of stock options:	Number of options outstanding at year-end	Number of options exercisable at year-end	Average remaining contractual life (in years)
$ 13.04	3,857	3,857	3.14
$ 13.50	11,500	2,875	9.07
$ 13.70	5,250	5,250	3.99
$ 16.31	6,299	6,299	5.06
$ 17.95	9,500	4,750	8.05
$ 18.85	6,000	4,500	7.05
$ 21.43	6,826	6,826	6.05

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that uses the weighted average assumptions noted in the following table. ChoiceOne uses historical data to estimate the volatility of the option exercise price and employee terminations within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

		2008			2007			2006
Expected stock price volatility		21.96	%		24.96	%		24.79	%
Dividend yield		4.41	%		3.78	%		3.39	%
Expected option life (in years)		7			7			7
Risk-free interest rate		3.02	%		4.75	%		4.31	%
Fair value of options granted during year	$	1.91		$	3.92		$	4.18

37

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 2008, shares totaling 8,456 were vested at an average exercise price of $17.30. As of December 31, 2008, there was approximately $42,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plan. That cost is expected to be recognized by ChoiceOne through 2011.

Note 17 - Earnings Per Share

(Dollars in thousands, except per share data)

		2008		2007		2006
Basic
Net income	$	1,435	$	3,580	$	2,088
Weighted average common shares outstanding		3,236,984		3,238,837		1,918,659
Basic earnings per common share	$	0.44	$	1.11	$	1.09
Diluted
Net income	$	1,435	$	3,580	$	2,088
Weighted average common shares outstanding		3,236,984		3,238,837		1,918,659
Plus: dilutive effect of assumed exercises of stock options		-		1,178		2,986
Average shares and dilutive potential common shares		3,236,984		3,240,015		1,921,645
Diluted earnings per common share	$	0.44	$	1.10	$	1.09

There were 49,232 stock options as of December 31, 2008 and 28,625 stock options as of December 31, 2007 considered to be anti-dilutive to earnings per share and thus have been excluded from the calculations above.

Note 18 - Other Comprehensive Income (Loss)

Other comprehensive income (loss) components and related taxes follow:

(Dollars in thousands)

		2008			2007		2006
Unrealized holding gains (losses) on available for sale securities	$	(1,502	)	$	595	$	358
Less reclassification adjustments for gains (losses) included in net income		(833	)		13		(66	)
Net unrealized gains (losses)		(669	)		582		424
Less tax effect		(227	)		198		144
Net-of-tax amount		(442	)		384		280
Change in funded status of postretirement benefit plan		56			237		-
Tax effect		19			81		-
Net-of-tax amount		37			156		-
Total	$	(405	)	$	540	$	280

Accumulated other comprehensive income, a component of equity, was comprised of the following at December 31:

(Dollars in thousands)

		2008			2007
Unrealized holding gains (losses) on available for sale securities	$	(116	)	$	553
Unrecognized actuarial gains on postretirement benefit plan		292			237
Tax effect		(60	)		(269	)
Net accumulated other comprehensive income	$	116		$	521

38

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 - Condensed Financial Statements of Parent Company

Condensed Balance Sheets

(Dollars in thousands)		December 31
		2008		2007
Assets
Cash	$	54	$	68
Securities available for sale		736		769
Other assets		62		65
Investment in ChoiceOne Bank		51,379		52,324
Total assets	$	52,231	$	53,226
Liabilities
Mandatory redeemable shares under ESOP, at fair value	$	44	$	67
Other liabilities		2		17
Total liabilities		46		84
Shareholders' equity		52,185		53,142
Total liabilities and shareholders' equity	$	52,231	$	53,226

Condensed Statements of Income

(Dollars in thousands)		Years Ended December 31
		2008			2007		2006
Interest and dividends from ChoiceOne Bank	$	2,017		$	2,347	$	4,395
Interest and dividends from other securities		27			27		26
Gains on sales of securities		18			-		-
Total income		2,062			2,374		4,421
Other expenses		61			149		124
Income before income tax and equity in undistributed net
income of subsidiary		2,001			2,225		4,297
Income tax benefit		26			39		42
Income before equity in undistributed net income of subsidiary		2,027			2,264		4,339
Equity in undistributed net income (distributions in excess    of net income) of subsidiary		(592	)		1,316		(2,251	)
Net income	$	1,435		$	3,580	$	2,088

39

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Statements of Cash Flows

(Dollars in thousands)		Years Ended December 31
		2008			2007			2006
Cash flows from operating activities:
Net income	$	1,435		$	3,580		$	2,088
Adjustments to reconcile net income to net cash from operating      activities:
Equity in (undistributed net income) distributions in excess
of net income of subsidiary		592			(1,316	)		2,251
Amortization		2			2			(2	)
Gains on sales of securities		(18	)		-			-
Changes in other assets		3			53			(27	)
Changes in other liabilities		(13	)		7			(10,090	)
Net cash from (used in) operating activities		2,001			2,326			(5,780	)
Cash flows from investing activities:
Capital contribution to subsidiary		-			-			(3,000	)
Sales of securities		40			-			-
Purchases of securities		-			-			(226	)
Cash acquired from VRFC		-			-			10,330
Net cash from investing activities		40			-			7,104
Cash flows from financing activities:
Issuance of common stock		147			169			339
Repurchase of common stock		-			(537	)		(84	)
Cash dividends paid		(2,202	)		(2,200	)		(1,397	)
Net cash used in financing activities		(2,055	)		(2,568	)		(1,142	)
Net change in cash and cash equivalents		(14	)		(242	)		182
Beginning cash and cash equivalents		68			310			128
Ending cash and cash equivalents	$	54		$	68		$	310
Supplemental disclosure of non-cash activities:
Land acquired from VRFC						$		(116	)
Other assets acquired from VRFC								(37	)
Other liabilities assumed from VRFC								10,089
Common stock issued to VRFC shareholders								28,538

40

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 20 - Financial Instruments

Financial instruments as of December 31 were as follows:

(Dollars in thousands)		2008				2007
		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and due from banks	$	9,252	$	9,252	$	10,923	$	10,923
Federal funds sold		1,908		1,908		217		217
Securities available for sale		77,368		77,368		83,156		83,156
Federal Home Loan Bank and Federal Reserve         Bank stock		4,573		4,573		4,569		4,569
Loans held for sale		316		316		100		100
Loans, net		322,377		318,730		324,758		327,605
Accrued interest receivable		2,263		2,263		2,609		2,609
Liabilities:
Demand, savings and money market deposits		169,387		169,387		170,779		170,779
Time deposits		177,611		178,050		181,065		185,120
Repurchase agreements		18,786		18,811		21,710		22,275
Advances from Federal Home Loan Bank		39,957		40,759		35,933		36,229

The estimated fair values approximate the carrying amounts for all assets and liabilities except those described later in this paragraph. The methodology for determining the estimated fair value for securities available for sale is described in Note 21. The estimated fair value for loans is based on the rates charged at December 31 for new loans with similar maturities, applied until the loan is assumed to reprice or be paid. The allowance for loan losses is considered to be a reasonable estimate of discount for credit quality concerns. The estimated fair values for time deposits and FHLB advances are based on the rates paid at December 31 for new deposits or FHLB advances, applied until maturity. The estimated fair values for other financial instruments and off-balance sheet loan commitments are considered nominal.

Note 21 - Fair Value Measurements

The following tables present information about the Bank's assets and liabilities measured at fair value on a recurring basis at December 31, 2008, and the valuation techniques used by the Bank to determine those fair values.

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Bank has the ability to access.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Bank's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

There were no liabilities measured at fair value as of December 31, 2008. Disclosures concerning assets measured at fair value are as follows:

41

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets Measured at Fair Value on a Recurring Basis at December 31, 2008
(Dollars in Thousands)

	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Balance at December 31, 2008
Assets
Investment securities, available for sale	$ 27,908	$ 46,230	$ 3,230	$ 77,368

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis
(Dollars in Thousands)

Investment Securities, Available for Sale
Balance at December 31, 2007	$	1,748
Total realized and unrealized gains (losses) included in income		-
Total unrealized gains (losses) included in other comprehensive income		(2	)
Net purchases, sales, calls, and maturities		646
Net transfers in (out) of Level 3		838
Balance at December 31, 2008	$	3,230

Of the Level 3 assets that were still held by the Bank at December 31, 2008, the net unrealized gain for the twelve months ended December 31, 2008 was $10,000, which is recognized in other comprehensive income in the consolidated balance sheet. There were no sales of Level 3 securities in the year of 2008. There were purchases of $869,000 of Level 3 securities during the year of 2008.

Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 assets and liabilities. As a result, the unrealized gains and losses for these assets and liabilities presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs.

Available for sale investment securities categorized as Level 3 assets consist of bonds issued by local municipalities and a trust preferred security. The Bank estimates the fair value of these assets based on the present value of expected future cash flows using management's best estimate of key assumptions, including forecasted interest yield and payment rates, credit quality and a discount rate commensurate with the current market and other risks involved.

The Bank also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets include loans which have been classified as impaired under the provisions of Statement of Financial Accounting Standards 114, "Accounting by Creditors for Impairment of a Loan" ("SFAS 114"). The Bank has estimated the fair values of these assets using Level 3 inputs, specifically discounted cash flow projections.

Assets Measured at Fair Value on a Non-recurring Basis
(Dollars in Thousands)

	Balance at December 31, 2008	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total Losses for the Period Ended December 31, 2008
Assets
Impaired loans accounted for under    SFAS 114	$ 7,663	$  -	$  -	$ 7,663	$ 1,200

Impaired loans accounted for under SFAS 114 categorized as Level 3 assets consist of non-homogeneous loans that are considered impaired. The Bank estimates the fair value of the loans based on the present value of expected future cash flows using management's best estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated

42

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

realizable values of available collateral (typically based on outside appraisals). The losses indicated for the period ended December 31, 2008 consisted of charge-downs that were posted to the allowance for loan losses.

Other assets, including other real estate, bank-owned life insurance, goodwill, intangible assets and other assets acquired in business combinations, may be carried at fair value or are subject to periodic impairment assessments under other accounting principles generally accepted in the United States of America that could result in reporting at fair value. These assets are not considered financial instruments. Effective February 12, 2008, the Financial Accounting Standards Board issued a staff position that delayed the applicability of Statement of Financial Accounting Standards 157, "Fair Value Measurements," to non-financial instruments. Accordingly, these assets have been omitted from the above disclosures.

Note 22 - Off-Balance Sheet Activities

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customers' financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

The contractual amount of financial instruments with off-balance sheet risk was as follows at December 31:

(Dollars in thousands)		2008				2007
		Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Unused lines of credit and letters of credit	$	7,087	$	39,989	$	8,313	$	43,583
Commitments to fund loans (at market rates)		1,397		460		3,679		8,532

Commitments to fund loans are generally made for periods of 180 days or less. The fixed rate loan commitments have interest rates ranging from 5.75% to 6.75% and maturities ranging from 8 years to 20 years.

Note 23 - Regulatory Capital

ChoiceOne Bank is subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as are asset growth and expansion, and plans for capital restoration are required. At year-end 2008 and 2007, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's categories.

43

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Actual capital levels and minimum required levels for ChoiceOne Bank were as follows:

(Dollars in thousands)	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required to be Well Capitalized Under Prompt Corrective Action Regulations
		Amount	Ratio			Amount	Ratio			Amount	Ratio
December 31, 2008
Total capital (to risk weighted assets)	$	36,941	11.1	%	$	26,524	8.0	%	$	33,155	10.0	%
Tier 1 capital (to risk weighted assets)		33,563	10.1			13,262	4.0			19,893	6.0
Tier 1 capital (to average assets)		33,563	7.5			17,914	4.0			22,392	5.0
December 31, 2007
Total capital (to risk weighted assets)	$	37,416	11.4	%	$	26,162	8.0	%	$	32,702	10.0	%
Tier 1 capital (to risk weighted assets)		34,068	10.4			13,081	4.0			19,621	6.0
Tier 1 capital (to average assets)		34,068	7.6			17,965	4.0			22,456	5.0

Banking regulations limit capital distributions by state-chartered banks. Generally, capital distributions are limited to undistributed net income for the current and prior two years. At December 31, 2008, approximately $723,000 was available for ChoiceOne Bank to pay dividends to ChoiceOne Financial Services, Inc. ChoiceOne's ability to pay dividends to shareholders is dependent on the Bank, which is restricted by state law and regulations.

Note 24 - Quarterly Financial Data (Unaudited)

(Dollars in thousands)							Earnings Per Share
		Interest Income		Net Interest Income		Net Income		Basic		Fully Diluted
2008
First Quarter	$	6,928	$	3,698	$	759		$   0.23		$   0.23
Second Quarter		6,583		3,728		723		0.23		0.23
Third Quarter		6,600		3,986		612		0.19		0.19
Fourth Quarter		6,423		3,919		(659	)	(0.21	)	(0.21	)
2007
First Quarter	$	7,032	$	3,773	$	1,001		$   0.31		$   0.30
Second Quarter		7,236		3,831		901		0.28		0.28
Third Quarter		7,380		3,885		674		0.20		0.20
Fourth Quarter		7,117		3,654		1,004		0.32		0.32

The net loss and related negative earnings per share experienced in the fourth quarter of 2008 were due to a higher provision for loan losses and securities losses. The provision for loan losses in the fourth quarter of 2008 was $1,725,000, compared to a provision of $1,750,000 for the first three quarters of 2008 and $1,000,000 for the fourth quarter of 2007. The securities losses were comprised of a $435,000 loss when a money market preferred security converted to preferred stock and a $432,000 loss when the decline in a security's market value was considered to be an other than temporary impairment.

44

ChoiceOne Financial Services, Inc.
CORPORATE AND SHAREHOLDER INFORMATION

Corporate Headquarters
ChoiceOne Financial Services, Inc.
     109 East Division Street
     Sparta, Michigan 49345
     Phone:  (616) 887-7366
     Fax:     (616) 887-7990
     Website: www.choiceone.com


Market Makers in ChoiceOne Financial
Services, Inc. Stock
Howe Barnes Hoefer & Arnett
     Chicago, Illinois
     (800) 800-4693

Kent King Securities, Division of Royal
Securities, Inc.
     Grand Rapids, Michigan
     (616) 459-3317
     (800) 321-9171

Stifel Nicolaus & Company, Inc.
     Grand Rapids, Michigan
     (616) 942-1717
     (800) 676-0477


Stock Registrar and Transfer Agent
Registrar and Transfer Company
     10 Commerce Drive
     Cranford, New Jersey 07016
     (800) 368-5948


Annual Shareholder Meeting
The 2009 Annual Shareholder Meeting of
ChoiceOne Financial Services, Inc., will
be held at 11:00 a.m. local time on Thursday,
April 30, 2009, at Moss Ridge Golf Club in
Ravenna, Michigan. ChoiceOne Bank
Alpine Office
     5050 Alpine Avenue NW
     Comstock Park, Michigan 49321

Cedar Springs Office
     4170 - 17 Mile Road
     Cedar Springs, Michigan 49319

Coopersville Office
     661 West Randall Street
     Coopersville, Michigan 49404

Egelston Office
     5475 East Apple Avenue
     Muskegon, Michigan 49442

Fremont Office
     1423 West Main Street
     Fremont, Michigan 49412

Grant Office
     10 West Main Street
     Grant, Michigan 49327

Kent City Office
     450 West Muskegon Street
     Kent City, Michigan 49330

Newaygo Office
     246 West River Drive
     Newaygo, Michigan 49337

Ravenna Office
     3069 Slocum Road
     Ravenna, Michigan 49451

Rockford Office
     6795 Courtland Drive
     Rockford, Michigan 49341

Sparta - Main Office
     109 East Division Street
     Sparta, Michigan 49345

Sparta - Appletree Office
     416 West Division Street
     Sparta, Michigan 49345

White Cloud Office
     47 South Charles Street
     White Cloud, Michigan 49349 ChoiceOne Insurance Agencies, Inc.
Sparta Office
     109 East Division Street
     Sparta, Michigan 49345

45

ChoiceOne Financial Services, Inc.
DIRECTORS AND OFFICERS

Directors
ChoiceOne Financial Services, Inc.

Jerome B. Arends
   Former President and Chief Executive
   Officer of Ravenna Farm Equipment
   (Agricultural Equipment Supplier)

Frank G. Berris
   President and Chief Executive Officer,
   American Gas & Oil Co., Inc.
   (Distributor of Petroleum Products)

James A. Bosserd
   President and Chief Executive Officer,
   ChoiceOne Financial Services, Inc. and
   ChoiceOne Bank

K. Timothy Bull
   President, Moon Lake Orchards, Inc.
   (Fruit Producer)

William F. Cutler, Jr.
   Former Vice President, H. H. Cutler Co.
   (Apparel Manufacturer)

Richard L. Edgar
   Former President and Chief Executive
   Officer, Valley Ridge Financial Corp.
   and Valley Ridge Bank

Stuart Goodfellow
   Owner, Goodfellow Vending Services
   (Vending Company) and Goodfellow
   Blueberry Farms

Gary Gust
   President, Gust Construction Company
   (General Contractor)

Paul L. Johnson
   President, Falcon Resources, Inc.
   (Automotive and Furniture Design) Directors
ChoiceOne Financial Services, Inc.
(continued)

Dennis C. Nelson, DDS
   General Dentistry

Nels W. Nyblad
   President, Nyblad Orchards
   (Fruit Producer)

Jon E. Pike
   CPA and Chairman, Beene Garter LLP
   (Certified Public Accountants)

Donald VanSingel
   Former Consultant, Governmental
   Consultant Services. Former Legislator,
   Michigan House of Representatives
Officers
ChoiceOne Financial Services, Inc.

James A. Bosserd
   President and Chief Executive Officer

Louis D. Knooihuizen
   Senior Vice President

Michael E. McHugh
   Senior Vice President

Linda R. Pitsch
   Secretary

Thomas L. Lampen
   Treasurer

46

Officers
ChoiceOne Bank

James A. Bosserd
   President, Chief Executive Officer

Sheila R. Clark
   Senior Vice President,
     Human Resources Director

Louis D. Knooihuizen
   Senior Vice President,
     Chief Lending Officer

Michael E. McHugh
   Senior Vice President,
     Accounting, Sales and Marketing

Linda R. Pitsch
   Senior Vice President, Operations

Lee A. Braford
   Vice President,
     Commercial Loans and Credit Risk

Amy S. Homich
   Vice President, Retail Sales

Mary J. Johnson
   Vice President, Risk Management

Thomas L. Lampen, CPA
   Vice President, Chief Financial Officer

Daniel C. Wheat
   Vice President,
     Retail Loan Sales and Operations

Linda K. Anderson
   Assistant Vice President,
     Office Manager - Rockford

Brian R. Bacon
   Assistant Vice President,
     Commercial Loans

Marilyn B. Childress
   Assistant Vice President,
     Mortgage Loans

Rita A. Flintoff
   Assistant Vice President,
     Office Manager - Newaygo

Denise L. Gates
   Assistant Vice President,
     Office Manager - Cedar Springs

Gregory M. Goss
   Assistant Vice President,
     Security Officer Officers
ChoiceOne Bank (continued)

Stephen P. Grey
   Assistant Vice President,
     Commercial Loans

Dean A. Hanson
   Assistant Vice President,
     Commercial Loans

Jason J. Herbig
   Assistant Vice President,
     Information Technology

Valerie J. Heyt
   Assistant Vice President,
     Retail Lending

Rebecca J. Johnson
   Assistant Vice President,
     Retail Banking

Linda S. Nichols
   Assistant Vice President,
     Office Manager - Ravenna

Lori J. O'Brien
   Assistant Vice President,
     Commercial Loans

Peggy A. O'Dea
   Assistant Vice President,
     Office Manager - Coopersville

Paul E. Tucker
   Assistant Vice President,
     Information Technology

Cynthia J. Watson
   Assistant Vice President, Operations

Wayne F. Webster
   Assistant Vice President,
     Office Manager - Grant

Marva J. Zeldenrust
   Assistant Vice President,
     Office Manager - Fremont

Sally K. Anderson
   Credit Analyst Officer

Candace J. Bouwkamp
   Administrative Services Manager

Erin M. Burdick-Bloom
   Office Manager - Alpine

Lee J. Decker
   Office Manager - Egelston Officers
ChoiceOne Bank (continued)

Bonnie K. Koehn
   Office Manager - Kent City

Judy A. Schulz
   Collections Manager

Christine L. Steele
   Office Manager - White Cloud


Officers
ChoiceOne Insurance Agencies, Inc.

James A. Bosserd
   President

Kelly J. Potes, CFP
   Senior Vice President

Jack L. Draper
   Vice President

Randy A. Schmidt, CFP
   Vice President

Linda R. Pitsch
   Secretary

Thomas L. Lampen, CPA
   Treasurer

47

EX-21

EXHIBIT21

SUBSIDIARIES OF THE REGISTRANT

The following lists the subsidiaries of the Registrant and the state or jurisdiction of incorporation.

	Name and Address of Subsidiary	Incorporated
1.	ChoiceOne Bank 109 East Division Sparta, Michigan 49345	Michigan
2.	ChoiceOne Insurance Agencies, Inc. (1) 109 East Division Sparta, Michigan 49345	Michigan
3.	West Shore Computer Services, Inc. (2) 111 North Main Street Scottville, Michigan 49454	Michigan
4.	Valley Ridge Financial Services, Inc. (1) 450 West Muskegon Kent City, Michigan 49330	Michigan
5.	Valley Ridge Realty, Inc. (1) 450 West Muskegon Kent City, Michigan 49330	Michigan
6.	1423 West Main LLC (1) 450 West Muskegon Kent City, Michigan 49330	Michigan

____________________

(1)	These are wholly-owned subsidiaries of ChoiceOne Bank.
(2)	ChoiceOne Bank owns a 25% interest in West Shore Computer Services, Inc.

EX-23

EXHIBIT 23

CONSENT OF REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of ChoiceOne Financial Services, Inc. on Form S-3 (Registration No. 333-44336); Form S-8 (Registration No. 333-91364); and Form S-8 (Registration No. 333-91366) of our report dated March 24, 2009 on the consolidated financial statements of ChoiceOne Financial Services, Inc. for the years ended December 31, 2008, 2007 and 2006, which report is included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

Plante & Moran, PLLC

Grand Rapids, Michigan
March 24, 2009

EX-24

EXHIBIT 24

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 28, 2009	/s/ Jon E. Pike
	(signature)
	Jon E. Pike
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 26, 2009	/s/ Jerome Arends
	(signature)
	Jerome Arends
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 30, 2009	/s/ Frank G. Berris
	(signature)
	Frank G. Berris
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  March 30, 2009	/s/ K. Timothy Bull
	(signature)
	K. Timothy Bull
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 29, 2009	/s/ William F. Cutler, Jr.
	(signature)
	William F. Cutler, Jr.
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 26, 2009	/s/ Richard L. Edgar
	(signature)
	Richard L. Edgar
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 22, 2009	/s/ Stuart Goodfellow
	(signature)
	Stuart Goodfellow
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 23, 2009	/s/ Gary Gust
	(signature)
	Gary Gust
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 22, 2009	/s/ Paul L. Johnson
	(signature)
	Paul L. Johnson
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 22, 2009	/s/ Dennis C. Nelson
	(signature)
	Dennis C. Nelson
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 26, 2009	/s/ Nels W. Nyblad
	(signature)
	Nels W. Nyblad
	(type or print name)

LIMITED POWER OF ATTORNEY

          The undersigned, in his or her capacity as a director or officer, or both, of ChoiceOne Financial Services, Inc., does hereby appoint James A. Bosserd, Linda R. Pitsch, Michael E. McHugh and Thomas Lampen, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of ChoiceOne Financial Services, Inc. on Form 10-K for its fiscal year ended December 31, 2008, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Dated:  January 22, 2009	/s/ Donald VanSingel
	(signature)
	Donald VanSingel
	(type or print name)

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, James A. Bosserd, certify that:

1.	I have reviewed this annual report on Form 10-K for the year ended December 31, 2008 of ChoiceOne Financial Services, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 31, 2009	/s/ James A. Bosserd
	James A. Bosserd President and Chief Executive Officer ChoiceOne Financial Services, Inc.

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Thomas L. Lampen, certify that:

1.	I have reviewed this annual report on Form 10-K for the year ended December 31, 2008 of ChoiceOne Financial Services, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 31, 2009	/s/ Thomas L. Lampen
	Thomas L. Lampen Treasurer ChoiceOne Financial Services, Inc.

EX-32

EXHIBIT 32

CERTIFICATION

Pursuant to 18 U.S.C. § 1350, each of the undersigned hereby certifies in his capacity as an officer of ChoiceOne Financial Services, Inc. (the "Company") that the Annual Report of the Company on Form 10-K for the accounting period ended December 31, 2008 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.

Dated: March 31, 2009	/s/ James A. Bosserd
	James A. Bosserd President and Chief Executive Officer

Dated: March 31, 2009	/s/ Thomas L. Lampen
	Thomas L. Lampen Treasurer

A signed original of this written statement required by Section 906 has been provided to ChoiceOne Financial Services, Inc. and will be retained by ChoiceOne Financial Services, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.