10-K

Securities and Exchange Commission
Washington, D.C. 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, 2004
(   )	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 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.  (X)

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Yes        No   X  

As of June 30, 2004, the aggregate market value of common stock held by non-affiliates of the Registrant was $32,526,000. This amount is based on an average bid price of $20.75 per share for the Registrant's stock as of such date.

As of February 28, 2005, the Registrant had 1,567,012 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part I, Item 1, and Part II, Items 5 through 8 incorporate by reference portions of the Registrant's Annual Report to Shareholders for the year ended December 31, 2004.

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 28, 2005.

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 stateme nts, whether as a result of new information, future events, or otherwise.

Risk factors include, but are not limited to, 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 ability to repay loans; changes in the local and national economies; and local and global uncertainties such as acts of terrorism and military actions. 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, 2004, 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"). The Bank also owns a 20% interest in a non-banking corporation, West Shore Computer Services, Inc., a data processing firm located in Scottville, Michigan.

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 originates and sells 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 customers, the loss of which would have a materially adverse effect on the Registrant.

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

2

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 71%, 72%, and 74% of total revenues in 2004, 2003, and 2002, respectively. Interest on securities accounted for 11%, 8%, and 6% of total revenues in 2004, 2003, and 2002, 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 business of banking is highly competitive. The Bank's competition primarily comes from other financial institutions located within Sparta, Michigan, and the Kent County, Michigan area. There are a number of larger commercial banks in 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 Services. 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.

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. Under federal law, the FDIC also has authority to impose special assessments on insured depository institutions to repay FDIC borrowings from the United States Treasury or other sources and to establish semiannual assessment rates on Bank Insurance Fund ("BIF") member banks to maintain the BIF at the designated reserve ratio required by law.

The recapitalization of the Savings Association Insurance Fund ("SAIF") was accomplished through the enactment of The Deposit Insurance Funds Act of 1996. This legislation authorized the Financing Corporation ("FICO") to impose periodic assessments on depository institutions that are members of the BIF, in addition to institutions that are members of the SAIF. The purpose of these periodic assessments is to spread the cost of the interest payments on the outstanding FICO bonds over a larger number of institutions. Until the change in the law, only SAIF member institutions bore the cost of funding these interest payments.

3

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 Services, (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 br anches located in Michigan.

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, 2005, the Bank employed 59 full-time equivalent employees ("FTE's"); the Insurance Agency employed 11 FTE's; and the Mortgage Company employed 10 FTE's. The Registrant's only employees as of the same date were its four executive officers (who are also employed by the Bank). The Registrant, Bank, Insurance Agency, and Mortgage Company 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.

4

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

(Dollars in thousands)

		2004		2003		2002
U.S. Government and federal agency	$	6,875	$	7,805	$	4,699
State and municipal		26,768		20,435		11,725
Mortgage-backed		6,700		4,589		1,517
Asset-backed		-		233		508
Corporate		4,570		5,087		3,042
Total	$	44,913	$	38,149	$	21,491

The Registrant did not hold investment securities from any one issuer at December 31, 2004, 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, 2004 and 2003, a schedule of maturities of securities as of December 31, 2004, and the weighted average yields of securities as of December 31, 2004.

(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, 2004		Fair Value at Dec. 31, 2003
U.S. Government and
federal agency	$	2,292	$	4,583	$	-	$	-	$	6,875	$	7,805
State and municipal		2,817		14,914		8,196		841		26,768		20,435
Mortgage-backed securities		-		2,344		2,043		2,313		6,700		4,589
Asset-backed		-		-		-		-		-		233
Corporate debt		510		3,521		-		-		4,031		4,879
Total debt securities	$	5,619	$	25,362	$	10,239	$	3,154	$	44,374	$	37,941
Corporate equities (1)		-		-		-		-		539		208
Total securities	$	5,619	$	25,362	$	10,239	$	3,154	$	44,913	$	38,149

			Weighted average yields:
U.S. Government and
federal agency	2.66	%	2.67	%	-	%	-	%	2.67	%
State and municipal (2)	4.04		4.49		5.68		5.34		4.83
Corporate debt	5.14		3.42		-		-		3.64
Mortgage-backed securities	-		3.88		4.34		3.82		4.00
Corporate equities (3)	-		-		-		-		5.29

______________

(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%.
(3)	The yield on corporate equities applies only to preferred stock held which had a carrying value of $504,000 at December 31, 2004.

5

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)

		2004		2003		2002		2001		2000
Commercial and agricultural	$	37,770	$	33,006	$	34,263	$	27,756	$	27,710
Real estate - commercial		51,751		47,019		51,395		41,634		41,565
Real estate - construction		6,661		10,200		7,869		7,345		6,555
Real estate - residential		63,846		58,375		61,755		66,603		77,901
Consumer		13,250		14,532		18,565		21,829		21,587
Total loans, gross	$	173,278	$	163,132	$	173,847	$	165,167	$	175,318

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, 2004. 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, 2004.

(Dollars in thousands)

Loan Type		Less than 1 Year		1 Year - 5 Years		More than 5 Years		Total
Commercial and agricultural	$	44,604	$	43,299	$	1,618	$	89,521
Real estate - construction		6,661		-		-		6,661
Totals	$	51,265	$	43,299	$	1,618	$	96,182
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	$	16,384	$	29,766	$	300	$	46,450
Loans with floating or adjustable interest rates		34,881		13,533		1,318		49,732
Totals	$	51,265	$	43,299	$	1,618	$	96,182

(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.

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

(Dollars in thousands)

	2004	2003	2002	2001	2000
Loans accounted for on a non-accrual basis	$  795	$  1,914	$  2,522	$    855	$  1,019
Accruing loans which are contractually past due 90      days or more as to principal or interest payments	11	39	210	1,316	1,503
Loans defined as "troubled debt restructurings"	16	47	48	120	108
Totals	$  822	$  2,000	$  2,780	$  2,291	$  2,630

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.

6

(Dollars in thousands)

	2004	2003	2002	2001	2000
Interest on non-performing loans which would have      been earned had the loans been in an accrual or      performing status	$  32	$  77	$  97	$  80	$  51
Interest on non-performing loans that was actually      recorded when received	$  18	$  54	$  48	$  20	$  29

Potential Problem Loans
At December 31, 2004, there were $6.3 million of loans not disclosed above where some concern existed as to the borrowers' abilities to comply with original loan terms. A specific loss allocation of $105,000 from the Bank's allowance for loan losses had been allocated for nonperforming and potential problem loans as of December 31, 2004. However, the entire allowance for loan losses is also available for these potential problem loans.

Loan Concentrations
As of December 31, 2004, 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 3 to the Consolidated Financial Statements incorporated by reference in Item 8 of this report.

Other Interest-Bearing Assets
Other than $981,000 of other real estate owned, there were no other interest-bearing assets that would be required to be disclosed if such assets were loans as of December 31, 2004.

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)

		2004			2003			2002			2001			2000
Balance at January 1	$	1,974		$	2,211		$	2,013		$	2,101		$	1,907
Charge-offs:
Commercial and agricultural		689			360			360			451			191
Real estate - commercial		66			190			90			146			93
Real estate - construction		-			-			-			109			100
Real estate - residential		41			76			45			98			65
Consumer		144			354			762			476			532
Total charge-offs		940			980			1,257			1,280			981
Recoveries:
Commercial and agricultural		58			96			9			43			2
Real estate - commercial		-			-			-			-			-
Real estate - construction		-			-			-			5			-
Real estate - residential		-			5			6			-			-
Consumer		182			242			170			141			98
Total recoveries		240			343			185			189			100
Net charge-offs		700			637			1,072			1,091			881
Additions charged to operations (1)		465			400			1,270			1,003			1,075
Balance at December 31	$	1,739		$	1,974		$	2,211		$	2,013		$	2,101
Ratio of net charge-offs during the period to average loans outstanding during the period		0.41	%		0.39	%		0.62	%		0.63	%		0.50	%

7

(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)

		2004		2003		2002		2001		2000
Commercial and agricultural	$	1,071	$	1,017	$	903	$	460	$	485
Real estate - commercial		302		258		509		390		290
Real estate - construction		32		33		140		129		34
Real estate - residential		181		240		251		429		340
Consumer		123		325		408		561		866
Unallocated		30		101		-		44		86
Total allowance	$	1,739	$	1,974	$	2,211	$	2,013	$	2,101

The increase from 2003 to 2004 in the allowance for loan losses allocated to commercial and agricultural and commercial real estate loans was primarily based upon portfolio growth of 11%. Many of the substandard or nonperforming loans have a specific allowance allocated to them based upon discounted collateral values or the present value of future expected cashflows. The allocation to real estate construction was maintained at roughly the same level as 2003. The allocation for residential real estate and consumer loans decreased significantly during 2004 due to lower historical loss rates and lower nonperforming and delinquency levels as compared to 2003.

During 2004, the Bank experienced significant improvements in the overall quality of the loan portfolio; however, there continues to be uncertainties regarding local economic conditions and an increasing trend in commercial charge-offs over the past 4 years. Hence, an unallocated portion of $30,000 or 2% of the total allowance was maintained at December 31, 2004.

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.

	2004		2003		2002		2001		2000
Commercial and agricultural	22	%	20	%	20	%	17	%	16	%
Real estate - commercial	30		29		30		25		24
Real estate - construction	4		6		4		5		4
Real estate - mortgage	37		36		35		40		44
Consumer	7		9		11		13		12
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)

		2004				2003				2002
Noninterest-bearing demand	$	17,864	-		$	17,027	-		$	16,262	-
Interest-bearing demand		53,339	1.53	%		42,239	1.40	%		35,422	1.76	%
Savings		9,575	0.50	%		9,081	0.62	%		8,441	0.86	%
Time		76,059	2.85	%		81,594	3.19	%		81,466	4.13	%
Total	$	156,837	1.93	%	$	149,941	2.17	%	$	141,591	2.87	%

8

The following table illustrates the maturities of time deposits issued in denominations of $100,000 or more as of December 31, 2004.

(Dollars in thousands)

Maturing in less than 3 months	$	9,988
Maturing in 3 to 6 months		6,134
Maturing in 6 to 12 months		11,571
Maturing in more than 12 months		14,572
Total	$	42,265

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)

		2004			2003			2002
Outstanding balance at December 31	$	1,281		$	7,882		$	-
Average interest rate at December 31		2.47	%		1.24	%		-	%
Average balance during the year	$	3,094		$	1,760		$	3,346
Average interest rate during the year		1.56	%		1.21	%		1.99	%
Maximum month end balance during the year	$	6,968		$	7,882		$	8,250

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)

		2004			2003			2002
Outstanding balance at December 31	$	6,338		$	5,305		$	5,876
Average interest rate at December 31		1.62	%		1.55	%		1.31	%
Average balance during the year	$	5,051		$	5,710		$	4,944
Average interest rate during the year		1.45	%		1.42	%		1.79	%
Maximum month end balance during the year	$	6,767		$	7,324		$	5,976

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 date of issue. The table below provides additional information regarding these short-term borrowings:

(Dollars in thousands)

		2004			2003			2002
Outstanding balance at December 31	$	9,000		$	9,000		$	3,500
Average interest rate at December 31		1.95	%		1.16	%		1.56	%
Average balance during the year	$	7,500		$	2,125		$	4,056
Average interest rate during the year		1.65	%		1.78	%		2.16	%
Maximum month end balance during the year	$	11,000		$	9,000		$	9,000

There were no other categories of short-term borrowings whose average balance outstanding exceeded 30% of shareholders' equity in 2004, 2003, or 2002.

9

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

	2004		2003		2002
Return on assets (net income divided by average total assets)	0.83	%	1.01	%	0.79	%
Return on equity (net income divided by average equity)	8.93	%	10.48	%	8.78	%
Dividend payout ratio (dividends declared per share divided      by net income per share)	57.44	%	50.40	%	63.12	%
Equity to assets ratio (average equity divided by average total assets)	9.28	%	9.65	%	9.00	%

Item 2. Properties

The offices of the Bank, Insurance Agency, and Mortgage Company as of February 28, 2005, were as follows:

Registrant's, Bank's, Insurance Agency's, and Mortgage Company'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 and Insurance Agency'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:
     5228 Alpine Avenue NW, Comstock Park, Michigan
     Office is leased by the Bank and comprises 1,600 square feet.

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

The Registrant operates its business at the main office of the Bank. No properties were owned by the Registrant as of February 28, 2005. The Registrant, Insurance Agency, and Mortgage Company believe that their offices are suitable and adequate for their future needs and are in good condition. Aside from the Bank's Alpine Office, its offices are suitable and adequate for future needs and are in good condition. The Bank is not renewing its lease on the Alpine Office and constructing a new office during 2005 on Alpine Avenue, slightly south of its current Alpine Office. The new Alpine Office will allow more convenient drive-in access, a drive-up automated teller machine and be better suited for the future needs of Bank customers. The Registrant's management believes all offices are adequately covered by property insurance.

Item 3. Legal Proceedings

There are no material pending legal proceedings to which the Registrant or the Bank is a party or to which any of their properties are subject, except for proceedings which arose 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.

10

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, 2004.

PART II

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

The information under the caption "Common Stock Information" on page 2 of the Registrant's Annual Report to Shareholders for the year ended December 31, 2004, is incorporated herein by reference.

On October 31, 2004, the Registrant issued 664 shares of common stock to its directors pursuant to the Directors' Stock Purchase Plan for an aggregate cash price of $15,000. The Registrant relied on the exemption contained in Section 4(6) of the Securities Act of 1933 in connection with this sale.

The Registrant did not repurchase any common stock during the quarter ended December 31, 2004.

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, 2004, 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 5 through 14, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2004, 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 12 through 14, inclusive, of the Registrant's Annual Report to Shareholders for the year ended December 31, 2004, 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 15 through 36, inclusive, and the information under the caption "Quarterly Financial Data (Unaudited)" on page 4 of the Registrant's Annual Report to Shareholders for the year ended December 31, 2004, are incorporated herein by reference.

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

None.

11

Item 9A. 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 months ended December 31, 2004 that has materially affected, or that is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

The information under the captions "ChoiceOne's Board of Directors and Executive Officers" and "Related Matters - Section 16(a) Beneficial Ownership Reporting Compliance" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2005, 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 principal 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" and "ChoiceOne's Board of Directors and Executive Officers - Compensation of Directors" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2005, 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 28, 2005, is incorporated herein by reference.

12

The following table presents information regarding the equity compensation plans both approved and not approved by shareholders at December 31, 2004:

	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	15,485	$  15.38	138,266
Equity compensation plans not      approved by security holders	- -	- -	50,019
Total	15,485	$  15.38	188,285

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

The Amended and Restated Executive Stock Incentive Plan was approved by shareholders at the annual meeting of the Registrant on April 27, 2000. Key employees of the Registrant and its subsidiaries, as the Personal 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 be stock options, stock appreciation rights or stock awards. The Plan provides for a maximum of 107,492 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 92,007 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.

The Employee Stock Purchase Plan was approved by shareholders at the annual meeting of shareholders on April 29, 2002. 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 52,500 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 46,259 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 70,556 shares of the Registrant's common stock, subject to adjustments for cert ain changes in the capital structure of the Registrant. New issuances for up to 50,019 may be made under this Plan.

13

Item 13. Certain Relationships and Related Transactions

The information under the caption "Related Matters - Certain Relationships and Related Transactions" in the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2005, 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 28, 2005, 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' report are filed as part of this report:
			Consolidated Balance Sheets at December 31, 2004 and 2003.
			Consolidated Statements of Income for the years ended December 31, 2004, 2003, and 2002.
			Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2004, 2003, and 2002.
			Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003, and 2002.
			Notes to Consolidated Financial Statements.
			Report of Independent Registered Public Accounting Firm dated February 25, 2005.
		The consolidated financial statements, notes to consolidated financial statements and independent auditors' report 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, 2004.
	(2)	Financial Statement Schedules. None.
(b)		Exhibits. The following exhibits are filed as part of this report:

14

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, 2000. Here incorporated by reference.
3.2	Bylaws of the Registrant as currently in effect and any amendments thereto. Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2003. Here incorporated by reference.
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, 2001. Here incorporated by reference.
10.1	Agreement with James A. Bosserd. (1) Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended March 31, 2001. Here incorporated by reference.
10.2	Amended and Restated Executive Stock Incentive Plan. (1) Previously filed as an appendix to the Registrant's Definitive Proxy Statement with respect to its Annual Meeting of Shareholders held on April 27, 2000. Here incorporated by reference.
10.3	Directors' Stock Purchase Plan. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2003. Here incorporated by reference.
13	Annual Report to Shareholders for the year ended December 31, 2004.
21	Subsidiaries of the Registrant.
23	Consent of Independent Registered Public Accounting Firm.
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 Tom Lampen, Treasurer, ChoiceOne Financial Services, Inc., 109 East Division, Sparta, Michigan 49345.

15

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 29, 2005
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 in the capacities and on the dates indicated.

/s/ James A. Bosserd	President and Chief Executive Officer and Director (Principal Executive Officer)	March 29, 2005
James A. Bosserd
/s/ Thomas L. Lampen	Treasurer (Principal Financial and Accounting Officer)	March 29, 2005
Thomas L. Lampen
*/s/ Jon E. Pike	Chairman of the Board and Director	March 29, 2005
Jon E. Pike
/s/ Linda R. Pitsch	Secretary and Director	March 29, 2005
Linda R. Pitsch
*/s/ Frank G. Berris	Director	March 29, 2005
Frank G. Berris
*/s/ William F. Cutler, Jr.	Director	March 29, 2005
William F. Cutler, Jr.
*/s/ Lewis G. Emmons	Director	March 29, 2005
Lewis G. Emmons
*/s/ Stuart Goodfellow	Director	March 29, 2005
Stuart Goodfellow
*/s/ Bruce A. Johnson	Director	March 29, 2005
Bruce A. Johnson
*/s/ Paul L. Johnson	Director	March 29, 2005
Paul L. Johnson
*/s/ Andrew W. Zamiara	Director	March 29, 2005
Andrew W. Zamiara

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

16

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, 2000. Here incorporated by reference.
3.2	Bylaws of the Registrant as currently in effect and any amendments thereto. Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2003. Here incorporated by reference.
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, 2001. Here incorporated by reference.
10.1	Agreement with James A. Bosserd. (1) Previously filed as an exhibit to the Registrant's Form 10-Q Quarterly Report for the quarter ended March 31, 2001. Here incorporated by reference.
10.2	Amended and Restated Executive Stock Incentive Plan. (1) Previously filed as an appendix to the Registrant's Definitive Proxy Statement with respect to its Annual Meeting of Shareholders held on April 27, 2000. Here incorporated by reference.
10.3	Directors' Stock Purchase Plan. (1) Previously filed as an exhibit to the Registrant's Form 10-K Annual Report for the year ended December 31, 2003. Here incorporated by reference.
13	Annual Report to Shareholders for the year ended December 31, 2004.
21	Subsidiaries of the Registrant.
23	Consent of Independent Registered Public Accounting Firm.
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.

17

EX-13

EXHIBIT 13

CHOICEONE FINANCIAL SERVICES, INC.

2004

ANNUAL REPORT TO SHAREHOLDERS

CHOICEONE FINANCIAL SERVICES, INC.

2004 Annual Report to Shareholders

Contents
To Our Shareholders	1
Common Stock Information	2
Selected Financial Data	3
Quarterly Financial Data	4
Management's Discussion and Analysis of Financial Condition and Results of Operations	5
Report of Independent Registered Public Accounting Firm	15
Consolidated Financial Statements	16
Notes to Consolidated Financial Statements	20
Corporate and Shareholder Information	37
Directors and Officers	38

TO OUR SHAREHOLDERS

This 2004 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. 2004 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 2004 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, 2004, 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 five 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 is engaged in mortgage lending.

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 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 from loans accounted for 71%, 72%, and 74% of total revenues in 2004, 2003, and 2002, respectively. Interest from securities accounted for 11%, 8%, and 6% of total revenues in 2004, 2003, and 2002, respectively.

1

COMMON STOCK INFORMATION

ChoiceOne's shares are traded in the over-the-counter market by several brokers. 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 average high and low bid prices for shares of common stock for each quarterly period during the past two years is as follows:

	2004		2003
	Low	High	Low	High
First Quarter	$ 17.05	$ 19.00	$ 14.00	$ 14.88
Second Quarter	18.60	21.25	14.00	15.92
Third Quarter	20.30	23.00	14.67	17.38
Fourth Quarter	20.80	25.00	16.00	17.50

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 15, 2005, there were 1,569,808 shares of ChoiceOne Financial Services, Inc., common stock issued and outstanding. These shares were held of record by 610 shareholders.

The following table summarizes cash dividends declared per share of common stock during 2004 and 2003:

	2004	2003
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 regulations (see Note 20 to Consolidated Financial Statements). Based on information presently available, management expects ChoiceOne to declare and pay regular quarterly cash dividends in 2005.

2

SELECTED FINANCIAL DATA

(Dollars in thousands)

		2004			2003			2002			2001			2000
For the year
Net interest income	$	7,672		$	7,775		$	8,106		$	7,603		$	8,032
Provision for loan losses		465			400			1,270			1,003			1,075
Noninterest income		2,570			3,109			3,657			2,646			2,354
Noninterest expense		7,228			7,668			8,187			7,198			7,111
Income before income taxes		2,549			2,816			2,306			2,048			2,200
Income tax expense		695			715			663			590			674
Net income		1,854			2,101			1,643			1,458			1,526
Cash dividends declared		1,065			1,059			1,037			995			981
Per share *
Basic and diluted earnings	$	1.18		$	1.35		$	1.06		$	0.95		$	1.00
Cash dividends declared		0.68			0.68			0.67			0.65			0.64
Shareholders' equity (at year end)		13.41			13.16			12.48			11.86			11.51
Average for the year
Securities	$	42,361		$	31,165		$	21,872		$	15,959		$	14,414
Gross loans		170,045			165,224			174,135			172,018			171,620
Deposits		156,837			149,941			141,591			135,996			133,135
Federal Home Loan Bank advances		36,652			28,416			36,489			39,189			36,786
Shareholders' equity		20,753			20,045			18,703			18,058			17,366
Assets		223,742			207,656			207,791			200,555			197,697
At year end
Securities	$	47,858		$	40,921		$	24,111		$	20,885		$	14,153
Gross loans		173,559			163,132			175,061			165,823			175,776
Deposits		167,066			146,263			152,779			135,975			137,704
Federal Home Loan Bank advances		34,250			33,750			32,791			35,125			36,207
Shareholders' equity		21,069			20,568			19,359			18,273			17,589
Assets		232,285			215,467			212,324			197,791			201,194
Selected financial ratios
Return on average assets		0.83	%		1.01	%		0.79	%		0.73	%		0.77	%
Return on average shareholders' equity		8.93			10.48			8.78			8.07			8.79
Cash dividend payout		57.44			50.40			63.12			68.24			64.29
Shareholders' equity to assets (at year end)		9.07			9.55			9.12			9.24			8.74

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

3

QUARTERLY FINANCIAL DATA (Unaudited)

(Dollars in thousands)							Earnings Per Share
		Interest Income		Net Interest Income		Net Income		Basic	Fully Diluted
2004
First Quarter	$	2,874	$	1,910	$	512		$  0.33	$  0.33
Second Quarter		2,845		1,862		404		0.26	0.26
Third Quarter		2,920		1,879		417		0.27	0.27
Fourth Quarter		3,100		2,021		521		0.32	0.32
2003
First Quarter	$	3,239	$	1,980	$	506		$  0.33	$  0.33
Second Quarter		3,127		1,970		505		0.32	0.32
Third Quarter		3,041		1,942		558		0.36	0.36
Fourth Quarter		2,923		1,883		532		0.34	0.34

4

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"). 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," and 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, 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 ability to repay loans; changes in the local and national economies; and various other local and global uncertainties such as acts of terrorism and military actions. 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 2004. 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. One material estimate that is particularly susceptible to significant change in the near term relates to the determination of the allowance for loan losses. Actual results could differ from those estimates.

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 individual loans, assessments of the impact of current and anticipated economic conditions on the portfolio and historical loss experience of seasoned loan portfolios. See Notes 1 and 5 to the Consolidated Financial Statements for additional information.

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 anticipated 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 the Company. 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 which are typically market driven. See Note 4 to the Consolidated Financial Statements for additional information regarding activity within loan servicing rights.

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

5

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

effect on the Company'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.

RESULTS OF OPERATIONS

Summary

(Dollars in thousands)

		Year ended December 31
		2004			2003			2002
Net interest income	$	7,672		$	7,775		$	8,106
Provision for loan losses		(465	)		(400	)		(1,270	)
Noninterest income		2,570			3,109			3,657
Noninterest expense		(7,228	)		(7,668	)		(8,187	)
Income tax expense		(695	)		(715	)		(663	)
Net income	$	1,854		$	2,101		$	1,643

Net income for 2004 was $1,854,000, which represented a $247,000 or 12% decrease from 2003. The decrease in net income was due to reduced net interest income, a higher provision for loan losses, and reduced noninterest income, offset by decreased noninterest expense. Lower noninterest income was the primary reason for the decrease in net income in 2004. Gains on sales of loans in 2004 decreased $502,000 or 62% from 2003. While the Bank did grow from 2003 to 2004, the additional earning assets could not offset the impact of lower rates on new and existing loans and securities. A slightly higher loan loss provision was based upon a slight increase in net charge-offs for 2004 compared to the prior year. Noninterest expense declined from 2003 due to lower payroll costs and lower occupancy expenses. Also, contributing to the lower level of expense in 2004 was $156,000 of prepayment penalties incurred in 2003 that were related to the early payoff of advances from the Federal Home Loan Bank.

Net income for 2003 was $2,101,000, which represented a $458,000 or 28% increase from 2002. The increase in net income over 2002 was due to a reduced provision for loan losses and reduced noninterest expense. A lower loan loss provision was based on a lower level of nonperforming and substandard loans throughout 2003 compared to 2002. Significant recoveries made within consumer loans allowed the Bank to decrease the provision for loan loss compared to 2002. Noninterest expense declined in 2003 due to closure of the Bank's Plainfield Office in September 2002 and Sparta Great Day Office in September 2003. The Insurance Agency sold its Grand Rapids book of business and related fixed assets in January 2003, which also reduced noninterest expenses in 2003 as compared to 2002.

Return on average assets was 0.83% for 2004, compared to 1.01% for 2003 and 0.79% in 2002. Return on average shareholders' equity was 8.93% for 2004, compared to 10.48% for 2003 and 8.78% in 2002.

Dividends
Cash dividends of $1,065,000, or $0.68 per common share were declared in 2004, compared to $1,059,000 or $0.68 per common share in 2003. The dividend yield on ChoiceOne's common stock was 3.44% in 2004 compared to 4.49% in 2003. The cash dividend payout percentage was 57% for 2004 compared to 50% for the prior year.

ChoiceOne's Board of Directors declared a 5% stock dividend payable on common stock in April 2002. The dividend was paid in May 2002 and earnings per share data for all periods presented have been adjusted for this stock dividend.

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 2005 to shareholders based on the actual earnings of the Bank.

6

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

Table 1 - Average Balances and Tax-Equivalent Interest Rates

(Dollars in thousands)

					Year ended December 31
	2004				2003				2002
	Average Balance	Interest	Rate		Average Balance	Interest	Rate		Average Balance	Interest	Rate
Assets
Loans (1) (2)	$ 170,045	$ 10,190	5.99	%	$ 165,224	$ 11,100	6.72	%	$ 174,135	$ 13,250	7.61	%
Taxable securities (3)	27,600	971	3.52		20,472	776	3.85		12,347	603	4.93
Tax exempt securities (1)	14,761	888	6.02		10,693	689	6.79		9,525	653	7.15
Other	67	1	1.49		700	8	1.14		295	3	1.02
Interest-earning assets	212,473	12,050	5.67		197,089	12,573	6.41		196,302	14,509	7.41
Noninterest-earning assets (4)	11,269				10,567				11,489
Total assets	$ 223,742				$ 207,656				$ 207,791
Liabilities and Shareholders' Equity    Interest-bearing
demand deposits	$  53,339	814	1.53	%	$  42,239	591	1.40	%	$  35,422	625	1.76	%
Savings deposits	9,575	48	0.50		9,081	56	0.62		8,441	73	0.86
Time deposits	76,059	2,169	2.85		81,594	2,600	3.19		81,466	3,361	4.13
FHLB advances	36,652	914	2.49		28,416	1,206	4.24		36,489	1,942	5.32
Other	8,145	122	1.50		7,470	102	1.37		8,290	162	1.95
Interest-bearing liabilities	183,770	4,067	2.21		168,800	4,555	2.70		170,108	6,163	3.62
Demand deposits	17,864				17,027				16,262
Other noninterest-bearing       liabilities	1,355				1,784				2,718
Shareholders' equity	20,753				20,045				18,703
Total liabilities and          shareholders' equity	$ 223,742				$ 207,656				$ 207,791
Net interest income    (tax-equivalent basis) -    interest spread		7,983	3.46	%		8,018	3.71	%		8,346	3.79	%
Tax-equivalent adjustment (1)		(311	)			(243	)			(240	)
Net interest income		$  7,672				$  7,775				$  8,106
Net interest income as a    percentage of earning assets    (tax-equivalent basis)			3.76	%			4.07	%			4.25	%

(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 $309,000, $369,000, and $625,000 in 2004, 2003, and 2002, respectively.
(3)	Taxable securities include dividend income from Federal Home Loan Bank and Federal Reserve Bank stock.
(4)	Noninterest-earning assets include loans on a nonaccrual status, which averaged approximately $1,687,000, $2,647,000, and $2,551,000 in 2004, 2003, and 2002, respectively.

Net Interest Income
As shown in Tables 1 and 2, tax equivalent net interest income decreased $35,000 in 2004 compared to 2003. This is primarily because the Bank's interest-earning assets have repriced downward faster than the Bank's interest-bearing liabilities. The impact of lower rates has more than offset the $15.4 million in total earning asset growth. A change in the funding mix by growth in interest-bearing demand deposits has helped reduce interest expense, but not enough to offset the lower interest income compared to 2003.

7

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

Table 2 - Changes in Tax-Equivalent Net Interest Income

(Dollars in thousands)

		Year ended December 31
		2004 Over 2003									2003 Over 2002
		Total			Volume			Rate			Total			Volume			Rate
Increase (decrease) in interest income (1)
Loans (2)	$	(910	)	$	317		$	(1,227	)	$	(2,150	)	$	(653	)	$	(1,497	)
Taxable securities		195			267			(72	)		173			198			(25	)
Nontaxable securities (2)		199			285			(86	)		36			73			(37	)
Other		(7	)		(9	)		2			5			4			1
Net change in tax-equivalent income		(523	)		860			(1,383	)		(1,936	)		(378	)		(1,558	)
Increase (decrease) in interest expense (1)
Interest-bearing transaction accounts		223			166			57			(34	)		125			(159	)
Savings deposits		(8	)		3			(11	)		(17	)		6			(23	)
Time deposits		(431	)		(169	)		(262	)		(761	)		6			(767	)
Federal Home Loan Bank advances		(292	)		290			(582	)		(736	)		(448	)		(288	)
Other		20			10			10			(60	)		(17	)		(43	)
Net change in interest expense		(488	)		300			(788	)		(1,608	)		(328	)		(1,280	)
Net change in tax-equivalent          net interest income	$	(35	)	$	560		$	(595	)	$	(328	)	$	(50	)	$	(278	)

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

Significant repricing downward of loans and origination of new loans at lower rates, offset by growth of $4.8 million in average loans, caused interest income from loans to fall $910,000 for the year ended December 31, 2004, compared to the same period a year ago. The average balance of investment securities grew $11.2 million, which was partially offset by lower yields thereby causing interest income from securities to increase $394,000 over 2003.

Lower rates paid on time deposits and a $5.5 million decrease in average time deposit balances reduced interest expense $431,000 in 2004 versus 2003. Lower rates paid on advances from the Federal Home Loan Bank more than offset an $8.2 million increase in the average balance causing interest expense to drop $292,000 in 2004. Growth of $11.1 million in the average balance of interest-bearing demand deposits primarily occurred in the Bank's high-yielding money market accounts and increased interest expense by $223,000 in 2004 over 2003.

Net interest income spread was 3.46% (shown in Table 1) for 2004, compared to 3.71% in 2003. This is a slight increase from the net interest income spread of 3.44% for the nine months ended September 30, 2004. The average yield received on interest-earning assets in 2004 was down 74 basis points to 5.67% while the average rate paid on interest-bearing liabilities in 2004 was down 49 basis points to 2.21%.

In 2003, tax equivalent net interest income decreased $328,000 in 2003 compared to 2002 (shown in Tables 1 and 2). This is primarily because the Bank's interest-earning assets repriced downward faster than the Bank's interest-bearing liabilities. The income impact from a smaller loan portfolio was greater than the additional income from an increased securities portfolio. A change in the funding mix by growth in interest-bearing demand deposits helped reduce interest expense, but not enough to offset the lower interest income compared to 2002.

In 2003, tax-equivalent net interest spread slid 8 basis points from 3.79% in 2002 to 3.71% in 2003. The rate earned on interest-earning assets dropped 100 basis points from 7.41% in 2002 to 6.41% in 2003, while the rate paid on interest-bearing liabilities decreased 92 basis points from 3.62% in 2002 to 2.70% in 2003.

8

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

Management anticipates that net interest income in 2005 may increase due to the recent prime rate increases affecting variable rate commercial and consumer loans. It will also depend on the Bank's ability to match asset growth with the right mix of deposits and short and long term borrowings. Deposit rates will be dictated by local market conditions and management intends to aggressively pursue growth of its core deposits in 2005 to maintain a low cost of funds. Management anticipates the new branch offices will allow it to attract these types of deposits. Brokered time deposits and advances from the FHLB will be used if core deposit growth is insufficient to fund the Company's asset growth.

Allowance and Provision For Loan Losses
Information regarding the allowance and provision for loan losses can be found in Table 3 and in Note 5 to the Consolidated Financial Statements. As indicated in Table 3, the provision for loan losses was $65,000 higher in 2004 than in 2003. Management increased the provision as a result of the higher net charge-offs during 2004.

As shown in Table 3, commercial loan net charge-offs increased $243,000 in 2004 versus 2003; however, consumer loan net charge-offs decreased $129,000 from 2003, and mortgage loan net charge-offs decreased $51,000. Commercial loan charge-offs in 2004 included five significant substandard loan charge-offs totaling $362,000 that were charged off due to insolvency of the borrowers. These loans were 53% reserved at the end of 2003. The ratio of net charge-offs as a percentage of average loans increased slightly from 0.39% in 2003 to 0.41% in 2004. The allowance as a percentage of total loans is lower (1.00%) at the end of 2004, compared to the end of 2003 (1.21%) reflecting the improved credit quality within the loan portfolio.

Table 3 - Provision and Allowance For Loan Losses

(Dollars in thousands)

		2004			2003			2002			2001			2000
Provision for loan losses	$	465		$	400		$	1,270		$	1,003		$	1,075
Net charge-offs:
Commercial loans	$	697		$	454		$	441		$	554		$	282
Real estate mortgages		-			51			-			188			100
Consumer loans		3			132			631			349			499
Total	$	700		$	637		$	1,072		$	1,091		$	881
Allowance for loan losses at year end	$	1,739		$	1,974		$	2,211		$	2,013		$	2,101
Allowance for loan losses as a percentage of:
Total loans as of year end		1.00	%		1.21	%		1.26	%		1.21	%		1.20	%
Nonaccrual loans, accrual loans past due 90       days or more and troubled debt       restructurings		212	%		99	%		80	%		88	%		75	%
Ratio of net charge-offs to average total loans    outstanding during the year		0.41	%		0.39	%		0.62	%		0.63	%		0.51	%
Loan recoveries as a percentage of prior year's    charge-offs		24	%		27	%		14	%		19	%		16	%

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, 2004, is adequate to absorb probable incurred losses. 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 $539,000 or 17% in 2004, compared to a $548,000 or 15% decrease in 2003. Gains received from the sale of loans decreased $502,000 or 62% in 2004 due to a slowdown in mortgage refinancing activity throughout the year. In 2004, the Mortgage Company sold $17 million of loans to the secondary market versus $37 million during 2003. Insurance and investment commissions dipped slightly in 2004 compared to 2003, as 2003 included a few months of commissions from the Grand Rapids division of the Insurance Agency. The Insurance Agency's book of commissions for its Grand Rapids division was sold in first quarter of 2003. Servicing fee income is reported net of servicing right amortization expense and resulted in a negative $4,000 in 2003 due to borrowers paying off their serviced mortgages faster than management's estimate of the loan servicing term.

9

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

Management anticipates that noninterest income in 2005 will depend upon the growth of deposit accounts, sales of residential mortgage loans, and sales of insurance and investment products.

Noninterest Expense
Total noninterest expense decreased $440,000 or 6% versus 2003, compared to a $519,000 or 6% decrease in 2003 from 2002. Salaries and benefits decreased $189,000 in 2004 due to significantly less commissions paid to mortgage producers. ChoiceOne reduced payroll by more than 3 full-time equivalent employees even though the Bank opened its Rockford Office with more than 4 full-time equivalent employees. Higher employee health insurance costs offset the reduced salaries expense in 2004. Occupancy expense was lower in 2004, as the Bank sold its Sparta Appletree Office in September 2004 and closed its Sparta Great Day Office in September 2003. The Bank's Rockford Office was opened in September 2004. The Bank sold the building housing its Sparta Appletree Office and subsequently leased back 50% of the building from the new owner. The Bank's operations department was moved from the Sparta Appletree Office to the Sparta Main Office to utilize available office space and reduce overall occupancy costs. Professional fe es decreased slightly over 2003 due to much lower legal fees offset by higher audit and consulting fees. In 2003, ChoiceOne absorbed $156,000 in prepayment penalties as a result of paying off $3 million of high-rate advances from the Federal Home Loan Bank. This was done to reduce the Bank's cost of funds in 2004 and 2005. Other noninterest expense was slightly higher in 2004 due to increased bad check charge-offs offset by lower expenses related to foreclosed real estate.

Management anticipates that noninterest expenses in 2005 will increase due to professional fees associated with the implementation of requirements mandated by the Sarbanes-Oxley Act as well as a full year of operations for the Bank's Rockford Office.

FINANCIAL CONDITION

Securities
The securities portfolio increased approximately $6.8 million or 18% from December 31, 2003 to December 31, 2004. A mix of just over $18 million in government agency, municipal, mortgage-backed, and corporate securities were purchased to maintain asset size of the Bank and provide liquidity for future loan growth. Approximately $2.5 million in agency and municipal bonds matured or were called in 2004. Payments from mortgage-backed securities totaled $1.9 million in 2004. Agency and corporate bonds totaling $5.6 million were sold during 2004 for net gains totaling $38,000. The Bank's Investment Committee continues to monitor the portfolio and purchase securities when deemed prudent. Certain securities are sold under agreements to repurchase and management plans to continue this practice as a low-cost source of funding. Securities also are pledged as collateral for borrowings from the Federal Home Loan Bank. In addition, they serve as a source of liquidity for deposit needs.

Loans
The loan portfolio (excluding loans held for sale) increased approximately $10.1 million or 6% from December 31, 2003 to December 31, 2004. Commercial loans increased $4.6 million due to increased demand and growth in number of borrowers. Real estate loans increased $6.7 million, primarily through growth in commercial real estate financing. Residential real estate loans grew slightly but were reduced by a bulk sale of $5 million of seasoned hybrid adjustable rate mortgages in December 2004. The Mortgage Company sold these loans to reposition itself with assets that will reprice faster than those particular loans sold. In 2004, the Mortgage Company originated approximately $39 million of residential mortgage loans (compared to a record high $76 million in 2003) and sold almost $17 million to investors in the secondary market (compared to $37 million in 2003). Rising long term interest rates tempered customer demand for mortgage refinancing akin to the levels seen in 2003. Consumer loans dropped $1.3 million s ince year-end 2003 due to more payoffs than originations of automobile, recreational vehicle, and personal loans in 2004.

Management anticipates demand for commercial loans will remain steady in 2005 due to favorable national economic data and relationships cultivated within ChoiceOne's local market. Increased marketing efforts may help consumer and mortgage demand.

Information regarding impaired loans can be found in Note 5 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.

10

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

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

(Dollars in thousands)

		2004		2003
Loans accounted for on a nonaccrual basis	$	795	$	1,914
Loans contractually past due 90 days
or more as to principal or interest payments		11		39
Loans considered troubled debt restructurings		16		47
Total	$	822	$	2,000

At December 31, 2004, nonaccrual loans included $389,000 in commercial loans, $363,000 in residential mortgages, and $43,000 in consumer loans. At December 31, 2003, nonaccrual loans included $1,310,000 in commercial loans, $380,000 in residential mortgages, and $224,000 in consumer loans. 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 $6.3 million as of December 31, 2004, compared to $8.8 million as of December 31, 2003. The decrease of $2.5 million or 28% reflects ChoiceOne's improvement in commercial loan quality from a year ago.

Deposits and Other Funding Sources
Total deposits increased $20.8 million or 14% from December 31, 2003 to December 31, 2004. Growth of $11.6 million in noninterest-bearing checking, interest-bearing checking, and money market accounts and $0.8 million in savings accounts provided much of the increase. The Bank's Investor Money Market Account has been very successful in providing substantial growth during the year. The opening of the Bank's new Rockford Office in 2004 also attributed to some of the growth experienced in 2004. Time deposits grew $8.4 million, with all of the increase coming from brokered time deposits that are received from customers outside ChoiceOne's local markets.

Securities sold under agreements to repurchase increased $1.0 million during 2004. Federal funds purchased at the end of 2004 dropped $6.6 million or 84% from year-end 2003. Advances from the Federal Home Loan Bank ("FHLB") increased $500,000 in 2004. Of these advances, 74% have fixed rates with maturities ranging from January 2005 to March 2007, and 26% of these advances carry a floating rate indexed to the federal funds rate. Specific residential real estate mortgages and investment securities were pledged as collateral against these advances at the end of 2004.

Management continues to emphasize growth of local deposits through its noninterest-bearing and interest-bearing checking accounts for both commercial and retail customers. Management also projects that the new Rockford Office will continue to grow its deposits in 2005. The construction of a new Alpine Office is also expected to enhance the Bank's market share in the growing Comstock Park area for 2005 as well. If local deposit growth is insufficient to support loan growth and other operating needs during 2005, management believes advances from the FHLB and brokered time deposits can address corresponding funding needs.

Shareholders' Equity
Total shareholders' equity increased $0.5 million or 2% since the end of 2003. Equity growth resulted from retained earnings and proceeds from the sale of ChoiceOne's stock, offset by cash dividends paid to shareholders, shares repurchased, and a sizable decline in accumulated other comprehensive income. The net dollar difference between the issuance and repurchase of common stock was $142,000 in 2004 compared to $196,000 in 2003. ChoiceOne repurchased 6,053 shares of its common stock in 2004 compared to 1,446 shares in 2003. Management anticipates it will continue to repurchase shares of its common stock in 2005 and retire them.

Note 20 to the Consolidated Financial Statements presents regulatory capital information at the end of 2004 and 2003. ChoiceOne's capital ratios decreased slightly from December 31, 2003 to December 31, 2004 due to assets growing at a faster rate than shareholders' equity. If opportunities for prudent asset growth present themselves in 2005, management may grow assets to a greater extent than shareholders' equity. This may cause capital to decrease as a percentage of assets. However, management and its Board of Directors do not desire to decrease capital below those levels necessary to be considered "well capitalized."

11

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

Table 4 - Contractual Obligations

The following table discloses information regarding the maturity of ChoiceOne's contractual obligations at December 31, 2004:

(Dollars in thousands)

	Payment Due By Period
		Total		Less than 1 year		1-3 Years		3-5 Years		Over 5 Years
Federal funds purchased	$	1,281	$	1,281	$	-	$	-	$	-
Repurchase agreements		6,338		6,338		-		-		-
Time deposits		80,983		46,364		28,243		6,376		-
Advances from Federal Home Loan Bank		34,250		24,500		9,750		-		-
Operating leases		120		53		67		-		-
Total	$	122,972	$	78,536	$	38,060	$	6,376	$	-

Liquidity and Interest Rate Risk
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.

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 five of the Bank's correspondent banks. As of December 31, 2004, the amount of federal funds available for purchase from the Bank's correspondent banks totaled $18.5 million. ChoiceOne purchased $1,281,000 of federal funds at the end of 2004. The Bank also has a line of credit secured by ChoiceOne's commercial loans with the Federal Reserve Bank of Chicago for $70 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 time deposits, and income retention. Approximately $11.8 million of borrowing capacity was available from the Federal Home Loan Ban k based on the Mortgage Company's residential mortgage loans and investment securities pledged as collateral at year-end 2004. The acquisition of brokered time deposits is not limited as long as the Bank's capital to assets percentage is considered to be "well capitalized."

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 its 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.

12

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

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)

		December 31, 2004
		0-3 Months			3-12 Months			1-5 Years			Over 5 Years		Total
Assets
Loans and loans held for sale	$	71,001		$	25,798		$	71,888		$	4,872	$	173,559
Taxable securities		1,716			2,368			20,251			2,133		26,468
Tax exempt securities		-			2,061			9,353			7,031		18,445
Federal Home Loan Bank and         Federal Reserve Bank stock		- -			- -			- -			2,945		2,945
Rate-sensitive assets		72,717			30,227			101,492			16,981		221,417
Liabilities
Interest-bearing demand deposits		76,117			-			-			-		76,117
Savings deposits		9,966			-			-			-		9,966
Time deposits		14,754			31,610			34,619			-		80,983
Federal Home Loan Bank advances		13,000			11,500			9,750			-		34,250
Federal funds purchased		1,281			-			-			-		1,281
Repurchase agreements		6,338			-			-			-		6,338
Rate-sensitive liabilities		121,456			43,110			44,369			-		208,935
Rate-sensitive assets less rate-sensitive liabilities:
Asset (liability) gap for the period	$	(48,739	)	$	(12,883	)	$	57,123		$	16,981	$	12,482
Cumulative asset (liability) gap	$	(48,739	)	$	(61,622	)	$	(4,499	)	$	12,482

One method the ALCO uses to measure interest rate sensitivity is 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 63% at December 31, 2004, compared to 78% at December 31, 2003. The above table places the entire balance of interest-bearing demand deposits, savings deposits, and repurchase agreements in the shortest repricing term. Although these three 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 deposits. Growth in the Bank's demand and savings deposits has made ChoiceOne more liability sensitive at year-end 2004 compared to year-end 2003. The ALCO plans to continue to monitor the ratio of rate-sensitive assets to rate-sensitive liabilities on a monthly basis in 2005. As interest rates change during 2005, 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, 2004, management used a simulation model to subject its assets and liabilities to an immediate 200 basis point increase and an immediate 200 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 income and shareholders' equity. ChoiceOne's Interest Rate Risk Policy states that the changes in interest rates cannot cause net income to decreas e more than 12.5% and the value of shareholders' equity to decrease more than 15%.

13

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

Table 6 provides an illustration of hypothetical interest rate changes as of December 31, 2004 and 2003, respectively:

Table 6 - Sensitivity to Changes in Interest Rates

(Dollars in thousands)

		2004
		Net Income	Percent Change			Market Value of Equity	Percent Change
Change in Interest Rates
200 basis point rise	$	2,274	11	%	$	22,788	- 13	%
100 basis point rise		2,153	5	%		25,046	- 5	%
Base rate scenario		2,052	-	%		26,296	-	%
100 basis point decline		1,800	- 12	%		27,637	5	%
200 basis point decline		1,409	- 31	%		28,947	10	%

(Dollars in thousands)

		2003
		Net Income	Percent Change			Market Value of Equity	Percent Change
Change in Interest Rates
300 basis point rise	$	2,291	14	%	$	19,607	- 18	%
200 basis point rise		2,105	5	%		21,245	- 11	%
100 basis point rise		2,073	3	%		22,775	- 5	%
Base rate scenario		2,014	-	%		23,949	-	%
100 basis point decline		1,961	- 3	%		25,566	7	%

The impact of the rate shock at December 31, 2004 on net income for rates falling 200 basis points exceeds the ALCO's policy limit; however, management believes the likelihood of such an occurrence is highly remote given that the ALCO predicts rates will most likely rise during 2005. As of December 31, 2003, the ALCO's modeling forecast simulated a 300 basis point rise and excluded a simulation of rates immediately dropping 200 basis points due to the historically low interest rate environment. The impact of the rate shock at December 31, 2003 on net income and market value of equity for rates rising 300 basis points exceeded the ALCO's policy limit at that time; however, management believed the likelihood of that scenario to be very unlikely to occur given the current economic indicators at that time.

The ALCO plans to continue to monitor the effect of changes in interest rates on both net income and shareholders' equity and will make changes in the duration of its rate-sensitive assets and rate-sensitive liabilities where necessary

14

          Crowe Chizek and Company LLC
          Member Horwath International

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying consolidated balance sheets of ChoiceOne Financial Services, Inc. as of December 31, 2004 and 2003, and the related consolidated statements of income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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, 2004 and 2003, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

     Crowe Chizek and Company LLC

Grand Rapids, Michigan
February 25, 2005

15

ChoiceOne Financial Services, Inc.
CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

		December 31
		2004			2003
Assets
Cash and due from banks	$	3,619		$	4,722
Securities available for sale		44,913			38,149
Federal Home Loan Bank stock		2,569			2,456
Federal Reserve Bank stock		376			316
Loans held for sale		281			-
Loans, net (of allowance of $1,739 and $1,974)		171,539			161,158
Premises and equipment, net		4,906			4,000
Other real estate owned, net		981			1,433
Loan servicing rights, net		472			442
Other assets		2,629			2,791
Total assets	$	232,285		$	215,467
Liabilities
Deposits - noninterest-bearing	$	17,086		$	17,288
Deposits - interest-bearing		149,980			128,975
Total deposits		167,066			146,263
Repurchase agreements		6,338			5,305
Federal funds purchased		1,281			7,882
Advances from Federal Home Loan Bank		34,250			33,750
Other liabilities		2,281			1,699
Total liabilities		211,216			194,899
Shareholders' Equity
Preferred stock; shares authorized: 100,000; shares outstanding: none		-			-
Common stock and paid-in capital, no par value; shares authorized: 4,000,000;         shares outstanding: 1,570,937 in 2004 and 1,563,415 in 2003		15,913			15,815
Unallocated shares held by Employee Stock Ownership Plan		(9	)		(27	)
Retained earnings		5,053			4,264
Accumulated other comprehensive income, net		112			516
Total shareholders' equity		21,069			20,568
Total liabilities and shareholders' equity	$	232,285		$	215,467

See accompanying notes to consolidated financial statements.

16

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands)

		Years ended December 31
		2004		2003			2002
Interest income
Loans, including fees	$	10,181	$	11,091		$	13,232
Securities
Taxable		971		776			603
Tax exempt		586		455			431
Other		1		8			3
Total interest income		11,739		12,330			14,269
Interest expense
Deposits		3,031		3,247			4,059
Advances from Federal Home Loan Bank		914		1,206			1,942
Federal funds purchased and repurchase agreements		122		102			154
Other		-		-			8
Total interest expense		4,067		4,555			6,163
Net interest income		7,672		7,775			8,106
Provision for loan losses		465		400			1,270
Net interest income after provision for loan losses		7,207		7,375			6,836
Noninterest income
Insurance and investment commissions		1,002		1,042			1,416
Customer service charges		985		1,001			1,006
Loan servicing fees, net		49		(4	)		66
Gains on sales of loans		305		807			967
Gains on sales of securities		38		61			60
Other income		191		202			142
Total noninterest income		2,570		3,109			3,657
Noninterest expense
Salaries and benefits		3,830		4,019			4,087
Occupancy and equipment		1,024		1,092			1,520
Professional fees		498		514			543
Supplies and postage		225		252			265
Data processing		498		495			499
Advertising and promotional		120		149			172
Prepayment penalties on advances from Federal Home       Loan Bank		- -		156			- -
Other expense		1,033		991			1,101
Total noninterest expense		7,228		7,668			8,187
Income before income tax		2,549		2,816			2,306
Income tax expense		695		715			663
Net income	$	1,854	$	2,101		$	1,643
Basic and diluted earnings per common share	$	1.18	$	1.35		$	1.06

See accompanying notes to consolidated financial statements.

17

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

(Dollars in thousands)

	Number of Shares		Common Stock and Paid in Capital		Unallocated Shares held by ESOP		Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net		Total
Balance, January 1, 2002	1,467,706		$ 14,475		$ (64	)	$ 3,680		$ 182		$ 18,273
Comprehensive income:
Net income							1,643				1,643
Net change in unrealized gain (loss)									355		355
Total comprehensive income											1,998
Shares issued	13,901		179								179
Shares repurchased	(3,546	)	(51	)							(51	)
Shares committed to be released    under Employee Stock    Ownership Plan			(19	)	19						- -
Stock dividend	73,167		1,061				(1,064	)			(3	)
Cash dividends declared ($0.67 per share)							(1,037	)			(1,037	)
Balance, December 31, 2002	1,551,228		15,645		(45	)	3,222		537		19,359
Comprehensive income:
Net income							2,101				2,101
Net change in unrealized gain (loss)									(21	)	(21	)
Total comprehensive income											2,080
Shares issued	13,633		218								218
Shares repurchased	(1,446	)	(22	)							(22	)
Shares committed to be released    under Employee Stock    Ownership Plan			(26	)	18						(8	)
Cash dividends declared ($0.68 per share)							(1,059	)			(1,059	)
Balance, December 31, 2003	1,563,415		15,815		(27	)	4,264		516		20,568
Comprehensive income:
Net income							1,854				1,854
Net change in unrealized gain (loss)									(404	)	(404	)
Total comprehensive income											1,450
Shares issued	13,267		255								255
Shares repurchased	(6,053	)	(118	)							(118	)
Shares committed to be released    under Employee Stock    Ownership Plan			(44	)	18						(26	)
Shares issued under stock    option plans	308		5								5
Cash dividends declared ($0.68 per share)							(1,065	)			(1,065	)
Balance, December 31, 2004	1,570,937		$ 15,913		$ (9	)	$ 5,053		$ 112		$ 21,069

See accompanying notes to consolidated financial statements.

18

ChoiceOne Financial Services, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

		Years ended December 31
		2004			2003			2002
Cash flows from operating activities:
Net income	$	1,854		$	2,101		$	1,643
Adjustments to reconcile net income to net cash from   operating activities:
Provision for loan losses		465			400			1,270
Depreciation		495			538			885
Amortization		631			623			469
Gains on sales of securities		(38	)		(61	)		(60	)
Gains on sales of loans		(305	)		(807	)		(967	)
Loans originated for sale		(12,580	)		(35,589	)		(40,882	)
Proceeds from loan sales		12,471			37,302			41,291
Net change in:
Other assets		1,801			786			741
Other liabilities		763			184			(180	)
Net cash from operating activities		5,557			5,477			4,210
Cash flows from investing activities:
Net change in interest-bearing deposits		-			100			(100	)
Securities available for sale:
Sales		5,615			2,085			972
Maturities, prepayments and calls		4,369			3,905			3,832
Purchases		(18,135	)		(23,088	)		(7,583	)
Loan originations and payments, net		(16,877	)		8,920			(11,975	)
Proceeds from sale of adjustable rate mortgage loans		5,037			-			-
Additions to premises and equipment, net of disposals		(1,481	)		(225	)		(331	)
Proceeds from sale of insurance agency		-			186			-
Purchase of insurance agency		-			-			(17	)
Net cash used in investing activities		(21,472	)		(8,117	)		(15,202	)
Cash flows from financing activities:
Net change in deposits		20,803			(6,516	)		16,804
Net change in repurchase agreements		1,033			(571	)		1,874
Net change in federal funds purchased		(6,601	)		7,882			(2,900	)
Proceeds from Federal Home Loan Bank advances		27,750			25,750			22,650
Payments on Federal Home Loan Bank advances		(27,250	)		(24,791	)		(24,984	)
Issuance of common stock		260			218			179
Repurchase of common stock		(118	)		(22	)		(51	)
Cash dividends and fractional shares from stock dividends and splits		(1,065	)		(1,059	)		(1,040	)
Net cash from financing activities		14,812			891			12,532
Net change in cash and cash equivalents		(1,103	)		(1,749	)		1,540
Beginning cash and cash equivalents		4,722			6,471			4,931
Ending cash and cash equivalents	$	3,619		$	4,722		$	6,471
Cash paid for interest	$	4,018		$	4,667		$	6,165
Cash paid for income taxes		375			820			650
Loans transferred to other real estate owned		967			1,233			2,223
Loans transferred to loans held for sale		5,064			-			-
Equity securities transferred to other assets		208			-			-

See accompanying notes to consolidated financial statements.

19

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 secured by both residential and commercial real estate.

ChoiceOne Mortgage Company of Michigan (the "Mortgage Company") began operations January 1, 2002 as a wholly-owned subsidiary of the Bank. The Mortgage Company originates and sells a full line of conventional type mortgage loans for 1-4 family and multi-family residential real estate properties.

ChoiceOne Insurance Agencies, Inc. (the "Insurance Agency") is a wholly-owned subsidiary of the Bank. The Insurance Agency sells a full line of insurance policies such as life, health, property and casualty 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, loan servicing rights, 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 terms of 90 days or less.

Securities
Securities are classified as available for sale when 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 other comprehensive income or loss and shareholders' equity, net of tax effect. Other securities, such as Federal Reserve Bank stock or Federal Home Loan Bank stock, are carried at cost.

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. Securities are written down to fair value when a decline in fair value is not considered to be temporary.

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 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

20

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 accounted for on the cash-basis method until qualifying for return to accrual. Loans are returned to accrual basis when all the principal and interest amounts contractually due are brought current and future payment is reasonably assured.

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 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.

Long Term Assets
Premises and equipment, other intangible assets and other long term assets are 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.

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 customer financing needs. 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.

21

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Repurchase Agreements
Substantially all repurchase agreement liabilities represent amounts advanced by deposit clients that are not covered by federal deposit insurance and are secured by securities owned by ChoiceOne.

Employee Benefit Plans
ChoiceOne's 401(k) plan allows participant contributions of up to 15% of compensation. Company contributions to the 401(k) plan are discretionary. ChoiceOne allows retired employees to participate in its health insurance plan. These postretirement benefits are accrued during the years in which the employee provides services.

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.

Stock Based Compensation
Employee compensation expense under ChoiceOne's stock option plan is reported if options are granted below market price at the grant date. Pro forma disclosures of net income and earnings per share are shown using the fair value method to measure expense for options granted using an option pricing model to estimate the fair value.

The following pro forma information presents net income and earnings per share for the years ended December 31, 2004, 2003 and 2002, respectively, had the fair value method been used to measure compensation cost for stock option plans. No compensation cost was recognized for stock options in 2004, 2003 and 2002.

(Dollars in thousands)

		2004		2003		2002
Net income as reported	$	1,854	$	2,101	$	1,643
Deduct: Stock-based compensation expense determined under     fair value based method		10		5		3
Pro forma net income		1,844		2,096		1,640
Basic and diluted earnings per common share as reported		1.18		1.35		1.06
Pro forma basic and diluted earnings per common share		1.18		1.35		1.06

The pro forma effects are computed using an option pricing model and the following weighted average assumptions as of grant date:

	2004		2003		2002
Risk-free interest rate	3.78	%	3.65	%	4.71	%
Expected option life (in years)	7		7		7
Expected stock price volatility	20.54	%	18.95	%	20.90	%
Dividend yield	4.42	%	4.49	%	4.78	%

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 earnings per common share 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.

22

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income
Comprehensive income consists of net income and other comprehensive income or loss. Other comprehensive income or loss includes the net change in unrealized appreciation (depreciation) on securities available for sale, net of tax, which is 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 $998,000 and $955,000 was required to meet regulatory reserve and clearing requirements at December 31, 2004 and 2003, respectively. These balances do not earn interest.

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.

Dividend Restrictions
Banking regulations require the maintenance of certain capital levels and may limit the amount of dividends which may be paid by the Bank to ChoiceOne or by ChoiceOne to its shareholders (see Note 20).

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 18 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.

Industry Segments
Internal financial information is primarily reported and aggregated in two lines of business: banking and insurance. The majority of ChoiceOne's income and assets are obtained from banking.

Adoption of New Accounting Standards
Statement of Financial Accounting Standards ("SFAS") No. 123R, "Share-Based Payment," requires all public companies to record compensation cost for stock options provided to employees in return for employee service. The cost is measured at the fair value of the options when granted, and this cost is expensed over the employee service period, which is normally the vesting period of the options. This will apply to awards granted or modified after the first quarter or year beginning after June 15, 2005. Compensation cost will also be recorded for prior option grants that vest after the date of adoption. The effect on ChoiceOne's results of operations will depend on the level of future grants and the calculation of the fair value of the options granted at such future dates, as well as the vesting periods provided, and therefore cannot currently be predicted. Existing options outstanding as of December 31, 2004 that will vest after the adoption date are expected to result in additional compensation expense of app roximately $5,000 during the balance of 2005, $7,000 in 2006, and $5,000 in 2007. There will be no significant effect on ChoiceOne's financial position, as total shareholders' equity will not change.

Statement of Position 03-3 requires that a valuation allowance for loans acquired in a transfer, including in a business combination, reflect only those losses incurred after acquisition and should not be recorded at acquisition. It applies to any loan acquired in a transfer that showed evidence of credit quality deterioration since it was made.

The effect of these new standards on ChoiceOne's financial position and results of operations is not expected to be material upon and after adoption.

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

23

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - Securities

Information regarding securities available for sale at December 31 follows:

(Dollars in thousands)		2004
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
U.S. Government and federal agency	$	6,875	$	5	$	(79	)
State and municipal		26,768		435		(139	)
Mortgage-backed		6,700		17		(49	)
Corporate		4,570		9		(29	)
Total	$	44,913	$	466	$	(296	)

		2003
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
U.S. Government and federal agency	$	7,805	$	79	$	(13	)
State and municipal		20,435		667		(52	)
Mortgage-backed		4,589		34		(10	)
Asset-backed		233		1		-
Corporate		5,087		75		-
Total	$	38,149	$	856	$	(75	)

Information regarding sales of securities available for sale follows:

(Dollars in thousands)

		2004		2003		2002
Proceeds from sales of securities	$	5,615	$	2,085	$	972
Gross realized gains		41		61		60
Gross realized losses		3		-		-

Contractual maturities of securities available for sale at December 31, 2004 were as follows:

(Dollars in thousands)

		Fair Value
Due within one year	$	5,619
Due after one year through five years		23,018
Due after five years through ten years		8,196
Due after ten years		841
Total debt securities		37,674
Mortgage-backed securities not due at a specific date		6,700
Equity securities		539
Total	$	44,913

Various securities were pledged as collateral for securities sold under agreements to repurchase and as collateral for advances from the Federal Home Loan Bank. The carrying amount of securities pledged as collateral at December 31 was as follows:

(Dollars in thousands)

		2004		2003
Securities pledged for securities sold under agreements to repurchase	$	6,739	$	5,790
Securities pledged for advances from Federal Home Loan Bank		8,555		-
Total securities pledged as collateral	$	15,294	$	5,790

24

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities with unrealized losses at year-end 2004 and 2003, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, are as follows.

(Dollars in thousands)		2004
		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	$	5,320	$	(60	)	$	1,023	$	(19	)	$	6,343	$	(79	)
State and municipal		10,700		(110	)		476		(29	)		11,176		(139	)
Mortgage-backed		2,689		(33	)		1,081		(16	)		3,770		(49	)
Corporate		3,005		(29	)		-		-			3,005		(29	)
Total temporarily impaired	$	21,714	$	(232	)	$	2,580	$	(64	)	$	24,294	$	(296	)

(Dollars in thousands)		2003
		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	$	1,050	$	(13	)	$	- -	$	- -	$	1,050	$	(13	)
State and municipal		5,372		(52	)		-		-		5,372		(52	)
Mortgage-backed		1,532		(10	)		-		-		1,532		(10	)
Total temporarily impaired	$	7,954	$	(75	)	$	-	$	-	$	7,954	$	(75	)

The Company evaluates 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 the Company to retain its investment in the issue for a period of time sufficient to allow for any anticipated recovery in fair value.

Note 3 - Loans

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

(Dollars in thousands)

		2004			2003
Commercial	$	29,084		$	24,491
Real estate:
Residential		63,846			58,375
Commercial		51,751			47,019
Construction		6,661			10,200
Consumer		13,250			14,532
Agricultural		8,686			8,515
Loans, gross		173,278			163,132
Allowance for loan losses		(1,739	)		(1,974	)
Loans, net	$	171,539		$	161,158

25

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Mortgage Banking

Activity during the year was as follows:

(Dollars in thousands)

		2004		2003		2002
Loans originated for resale, net of principal payments	$	12,580	$	35,589	$	40,882
Proceeds from loan sales		12,471		37,302		41,291
Net gains on sales of loans held for sale		305		807		967
Loan servicing fees, net of amortization		49		(4	)	66

Residential mortgage loans serviced for others are not reported as assets in the accompanying consolidated balance sheets. The principal balances (dollars in thousands) of these loans at December 31 were as follows:

Residential mortgage loans serviced for:		2004		2003
Federal Home Loan Mortgage Corporation	$	70,016	$	66,249

The Bank maintains custodial escrow balances in connection with these serviced loans; however, such escrows were immaterial at December 31, 2004 and 2003.

Activity for loan servicing rights was as follows:

(Dollars in thousands)

		2004			2003			2002
Balance, beginning of year	$	442		$	363		$	175
Capitalized		160			308			333
Amortization		(130	)		(247	)		(127	)
Changes to valuation allowance		-			18			(18	)
Balance, end of year	$	472		$	442		$	363

Note 5 - Allowance for Loan Losses

Activity in the allowance for loan losses was as follows:

(Dollars in thousands)

		2004			2003			2002
Balance, beginning of year	$	1,974		$	2,211		$	2,013
Provision charged to expense		465			400			1,270
Recoveries credited to the allowance		240			343			185
Loans charged off		(940	)		(980	)		(1,257	)
Balance, end of year	$	1,739		$	1,974		$	2,211

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

(Dollars in thousands)

		2004		2003
Nonaccrual loans	$	795	$	1,914
Loans past due over 90 days still on accrual		11		39
Restructured loans		16		47
Total	$	822	$	2,000

26

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)

		2004		2003		2002
Loans with no allowance allocated at year end	$	419	$	753	$	1,041
Loans with allowance allocated at year end		247		1,051		1,128
Amount of allowance for loan losses allocated at year end		105		576		697
Average balance during the year		1,072		2,188		2,294
Interest income recognized thereon		39		83		126
Cash-basis interest income recognized		25		80		153

Note 6 - Premises and Equipment

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

(Dollars in thousands)

		2004			2003
Land and land improvements	$	1,388		$	639
Leasehold improvements		320			274
Buildings		4,348			4,260
Furniture and equipment		2,240			2,032
Total cost		8,296			7,205
Accumulated depreciation		(3,390	)		(3,205	)
Premises and equipment, net	$	4,906		$	4,000

Depreciation expense was $495,000, $538,000, and $885,000 for 2004, 2003, and 2002, respectively. In August 2002, the Bank closed its Plainfield Office in Grand Rapids, Michigan. The financial impact of closing this office resulted in additional depreciation of $139,000 and a $68,000 expense in 2002 for early termination of the lease agreement. In September 2003, the Bank closed its Sparta Great Day Office in Sparta, Michigan. The financial impact of closing this office was immaterial. In 2003, the Bank also retired $1.2 million of fixed assets that were fully depreciated and no longer in service within the Bank or Insurance Agency. In September 2004, the Bank sold its Sparta Appletree Office in Sparta, Michigan for a gain of $162,000, of which $105,000 was deferred over a three-year term since part of the office was simultaneously leased back from the purchaser. Also, in September 2004, the Bank opened a new office in Rockford, Michigan. In December 2004, the Bank purchased vacant land for a new office i n Comstock Park, Michigan. The Bank's lease on the current Alpine Office location in Comstock Park will terminate in June 2005.

The Bank leases certain branch properties and automated-teller machine locations in its normal course of business. Rent expense totaled $40,000, $40,000 and $91,000 for 2004, 2003 and 2002, respectively. Rent commitments under non-cancelable operating leases were as follows, before considering renewal options that generally are present.

(Dollars in thousands)

2005	$	53
2006		38
2007		29
Total	$	120

27

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - 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)

		2004			2003
Balance, beginning of year	$	1,433		$	1,867
Transfers from loans		967			1,233
Capitalized improvements or purchased assets		401			223
Sales		(1,682	)		(1,721	)
Write-downs		(138	)		(169	)
Balance, end of year	$	981		$	1,433

Note 8 - Deposits

Deposit information as of December 31 follows:

(Dollars in thousands)

		2004		2003
Certificates of deposit issued in denominations of $100,000 or more	$	42,265	$	31,650
Scheduled maturities of certificates of deposit:
2005	$	46,364
2006		22,237
2007		6,006
2008		2,157
2009		4,219
Total	$	80,983

The Bank had brokered certificates of deposit totaling $33.7 million at December 31, 2004 compared to $25.2 million at December 31, 2003. The weighted average interest rate on these brokered certificates of deposit was 2.59% with maturities ranging from January 2005 to June 2007 as of December 31, 2004.

Note 9 - Repurchase Agreements

Repurchase agreements are advances by customers that are not covered by federal deposit insurance. These agreements are direct obligations of the Bank and are secured by securities held in safekeeping at a correspondent bank. Information regarding repurchase agreements follows:

(Dollars in thousands)

		2004			2003
Outstanding balance at December 31	$	6,338		$	5,305
Average interest rate at December 31		1.62	%		1.55	%
Average balance during the year	$	5,051		$	5,713
Average interest rate during the year		1.45	%		1.42	%
Maximum month end balance during the year	$	6,767		$	7,324

28

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10 - Federal Home Loan Bank Advances

At December 31, advances from the Federal Home Loan Bank were as follows:

(Dollars in thousands)

		2004		2003
Maturities ranging from January 2005 to March 2007, fixed interest rates ranging from 1.69% to 4.30%, with an average rate of 2.37%	$	25,250	$	27,750
Maturities ranging from March 2005 to May 2005, floating interest rates, with an average rate of 1.95%		9,000		6,000
Total advances outstanding at year-end	$	34,250	$	33,750

Penalties are charged on fixed rate advances that are paid prior to maturity. The Bank prepaid $3 million of fixed rate advances incurring a prepayment penalty of $156,000 in 2003. No fixed rate advances were paid prior to maturity in 2004 or 2002.

Advances are secured by both residential real estate loans and U.S. Government agency securities with a carrying value of approximately $52.5 million and $45.3 million at December 31, 2004 and 2003, respectively. Based on this collateral, the Bank was eligible to borrow an additional $11.8 million at year-end 2004.

The scheduled maturities of advances from the Federal Home Loan Bank at December 31, 2004 are as follows:

(Dollars in thousands)

2005	$	24,500
2006		5,750
2007		4,000
Total	$	34,250

Note 11 - Income Taxes

Information as of December 31 and for the year follows:

(Dollars in thousands)

		2004			2003			2002
Provision for Income Taxes
Current federal income tax expense	$	456		$	693		$	540
Deferred federal income tax expense		239			22			123
Income tax expense	$	695		$	715		$	663
Reconciliation of Income Tax Provision to Statutory Rate
Income tax computed at statutory federal rate of 34%	$	867		$	957		$	784
Tax exempt interest income		(203	)		(160	)		(158	)
Adjustment of federal tax contingent liability		-			(113	)		-
Nondeductible interest expense		17			14			21
Other items		14			17			16
Income tax expense	$	695		$	715		$	663
Effective income tax rate		27	%		25	%		29	%

29

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Components of Deferred Tax Assets and Liabilities		2004		2003
Deferred tax assets:
Allowance for loan losses	$	356	$	478
Postretirement benefits obligation		71		62
Deferred loan costs		36		48
Write downs on other real estate owned		41		54
Deferred compensation		12		21
Other		47		76
Total deferred tax assets		563		739
Deferred tax liabilities:
Unrealized appreciation on securities available for sale		58		266
Depreciation		137		165
Loan servicing rights		160		150
Stock dividends from Federal Home Loan Bank stock		70		-
Investment in West Shore Computer Services		48		40
Other		52		49
Total deferred tax liabilities		525		670
Net deferred tax assets	$	38	$	69

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, 2004 and 2003.

Note 12 - Related Party Transactions

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

(Dollars in thousands)

		2004			2003
Balance, beginning of year	$	3,018		$	3,298
New loans		719			982
Repayments		(816	)		(1,262	)
Effect of changes in related parties		(296	)		-
Balance, end of year	$	2,625		$	3,018

Deposits from principal officers, directors, and their affiliates were $4,965,000 and $5,013,000 at December 31, 2004 and 2003, respectively.

In 2004, the Bank sold its Sparta Appletree Office to an affiliate of a member of ChoiceOne's Board of Directors. The building and other related fixed assets were sold for a net gain of $162,000. Half of the building is being leased back from the same affiliate of the Board member for a three-year term. An independent appraiser determined the market value of the building.

Note 13 - Employee Benefit Plans

401(k) Plan:
The 401(k) plan allows employee contributions up to 15% of their compensation. Matching company contributions to the plan are discretionary. Expense of this plan was $65,000, $45,000, and $62,000 in 2004, 2003 and 2002, respectively.

Employee Stock Ownership Plan:
Employees participate in an Employee Stock Ownership Plan (the "ESOP"). In 2000, the ESOP borrowed $91,000 from the Bank and used the funds to acquire 5,100 shares of ChoiceOne common stock at $17.78 per share. These amounts have been adjusted for stock splits and dividends. ChoiceOne makes discretionary contributions to the ESOP, as well as paying dividends on unallocated shares to

30

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the ESOP, and the ESOP uses funds it receives to repay the loan. As loan payments are made, ESOP shares are allocated to participants based on relative compensation and expense is recorded. Dividends on allocated shares increase the participant accounts.

Participants become fully vested upon completion of six years of qualifying service. Participants receive the shares at the end of employment. A participant may require stock received to be repurchased unless the stock is traded on an established market. Contributions from ChoiceOne to the ESOP during 2004, 2003, and 2002 were $23,000 for all three years. Expense for 2004, 2003, and 2002, was $18,000, $14,000, and $14,000, respectively.

Shares held by the ESOP were as follows:

(Dollars in thousands)

		2004		2003		2002
Shares allocated to participants		4,590		3,570		2,550
Shares unallocated		510		1,530		2,550
Total shares of ChoiceOne stock held by ESOP		5,100		5,100		5,100
Fair value of unallocated shares as of December 31	$	12	$	26	$	36
Fair value of allocated shares subject to repurchase obligation	$	106	$	59	$	36

Postretirement Benefits Plan:
Information regarding the postretirement benefits plan as of December 31 and for the year follows:

(Dollars in thousands)

		2004			2003			2002
Accumulated benefit obligation	$	155		$	146		$	125
Accrued benefit cost		210			181			153
Postretirement benefit expense		29			28			(1	)
Employer contributions		33			32			17
Participant contributions		37			36			38
Benefits paid		41			40			56
Actuarial assumption - discount rate on benefit obligation		6.0	%		6.0	%		6.5	%

The trend for annual increases in health care costs was assumed to be 8% for the year beginning January 1, 2005, dropping 1% annually to an annual rate of 6% for the year beginning January 1, 2007 and each year thereafter. The effect of a 1% increase or decrease in the assumed health care cost trend rate would have an immaterial impact on the combined service and interest cost components of net periodic postretirement health care benefits cost and the accumulated benefit obligation for health care benefits.

Deferred Compensation Plan:
A deferred compensation plan covers one former executive officer. Under the plan, ChoiceOne pays this individual the amount of compensation deferred plus interest over 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 $1,000, $2,000, and $6,000 in 2004, 2003, and 2002, respectively, which resulted in a deferred compensation liability of $37,000 and $61,000 as of December 31, 2004 and 2003, respectively. ChoiceOne has purchased life insurance on the participant. The cash surrender value of such insurance was $159,000 and $156,000 at December 31, 2004 and 2003, respectively, and is included in other assets.

31

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 - 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 issuance of up to 107,492 options. The exercise price is the market price at the date of grant, so there is no compensation expense recognized in the income statement. The maximum option term is 10 years and options vest over 3 years. At December 31, 2004, there were 92,007 options available for future grants.

A summary of the activity in the plan is as follows:

	2004			2003			2002
	Shares		Weighted average exercise price	Shares		Weighted average exercise price	Shares		Weighted average exercise price
Options outstanding, beginning of year	24,489		$13.51	20,314		$13.31	15,194		$13.16
Options granted	6,800		17.13	4,900		14.38	5,330		13.76
Options exercised	(308	)	14.48	-		-	-		-
Options forfeited or expired	(15,496	)	13.24	(725	)	13.88	(210	)	13.70
Options outstanding, end of year	15,485		$15.38	24,489		$13.51	20,314		$13.31
Options exercisable at December 31	7,189			18,666			16,474
Weighted average fair value of options      granted during year	$3.05			$1.84			$2.21

The exercise price for options outstanding at the end of 2004 ranged from $13.70 to $17.13 per share. The weighted average remaining contractual life of options outstanding at the end of 2004 was approximately 8.2 years. The numbers of options and exercise prices have been adjusted for all stock dividends and splits.

Note 15 - Earnings Per Share

The factors used in the earnings per share computation follow:

(Dollars in thousands, except per share)

		2004		2003		2002
Basic
Net income	$	1,854	$	2,101	$	1,643
Weighted average common shares outstanding		1,565,421		1,554,600		1,544,248
Basic earnings per common share	$	1.18	$	1.35	$	1.06

		2004		2003		2002
Diluted
Net income	$	1,854	$	2,101	$	1,643
Weighted average common shares outstanding		1,565,421		1,554,600		1,544,248
Plus:  dilutive effect of assumed exercises of stock options		3,805		2,636		1,242
Average shares and dilutive potential common shares		1,569,226		1,557,236		1,545,490
Diluted earnings per common share	$	1.18	$	1.35	$	1.06

Weighted average common shares have been adjusted for the stock dividend in 2002.

32

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 - Other Comprehensive Income (Loss)

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

(Dollars in thousands)

		2004			2003			2002
Unrealized holding gains (losses) on available for sale securities	$	(574	)	$	29		$	599
Less: reclassification adjustments for gains (losses) included in net income		38			61			60
Net unrealized gains (losses)		(612	)		(32	)		539
Tax effect		208			11			(184	)
Total other comprehensive income (loss)	$	(404	)	$	(21	)	$	355

Note 17 - Condensed Financial Statements of Parent Company

Condensed Balance Sheets

(Dollars in thousands)		December 31
		2004		2003
Assets
Cash	$	145	$	41
Securities available for sale		576		50
Other assets		10		31
Investment in ChoiceOne Bank		20,451		20,505
Total assets	$	21,182	$	20,627
Liabilities
Mandatory redeemable shares under Employee Stock Ownership Plan, at fair value	$	106	$	59
Other liabilities		7		-
Total liabilities		113		59
Shareholders' equity		21,069		20,568
Total liabilities and shareholders' equity	$	21,182	$	20,627

33

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Condensed Statements of Income

(Dollars in thousands)		Years Ended December 31
		2004		2003		2002
Dividends from ChoiceOne Bank	$	1,599	$	973	$	836
Gains on sales of securities		-		23		49
Interest and dividends from other securities		9		-		1
Total income		1,608		996		886
Other expenses		124		96		124
Income before income tax and equity in undistributed net
income of subsidiary		1,484		900		762
Income tax benefit		32		26		25
Income before equity in undistributed net income of subsidiary		1,516		926		787
Equity in undistributed net income of subsidiary		338		1,175		856
Net income	$	1,854	$	2,101	$	1,643

Condensed Statements of Cash Flows

(Dollars in thousands)		Years Ended December 31
		2004			2003			2002
Cash flows from operating activities:
Net income	$	1,854		$	2,101		$	1,643
Adjustments to reconcile net income to net cash from operating     activities:
Equity in undistributed net income of subsidiary		(338	)		(1,175	)		(856	)
Gains on sales of securities		-			(23	)		(49	)
Changes in other assets		21			57			(87	)
Changes in other liabilities		3			(85	)		71
Net cash from operating activities		1,540			875			722
Cash flows from investing activities:
Purchases of securities		(513	)		(50	)		-
Proceeds from sales of securities		-			31			200
Net cash from (used in) investing activities		(513	)		(19	)		200
Cash flows from financing activities:
Issuance of common stock		260			218			179
Repurchase of common stock		(118	)		(22	)		(51	)
Cash dividends paid		(1,065	)		(1,059	)		(1,040	)
Net cash used in financing activities		(923	)		(863	)		(912	)
Net change in cash and cash equivalents		104			(7	)		10
Beginning cash and cash equivalents		41			48			38
Ending cash and cash equivalents	$	145		$	41		$	48

34

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 - Financial Instruments

Financial instruments as of December 31 were as follows:

(Dollars in thousands)		2004						2003
		Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Assets:
Cash and due from banks	$	3,619		$	3,619		$	4,722		$	4,722
Securities available for sale		44,913			44,913			38,149			38,149
Federal Home Loan Bank and Federal Reserve         Bank stock		2,945			2,945			2,772			2,772
Loans held for sale		281			281			-			-
Loans, net		171,539			172,539			161,158			161,998
Liabilities:
Demand, savings and money market deposits		(86,083	)		(86,083	)		(73,664	)		(73,664	)
Time deposits		(80,983	)		(81,159	)		(72,599	)		(74,165	)
Repurchase agreements		(6,338	)		(6,338	)		(5,305	)		(5,305	)
Federal funds purchased		(1,281	)		(1,281	)		(7,882	)		(7,882	)
Advances from Federal Home Loan Bank		(34,250	)		(34,147	)		(33,750	)		(34,094	)

The estimated fair values approximate the carrying amounts for all assets and liabilities except those described later in this paragraph. The estimated fair value for securities available for sale is based on quoted market values for the individual securities or for equivalent securities. 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 loss 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 19 - 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)		2004				2003
		Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Unused lines of credit and letters of credit	$	3,711	$	25,978	$	5,632	$	14,970
Commitments to fund loans (at market rates)		3,185		4,379		1,933		3,184

Commitments to fund loans are generally made for periods of 180 days or less. The fixed rate loan commitments have interest rates ranging from 5.63% to 7.50% and maturities ranging from 6 months to 30 years.

35

ChoiceOne Financial Services, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 20 - Regulatory Capital

ChoiceOne Financial Services, Inc. and ChoiceOne Bank are 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 2004 and 2003, the most recent regulatory notifications categorized ChoiceOne and 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 institutions' categories.

Actual capital levels and minimum required levels 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, 2004
Total capital (to risk weighted assets)
Consolidated	$	22,644	13.4	%	$	13,564	8.0	%	$	16,955	10.0	%
Bank		22,026	13.0			13,551	8.0			16,939	10.0
Tier 1 capital (to risk weighted assets)
Consolidated		20,905	12.3			6,782	4.0			10,173	6.0
Bank		20,287	12.0			6,776	4.0			10,163	6.0
Tier 1 capital (to average assets)
Consolidated		20,905	9.1			9,231	4.0			11,539	5.0
Bank		20,287	8.8			9,231	4.0			11,539	5.0
December 31, 2003
Total capital (to risk weighted assets)
Consolidated	$	21,934	13.9	%	$	12,666	8.0	%	$	15,833	10.0	%
Bank		21,871	13.8			12,660	8.0			15,825	10.0
Tier 1 capital (to risk weighted assets)
Consolidated		19,975	12.6			6,333	4.0			9,500	6.0
Bank		19,912	12.6			6,330	4.0			9,495	6.0
Tier 1 capital (to average assets)
Consolidated		19,975	9.5			8,370	4.0			10,463	5.0
Bank		19,912	9.5			8,370	4.0			10,463	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, 2004, approximately $2.4 million was available to pay dividends to the holding company. The Bank is also subject to state regulations restricting the amount of dividends payable to the holding company. At December 31, 2004, the Bank had $7.8 million of retained earnings available for dividends under these regulations. The Company's ability to pay dividends is dependent on the Bank, which is restricted by state law and regulations. These regulations pose no practical restrictions to paying dividends at historical levels.

36

CORPORATE AND SHAREHOLDER INFORMATION
ChoiceOne Financial Services, Inc.

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


Market Makers in ChoiceOne Financial
Services, Inc. Stock

Royal Securities, Inc.
     Grand Rapids, Michigan
      (616) 459-3317

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

Kellogg Financial Group
     Ada, Michigan
     (616) 676-8177


Stock Registrar and Transfer Agent

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


Annual Meeting
The annual meeting of shareholders of
ChoiceOne Financial Services, Inc., will
be held at 6:30 p.m. local time on Thursday,
April 28, 2005, at Sparta Church of the
Nazarene in Sparta, Michigan. Subsidiary Information

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

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

Cedar Springs Office
     4170 Seventeen Mile Road
     Cedar Springs, Michigan 49319

Rockford Office
     6795 Courtland Drive
     Rockford, Michigan 49341

Alpine Office
     5228 Alpine Avenue NW
     Comstock Park, Michigan 49321

ChoiceOne Bank is a member of the
Federal Deposit Insurance Corporation
and is an Equal Opportunity and
Housing Lender.

ChoiceOne Insurance Agencies, Inc.
Sparta Office
     109 East Division Street
     Sparta, Michigan 49345

Cedar Springs Office
     4170 Seventeen Mile Road
     Cedar Springs, Michigan 49319

ChoiceOne Mortgage Company of
Michigan
Sparta Office
     109 East Division Street
     Sparta, Michigan 49345

37

DIRECTORS AND OFFICERS
ChoiceOne Financial Services, Inc.

Directors
ChoiceOne Financial Services, Inc.

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

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

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

Lewis G. Emmons
   President, Emmons Development;
   President, Brat Development
   (Real Estate Development)

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

Bruce A. Johnson
   Vice President and Chief Financial Officer,
   Spartan Distributors, Inc.
   (Lawn, Garden, Turf and Irrigation
   Equipment and Materials)

Paul L. Johnson
   President, Falcon Resources, Inc.
   (Automotive and Furniture Design)

Linda R. Pitsch
   Secretary, ChoiceOne Financial Services,
   Inc.; Senior Vice President - Operations/
   Branch Administration, ChoiceOne Bank

Andrew W. Zamiara, R.Ph.
   President and Manager, Momber
   Pharmacy and Momber Hallmark


Officers
ChoiceOne Financial Services, Inc.

James A. Bosserd
   President and Chief Executive Officer

Louis D. Knooihuizen
   Vice President

Linda R. Pitsch
   Secretary

Thomas L. Lampen
   Treasurer Officers
Subsidiary - ChoiceOne Bank

James A. Bosserd
   President and Chief Executive Officer

Louis D. Knooihuizen
   Senior Vice President -
      Senior Loan Officer

Linda R. Pitsch
   Senior Vice President - Operations/
      Branch Administration

Lee A. Braford
   Vice President - Retail Loans/
      Sales Administration

John C. Huffman
   Vice President - Commercial Loans

Mary J. Johnson
   Vice President - Human Resources/
      Internal Audit

Thomas L. Lampen
   Vice President - Chief Financial Officer

Linda K. Anderson
   Assistant Vice President - Rockford
      Office Manager

Michael F. Feighan
   Assistant Vice President - Controller

Robert C. Godfrey
   Assistant Vice President -
      Commercial Loans

Dean A. Hanson
   Assistant Vice President -
      Sparta Appletree Office Manager

Jason J. Herbig
   Assistant Vice President -
   Management Information Systems/
   Network Administration

Valerie J. Heyt
   Assistant Vice President -
      Alpine Office Manager

Jason A. Parker
   Assistant Vice President -
      Consumer Loans Manager

Darci M. Reinhardt
   Assistant Vice President -
      Cedar Springs Office Manager

Christine L. Witt
   Assistant Vice President -
      Operations Manager Officers
Subsidiary - ChoiceOne Insurance
Agencies, Inc.

James A. Bosserd
   President

Kelly J. Potes
   Senior Vice President -
      General Manager

Jeffrey S. Bradford, CIC
   Vice President

Dana L. Quick
  Vice President -  Investment Services

Linda R. Pitsch
   Secretary

Thomas L. Lampen
   Treasurer

Officers
Subsidiary - ChoiceOne Mortgage
Company of Michigan

James A. Bosserd
   President

Louis D. Knooihuizen
   Senior Vice President

Lee A. Braford
   Vice President

Marilyn B. Childress
   Assistant Vice President

Linda R. Pitsch
   Secretary

Thomas L. Lampen
   Treasurer

38

EX-21

Exhibit 21

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.	ChoiceOne Mortgage Company of Michigan (1) 109 E. Division Sparta, Michigan 49345	Michigan
4.	West Shore Computer Services, Inc. (2) 111 North Main Street Scottville, Michigan 49454	Michigan

________________________

(1)	These are wholly-owned subsidiaries of ChoiceOne Bank.
(2)	ChoiceOne Bank owns a 20% interest in West Shore Computer Services, Inc.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT 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 February 25, 2005 on the 2004 consolidated financial statements of ChoiceOne Financial Services, Inc., which report is incorporated by reference and included in Exhibit 13 in the Annual Report on Form 10-K for the fiscal year ended December 31, 2004 of ChoiceOne Financial Services, Inc.

/s/ Crowe Chizek and Company LLC
Crowe Chizek and Company LLC

Grand Rapids, Michigan
March 24, 2005

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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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 19, 2005	/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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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:  February 10, 2005	/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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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 21, 2005	/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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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 20, 2005	/s/ Lewis G. Emmons
	(signature)
	Lewis G. Emmons
	(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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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 19, 2005	/s/ Stuart L. Goodfellow
	(signature)
	Stuart L. 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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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 25, 2005	/s/ Bruce A. Johnson
	(signature)
	Bruce A. 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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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 19, 2005	/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 Jon E. Pike, James A. Bosserd, Linda R. Pitsch 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, 2004, 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:  February 9, 2005	/s/ Andrew W. Zamiara
	(signature)
	Andrew W. Zamiara
	(type or print name)

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, James A. Bosserd, certify that:

1.	I have reviewed this annual report on Form 10-K for the year ended December 31, 2004 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)) 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)	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
c)	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 29, 2005	/s/ James A. Bosserd
	James A. Bosserd President and Chief Executive Officer ChoiceOne Financial Services, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Thomas L. Lampen, certify that:

1.	I have reviewed this annual report on Form 10-K for the year ended December 31, 2004 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)) 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)	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
c)	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 29, 2005	/s/ Thomas L. Lampen
	Thomas L. Lampen Treasurer ChoiceOne Financial Services, Inc.

EX-32

Exhibit 32.1

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, 2004 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 29, 2005	/s/ James A. Bosserd
	James A. Bosserd President and Chief Executive Officer

Dated:  March 29, 2005	/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.