Isabella Bank Corporation Reports Third Quarter 2025 Results

Rhea-AI Summary

Isabella Bank Corporation (Nasdaq:ISBA) reported Q3 2025 net income of $5.2M and YTD net income of $14.2M, equal to $0.71 and $1.92 diluted EPS, respectively. Core loans rose modestly and Total deposits reached $1.93B. Net interest income was $16.2M in Q3 with a NIM of 3.15%, up from 2.96% a year earlier. Total assets were $2.3B and tangible book value per share increased to $24.37 from $21.82 at year-end 2024. Allowance for credit losses was $13.1M; nonperforming loans to total loans were 0.24%. Management noted BOLI repositioning and share repurchases during 2025.

Positive

• Net income +57% year-over-year (Q3 2025 vs Q3 2024)
• Total deposits +$178.5M since Dec 31, 2024 (to $1.93B)
• Tangible book value +11.7% (to $24.37 per share)
• Net unrealized securities loss improved from $26.5M to $12.6M

Negative

• One large deposit expected to be withdrawn by year-end, concentration risk
• Nonaccrual loans +$2.3M in Q3 from a downgraded commercial real estate loan
• Noninterest expense +$0.76M in Q3 due to higher compensation and professional fees

Insights

Senior Banking Financial Analyst

Solid quarter: rising NIM, loan and deposit growth, and improved earnings with strong credit metrics; monitor a large deposit withdrawal and ACL trends.

Isabella Bank Corporation reported third quarter net income of $5.2 million and year‑to‑date net income of $14.2 million, with diluted EPS of $0.71 for the quarter and $1.92 year‑to‑date. Core loans rose by $32 million in the quarter and core loan growth of $66.4 million for the year, while total deposits increased $76 million in the quarter to $1.93 billion. Net interest margin expanded to 3.15% from 2.96%, driven by higher loan yields and lower cost of interest‑bearing liabilities, and noninterest income and expense control contributed to overall profitability.

Credit metrics remain strong: nonperforming loans to total loans was 0.24%, ACL reached $13.1 million after small increases, and nonaccrual loans rose by $2.3 million primarily due to one downgraded CRE loan. A notable funding dependency is one large relationship that boosted money market deposits during the year and is expected to withdraw those funds by the end of the year; this is a concrete liquidity item to watch. Also monitor securities unrealized losses improving to $12.6 million and tangible book value per share movements driven by AFS marks.

Key near‑term milestones to follow are the expected withdrawal by the large depositor by year‑end, quarterly trends in NIM as loan repricing continues, and ACL changes in upcoming quarters as recoveries and any future charge‑offs materialize; these will affect liquidity, margin, and capital measures over the next one to four quarters.

MT. PLEASANT, MI / ACCESS Newswire / October 27, 2025 / Isabella Bank Corporation (Nasdaq:ISBA) ("Isabella" or the "Company") reported net income of $5.2 million for the third quarter 2025 and $14.2 million for the nine months ended September 30, 2025. Earnings per diluted share were $0.71 for the third quarter 2025 and $1.92 for the first nine months of 2025.

THIRD QUARTER 2025 HIGHLIGHTS

• Core loans grew $32 million, or 2%

• Total deposits grew $76 million, or 4%

• Net interest income increased 11.6% compared to third quarter 2024

• Net interest margin ("NIM") was 3.15%, up from 2.96% during the third quarter of 2024

• Strong credit quality, with a ratio of nonperforming loans to total loans of 0.24% as of September 30, 2025

"Our strong third quarter results were driven by continued expansion in core loans and deposits," said Isabella's Chief Executive Officer, Jerome Schwind. "Earning assets continued to reprice with low and stable funding costs, generating NIM growth," he added.

"Our loan growth this year has been driven by the commercial and residential mortgage loan portfolios. Our deposit growth includes larger deposits from not-for-profit entities and while some of our deposit growth is considered short-term, we continue to build new relationships across our geographic footprint.

"We also launched initiatives to strengthen noninterest revenue through fee-based income during the quarter, which coupled with noninterest expense control, have contributed to our overall financial performance.

"Our stock trading volume and price remain robust since uplisting our shares to the Nasdaq Capital Market earlier this year," Schwind added. "Our financial results and stock performance position us well for growth and to continue to deliver long-term value to our shareholders."

FINANCIAL CONDITION (as of September 30, 2025, compared to December 31, 2024, unless otherwise noted)

Total assets were $2.3 billion as of September 30, 2025, up $173.4 million, primarily due to an increase of $127.5 million in interest bearing cash balances, $22.9 million in available-for-sale ("AFS") securities, and $10.8 million in the value of bank-owned life insurance ("BOLI") policies.

AFS securities at fair value were $512 million as of September 30, 2025, increasing $11.4 million during the third quarter and $22.9 million compared to December 31, 2024. The increase during the year was largely driven by purchases of $62.1 million and an improvement in unrealized losses of $13.9 million, partially offset by amortizations and maturities totaling $53.1 million. Net unrealized losses on securities totaled $12.6 million as of September 30, 2025, compared to $26.5 million at December 31, 2024. Net unrealized losses as a percentage of total AFS securities decreased to 2% from 5%, primarily due to the treasury portfolio rapidly approaching maturity.

Total loans were $1.4 billion at the end of the third quarter, increasing $34.4 million during the third quarter and $8.3 million since December 31, 2024. While core loans have grown $66.4 million during 2025, advances to mortgage brokers decreased $58 million due to lower participation demand from the counterparty.

During the year, the commercial and industrial and commercial real estate portfolios grew $17.5 million and $34.9 million, respectively. Residential mortgages increased $31.2 million since year-end 2024 with $13.4 million of growth in the third quarter on construction drawdowns and seasonal patterns. Most residential originations were adjustable-rate products, which are retained on the balance sheet rather than sold in the secondary market. The consumer loan portfolio declined $15.4 million as loans continue to roll off amid decreasing demand, competition, and an adherence to credit quality standards.

The allowance for credit losses ("ACL") increased $172 thousand during the third quarter and $254 thousand since December 31, 2024, reaching $13.1 million as of September 30, 2025. The increase for each period reflects core loan growth, offset by improvement in historical loss experience driven by the recovery of previously charged-off loans during the year. Nonaccrual loan balances increased $2.3 million during the quarter to $3.4 million, primarily due to the downgrade of one commercial real estate loan to nonaccrual status during the quarter. Past due and accruing accounts between 30 to 89 days, as a percentage of total loans, was 0.03% compared to 0.40% at December 31, 2024. Overall credit quality remains strong.

BOLI assets were $45.7 million at September 30, 2025, an increase of $10.8 million from December 31, 2024. The growth was mostly driven by a $10.6 million investment of new policies in a separate account product at the beginning of January. During the year, over $13 million of existing general account policies were surrendered and/or exchanged and the funds were redeployed into a separate account BOLI. The separate account BOLI policies are expected to have higher yields than general account policies.

Total deposits were $1.93 billion at September 30, 2025, increasing $76.2 million during the third quarter and $178.5 million since December 31, 2024. Money market deposits have increased $134.3 million during the year, with a large portion related to one relationship with large deposits that is expected to be withdrawn by the customer by the end of the year. Consumer demand for retail certificates of deposit accounts continues based on the current elevated market interest rate environment, resulting in a $17.2 million increase during the year.

Total equity was $227.4 million, or $30.94 per share, at September 30, 2025 compared to $210.3 million, or $28.32 per share, at year-end 2024. Tangible book value per share was $24.37 as of September 30, 2025, compared to $21.82 on December 31, 2024. Net unrealized losses in the AFS securities portfolio reduced tangible book value per share by $1.36 and $2.82 for the respective periods. Share repurchases totaled 19,096 during the third quarter and 122,502 during the first nine months of 2025 at an average price of approximately $32.00 and $26.60, respectively.

RESULTS OF OPERATIONS (Comparison of the three and nine months ended September 30, 2025, and 2024, unless otherwise noted)

Net income in the third quarter of 2025 was $5.2 million, or $0.71 per diluted share, compared with $3.3 million, or $0.44 per diluted share, in the same quarter 2024. Net income for the year-to-date period of 2025 was $14.2 million, or $1.92 per diluted share, compared with $9.9 million, or $1.32 per diluted share, in the same period of 2024.

Net interest income was $16.2 million in the third quarter of 2025 and $14.5 million in the same quarter of 2024, representing 3.15% and 2.96% of earning assets, or NIM, respectively. The book yield from securities was 2.42% and 2.17% during the third quarters of 2025 and 2024, respectively. The yield on loans expanded to 5.78% in the third quarter 2025, up from 5.72% in the same quarter of 2024. The expansion in loan yields was primarily due to higher rates on new loans and variable rate commercial loans that continue to reprice. The cost of interest-bearing liabilities in the third quarter of 2025 decreased to 2.25% from 2.42% in the third quarter of 2024 due to reductions to rates in the money market and certificate of deposit products. NIM is expected to continue to expand as loans reprice and the cost of interest-bearing liabilities stabilizes.

For the first nine months of 2025, net interest income was $45.8 million compared with $41.3 million in the same period of 2024. The comparison of NIM and yield on interest earning assets for the nine months ended September 30, 2025 were 3.12% and 4.80%, respectively, compared to 2.87% and 4.62%, respectively, for the same period in 2024. The yield on loans expanded to 5.75%, from 5.55%, and the cost of interest-bearing liabilities decreased to 2.25% from 2.36% for the first nine months of 2025 and 2024, respectively. The explanations for the improvement in NIM are consistent with those provided in the year-over-year three month comparison above.

The provision for credit losses in the third quarter of 2025 was $209 thousand, which reflects a $172 thousand increase in the ACL on loans, net charge offs totaling $74 thousand, and an increase in the reserve for unfunded commitments. The provision for loan losses in the same period of 2024 was $946 thousand, reflecting growth in core loans, unfunded commitments, and $1.8 million in charge offs. The increase in charge offs was related to overdrawn deposit accounts from a single customer. The year-to-date provision for credit loss was a credit of $1.0 million, as compared to a provision of $1.5 million in the third quarter 2024. Recoveries during 2025 totaled $2.1 million, of which $1.6 million was related to the overdrawn deposit accounts from a single customer charged off during the third quarter of 2024. The $1.6 million charge off and subsequent recovery, net of tax, impacted diluted earnings per share by $0.17 in 2024 and $0.16 in 2025.

Noninterest income for the three months ended September 30, 2025 and 2024 was $4.3 million and $3.5 million, respectively. Service charges and fees increased $219 thousand and was mostly the result of profitability initiatives designed to increase fee income. Wealth management fees grew $71 thousand due to growth in assets under management throughout the year. Earnings on BOLI policies increased $216 thousand over the prior year quarter due to new investments in a separate account BOLI, which was offset in part by a one-time expense of $120 thousand due to restructuring charges. Noninterest income during the third quarter of 2025 also includes a $163 thousand gain on the redemption of a BOLI policy. For the first nine months of 2025, noninterest income was $11.5 million, compared to $10.6 million in the same period of 2024. Increases in service charges and fees, wealth management fees, earnings on BOLI policies, and other income for the nine-month comparison are the same as the three-month comparison.

Noninterest expenses for the three-month period ended September 30, 2025 increased $757 thousand compared to the same period in 2024. Compensation and benefit expenses increased $379 thousand reflecting annual merit increases in 2025, incentives, and higher medical insurance claims compared to the third quarter of 2024. Other professional services increased $263 thousand primarily due to an increase in outsourced services. For the first nine months of 2025, noninterest expenses were $41.0 million, compared to $38.8 million in the same period of 2024. Compensation and benefits increased $1.3 million for the same reasons as the three-month comparison. Other professional service fees increased $797 thousand principally due to $173 thousand of profitability initiative costs, $168 thousand in legal fees related to our uplisting of the Company's shares of common stock from the OTCQX market to the Nasdaq Capital Market, and an increased reliance on outsourced professional services.

About Isabella Bank Corporation

Isabella Bank Corporation (Nasdaq:ISBA) is the parent holding company of Isabella Bank, a state-chartered community bank headquartered in Mt. Pleasant, Michigan. Isabella Bank was established in 1903 and has been committed to serving its customers' and communities' local banking needs for over 120 years. The Bank offers personal and commercial lending and deposit products, as well as investment, trust, and estate planning services. The Bank has locations throughout eight Mid-Michigan counties: Bay, Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw.

For more information about Isabella Bank Corporation, visit the Investor Relations link at www.isabellabank.com.

Contact

Lori Peterson, Director of Marketing
Phone: 989-779-6333 Fax: 989-775-5501

Available Information

The Company maintains an Internet web site at ir.isabellabank.com/overview. The Company makes available, free of charge, on its web site the Company's annual reports, quarterly earnings reports, and other press releases.

The Company routinely posts important information for investors on its website (www.isabellabank.com and, more specifically, under the News tab at ir.isabellabank.com/news). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the "SEC"). Accordingly, investors should monitor the Company's web site, in addition to following the Company's press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company's website is not incorporated by reference into, and is not a part of, this document.

Forward-Looking Statements

Information in this press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended and Rule 3b-6 promulgated thereunder. We intend such forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995, and are included in this statement for purposes of these safe harbor provisions. Forward-looking statements generally relate to losses, impact of events, financial condition, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting the Company and its future business and operations. Forward-looking statements are typically identified by words or phrases such as "will likely result", "expect", "could", "may", "plan", "believe", "estimate", "anticipate", "strategy", "trend", "forecast", "outlook", "project", "intend", "assume", "outcome", "continue", "remain", "potential", "opportunity", "current", "position", "maintain", "sustain", "seek", "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Factors that could cause such differences include, but are not limited to: (i) the impact on us or our customers of a decline in general economic conditions, and any regulatory responses thereto; (ii) slower economic growth rates or potential recession in the United States and our market areas; (iii) the impacts related to or resulting from uncertainty in the banking industry as a whole; (iv) increased competition for deposits among traditional and nontraditional financial services companies, and related changes in deposit customer behavior; (v) the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; (vi) the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; (vii) the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; (viii) changes in unemployment rates in the United States and our market areas; (ix) adverse changes in customer spending, borrowing and savings habits; (x) declines in commercial real estate values and prices; (xi) a deterioration of the credit rating for the United States long-term sovereign debt or the impact of uncertain or changing political conditions, including federal government shutdowns and uncertainty regarding United States fiscal debt, deficit and budget matters; (xii) cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; (xiii) severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events, including as a result of in the policies of the current U.S. presidential administration or Congress; (xiv) in the impact of tariffs, sanctions and other trade policies of the United States and its global trading counterparts and the resulting impact on the Company and its customers; (xv) competition and market expansion opportunities; (xvi) changes in non-interest expenditures or in the anticipated benefits of such expenditures; (xvii) the receipt of required regulatory approvals; (xviii) changes in tax laws; (xix) the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; (xx) potential costs related to the impacts of climate change; (xxi) current or future litigation, regulatory examinations or other legal and/or regulatory actions; and (xxii) changes in applicable laws and regulations. These forward-looking statements are based on current information and/or management's good faith belief as to future events. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Additional information regarding risks and uncertainties to which the Company's business and future financial performance are subject is contained in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of such documents, and other documents the Company files or furnishes with the SEC from time to time, which are available on the SEC's website, www.sec.gov. Due to these and other possible uncertainties and risks, the Company cautions you not to unduly rely on forward-looking statements. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans or expectations contemplated by the Company will be achieved. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made, except as required by law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States ("GAAP"). The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

Table Index	Consolidated Financial Schedules (Unaudited)
A	Selected Financial Data
B	Consolidated Balance Sheets
C	Consolidated Statements of Income
D	Average Balances, Interest Rate, and Net Interest Income
E	Average Balances, Interest Rate, and Net Interest Income
F	Reconciliation of Non-GAAP Financial Measures

[A] SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands except per share amounts and ratios)

The following table outlines selected financial data as of, and for the:

		Three Months Ended																				Nine Months Ended
		September 30 2025				June 30 2025				March 31 2025				December 31 2024				September 30 2024				September 30 2025				September 30 2024
PER SHARE
Basic earnings		$	0.71			$	0.68			$	0.53			$	0.54			$	0.44			$	1.93			$	1.32
Diluted earnings			0.71				0.68				0.53				0.54				0.44				1.92				1.32
Dividends			0.28				0.28				0.28				0.28				0.28				0.84				0.84
Book value (1)			30.94				29.95				29.10				28.32				28.63				30.94				28.63
Tangible book value (1) (2)			24.37				23.39				22.58				21.82				22.14				24.37				22.14
Market price (1)			35.25				30.15				23.59				25.99				21.21				35.25				21.21
Common shares outstanding (1) (3)			7,350,567				7,361,684				7,408,010				7,424,893				7,438,720				7,350,567				7,438,720
Average number of diluted common shares outstanding (3)			7,371,652				7,398,109				7,432,162				7,451,718				7,473,184				7,399,441				7,492,404
PERFORMANCE RATIOS
Return on average total assets			0.94	%			0.96	%			0.77	%			0.76	%			0.62	%			0.89	%			0.64	%
Return on average shareholders' equity			9.28	%			9.19	%			7.48	%			7.47	%			6.26	%			8.67	%			6.47	%
Return on average tangible shareholders' equity (1)			11.83	%			11.78	%			9.65	%			9.66	%			8.15	%			11.12	%			8.48	%
Net interest margin yield (fully taxable equivalent) (1)			3.15	%			3.14	%			3.06	%			2.98	%			2.96	%			3.12	%			2.87	%
Efficiency ratio			67.51	%			70.53	%			71.73	%			71.08	%			72.30	%			69.80	%			73.65	%
Gross loan to deposit ratio (1)			74.36	%			75.57	%			76.07	%			81.48	%			79.93	%			74.36	%			79.93	%
Shareholders' equity to total assets (1)			10.06	%			10.23	%			10.25	%			10.08	%			10.11	%			10.06	%			10.11	%
Tangible shareholders' equity to tangible assets (1)			8.10	%			8.17	%			8.14	%			7.95	%			8.00	%			8.10	%			8.00	%
ASSETS UNDER MANAGEMENT
Wealth assets under management (1)			679,724				678,959				656,617				658,042				679,858				679,724				679,858
ASSET QUALITY
Nonaccrual loans (1)			3,443				1,164				173				282				547				3,443				547
Foreclosed assets (1)			1,018				667				649				544				546				1,018				546
Net loan charge-offs (recoveries)			74				(1,432	)			(52	)			102				1,359				(1,410	)			1,798
Net loan charge-offs (recoveries) to average loans outstanding			0.01	%			(0.10)	%			0.00	%			0.01	%			0.10	%			(0.10)	%			0.13	%
Nonperforming loans to gross loans (1)			0.24	%			0.09	%			0.01	%			0.02	%			0.04	%			0.24	%			0.04	%
Nonperforming assets to total assets (1)			0.20	%			0.09	%			0.04	%			0.04	%			0.06	%			0.20	%			0.06	%
Allowance for credit losses to gross loans (1)			0.92	%			0.93	%			0.93	%			0.91	%			0.89	%			0.92	%			0.89	%
CAPITAL RATIOS (1)
Tier 1 leverage			8.71	%			9.04	%			8.96	%			8.86	%			8.77	%			8.71	%			8.77	%
Common equity tier 1 capital			12.37	%			12.46	%			12.58	%			12.21	%			12.08	%			12.37	%			12.08	%
Tier 1 risk-based capital			12.37	%			12.46	%			12.58	%			12.21	%			12.08	%			12.37	%			12.08	%
Total risk-based capital			15.20	%			15.34	%			15.50	%			15.06	%			14.90	%			15.20	%			14.90	%

⁽¹⁾ At end of period.
⁽²⁾ Non-GAAP financial measure; refer to the Reconciliation of Non-GAAP Financial Measures (Unaudited) in table F
⁽³⁾ Whole shares

[B] CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)

		September 30 2025				June 30 2025				March 31 2025				December 31 2024				September 30 2024
ASSETS
Cash and demand deposits due from banks		$	32,124			$	34,246			$	28,786			$	22,830			$	27,019
Fed Funds sold and interest bearing balances due from banks			129,177				74,308				40,393				1,712				359
Total cash and cash equivalents			161,301				108,554				69,179				24,542				27,378
Available-for-sale securities, at fair value			511,970				500,560				513,040				489,029				506,806
Federal Home Loan Bank stock			5,600				5,600				5,600				12,762				12,762
Mortgage loans held-for-sale			737				55				127				242				504
Loans			1,431,905				1,397,513				1,367,724				1,423,571				1,424,283
Less allowance for credit losses			13,149				12,977				12,735				12,895				12,635
Net loans			1,418,756				1,384,536				1,354,989				1,410,676				1,411,648
Premises and equipment			28,659				28,171				28,108				27,659				27,674
Cash surrender value of bank-owned life insurance policies			45,651				45,774				45,833				34,882				34,625
Goodwill and other intangible assets			48,282				48,282				48,282				48,283				48,283
Other assets			38,698				34,636				37,429				38,166				37,221
Total assets		$	2,259,654			$	2,156,168			$	2,102,587			$	2,086,241			$	2,106,901
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Demand deposits		$	421,027			$	493,477			$	404,194			$	416,373			$	421,493
Interest bearing demand deposits			248,666				223,376				243,939				237,548				228,902
Money market deposits			558,212				446,845				473,138				423,883				471,745
Savings			292,899				289,746				286,399				281,665				276,095
Certificates of deposit			404,798				395,932				390,239				387,591				383,597
Total deposits			1,925,602				1,849,376				1,797,909				1,747,060				1,781,832
Short-term borrowings			62,022				43,208				47,310				53,567				52,434
Federal Home Loan Bank advances			-				-				-				30,000				15,000
Subordinated debt, net of unamortized issuance costs			29,492				29,469				29,447				29,424				29,402
Total borrowed funds			91,514				72,677				76,757				112,991				96,836
Other liabilities			15,118				13,615				12,365				15,914				15,248
Total liabilities			2,032,234				1,935,668				1,887,031				1,875,965				1,893,916
Shareholders' equity
Common stock			124,284				124,607				125,547				126,224				125,218
Shares to be issued for deferred compensation obligations			2,373				2,331				2,508				2,383				3,981
Retained earnings			111,172				107,949				104,940				103,024				101,065
Accumulated other comprehensive loss			(10,409	)			(14,387	)			(17,439	)			(21,355	)			(17,279	)
Total shareholders' equity			227,420				220,500				215,556				210,276				212,985
Total liabilities and shareholders' equity		$	2,259,654			$	2,156,168			$	2,102,587			$	2,086,241			$	2,106,901

[C] CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share amounts)

		Three Months Ended																				Nine Months Ended
		September 30 2025				June 30 2025				March 31 2025				December 31 2024				September 30 2024				September 30 2025				September 30 2024
Interest income
Loans		$	20,583			$	19,832			$	19,348			$	20,145			$	20,230			$	59,763			$	57,150
Available-for-sale securities			2,994				3,032				2,643				2,656				2,749				8,669				8,437
Federal Home Loan Bank stock			70				125				160				168				168				355				472
Federal funds sold and other			1,235				253				482				200				194				1,970				750
Total interest income			24,882				23,242				22,633				23,169				23,341				70,757				66,809
Interest expense
Deposits			8,012				7,391				7,463				7,583				7,631				22,866				22,107
Short-term borrowings			441				324				341				413				384				1,106				1,026
Federal Home Loan Bank advances			-				132				38				352				571				170				1,597
Subordinated debt			267				266				266				266				267				799				799
Total interest expense			8,720				8,113				8,108				8,614				8,853				24,941				25,529
Net interest income			16,162				15,129				14,525				14,555				14,488				45,816				41,280
Provision (reversal) for credit losses			209				(1,099	)			(107	)			376				946				(997	)			1,508
Net interest income after provision for credit losses			15,953				16,228				14,632				14,179				13,542				46,813				39,772
Noninterest income
Service charges and fees			2,352				2,071				1,974				2,186				2,133				6,397				6,089
Wealth management fees			1,074				1,084				979				1,051				1,003				3,137				2,990
Earnings on bank-owned life insurance policies			468				300				372				259				252				1,140				748
Net gain on sale of mortgage loans			38				47				30				75				37				115				138
Other			376				184				173				401				103				733				639
Total noninterest income			4,308				3,686				3,528				3,972				3,528				11,522				10,604
Noninterest expenses
Compensation and benefits			7,630				7,496				7,383				7,340				7,251				22,509				21,236
Occupancy and equipment			2,628				2,650				2,600				2,554				2,645				7,878				7,970
Other professional services			851				863				711				584				588				2,425				1,628
ATM and debit card fees			595				555				486				516				503				1,636				1,459
Marketing			514				469				459				458				403				1,442				1,254
FDIC insurance premiums			271				267				303				309				291				841				823
Other losses			47				339				115				209				347				501				908
Other			1,449				1,106				1,242				1,360				1,200				3,797				3,521
Total noninterest expenses			13,985				13,745				13,299				13,330				13,228				41,029				38,799
Income before income tax expense			6,276				6,169				4,861				4,821				3,842				17,306				11,577
Income tax expense			1,036				1,138				912				825				561				3,086				1,684
Net income		$	5,240			$	5,031			$	3,949			$	3,996			$	3,281			$	14,220			$	9,893
Earnings per common share
Basic		$	0.71			$	0.68			$	0.53			$	0.54			$	0.44			$	1.93			$	1.32
Diluted			0.71				0.68				0.53				0.54				0.44				1.92				1.32
Cash dividends per common share			0.28				0.28				0.28				0.28				0.28				0.84				0.84

[D] AVERAGE BALANCES, INTEREST RATE, AND NET INTEREST INCOME (UNAUDITED)
(Dollars in thousands)

The following schedules present the daily average amount outstanding for each major category of interest earning assets, non-earning assets, interest bearing liabilities, and noninterest bearing liabilities. These schedules also present an analysis of interest income and interest expense for the periods indicated. All interest income is reported on a fully tax equivalent ("FTE") basis using a federal income tax rate of 21%. Loans in nonaccrual status, for the purpose of the following computations, are included in the average loan balances. Federal Reserve Bank ("FRB") restricted equity holdings are included in other interest earning assets.

		Three Months Ended
		September 30, 2025												June 30, 2025												September 30, 2024
		Average Balance				Tax Equivalent Interest				Average Yield / Rate				Average Balance				Tax Equivalent Interest				Average Yield / Rate				Average Balance				Tax Equivalent Interest				Average Yield / Rate
INTEREST EARNING ASSETS
Loans (1)		$	1,409,928			$	20,583				5.78	%		$	1,388,684			$	19,832				5.71	%		$	1,403,810			$	20,230				5.72	%
AFS securities (2)			517,286				3,172				2.42	%			534,352				3,210				2.38	%			536,379				2,981				2.17	%
Federal Home Loan Bank stock			5,600				70				4.95	%			5,600				125				8.94	%			12,762				168				5.26	%
Fed funds sold			186				2				4.35	%			6				-				3.83	%			4				-				5.36	%
Other (3)			123,183				1,233				3.92	%			20,487				253				4.92	%			14,597				194				5.18	%
Total interest earning assets			2,056,183				25,060				4.83	%			1,949,129				23,420				4.81	%			1,967,552				23,573				4.75	%
NONEARNING ASSETS
Allowance for credit losses			(13,057	)											(13,369	)											(13,125	)
Cash and demand deposits due from banks			25,591												22,026												25,903
Premises and equipment			28,313												28,306												27,868
Other assets			109,692												106,595												87,002
Total assets		$	2,206,722											$	2,092,687											$	2,095,200
INTEREST BEARING LIABILITIES
Interest bearing demand deposits		$	234,105				144				0.24	%		$	236,076				220				0.37	%		$	232,018				161				0.28	%
Money market deposits			534,127				3,533				2.63	%			449,110				2,857				2.55	%			451,216				3,148				2.77	%
Savings			289,442				560				0.77	%			286,434				544				0.76	%			274,828				423				0.61	%
Certificates of deposit			399,781				3,775				3.75	%			395,450				3,770				3.82	%			375,936				3,899				4.13	%
Short-term borrowings			52,700				441				3.32	%			41,661				324				3.11	%			48,304				384				3.17	%
Federal Home Loan Bank advances			-				-				-	%			11,539				132				4.53	%			40,435				571				5.52	%
Subordinated debt, net of unamortized issuance costs			29,477				267				3.61	%			29,455				266				3.61	%			29,388				267				3.62	%
Total interest bearing liabilities			1,539,632				8,720				2.25	%			1,449,725				8,113				2.24	%			1,452,125				8,853				2.42	%
NONINTEREST BEARING LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits			428,144												409,262												418,973
Other liabilities			14,976												14,158												15,658
Shareholders' equity			223,970												219,542												208,444
Total liabilities and shareholders' equity		$	2,206,722											$	2,092,687											$	2,095,200
Net interest income (FTE)						$	16,340											$	15,307											$	14,720
Net yield on interest earning assets (FTE) (4)														3.15	%											3.14	%								2.96	%

⁽¹⁾ Includes loans held-for-sale and nonaccrual loans
⁽²⁾ Average balances for available-for-sale securities are based on amortized cost
⁽³⁾ Includes average interest-bearing deposits with other banks, net of Federal Reserve daily cash letter.

[E] AVERAGE BALANCES, INTEREST RATE, AND NET INTEREST INCOME (UNAUDITED) (continued)
(Dollars in thousands)

		Nine Months Ended
		September 30, 2025												September 30, 2024
		Average Balance				Tax Equivalent Interest				Average Yield/Rate				Average Balance				Tax Equivalent Interest				Average Yield/Rate
INTEREST EARNING ASSETS
Loans (1)		$	1,389,936			$	59,763				5.75	%		$	1,376,122			$	57,150				5.55	%
AFS securities (2)			522,049				9,210				2.34	%			546,376				9,153				2.23	%
Federal Home Loan Bank stock			7,384				355				6.41	%			12,762				472				4.93	%
Fed funds sold			66				2				4.35	%			6				-				5.35	%
Other (3)			63,959				1,968				3.92	%			17,941				750				5.49	%
Total interest earning assets			1,983,394				71,298				4.80	%			1,953,207				67,525				4.62	%
NONEARNING ASSETS
Allowance for credit losses			(13,104	)											(13,216	)
Cash and demand deposits due from banks			23,844												24,623
Premises and equipment			28,195												27,962
Other assets			106,430												83,878
Total assets		$	2,128,759											$	2,076,454
INTEREST BEARING LIABILITIES
Interest bearing demand deposits		$	236,989				606				0.34	%		$	238,703				542				0.30	%
Money market deposits			481,571				9,319				2.59	%			445,604				9,437				2.83	%
Savings			287,425				1,642				0.76	%			280,447				1,154				0.55	%
Certificates of deposit			394,395				11,299				3.83	%			366,672				10,974				4.00	%
Short-term borrowings			46,008				1,106				3.21	%			43,197				1,026				3.18	%
Federal Home Loan Bank advances			4,945				170				4.53	%			37,883				1,597				5.54	%
Subordinated debt, net of unamortized issuance costs			29,455				799				3.61	%			29,365				799				3.63	%
Total interest bearing liabilities			1,480,788				24,941				2.25	%			1,441,871				25,529				2.36	%
NONINTEREST BEARING LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits			413,568												414,179
Other liabilities			15,131												16,183
Shareholders' equity			219,272												204,221
Total liabilities and shareholders' equity		$	2,128,759											$	2,076,454
Net interest income (FTE)						$	46,357											$	41,996
Net yield on interest earning assets (FTE) (4)											3.12	%											2.87	%

⁽¹⁾ Includes loans held-for-sale and nonaccrual loans (loan summary below)
⁽²⁾ Average balances for available-for-sale securities are based on amortized cost
⁽³⁾ Includes average interest-bearing deposits with other banks, net of Federal Reserve daily cash letter.

		September 30 2025				June 30 2025				March 31 2025				December 31 2024				September 30 2024
Commercial and industrial (4)		$	218,132			$	207,719			$	205,172			$	200,623			$	197,372
Commercial real estate (4)			626,642				614,383				596,282				591,718				590,255
Advances to mortgage brokers			5,056				3,005				3,015				63,080				76,187
Agricultural			97,794				96,842				94,359				99,694				96,794
Total commercial loans			947,624				921,949				898,828				955,115				960,608
Residential real estate			412,056				398,668				387,348				380,872				369,846
Consumer			72,225				76,896				81,548				87,584				93,829
Gross loans		$	1,431,905			$	1,397,513			$	1,367,724			$	1,423,571			$	1,424,283

⁽⁴⁾ Certain amounts reported as commercial and industrial loans have been reclassified as commercial real estate loans to conform to the September 30, 2025 presentation

[F] RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands except per share amounts and ratios)

			September 30 2025				June 30 2025				March 31 2025				December 31 2024				September 30 2024
Gross loans			$	1,431,905			$	1,397,513			$	1,367,724			$	1,423,571			$	1,424,283
Advances to mortgage brokers				5,056				3,005				3,015				63,080				76,187
Core loans			$	1,426,849			$	1,394,508			$	1,364,709			$	1,360,491			$	1,348,096
Total shareholders' equity			$	227,420			$	220,500			$	215,556			$	210,276			$	212,985
Goodwill and other intangible assets				48,282				48,282				48,282				48,283				48,283
Tangible equity	(A)			179,138				172,218				167,274				161,993				164,702
Common shares outstanding (1)	(B)			7,350,567				7,361,684				7,408,010				7,424,893				7,438,720
Tangible book value per share	(A/B)			24.37				23.39				22.58				21.82				22.14

⁽¹⁾ Whole shares.

SOURCE: Isabella Bank Corporation

View the original press release on ACCESS Newswire

FAQ

What were Isabella Bank (ISBA) Q3 2025 earnings per share and net income?

Q3 2025 net income was $5.2 million, or $0.71 diluted EPS; year-to-date net income was $14.2 million, or $1.92 diluted EPS.

How did Isabella Bank's (ISBA) net interest margin change in Q3 2025?

NIM increased to 3.15% in Q3 2025 from 2.96% in Q3 2024.

What deposit trends did Isabella Bank (ISBA) report for 2025?

Total deposits were $1.93 billion at Sept 30, 2025, up $178.5 million since Dec 31, 2024, with money market growth and some short-term large deposits.

Does Isabella Bank (ISBA) have credit quality issues to note in Q3 2025?

Credit metrics remain strong: nonperforming loans to total loans were 0.24%, though nonaccrual balances rose $2.3 million in Q3 due to one commercial real estate downgrade.

How did Isabella Bank (ISBA) move its BOLI investments in 2025?

BOLI increased to $45.7 million driven by a $10.6 million investment in separate account BOLI and redeployment from general account policies.

What capital actions did Isabella Bank (ISBA) take in 2025 that affect shareholders?

The company repurchased 122,502 shares in the first nine months of 2025 at an average price of $26.60 and reported tangible book value of $24.37 per share.