Isabella Bank (Nasdaq: ISBA) profit jumps 36% on wider margins

Rhea-AI Filing Summary

Isabella Bank Corporation reported stronger results for 2025, with net income rising to $18.9 million, or $2.56 per diluted share, up from $13.9 million, or $1.86 per share in 2024. Fourth quarter net income was $4.7 million, or $0.64 per diluted share, compared to $4.0 million, or $0.54.

Total assets reached $2.2 billion at December 31, 2025, driven by $112.8 million growth in loans and higher bank-owned life insurance and securities balances. Loans excluding advances to mortgage brokers increased $99 million, or 7%, while total deposits grew $73 million, or 4%.

Profitability improved as the net interest margin expanded to 3.16% for 2025 from 2.90% in 2024 and noninterest income increased to $16.0 million from $14.6 million. Credit quality remained solid, with nonperforming loans at 0.30% of total loans and net loan charge-offs representing (0.10)% of average loans for the year.

Positive

• Net income up 36% year-over-year to $18.9 million, with diluted EPS rising from $1.86 to $2.56, indicating significantly improved profitability in 2025.
• Net interest margin expanded to 3.16% from 2.90%, as loan yields increased and the cost of interest-bearing liabilities declined, strengthening core banking earnings.
• Healthy balance sheet growth with loans up $112.8 million and deposits up $72.6 million, alongside wealth assets under management increasing $49 million to $707 million.
• Strong credit quality with nonperforming loans at 0.30% of total loans and net loan charge-offs equating to (0.10)% of average loans for 2025.
• Capital and book value improved, with shareholders’ equity rising to $231.4 million and tangible book value per share increasing from $21.82 to $25.01.

Negative

• None.

Insights

Bank equity analyst

Isabella Bank delivered strong 2025 earnings growth with better margins, solid credit, and balance sheet expansion.

Isabella Bank Corporation grew net income to $18.9M in 2025 from $13.9M in 2024, with diluted EPS rising from $1.86 to $2.56. Net interest income increased to $62.5M, helped by a higher net interest margin of 3.16% versus 2.90%.

Balance sheet growth was broad-based. Loans reached $1.54B, up $112.8M, including $99.2M growth in adjusted loans. Total deposits increased $72.6M to $1.82B. Wealth assets under management rose $49M to $707M, supporting fee income. Tangible book value per share improved from $21.82 to $25.01.

Asset quality metrics remained favorable: nonperforming loans were 0.30% of total loans and nonperforming assets were 0.25% of total assets at December 31, 2025. Provision for credit losses was a net credit of $0.6M for 2025, aided by $2.3M in recoveries, including a single large overdrawn account recovery. Income taxes increased to $5.2M and the effective tax rate to 22%, partly from one-time deferred tax and BOLI-related charges.

0000842517false00008425172026-02-052026-02-05

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 5, 2026

ISABELLA BANK CORPORATION

(Exact name of registrant as specified in its charter)

Michigan

000-18415

38-2830092

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

401 North Main Street

Mt. Pleasant

Michigan

48858-1649

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (989) 772-9471

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.l4a-l2)

☐ Pre-commencement communications pursuant to Rule l4d-2(b) under the Exchange Act (17 CFR 240.l4d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.l3e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common stock, no par value per share			ISBA			The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition.

On February 5, 2026, Isabella Bank Corporation issued a press release announcing its financial results for the quarter and year ended December 31, 2025.

A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor will any of such information be deemed incorporated by reference into any filing made by the registrant under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.						Description
99.1						Press release issued by Isabella Bank Corporation, dated February 5, 2026
104						Cover page interactive data file - the cover page XBRL tags are embedded within the inline XBRL document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ISABELLA BANK CORPORATION

Dated:

February 5, 2026

By:

/s/ Jerome E. Schwind

Jerome E. Schwind, President & CEO

Exhibit 99.1

Isabella Bank Corporation Reports Fourth Quarter and 2025 Annual Earnings

MT. PLEASANT, MICHIGAN — February 5, 2026 — Isabella Bank Corporation (Nasdaq: ISBA) (“Isabella” or the “Company”) reported net income of $4.7 million, or $0.64 per diluted share, for the fourth quarter 2025 compared to $4.0 million, or $0.54 per diluted share, for the fourth quarter 2024. Net income for the year ended December 31, 2025 was $18.9 million, or $2.56 per diluted share, compared to $13.9 million, or $1.86 per diluted share, for the year ended December 31, 2024.

2025 HIGHLIGHTS

•Loans, excluding advances to mortgage brokers, grew $99 million, or 7%

•Isabella Wealth assets under management increased $49 million, or 7%, to $707 million

•Total deposits increased $73 million, or 4%

•Net income growth of 36% from 2024

•Net interest margin ("NIM") improved to 3.16%, up from 2.90% in 2024

•Credit quality was strong, with a ratio of nonperforming loans to total loans of 0.30% at December 31, 2025

“Isabella Bank Corporation had an outstanding 2025, driven by growth across our markets and increases in our loans, deposits, and wealth management services," said CEO Jerome Schwind. "During the year, we also launched initiatives to strengthen our noninterest income, which are already contributing positive results. We continue to attract new customers while remaining focused on our current customers," he added.

"We uplisted our stock to the Nasdaq in May, and have seen significant volume and price growth since then," Schwind added. "Together, our strong financial results and stock performance position us well as we enter 2026."

FINANCIAL CONDITION

Total assets were $2.2 billion as of December 31, 2025, up $123.2 million compared to December 31, 2024, primarily due to increases of $112.8 million in loans, $11.3 million in the value of bank-owned life insurance ("BOLI") policies, and $8.8 million in available-for-sale ("AFS") securities.

AFS securities at fair value were $497.8 million as of December 31, 2025, increasing $8.8 million compared to December 31, 2024. The increase during the year was largely driven by purchases of $67.3 million and an improvement in net unrealized losses of $16.6 million, partially offset by amortizations and maturities totaling $75.2 million. Net unrealized losses on AFS securities totaled $9.9 million as of December 31, 2025, compared to $26.5 million at December 31, 2024. Net unrealized losses as a percentage of the fair value of AFS securities decreased to 2% from 5%, primarily due to the treasury portfolio rapidly approaching maturity.

Loans were $1.5 billion as of December 31, 2025, increasing $112.8 million compared to December 31, 2024. Adjusted loans, which excludes advances to mortgage brokers, grew $99.2 million since year-end 2024. Advances to mortgage brokers increased $13.6 million in 2025 due to increased participation demand from the counterparty.

During the year, the commercial real estate and commercial and industrial portfolios grew $48.0 million and $19.8 million, respectively. Residential mortgages increased $47.0 million since year-end 2024. 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 $18.1 million during 2025 amid decreasing demand, competition, and an adherence to credit quality standards.

The allowance for credit losses ("ACL") was $13.7 million at December 31, 2025, an increase of $832,000 from December 31, 2024. The increase reflects loan growth and an increase of specific reserves, offset by improvement in historical loss experience driven by the recovery of previously charged-off loans during the year. Nonaccrual loans remained low during 2025 and were $4.6 million as of December 31, 2025. Past due and accruing accounts between 30 to 89 days, as a percentage of loans, were 0.44% at December 31, 2025 compared to 0.40% at December 31, 2024. Overall credit quality remains strong.

BOLI assets were $46.1 million at December 31, 2025, an increase of $11.3 million from December 31, 2024. The growth was primarily a result of the purchase of $10.2 million of new policies in 2025. During the year, approximately $13 million of existing general account policies were surrendered and/or exchanged and redeployed into separate account policies. The separate account policies are expected to have higher yields.

Total deposits were $1.8 billion at December 31, 2025, an increase of $72.6 million from December 31, 2024. Interest bearing demand deposit accounts increased by $28.6 million during 2025. Consumer demand for retail certificates of deposit accounts continues to be strong based on the current elevated market interest rate environment, resulting in a $22.5 million increase during the year.

Total equity was $231.4 million, or $31.60 per share, at December 31, 2025 compared to $210.3 million, or $28.32 per share, at December 31, 2024. Tangible book value per share (non-GAAP) was $25.01 as of December 31, 2025, compared to $21.82 as of December 31, 2024. Net unrealized losses in the AFS securities portfolio reduced tangible book value per share by $1.09 and $2.82 for the respective periods. Share repurchases totaled 156,957 during 2025 at an average price of approximately $30.00.

RESULTS OF OPERATIONS

Net income in the fourth quarter of 2025 was $4.7 million, or $0.64 per diluted share, compared with $4.0 million, or $0.54 per diluted share, in the same quarter of 2024. Net income for the year ended December 31, 2025 was $18.9 million, or $2.56 per diluted share, compared with $13.9 million, or $1.86 per diluted share, for the year ended December 31, 2024.

Net interest income was $16.7 million in the fourth quarter of 2025 compared to $14.6 million in the fourth quarter of 2024, representing 3.28% and 2.98% of earning assets, or NIM, respectively. The book yield on securities was 2.47% and 2.18% during the fourth quarters of 2025 and 2024, respectively. The yield on loans expanded to 5.74% in the fourth quarter of 2025 from 5.67% in the fourth 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 fourth quarter of 2025 decreased to 2.24% from 2.38% in the fourth quarter of 2024 primarily due to lower rates on the money market and certificate of deposit products.

Net interest income was $62.5 million for the year ended December 31, 2025 compared with $55.8 million for the year ended December 31, 2024. NIM and the yield on interest earning assets for the year ended December 31, 2025 were 3.16% and 4.84%, respectively, compared to 2.90% and 4.65%, respectively, for the year ended December 31, 2024. The yield on loans increased to 5.75%, from 5.58%, and the cost of interest-bearing liabilities decreased to 2.25% from 2.37% for 2025 and 2024, respectively. The explanations for the improvement in NIM are consistent with those provided in the quarterly comparison above.

The provision for credit losses in the fourth quarter of 2025 was $434,000, which reflects a $578,000 increase in the ACL on loans, net charge offs totaling $34,000, and a $178,000 decrease in the reserve for unfunded commitments. The provision for loan losses in the same period of 2024 was $376,000, reflecting growth in adjusted loans, unfunded commitments, and $102,000 in net charge offs. The year-to-date provision for credit loss was a credit of $563,000, as compared to a provision of $1.9 million in 2024. Recoveries during 2025 totaled $2.3 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 2025 and $0.16 in 2024.

Noninterest income was $4.4 million in the fourth quarter of 2025 compared to $4.0 million in the fourth quarter of 2024. Service charges and fees increased $275,000 and was mostly the result of internal initiatives designed to align our fees within our market. Earnings on BOLI policies increased $226,000 due to new investments in a separate account BOLI, which was offset in part by a one-time expense of $120,000 due to restructuring charges. Wealth management fees grew $59,000 due to growth in assets under management throughout the year. For the year ended December 31, 2025, noninterest income was $16.0 million, compared to $14.6 million for the year ended December 31, 2024. The $1.4 million increase compared to the prior year was primarily driven by increased earnings on BOLI policies of $618,000, service charges and fees of $583,000, and wealth management fees of $206,000.

Noninterest expenses were $13.9 million in the fourth quarter of 2025 compared to $13.3 million in the fourth quarter of 2024. Other professional services increased $231,000 primarily due to an increase in outsourced services. Compensation and benefit expenses increased $192,000 reflecting annual merit increases and increased incentives compared to the fourth quarter of 2024. For the year ended December 31, 2025, noninterest expenses were $55.0 million, up $2.8 million compared to the year ended December 31, 2024. The increase was primarily driven by increased compensation and benefits of $1.5 million and other professional services of $1.0 million. The increase in compensation and benefits was due to annual merit increases, higher medical insurance claims throughout the year, and increased incentives. The increase in other professional services was due to an increase in outsourced services, costs associated with profitability initiatives, and legal fees related to the uplisting to the Nasdaq.

Income tax expense was $2.1 million in the fourth quarter 2025, compared to $825,000 in the fourth quarter 2024. The effective tax rate (ETR) was 31% and 17% for the aforementioned periods, respectively. The ETR in the fourth quarter 2025 included a one-time expense totaling $942,000 to write-off deferred tax assets. For the year ended December 31, 2025, income tax expense was $5.2 million, compared to $2.5 million for the year ended December 31, 2024. The ETR was 22% for the year ended 2025, compared to 15% for the year ended 2024. Income tax expense in 2025 included a one-time expense totaling $195,000 due to the taxes owed from the lifetime earnings on BOLI policies that were surrendered during the year. Excluding the one-time charges during 2025, the ETR was 17%, which was higher than the prior year due to higher pretax income.

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) uncertainty or perceived instability 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, domestic civil unrest 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) changes in accounting principles and standards, including those related to loan loss recognition under the current expected credit loss, or CECL, methodology; (xviii) the receipt of required regulatory approvals; (xix) changes in tax laws; (xx) the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; (xxi) potential costs related to the impacts of climate change; (xxii) current or future litigation, regulatory examinations or other legal and/or regulatory actions; and (xxiii) 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

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																														Year Ended
			December 31 2025						September 30 2025						June 30 2025						March 31 2025						December 31 2024						December 31 2025						December 31 2024
PER SHARE
Basic earnings			$	0.64					$	0.71					$	0.68					$	0.53					$	0.54					$	2.56					$	1.86
Diluted earnings			0.64						0.71						0.68						0.53						0.54						2.56						1.86
Dividends			0.28						0.28						0.28						0.28						0.28						1.12						1.12
Book value (1)			31.60						30.94						29.95						29.10						28.32						31.60						28.32
Tangible book value (1) (2)			25.01						24.37						23.39						22.58						21.82						25.01						21.82
Market price (1)			50.00						35.25						30.15						23.59						25.99						50.00						25.99
Common shares outstanding (1) (3)			7,322,207						7,350,567						7,361,684						7,408,010						7,424,893						7,322,207						7,424,893
Average number of diluted common shares outstanding (3)			7,345,610						7,371,652						7,398,109						7,432,162						7,451,718						7,385,862						7,482,374
PERFORMANCE RATIOS
Return on average total assets			0.85		%				0.94		%				0.96		%				0.77		%				0.76		%				0.88		%				0.67		%
Return on average shareholders' equity			8.04		%				9.28		%				9.19		%				7.48		%				7.47		%				8.51		%				6.73		%
Return on average tangible shareholders' equity (2)			10.16		%				11.83		%				11.78		%				9.65		%				9.66		%				10.87		%				8.78		%
Net interest margin yield (fully taxable equivalent) (1)			3.28		%				3.15		%				3.14		%				3.06		%				2.98		%				3.16		%				2.90		%
Efficiency ratio (2)			65.02		%				67.62		%				72.14		%				72.39		%				71.20		%				69.11		%				73.01		%
Loan to deposit ratio (1)			84.43		%				74.36		%				75.57		%				76.07		%				81.48		%				84.43		%				81.48		%
Shareholders' equity to total assets (1)			10.47		%				10.06		%				10.23		%				10.25		%				10.08		%				10.47		%				10.08		%
Tangible shareholders' equity to tangible assets (1)			8.47		%				8.10		%				8.17		%				8.14		%				7.95		%				8.47		%				7.95		%
ASSETS UNDER MANAGEMENT
Wealth assets under management (1)			707,118						679,724						678,959						656,617						658,042						707,118						658,042
ASSET QUALITY
Nonaccrual loans (1)			4,578						3,443						1,164						173						282						4,578						282
Foreclosed assets (1)			938						1,018						667						649						544						938						544
Net loan charge-offs (recoveries)			34						74						(1,432)						(52)						102						(1,376)						1,900
Net loan charge-offs (recoveries) to average loans outstanding			0.00		%				0.01		%				(0.10)		%				0.00		%				0.01		%				(0.10)		%				0.14		%
Nonperforming loans to total loans (1)			0.30		%				0.24		%				0.09		%				0.01		%				0.02		%				0.30		%				0.02		%
Nonperforming assets to total assets (1)			0.25		%				0.20		%				0.09		%				0.04		%				0.04		%				0.25		%				0.04		%
Allowance for credit losses to loans (1)			0.89		%				0.92		%				0.93		%				0.93		%				0.91		%				0.89		%				0.91		%
CAPITAL RATIOS (1)
Tier 1 leverage			8.84		%				8.71		%				9.04		%				8.96		%				8.86		%				8.84		%				8.86		%
Common equity tier 1 capital			11.73		%				12.37		%				12.46		%				12.58		%				12.21		%				11.73		%				12.21		%
Tier 1 risk-based capital			11.73		%				12.37		%				12.46		%				12.58		%				12.21		%				11.73		%				12.21		%
Total risk-based capital			14.41		%				15.20		%				15.34		%				15.50		%				15.06		%				14.41		%				15.06		%

(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

A

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

			December 31 2025						September 30 2025						June 30 2025						March 31 2025						December 31 2024
ASSETS
Cash and demand deposits due from banks			$	22,935					$	32,124					$	34,246					$	28,786					$	22,830
Fed Funds sold and interest bearing balances due from banks			3,106						129,177						74,308						40,393						1,712
Total cash and cash equivalents			26,041						161,301						108,554						69,179						24,542
Available-for-sale securities, at fair value			497,791						511,970						500,560						513,040						489,029
Federal Home Loan Bank stock			5,600						5,600						5,600						5,600						12,762
Mortgage loans held-for-sale			423						737						55						127						242
Loans			1,536,364						1,431,905						1,397,513						1,367,724						1,423,571
Less allowance for credit losses			13,727						13,149						12,977						12,735						12,895
Net loans			1,522,637						1,418,756						1,384,536						1,354,989						1,410,676
Premises and equipment			29,000						28,659						28,171						28,108						27,659
Cash surrender value of bank-owned life insurance policies			46,133						45,651						45,774						45,833						34,882
Goodwill and other intangible assets			48,282						48,282						48,282						48,282						48,283
Other assets			33,541						38,698						34,636						37,429						38,166
Total assets			$	2,209,448					$	2,259,654					$	2,156,168					$	2,102,587					$	2,086,241
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Demand deposits			$	426,342					$	421,027					$	493,477					$	404,194					$	416,373
Interest bearing demand deposits			266,187						248,666						223,376						243,939						237,548
Money market deposits			436,631						558,212						446,845						473,138						423,883
Savings			280,429						292,899						289,746						286,399						281,665
Certificates of deposit			410,065						404,798						395,932						390,239						387,591
Total deposits			1,819,654						1,925,602						1,849,376						1,797,909						1,747,060
Short-term borrowings			68,000						62,022						43,208						47,310						53,567
Federal Home Loan Bank advances			45,000						—						—						—						30,000
Subordinated debt, net of unamortized issuance costs			29,514						29,492						29,469						29,447						29,424
Total borrowed funds			142,514						91,514						72,677						76,757						112,991
Other liabilities			15,884						15,118						13,615						12,365						15,914
Total liabilities			1,978,052						2,032,234						1,935,668						1,887,031						1,875,965
Shareholders’ equity
Common stock			123,204						124,284						124,607						125,547						126,224
Shares to be issued for deferred compensation obligations			2,366						2,373						2,331						2,508						2,383
Retained earnings			113,849						111,172						107,949						104,940						103,024
Accumulated other comprehensive loss			(8,023)						(10,409)						(14,387)						(17,439)						(21,355)
Total shareholders’ equity			231,396						227,420						220,500						215,556						210,276
Total liabilities and shareholders' equity			$	2,209,448					$	2,259,654					$	2,156,168					$	2,102,587					$	2,086,241

B

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands except per share amounts)

			Three Months Ended																														Year Ended
			December 31 2025						September 30 2025						June 30 2025						March 31 2025						December 31 2024						December 31 2025						December 31 2024
Interest income
Loans			$	21,669					$	20,583					$	19,832					$	19,348					$	20,145					$	81,432					$	77,295
Available-for-sale securities			3,048						2,994						3,032						2,643						2,656						11,717						11,093
Federal Home Loan Bank stock			63						70						125						160						168						418						640
Federal funds sold and other			498						1,235						253						482						200						2,468						950
Total interest income			25,278						24,882						23,242						22,633						23,169						96,035						89,978
Interest expense
Deposits			7,380						8,012						7,391						7,463						7,583						30,246						29,690
Short-term borrowings			587						441						324						341						413						1,693						1,439
Federal Home Loan Bank advances			317						—						132						38						352						487						1,949
Subordinated debt			266						267						266						266						266						1,065						1,065
Total interest expense			8,550						8,720						8,113						8,108						8,614						33,491						34,143
Net interest income			16,728						16,162						15,129						14,525						14,555						62,544						55,835
Provision (reversal) for credit losses			434						209						(1,099)						(107)						376						(563)						1,884
Net interest income after provision for credit losses			16,294						15,953						16,228						14,632						14,179						63,107						53,951
Noninterest income
Service charges and fees			2,461						2,352						2,071						1,974						2,186						8,858						8,275
Wealth management fees			1,110						1,074						1,084						979						1,051						4,247						4,041
Earnings on bank-owned life insurance policies			485						468						300						372						259						1,625						1,007
Net gain on sale of mortgage loans			65						38						47						30						75						180						213
Other			323						376						184						173						401						1,056						1,040
Total noninterest income			4,444						4,308						3,686						3,528						3,972						15,966						14,576
Noninterest expenses
Compensation and benefits			7,532						7,630						7,496						7,383						7,340						30,041						28,576
Occupancy and equipment			2,663						2,628						2,650						2,600						2,554						10,541						10,524
Other professional services			815						851						863						711						584						3,240						2,212
ATM and debit card fees			575						595						555						486						516						2,211						1,975
Marketing			547						514						469						459						458						1,989						1,712
FDIC insurance premiums			339						271						267						303						309						1,180						1,132
Memberships and subscriptions			276						272						272						247						239						1,067						928
Other losses			142						47						339						115						209						643						1,117
Other			1,032						1,177						834						995						1,121						4,038						3,953
Total noninterest expenses			13,921						13,985						13,745						13,299						13,330						54,950						52,129
Income before income tax expense			6,817						6,276						6,169						4,861						4,821						24,123						16,398
Income tax expense			2,127						1,036						1,138						912						825						5,213						2,509
Net income			$	4,690					$	5,240					$	5,031					$	3,949					$	3,996					$	18,910					$	13,889
Earnings per common share
Basic			$	0.64					$	0.71					$	0.68					$	0.53					$	0.54					$	2.56					$	1.86
Diluted			0.64						0.71						0.68						0.53						0.54						2.56						1.86
Cash dividends per common share			0.28						0.28						0.28						0.28						0.28						1.12						1.12

C

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
			December 31, 2025																		September 30, 2025																		December 31, 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)			$	1,493,654					$	21,669					5.74		%				$	1,409,928					$	20,583					5.78		%				$	1,412,578					$	20,145					5.67		%
AFS securities (2)			515,050						3,186						2.47		%				517,286						3,138						2.42		%				522,733						2,869						2.18		%
Federal Home Loan Bank stock			5,600						63						4.54		%				5,600						70						4.95		%				12,762						168						5.24		%
Fed funds sold			9						—						3.86		%				186						2						4.35		%				8						—						4.59		%
Other (3)			28,344						498						6.88		%				123,183						1,233						3.92		%				15,905						200						5.00		%
Total interest earning assets			2,042,657						25,416						4.94		%				2,056,183						25,026						4.83		%				1,963,986						23,382						4.74		%
NONEARNING ASSETS
Allowance for credit losses			(13,213)																		(13,057)																		(12,598)
Cash and demand deposits due from banks			23,239																		25,591																		22,800
Premises and equipment			29,009																		28,313																		27,773
Other assets			117,201																		109,692																		92,608
Total assets			$	2,198,893																	$	2,206,722																	$	2,094,569
INTEREST BEARING LIABILITIES
Interest bearing demand deposits			$	249,809					211						0.34		%				$	234,105					144						0.24		%				$	232,271					212						0.36		%
Money market deposits			449,129						2,900						2.56		%				534,127						3,533						2.63		%				436,235						2,970						2.71		%
Savings			282,306						498						0.70		%				289,442						560						0.77		%				276,856						446						0.64		%
Certificates of deposit			408,861						3,771						3.66		%				399,781						3,775						3.75		%				386,871						3,955						4.07		%
Short-term borrowings			67,521						587						3.45		%				52,700						441						3.32		%				50,862						413						3.22		%
Federal Home Loan Bank advances			30,163						317						4.12		%				—						—						—		%				28,261						352						4.88		%
Subordinated debt, net of unamortized issuance costs			29,500						266						3.61		%				29,477						267						3.61		%				29,410						266						3.62		%
Total interest bearing liabilities			1,517,289						8,550						2.24		%				1,539,632						8,720						2.25		%				1,440,766						8,614						2.38		%
NONINTEREST BEARING LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits			432,038																		428,144																		425,116
Other liabilities			18,182																		14,976																		15,775
Shareholders’ equity			231,384																		223,970																		212,912
Total liabilities and shareholders’ equity			$	2,198,893																	$	2,206,722																	$	2,094,569
Net interest income (FTE)									$	16,866																	$	16,306																	$	14,768
Net yield on interest earning assets (FTE)															3.28		%																3.15		%																2.98		%

(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.

D

AVERAGE BALANCES, INTEREST RATE, AND NET INTEREST INCOME (UNAUDITED) (continued)

(Dollars in thousands)

			Year Ended
			December 31, 2025																		December 31, 2024
			Average Balance						Tax Equivalent Interest						Average Yield/Rate						Average Balance						Tax Equivalent Interest						Average Yield/Rate
INTEREST EARNING ASSETS
Loans (1)			$	1,416,079					$	81,432					5.75		%				$	1,385,287					$	77,295					5.58		%
AFS securities (2)			520,284						12,361						2.38		%				540,433						12,023						2.22		%
Federal Home Loan Bank stock			6,934						418						6.03		%				12,762						640						5.01		%
Fed funds sold			52						2						4.37		%				7						—						5.19		%
Other (3)			54,982						2,466						4.49		%				17,430						950						5.45		%
Total interest earning assets			1,998,331						96,679						4.84		%				1,955,919						90,908						4.65		%
NONEARNING ASSETS
Allowance for credit losses			(13,132)																		(13,061)
Cash and demand deposits due from banks			23,690																		24,165
Premises and equipment			28,400																		27,915
Other assets			109,142																		86,073
Total assets			$	2,146,431																	$	2,081,011
INTEREST BEARING LIABILITIES
Interest bearing demand deposits			$	240,220					817						0.34		%				$	237,086					754						0.32		%
Money market deposits			473,394						12,219						2.58		%				443,251						12,407						2.80		%
Savings			286,134						2,140						0.75		%				279,544						1,600						0.57		%
Certificates of deposit			398,040						15,070						3.79		%				371,750						14,929						4.02		%
Short-term borrowings			51,430						1,693						3.29		%				45,124						1,439						3.19		%
Federal Home Loan Bank advances			11,301						487						4.31		%				35,464						1,949						5.50		%
Subordinated debt, net of unamortized issuance costs			29,466						1,065						3.61		%				29,376						1,065						3.62		%
Total interest bearing liabilities			1,489,985						33,491						2.25		%				1,441,595						34,143						2.37		%
NONINTEREST BEARING LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits			418,225																		416,927
Other liabilities			15,896																		16,088
Shareholders’ equity			222,325																		206,401
Total liabilities and shareholders’ equity			$	2,146,431																	$	2,081,011
Net interest income (FTE)									$	63,188																	$	56,765
Net yield on interest earning assets (FTE)															3.16		%																2.90		%

(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.

			December 31 2025						September 30 2025						June 30 2025						March 31 2025						December 31 2024
Commercial and industrial (4)			$	220,450					$	218,132					$	207,719					$	205,172					$	200,623
Commercial real estate (4)			639,758						626,642						614,383						596,282						591,718
Advances to mortgage brokers			76,676						5,056						3,005						3,015						63,080
Agricultural			102,109						97,794						96,842						94,359						99,694
Total commercial loans			1,038,993						947,624						921,949						898,828						955,115
Residential real estate			427,880						412,056						398,668						387,348						380,872
Consumer			69,491						72,225						76,896						81,548						87,584
Loans			$	1,536,364					$	1,431,905					$	1,397,513					$	1,367,724					$	1,423,571

(4) Certain amounts reported as commercial and industrial loans have been reclassified as commercial real estate loans to conform to the December 31, 2025 presentation

E

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

(Dollars in thousands except per share amounts and ratios)

						Three Months Ended																														Year Ended
						December 31 2025						September 30 2025						June 30 2025						March 31 2025						December 31 2024						December 31 2025						December 31 2024
Loans						$	1,536,364					$	1,431,905					$	1,397,513					$	1,367,724					$	1,423,571					$	1,536,364					$	1,423,571
Advances to mortgage brokers						76,676						5,056						3,005						3,015						63,080						76,676						63,080
Adjusted loans						$	1,459,688					$	1,426,849					$	1,394,508					$	1,364,709					$	1,360,491					$	1,459,688					$	1,360,491
Total shareholders’ equity						$	231,396					$	227,420					$	220,500					$	215,556					$	210,276					$	231,396					$	210,276
Goodwill and other intangible assets						48,282						48,282						48,282						48,282						48,283						48,282						48,283
Tangible equity			(A)			183,114						179,138						172,218						167,274						161,993						183,114						161,993
Common shares outstanding (1)			(B)			7,322,207						7,350,567						7,361,684						7,408,010						7,424,893						7,322,207						7,424,893
Tangible book value per share			(A/B)			$	25.01					$	24.37					$	23.39					$	22.58					$	21.82					$	25.01					$	21.82
Noninterest expenses						$	13,921					$	13,985					$	13,745					$	13,299					$	13,330					$	54,950					$	52,129
Amortization of acquisition intangibles						—						—						—						1						1						1						1
Adjusted noninterest expense			(C)			$	13,921					$	13,985					$	13,745					$	13,298					$	13,329					$	54,949					$	52,128
Net interest income						$	16,728					$	16,162					$	15,129					$	14,525					$	14,555					$	62,544					$	55,835
Tax equivalent adjustment for net interest margin						138						144						178						184						213						644						930
Net interest income (FTE)						16,866						16,306						15,307						14,709						14,768						63,188						56,765
Noninterest income						4,444						4,308						3,686						3,528						3,972						15,966						14,576
Tax equivalent adjustment for efficiency ratio						102						98						63						78						54						341						211
Adjusted revenue (FTE)						21,412						20,712						19,056						18,315						18,794						79,495						71,552
Net gains (losses) on foreclosed assets						3						31						3						(55)						74						(18)						153
Adjusted revenue			(D)			$	21,409					$	20,681					$	19,053					$	18,370					$	18,720					$	79,513					$	71,399
Efficiency ratio			(C/D)			65.02		%				67.62		%				72.14		%				72.39		%				71.20		%				69.11		%				73.01		%

(1) Whole shares.

F

FAQ

How did Isabella Bank Corporation (ISBA) perform financially in 2025?

Isabella Bank Corporation reported 2025 net income of $18.9 million, up from $13.9 million in 2024. Diluted earnings per share increased to $2.56 from $1.86, reflecting stronger core banking performance, better margins, and higher noninterest income.

What were Isabella Bank Corporation’s fourth quarter 2025 earnings?

For the fourth quarter 2025, Isabella Bank Corporation generated net income of $4.7 million, or $0.64 per diluted share. This compares with $4.0 million, or $0.54 per diluted share, in the fourth quarter 2024, showing solid year-over-year quarterly growth.

How did Isabella Bank’s loans and deposits change in 2025?

At December 31, 2025, Isabella Bank’s loans reached $1.54 billion, up $112.8 million from 2024, with adjusted loans up $99.2 million. Total deposits increased to $1.82 billion, a gain of $72.6 million, driven by interest-bearing demand and certificates of deposit.

What happened to Isabella Bank’s net interest margin in 2025?

Isabella Bank’s net interest margin improved to 3.16% in 2025 from 2.90% in 2024. Higher yields on loans and securities combined with a lower cost of interest-bearing liabilities contributed to this expansion, supporting higher net interest income of $62.5 million.

How strong was Isabella Bank Corporation’s asset quality at year-end 2025?

Asset quality remained strong at year-end 2025. Nonperforming loans were $4.6 million, or 0.30% of total loans, and nonperforming assets were 0.25% of total assets. Net loan charge-offs for 2025 were a recovery of (0.10)% of average loans, helped by significant recoveries.

What were Isabella Bank’s capital and book value metrics at December 31, 2025?

At December 31, 2025, shareholders’ equity was $231.4 million, representing 10.47% of total assets. Book value per share was $31.60, while tangible book value per share (non-GAAP) increased to $25.01 from $21.82 a year earlier, reflecting retained earnings growth.

How did noninterest income and expenses affect Isabella Bank in 2025?

In 2025, noninterest income rose to $16.0 million from $14.6 million, mainly from higher bank-owned life insurance earnings, service charges, and wealth management fees. Noninterest expenses increased to $55.0 million, driven by higher compensation, professional services, and other operating costs.