Isabella Bank Corporation Reports Fourth Quarter 2024 Results

Rhea-AI Summary

Isabella Bank (ISBA) reported Q4 2024 net income of $4.0 million ($0.54 per diluted share), up from $3.8 million ($0.51 per share) in Q4 2023. Full-year 2024 net income was $13.9 million ($1.86 per share), down from $18.2 million ($2.40 per share) in 2023.

Key Q4 2024 metrics include: return on assets of 0.76%, core loan growth of 4% annualized, net interest margin of 2.99%, and noninterest income growth of 13%. Total assets were $2.1 billion, with total loans steady at $1.42 billion. The allowance for credit losses increased to $12.9 million.

The bank's deposit base stood at $1.75 billion, down $34.8 million due to seasonal business and municipal outflows. Tangible book value per share was $21.82 as of December 31, 2024. The company repurchased 27,608 shares during Q4 for $657,000 at an average price of $23.80.

Positive

• Q4 net income increased to $4.0M from $3.8M year-over-year
• Net interest margin improved to 2.99% from 2.83% YoY
• Noninterest income grew 13% YoY
• Core loan growth of 4% annualized
• Net loan charge-offs decreased to 0.01% from 0.03% YoY

Negative

• Full-year net income declined to $13.9M from $18.2M YoY
• Total deposits decreased by $34.8M in Q4
• Net unrealized losses on securities increased to $26M from $21M QoQ
• Noninterest expenses increased to $13.3M from $11.9M YoY
• Tangible book value per share decreased to $21.82 from $22.14 QoQ

MT. PLEASANT, Mich., Jan. 30, 2025 /PRNewswire/ -- Isabella Bank Corporation (OTCQX: ISBA) (the "Company" or "we") reported fourth quarter 2024 net income of $4.0 million, or $0.54 per diluted share, an increase compared to $3.8 million, or $0.51 per diluted share in the same quarter of 2023. The non-GAAP measure of core earnings in the fourth quarter 2024 totaled $3.9 million, or $0.52 per diluted share, an increase compared to $3.8 million, or $0.50 per diluted share for the same quarter of 2023.

For the full year, net income was $13.9 million, or $1.86 per diluted share, compared to $18.2 million, or $2.40 per diluted share for 2023. The non-GAAP measure of 2024 core earnings was $15.0 million, or $2.01 per diluted share, compared to $18.0 million, or $2.37 per diluted share, in 2023.

FOURTH QUARTER 2024 HIGHLIGHTS (compared to fourth quarter 2023, unless otherwise stated)

• Return on assets of 0.76%, compared to 0.73%
• Core loan growth of 4% annualized, compared to 6%
• Net interest margin of 2.99%, compared to 2.83%
• Noninterest income growth of 13%, compared to 3%
• Net loan charge-offs to average loans of 0.01%, compared to 0.03%

"Over the past several quarters we've emphasized that our financial performance is based on the strength of our core operations and maintaining our earnings momentum, and this quarter reflected the same focus," said the Chief Executive Officer Jerome Schwind. He noted that net interest margin expanded again in the fourth quarter, when non-recurring loan recoveries are excluded, and continue to grow core loans while adhering to our disciplined credit culture.

"We enter 2025 looking forward to continued repricing of low fixed rate loans to variable rates, and the redeployment of more than $70 million of securities that will amortize and mature during the year," Schwind added. "Our teams also have been working on initiatives that will drive higher noninterest income, mostly in the second half of 2025. We are well-positioned to deliver long-term value to our shareholders in 2025 and beyond.

"What sets Isabella Bank apart is the talent, dedication, and teamwork of our employees, who continue to deliver exceptional service and financial strength, as noted by reader's choice awards across our market," Schwind added. In September 2024, the Company was honored as the Best Bank in Isabella County by The Morning Sun People's Choice Awards. In December 2024, Midland Daily News recognized Isabella Bank as the Best Bank in Midland County through its Reader's Choice Awards. Most recently, in January 2025, The Pioneer named Isabella Bank the Best Bank in Mecosta County serving the Big Rapids region in its Pioneer All Area Reader's Choice Awards.

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

Total assets were $2.1 billion, down $20.7 million, primarily due to relatively flat total loans and a decline in available-for-sale (AFS) securities from amortization, maturities and a lower valuation of the portfolio in the fourth quarter.

AFS securities were $489.0 million, down $17.8 million, at the end of fourth quarter 2024. The decrease was due to a $5.5 million increase in the net unrealized loss and $17.7 million of amortization and maturities related to agency and municipal securities, offset by $5,400 of municipal bond purchases. Net unrealized losses on securities totaled $26 million and $21 million at the end of the fourth and third quarters, respectively. Net unrealized losses as a percentage of total AFS securities increased to 5% from 4% at the end of the third quarter of 2024 due to an increase in bond yields. While bond rates may vary from quarter to quarter, unrealized losses are expected to decrease as bonds approach their maturity dates over the next two years.

Total loans remained steady at $1.42 billion at the end of the fourth quarter, due to an increase of $11.0 million in residential loans and $4.3 million in commercial and industrial loans, offset by a $13.1 million decrease in advances to mortgage brokers. The increase in residential loans was related to steady new volume and continued slowing of prepayments. The growth in commercial and industrial loans primarily was in the hotel and construction industries.  While commercial real estate loans remained relatively flat with the third quarter of 2024, the fourth quarter included a payoff of a $6.4 million relationship that had an elevated credit risk. Core loans, which excluded advances to mortgage brokers, grew $12.4 million or 4% on an annualized basis. 

The allowance for credit losses increased $260 thousand to $12.9 million at the end of the fourth quarter of 2024. The increase mostly reflects $118 thousand from core loan growth, and the impact from a few commercial loans migrating to a special mention risk rating during the quarter. The downgraded loans are well collateralized and are not an indication of a negative trend in the broader portfolio. Nonaccrual loan balances decreased $265 thousand to $282 thousand at the end of the fourth quarter of 2024. Past due and accruing accounts between 30 to 89 days, as a percentage of total loans, was 0.40% compared to 0.16% at the end of third quarter 2024. The increase primarily was due to customers who typically make payments about 30 days in arrears, which becomes overdue in months with 31 days. Accordingly, the increase is not believed to be an indication of deteriorating credit quality.

Total deposits were $1.75 billion, down $34.8 million, at the end of the fourth quarter. The slight decrease primarily was due to an outflow from businesses and municipalities consistent with normal seasonal patterns, in addition to some expected outflows to fund large, regional projects. Certificates of Deposit accounts (CDs) were up $4.0 million, driven by the rate environment that attracted customers and investors as a safe place with a competitive rate.

Tangible book value per share was $21.82 as of December 31, 2024, compared to $22.14 on September 30, 2024. Net unrealized losses on AFS securities reduced tangible book value per share by $2.82 and $2.23 for the respective periods. Share repurchases totaled 27,608 during the fourth quarter for a value of $657 thousand at an average price of $23.80.

RESULTS OF OPERATIONS (December 31, 2024 to December 31, 2023 quarterly comparison, unless otherwise noted)

Net interest margin (NIM) was 2.99%, an increase from 2.98% last quarter and 2.83% in the fourth quarter of 2023. During the third quarter, we recovered the full contractual interest from two commercial loans that previously were charged off, which contributed 6 basis points to NIM. The book yield from securities was 2.18% and 2.23% during fourth quarters of 2024 and 2023, respectively. The weighted average maturity of our U.S. Treasury portfolio is less than 1.4 years, and the proceeds are expected to be reinvested in market rate loans and securities, or to pay off borrowed funds. The yield on loans expanded to 5.67% in fourth quarter, up from 5.20% in the same quarter of 2023. The expansion in loan yields was a result of higher rates on new loans and fixed rate commercial loans that have and continue to reprice to variable rates. At the end of the fourth quarter, approximately 40% of commercial loans were fixed at rates lower than current market rates, but the majority will contractually reprice to variable rates over the next four years. Cost of interest-bearing liabilities increased to 2.38% from 2.11% in the fourth quarter of 2023, but have stabilized compared to the cost in the previous quarter of 2.43%.

The provision for credit losses in the fourth quarter 2024 was $376 thousand, which reflects the $260 thousand change in the allowance for credit losses on loans and net charge-offs totaling $102 thousand.  The provision for loan losses in the same period of 2023 was $684 thousand reflecting $200 thousand from growth in core loans and $381 thousand in net charge-offs.  Charge-offs in the fourth quarter of 2023 included a $247 thousand write down of a commercial and industrial loan that was recovered in the third quarter of 2024.

Noninterest income was $4.0 million, an increase from $3.5 million in the fourth quarter of 2023. Customer service fees grew $81 thousand based on a higher number of transactional accounts. Wealth management income increased $119 thousand, or 13%, due to higher assets under management (AUM). Average AUM in the fourth quarter 2024 increased $53.6 million, or 9% over the prior year quarter, driven by growth in new accounts and higher security valuations.  Other noninterest income in the fourth quarter 2024 included a $103 thousand recovery from a security that was written down in a previous year and $74 thousand from net gains on foreclosed assets. 

Noninterest expenses were $13.3 million in the fourth quarter 2024 compared to $11.9 million in same quarter of 2023. The change mostly was due to higher compensation and benefit expenses totaling $1.2 million, which reflect annual merit increases in 2024 and more medical insurance claims compared to the fourth quarter of 2023.

About the Corporation

Isabella Bank Corporation (OTCQX: 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. Isabella Bank Corporation common stock is quoted on the OTCQX tier of the OTC Markets Group, Inc.'s electronic quotation system (www.otcmarkets.com) under the symbol "ISBA." The Corporation's investor relations firm is Stonegate Capital Partners, Inc. (www.stonegateinc.com).

Forward-Looking Statements
Information in this 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", "plan", "believe", "estimate", "anticipate", "strategy", "trend", "forecast", "outlook", "project", "intend", "assume", "outcome", "continue", "remain", "potential", "opportunity", "comfortable", "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. 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. The matters discussed in these forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, or included in any subsequent filing by the Company with the Securities and Exchange Commission. Forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Company cautions you not to unduly rely on forward-looking statements because the assumptions, beliefs, expectations, and projections about future events may, and often do, differ materially from actual results. 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.

Non-GAAP Financial Measures
This document contains certain non-GAAP financial measures in addition to results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. Because non-GAAP financial measures presented in this document are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies. A reconciliation of non-GAAP financial measures to GAAP measures is provided in this release.

Table Index	Consolidated Financial Schedules (Unaudited)
A	Selected Financial Data
B	Consolidated Balance Sheets - Quarterly Trend
C	Consolidated Statements of Income
D	Consolidated Statements of Income - Quarterly Trend
E	Average Yields and Costs
F	Average Balances
G	Asset Quality Analysis
H	Consolidated Loan and Deposit Analysis
I	Reconciliation of Non-GAAP Financial Measures

 

SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands except per share amounts and ratios)
	Three Months Ended
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023
PER SHARE
Basic earnings	$        0.54		$       0.44		$       0.47		$       0.42		$       0.51
Diluted earnings	0.54		0.44		0.46		0.42		0.51
Core diluted earnings (2)	0.52		0.61		0.46		0.41		0.50
Dividends	0.28		0.28		0.28		0.28		0.28
Book value (1)	28.32		28.63		27.06		26.80		27.04
Tangible book value (1)	21.82		22.14		20.60		20.35		20.59
Market price (1)	25.99		21.21		18.20		19.40		21.50
Common shares outstanding (1) (3)	7,424,893		7,438,720		7,474,016		7,488,101		7,485,889
Average number of diluted common shares outstanding (3)	7,453,033		7,473,184		7,494,828		7,507,739		7,526,515
PERFORMANCE RATIOS
Return on average total assets	0.76 %		0.62 %		0.68 %		0.61 %		0.73 %
Core return on average total assets (2)	0.74 %		0.87 %		0.68 %		0.60 %		0.73 %
Return on average shareholders' equity	7.47 %		6.26 %		6.97 %		6.19 %		7.98 %
Core return on average shareholders' equity (2)	7.29 %		8.70 %		6.96 %		6.08 %		7.97 %
Return on average tangible shareholders' equity	9.66 %		8.15 %		9.19 %		8.12 %		10.73 %
Core return on average tangible shareholders' equity (2)	9.43 %		11.32 %		9.17 %		7.97 %		10.71 %
Net interest margin yield (fully taxable equivalent) (2)	2.99 %		2.98 %		2.85 %		2.79 %		2.83 %
Efficiency ratio (2)	71.20 %		72.30 %		73.93 %		74.84 %		68.41 %
Gross loan to deposit ratio (1)	81.48 %		79.93 %		80.22 %		77.22 %		78.29 %
Shareholders' equity to total assets (1)	10.08 %		10.11 %		9.82 %		9.75 %		9.83 %
Tangible shareholders' equity to tangible assets (1)	7.95 %		8.00 %		7.65 %		7.58 %		7.66 %
ASSETS UNDER MANAGEMENT
Wealth assets under management (1)	658,042		679,858		647,850		660,645		641,027
ASSET QUALITY
Nonaccrual loans (1)	282		547		994		1,283		982
Foreclosed assets (1)	544		546		629		579		406
Net loan charge-offs (recoveries)	102		1,359		393		46		381
Net loan charge-offs (recoveries) to average loans outstanding	0.01 %		0.10 %		0.03 %		0.00 %		0.03 %
Nonperforming loans to gross loans (1)	0.02 %		0.04 %		0.07 %		0.09 %		0.08 %
Nonperforming assets to total assets (1)	0.04 %		0.06 %		0.08 %		0.09 %		0.07 %
Allowance for credit losses to gross loans (1)	0.91 %		0.89 %		0.95 %		0.98 %		0.97 %
CAPITAL RATIOS (1)
Tier 1 leverage	8.86 %		8.77 %		8.83 %		8.80 %		8.76 %
Common equity tier 1 capital	12.21 %		12.08 %		12.37 %		12.36 %		12.54 %
Tier 1 risk-based capital	12.21 %		12.08 %		12.37 %		12.36 %		12.54 %
Total risk-based capital	15.06 %		14.90 %		15.29 %		15.31 %		15.52 %

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

 

A
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023
ASSETS
Cash and demand deposits due from banks	$         22,830		$         27,019		$         22,690		$         22,987		$         25,628
Fed Funds sold and interest bearing balances due from banks	1,712		359		869		2,231		8,044
Total cash and cash equivalents	24,542		27,378		23,559		25,218		33,672
Available-for-sale securities, at fair value	489,029		506,806		505,646		517,585		528,148
Federal Home Loan Bank stock	12,762		12,762		12,762		12,762		12,762
Mortgage loans held-for-sale	242		504		637		366		—
Loans	1,423,571		1,424,283		1,381,636		1,365,508		1,349,463
Less allowance for credit losses	12,895		12,635		13,095		13,390		13,108
Net loans	1,410,676		1,411,648		1,368,541		1,352,118		1,336,355
Premises and equipment	27,659		27,674		27,843		27,951		27,639
Bank-owned life insurance policies	34,882		34,625		34,382		34,131		33,892
Goodwill and other intangible assets	48,283		48,283		48,283		48,284		48,284
Other assets	38,166		37,221		38,486		39,161		38,216
Total assets	$    2,086,241		$    2,106,901		$    2,060,139		$    2,057,576		$    2,058,968
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Demand deposits	$       416,373		$       421,493		$       412,193		$       413,272		$       428,505
Interest bearing demand deposits	341,366		376,592		338,329		349,401		320,737
Savings	601,730		600,150		603,328		639,491		628,079
Certificates of deposit	387,591		383,597		368,449		366,143		346,374
Total deposits	1,747,060		1,781,832		1,722,299		1,768,307		1,723,695
Short-term borrowings	53,567		52,434		44,194		42,998		46,801
Federal Home Loan Bank advances	30,000		15,000		45,000		—		40,000
Subordinated debt, net of unamortized issuance costs	29,424		29,402		29,380		29,357		29,335
Total borrowed funds	112,991		96,836		118,574		72,355		116,136
Other liabilities	15,914		15,248		17,017		16,240		16,735
Total liabilities	1,875,965		1,893,916		1,857,890		1,856,902		1,856,566
Shareholders' equity
Common stock	126,224		125,218		126,126		126,656		127,323
Shares to be issued for deferred compensation obligations	2,383		3,981		3,951		3,890		3,693
Retained earnings	103,024		101,065		99,808		98,318		97,282
Accumulated other comprehensive income (loss)	(21,355)		(17,279)		(27,636)		(28,190)		(25,896)
Total shareholders' equity	210,276		212,985		202,249		200,674		202,402
Total liabilities and shareholders' equity	$    2,086,241		$    2,106,901		$    2,060,139		$    2,057,576		$    2,058,968

 

B
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share amounts)
	Year Ended  December 31
	2024		2023
Interest income
Loans	$         77,295		$         65,670
Available-for-sale securities	11,093		12,156
Federal Home Loan Bank stock	640		355
Federal funds sold and other	950		1,450
Total interest income	89,978		79,631
Interest expense
Deposits	29,690		18,352
Short-term borrowings	1,439		961
Federal Home Loan Bank advances	1,949		1,309
Subordinated debt, net of unamortized issuance costs	1,065		1,065
Total interest expense	34,143		21,687
Net interest income	55,835		57,944
Provision for credit losses	1,884		629
Net interest income after provision for credit losses	53,951		57,315
Noninterest income
Service charges and fees	8,626		8,297
Wealth management fees	4,041		3,557
Earnings on bank-owned life insurance policies	1,007		920
Net gain on sale of mortgage loans	213		317
Other	689		736
Total noninterest income	14,576		13,827
Noninterest expenses
Compensation and benefits	28,576		25,905
Occupancy and equipment	10,524		10,297
Other professional services	2,212		2,340
ATM and debit card fees	1,975		1,767
FDIC insurance premiums	1,132		922
Other	7,710		8,079
Total noninterest expenses	52,129		49,310
Income before income tax expense	16,398		21,832
Income tax expense	2,509		3,665
Net income	$         13,889		$         18,167
Earnings per common share
Basic	$              1.86		$              2.42
Diluted	1.86		2.40
Cash dividends per common share	1.12		1.12

 

C
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share amounts)
	Three Months Ended
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023
Interest income
Loans	$         20,145		$         20,230		$         18,863		$         18,057		17,580
Available-for-sale securities	2,656		2,749		2,804		2,884		2,926
Federal Home Loan Bank stock	168		168		158		146		129
Federal funds sold and other	200		194		263		293		421
Total interest income	23,169		23,341		22,088		21,380		21,056
Interest expense
Deposits	7,583		7,631		7,313		7,163		6,399
Short-term borrowings	413		384		321		321		357
Federal Home Loan Bank advances	352		571		638		388		422
Subordinated debt, net of unamortized issuance costs	266		267		266		266		266
Total interest expense	8,614		8,853		8,538		8,138		7,444
Net interest income	14,555		14,488		13,550		13,242		13,612
Provision for credit losses	376		946		170		392		684
Net interest income after provision for credit losses	14,179		13,542		13,380		12,850		12,928
Noninterest income
Service charges and fees	2,293		2,159		2,128		2,046		2,212
Wealth management fees	1,051		1,003		1,048		939		932
Earnings on bank-owned life insurance policies	259		252		253		243		239
Net gain on sale of mortgage loans	75		37		67		34		85
Other	294		77		112		206		48
Total noninterest income	3,972		3,528		3,608		3,468		3,516
Noninterest expenses
Compensation and benefits	7,340		7,251		6,970		7,015		6,116
Occupancy and equipment	2,554		2,645		2,619		2,706		2,554
Other professional services	584		588		527		513		576
ATM and debit card fees	516		503		487		469		487
FDIC insurance premiums	309		291		280		252		233
Other	2,027		1,950		2,012		1,721		1,949
Total noninterest expenses	13,330		13,228		12,895		12,676		11,915
Income before income tax expense	4,821		3,842		4,093		3,642		4,529
Income tax expense	825		561		612		511		726
Net income	$           3,996		$           3,281		$           3,481		$           3,131		$           3,803
Earnings per common share
Basic	$              0.54		$              0.44		$              0.47		$              0.42		$              0.51
Diluted	0.54		0.44		0.46		0.42		0.51
Cash dividends per common share	0.28		0.28		0.28		0.28		0.28

 

D
AVERAGE YIELDS AND COSTS (UNAUDITED)
The following schedules present yield and daily average amounts outstanding for each major category of interest earning assets, non-earning assets, interest bearing liabilities, and noninterest bearing liabilities. For analytical purposes, interest income is reported on a fully taxable equivalent (FTE) basis using a federal income tax rate of 21%. Federal Reserve Bank restricted equity holdings are included in other interest earning assets.
	Three Months Ended
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023
INTEREST EARNING ASSETS
Loans (1)	5.67 %		5.73 %		5.52 %		5.38 %		5.20 %
Available-for-sale securities	2.18 %		2.21 %		2.24 %		2.26 %		2.23 %
Federal Home Loan Bank stock	5.24 %		5.24 %		4.98 %		4.60 %		4.04 %
Fed funds sold	4.59 %		5.55 %		5.51 %		5.72 %		5.71 %
Other	5.00 %		5.29 %		7.53 %		4.67 %		6.20 %
Total interest earning assets	4.74 %		4.77 %		4.61 %		4.47 %		4.35 %
INTEREST BEARING LIABILITIES
Interest bearing demand deposits	0.41 %		0.33 %		0.39 %		0.48 %		0.63 %
Savings	2.17 %		2.28 %		2.18 %		2.11 %		1.76 %
Certificates of deposit	4.07 %		4.13 %		4.01 %		3.84 %		3.60 %
Short-term borrowings	3.30 %		3.17 %		3.18 %		3.18 %		2.83 %
Federal Home Loan Bank advances	4.77 %		5.60 %		5.64 %		5.64 %		5.64 %
Subordinated debt, net of unamortized issuance costs	3.60 %		3.61 %		3.64 %		3.65 %		3.60 %
Total interest bearing liabilities	2.38 %		2.43 %		2.39 %		2.28 %		2.11 %
Net yield on interest earning assets (FTE) (2)	2.99 %		2.98 %		2.85 %		2.79 %		2.83 %
Net interest spread	2.36 %		2.34 %		2.22 %		2.19 %		2.24 %

(1)	Includes loans held-for-sale and nonaccrual loans
(2)	Non-GAAP financial measure; refer to the Reconciliation of Non-GAAP Financial Measures (Unaudited) in table I

 

E
AVERAGE BALANCES (UNAUDITED)
(Dollars in thousands)
	Three Months Ended
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023
INTEREST EARNING ASSETS
Loans (1)	$    1,412,578		$    1,403,810		$    1,375,523		$    1,348,749		$    1,340,271
Available-for-sale securities (2)	522,733		536,379		545,827		557,030		564,068
Federal Home Loan Bank stock	12,762		12,762		12,762		12,762		12,762
Fed funds sold	8		4		7		7		13
Other (3)	15,905		14,597		14,054		25,210		26,823
Total interest earning assets	1,963,986		1,967,552		1,948,173		1,943,758		1,943,937
NONEARNING ASSETS
Allowance for credit losses	(12,598)		(13,125)		(13,431)		(13,100)		(12,780)
Cash and demand deposits due from banks	22,800		25,903		23,931		24,018		23,244
Premises and equipment	27,773		27,868		27,999		28,022		27,444
Other assets	92,608		87,002		80,539		84,059		71,592
Total assets	$    2,094,569		$    2,095,200		$    2,067,211		$    2,066,757		$    2,053,437
INTEREST BEARING LIABILITIES
Interest bearing demand deposits	$       345,529		$       358,383		$       342,931		$       345,842		$       317,996
Savings	599,833		599,679		613,601		633,904		634,539
Certificates of deposit	386,871		375,936		366,440		357,541		338,852
Short-term borrowings	49,777		48,151		40,593		40,623		50,049
Federal Home Loan Bank advances	29,346		40,588		45,510		27,692		29,674
Subordinated debt, net of unamortized issuance costs	29,410		29,388		29,365		29,342		29,320
Total interest bearing liabilities	1,440,766		1,452,125		1,438,440		1,434,944		1,400,430
NONINTEREST BEARING LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits	425,116		418,973		411,282		412,228		446,747
Other liabilities	15,775		15,658		16,755		16,151		17,302
Shareholders' equity	212,912		208,444		200,734		203,434		188,958
Total liabilities and shareholders' equity	$    2,094,569		$    2,095,200		$    2,067,211		$    2,066,757		$    2,053,437

(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

 

F
ASSET QUALITY ANALYSIS (UNAUDITED)
(Dollars in thousands)
The following table outlines our quarter-to-date asset quality analysis as of, and for the three-month periods ended:
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023
NONPERFORMING ASSETS
Commercial and industrial	$               —		$             120		$             271		$             567		$             491
Commercial real estate	—		—		—		234		—
Agricultural	—		—		167		189		205
Residential real estate	282		427		556		293		286
Consumer	—		—		—		—		—
Total nonaccrual loans	282		547		994		1,283		982
Accruing loans past due 90 days or more	19		64		15		—		87
Total nonperforming loans	301		611		1,009		1,283		1,069
Foreclosed assets	544		546		629		579		406
Debt securities	—		12		12		12		12
Total nonperforming assets	$             845		$          1,169		$          1,650		$          1,874		$          1,487
Nonperforming loans to gross loans	0.02 %		0.04 %		0.07 %		0.09 %		0.08 %
Nonperforming assets to total assets	0.04 %		0.06 %		0.08 %		0.09 %		0.07 %
Allowance for credit losses as a % of nonaccrual loans (1)	N/M		N/M		N/M		N/M		N/M
ALLOWANCE FOR CREDIT LOSSES
Allowance at beginning of period	$        12,635		$        13,095		$        13,390		$        13,108		$        12,767
Charge-offs	299		1,767		527		191		452
Recoveries	197		408		134		145		71
Net loan charge-offs (recoveries)	102		1,359		393		46		381
Provision for credit losses - loans	362		899		98		328		722
Allowance at end of period	$        12,895		$        12,635		$        13,095		$        13,390		$        13,108
Allowance for credit losses to gross loans	0.91 %		0.89 %		0.95 %		0.98 %		0.97 %
Reserve for unfunded commitments	512		498		450		379		315
Provision for credit losses - unfunded commitments	14		47		72		64		(38)
Reserve to unfunded commitments	0.15 %		0.15 %		0.14 %		0.11 %		0.10 %
NET LOAN CHARGE-OFFS (RECOVERIES)
Commercial and industrial	$               13		$               (6)		$             334		$               (2)		$             242
Commercial real estate	(2)		(318)		(29)		(6)		(3)
Agricultural	(4)		—		—		(2)		(6)
Residential real estate	(16)		(20)		(19)		(63)		(14)
Consumer	111		1,703		107		119		162
Total	$             102		$          1,359		$             393		$               46		$             381
Net (recoveries) charge-offs (Quarter to Date annualized to average loans)	0.03 %		0.39 %		0.11 %		0.01 %		0.11 %
Net (recoveries) charge-offs (Year to Date annualized to average loans)	0.14 %		0.17 %		0.00 %		0.00 %		0.01 %
DELINQUENT AND NONACCRUAL LOANS
Accruing loans 30-89 days past due	$          5,682		$          2,226		$          1,484		$          7,938		$          3,895
Accruing loans past due 90 days or more	19		64		15		—		87
Total accruing past due loans	5,701		2,290		1,499		7,938		3,982
Nonaccrual loans	282		547		994		1,283		982
Total past due and nonaccrual loans	$          5,983		$          2,837		$          2,493		$          9,221		$          4,964

(1) N/M:  Not meaningful

 

G
CONSOLIDATED LOAN AND DEPOSIT ANALYSIS (UNAUDITED)
(Dollars in thousands)
Loan Analysis
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023		Annualized Growth % Quarter to Date
Commercial and industrial	$       244,894		$       240,589		$       238,245		$       226,281		$       209,738		7.16 %
Commercial real estate	547,447		547,038		547,005		561,123		564,244		0.30 %
Advances to mortgage brokers	63,080		76,187		39,300		29,688		18,541		(68.81) %
Agricultural	99,694		96,794		94,996		93,695		99,994		11.98 %
Total commercial loans	955,115		960,608		919,546		910,787		892,517		(2.29) %
Residential real estate	380,872		369,846		365,188		356,658		356,418		11.92 %
Consumer	87,584		93,829		96,902		98,063		100,528		(26.62) %
Gross loans	$    1,423,571		$    1,424,283		$    1,381,636		$    1,365,508		$    1,349,463		(0.20) %

 

Deposit Analysis
	December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023		Annualized Growth % Quarter to Date
Noninterest bearing demand deposits	$       416,373		$       421,493		$       412,193		$       413,272		$       428,505		(4.86) %
Interest bearing demand deposits	341,366		376,592		338,329		349,401		320,737		(37.42) %
Savings	601,730		600,150		603,328		639,491		628,079		1.05 %
Certificates of deposit	387,591		383,597		368,449		366,143		346,374		4.16 %
Total deposits	$    1,747,060		$    1,781,832		$    1,722,299		$    1,768,307		$    1,723,695		(7.81) %

 

H
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands except per share amounts and ratios)
		Three Months Ended
		December 31 2024		September 30 2024		June 30 2024		March 31 2024		December 31 2023
Net income		$        3,996		$        3,281		$        3,481		$        3,131		$        3,803
Nonrecurring items
Net gains (losses) on foreclosed assets		74		4		6		69		8
Overdraft (charge-off) recoveries (1)		66		(1,622)		—		—		—
Profitability initiative cost		(23)		—		—		—		—
Income tax impact		(25)		340		(1)		(14)		(2)
Total nonrecurring items		92		(1,278)		5		55		6
Core net income	(A)	$        3,904		$        4,559		$        3,476		$        3,076		$        3,797
Noninterest expenses		$     13,330		$     13,228		$     12,895		$     12,676		$     11,915
Amortization of acquisition intangibles		1		—		1		—		1
Core noninterest expense	(B)	$     13,329		$     13,228		$     12,894		$     12,676		$     11,914
Net interest income		$     14,555		$     14,488		$     13,550		$     13,242		$     13,612
Tax equivalent adjustment for net interest margin		213		232		237		246		246
Net interest income (FTE)	(C)	14,768		14,720		13,787		13,488		13,858
Noninterest income		3,972		3,528		3,608		3,468		3,516
Tax equivalent adjustment for efficiency ratio		54		53		53		51		50
Core revenue (FTE)		18,794		18,301		17,448		17,007		17,424
Nonrecurring items
Net gains (losses) on foreclosed assets		74		4		6		69		8
Total nonrecurring items		74		4		6		69		8
Core revenue	(D)	$     18,720		$     18,297		$     17,442		$     16,938		$     17,416
Efficiency ratio	(B/D)	71.20 %		72.30 %		73.93 %		74.84 %		68.41 %
Average earning assets	(E)	1,963,986		1,967,552		1,948,173		1,943,758		1,943,937
Net yield on interest earning assets (FTE)	(C/E)	2.99 %		2.98 %		2.85 %		2.79 %		2.83 %
Average assets	(F)	2,094,569		2,095,200		2,067,211		2,066,757		2,053,437
Average shareholders' equity	(G)	212,912		208,444		200,734		203,434		188,958
Average tangible shareholders' equity	(H)	164,629		160,161		152,451		155,150		140,674
Average diluted shares outstanding (2)	(I)	7,453,033		7,473,184		7,494,828		7,507,739		7,526,515
Core diluted earnings per share	(A/I)	$          0.52		$          0.61		$          0.46		$          0.41		$          0.50
Core return on average assets	(A/F)	0.74 %		0.87 %		0.68 %		0.60 %		0.73 %
Core return on average shareholders' equity	(A/G)	7.29 %		8.70 %		6.96 %		6.08 %		7.97 %
Core return on average tangible shareholders' equity	(A/H)	9.43 %		11.32 %		9.17 %		7.97 %		10.71 %

(1)	Includes provision for credit losses related to overdrawn deposit accounts from a single customer in the third quarter of 2024.
(2)	Whole shares

 

View original content:https://www.prnewswire.com/news-releases/isabella-bank-corporation-reports-fourth-quarter-2024-results-302364932.html

SOURCE Isabella Bank Corporation

FAQ

What was Isabella Bank's (ISBA) Q4 2024 earnings per share?

Isabella Bank reported Q4 2024 earnings of $0.54 per diluted share, compared to $0.51 per diluted share in Q4 2023.

How much did ISBA's net interest margin improve in Q4 2024?

ISBA's net interest margin increased to 2.99% in Q4 2024, up from 2.83% in Q4 2023.

What was ISBA's total loan balance at the end of Q4 2024?

ISBA's total loan balance remained steady at $1.42 billion at the end of Q4 2024.

How many shares did ISBA repurchase in Q4 2024?

ISBA repurchased 27,608 shares during Q4 2024 for $657,000 at an average price of $23.80 per share.

What was ISBA's full-year 2024 net income compared to 2023?

ISBA's full-year 2024 net income was $13.9 million ($1.86 per share), down from $18.2 million ($2.40 per share) in 2023.