Company: ISBA
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0000842517-25-000135
Chunk: 76

Company: ISABELLA BANK CORP
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 76
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63%. Amortization and maturities of $47,819 offset the increase from purchases. Net unrealized losses at June 30, 2025 totaled $17,594, or 3.40%, of the portfolio and improved during the quarter due to the treasury portfolio rapidly approaching maturity and a decrease in market yields. The par value and corresponding book yields that are estimated to mature or payoff by year include: $28,200 in principal with a weighted-average book yield of 2.36% over the remainder of 2025; $217,400 at 1.17% in 2026; and $63,000 at 1.87% in 2027.  Some of these securities amortize so the actual principal paydown may differ from these estimates.

Gross loans decreased $26,058 to $1,397,513 as of June 30, 2025 totaled $1,397,513. While core loans (non-GAAP) grew $34,017, advances to mortgage brokers decreased $60,075 due to lower participation demand from our counterparty.  However, the decline in advances to mortgage brokers has provided liquidity to refocus on loans that can be recorded on our balance sheet for longer terms and help to mitigate interest rate risk. 

Core loans (non-GAAP) grew $34,017, led by growth in the commercial and industrial and commercial real estate portfolios of $7,096 and $22,665, respectively. Commercial loan growth during the year was in the real estate, construction, and hospitality industries. While our commercial pipeline is strong at the beginning of the third quarter, our ability to grow the loan portfolio is subject to uncertainties around timing and funding, customer demand, and overall economic conditions.  Residential mortgages increased $17,796 since year-end 2024 with $11,320 of growth in the second quarter as construction drawdowns and seasonal patterns occurred.  Most residential originations were adjustable rate products, which are put on the balance sheet rather than sold in the secondary market. The consumer loan portfolio continues to roll off amid decreasing demand, competition and our adherence to credit quality standards.

The ACL was $12,977 at June 30, 2025, an increase of $82 from $12,895 at December 31, 2024. The increase is due to core loan growth (non-GAAP), offset by improvement in historical loss experience driven by the recovery of previously charged-off loans during the year. Nonaccrual