Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 131

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 8
Chunk 131
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,059 1,022 Other1,162 1,236 Total deferred tax liabilities4,589 5,101 Net deferred tax assets (liabilities)$7,094 $7,919 While we are subject to U.S. federal income tax, we are no longer subject to examination by taxing authorities for years before 2021.  There are no material uncertain tax positions requiring recognition in our consolidated financial statements.  We do not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.We recognize interest and/or penalties related to income tax matters in income tax expense.  We do not have any amounts accrued for interest and penalties at December 31, 2024 and 2023 and we are not aware of any claims for such amounts by federal income tax authorities.

Note 13 – Fair Value

Fair value measurement requires the use of an exit price notion which may differ from entrance pricing. Generally, we believe our assets and liabilities classified as Level 1 or Level 2 approximate an exit price notion.The following is a description of the valuation methodologies, key inputs, and an indication of the level of the fair value hierarchy in which the assets or liabilities are classified.AFS securities: AFS securities are recorded at fair value on a recurring basis.  Level 1 fair value measurement is based upon quoted prices for identical instruments.  Level 2 fair value measurement is based upon quoted prices for similar instruments.  If quoted prices are not available, fair values are measured using independent pricing models or other model based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss and liquidity assumptions.  The values for Level 1 and Level 2 investment securities are generally obtained from an independent third party.  On a quarterly basis, we compare the values provided to alternative pricing sources.Loans: We do not record loans at fair value on a recurring basis. However, some loans are individually evaluated for ACL purposes, and a specific ACL may be established. To measure reserve, the fair value of the loan is estimated using the fair value of the collateral, less costs to sell if foreclosure is probable, or the present value of expected future cash flows discounted at the loan’s effective interest rate. Loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.

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We review the net realizable values of the underlying collateral