Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 43

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 43
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%3.05 %3.18 %Efficiency ratio (1)73.01 %67.76 %62.10 %Gross loan to deposit ratio (2)81.48 %78.29 %72.48 %Shareholders' equity to total assets (2)10.08 %9.83 %9.17 %Tangible shareholders' equity to tangible assets (2)7.95 %7.66 %7.78 %FINANCIAL DATA (in millions)Total assets (2)2,086 2,059 2,030 AFS securities (2)489 528 580 Gross loans (2)1,424 1,349 1,264 ACL (2)13 13 10 Deposits (2)1,747 1,724 1,744 Borrowed funds (2)113 116 87 Shareholders' equity (2)210 202 186 Wealth assets under management (2)658 641 514 Net income14 18 22 Interest income90 80 66 Interest expense34 22 5 Net interest income56 58 60 Provision for credit losses2 1 — Noninterest income15 14 14 Noninterest expenses52 49 47 

(1) Non-GAAP financial measure; refer to the "Recconcilation of Non-GAAP Financial Measures" section

(2) At end of period

20

Table of Contents

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are set forth in “Note 1 – Significant Accounting Policies” of “Notes to Consolidated Financial Statements” in Item 8. Financial Statements and Supplementary Data.  Of these significant accounting policies, we consider our policies regarding the ACL, acquisition intangibles and goodwill, and the determination of the fair value and assessment of credit related impairments of investment securities to be our most critical accounting policies.

The ACL requires our most subjective and complex judgment.  Changes in economic conditions and other external factors can have a significant impact on the ACL and, therefore, the allowance for credit losses and results of operations.  We have developed policies and procedures for assessing the appropriateness of the ACL, recognizing that this process requires a number of assumptions and estimates with respect to our loan portfolio.  Our assessments may be impacted in future periods by changes in