Company: ISBA
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000842517-25-000099
Chunk: 51

Company: ISABELLA BANK CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 51
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 using life-of-loan analysis, and the historical severity of loss, based on the aggregate net lifetime losses incurred per loan class.The default and severity factors used to calculate the allowance for credit losses for loans that share similar risk characteristics with other loans are adjusted for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio. These qualitative factors are used to adjust the historical probabilities of default and severity of loss so that they reflect management's expectation of future conditions based on a reasonable and supportable forecast. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the model reverts back to the historical rates of default and severity of loss.  Qualitative factors include:•Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, recovery practices not considered elsewhere in estimating credit losses;•Changes in the experience, ability, and depth of lending management and other relevant staff;•Changes in interest rates;•Changes in international, national, regional, and local economic factors;•Changes in the nature and volume of the portfolio and in the terms of loans;•Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;•Lack of current financial information;•Competition, legal, and regulatory; and•Changes in the value of underlying collateral.A summary of activity in the ACL by portfolio segment and the recorded investment in loans by segments follows for the:Three Months Ended March 31, 2025Commercial and IndustrialCommercial Real EstateAgriculturalResidential Real EstateConsumerTotalDecember 31, 2024$1,316 $5,171 $287 $4,521 $1,600 $12,895 Charge-offs— — — (1)(171)(172)Recoveries80 2 — 14 128 224 Reversal of credit losses(157)1 (21)66 (101)(212)March 31, 2025$1,239 $5,174 $266 $4,600 $1,456 $12,735 Three Months Ended March 31, 2024Commercial and IndustrialCommercial Real EstateAgriculturalResidential Real EstateConsumerTotalDecember 31, 2023$