Company: ISBA
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0000842517-25-000135
Chunk: 30

Company: ISABELLA BANK CORP
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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 require loan-to-value limits of 80% or less. Depending upon the type of loan, past credit history, and current operating results, 

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we may require the borrower to pledge accounts receivable, inventory, property, or equipment. Government agency guarantee may be required.  Personal guarantees and/or life insurance beneficiary assignments are generally required from the owners of closely held corporations, partnerships, and sole proprietorships. In addition, we may require annual financial statements, prepare cash flow analyses, and review credit reports.We offer adjustable-rate mortgages, construction loans, and fixed rate residential real estate loans which have amortization periods up to a maximum of 30 years. We consider the anticipated direction of interest rates, balance sheet duration, the sensitivity of our balance sheet to changes in interest rates, our liquidity needs, and overall loan demand to determine whether or not to sell fixed rate loans to Freddie Mac.Our lending policies generally limit the maximum loan-to-value ratio on residential real estate loans to 100% of the lower of the appraised value of the property or the purchase price.  Private mortgage insurance is typically required on loans with loan-to-value ratios in excess of 80% unless the loan qualifies for government guarantees.Underwriting criteria for originated residential real estate loans generally include:•Evaluation of the borrower’s ability to make monthly payments.•Evaluation of the value of the property securing the loan.•Ensuring the payment of principal, interest, taxes, and hazard insurance generally does not exceed 28% of a borrower’s gross income.•Ensuring all debt servicing does not exceed 40% of income.•Verification of acceptable credit reports.•Verification of employment, income, and financial information.Appraisals are performed by independent appraisers and are reviewed for appropriateness. Generally, mortgage loan requests are reviewed by our mortgage loan committee or through a secondary market underwriting system; loans in excess of $1,000 require the approval of one or more of the following committees:  Internal Loan Committee, the Executive Loan Committee, or the Board of Directors.Consumer loans include secured and unsecured personal loans. Loans are amortized for a period of up to 15 years based on the age and value of the underlying collateral. The underwriting emphasis is on a borrower’s perceived intent and ability to pay rather than collateral value. No consumer loans are sold to the secondary market.Nonaccrual and Past Due LoansThe accrual of interest on commercial and agricultural loans, as well as residential real estate loans, is discontinued at the time a loan is 90 days or more past