Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 76

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 8
Chunk 76
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 goodwill, and certain other assets and liabilities.  These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write downs of individual assets.Fair Value HierarchyUnder fair value measurement and disclosure authoritative guidance, we group assets and liabilities measured at fair value into three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value, based on the prioritization of inputs in the valuation techniques.  These levels are:Level 1:Valuation is based upon quoted prices for identical instruments traded in active markets.Level 2:Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model based valuation techniques for which all significant assumptions are observable in the market.Level 3:Valuation is generated from model based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability.The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.  Transfers between measurement levels are recognized at the end of reporting periods.For further discussion of fair value considerations, refer to “Note 13 – Fair Value.”SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK: Most of our activities are conducted with customers located within the central Michigan area.  A significant amount of our outstanding loans are secured by commercial and residential real estate.  Other than these types of loans, there is no significant concentration to any other industry or any one customer.CASH AND CASH EQUIVALENTS: For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks, federal funds sold, and other deposit accounts.  Generally, federal funds sold are for a one day period.  We maintain deposit accounts in various financial institutions which generally exceed federally insured limits or are not insured.  We do not believe we are exposed to any significant interest, credit or other financial risk as a result of these deposits.AFS SECURITIES: Purchases of investment securities are generally classified as AFS. However, we may elect to classify securities as either held to maturity or trading. Securities classified as AFS debt securities are recorded at fair value, with unrealized gains