Company: ISBA
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0000842517-25-000210
Chunk: 115

Company: ISABELLA BANK CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 2
Chunk 115
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 result of an increase in cash, driven by deposit growth.  Liquidity is important for financial institutions because of their need to meet loan funding commitments, depositor withdrawal requests, and various other commitments including expansion of operations, investment opportunities, and payment of cash dividends.  Based on these same factors, daily liquidity could vary significantly.

Our secondary sources include the ability to borrow from the FHLB, from the FRB, and through various correspondent banks in the form of federal funds purchased and lines of credit. These funding methods typically carry a higher interest rate than traditional market deposit accounts.  Some borrowed funds, including FHLB advances, FRB Discount Window advances, and repurchase agreements, require us to pledge assets, typically in the form of AFS securities or loans, as collateral. As of September 30, 2025, we had available lines of credit of $384,555.

We monitor our daily liquidity position to meet our cash flow needs.  We also forecast anticipated funding needs for changes in interest rates and economic conditions, the scheduled maturity and interest rate sensitivity of the investment and loan portfolios and deposits, and regulatory capital requirements.  Our liquidity stress testing is designed with consideration of these and other factors that could pose undue risk to liquidity.

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Our liquidity position remained strong at September 30, 2025, which is illustrated in the following table:September 302025June 302025March 312025December 312024September 302024Total cash and cash equivalents$161,301 $108,554 $69,179 $24,542 $27,378 Brokered CD capacity130,000 120,000 120,000 120,000 120,000 Available lines of creditFed funds lines with correspondent banks93,000 93,000 93,000 93,000 93,000 FHLB borrowings257,288 249,890 250,884 215,432 233,552 FRB Discount Window29,267 29,084 28,940 28,698 28,888 Other lines of credit5,000 5,000 5,000 5,000 5,000 Total available lines of credit384,555 376,974 377,824 342,130 360,440 Unencumbered lendable value of FRB collateral, estimated (1)300,000 320,000 340,000 290,000 290