Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 55

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 55
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 to repurchase up to an additional 118,229 shares of common stock.

The FRB has established minimum risk-based capital guidelines. Pursuant to these guidelines, a framework has been established that assigns risk weights to each category of on and off-balance-sheet items to arrive at risk adjusted total assets. Regulatory capital is divided by the risk adjusted assets with the resulting ratio compared to the minimum standard to determine whether a corporation has adequate capital.

The following table sets forth these requirements and our ratios as of December 31:20242023ActualMinimum Required - BASEL IIIRequired to be Considered Well CapitalizedActualMinimum Required - BASEL IIIRequired to be Considered Well CapitalizedCommon equity tier 1 capital12.21 %7.00 %6.50 %12.54 %7.00 %6.50 %Tier 1 capital12.21 %8.50 %8.00 %12.54 %8.50 %8.00 %Total capital15.06 %10.50 %10.00 %15.52 %10.50 %10.00 %Tier 1 leverage8.86 %4.00 %5.00 %8.76 %4.00 %5.00 %

Liquidity

Liquidity is monitored regularly by our ALCO, which consists of members of senior management.  The committee reviews projected cash flows, key ratios, and liquidity available from both primary and secondary sources.

Our primary sources of liquidity are retail deposits, cash and cash equivalents, and unencumbered AFS securities.  These categories totaled $330,876 or 15.86% of assets as of December 31, 2024, compared to $381,417 or 18.52% as of December 31, 2023.  The decline in the amount and percentage of primary liquidity is a direct result of an increase in loans and a decrease in unencumbered AFS securities collateralizing non-market funding.  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 a