Company: ISBA
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0000842517-25-000135
Chunk: 105

Company: ISABELLA BANK CORP
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 2
Chunk 105
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 our cost of interest bearing liabilities decreased to 2.25% from 2.33% for the first six months of 2025 and 2024, respectively. The explanations for the improvement in NIM are consistent with those provided in the year-over-year three month comparison above.

The provision for credit losses was a credit of $1,099 in the second quarter of 2025, which reflects net recoveries totaling $1,432, partially offset by a $242 increase in the ACL on loans and an increase in the reserve for unfunded commitments. Recoveries totaled $1,822, of which $1,556 were related to overdrawn deposit accounts from a single customer charged off during the third quarter of 2024. The provision for loan losses in the same period of 2024 was $170 due to growth in core loans, which excludes advances to mortgage brokers (non-GAAP), and unfunded commitments.

For the first half of 2025, provision for credit losses was a credit of $1,206 compared to a provision of $562 in the same period of 2024. The drivers of the credit and provision for the six month comparison are consistent with those provided in the three month comparison above. Credit quality remains strong with low levels of past due and nonaccrual loans and net charge offs.  The Corporation continues to closely monitor credit quality in light of the continued economic uncertainty caused by, among other factors, the interest rate environment, employment data in recent periods, continued uncertainty regarding U.S. trade and tariff policy and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.

Noninterest income for the three months ended June 30, 2025 and 2024 was $3,686 and $3,608, respectively. Service charges and fees increased $48 as a result of profitability initiatives designed to increase fee income. Wealth management fees grew $36 due to growth in assets under management as compared to the second quarter of 2024. AUM totaled $678,959, $656,617, and $647,850 as of June 30, 2025, March 31, 2025, and June 30, 2024, respectively.  Earnings on BOLI policies increased $47 over the prior year quarter due to new investments in a separate account BOLI, which was offset in