Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 130

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 8
Chunk 130
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4,593 Deferred expense (benefit)(310)1,008 13 Income tax expense$2,509 $3,665 $4,606 The reconciliation of the provision for federal income taxes and the amount computed at the federal statutory tax rate of 21% of income before federal income tax expense is as follows for the years ended December 31:202420232022Income taxes at statutory rate$3,444 $4,585 $5,637 Effect of nontaxable incomeInterest income on tax exempt municipal securities(490)(552)(587)Earnings on corporate owned life insurance policies(211)(193)(197)Other497 292 329 Total effect of nontaxable income(204)(453)(455)Effect of nondeductible expenses93 86 45 Effect of tax credits(824)(602)(621)Unrecognized deferred tax benefit— 49 — Federal income tax expense$2,509 $3,665 $4,606 The unrecognized deferred tax benefit recorded during 2023 related to a low income housing tax credit investment.  The sale of this investment resulted in a capital loss carryforward that is unlikely to be recognized in the foreseeable future.  As such, we did not recognize a deferred tax asset as of December 31, 2024 and 2023 related to our low income housing tax credit investment.

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for federal income tax purposes.  Significant components of our deferred tax assets and liabilities, measured at the 21% statutory rate, included in other assets on our consolidated balance sheets, are summarized as follows as of December 31:20242023Deferred tax assetsAllowance for credit losses$2,715 $2,658 Deferred compensation1,148 1,388 Employee benefit plans112 80 Core deposit premium and acquisition expenses764 764 Net unrealized losses on AFS securities5,529 6,627 Net unrecognized actuarial losses on pension plan105 185 Life insurance death benefit payable497 497 Other813 821 Total deferred tax assets11,683 13,020 Deferred tax liabilitiesPrepaid pension cost294 277 Premises and equipment1,592 2,251 Accretion on securities482 315 Core deposit premium and acquisition expenses1