Company: ISBA
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0000842517-25-000210
Chunk: 75

Company: ISABELLA BANK CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 1
Chunk 75
---
1,273 for the same reasons as the three month comparison.  Other professional service fees increased $797 principally due to $173 of profitability initiative costs, $168 in legal fees related to our Nasdaq uplisting, and temporary increases in outsourced services. Offsetting these increases was a $407 decline in other losses, largely due to fraudulent related activity.

Income tax expense for the three months ended September 30, 2025 and 2024 was $1,036 and $561 and the ETR was 17% and 15%, respectively.  The increase in the ETR was primarily due to a higher annual forecast of pretax income.  Income tax expense for the first nine months of 2025 was $3,086, compared to $1,684 in the same period of 2024 and the ETR was 18% and 15%, respectively. The ETR in the first nine months of 2025 included a one-time tax expense totaling $166 due to the taxes owed from the lifetime earnings on BOLI policies that were surrendered during the first quarter of 2025. Excluding the one-

43

time charge, the ETR was 17% for the first nine months of 2025, which is higher than the prior year due to a higher annual forecast of pretax income.

Financial Condition (September 30, 2025 to December 31, 2024 comparison)

Total assets increased $173,413 to $2,259,654 as of September 30, 2025, primarily due to an increase of $127,465 in interest bearing cash, a $22,941 increase in AFS securities, and a $10,769 increase in BOLI policies.

Our AFS securities portfolio totaled $511,970 at September 30, 2025, increasing $22,941 at the end of third quarter 2025. The increase was driven by $62,148 in purchases, offset by amortization and maturities of $52,359. Net unrealized losses at September 30, 2025 totaled $12,564, or 2.40%, of the portfolio and improved during the quarter due to the treasury portfolio rapidly approaching maturity and an increase in bond prices.

Gross loans increased $8,334 to $1,431,905 as of September 30, 2025. While core loans (non-GAAP) grew $66,358, advances to mortgage brokers decreased $58,024 due to