Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 45

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 45
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 least an annual basis.  Based on the analysis completed, it was determined that our estimated fair value of Isabella Bank and Isabella Bank Corporation at December 31, 2024 was greater than our recorded book value and no impairment of goodwill was identified.

AFS securities are carried at fair value with changes in the fair value included as a component of other comprehensive income. The market values for most AFS investment securities are typically obtained from outside sources and applied to individual securities within the portfolio.  Municipal securities for which no readily determinable market values are available are priced using fair value curves which most closely match the securities' characteristics.  AFS securities are reviewed quarterly for possible credit impairment. In determining whether a credit-related impairment exists for debt securities, we assess whether: (a) we do not have the intent to sell the security; and (b) it is more likely than not we will not have to sell the security before recovery of its cost basis. If either of these conditions are met, any previously recognized allowances are charged-off and the security's amortized cost is written down to fair value through income. If these conditions are not met, the security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors.

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Table of Contents

Average Balances, Interest Rates, and Net Interest Income

The following schedules present the daily average amount outstanding for each major category of interest earning assets, non-earning assets, interest bearing liabilities, and noninterest bearing liabilities for the last three years.  These schedules also present an analysis of interest income and interest expense for the periods indicated.  All interest income is reported on a FTE basis using a federal income tax rate of 21%. Loans in nonaccrual status, for the purpose of the following computations, are included in the average loan balances.  FRB restricted equity holdings are included in other interest earning assets.

Year Ended December 31202420232022Average BalanceTax Equivalent InterestAverage Yield/RateAverage BalanceTax Equivalent InterestAverage Yield/RateAverage BalanceTax Equivalent InterestAverage Yield/RateINTEREST EARNING ASSETSLoans (1)$1,385,287 $77,295 5.58 %$1,308,891 $65,670 5.02 %$1,249,634 $53,283 4.26 %AFS securities (2)540,433 12,023 2.22 %582,563 13,179 2.