Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 138

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 8
Chunk 138
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 pay a “pair-off” fee, based on then current market prices, to the investor to compensate the investor for the shortfall.With a “best efforts” contract, we commit to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes.  Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g. on the same day the lender commits to lend funds to a potential borrower).We expect that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments.  There were undesignated forward loan sale commitments of $242 and $0 at December 31, 2024 and 2023, respectively.  The fair value of these forward loan sale commitments was $247 and $0 at December 31, 2024 and 2023, respectively.The fair values of the rate lock loan commitments related to the origination of mortgage loans that will be held for sale and the forward loan sale commitments are deemed insignificant by management and, accordingly, are not recorded in our consolidated financial statements.ACL - Off-Balance-Sheet Credit CommitmentsIn connection with the commitments for credit-related financial instruments discussed above, we established an allowance for credit losses related to this off-balance-sheet credit exposure.  The allowance, recorded in a liability account, is calculated in accordance with ASC 326 and represents expected credit losses over the contractual period for which we are exposed to credit risk resulting from a contractual obligation to extend credit.  The estimate of expected credit losses considers both the likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment.  The likelihood and expected amount of funding are based on historical utilization rates.  No allowance is recognized if we have the unconditional right to cancel the obligation.The allowance was $512 and $315 at December 31, 2024 and 2023, and is reported as a component of other liabilities.  Adjustments to the allowance are reported in our income statement as a component of provision for credit losses.

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Other MattersCorrespondent banks may require us to maintain minimum cash reserve balances.  The reserve balances related to correspondent banks amounted to $450 and $250 for the years ended December 31, 2024 and 2023.Banking regulations limit the transfer of assets in the form of dividends, loans, or advances from the Bank to the Corporation.  At