Company: ISBA
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000842517-25-000053
Chunk: 39

Company: ISABELLA BANK CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 39
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n deposit accounts from a single customer.  The decrease in adjusted net income primarily reflects the impact on net interest income due to slower repricing of earning assets as compared to the rising costs of interest bearing liabilities.  The decrease in net income for the comparative periods also included an increase in provision for credit losses and compensation expenses.

Net interest income was $55,835 in 2024 compared with $57,944 in the same period of 2023.  The comparison of NIM and yield on interest earning assets were 2.90% and 4.65% compared to 3.05%, and 4.17% for 2024 and 2023, respectively. The book yield from securities was 2.22% and 2.26% during 2024 and 2023, respectively. The weighted average maturity of our U.S. Treasury portfolio is less than 1.4 years, and the proceeds are expected to be reinvested in market rate loans and securities, or to pay off borrowed funds.  The yield on loans expanded to 5.58%, from 5.02% due to higher rates on new loans and fixed rate commercial loans that have and continue to reprice to variable rates. At the end of 2024, approximately 40% of commercial loans were fixed at rates lower than current market rates, but the majority will contractually reprice to variable rates over the next four years.  Our cost of interest bearing liabilities increased to 2.37% from 1.57% in 2023, but have stabilized in comparison to the first half of the year.

The provision for credit losses for the year ended December 31, 2024 was $1,884, compared to $629 for the same period in 2023.  The provision for 2024 includes the recovery of contractual principal of two previously charged-off commercial loans totaling $314.  Given these loan recoveries, our historical loss rate experience improved which provided a benefit of $435.  The benefits were offset by a $1,556 net charge-off related to an overdrawn deposit account from a single customer and additional reserves for core loan growth.

Noninterest income for the year ended December 31, 2024 was $14,576, an increase of $749, or 5.4%, in comparison to 2023.  Wealth management fees grew $484, or 13.6%, due to higher assets under management.  Managed assets increased $