Company: ISBA
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0000842517-25-000210
Chunk: 76

Company: ISABELLA BANK CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 1
Chunk 76
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 lower participation demand from our counterparty. Core loans (non-GAAP) grew $66,358, led by growth in the commercial and industrial and commercial real estate portfolios of $17,509 and $34,924, respectively. Residential mortgages increased $31,184 since year-end 2024 with $13,388 of growth in the third quarter as construction drawdowns and seasonal patterns occurred.  Most residential originations were adjustable rate products, which are put on the balance sheet rather than sold in the secondary market. The consumer loan portfolio continues to slowly roll off amid decreasing demand, competition, and our adherence to credit quality standards.

The ACL was $13,149 at September 30, 2025, an increase of $254 from $12,895 at December 31, 2024. The increase is due to core loan growth (non-GAAP), offset by improvement in historical loss experience driven by the recovery of previously charged-off loans during the year. Nonaccrual loans were $3,443 as of September 30, 2025 compared to $282 at December 31, 2024.  This increase relates to one commercial real estate loan. Past due and accruing accounts between 30 to 89 days as a percentage of total loans was 0.03% at September 30, 2025, compared to 0.40% at year-end 2024. Overall, credit quality remains strong.

BOLI assets were $45,651 at September 30, 2025, an increase of $10,769 from December 31, 2024. The growth was mostly driven by a $10,583 investment of new policies in a separate account product at the beginning of January. In the first half of 2025, we also surrendered and/or exchanged over $13,000 of existing general account policies and redeployed the funds into a separate account BOLI structure, which yields a higher rate compared to existing general account policies.

Total deposits increased $178,542 from December 31, 2024, to $1,925,602 at September 30, 2025. The growth was driven by demand and money market deposits. Approximately half of the $134,329 increase in money market deposits was driven by one customer with large deposits during the second and third quarters that are expected to be withdrawn by the customer by the end of the year. Consumer demand for retail certificates of deposit accounts continues based on the rate environment, resulting in a $