Isabella Bank Corporation · NASDAQ:ISBA
Isabella Bank — Shareholder Meeting (May 2024)
40 slides from Isabella Bank's shareholder meeting presentation, May 7, 2024
Slide 1: 2024 Annual Shareholder Meeting
2024 Annual Shareholder Meeting May 7, 2024
Slide 2: Jerome Schwind
Jerome Schwind President & Chief Executive Officer Isabella Bank Corporation
Slide 3: Agenda
Agenda • Welcome • Meeting Format Review • Board Chair Remarks • Business Meeting • Financial Review • Closing Comments • Q&A
Slide 4: Sarah Opperman
Sarah Opperman Board Chair
Slide 5: Board of Directors
Board of Directors Sarah R. Opperman – Chair Dr. Jeffrey J. Barnes Thomas L. Kleinhardt Vice President (retired), Physician, President, The Dow Chemical Company L.O. Eye Care McGuire Chevrolet Jerome E. Schwind Jill Bourland, CPA, HCCP Richard L. McGuirk President & Chief Executive Officer, Chief Ex
Slide 6: Board Changes
Board Changes Neil McDonnell President, Isabella Bank
Slide 7: Board Changes
Board Changes Rick McGuirk Operations Manager/President, United Apartments
Slide 8: Board Priorities
Board Priorities • Executive Leadership Transition • Strategic Planning • Financial Performance
Slide 9: Mission Statement
Mission Statement To be the preeminent financial services provider benefiting our customers, shareholders, and employees.
Slide 10: Proposals
Proposals 1. Election of Directors • Jill Bourland • Jae A. Evans • Jerome E. Schwind 2. Ratification of Independent Accounting Firm
Slide 11: Guests
Guests • Foster Swift (Legal Counsel) • Matt Hrebec • External Auditors • Rehmann & Robson (Independent Accountant) • Heather Funsch • Kevin Frank
Slide 12: Neil McDonnell
Neil McDonnell Bank President, Former CFO
Slide 13: Financial Review - 2023
Financial Review - 2023 • Solid financial results • Core loan growth continued; strong credit quality • Federal funds interest rate climbed 100 bps. • Interest income increased 21% • Interest expense up +300% • Isabella Wealth AUM grew $127 million
Slide 14: ISBA Highlights
ISBA Highlights ($000) YE 2023 % of change since 2022 Assets Under Management (AUM) $2,948,751 5.00% Total Assets $2,058,968 1.41% Gross Loans $1,349,463 6.75% Investment Securities $528,148 -9.02% Deposits $1,723,695 -1.18% Borrowings $116,136 33.47% Capital $202,402 8.70% Source: ISBA Annual Repor
Slide 15: Loan Growth
Loan Growth ($000) $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Commercial Adv. to Mortgage Brokers Agricultural Residential Mortgages Consumer Source: ISBA Annual Report on Form 10-K for the year ended December 31, 2023
Slide 16: Nonperforming Assets
Nonperforming Assets ISBA Peers 0.40% 0.35% 0.30% 0.25% 0.20% 0.15% 0.10% 0.05% 0.00% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Source: S&P Global Market Intelligence May 3, 2024
Slide 17: Deposit Growth
Deposit Growth ($000) $2,000,000 $1,750,000 $1,500,000 $1,250,000 $1,000,000 $750,000 $500,000 $250,000 $0 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Noninterest Bearing Interest Bearing Demand CDs & Savings CDs over $250,000 Source: ISBA Annual Report on Form 10-K for the year ended December 31,
Slide 18: Isabella Wealth Revenue
Isabella Wealth ($000) $700,000 $4,000 $600,000 $3,500 $3,000 $500,000 $2,500 $400,000 Revenue Assets $2,000 $300,000 $1,500 $200,000 $1,000 $100,000 $500 $0 $0 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Investment Management Trust Services Revenue Source: ISBA Annual Report on Form 10-K for the y
Slide 19: Market Rates
Market Rates ISBA Cost of Funds Fed Funds 5 Year Treas 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Source: ISBA Annual Report on Form 10-K for the year ended December 31, 2023
Slide 20: Cost of Funds
Cost of Funds 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 ISBA Cost of Funds Peers Source: ISBA Annual Report on Form 10-K for the year ended December 31, 2023
Slide 21: ISBA Earnings Results
ISBA Earnings Results ($000) 2023 2022 % Change Net Interest Income $57,944 $60,481 -4.19% Provision for Loan Losses $629 $483 30.23% Noninterest Income $13,827 $13,666 1.18% Noninterest Expenses $49,310 $46,820 5.32% Net Income $18,167 $22,238 -18.31% Source: ISBA Annual Report on Form 10-K for the
Slide 22: ISBA Share Data
ISBA Share Data ($000) 2023 2022 % Change Earnings Per Common Share $2.42 $2.95 -17.97% Dividends Paid $1.12 $1.09 2.75% Dividend Yield (YE Annualized) 5.21% 4.77% 44bps Closing Price (YE) $21.50 $23.50 -8.51% Source: ISBA Annual Report on Form 10-K for the year ended December 31, 2023
Slide 23: Relative Stock Performance
Relative Stock Performance Total Return 0.0% -5.0% -6.9% -10.0% -15.0% -20.0% -19.2% -25.0% 12/31/21 - 12/31/23 ISBA Nasdaq Bank Index Source: Bloomberg May 3, 2024
Slide 24: Strength of the Bank
Strength of the Bank • Excess cash and liquidity - $692 million • Strong Capital ratios • Total risk-based capital – 15.52% • Conservative AFS securities portfolio • Unrealized losses represented 6.0% of AFS securities at YE 2023 • Lack of deposit concentration risk
Slide 25: A Look at 2024
A Look at 2024 • Q1 Results • Capital & Liquidity – Strong • Credit quality continues • Fed interest rate direction? • Net interest margin challenge • Stock price?
Slide 26: Jerome Schwind
Jerome Schwind President & Chief Executive Officer Isabella Bank Corporation
Slide 27: Voting Results
Voting Results 1. Election of Directors • Jill Bourland • Jae A. Evans • Jerome E. Schwind 2. Ratification of Independent Accounting Firm
Slide 28: Continued Solid Performance
Continued Solid Performance $85 Million TOTAL LOAN GROWTH 25% INCREASE IN ASSETS MANAGED 3.05% NET INTEREST MARGIN BY ISABELLA WEALTH (NIM)
Slide 29: Isabella Bank: Local. Growing. Staying.
ISABELLA BANK Local. Growing. Staying. § Se _/
Slide 30: Our Market Area
MECOSTA MIDLAND ‘COUNTY COUNTY e Saginaw GRATIOT © UW Cols SAGINAW COUNTY On OTTO Vin The Best Marketplace
Slide 31: Bay City Loan and Wealth Office
Bay City Loan and Wealth Office Opened October 2023
Slide 32: State Street Branch
State Street Branch Opened March 2023
Slide 33: West High Branch Remodel
West High Branch Remodel Reopened January 2024
Slide 34: Lake ATM Renovation
Lake ATM Renovation Reopened May 2024
Slide 35: Strategic Plan 3-Year Strategy
Strategic Plan 3-Year Strategy
Slide 36: Our Team
Our Team ea Pa S999
Slide 37: Introducing…
Introducing… Bill Schaefer Chief Financial Officer, Isabella Bank Corporation
Slide 38: Looking forward
Looking forward • Technology enhancements • Customer focused • Our employees and our culture
Slide 39: Thank You!
Thank You!
Slide 40: Questions
Questions