Isabella Bank Corporation · NASDAQ:ISBA
Isabella Bank — Investor Presentation (October 2023)
27 slides from Isabella Bank's investor presentation, Oct 26, 2023
Slide 1: Slide 1
Slide 2: About Us, Financial Data, Objectives & Strategy, Q&A
• About Us • Financial Data • Objectives & Strategy • Q&A 2
Slide 3: Isabella Bank founded in 1903
• Isabella Bank was founded in 1903 • 31 Banking offices throughout eight Mid-Michigan counties • Full service banking, including Wealth Management • Five-star rating from Bauer Financial, Inc. • Cash dividends for 74 consecutive years 3
Slide 4: Our Market Area
Our Market Area wo CLARE g county of + MIDLAND Traverse counry city 8 . a ro Midland L Mt PleSéant a MONTCALM GRATIOT @ COUNTY | |e on [ | Saginaw r| 7 Lansing e Detroit YT Vin ISBA The Best Marketplace
Slide 5: Branches, market share and population by county
Number Of Market Share / Total Banks In The County Population Branches Rank Market CLARE 3 40% / 2 31,028 3 GRATIOT 2 19% / 3 41,354 4 ISABELLA 10 57% / 1 63,935 6 MECOSTA 5 32% / 1 39,574 7 MIDLAND 2 12% / 3 83,297 7 MONTCALM 3 23% / 2 67,614 7 SAGINAW 5 7% / 7 187,846 11 Branch and market share so
Slide 6: Expansion timeline and acquisitions since 2008
2008 Greenville Community Bank ($114 Million in Assets) 2008 Lake Isabella office was opened 2008 Corporate Office moved to new location 2010 Midland West office was opened 2012 Freeland office was opened 2013 Big Rapids East office was opened 2015 Saginaw office was acquired ($44 Million in Deposit
Slide 7: Board of Directors
Sarah R. Opperman - Chair Thomas L. Kleinhardt Vice President (retired) President The Dow Chemical Company McGuire Chevrolet Jae A. Evans Richard L. McGuirk Chief Executive Officer President & Operations Manager Isabella Bank United Apartments Jerome E. Schwind Chad R. Payton, CPA President Officer
Slide 8: Jae Evans, CEO and Jerome Schwind, President
Jae Evans, Chief Executive Officer Mr. Evans has served as President and Chief Executive Officer of Isabella Bank Corporation since 2014 and Chief Executive Officer of the Bank since 2018. He has been employed by the corporation since 2008 and served as Chief Operations Officer of the Bank from 2011
Slide 9: Neil McDonnell, Peggy Wheeler, Dave Reetz
Neil McDonnell, Chief Financial Officer Mr. McDonnell has over 30 years of banking experience and has been employed by the Bank since 2018. He has served as chief financial officer, controller, treasurer, compliance & risk officer, and director of finance at large international banks, local communit
Slide 10: 377 employees
• 377 employees • 333 (88%) are full time employees • 142 (38%) have been with us more than 10 years • 87 (23%) have been with us more than 20 years • 18% employee turnover in 2022 (Industry Average for 2022 was 28%) Information as of September 30, 2023 10
Slide 11: Shareholders and outstanding shares
• 2,697 Shareholders and 7,490,557 Outstanding Shares • 33% of Employees are Shareholders • Current and retired director ownership 16% • Largest Shareholder owns <6% • Paid Cash Dividends Every Year Since 1948 Information as of September 30, 2023 11
Slide 12: Gross Loans and Commercial Loans
Gross Loans 7.5% Commercial Agricultural 26.4% Residential Mortgages Commercial Loans Consumer 58.6% 11.8% 1.6% 3.2% Real Estate 7.4% Accommodation Services 4.9% Health Care 4.2% Retail Trade 42.0% 2.8% Wholesale Trade Construction 6.5% Manufacturing Education 7.8% Advances to Mtg. Brokers Other 15.
Slide 13: Investments in Technology
• Investments in Technology -New Online Banking Solution -Enhancing Mobile Banking Solution -New Deposit Account Platform -Phase 2 of Small Business Loan Automation 13
Slide 14: New offices, efficiencies and stock buyback
• Saginaw State Street branch opened • Bay City loan and wealth office opened • Focus on operational efficiencies • Continued effort on stock buyback program 14 14
Slide 15: Excess cash and liquidity, strong capital ratios
• Excess cash and liquidity – $724 million – Total cash and cash equivalents – $116 million – Available lines of credit – $288 million – Unencumbered lendable value of collateral – $320 million • Strong capital ratios – Tier 1 leverage – 8.97% – Tier 1 risk-based capital – 12.75% – Total risk-based
Slide 16: Balance sheet changes since December 31, 2022
% of change since September 30, 2023 December 31, 2022 Assets Under Management $2,961,332 5.45% Total Assets $2,118,490 4.35% Gross Loans $1,334,674 5.58% Investment Securities $516,897 -10.95% Deposits $1,769,474 1.44% Borrowings $146,642 68.52% Capital $185,123 -0.58% Information as of September 3
Slide 17: Information as of September 30, 2023
Information as of September 30, 2023 17
Slide 18: Investment Management and Trust Services Revenue
$600,000 $4,000 $3,500 $500,000 $3,000 $400,000 $2,500 Revenue Assets $300,000 $2,000 $1,500 $200,000 $1,000 $100,000 $500 $0 $0 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 Investment Management Trust Services Revenue* * 2023 annualized based on actual September 30, 2023 results Information as of S
Slide 19: Nine Months Ended September 30, 2023
Nine Months Ended Nine Months Ended % Change September 30, 2023 September 30, 2022 Net Interest Income $44,332 $44,209 0.28% Provision for Credit Losses ($55) $540 -110.19% Noninterest Income $10,311 $10,394 -0.80% Noninterest Expenses $37,395 $34,898 7.16% Net Income $14,364 $15,916 -9.75% Earnings
Slide 20: Earnings and Dividends Per Common Share
Earnings Per Common Share Dividends Per Common Share $3.20 3.90% $2.80 $2.40 $2.00 CAGR $1.60 $1.20 $0.80 2.84% $0.40 $0.00 (1) 2020 includes a $6.0 million after-tax debt extinguishment charge *Annualized based on actual September 30, 2023 results Information as of September 30, 2023 20
Slide 21: Isabella Bank Corporation vs Peer Average
Isabella Bank Corporation Peer Average 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 -0.20 -0.40 Source: S&P Global Market Intelligence Data as of Q2-2023 21
Slide 22: Isabella Bank Corporation vs Peer Average
Isabella Bank Corporation Peer Average 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 -2.00 -4.00 Source: S&P Global Market Intelligence Data as of Q2-2023 22
Slide 23: Isabella Bank Corporation vs Peer Average
Isabella Bank Corporation Peer Average 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Source: S&P Global Market Intelligence Data as of Q2-2023 23
Slide 24: Isabella Bank Corporation vs Peer Average
Isabella Bank Corporation Peer Average 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Source: S&P Global Market Intelligence Data as of Q2-2023 24
Slide 25: Isabella Bank Corporation vs Peer Average
Isabella Bank Corporation Peer Average 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Source: S&P Global Market Intelligence Data as of Q2-2023 25
Slide 26: Long History of Growth and Performance
• Long History of Growth and Performance • Strategic Initiatives Improving Key Financial Metrics • Strong Credit Performance • Dividend History and Current Yield • Strong Capital & Liquidity Positions • Focused on Building Long Term Shareholder Value 26
Slide 27: Contact and forward-looking statements
Jerome Schwind President 989.779.6345 | jschwind@isabellabank.com Neil McDonnell Chief Financial Officer 989.779.6236 | nmcdonnell@isabellabank.com This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are b