Isabella Bank Corporation · NASDAQ:ISBA
Isabella Bank — Investor Presentation (April 2023)
27 slides from Isabella Bank's investor presentation, Apr 25, 2023
Slide 1: Slide 1
Slide 2: Agenda
• About Us • Financial Data • Objectives & Strategy • Q&A 2
Slide 3: About Isabella Bank
• Isabella Bank was founded in 1903 • 30 Banking offices throughout seven 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 S CLARE t County city i Z OSTS ISABELLA MIDLAND ( C Counly County Rapids i r Ce UI 5 Mt. @ Pleasant! e r Py a Saginaw = Saginaw MONTCALM A SAGINAW County County e Grand Rapids 7 | Lansing e Detroit| YT Vin ISBA The Best Marketplace
Slide 5: Branches and market share by county
Number Of Market Share / Total Banks In The County Population Branches Rank Market CLARE 3 41% / 2 31,129 3 GRATIOT 2 19% / 3 40,392 4 ISABELLA 10 58% / 1 69,920 6 MECOSTA 5 31% / 1 44,624 7 MIDLAND 2 9% / 4 84,343 7 MONTCALM 3 24% / 2 64,195 7 SAGINAW 4 6% / 7 190,738 12 Branch and market share sou
Slide 6: Expansion history: acquisitions and office openings
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 David J. Maness Chief Executive Officer President Isabella Bank Maness Petroleum Corporation Jerome E. Schwind Richard L. McGuirk President President & Operations
Slide 8: Jae Evans, CEO; 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: Employees
• 377 employees • 333 (88%) are full time employees • 140 (37%) have been with us more than 10 years • 83 (22%) have been with us more than 20 years • 18% employee turnover in 2022 (Industry Average for 2022 was 28%) Information as of March 31, 2023 10
Slide 11: Shareholders and outstanding shares
• 2,730 Shareholders and 7,540,015 Outstanding Shares • 34% of Employees are Shareholders • Current and retired director ownership 19% • Largest Shareholder owns <6% • Paid Cash Dividends Every Year Since 1948 Information as of March 31, 2023 11
Slide 12: Gross Loans and Commercial Loans breakdown
Gross Loans 6.6% Commercial 26.8% Agricultural Commercial Loans Residential Mortgages 59.2% Consumer 13.9% 1.5% 7.4% Real Estate 3.7% Accommodation Services 40.4% Agricultural 4.6% Health Care 6.1% Retail Construction 6.8% Manufacturing Education 9.6% Other 13.5% Information as of March 31, 2023 12
Slide 13: 2022 highlights
• Strong annual results • Core loan growth continues; strong credit quality • Interest expense declined 28% • Investments in Technology -New Online Banking Solution -Enhancing Mobile Banking Solution -New Deposit Account Platform -Phase 2 of Small Business Loan Automation • Expansion of Insurance Of
Slide 14: 2023 focus areas
• Saginaw State Street office opened • Opening of an LPO in Bay City • Focus on operational efficiencies • Asset sensitive balance sheet benefits us in a rising rate environment • Continued effort on stock buyback program 14 14
Slide 15: Liquidity and capital
• Excess cash and liquidity - $793 million – Total cash and cash equivalents – $99 million – Available lines of credit – $344 million – Unencumbered lendable value of collateral – $350 million • Strong capital ratios – Tier 1 leverage – 9.25% – Tier 1 risk-based capital – 13.73% – Total risk-based c
Slide 16: Balance sheet summary, March 31, 2023
% of change since March 31, 2023 December 31, 2022 Assets Under Management $2,915,589 3.82% Total Assets $2,084,624 2.68% Gross Loans $1,270,651 0.51% Investment Securities $568,650 -2.04% Deposits $1,813,528 3.97% Borrowings $61,262 -29.60% Capital $193,333 3.83% Information as of March 31, 2023 In
Slide 17: Information as of March 31, 2023
Information as of March 31, 2023 17
Slide 18: Revenue: Investment Management and Trust Services
$600,000 $3,500 $500,000 $3,000 $2,500 $400,000 Revenue $2,000 Assets $300,000 $1,500 $200,000 $1,000 $100,000 $500 $0 $0 12/31/2019 12/31/2020 12/31/2021 12/31/2022 03/31/2023* Investment Management Trust Services Revenue * Annualized based on actual March 31, 2023 results Information as of March 3
Slide 19: Three months ended March 31, 2023 results
Three Months Ended Three Months Ended % Change March 31, 2023 March 31, 2022 Net Interest Income $15,351 $13,479 13.89% Provision for Credit Losses $41 $37 10.81% Noninterest Income $3,293 $3,547 -7.16% Noninterest Expenses $12,198 $11,320 7.76% Net Income $5,321 $4,734 12.40% Earnings Per Common Sh
Slide 20: Net income and earnings per share
$25,000 $4.00 $22,238 $21,284 $3.50 $19,499 $20,000 $2.95 $2.80 $3.00 Earnings Per Share $2.48 $2.50 Net Income $15,000 $13,024 $10,885 $2.00 $1.65 $10,000 $1.37 $1.50 $1.00 $5,000 $0.50 $0 $0.00 2019 2020 2021 2022 2023* Net Income EPS * Annualized based on actual March 31, 2023 results Information
Slide 21: Isabella Bank 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 Q4-2022 21
Slide 22: Isabella Bank 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 Q4-2022 22
Slide 23: Isabella Bank 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 Q4-2022 23
Slide 24: Isabella Bank 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 Q4-2022 24
Slide 25: Isabella Bank 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 Q4-2022 25
Slide 26: Investment highlights
• 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
Jae Evans Chief Executive Officer 989.779.6215 | jevans@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 statement