Growth in core loans and deposits; pricing competition continues
MT. PLEASANT, Mich., Oct. 19, 2023 /PRNewswire/ -- Isabella Bank Corporation (the "Corporation") (OTCQX: ISBA) has reported net income of $4.4 million for the third quarter of 2023 and $14.4 million for the nine-month period ended September 30, 2023. Earnings per common share were $0.59 for the third quarter of 2023 and $1.91 for the first nine months of the year.
Third Quarter 2023 Highlights:
- Core loan portfolio grew $14.6 million as borrowing demand remained steady.
- Deposits grew $54.5 million, or 3.2%, despite strong pricing competition in the market.
- Wealth management fees increased 26.4% compared to the third quarter of 2022.
- Shareholders earned a cash dividend of $0.28 per share, with an annualized dividend yield of 5.32%, as of September 30, 2023.
"Our financial results for the third quarter are strong despite the continued pressure of rising interest rates and economic uncertainty," said Jae A. Evans, President and Chief Executive Officer. "Competition for deposits continued during the third quarter, leading to increased deposit rates and pressure on our net interest margin. We've benefited from core and non-core loan growth which has mitigated some of this pressure.
"We remain focused on the long-term success of the bank with strategic decisions and initiatives designed to enhance shareholder value and the customer experience," Evans added. "We are pleased to have recently opened a new loan and wealth office in downtown Bay City, expanding our physical presence to Bay County. In addition, a new full-service branch in Saginaw opened earlier this year. The continued, steady growth of our footprint demonstrates our commitment to customers and communities as a leading, independent community bank."
Operating Results
Net income: Net income for the third quarter of 2023 was $4.4 million, compared to $5.9 million in the third quarter of 2022. Net income for the first nine months of the year was $14.4 million, compared to $15.9 million for the same period in 2022. Interest income continued to improve in the third quarter, but fell short of the growth in interest expense due to rising rates on deposits and increased borrowings.
Net interest income: Net interest income for the third quarter of 2023 decreased by $1.5 million compared to the third quarter of 2022. For the first nine months of the year, net interest income increased by $123,000 compared to the same period in 2022. Rising interest rates and loan growth led to an increase in gross interest income of $3.5 million and $10.7 million for the third quarter and first nine months of 2023, compared to the same periods in 2022. Conversely, rising interest rates on deposits and an increase in borrowings led to a $5.0 million and $10.6 million increase in interest expense for the third quarter and first nine months of 2023, compared to the same periods in 2022.
Noninterest income and expenses: Noninterest income was $3.4 million for the third quarter of 2023 versus $3.3 million for the third quarter of 2022. For the first nine months of 2023, noninterest income decreased $83,000 compared to the same period in 2022, driven by a $574,000 reduction in mortgage servicing rights income and a $336,000 decline in the gain on the sale of mortgage loans, offset largely by a $408,000, or 18.4%, increase in wealth management fees. Noninterest expenses increased $741,000 during the third quarter of 2023 and $2.5 million for the nine-month period ended September 30, 2023 in comparison to the same periods in 2022. The increase was the result of increased compensation, equipment expense, FDIC insurance premiums, and other losses.
Net yield on interest earning assets: The Corporation's fully taxable equivalent net yield on interest earning assets was 3.02% and 3.12% for the three and nine months ended September 30, 2023, compared to 3.28% and 3.10% for the same periods in 2022. While the third quarter of 2023 fell in comparison to the same period in 2022, net yield for the first nine months of 2023 improved through strategic initiatives - such as the reduced reliance on higher-cost borrowed funds and brokered deposits - that were implemented in prior periods in anticipation of rising interest rates. To maintain a competitive edge in a rising interest rate environment, the Bank increased most of its deposit rates beginning in the fourth quarter of 2022 and in recent periods, increased the level of borrowings to fund loan growth. As a result, this has negatively impacted the net yield on interest earning assets and further increases could slow the rate of improvement in the net yield on interest earning assets.
Balance Sheet
Assets: Total assets were $2.1 billion and assets under management were $3 billion as of September 30, 2023. Managed assets include loans sold and serviced of $252 million as well as $591 million in investment and trust assets managed by Isabella Wealth. Investment and trust assets increased $77 million, or 14.9%, since December 31, 2022.
Loans: Loans outstanding as of September 30, 2023 totaled $1.3 billion. Core loans increased $14.6 million during the third quarter and rose $45.7 million compared to December 31, 2022. This reflects growth in the commercial and consumer portfolios. In addition, the Bank resumed its engagement in a mortgage participation program in the second quarter, with loans outstanding of $24.8 million as of September 30, 2023. Adherence to strong underwriting standards are reflected in the continued low levels of total past due and nonaccrual loans, which were $1.2 million, or 0.09% of total loans, at the end of the period.
Deposits: Total deposits were $1.8 billion as of September 30, 2023, an increase of $25.2 million, or 1.4%, since December 31, 2022. Strong pricing competition within the industry continues.
Capital: The Bank is considered a "well-capitalized" institution, as its capital ratios exceeded the minimum designated requirements. As of September 30, 2023, the Bank's Tier 1 Leverage Ratio was 8.97%, Tier 1 Capital Ratio was 12.75%, and Total Capital Ratio was 13.67%. The minimum requirements to be considered well capitalized are a Tier 1 Leverage Ratio of 5.0%, Tier 1 Capital Ratio of 8.0%, and Total Capital Ratio of 10.0%.
Dividend: During the third quarter of 2023, the Corporation paid a $0.28 per common share cash dividend. Based on the Corporation's closing stock price of $21.05 as of September 29, 2023, the annualized cash dividend yield was 5.32%.
About the Corporation
Isabella Bank Corporation (OTCQX: ISBA) is the parent holding company of Isabella Bank, a state-chartered community bank headquartered in Mt. Pleasant, Michigan. Isabella Bank was established in 1903 and has been committed to serving its customers' and communities' local banking needs for 120 years. The Bank offers personal and commercial lending and deposit products, as well as investment, trust, and estate planning services through Isabella Wealth. The Bank has 31 locations throughout eight Mid-Michigan counties: Bay, Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw.
For more information about Isabella Bank Corporation, visit the Investor Relations link at www.isabellabank.com. Isabella Bank Corporation common stock is quoted on the OTCQX tier of the OTC Markets Group, Inc.'s electronic quotation system (www.otcmarkets.com) under the symbol "ISBA." The Corporation's investor relations firms include Renmark Financial Communications, Inc. (www.renmarkfinancial.com) and Stonegate Capital Partners, Inc. (www.stonegateinc.com).
Forward-Looking Statements
This press release includes forward-looking statements. To the extent that the foregoing information refers to matters that may occur in the future, please be aware that such forward-looking statements may differ materially from the actual results. Additional information concerning some of the factors that could cause materially different results is included in the sections titled "Risk Factors" and "Forward Looking Statements" set forth in Isabella Bank Corporation's filings with the Securities and Exchange Commission, which are available from the Securities and Exchange Commission's Public Reference facilities and from its website at www.sec.gov.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(Dollars in thousands) | |||
September 30 2023 | December 31 2022 | ||
ASSETS | |||
Cash and cash equivalents | |||
Cash and demand deposits due from banks | $ 48,862 | $ 27,420 | |
Fed Funds sold and interest bearing balances due from banks | 67,017 | 11,504 | |
Total cash and cash equivalents | 115,879 | 38,924 | |
Available-for-sale securities, at fair value | 516,897 | 580,481 | |
Mortgage loans available-for-sale | 105 | 379 | |
Loans | 1,334,674 | 1,264,173 | |
Less allowance for credit losses | 12,767 | 9,850 | |
Net loans | 1,321,907 | 1,254,323 | |
Premises and equipment | 26,960 | 25,553 | |
Corporate owned life insurance policies | 33,654 | 32,988 | |
Equity securities without readily determinable fair values | 15,848 | 15,746 | |
Goodwill and other intangible assets | 48,285 | 48,287 | |
Accrued interest receivable and other assets | 38,955 | 33,586 | |
TOTAL ASSETS | $ 2,118,490 | $ 2,030,267 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Deposits | |||
Noninterest bearing | $ 445,043 | $ 494,346 | |
Interest bearing demand deposits | 363,558 | 372,155 | |
Certificates of deposit under $250 and other savings | 853,991 | 810,642 | |
Certificates of deposit over $250 | 106,882 | 67,132 | |
Total deposits | 1,769,474 | 1,744,275 | |
Borrowed funds | |||
Federal funds purchased and repurchase agreements | 52,330 | 57,771 | |
Federal Home Loan Bank advances | 65,000 | — | |
Subordinated debt, net of unamortized issuance costs | 29,312 | 29,245 | |
Total borrowed funds | 146,642 | 87,016 | |
Accrued interest payable and other liabilities | 17,251 | 12,766 | |
Total liabilities | 1,933,367 | 1,844,057 | |
Shareholders' equity | |||
Common stock — no par value 15,000,000 shares authorized; issued and outstanding 7,490,557 shares (including 136,694 shares held in the Rabbi Trust) in 2023 and 7,559,421 shares (including 154,879 shares held in the Rabbi Trust) in 2022 | 127,680 | 128,651 | |
Shares to be issued for deferred compensation obligations | 3,641 | 5,005 | |
Retained earnings | 95,533 | 89,748 | |
Accumulated other comprehensive income (loss) | (41,731) | (37,194) | |
Total shareholders' equity | 185,123 | 186,210 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 2,118,490 | $ 2,030,267 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(Dollars in thousands except per share amounts) | |||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Interest income | |||||||
Loans, including fees | $ 17,270 | $ 13,563 | $ 48,090 | $ 39,120 | |||
Available-for-sale securities | |||||||
Taxable | 2,327 | 2,209 | 7,211 | 5,851 | |||
Nontaxable | 636 | 726 | 2,019 | 2,090 | |||
Federal funds sold and other | 252 | 521 | 1,255 | 822 | |||
Total interest income | 20,485 | 17,019 | 58,575 | 47,883 | |||
Interest expense | |||||||
Deposits | 5,015 | 908 | 11,953 | 2,698 | |||
Borrowings | |||||||
Federal funds purchased and repurchase agreements | 284 | 9 | 604 | 26 | |||
Federal Home Loan Bank advances | 617 | 33 | 887 | 152 | |||
Subordinated debt, net of unamortized issuance costs | 267 | 266 | 799 | 798 | |||
Total interest expense | 6,183 | 1,216 | 14,243 | 3,674 | |||
Net interest income | 14,302 | 15,803 | 44,332 | 44,209 | |||
Provision for credit losses | (292) | 18 | (55) | 540 | |||
Net interest income after provision for credit losses | 14,594 | 15,785 | 44,387 | 43,669 | |||
Noninterest income | |||||||
Service charges and fees | 2,060 | 2,122 | 6,085 | 6,615 | |||
Wealth management fees | 858 | 679 | 2,625 | 2,217 | |||
Earnings on corporate owned life insurance policies | 229 | 223 | 681 | 655 | |||
Net gain on sale of mortgage loans | 109 | 174 | 232 | 568 | |||
Other | 158 | 54 | 688 | 339 | |||
Total noninterest income | 3,414 | 3,252 | 10,311 | 10,394 | |||
Noninterest expenses | |||||||
Compensation and benefits | 6,639 | 6,369 | 19,789 | 18,480 | |||
Furniture and equipment | 1,612 | 1,490 | 4,822 | 4,382 | |||
Occupancy | 923 | 918 | 2,921 | 2,813 | |||
Other | 3,484 | 3,140 | 9,863 | 9,223 | |||
Total noninterest expenses | 12,658 | 11,917 | 37,395 | 34,898 | |||
Income before federal income tax expense | 5,350 | 7,120 | 17,303 | 19,165 | |||
Federal income tax expense | 937 | 1,233 | 2,939 | 3,249 | |||
NET INCOME | $ 4,413 | $ 5,887 | $ 14,364 | $ 15,916 | |||
Earnings per common share | |||||||
Basic | $ 0.59 | $ 0.78 | $ 1.91 | $ 2.11 | |||
Diluted | $ 0.58 | $ 0.77 | $ 1.89 | $ 2.08 | |||
Cash dividends per common share | $ 0.28 | $ 0.27 | $ 0.84 | $ 0.81 | |||
AVERAGE BALANCES, INTEREST RATE, AND NET INTEREST INCOME (UNAUDITED) (Dollars in thousands) | |||||||||||
The following schedules present the daily average amount outstanding for each major category of interest earning assets, non-earning assets, interest bearing liabilities, and noninterest bearing liabilities. These schedules also present an analysis of interest income and interest expense for the periods indicated. All interest income is reported on a fully taxable equivalent (FTE) basis using a federal income tax rate of 21%. Loans in nonaccrual status, for the purpose of the following computations, are included in the average loan balances. Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) restricted equity holdings are included in other interest earning assets. | |||||||||||
Three Months Ended | |||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||
Average Balance | Tax Equivalent Interest | Average Yield / Rate | Average Balance | Tax Equivalent Interest | Average Yield / Rate | ||||||
INTEREST EARNING ASSETS | |||||||||||
Loans (1) | $ 1,325,455 | $ 17,270 | 5.21 % | $ 1,256,723 | $ 13,563 | 4.32 % | |||||
Taxable investment securities | 478,846 | 2,298 | 1.92 % | 490,751 | 2,190 | 1.79 % | |||||
Nontaxable investment securities | 93,192 | 915 | 3.93 % | 110,058 | 1,002 | 3.64 % | |||||
Fed funds sold | 13 | — | 5.51 % | 16 | — | 1.98 % | |||||
Other | 30,400 | 252 | 3.32 % | 101,687 | 521 | 2.05 % | |||||
Total earning assets | 1,927,906 | 20,735 | 4.30 % | 1,959,235 | 17,276 | 3.53 % | |||||
NONEARNING ASSETS | |||||||||||
Allowance for credit losses | (12,937) | (9,691) | |||||||||
Cash and demand deposits due from banks | 25,287 | 24,875 | |||||||||
Premises and equipment | 26,629 | 24,475 | |||||||||
Accrued income and other assets | 74,244 | 78,151 | |||||||||
Total assets | $ 2,041,129 | $ 2,077,045 | |||||||||
INTEREST BEARING LIABILITIES | |||||||||||
Interest bearing demand deposits | $ 342,175 | 242 | 0.28 % | $ 381,282 | 64 | 0.07 % | |||||
Savings deposits | 595,372 | 2,156 | 1.45 % | 642,916 | 270 | 0.17 % | |||||
Time deposits | 324,399 | 2,617 | 3.23 % | 262,628 | 574 | 0.87 % | |||||
Federal funds purchased and repurchase agreements | 46,574 | 284 | 2.44 % | 49,267 | 9 | 0.07 % | |||||
Federal Home Loan Bank advances | 44,429 | 617 | 5.55 % | 6,739 | 33 | 1.96 % | |||||
Subordinated debt, net of unamortized issuance costs | 29,298 | 267 | 3.65 % | 29,211 | 266 | 3.64 % | |||||
Total interest bearing liabilities | 1,382,247 | 6,183 | 1.79 % | 1,372,043 | 1,216 | 0.35 % | |||||
NONINTEREST BEARING LIABILITIES | |||||||||||
Demand deposits | 451,123 | 497,215 | |||||||||
Other | 16,802 | 13,627 | |||||||||
Shareholders' equity | 190,957 | 194,160 | |||||||||
Total liabilities and shareholders' equity | $ 2,041,129 | $ 2,077,045 | |||||||||
Net interest income (FTE) | $ 14,552 | $ 16,060 | |||||||||
Net yield on interest earning assets (FTE) | 3.02 % | 3.28 % | |||||||||
(1) Includes loans and mortgage loans available-for-sale | |||||||||||
Nine Months Ended | |||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||
Average Balance | Tax Equivalent Interest | Average Yield / Rate | Average Balance | Tax Equivalent Interest | Average Yield / Rate | ||||||
INTEREST EARNING ASSETS | |||||||||||
Loans (1) | $ 1,298,316 | $ 48,090 | 4.94 % | $ 1,251,206 | $ 39,120 | 4.17 % | |||||
Taxable investment securities | 489,782 | 7,125 | 1.94 % | 462,675 | 5,795 | 1.67 % | |||||
Nontaxable investment securities | 99,014 | 2,882 | 3.88 % | 107,041 | 2,934 | 3.65 % | |||||
Fed funds sold | 11 | — | 5.06 % | 8 | — | 1.69 % | |||||
Other | 42,767 | 1,255 | 3.91 % | 113,847 | 822 | 0.96 % | |||||
Total earning assets | 1,929,890 | 59,352 | 4.10 % | 1,934,777 | 48,671 | 3.35 % | |||||
NONEARNING ASSETS | |||||||||||
Allowance for credit losses | (12,786) | (9,372) | |||||||||
Cash and demand deposits due from banks | 25,043 | 24,843 | |||||||||
Premises and equipment | 26,300 | 24,401 | |||||||||
Accrued income and other assets | 75,239 | 87,989 | |||||||||
Total assets | $ 2,043,686 | $ 2,062,638 | |||||||||
INTEREST BEARING LIABILITIES | |||||||||||
Interest bearing demand deposits | $ 356,608 | 582 | 0.22 % | $ 379,952 | 170 | 0.06 % | |||||
Savings deposits | 623,157 | 5,471 | 1.17 % | 628,823 | 600 | 0.13 % | |||||
Time deposits | 298,535 | 5,900 | 2.64 % | 275,586 | 1,928 | 0.93 % | |||||
Federal funds purchased and repurchase agreements | 40,707 | 604 | 1.98 % | 48,119 | 26 | 0.07 % | |||||
Federal Home Loan Bank advances | 21,685 | 887 | 5.45 % | 10,513 | 152 | 1.93 % | |||||
Subordinated debt, net of unamortized issuance costs | 29,275 | 799 | 3.64 % | 29,189 | 798 | 3.65 % | |||||
Total interest bearing liabilities | 1,369,967 | 14,243 | 1.39 % | 1,372,182 | 3,674 | 0.36 % | |||||
NONINTEREST BEARING LIABILITIES | |||||||||||
Demand deposits | 466,725 | 475,373 | |||||||||
Other | 15,619 | 15,242 | |||||||||
Shareholders' equity | 191,375 | 199,841 | |||||||||
Total liabilities and shareholders' equity | $ 2,043,686 | $ 2,062,638 | |||||||||
Net interest income (FTE) | $ 45,109 | $ 44,997 | |||||||||
Net yield on interest earning assets (FTE) | 3.12 % | 3.10 % | |||||||||
(1) Includes loans and mortgage loans available-for-sale | |||||||||||
SELECTED FINANCIAL DATA (UNAUDITED)(Dollars in thousands except per share amounts) | |||||||||
Three Months Ended | |||||||||
September 30 2023 | June 30 2023 | March 31 2023 | December 31 2022 | September 30 2022 | |||||
PER SHARE | |||||||||
Basic earnings | $ 0.59 | $ 0.62 | $ 0.70 | $ 0.84 | $ 0.78 | ||||
Diluted earnings | $ 0.58 | $ 0.61 | $ 0.70 | $ 0.83 | $ 0.77 | ||||
Dividends | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.27 | ||||
Tangible book value | $ 18.27 | $ 18.69 | $ 19.24 | $ 18.25 | $ 16.96 | ||||
Quoted market value | |||||||||
High | $ 23.00 | $ 26.00 | $ 25.10 | $ 24.02 | $ 24.95 | ||||
Low | $ 19.61 | $ 19.13 | $ 22.08 | $ 21.00 | $ 21.39 | ||||
Close (1) | $ 21.05 | $ 20.50 | $ 24.80 | $ 23.50 | $ 21.40 | ||||
Common shares outstanding (1) | 7,490,557 | 7,496,826 | 7,540,015 | 7,559,421 | 7,564,348 | ||||
Average number of common shares outstanding | 7,495,168 | 7,498,584 | 7,556,585 | 7,564,405 | 7,555,333 | ||||
Average number of diluted common shares outstanding | 7,570,374 | 7,567,527 | 7,634,417 | 7,648,152 | 7,650,950 | ||||
PERFORMANCE RATIOS | |||||||||
Return on average total assets | 0.86 % | 0.91 % | 1.04 % | 1.24 % | 1.13 % | ||||
Return on average shareholders' equity | 9.24 % | 9.47 % | 11.35 % | 14.01 % | 12.13 % | ||||
Return on average tangible shareholders' equity | 12.37 % | 12.58 % | 15.28 % | 19.14 % | 16.15 % | ||||
Net interest margin yield (FTE) | 3.02 % | 3.11 % | 3.22 % | 3.43 % | 3.28 % | ||||
ASSETS UNDER MANAGEMENT (1) | |||||||||
Loans sold with servicing retained | $ 252,176 | $ 254,934 | $ 259,512 | $ 264,206 | $ 268,879 | ||||
Assets managed by Isabella Wealth | $ 590,666 | $ 593,530 | $ 571,453 | $ 513,918 | $ 464,136 | ||||
Total assets under management | $ 2,961,332 | $ 2,890,912 | $ 2,915,589 | $ 2,808,391 | $ 2,796,992 | ||||
ASSET QUALITY (1) | |||||||||
Nonaccrual loans | $ 520 | $ 414 | $ 488 | $ 457 | $ 580 | ||||
Foreclosed assets | $ 509 | $ 405 | $ 414 | $ 439 | $ 240 | ||||
Net loan charge-offs (recoveries) | $ (254) | $ (3) | $ (9) | $ (230) | $ 41 | ||||
Nonperforming loans to gross loans | 0.04 % | 0.04 % | 0.04 % | 0.04 % | 0.05 % | ||||
Nonperforming assets to total assets | 0.05 % | 0.05 % | 0.05 % | 0.05 % | 0.04 % | ||||
Allowance for credit losses to gross loans | 0.96 % | 0.96 % | 0.99 % | 0.78 % | 0.78 % | ||||
CAPITAL RATIOS (1) | |||||||||
Shareholders' equity to assets | 8.74 % | 9.23 % | 9.27 % | 9.17 % | 8.56 % | ||||
Tier 1 leverage | 8.77 % | 8.70 % | 8.58 % | 8.61 % | 8.44 % | ||||
Common equity tier 1 capital | 12.43 % | 12.39 % | 12.71 % | 12.91 % | 12.92 % | ||||
Tier 1 risk-based capital | 12.43 % | 12.39 % | 12.71 % | 12.91 % | 12.92 % | ||||
Total risk-based capital | 15.39 % | 15.37 % | 15.77 % | 15.79 % | 15.85 % | ||||
(1) At end of period | |||||||||
SELECTED FINANCIAL DATA (UNAUDITED)(Dollars in thousands except per share amounts) | |||||
Nine Months Ended | |||||
September 30 2023 | September 30 2022 | September 30 2021 | |||
PER SHARE | |||||
Basic earnings | $ 1.91 | $ 2.11 | $ 1.85 | ||
Diluted earnings | $ 1.89 | $ 2.08 | $ 1.82 | ||
Dividends | $ 0.84 | $ 0.81 | $ 0.81 | ||
Tangible book value | $ 18.27 | $ 16.96 | $ 21.87 | ||
Quoted market value | |||||
High | $ 26.00 | $ 26.25 | $ 26.74 | ||
Low | $ 19.13 | $ 21.39 | $ 19.45 | ||
Close (1) | $ 21.05 | $ 21.40 | $ 26.03 | ||
Common shares outstanding (1) | 7,490,557 | 7,564,348 | 7,926,610 | ||
Average number of common shares outstanding | 7,517,680 | 7,544,909 | 7,948,578 | ||
Average number of diluted common shares outstanding | 7,591,664 | 7,647,117 | 8,065,252 | ||
PERFORMANCE RATIOS | |||||
Return on average total assets | 0.94 % | 1.03 % | 0.97 % | ||
Return on average shareholders' equity | 10.01 % | 10.62 % | 8.82 % | ||
Return on average tangible shareholders' equity | 13.39 % | 14.01 % | 11.28 % | ||
Net interest margin yield (FTE) | 3.12 % | 3.10 % | 2.87 % | ||
ASSETS UNDER MANAGEMENT (1) | |||||
Loans sold with servicing retained | $ 252,176 | $ 268,879 | $ 285,392 | ||
Assets managed by Isabella Wealth | $ 590,666 | $ 464,136 | $ 491,784 | ||
Total assets under management | $ 2,961,332 | $ 2,796,992 | $ 2,859,877 | ||
ASSET QUALITY (1) | |||||
Nonaccrual loans | $ 520 | $ 580 | $ 3,077 | ||
Foreclosed assets | $ 509 | $ 240 | $ 348 | ||
Net loan charge-offs (recoveries) | $ (266) | $ (34) | $ 52 | ||
Nonperforming loans to gross loans | 0.04 % | 0.05 % | 0.25 % | ||
Nonperforming assets to total assets | 0.05 % | 0.04 % | 0.18 % | ||
Allowance for credit losses to gross loans | 0.96 % | 0.78 % | 0.73 % | ||
CAPITAL RATIOS (1) | |||||
Shareholders' equity to assets | 8.74 % | 8.56 % | 10.64 % | ||
Tier 1 leverage | 8.77 % | 8.44 % | 8.37 % | ||
Common equity tier 1 capital | 12.43 % | 12.92 % | 13.07 % | ||
Tier 1 risk-based capital | 12.43 % | 12.92 % | 13.07 % | ||
Total risk-based capital | 15.39 % | 15.85 % | 16.03 % | ||
(1) At end of period | |||||
SUPPLEMENTAL BALANCE SHEET DATA (UNAUDITED)(Dollars in thousands) | |||||||||
September 30 2023 | June 30 2023 | March 31 2023 | December 31 2022 | September 30 2022 | |||||
Commercial and industrial | $ 195,814 | $ 194,914 | $ 189,185 | $ 178,428 | $ 180,124 | ||||
Commercial real estate | 566,639 | 564,254 | 566,410 | 566,012 | 552,399 | ||||
Advances to mortgage brokers | 24,807 | 39,099 | — | — | 1,484 | ||||
Agricultural | 99,233 | 96,689 | 94,760 | 104,985 | 97,527 | ||||
Residential real estate | 348,196 | 343,474 | 336,186 | 336,694 | 330,232 | ||||
Consumer | 99,985 | 95,972 | 84,110 | 78,054 | 74,385 | ||||
Gross loans | $ 1,334,674 | $ 1,334,402 | $ 1,270,651 | $ 1,264,173 | $ 1,236,151 | ||||
September 30 2023 | June 30 2023 | March 31 2023 | December 31 2022 | September 30 2022 | |||||
Noninterest bearing demand deposits | $ 445,043 | $ 458,845 | $ 478,829 | $ 494,346 | $ 510,127 | ||||
Interest bearing demand deposits | 363,558 | 335,922 | 383,602 | 372,155 | 368,537 | ||||
Savings deposits | 628,795 | 606,644 | 662,495 | 625,734 | 651,129 | ||||
Certificates of deposit | 331,829 | 313,288 | 288,103 | 251,541 | 260,741 | ||||
Internet certificates of deposit | 249 | 249 | 499 | 499 | 499 | ||||
Total deposits | $ 1,769,474 | $ 1,714,948 | $ 1,813,528 | $ 1,744,275 | $ 1,791,033 | ||||
September 30 2023 | June 30 2023 | March 31 2023 | December 31 2022 | September 30 2022 | |||||
U.S. Treasury | $ 209,182 | $ 209,353 | $ 212,086 | $ 208,701 | $ 206,791 | ||||
States and political subdivisions | 89,773 | 95,242 | 108,719 | 117,512 | 114,000 | ||||
Auction rate money market preferred | 2,570 | 2,637 | 2,716 | 2,342 | 2,479 | ||||
Mortgage-backed securities | 32,923 | 35,532 | 37,797 | 39,070 | 41,042 | ||||
Collateralized mortgage obligations | 175,630 | 180,996 | 200,252 | 205,728 | 209,720 | ||||
Corporate | 6,819 | 6,737 | 7,080 | 7,128 | 7,201 | ||||
Available-for-sale securities, at fair value | $ 516,897 | $ 530,497 | $ 568,650 | $ 580,481 | $ 581,233 | ||||
September 30 2023 | June 30 2023 | March 31 2023 | December 31 2022 | September 30 2022 | |||||
Securities sold under agreements to repurchase without stated maturity dates | $ 52,330 | $ 37,102 | $ 31,995 | $ 57,771 | $ 52,479 | ||||
Federal Home Loan Bank advances | 65,000 | 55,000 | — | — | — | ||||
Subordinated debt, net of unamortized issuance costs | 29,312 | 29,290 | 29,267 | 29,245 | 29,225 | ||||
Total borrowed funds | $ 146,642 | $ 121,392 | $ 61,262 | $ 87,016 | $ 81,704 | ||||
SUPPLEMENTAL STATEMENTS OF INCOME DATA (UNAUDITED)(Dollars in thousands) | |||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Service charges and fees | |||||||
ATM and debit card fees | $ 1,250 | $ 1,212 | $ 3,654 | $ 3,507 | |||
Service charges and fees on deposit accounts | 598 | 673 | 1,797 | 1,913 | |||
Freddie Mac servicing fee | 154 | 168 | 475 | 506 | |||
Net mortgage servicing rights income (loss) | (20) | — | (97) | 477 | |||
Other fees for customer services | 78 | 69 | 256 | 212 | |||
Total service charges and fees | 2,060 | 2,122 | 6,085 | 6,615 | |||
Wealth management fees | 858 | 679 | 2,625 | 2,217 | |||
Earnings on corporate owned life insurance policies | 229 | 223 | 681 | 655 | |||
Net gain on sale of mortgage loans | 109 | 174 | 232 | 568 | |||
Other | 158 | 54 | 688 | 339 | |||
Total noninterest income | $ 3,414 | $ 3,252 | $ 10,311 | $ 10,394 | |||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Compensation and benefits | $ 6,639 | $ 6,369 | $ 19,789 | $ 18,480 | |||
Furniture and equipment | 1,612 | 1,490 | 4,822 | 4,382 | |||
Occupancy | 923 | 918 | 2,921 | 2,813 | |||
Other | |||||||
Audit, consulting, and legal fees | 672 | 595 | 1,764 | 1,749 | |||
ATM and debit card fees | 471 | 543 | 1,280 | 1,485 | |||
Marketing costs | 398 | 209 | 883 | 812 | |||
Other losses | 198 | 93 | 770 | 409 | |||
Memberships and subscriptions | 259 | 230 | 729 | 654 | |||
Donations and community relations | 252 | 239 | 692 | 665 | |||
FDIC insurance premiums | 228 | 138 | 689 | 394 | |||
Loan underwriting fees | 206 | 243 | 637 | 640 | |||
Director fees | 179 | 210 | 581 | 598 | |||
All other | 621 | 640 | 1,838 | 1,817 | |||
Total other noninterest expenses | 3,484 | 3,140 | 9,863 | 9,223 | |||
Total noninterest expenses | $ 12,658 | $ 11,917 | $ 37,395 | $ 34,898 | |||
View original content:https://www.prnewswire.com/news-releases/isabella-bank-corporation-announces-third-quarter-2023-earnings-301962707.html
SOURCE Isabella Bank Corporation