1. ISBA reported Q1 2025 net income of $3.9 million, up from $3.1M. 2. NIM has increased to 3.06%, reflecting effective asset management. 3. Total deposits rose to $1.80 billion, demonstrating customer trust. 4. Loan growth primarily in commercial real estate and hospitality sectors. 5. Credit quality improved with reduced nonaccrual loans and recoveries.
The increase in net income and NIM suggests strong operational performance, likely boosting stock value.
The article highlights substantial financial improvement, affecting investor sentiment and likely stock price positively.
Immediate financial results typically lead to short-term stock price movement, as investors react quickly.
MT. PLEASANT, Mich., April 17, 2025 /PRNewswire/ --
Isabella Bank Corporation (OTCQX: ISBA) (the "Company" or "we") reported first quarter 2025 net income of $3.9 million, or $0.53 per diluted share, compared to $3.1 million, or $0.42 per diluted share in the same quarter of 2024. The non-GAAP measure of core earnings in the first quarter 2025 totaled $4.3 million, or $0.57 per diluted share, compared to $3.1 million, or $0.41 per diluted share for the same quarter of 2024.
"The Company had a strong first quarter as we expanded net interest margin (NIM), increased fee-based income and continued to improve credit quality," said Jerome Schwind, Chief Executive Officer.
"NIM has continued an upward trend since the first quarter of 2024 because of earning asset repricing and a lower cost of funds."
"In addition, our credit quality remains strong, and we have a successful history of collecting even when loans are charged off. In the first quarter, we recovered a significant amount of contractual interest related to nonperforming loans, which improved NIM by four basis points. Additionally, in the first week of April, we fully recovered a $1.6 million overdraft charge that was incurred in the third quarter of 2024. All loans to the overdrawn customer have been paid in full. Our ability to recover funds is a testament to our disciplined approach to credit quality and the strong relationships that we build in the communities we serve."
Schwind said the company also executed a strategy during the quarter to restructure a large portion of our bank-owned life insurance policies into a higher-yielding separate account. "While some new policies were added and accretive in the first quarter," he said, "the full transition and impact is expected by the third quarter 2025. We also have completed a study of all other components of fee-based income, and revenue enhancements are expected to launch by the end of the third quarter 2025.
"We are pleased with our start to 2025," Schwind added. "Our team is committed to our customers and communities, and we continue to focus on our fee businesses, balance sheet management, and credit performance. These strategic priorities drive all areas of revenue and expense control, expanding both return on assets and return on capital for the long term."
Total assets were $2.1 billion, up $16.3 million, primarily due to an increase of $38.7 million in interest bearing cash, $19.0 million in gross securities, and $11.0 million increase in bank-owned life insurance (BOLI) assets, offset by a $60.1 million decrease in advances to mortgage brokers.
Available-for-sale (AFS) securities at fair value were $513.0 million, growing $24.0 million at the end of first quarter 2025. The increase was driven by $40.4 million in purchases of collateralized mortgage obligation securities with a weighted-average yield of 4.56%. Amortization and maturities of $21.1 million partially offset the increase from purchases. Net unrealized losses on securities totaled $21.5 million and $26.5 million at the end of the first and fourth quarters, respectively.
Net unrealized losses as a percentage of total AFS securities decreased to 4% from 5% at the end of the fourth quarter of 2024 due to the treasury portfolio rapidly approaching maturity and a decrease in market yields.
NIM was 3.06%, an increase from 2.98% in the fourth quarter of 2024 and from 2.79% in the first quarter of 2024. During the first quarter, we recovered the full contractual interest from nonaccruing loans that paid off, which contributed four basis points to NIM. The book yield from securities was 2.20% and 2.25% during the first quarters of 2025 and 2024, respectively.
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 over 120 years.
Information in this release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933...
This document contains certain non-GAAP financial measures...
(Dollars in thousands except per share amounts and ratios)
| Three Months Ended | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Basic earnings | $0.53 | $0.54 |
| Diluted earnings | $0.53 | $0.54 |
| Core diluted earnings | $0.57 | $0.52 |
| Dividends | $0.28 | $0.28 |