1. Q4 2024 net income increased to $4 million, up from $3.8 million. 2. 2024 core earnings decreased to $15 million, down from $18 million in 2023. 3. Net interest margin improved to 2.99%, benefiting from repricing loans and securities. 4. Total assets decreased to $2.1 billion, driven by lower AFS securities. 5. Best Bank awards received enhance brand perception, supporting customer trust.
While net income increased, overall profitability decreased, suggesting caution for investors.
The financial results provide insights into ISBA's performance and future potential.
Short-term fluctuations in earnings and operational performance may impact stock price visibly.
MT. PLEASANT, Mich., Jan. 30, 2025 /PRNewswire/ -- Isabella Bank Corporation (OTCQX: ISBA) (the "Company" or "we") reported fourth quarter 2024 net income of $4.0 million, or $0.54 per diluted share, an increase compared to $3.8 million, or $0.51 per diluted share in the same quarter of 2023.
The non-GAAP measure of core earnings in the fourth quarter 2024 totaled $3.9 million, or $0.52 per diluted share, an increase compared to $3.8 million, or $0.50 per diluted share for the same quarter of 2023.
Net income was $13.9 million, or $1.86 per diluted share, compared to $18.2 million, or $2.40 per diluted share for 2023. The non-GAAP measure of 2024 core earnings was $15.0 million, or $2.01 per diluted share, compared to $18.0 million, or $2.37 per diluted share, in 2023.
"Over the past several quarters we've emphasized that our financial performance is based on the strength of our core operations and maintaining our earnings momentum, and this quarter reflected the same focus," said the Chief Executive Officer Jerome Schwind. He noted that net interest margin expanded again in the fourth quarter, when non-recurring loan recoveries are excluded, and continues to grow core loans while adhering to our disciplined credit culture.
"We enter 2025 looking forward to continued repricing of low fixed rate loans to variable rates, and the redeployment of more than $70 million of securities that will amortize and mature during the year," Schwind added. "Our teams also have been working on initiatives that will drive higher noninterest income, mostly in the second half of 2025. We are well-positioned to deliver long-term value to our shareholders in 2025 and beyond.
"What sets Isabella Bank apart is the talent, dedication, and teamwork of our employees, who continue to deliver exceptional service and financial strength, as noted by reader's choice awards across our market," Schwind added. In September 2024, the Company was honored as the Best Bank in Isabella County by The Morning Sun People's Choice Awards. In December 2024, Midland Daily News recognized Isabella Bank as the Best Bank in Midland County through its Reader's Choice Awards. Most recently, in January 2025, The Pioneer named Isabella Bank the Best Bank in Mecosta County serving the Big Rapids region in its Pioneer All Area Reader's Choice Awards.
Total assets were $2.1 billion, down $20.7 million, primarily due to relatively flat total loans and a decline in available-for-sale (AFS) securities from amortization, maturities and a lower valuation of the portfolio in the fourth quarter.
AFS securities were $489.0 million, down $17.8 million, at the end of fourth quarter 2024. The decrease was due to a $5.5 million increase in the net unrealized loss and $17.7 million of amortization and maturities related to agency and municipal securities, offset by $5,400 of municipal bond purchases. Net unrealized losses on securities totaled $26 million and $21 million at the end of the fourth and third quarters, respectively. Net unrealized losses as a percentage of total AFS securities increased to 5% from 4% at the end of the third quarter of 2024 due to an increase in bond yields.
While bond rates may vary from quarter to quarter, unrealized losses are expected to decrease as bonds approach their maturity dates over the next two years.
Total loans remained steady at $1.42 billion at the end of the fourth quarter, due to an increase of $11.0 million in residential loans and $4.3 million in commercial and industrial loans, offset by a $13.1 million decrease in advances to mortgage brokers. The increase in residential loans was related to steady new volume and continued slowing of prepayments. The growth in commercial and industrial loans primarily was in the hotel and construction industries.
Net interest margin (NIM) was 2.99%, an increase from 2.98% last quarter and 2.83% in the fourth quarter of 2023. The yield on loans expanded to 5.67% in fourth quarter, up from 5.20% in the same quarter of 2023.
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, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended and Rule 3b-6 promulgated thereunder.
This document contains certain non-GAAP financial measures in addition to results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").
For more information about Isabella Bank Corporation, visit the Investor Relations link at www.isabellabank.com.