Isabella Bank Corp(US:ISBA)2025-05-08 20:21AFS Securities - As of March 31, 2025, the total amortized cost of AFS securities is $534,513,000, with a fair value of $513,040,000, reflecting unrealized losses of $21,639,000[31]. - The total unrealized losses for AFS securities categorized by investment type include $21,275,000 for securities held for less than twelve months and $21,639,000 for those held for twelve months or more[34]. - The company has not recognized any allowance for credit losses on AFS securities in an unrealized loss position, indicating no impairment due to credit quality concerns[34]. - The total fair value of U.S. Treasury securities decreased from $220,571,000 on December 31, 2024, to $212,783,000 on March 31, 2025[31]. - The company’s investment in mortgage-backed securities has an amortized cost of $27,545,000 and a fair value of $25,828,000, resulting in unrealized losses of $1,717,000[31]. - The total number of securities in an unrealized loss position increased to 306 as of March 31, 2025, compared to 353 on December 31, 2024[34]. - The unrealized gains on AFS securities improved by $5,014 million for the three months ended March 31, 2025, compared to a loss of $2,926 million in the same period of 2024[90]. - Unrealized gains (losses) for AFS securities in Q1 2025 totaled $(215) million, with total unrealized gains of $5,014 million, compared to $(2,926) million in Q1 2024[91]. - The tax effect on unrealized gains (losses) resulted in a net of $(215) million in Q1 2025, compared to $(2,294) million in Q1 2024[91]. - The total available-for-sale (AFS) securities increased to $513,040 from $489,029 as of December 31, 2024, representing a growth of approximately 4.9%[104]. Loan Portfolio - Total loan portfolio balance as of March 31, 2025, is $1,367,724, a decrease from $1,423,571 as of December 31, 2024, representing a decline of approximately 3.9%[36]. - Commercial and industrial loans account for 18.22% of the total loan portfolio, increasing from 17.20% in the previous quarter[36]. - Total commercial real estate loans increased to $552,234, representing 40.38% of the total loan portfolio, up from 38.46%[36]. - Residential real estate loans increased to $387,348, accounting for 28.32% of the total loan portfolio, up from 26.75%[36]. - Nonaccrual loans in the residential real estate category totaled $173 as of March 31, 2025, down from $282 as of December 31, 2024[46]. - Total past due loans amount to $5,202, with 30-59 days past due at $5,202, and 90 days or more past due at $82[46]. - The company limits direct credit exposure to any one borrower to $18,000, with larger needs serviced through loan participations[38]. - The company requires a loan-to-value ratio of 80% or less for commercial and agricultural real estate loans[38]. - Total commercial and industrial loans amount to $244,894 million, with past due loans of $328 million[47]. - Total commercial real estate loans stand at $547,447 million, including $817 million past due[47]. - Total agricultural loans are $99,694 million, with no past due loans reported[47]. - Total residential real estate loans reach $380,872 million, with past due loans of $3,875 million[47]. - Total consumer loans amount to $87,584 million, with past due loans of $251 million[47]. - Overall, total loans amount to $1,423,571 million, with total past due loans of $502 million[47]. - The company has seen a significant amount of loans converted to term loans, indicating a shift in loan structure[49]. - Overall, the company maintains a diversified loan portfolio with a focus on managing credit risk effectively[49]. Credit Quality and Risk Management - The allowance for credit losses (ACL) as of March 31, 2025, was $12,735 million, reflecting a decrease from $12,895 million as of December 31, 2024[79]. - The collectively evaluated ACL to gross loans ratio was 0.93% as of March 31, 2025, compared to 0.91% as of December 31, 2024[79]. - Charge-offs for the three months ended March 31, 2025, totaled $172 million, while recoveries amounted to $224 million[77]. - The provision for credit losses for the three months ended March 31, 2024, was $328 million, indicating a proactive approach to managing credit risk[77]. - The company has implemented lending policies to maximize loan income while managing risk, with regular reviews by the Board[53]. - Internally assigned credit risk ratings are reviewed at least during loan renewals or when credit quality changes are known[54]. - The classification of loans includes categories from "Excellent" to "Loss," indicating varying levels of credit risk[56][58]. - The primary credit quality indicator for residential real estate and consumer loans is the individual loan's past due status[60]. - The company continues to monitor borrower financial difficulties closely, considering factors such as cash flow and potential defaults[65]. - The company does not modify loans by forgiving principal or accrued interest, ensuring the integrity of the loan modification process[66]. Financial Performance - Basic earnings per common share for the three months ended March 31, 2025, was $0.53, an increase from $0.42 in the same period of 2024[88]. - The net income for the three months ended March 31, 2025, was $3,949 million, compared to $3,131 million for the same period in 2024[88]. - The total capital to risk-weighted assets ratio was 12.99% for Isabella Bank and 15.50% for consolidated figures as of March 31, 2025[89]. - The Common Equity Tier 1 capital to risk-weighted assets ratio was 12.08% for Isabella Bank and 12.58% for consolidated figures as of March 31, 2025, exceeding the minimum required ratios[89]. Borrowings and Collateral - As of March 31, 2025, short-term borrowings from securities sold under repurchase agreements amounted to $47,310 million with a weighted average interest rate of 3.21%[81]. - The total amount pledged to secure borrowed funds was $519,967 million as of March 31, 2025, compared to $548,987 million as of December 31, 2024[82]. - The company had the ability to borrow an additional $377,824 million without pledging additional collateral as of March 31, 2025[83]. Fair Value Measurements - Fair value measurement categorizes assets and liabilities into three levels, with Level 1 based on quoted prices in active markets and Level 3 based on unobservable inputs[92]. - As of March 31, 2025, the fair value of collateral-dependent loans was $145 million, with a 20% discount applied to collateral[98]. - The fair value of OMSR as of March 31, 2025, was $2,366 million, with a constant prepayment rate of 7% and a discount rate of 11%[100]. - The carrying amount of gross loans as of March 31, 2025, was $1,367,724 million, with an estimated fair value of $1,321,419 million[103]. - Cash and cash equivalents were recorded at $69,179 million, with an equal estimated fair value[103]. - Deposits without stated maturities totaled $1,407,670 million, matching their estimated fair value[103]. - The estimated fair value of subordinated debt as of March 31, 2025, was $27,916 million, compared to a carrying amount of $29,447 million[103]. - As of March 31, 2025, total assets and liabilities measured at fair value amounted to $513,834, with $513,040 classified as recurring items[104]. - The percentage of assets and liabilities measured at fair value remained stable, with 99.85% classified under Level 2 as of March 31, 2025[104]. - The company had no other assets or liabilities recorded at fair value with changes recognized through earnings on a recurring or nonrecurring basis as of March 31, 2025[104].