MOUNT PLEASANT, MI / ACCESS Newswire / February 5, 2026 / Isabella Bank Corporation (Nasdaq:ISBA) ("Isabella" or the "Company") reported net income of $4.7 million, or $0.64 per diluted share, for the fourth quarter 2025 compared to $4.0 million, or $0.54 per diluted share, for the fourth quarter 2024. Net income for the year endedDecember 31, 2025 was $18.9 million, or $2.56 per diluted share, compared to $13.9 million, or $1.86 per diluted share, for the year endedDecember 31, 2024.

2025 HIGHLIGHTS

• Loans, excluding advances to mortgage brokers, grew $99 million, or 7%

• Isabella Wealth assets under management increased $49 million, or 7%, to $707 million

• Total deposits increased $73 million, or 4%

• Net income growth of 36% from 2024

• Net interest margin ("NIM") improved to 3.16%, up from 2.90% in 2024

• Credit quality was strong, with a ratio of nonperforming loans to total loans of 0.30% at December 31, 2025

"Isabella Bank Corporation had an outstanding 2025, driven by growth across our markets and increases in our loans, deposits, and wealth management services," said CEO Jerome Schwind. "During the year, we also launched initiatives to strengthen our noninterest income, which are already contributing positive results. We continue to attract new customers while remaining focused on our current customers," he added.

"We uplisted our stock to the Nasdaq in May, and have seen significant volume and price growth since then," Schwind added. "Together, our strong financial results and stock performance position us well as we enter 2026."

FINANCIAL CONDITION

Total assets were $2.2 billion as of December 31, 2025, up $123.2 million compared to December 31, 2024, primarily due to increases of $112.8 million in loans, $11.3 million in the value of bank-owned life insurance ("BOLI") policies, and $8.8 million in available-for-sale ("AFS") securities.

AFS securities at fair value were $497.8 million as of December 31, 2025, increasing $8.8 million compared to December 31, 2024. The increase during the year was largely driven by purchases of $67.3 million and an improvement in net unrealized losses of $16.6 million, partially offset by amortizations and maturities totaling $75.2 million. Net unrealized losses on AFS securities totaled $9.9 million as of December 31, 2025, compared to $26.5 million at December 31, 2024. Net unrealized losses as a percentage of the fair value of AFS securities decreased to 2% from 5%, primarily due to the treasury portfolio rapidly approaching maturity.

Loans were $1.5 billion as of December 31, 2025, increasing $112.8 million compared to December 31, 2024. Adjusted loans, which excludes advances to mortgage brokers, grew $99.2 million since year-end 2024. Advances to mortgage brokers increased $13.6 million in 2025 due to increased participation demand from the counterparty.

During the year, the commercial real estate and commercial and industrial portfolios grew $48.0 million and $19.8 million, respectively. Residential mortgages increased $47.0 million since year-end 2024. Most residential originations were adjustable-rate products, which are retained on the balance sheet rather than sold in the secondary market. The consumer loan portfolio declined $18.1 million during 2025 amid decreasing demand, competition, and an adherence to credit quality standards.

The allowance for credit losses ("ACL") was $13.7 million at December 31, 2025, an increase of $832,000 from December 31, 2024. The increase reflects loan growth and an increase of specific reserves, offset by improvement in historical loss experience driven by the recovery of previously charged-off loans during the year. Nonaccrual loans remained low during 2025 and were $4.6 million as of December 31, 2025. Past due and accruing accounts between 30 to 89 days, as a percentage of loans, were 0.44% at December 31, 2025 compared to 0.40% at December 31, 2024. Overall credit quality remains strong.

BOLI assets were $46.1 million at December 31, 2025, an increase of $11.3 million from December 31, 2024. The growth was primarily a result of the purchase of $10.2 million of new policies in 2025. During the year, approximately $13 million of existing general account policies were surrendered and/or exchanged and redeployed into separate account policies. The separate account policies are expected to have higher yields.

Total deposits were $1.8 billion at December 31, 2025, an increase of $72.6 million from December 31, 2024. Interest bearing demand deposit accounts increased by $28.6 million during 2025. Consumer demand for retail certificates of deposit accounts continues to be strong based on the current elevated market interest rate environment, resulting in a $22.5 million increase during the year.

Total equity was $231.4 million, or $31.60 per share, at December 31, 2025 compared to $210.3 million, or $28.32 per share, at December 31, 2024. Tangible book value per share (non-GAAP) was $25.01 as of December 31, 2025, compared to $21.82 as of December 31, 2024. Net unrealized losses in the AFS securities portfolio reduced tangible book value per share by $1.09 and $2.82 for the respective periods. Share repurchases totaled 156,957 during 2025 at an average price of approximately $30.00.

RESULTS OF OPERATIONS

Net income in the fourth quarter of 2025 was $4.7 million, or $0.64 per diluted share, compared with $4.0 million, or $0.54 per diluted share, in the same quarter of 2024. Net income for the year endedDecember 31, 2025 was $18.9 million, or $2.56 per diluted share, compared with $13.9 million, or $1.86 per diluted share, for the year endedDecember 31, 2024.

Net interest income was $16.7 million in the fourth quarter of 2025 compared to $14.6 million in the fourth quarter of 2024, representing 3.28% and 2.98% of earning assets, or NIM, respectively. The book yield on securities was 2.47% and 2.18% during the fourth quarters of 2025 and 2024, respectively. The yield on loans expanded to 5.74% in the fourth quarter of 2025 from 5.67% in the fourth quarter of 2024. The expansion in loan yields was primarily due to higher rates on new loans and variable rate commercial loans that continue to reprice. The cost of interest-bearing liabilities in the fourth quarter of 2025 decreased to 2.24% from 2.38% in the fourth quarter of 2024 primarily due to lower rates on the money market and certificate of deposit products.

Net interest income was $62.5 million for the year endedDecember 31, 2025 compared with $55.8 million for the year endedDecember 31, 2024. NIM and the yield on interest earning assets for the year endedDecember 31, 2025 were 3.16% and 4.84%, respectively, compared to 2.90% and 4.65%, respectively, for the year endedDecember 31, 2024. The yield on loans increased to 5.75%, from 5.58%, and the cost of interest-bearing liabilities decreased to 2.25% from 2.37% for 2025 and 2024, respectively. The explanations for the improvement in NIM are consistent with those provided in the quarterly comparison above.

The provision for credit losses in the fourth quarter of 2025 was $434,000, which reflects a $578,000 increase in the ACL on loans, net charge offs totaling $34,000, and a $178,000 decrease in the reserve for unfunded commitments. The provision for loan losses in the same period of 2024 was $376,000, reflecting growth in adjusted loans, unfunded commitments, and $102,000 in net charge offs. The year-to-date provision for credit loss was a credit of $563,000, as compared to a provision of $1.9 million in 2024. Recoveries during 2025 totaled $2.3 million, of which $1.6 million was related to the overdrawn deposit accounts from a single customer charged off during the third quarter of 2024. The $1.6 million charge off and subsequent recovery, net of tax, impacted diluted earnings per share by $0.17 in 2025 and $0.16 in 2024.

Noninterest income was $4.4 million in the fourth quarter of 2025 compared to $4.0 million in the fourth quarter of 2024. Service charges and fees increased $275,000 and was mostly the result of internal initiatives designed to align our fees within our market. Earnings on BOLI policies increased $226,000 due to new investments in a separate account BOLI, which was offset in part by a one-time expense of $120,000 due to restructuring charges. Wealth management fees grew $59,000 due to growth in assets under management throughout the year. For the year endedDecember 31, 2025, noninterest income was $16.0 million, compared to $14.6 million for the year endedDecember 31, 2024. The $1.4 million increase compared to the prior year was primarily driven by increased earnings on BOLI policies of $618,000, service charges and fees of $583,000, and wealth management fees of $206,000.

Noninterest expenses were $13.9 million in the fourth quarter of 2025 compared to $13.3 million in the fourth quarter of 2024. Other professional services increased $231,000 primarily due to an increase in outsourced services. Compensation and benefit expenses increased $192,000 reflecting annual merit increases and increased incentives compared to the fourth quarter of 2024. For the year ended December 31, 2025, noninterest expenses were $55.0 million, up $2.8 million compared to the year ended December 31, 2024. Theincrease was primarily driven by increased compensation and benefits of $1.5 million and other professional services of $1.0 million. The increase in compensation and benefits was due to annual merit increases, higher medical insurance claims throughout the year, and increased incentives. The increase in other professional services was due to an increase in outsourced services, costs associated with profitability initiatives, and legal fees related to the uplisting to the Nasdaq.

Income tax expense was $2.1 million in the fourth quarter 2025, compared to $825,000 in the fourth quarter 2024. The effective tax rate (ETR) was 31% and 17% for the aforementioned periods, respectively. The ETR in the fourth quarter 2025 included a one-time expense totaling $942,000 to write-off deferred tax assets. For the year ended December 31, 2025, income tax expense was $5.2 million, compared to $2.5 million for the year endedDecember 31, 2024. The ETR was 22% for the year ended 2025, compared to 15% for the year ended 2024. Income tax expense in 2025 included a one-time expense totaling $195,000 due to the taxes owed from the lifetime earnings on BOLI policies that were surrendered during the year. Excluding the one-time charges during 2025, the ETR was 17%, which was higher than the prior year due to higher pretax income.

About Isabella Bank Corporation

Isabella Bank Corporation (Nasdaq: 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. The Bank offers personal and commercial lending and deposit products, as well as investment, trust, and estate planning services. The Bank has 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.

Contact

Lori Peterson, Director of Marketing
Phone: 989-779-6333 Fax: 989-775-5501

Available Information

The Company maintains an Internet web site at ir.isabellabank.com/overview. The Company makes available, free of charge, on its web site the Company's annual reports, quarterly earnings reports, and other press releases.

The Company routinely posts important information for investors on its website (www.isabellabank.com and, more specifically, under the News tab at ir.isabellabank.com/news). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the "SEC"). Accordingly, investors should monitor the Company's web site, in addition to following the Company's press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company's website is not incorporated by reference into, and is not a part of, this document.

Forward-Looking Statements

Information in this press 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. We intend such forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995, and are included in this statement for purposes of these safe harbor provisions. Forward-looking statements generally relate to losses, impact of events, financial condition, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting the Company and its future business and operations. Forward-looking statements are typically identified by words or phrases such as "will likely result", "expect", "could", "may", "plan", "believe", "estimate", "anticipate", "strategy", "trend", "forecast", "outlook", "project", "intend", "assume", "outcome", "continue", "remain", "potential", "opportunity", "current", "position", "maintain", "sustain", "seek", "achieve" and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Factors that could cause such differences include, but are not limited to: (i) the impact on us or our customers of a decline in general economic conditions, and any regulatory responses thereto; (ii) slower economic growth rates or potential recession in the United States and our market areas; (iii) uncertainty or perceived instability in the banking industry as a whole; (iv) increased competition for deposits among traditional and nontraditional financial services companies, and related changes in deposit customer behavior; (v) the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; (vi) the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; (vii) the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; (viii) changes in unemployment rates in the United States and our market areas; (ix) adverse changes in customer spending, borrowing and savings habits; (x) declines in commercial real estate values and prices; (xi) a deterioration of the credit rating for the United States long-term sovereign debt or the impact of uncertain or changing political conditions, including federal government shutdowns and uncertainty regarding United States fiscal debt, deficit and budget matters; (xii) cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; (xiii) severe weather, natural disasters, acts of war or terrorism, geopolitical instability, domestic civil unrest or other external events, including as a result of in the policies of the current U.S. presidential administration or Congress; (xiv) in the impact of tariffs, sanctions and other trade policies of the United States and its global trading counterparts and the resulting impact on the Company and its customers; (xv) competition and market expansion opportunities; (xvi) changes in non-interest expenditures or in the anticipated benefits of such expenditures; (xvii) changes in accounting principles and standards, including those related to loan loss recognition under the current expected credit loss, or CECL, methodology; (xviii) the receipt of required regulatory approvals; (xix) changes in tax laws; (xx) the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; (xxi) potential costs related to the impacts of climate change; (xxii) current or future litigation, regulatory examinations or other legal and/or regulatory actions; and (xxiii) changes in applicable laws and regulations. These forward-looking statements are based on current information and/or management's good faith belief as to future events. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Additional information regarding risks and uncertainties to which the Company's business and future financial performance are subject is contained in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of such documents, and other documents the Company files or furnishes with the SEC from time to time, which are available on the SEC's website, www.sec.gov. Due to these and other possible uncertainties and risks, the Company cautions you not to unduly rely on forward-looking statements. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans or expectations contemplated by the Company will be achieved. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made, except as required by law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States ("GAAP"). The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands except per share amounts and ratios)

The following table outlines selected financial data as of, and for the:

⁽¹⁾ At end of period.
⁽²⁾ Non-GAAP financial measure; refer to the Reconciliation of Non-GAAP Financial Measures (Unaudited) in table F
⁽³⁾ Whole shares

A

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)

B

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per share amounts)

C

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 tax 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") restricted equity holdings are included in other interest earning assets.

⁽¹⁾ Includes loans held-for-sale and nonaccrual loans
⁽²⁾ Average balances for available-for-sale securities are based on amortized cost
⁽³⁾ Includes average interest-bearing deposits with other banks, net of Federal Reserve daily cash letter.

D

AVERAGE BALANCES, INTEREST RATE, AND NET INTEREST INCOME (UNAUDITED) (continued)
(Dollars in thousands)