Isabella Bank Corporation Announces Strong Second Quarter 2021 Earnings

Successful $30 million subordinated debt offering complete

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Jul 23, 2021, 11:12 ET

MT. PLEASANT, Mich., July 23, 2021 /PRNewswire/ -- Isabella Bank Corporation (the "Corporation") (OTCQX: ISBA) released its earnings results for the second quarter of 2021. The Corporation reported net income of $4.6 million for the second quarter and $10 million for the first six months of 2021, both increased compared to the same periods a year ago. Earnings per common share were $0.58 in the second quarter and $1.26 for the first half of the year, up from the same periods of 2020 at $0.53 and $0.91, respectively.

Highlights include:

Completed a $30 million private placement of subordinated notes with an initial interest rate of 3.25%.
Net interest income — $12.7 million in the second quarter of 2021. Interest expense initiatives reduced costs by 45.9%, or $1.6 million, compared to the same period in 2020.
Noninterest expense controls continue to benefit the Corporation.
Loan payment deferrals, to provide short-term relief to customers, continued to decline as customers resumed contractual payments. As of June 30, 2021, loan deferrals totaled just 0.3% of gross loans.

"We delivered another strong financial quarter following our record performance from the previous quarter," said Jae A. Evans, President and Chief Executive Officer of the Corporation. "Here at Isabella Bank, we continue to be a resource to our customers in a recovering economy. We facilitated over 950 PPP loans for a total of $99.5 million in 2020, and funded another 845 PPP loans for a total of $54.6 million this year. We also assisted customers by removing selected deposit account related charges and fees in day-to-day banking and temporarily waiving others."

On June 2, 2021, the Corporation completed a private placement of $30 million in fixed-to-floating rate notes due in 2031. The subordinated notes will initially bear a fixed interest rate of 3.25% until June 15, 2026, after which time until maturity, the notes convert to a floating rate instrument. The notes, issued to institutional investors, are structured to qualify as Tier 2 capital under regulatory guidelines. The Corporation expects to use proceeds from issuance of the notes for general corporate purposes, including potential repurchases of common stock and merger and acquisition activity.

"We are strengthening our ability to increase our presence while we continue to manage operating costs," Evans said. "We also remain committed to increasing earnings and shareholder value through growth in our loan portfolio and Isabella Wealth."

Operating Results

Net income: Net income for the second quarter 2021 was $4.6 million, compared to $4.2 million in the second quarter of 2020. For the first six months of 2021, net income was $10 million, compared to $7.3 million in the same period of 2020.

Net interest income: Net interest income for the first six months of 2021 increased by $1.6 million compared to the same period in 2020. Fees related to the U.S. Small Business Administration's Paycheck Protection Program ("PPP") have contributed significantly to interest income in 2021; however, fewer total loans and an interest rate decline led to a $2.1 million decrease in interest income when comparing the first two quarters of 2021 to 2020. Conversely, the reduction in interest rates, as well as reduced reliance on higher-cost borrowings, led to a $3.7 million decrease in interest expense on deposits and borrowings.

Noninterest income and expenses: Net gains on sold mortgage loans along with service charges and fees accounted for much of a $603,000 increase in noninterest income for the first six months of 2021 when compared to the same period in 2020. Noninterest expenses declined $333,000 for the first six months of 2021 compared to 2020, reflecting management's continued focus on reducing operating expenses.

Net yield on interest earning assets: The Corporation's fully taxable equivalent net yield on interest earning assets was 2.88% for the first six months of 2021 compared to 2.95% in the first six months of 2020. The Corporation's banking subsidiary, Isabella Bank (the "Bank"), implemented strategic programs focused on improving the net yield on interest-earning assets, such as enhanced pricing related to loans and reduced reliance on higher-cost borrowed funds and brokered deposits. These efforts have helped, although the current interest rate environment has had a negative impact on the yield of interest-earning assets. Future improvement is expected at a gradual pace.

Balance Sheet

Assets: Total assets and assets under management were $2 billion and $2.8 billion as of June 30, 2021, respectively. Assets under management include loans sold and serviced of $290 million and investment and trust assets managed by Isabella Wealth of $493 million, in addition to assets on our consolidated balance sheet. Assets under management are up $243 million, or 9.4%, compared to June 30, 2020. Market improvement and growth in new client assets managed by Isabella Wealth, as well as growth in deposits, account for this increase.

Loans: Loans outstanding as of June 30, 2021, totaled $1.2 billion. Approximately $62 million of PPP loans are included in the commercial loan balance. During the first six months of 2021, gross loans declined $31.6 million, largely driven by a decrease in advances to mortgage brokers, which also is included in the commercial loan portfolio. Credit quality indicators remained strong and economic factors continued to improve in the second quarter.

Deposits: Total deposits were $1.64 billion as of June 30, 2021, an increase of $70.2 million since December 31, 2020. Since June 2020, total deposits have increased 13.6%. The increase of deposits is the result of funds from PPP loans, customers receiving stimulus checks, and attracting new customers.

Liquidity

The Corporation's liquidity position remains strong as evidenced by its $797 million of cash and available funds as of June 30, 2021. This total is comprised of $248.2 million in cash and cash equivalents, $248.8 million in available lines of credit and approximately $300 million in unencumbered investment securities.

Capital

The Bank is designated as a "well capitalized" institution, as its capital ratios exceeded the minimum requirements for this designation. As of June 30, 2021, the Bank's Tier 1 Leverage Ratio was 8.3%, Tier 1 Capital Ratio was 13.5% and Total Capital Ratio was 14.2%. From a consolidated perspective, the Corporation's Tier 1 Leverage Ratio was 8.5%, Tier 1 Capital Ratio was 13.8% and Total Capital Ratio was 17.0% as of June 30, 2021. 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 second quarter of 2021, the Corporation paid a $0.27 per common share cash dividend. Based on the Corporation's closing stock price of $23.00 as of June 30, 2021, the annualized cash dividend yield was 4.70%.

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 the local banking needs of its customers and communities for 118 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 locations throughout seven Mid-Michigan counties: Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw.

For more information about Isabella Bank Corporation, visit the Investors 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 market maker is Boenning & Scattergood, Inc. (www.boenninginc.com) and its investor relations firm is Renmark Financial Communications, Inc. (www.renmarkfinancial.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 actual results. Additional information concerning some of the factors that could cause materially different results is included in the sections entitled "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.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)

	June 30 2021		December 31 2020
ASSETS
Cash and cash equivalents
Cash and demand deposits due from banks	$	29,549	$	31,296
Interest bearing balances due from banks	218,640		215,344
Total cash and cash equivalents	248,189		246,640
Available-for-sale securities, at fair value	448,454		339,228
Mortgage loans available-for-sale	1,189		2,741
Loans
Commercial	723,888		756,686
Agricultural	95,197		100,461
Residential real estate	312,567		307,543
Consumer	75,011		73,621
Gross loans	1,206,663		1,238,311
Less allowance for loan and lease losses	9,360		9,744
Net loans	1,197,303		1,228,567
Premises and equipment	24,463		25,140
Corporate owned life insurance policies	28,238		28,292
Equity securities without readily determinable fair values	17,383		17,383
Goodwill and other intangible assets	48,317		48,331
Accrued interest receivable and other assets	17,871		21,056
TOTAL ASSETS	$	2,031,407	$	1,957,378
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest bearing	$	428,410	$	375,395
Interest bearing demand deposits	326,971		302,444
Certificates of deposit under $250 and other savings	796,173		781,286
Certificates of deposit over $250	84,952		107,192
Total deposits	1,636,506		1,566,317
Borrowed funds
Federal funds purchased and repurchase agreements	62,274		68,747
Federal Home Loan Bank advances	70,000		90,000
Subordinated debt, net of unamortized issuance costs	29,121		—
Total borrowed funds	161,395		158,747
Accrued interest payable and other liabilities	12,516		13,726
Total liabilities	1,810,417		1,738,790
Shareholders' equity
Common stock — no par value 15,000,000 shares authorized; issued and outstanding 7,946,658 shares (including 82,474 shares held in the Rabbi Trust) in 2021 and 7,997,247 shares (including 59,162 shares held in the Rabbi Trust) in 2020	140,694		142,247
Shares to be issued for deferred compensation obligations	4,368		4,183
Retained earnings	70,204		64,460
Accumulated other comprehensive income	5,724		7,698
Total shareholders' equity	220,990		218,588
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,031,407	$	1,957,378

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

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Interest income
Loans, including fees	$	12,504	$	13,297	$	25,601	$	26,551
Available-for-sale securities
Taxable	1,140		1,352		2,305		2,841
Nontaxable	803		986		1,668		2,039
Federal funds sold and other	193		234		356		639
Total interest income	14,640		15,869		29,930		32,070
Interest expense
Deposits	1,444		2,247		3,112		5,038
Borrowings
Federal funds purchased and repurchase agreements	11		7		27		15
Federal Home Loan Bank advances	389		1,311		794		2,711
Subordinated debt, net of unamortized issuance costs	83		—		83		—
Total interest expense	1,927		3,565		4,016		7,764
Net interest income	12,713		12,304		25,914		24,306
Provision for loan losses	31		105		(492)		893
Net interest income after provision for loan losses	12,682		12,199		26,406		23,413
Noninterest income
Service charges and fees	1,830		1,386		3,525		2,739
Wealth management fees	806		656		1,502		1,228
Net gain on sale of mortgage loans	375		466		1,120		617
Earnings on corporate owned life insurance policies	190		189		376		371
Gains from redemption of corporate owned life insurance policies	4		349		150		873
Other	110		200		174		416
Total noninterest income	3,315		3,246		6,847		6,244
Noninterest expenses
Compensation and benefits	5,700		5,793		11,577		11,662
Furniture and equipment	1,327		1,431		2,700		2,892
Occupancy	915		912		1,860		1,779
Other	2,553		2,564		5,175		5,312
Total noninterest expenses	10,495		10,700		21,312		21,645
Income before federal income tax expense	5,502		4,745		11,941		8,012
Federal income tax expense	881		558		1,922		761
NET INCOME	$	4,621	$	4,187	$	10,019	$	7,251
Earnings per common share
Basic	$	0.58	$	0.53	$	1.26	$	0.91
Diluted	$	0.57	$	0.52	$	1.24	$	0.90
Cash dividends per common share	$	0.27	$	0.27	$	0.54	$	0.54

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
	June 30, 2021						June 30, 2020
	Average Balance		Tax Equivalent Interest		Average Yield / Rate		Average Balance		Tax Equivalent Interest		Average Yield / Rate
INTEREST EARNING ASSETS
Loans	$	1,200,998	$	12,504	4.16	%	$	1,241,856	$	13,297	4.28	%
Taxable investment securities	281,245		1,140		1.62	%	237,769		1,352		2.27	%
Nontaxable investment securities	122,514		1,117		3.65	%	141,229		1,333		3.78	%
Fed funds sold	3		—		0.01	%	12		—		0.04	%
Other	265,227		193		0.29	%	111,702		234		0.84	%
Total earning assets	1,869,987		14,954		3.20	%	1,732,568		16,216		3.74	%
NONEARNING ASSETS
Allowance for loan losses	(9,326)						(8,769)
Cash and demand deposits due from banks	28,629						20,389
Premises and equipment	24,826						25,854
Accrued income and other assets	106,780						120,444
Total assets	$	2,020,896					$	1,890,486
INTEREST BEARING LIABILITIES
Interest bearing demand deposits	$	330,586	$	45	0.05	%	$	249,735	$	86	0.14	%
Savings deposits	550,145		149		0.11	%	447,416		257		0.23	%
Time deposits	347,155		1,250		1.44	%	387,636		1,904		1.96	%
Federal funds purchased and repurchase agreements	52,239		11		0.08	%	31,036		7		0.09	%
Federal Home Loan Bank advances	84,725		389		1.84	%	222,802		1,311		2.35	%
Subordinated debt, net of unamortized issuance costs	9,551		83		3.48	%	—		—		—	%
Total interest bearing liabilities	1,374,401		1,927		0.56	%	1,338,625		3,565		1.07	%
NONINTEREST BEARING LIABILITIES
Demand deposits	412,600						317,035
Other	12,478						15,355
Shareholders' equity	221,417						219,471
Total liabilities and shareholders' equity	$	2,020,896					$	1,890,486
Net interest income (FTE)			$	13,027					$	12,651
Net yield on interest earning assets (FTE)					2.79	%					2.92	%

	Six Months Ended
	June 30, 2021						June 30, 2020
	Average Balance		Tax Equivalent Interest		Average Yield / Rate		Average Balance		Tax Equivalent Interest		Average Yield / Rate
INTEREST EARNING ASSETS
Loans	$	1,201,344	$	25,601	4.26	%	$	1,204,961	$	26,551	4.41	%
Taxable investment securities	236,099		2,305		1.95	%	244,783		2,841		2.32	%
Nontaxable investment securities	127,157		2,311		3.63	%	146,799		2,751		3.75	%
Fed funds sold	3		—		0.01	%	6		—		0.07	%
Other	280,083		356		0.25	%	101,000		639		1.27	%
Total earning assets	1,844,686		30,573		3.31	%	1,697,549		32,782		3.86	%
NONEARNING ASSETS
Allowance for loan losses	(9,574)						(8,368)
Cash and demand deposits due from banks	28,787						20,972
Premises and equipment	24,987						26,052
Accrued income and other assets	109,898						115,615
Total assets	$	1,998,784					$	1,851,820
INTEREST BEARING LIABILITIES
Interest bearing demand deposits	$	322,931	$	122	0.08	%	$	242,448	$	169	0.14	%
Savings deposits	540,776		298		0.11	%	437,025		891		0.41	%
Time deposits	357,466		2,692		1.51	%	396,178		3,978		2.01	%
Federal funds purchased and repurchase agreements	53,187		27		0.10	%	30,980		15		0.10	%
Federal Home Loan Bank advances	87,348		794		1.82	%	231,264		2,711		2.34	%
Subordinated debt, net of unamortized issuance costs	4,665		83		3.56	%	—		—		—	%
Total interest bearing liabilities	1,366,373		4,016		0.59	%	1,337,895		7,764		1.16	%
NONINTEREST BEARING LIABILITIES
Demand deposits	397,959						281,638
Other	13,311						14,747
Shareholders' equity	221,141						217,540
Total liabilities and shareholders' equity	$	1,998,784					$	1,851,820
Net interest income (FTE)			$	26,557					$	25,018
Net yield on interest earning assets (FTE)					2.88	%					2.95	%

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

	Three Months Ended
	June 30 2021			March 31 2021			December 31 2020			September 30 2020			June 30 2020
PER SHARE
Basic earnings (loss)	$	0.58		$	0.68		$	(0.10)		$	0.55		$	0.53
Diluted earnings (loss)	$	0.57		$	0.67		$	(0.10)		$	0.54		$	0.52
Dividends	$	0.27		$	0.27		$	0.27		$	0.27		$	0.27
Tangible book value	$	21.73		$	21.35		$	21.29		$	21.75		$	21.52
Quoted market value
High	$	23.90		$	22.50		$	21.95		$	19.00		$	19.50
Low	$	21.00		$	19.45		$	15.73		$	15.75		$	15.60
Close ⁽¹⁾	$	23.00		$	21.75		$	19.57		$	16.74		$	18.25
Common shares outstanding ⁽¹⁾	7,946,658			7,958,883			7,997,247			8,007,901			7,977,019
Average number of common shares outstanding	7,944,455			7,969,462			8,006,144			7,966,811			7,924,318
Average number of diluted common shares outstanding	8,063,164			8,088,524			8,133,157			8,111,283			8,068,748
PERFORMANCE RATIOS
Return on average total assets	0.91		%	1.09		%	(0.15)		%	0.90		%	0.89		%
Return on average shareholders' equity	8.35		%	9.78		%	(1.30)		%	7.78		%	7.63		%
Return on average tangible shareholders' equity	10.69		%	12.53		%	(1.63)		%	9.93		%	9.81		%
Net interest margin yield (FTE)	2.79		%	2.98		%	3.04		%	2.89		%	2.92		%
ASSETS UNDER MANAGEMENT ⁽¹⁾
Loans sold with servicing retained	$	290,033		$	298,514		$	301,377		$	289,524		$	263,332
Assets managed by Isabella Wealth	$	493,287		$	454,459		$	443,967		$	403,730		$	395,214
Total assets under management	$	2,814,727		$	2,768,405		$	2,702,722		$	2,664,951		$	2,571,773
ASSET QUALITY ⁽¹⁾
Nonaccrual status loans	$	3,329		$	4,532		$	5,313		$	4,946		$	5,319
Performing troubled debt restructurings	$	26,785		$	28,947		$	22,200		$	23,257		$	20,536
Foreclosed assets	$	365		$	384		$	527		$	651		$	776
Net loan charge-offs (recoveries)	$	(58)		$	(50)		$	18		$	(113)		$	(75)
Nonperforming loans to gross loans	0.28		%	0.38		%	0.43		%	0.38		%	0.42		%
Nonperforming assets to total assets	0.19		%	0.26		%	0.31		%	0.30		%	0.33		%
Allowance for loan and lease losses to gross loans	0.78		%	0.78		%	0.79		%	0.73		%	0.69		%
CAPITAL RATIOS ⁽¹⁾
Shareholders' equity to assets	10.88		%	10.83		%	11.17		%	11.29		%	11.50		%
Tier 1 leverage	8.46		%	8.56		%	8.37		%	8.76		%	8.86		%
Common equity tier 1 capital	13.81		%	13.77		%	12.97		%	12.90		%	12.90		%
Tier 1 risk-based capital	13.81		%	13.77		%	12.97		%	12.90		%	12.90		%
Total risk-based capital	17.00		%	14.54		%	13.75		%	13.64		%	13.60		%

⁽¹⁾ At end of period

	Six Months Ended
	June 30 2021			June 30 2020			June 30 2019
PER SHARE
Basic earnings	$	1.26		$	0.91		$	0.97
Diluted earnings	$	1.24		$	0.90		$	0.95
Dividends	$	0.54		$	0.54		$	0.52
Tangible book value	$	21.73		$	21.52		$	20.17
Quoted market value
High	$	23.90		$	24.50		$	24.50
Low	$	19.45		$	15.60		$	22.25
Close ⁽¹⁾	$	23.00		$	18.25		$	23.25
Common shares outstanding ⁽¹⁾	7,946,658			7,977,019			7,918,494
Average number of common shares outstanding	7,956,889			7,927,298			7,895,610
Average number of diluted common shares outstanding	8,075,763			8,081,475			8,084,965
PERFORMANCE RATIOS
Return on average total assets	1.00		%	0.78		%	0.85		%
Return on average shareholders' equity	9.06		%	6.67		%	7.58		%
Return on average tangible shareholders' equity	11.61		%	4.30		%	9.73		%
Net interest margin yield (FTE)	2.88		%	2.95		%	3.04		%
ASSETS UNDER MANAGEMENT ⁽¹⁾
Loans sold with servicing retained	$	290,033		$	263,332		$	257,062
Assets managed by Isabella Wealth	$	493,287		$	395,214		$	487,180
Total assets under management	$	2,814,727		$	2,571,773		$	2,568,834
ASSET QUALITY ⁽¹⁾
Nonaccrual status loans	$	3,329		$	5,319		$	8,107
Performing troubled debt restructurings	$	26,785		$	20,536		$	20,310
Foreclosed assets	$	365		$	776		$	513
Net loan charge-offs (recoveries)	$	(108)		$	(45)		$	193
Nonperforming loans to gross loans	0.28		%	0.42		%	0.70		%
Nonperforming assets to total assets	0.19		%	0.33		%	0.49		%
Allowance for loan and lease losses to gross loans	0.78		%	0.69		%	0.68		%
CAPITAL RATIOS ⁽¹⁾
Shareholders' equity to assets	10.88		%	11.50		%	11.41		%
Tier 1 leverage	8.46		%	8.86		%	9.03		%
Common equity tier 1 capital	13.81		%	12.90		%	12.43		%
Tier 1 risk-based capital	13.81		%	12.90		%	12.43		%
Total risk-based capital	17.00		%	13.60		%	13.06		%

⁽¹⁾ At end of period

SUPPLEMENTAL BALANCE SHEET DATA (UNAUDITED)
(Dollars in thousands)

	June 30 2021		March 31 2021		December 31 2020		September 30 2020		June 30 2020
Commercial	$	723,888	$	725,540	$	756,686	$	821,102	$	799,632
Agricultural	95,197		91,629		100,461		102,263		103,162
Residential real estate	312,567		305,909		307,543		304,559		307,926
Consumer	75,011		72,840		73,621		75,384		73,665
Gross loans	$	1,206,663	$	1,195,918	$	1,238,311	$	1,303,308	$	1,284,385

	June 30 2021		March 31 2021		December 31 2020		September 30 2020		June 30 2020
Noninterest bearing demand deposits	$	428,410	$	404,710	$	375,395	$	353,082	$	340,321
Interest bearing demand deposits	326,971		328,440		302,444		287,809		263,567
Savings deposits	549,134		555,688		505,497		474,483		458,167
Certificates of deposit	326,214		331,413		358,165		354,210		352,118
Brokered certificates of deposit	—		14,029		14,029		14,029		14,029
Internet certificates of deposit	5,777		9,301		10,787		11,482		12,476
Total deposits	$	1,636,506	$	1,643,581	$	1,566,317	$	1,495,095	$	1,440,678

	June 30 2021		March 31 2021		December 31 2020		September 30 2020		June 30 2020
U.S. Treasury	$	132,593	$	29,371	$	—	$	—	$	—
States and political subdivisions	130,960		140,329		143,656		148,401		146,785
Auction rate money market preferred	3,260		3,224		3,237		3,194		2,979
Mortgage-backed securities	68,155		75,835		88,652		104,165		119,029
Collateralized mortgage obligations	109,294		116,865		101,983		107,294		111,621
Corporate	4,192		1,700		1,700		—		—
Available-for-sale securities, at fair value	$	448,454	$	367,324	$	339,228	$	363,054	$	380,414

	June 30 2021		March 31 2021		December 31 2020		September 30 2020		June 30 2020
Federal Home Loan Bank advances	$	70,000	$	90,000	$	90,000	$	205,000	$	205,000
Securities sold under agreements to repurchase without stated maturity dates	62,274		51,967		68,747		33,349		31,268
Subordinated debt, net of unamortized issuance costs	29,121		—		—		—		—
Total borrowed funds	$	161,395	$	141,967	$	158,747	$	238,349	$	236,268

SUPPLEMENTAL STATEMENTS OF INCOME DATA (UNAUDITED)
(Dollars in thousands)

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Service charges and fees
ATM and debit card fees	$	1,127	$	883	$	2,126	$	1,677
Service charges and fees on deposit accounts	481		350		917		937
Freddie Mac servicing fee	181		155		395		314
Net OMSR income (loss)	(68)		(89)		(100)		(350)
Other fees for customer services	109		87		187		161
Total service charges and fees	1,830		1,386		3,525		2,739
Wealth management fees	806		656		1,502		1,228
Net gain on sale of mortgage loans	375		466		1,120		617
Earnings on corporate owned life insurance policies	190		189		376		371
Gains from redemption of corporate owned life insurance policies	4		349		150		873
All other	110		200		174		416
Total noninterest income	$	3,315	$	3,246	$	6,847	$	6,244

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Compensation and benefits	$	5,700	$	5,793	$	11,577	$	11,662
Furniture and equipment	1,327		1,431		2,700		2,892
Occupancy	915		912		1,860		1,779
Other
Audit, consulting, and legal fees	452		498		888		931
ATM and debit card fees	462		328		879		651
Marketing costs	238		265		447		468
Memberships and subscriptions	217		159		428		358
Loan underwriting fees	200		212		390		378
FDIC insurance premiums	129		144		360		300
Director fees	180		177		339		359
Donations and community relations	108		105		254		435
All other	567		676		1,190		1,432
Total other noninterest expenses	2,553		2,564		5,175		5,312
Total noninterest expenses	$	10,495	$	10,700	$	21,312	$	21,645

SOURCE Isabella Bank Corporation

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