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SEC filingIsabella Bank Corporation reported net income of $18.9 million for FY 2025, a significant increase from $13.9 million in FY 2024. Total interest income grew to $96.0 million from $90.0 million, while net interest income improved to $62.5 million from $55.8 million. The company benefited from a $0.6 million reversal in provision for credit losses, compared to a $1.9 million expense in the prior year. Total assets increased to $2.21 billion from $2.09 billion, driven by loan growth to $1.54 billion. The company maintained strong capital ratios, with common equity Tier 1 capital at 11.73% of risk-weighted assets, well above regulatory requirements. Cash dividends per common share remained stable at $1.12.
Isabella Bank Corporation reported strong financial results for FY 2025, with net income increasing 36.1% to $18.9 million from $13.9 million in FY 2024. Total interest income grew to $96.0 million from $90.0 million, while net interest income improved to $62.5 million from $55.8 million. The company benefited from a $0.6 million reversal in provision for credit losses, compared to a $1.9 million expense in the prior year. Noninterest income increased to $16.0 million from $14.6 million, while noninterest expenses rose to $55.0 million from $52.1 million. Basic earnings per share increased to $2.56 from $1.86 in the prior year.
Interest income from loans, including fees, increased to $81.4 million from $77.3 million in FY 2024. Interest income from AFS securities totaled $11.7 million ($9.6 million taxable and $2.1 million nontaxable), compared to $11.1 million in the prior year. Interest expense on deposits was $30.2 million, essentially flat compared to $29.7 million in FY 2024. Noninterest income components included service charges and fees of $8.9 million, wealth management fees of $4.2 million, earnings on BOLI of $1.6 million, and net gain on sale of mortgage loans of $0.2 million.
Net interest margin improved as net interest income increased to $62.5 million from $55.8 million. The provision for credit losses reversal of $0.6 million contributed significantly to profitability improvement. Noninterest expenses as a percentage of total revenue decreased, with compensation and benefits at $30.0 million, occupancy and equipment at $10.5 million, and other professional services at $3.2 million. Income before income tax expense was $24.1 million, up from $16.4 million in FY 2024, representing an operating margin of 25.1%.
Net cash provided by operating activities was $26.8 million, while investing activities used $115.9 million primarily for net change in loans HFI of $112.4 million. Financing activities provided $90.6 million, driven by net increase in deposits of $72.6 million. Total assets increased to $2.21 billion from $2.09 billion, with loans growing to $1.54 billion. Total deposits were $1.82 billion, consisting of $426.3 million noninterest bearing and $1.39 billion interest bearing. Total shareholders' equity was $231.4 million, with accumulated other comprehensive loss improving to $8.0 million from $21.4 million.
The company faces risks including credit quality deterioration, interest rate changes, liquidity constraints, and regulatory compliance requirements. Management noted competition from nationwide and local banks, technological changes, and potential impacts from climate change and external events. The company maintains a formal Compliance Risk Management Program and has effective internal controls over financial reporting. Capital ratios remain strong, with common equity Tier 1 capital at 11.73% of risk-weighted assets, well above the 7.0% minimum requirement. The company continues to focus on quality customer service, local decision-making, and maintaining long-term customer relationships.