Isabella Bank Corporation reported first quarter 2025 net income of $3.9 million, or $0.53 per diluted share, a notable increase from $3.1 million, or $0.42 per diluted share, in the first quarter of 2024. Core earnings for the quarter totaled $4.3 million, or $0.57 per diluted share, up from $3.1 million, or $0.41 per diluted share, in the prior year period. This enhanced profitability reflects an upward trend in the company's financial performance.
The Net Interest Margin (NIM) expanded to 3.06% in Q1 2025, up from 2.79% in Q1 2024, driven by earning asset repricing and a lower cost of funds. The yield on loans climbed to 5.71% from 5.38% in the same period last year, while the cost of interest-bearing liabilities decreased to 2.26% from 2.28%. The company also fully recovered a $1.6 million overdraft charge incurred in the third quarter of 2024 during the first week of April 2025, with all related loans paid in full.
Isabella Bank executed a strategy to restructure a large portion of its bank-owned life insurance (BOLI) policies into a higher-yielding separate account product. This included a $10.6 million investment in new separate account policies, which yield 5.4% compared to 2.9% from existing general account policies. Another $9 million of general account policies are expected to be exchanged by the end of the third quarter, further enhancing noninterest income.
Total assets increased by $16.3 million to $2.1 billion, with available-for-sale securities growing by $24.0 million, including $40.4 million in purchases of collateralized mortgage obligation securities with a weighted-average yield of 4.56%. Core loans, excluding advances to mortgage brokers, grew by $4.2 million, driven by increases in commercial real estate and commercial and industrial loan portfolios. Tangible book value per share improved to $22.58 as of March 31, 2025, from $21.82 at year-end 2024, and the company repurchased 45,582 shares for $1.1 million during the quarter.
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