ISABELLA BANK CORPORATION 2203
ANNUAL REPORTTABLE OF CONTENTS
Our Vision, Mission Statement, & Core Values ........................... 3
Shareholder Letter: Sarah R. Opperman, Board Chair ............. 4-5
CEO Letter: Jerome E. Schwind ................................................. 6-7
Questions & Answers: Jerome E. Schwind ............................... 8-9
Financial Report: Neil M. McDonnell ................................. 10-11
Financial Results ................................................................... 12-15
Board of Directors ...................................................................... 16
Senior Officers & Regional Boards ............................................. 17
Questions & Answers: Jae A. Evans ..................................... 18-19
Employee Recognition ............................................................... 20
Annual Shareholder Meeting .................................................... 21
Proxy Statement ................................................................... 23-41
Stock Information ...................................................................... 42
OUR VISION
To be recognized as the leading independent community bank.
MISSION STATEMENT
To be the preeminent financial services provider benefiting our customers, shareholders, and employees.
CORE VALUES
Demonstrate unwavering integrity Community bank focused
Continued stability and independence
Exceptional customer service delivered in a personal manner
EQUAL EMPLOYMENT OPPORTUNITY
Isabella Bank Corporation and its subsidiaries adhere to and support the equal employment opportunity clauses in Section 202 of the Executive Order 11246, as amended; 38 USC 4212,
Vietnam Era Veterans Readjustment Act of 1974; Section 503 of the Rehabilitation Act of 1973, as amended; relative to equal employment opportunity and
implementing rules and regulations of
the Secretary of Labor.
DEAR SHAREHOLDERS,
Isabella Bank's 120th year of serving customers and communities was marked by a number of milestones, including the retirement of Jae A. Evans, the election of new executive leadership, and the retirement of two long-serving
Board directors.
Jae Evans, who served as the President and Chief Executive Officer of the Corporation and Chief Executive Officer of Isabella Bank, is a respected, effective, and steady leader, which was especially critical during the last several years of volatility in our nation and specifically in the banking industry. We thank him for his excellent leadership and look forward to his continued contributions on our Board of Directors.
Appointing a President and CEO is one of the Board's most important roles, and your Board was united in electing Jerome E. Schwind, a 24-year Isabella Bank veteran, to succeed Jae, effective on January 5, 2024. Jerome, who had been president of Isabella Bank since 2015, has the experience, vision, and drive to lead this organization. His steadfast focus on customers and communities will guide our continued growth and success.
He is joined in the executive suite by Neil M. McDonnell, who was named by the Board to replace Jerome as Bank President, also effective
January 5, 2024. Neil has more than 30 years of banking experience and joined Isabella Bank in 2018 as Chief Financial Officer.
Jerome and Neil are proof of strong succession planning and make a powerful team to lead our bank and its employees. Together, and on your behalf, they and the Board will continue to drive Isabella Bank's reputation as this region's preeminent community bank.
In May 2023, two highly respected directors retired from the Board. Dave Maness had been a member of Isabella Bank's corporate board more than 20 years, serving as chair from 2010 until May 2021. Chuck Hubscher also had served two decades, including chairing the nomination and governance committee.
In closing and on behalf of the Board and you, the shareholders, I thank Jae, Dave, and Chuck for their extraordinary service over a combined 65 years of service to Isabella Bank and congratulate Jerome and Neil on their new executive leadership roles.
Isabella Bank has a long history of strong community banking as well as outstanding community banking leadership. That legacy continues.
Thank you for your continued investment and support.
SARAH R. OPPERMAN
Board Chair
CEO LETTER
As we close the books on 2023, we wrap up a year that will be remembered in the finance industry for its ongoing increases in interest rates.
At Isabella Bank Corporation, we will proudly remember our ability to accurately assess the competitive landscape and remain firmly committed to our vision and mission. Despite the challenging economic conditions that prevailed elsewhere, we remained resolute and confidently navigated through the headwinds with ease.
We had a forward-looking plan for the year and a well-constructed budget. Our stable, effective management team - supported by a smart and engaged Board of Directors - adjusted as necessary. And our strong liquidity, combined with the high quality of our expanding loan portfolio, kept us squarely on solid ground.
We moved forward with a fifth location in Saginaw County and a loan and wealth office in Bay City, expanding our service area to eight counties.
We also rebuilt our High Street branch in Mount Pleasant. In each case, we verified the efficacy of our efforts and kept rolling.
All of those factors point to a nimble, dynamic bank that's in business for the long haul, with the balance sheet, systems, and strategic plan to serve its shareholders, customers, and communities exceptionally well.
The year 2023 marked the 120th anniversary of Isabella Bank, with a history built on the shoulders of leaders such as Jae A. Evans, who retired this January as President and Chief Executive Officer of Isabella Bank Corporation and Chief Executive Officer of Isabella Bank. Jae and those before him are esteemed for their banking and business acumen as well as their profound commitment to the residents and businesses of the counties we serve.
Looking forward, the winning banks will be those that deliver a differentiated experience - ensuring customers can bank anywhere, any time, on any device, while also receiving personalized support when needed. Customers and communities must remain part of our value proposition, as Isabella Bank has proven since 1903.
As your new President and CEO, I assure you that shareholder value is a top priority.
Neil M. McDonnell, who succeeded me as Bank President, will oversee our presence across the region. He joins me, our entire management team, and our Board of Directors in the determination to deliver the results you expect - regardless of events happening in the world around us.
JEROME E. SCHWIND
President & Chief Executive Officer, Isabella Bank Corporation
Chief Executive Officer, Isabella Bank
QUESTIONS & ANSWERS
Jerome shares insights about Isabella Bank's strengths, staying power, and formula for success.
Q What can we expect from Isabella Bank going forward and from you as the new CEO?
A Community banks have always had a commitment to communities and relationships that set them apart. Combine that with our acceleration of technology the past couple of years, and we have a winning formula that customers and shareholders want. I'm all in, moving forward, and committed to customers, communities, employees, and shareholders.
Q You have a reputation statewide as a banking leader. Why do you choose Isabella Bank?
A Some 25 years ago, I was working for a large, regional bank, frustrated by a lack of focus on customers and communities. My wife asked if I could work anywhere, where would that be?
Without knowing anyone here, I said, "Isabella Bank," based 100% on its reputation. She told me to write a cover letter and send my resume, or else I needed to stop being frustrated.
Rick Barz was the chief lending officer at the time, and I'd heard of him and his commitment to employees, customers, and
Jerome E. Schwind
PRESIDENT & CHIEF EXECUTIVE OFFICER
communities. It is beyond words for me to sit in the chair he went on to occupy as CEO. True to Rick's style, my goal is to lead this organization in a way worthy of the effort all of us give to deliver Isabella Bank's trademark service and value.
Q What should we know about your leadership style?
A People tell me I'm a visionary, looking at what we need today, and also five and 10 years down the road. I consider that a vital role. Somebody has to look out the windshield to ensure we stay relevant.
Q How does Isabella Bank remain steadfastly independent?
A It's an alignment of our Board of Directors, management team, employees, and of our shareholders who decide we are a worthy investment.
We deliver on that value proposition every day.
Access to capital. Access to credit.
Access to safe places to put your money.
Those are critical in any economy. A team that knows and supports you - that's Isabella Bank.
Local leaders and customers say if a community bank goes away, it creates a hole. At Isabella Bank, we agree. We have a duty to remain a community bank, as we have for 120 years.
Q What else is Isabella Bank doing to thrive, no matter what happens in the industry or world?
A We invest in our people. Even with all of today's technology, this industry requires good people. With the right
team members doing the right thing at the right time, we'll take advantage of all the tailwinds and weather all the headwinds.
Isabella Bank is strong because of its people. One of our branch managers opened an account last year for a couple that had retired to the area. They were Central Michigan University students in the '70s and said Isabella Bank had treated them so well back then they wouldn't think of going anyplace else. We're still that kind of bank.
Q What makes Isabella Bank so valuable to its stakeholders?
A We're valuable because we provide stability in our markets. We're a safe harbor for deposits and source of advice for customers and communities. We're a source of credit to assist in the progress of customers' dreams and a source of return for shareholders. Our 120-year history is proof of this.
Q You say Isabella Bank is strong. What proves that?
A We've recently been through a pandemic, and I couldn't be more proud of our team. We've always strategically nurtured continuity in our management team, and our employees are extraordinarily dedicated. Throughout the pandemic, customers looked to us for support. Our shareholders stuck with us, confident we would deliver a positive return on investment - and we did. We weren't experts in pandemics, but we figured it out collectively - foreshadowing a nimble, strong future for Isabella Bank.
FINANCIAL REPORT
As we reflect on 2023, the banking industry faced some significant events. The collapse of three high-profile regional banks shook consumer confidence, and persistent inflationary pressure made consumers more cautious in their banking. However, during one of the most challenging years in recent history, Isabella Bank remained vigilant in safeguarding the interests of our customers.
Like many banks across the country, we faced challenges due to higher interest rates. While these rates benefited banks in many ways, they also sharply increased interest expenses, which are reflected in their net interest margin (NIM). Unfortunately, we were no exception, as interest expense outpaced the growth in interest income. However, despite these challenges, we finished the year with our NIM holding solid at 3.05%, not far from where we finished in 2022.
Despite these events, we remained competitive for deposits, and our loan portfolio experienced strong growth in the second half of the year. While other institutions scaled back on consumer loans, Isabella Bank identified an opportunity to help our customer base and grow consumer lending, all the while maintaining our robust credit standards. On the commercial side, loan customers became more comfortable with the rate environment and moved forward with planned projects as they continued to reinvest in their companies in 2023. Overall, our loans grew by $85 million in 2023.
10
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Isabella Bank Corporation published this content on 28 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2024 12:33:01 UTC.
