Isabella Bank Corporation Annual Report 2009

FY2009 Annual Report · Isabella Bank Corporation

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For your today
and their tomorrow.

INVEST
locally

Annual Report 2009

Isabella Bank Corporation

Isabella Bank Corporation, with $1.14 billion in assets
and $1.74 billion in assets under management, is
the parent company of Isabella Bank. Founded in
1903, Isabella Bank is now the eighth largest bank
in asset size headquartered in Michigan. Isabella
Bank has 24 offices located throughout Clare, Gratiot,
Isabella, Mecosta, Montcalm, and Saginaw counties.

Table of Contents

year in review
financial highlights
& industry updates
financial data

page 3

page 6

page 9

$1,139,263 $268,230 $735,385 $11,982 $775,630 $134,476 $61,385 $35,779 $9,500 $4,101 $0.55 $0.65 $17.89 $01 1.80% 2.85 $957,282
$238,191 $612,687 $7,301 $733,473 $123,080 $53,972 $28,013 $7,211 $7,930 $1.14 $0.62 $17.58 $40.00 12.86% 6.65% 54.27% 0.8%
$5,127 $213,450 $591,042 $7,605 $725,840 $115,749 $44,709 $24,977 $682 $7,001 $1.12 $0.58 $16.61 $40.00 12.72% 7.61% 53.89% 0.87%
$592,478 $80,902 $36,882 $23,909 $777 $6,77 $1.14 $0.55 $13.44 $36.36 10.91% 9.07% 48.02% 0.97% $678,034 $162,553 $452,895
$563,876 $72,594 $33,821 $23,364 $735 $6,645 $1.13 $0.52 $12.25 $34.711 0.71% 9.39% 46.20% .98% $1,139,263 $268,230 $6,982 $630
$134,476 $61,385 $35,779 $9,500 $4,101 $0.55 $0.65 $17.89 11.80% 2.85% 735% 118.82% 0.37% $957,282 $238,191 $612,687 $7,301
$733,473 $123,080 $53,972 $28,013 $1,211 $7,930 $1.14 $0.62 $17.58 $40.00 12.86% 6.65% 54.27% 0.8% %10,127 $3,450 $591,042 $5
$725,840 $115,749 $44,709 $24,977 $682 $7,001 $1.12 $0.58 $16.61 $40.00 12.72% 7.61% 53.89% 0.87% $741,654 $183,406 $483,242
$6,899 $592,478 $80,902 $36,882 $23,909 $777 $6,77 $1.14 $0.55 $13.44 $36.36 10.91% 9.07% 48.02% 0.97% $678,034 $162,553
$452,895 $6,444 $563,876 $72,594 $33,821 $23,364 $735 $6,645 $1.13 $0.52 $12.25 $34.71 10.71% 9.39% 46.20% 0.98% $213,450
$452,895 $6,444 $563,876 $72,594 $33,821 $23,364 $735 $6,645 $1.13 $0.52 $12.25 $34.71 10.71% 9.39% 46.20% 0.98% $213,450

2009 headlines
board of directors
& senior officers

page 13

page 16

Mission Statement
To create an operating environment that will provide
shareholders with sustained growth in their investment
while maintaining our independence and subsidiaries
autonomy.

Stock Information
Isabella Bank Corporation common stock is listed
ISBA on the Pink Sheets OTC Market.
under
Current
stock price and availability can be
obtained by contacting the financial advisors of
Raymond
located at
James Financial Services
Isabella Bank or through any other licensed broker.

2009 Year in Review

By the end of 2009, we had nearly 500 Mobile Banking users. We also introduced a service called Quick and Simple Payments to help our local businesses offer a more convenient
way for their customers to make payments to them electronically, without having to write a check. We believe that by offering innovative products and services such as these, we

year in review

In 2009, banks
in Michigan experienced historic
levels of loan defaults and massive increases in Federal
Deposit Insurance Corporation (FDIC) premiums. Isabella
Bank Corporation has not only survived these turbulent
economic conditions but we emerged stronger and healthier;
retaining earnings and paying healthy dividends. Equally
important, we have not lost sight of our community bank
heritage and avoided falling prey to the outside influences
that created so many problems for other organizations.

During challenging years such as 2009, the true test of a bank’s
financial strength and stability can best be measured by how
effectively they adapt to changes. Below is a quote written by
R. Perry Shorts about Isabella Bank that speaks well to this and
is especially relevant during today’s difficult economy. In this
speech, delivered in 1957 honoring John Benford (President
of Isabella County State Bank from 1949-1957), Shorts wrote:

“…and the one thing that a Bank is proudest of, is old age—
for old age to a Bank is best proof of its ability to survive
the ups and downs of business life, especially the downs.”

RICHARD J. BARZ
Chief Executive Officer

that

is a reminder

This quote
Isabella Bank has
including
experienced several cyclical ups and downs,
the Great Depression, during our 106 year history. While
2009 was a difficult year for the banking industry, we have
weathered the storm and quite frankly Isabella Bank is
doing very well. It was our ability to adapt to changes in the
economy, respond efficiently to changes in regulations, and
support from our local communities that helped us through a
challenging year.

Isabella Bank Corporation's net income, earnings per share,
and cash dividends all posted increases compared to year-end
2008. In fact, 2009 marked the 28th consecutive year that the
Corporation increased cash dividends.

JAMES C. FABIANO
Chairman of the Board

Net Income
Earnings Per Share
Cash Dividends

2009
$7.80 million
$1.04
$0.70

2008
$4.10 million
$0.55
$0.65

page 3

We recognize that there are always opportunities for us to improve in this area and in 2009 we dedicated significant time and resources to employee development. We are con-
stantly challenging our staff by offering Dale Carnegie training courses, leadership classes, and most recently in 2010 bank-wide service excellence training. We believe that invest-

When compared to our peer group averages in Michigan
and across the country in 2009, Isabella Bank had higher
income. In fact, Isabella Bank had the second highest
net income of the 132 banks headquartered in the state
of Michigan. Later in Dennis Angner’s letter, you will
see a detailed analysis of how Isabella Bank Corporation
compared with other bank holding companies on
a national
We owe our performance to a
seasoned staff that remains focused on fundamental
banking practices, strict adherence to credit risk policies,
diligent asset-liability management, and holding true
to our primary mission - to serve the needs of our
local communities.

level.

"This past year, when few banks were in a position
to lend, we stood apart from our competition.
We were able to tell our story as a safe and
strong community bank, still committed to
lending in our local communities."

to help our local businesses offer a more convenient
way for their customers to make payments to them
electronically, without having to write a check. We believe
that by offering innovative products and services such as
these, we maintain a competitive edge in the marketplace.

banking

industry

certainly

The
faced many
challenges in 2009, but for well capitalized banks, such
as Isabella Bank, there were great opportunities. This
past year, when few banks were in a position to lend,
we stood apart from our competition. We were able to
tell our story as a safe and strong community bank still
committed to lending in our local communities. As a
result, we were able to deepen many of our relationships
with existing customers and also attract new customers.

While many financial institutions avoided expansion,
our financial position allowed us to complete many
projects to better serve our customers. We know that
the more accessible we are, the more competitive we
are. In 2009, we completed our addition at one of our
busiest offices located on East Pickard Street in Mt. Pleasant.
We also added a drive-thru facility to our newest office at
Lake Isabella. Both offices have seen an increase in their
resources
customer activity as a
invested in them. In addition, we moved our Corporate
Office to Main Street in Mt. Pleasant to accomodate
our growth.

result of

the

During 2009, our Trust Department and the Raymond James
brokerage services moved together under one convenient
location. Each team brings a unique set of expertise
to offer customers the most appropriate products and
services to meet their financial needs. In addition, offering
one location has brought more awareness of the services
they offer. The Trust Department and Raymond James
brokerage services have been large contributors to our
financial success and we look forward to the future growth
of these areas.

In addition to physical expansion, we also added
new electronic services for the convenience of our
customers. Mobile Banking, which is the ability to view
our online banking from a mobile device, was available to
customers in November. By the end of 2009, we
had nearly 500 Mobile Banking users. We also
introduced a service called Quick and Simple Payments

page 4

While our ability to lend and our expansion projects have
certainly differentiated us from our competition, we also
believe that our ability to deliver excellent customer
service presents a unique opportunity as well. We
recognize that there are always opportunities for us
to improve in this area and in 2009 we dedicated
significant
employee
development. We are constantly challenging our staff
by offering Dale Carnegie training courses, leadership
classes, and most recently in 2010 bank-wide service
excellence training. We believe that investments in our
employees’ development will strengthen our organization
and give us a competitive edge now and in the future.

resources

time

and

Our employees are a key element of the Corporation’s
success. At this time we would like to recognize three
employees; Patrick Mease, Chuck Amble, and Tom
Gross for their contributions to Isabella Bank and their
promotions during 2009. Mr. Mease was promoted to
Assistant Vice President of Human Resources and is
responsible for planning and coordinating the Bank’s
training programs. As discussed earlier, Isabella Bank is
committed to employee development and Mr. Mease is
an integral part of this initiative. Mr. Amble was promoted
to Assistant Vice President of our Collection Department.
With increases in loan delinquencies, it is essential that
banks have employees who can work with customers
through tough financial times. Mr. Amble is one of these
individuals and a great asset to our team. Mr. Gross was
promoted to Assistant Vice President of Commercial
Lending. Banking has changed over the years and it
is more important than ever for us to actively seek
business development opportunities. Mr. Gross
is
a
large contributor to the success that we have
experienced in our business development area. Thank
you gentlemen for your dedication to our Bank.

In addition to our 2009 promotions, we would like to
recognize and congratulate Michael Huenemann, Greg
Mapes, and Jerome Schwind as our recent graduates from
the prestigious Graduate School of Banking in Madison,

Also in a January 2010 press release, we announced that the Board approved a resolution stating their current intent to pay future dividends in equal quarterly amounts. This will
assist current and prospective shareholders in calculating the Corporation’s dividend yield and is consistent with industry practice. At the Corporation’s February meeting, the Board

Wisconsin. The Graduate School of Banking is a three year
program that gives attendees tools and best practices to apply to their
current bank positions. This intense program takes many hours
outside of work and we would like to thank Mr. Huenemann,
Mr. Mapes, and Mr. Schwind for their hard work and dedication.

On a solemn note, we would like to recognize two of our
board members who passed away in 2009, Warren McGuire
and Robert R. Smith. Mr. McGuire was a long term board
member who served on our Farwell Board. Warren was an avid
the Farwell and Clare communities with
supporter of
successful business interests in both areas. Mr. Smith was a long
term board member of our Breckenridge Board where he served
as Chairman. Bob retired from Total Petroleum and was active in
several Breckenridge and Gratiot community organizations. We were
deeply saddened by their deaths and they will be greatly missed.

We would also like to recognize four members of our boards who
retired; Nancy Shankel from our Breckenridge Board, Dean Beavers
from our Farwell Board, and Todd Taylor and William Ham from our
Greenville Board. Thank you for your contributions and dedication
to Isabella Bank.

Although this letter focuses primarily on 2009, we would like to
mention that in January 2010 the Corporation’s Board of Directors
approved the proposal to have identical board membership at the
Corporation and Bank levels. As a result of these changes Isabella
Bank Corporation and Isabella Bank now have common board
membership. The Board believes common board membership will
improve corporate governance and will lead to decreased costs.
In addition to the Isabella Bank Board of Directors and the Isabella
Bank Corporation Board of Directors, we have local boards in our
Breckenridge, Farwell, Greenville, and Mecosta communities. These
boards are essential to us as a community bank. They ensure that
customers in each of our locations are represented by members of
their own communities and that local people are making the decisions.

Also in a January 2010 press release, we announced that the Board
approved a resolution stating our current intent to pay future
dividends in equal quarterly amounts. This will assist current and
prospective shareholders in calculating the Corporation’s dividend
yield and is consistent with industry practice. At the Corporation’s
February meeting, the Board instituted the change in quarterly
dividend payments. The Board approved an $0.18 cash dividend
payable on March 31, 2010. Of course, any future dividend payments
will depend upon the Corporation’s financial position and the action
by the Board at that time.

In closing, we would like to express our gratitude to you; our
shareholders, our
customers, our employees and our
communities. It is your support that has helped us through
challenging economies and it is your support that will help lead us
into the future. We look forward to working together this year.

2009 Expansion Projects

Investment & Trust Services

Corporate Offices

Lake Isabella

East Pickard

page 5

Financial Highlights and Industry Updates

The Corporation’s asset quality as of December 31, 2009 continues to be strong as evidenced by the relatively low percentage of the total loans, 1.28%, that are classified as
“non-performing.” This compares very favorably to the average of all banks in the state of Michigan at 4.43%. While overall assets quality remains excellent in this difficult

"In 2009, Isabella Bank Corporation’s
net income was $7.80 million, an increase
of $3.70 million when compared to
year-end 2008."

favorably to the average of all banks in the state of Michigan
at 4.43%. While overall asset quality remains excellent in this
difficult economy, net charged-off
in 2009 were
$5.1 million, which while down slightly from 2008, were still
above historical levels. The average of loans charged-off to total
loans from 2000 to 2007 was 0.14% versus 0.79% in 2008 and
0.70% in 2009.

loans

As a result of the increased number of bank failures during the
past two years, the FDIC insurance premiums for banks have
risen sharply. FDIC insurance and the associated regulatory costs
are fully funded by industry premiums and are based upon a 1 to
4 tier risk based premium assessment. A bank rated with a 1 has
the lowest risk and the lowest premium while a Tier 4 bank has
the highest risk and the highest premium. Although Isabella Bank
is currently assessed as a Tier 1 bank, our premiums increased
$1.42 million in 2009. The elevated cost associated with FDIC
insurance is expected to continue into the foreseeable future.

The banking industry is one of the most heavily regulated
industries in the United States. Isabella Bank complies with
regulations
imposed by the FDIC, Michigan’s Office of
Financial and Insurance Regulation, the Federal Reserve Board
of Governors, and the Department of Housing and Urban
Development, just to name a few. Once a year a team of about 15
to 20 Federal and State examiners spend approximately 3 weeks
examining our
loan quality, computer and backroom
operations, and our compliance with regulations such as the Bank
Secrecy Act. Then every 18 months, another team of 10 to 15
examiners will review our compliance with consumer compliance
laws and ensure we are meeting the needs of our communities as
required by the Community Reinvestment Act (CRA). Preparing
monthly and quarterly reports, monitoring operations for
compliance with the vast number of regulations, and preparing
information for examinations are ongoing projects for
our employees.

DENNIS P. ANGNER
President and Chief Financial Officer

2009 Financial Highlights
& Industry Updates

• Net income of $7.80 million

• Assets of $1.14 billion

• Book value of $18.69 per share

• Net interest income on a fully taxable basis

increased $2.46 million, a 6.4% increase

In 2009, Isabella Bank Corporation’s net income was
$7.80 million, an increase of $3.70 million when compared
to year-end 2008. Like banks in Michigan and across
the country, our earnings continue to be impacted by
elevated loan charge-offs (compared to historical norms),
increases in Federal Deposit Insurance Corporation (FDIC)
premiums, and the ongoing costs of complying with
regulatory changes. The Corporation estimates that these
factors have had a combined negative impact on earnings
of approximately $0.56 per share.

The reporting and monitoring requirements that a bank must have
in place to remain in compliance with the different regulators is
very complex. The Corporation is required to submit monthly
financial reports to our primary regulator, the Federal Reserve.

page 6

. A bank rated with a 1 has the lowest risk and the lowest premium while a Tier 4 bank has the highest risk and the highest premium. Although Isabella Bank is currently assessed
as a Tier 1 bank, our premiums increased $1.42 million in 2009. The elevated cost associated with FDIC insurance is expected to continue into the foreseeable future. The banking

On a quarterly basis, we submit an extremely detailed report for
the Bank and the parent company, Isabella Bank Corporation. In
addition, there are accounting standards required under the
Financial Accounting Standards Board and the Public Company
Accounting Oversight Board which govern the content and
disclosures of our financial statements and notes and
the auditing of these public reports. The Corporation
must also meet
the Securities
Act of 1933 and the Securities Exchange Act of 1934.

requirements of

the

shareholders

to comply with

Each year, we send out many communication pieces to our
customers and
these
regulatory requirements. For example, we are required under
the Bank Secrecy Act to send out a privacy policy annually
to each of our customers. For banks like ours, who never
have nor will ever share our customers' information with a
third party, it is an expensive cost to incur to notify them that
we do not share or sell information. Another example of a
compliance driven communication piece is the Proxy Statement
and Annual Report included in this mailing. We realize this
information can be overwhelming so we spend a great deal of time
and effort to ensure our communication pieces are user-friendly.

While the costs to keep the Corporation in compliance
with these numerous and complex
laws are staggering,
the monetary
costs of non-compliance and other
could be devastating. Our
non-financial penalties
backroom staff of professionals does a tremendous job
ensuring the Corporation’s compliance with these complex
and burdensome regulations. And as
important, they
do so while making sure that we still maintain our high level
of customer service.

Peer Group Comparison

We subscribe to reports that compare the
financial
performance of Isabella Bank Corporation to other bank
holding companies in the United States who are similar in size
($1.0 billion-$3.0 billion in assets). In all, there are 296 bank
holding companies in our peer group. There are several key
ratios that we use to monitor the strength and soundness
of Isabella Bank: (1) Return on Assets; (2) Problem Loans;
(3) Risked Based Capital to Risk Weighted Assets; and (4)
Problem Loans to Allowance for Bad Debt. We exceeded the
performance of our peer group in all four areas. (As of 12/31/09)

RETURN ON ASSETS (ROA)

Isabella Peer Group
0.69% -0.25%

ROA measures net income by the average asset size of the bank
holding company. Isabella Bank Corporati on's ROA in 2009
exceeded the peer group by 0.94%. The peer group is
sti ll struggling with extensive loan losses with hopes of
improvement in 2010.

PROBLEM LOANS

Isabella Peer Group
1.28% 3.49%

Problem Loans measures the percentage of loans that are
over 90 days past due and placed in non-accrual because
interest collecti on is doubtf ul. Isabella Bank Corporati on's total
problem loans as a percentage of loans were almost 2.73
ti mes lower than our peer group.

RISK BASED CAPITAL TO
RISK WEIGHTED ASSETS

Isabella Peer Group
14.06% 11.79%

Risk based capital to risk weighted assets measures
the amount of capital held against risk based assets. The
Corporati on’s rati o of 14.06% is excepti onally strong when
compared to the required rati o of 10.0% necessary
the
to be considered adequately capitalized under
Federal Reserve Board’s risk based capital rules. The
Corporati on conti nues to be proﬁ table, well capitalized and
has funds available to meet its customers’ borrowing needs.

PROBLEM LOANS TO
ALLOWANCE FOR BAD DEBT

Isabella Peer Group
139.68% 79.92%

Problem loans to allowance for bad debt measures the
amount of reserves needed for possible loan losses on
non-performing loans. Isabella Bank Corporati on has $1.00
in reserves for every $0.72 of non-performing loans, which
means Isabella Bank Corporati on has more in reserve than
we have problem loans. This is considered a very safe and
conservati ve practi ce. The peer group has $1.00 in reserves
for every $1.25 of non-performing loans, which is substanti ally
less in reserves to absorb future loan losses from their
problem loans.

Bauer Financial, Inc. recognized Isabella Bank in November 2009 with the disti nguished 4-Star Excellent rati ng. The 4-star
rati ng is a symbol of excellence and signiﬁ es that we are recommended by Bauer Financial. The rati ng is based on the overall
ﬁ nancial conditi on of Isabella Bank. Earning a 4-Star Excellent rati ng denotes we are among the strongest banks in the nati on.
We have proudly maintained a recommended rati ng for 80 consecuti ve quarters.

page 7

Invest Locally

Invest Locally. It is about about our customers,
it is about our communities, and it is about
you, our shareholders. Since 1903, invest
locally has described how dollars deposited at
Isabella Bank are used to help local growth.

Financial Data

$7.80 million

net income

$1.74 billion

assets under management

$0.70

2009 cash dividends

Summary of Financial Data

Historical Comparison

fi nancial data
fi nancial data

(Dollars in thousands except per share data)

Income Statement Data

Total Interest Income

Net Interest Income

Provision for Loans Losses

Net Income

Balance Sheet Data

End of Year Assets

Daily Average Assets

Daily Average Deposits

Daily Average Loans/Net

Daily Average Equity

*Per Share Data

Earnings Per Share

Basic

Diluted

Cash Dividends

Book Value (Year End)

Market Value (Year End)

Financial Ratios

Shareholders' Equity to Assets (Year End)

Return on Average Equity

Return on Average Tangible Equity

Cash Dividend Payout to Net Income

Return on Average Assets

*Retroactively restated for the 10% stock dividend paid on February 29, 2008

2009

2008

2007

2006

2005

$ 58,105

$ 38,266

$ 6,093

$ 7,800

$ 61,385

$ 35,779

$ 9,500

$ 4,101

$ 53,972

$ 28,013

$ 1,211

$ 7,930

$ 44,709

$ 24,977

$ 682

$ 7,001

$ 36,882

$ 23,909

$ 777

$ 6,776

$ 1,143,944

$ 1,139,263

$ 1,127,634

$ 1,113,102

$ 786,714

$ 712,965

$ 139,810

$ 817,041

$ 708,434

$ 143,626

$ 957,282

$ 925,631

$ 727,762

$ 596,739

$ 119,246

$ 910,127

$ 800,174

$ 639,046

$ 515,539

$ 91,964

$ 741,654

$ 700,624

$ 576,091

$ 459,310

$ 74,682

$ 1.04

$ 1.01

$ 0.70

$ 18.69

$ 18.95

12.31%

5.58%

8.54%

67.40%

0.69%

$ 0.55

$ 0.53

$ 0.65

$ 17.89

$ 25.50

11.80%

2.86%

4.41%

118.82%

0.37%

$ 1.14

$ 1.11

$ 0.62

$ 17.58

$ 40.00

12.86%

6.65%

8.54%

54.27%

0.86%

$ 1.12

$ 1.09

$ 0.58

$ 16.61

$ 40.00

12.72%

7.61%

8.31%

53.92%

0.87%

$ 1.14

$ 0.55

$ 13.44

$ 36.36

10.91%

9.07%

9.12%

48.02%

0.97%

page 10

This past year, when few banks were in a position to lend, we stood apart from our competition. We were able to tell our story as a safe and strong community bank still
committed to lending in our local communities. As a result, we were able to deepen many of our relationships with existing customers and also attract new customers.

Total Assets

Dividends Per Share*

*Retroactively restated for the 10% Stock Dividend Paid on February 29, 2008

1,000

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600

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2000

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2009

Net Income

Ending Stock Price*

*Retroactively restated for the 10% Stock Dividend Paid on February 29, 2008

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2009

page 11

Invest Locally

As a community bank, our customers’ hard-earned
dollars grow locally while helping others in the
community buy a new home, purchase a car, or
start a business. Invest Locally describes your
commitment as shareholders to support a local
company that is locally managed. And finally,
Invest Locally speaks to our commitment to help
our customers and communities grow and prosper.

growth & product
commitment

to our shareholders

innovation

community

support

employee

recognition

local

decision-making

Community Banking at its Best
2009 Isabella Bank Headlines

In this electronic age, many businesses are looking for more convenient ways to accept payments. This year we introduced Quick and Simple Payments which gave our business
owners the capability to accept payments online. This service provided a win-win for both our business customers and their clients. Businesses receive payments directly into

growth

Growth and Product Innovation
To remain competitive, it is essential that we offer
innovative products and services that meet the
ever-changing needs of our customers. In 2009,
we completed several expansion projects to
better serve the needs of our customers.

Expansion Projects

East Pickard in Mt. Pleasant

Drive-thru added at Lake Isabella

Isabella Bank Corporate Offices

Trust and Investment Services Center

Electronic Payment Services
In this electronic age, many businesses are looking for
more convenient ways to accept payments. This year
we introduced Quick and Simple Payments which gave
our business owners the capability to accept payments
online. This service provided a win-win for both our
business customers and their clients. Businesses receive
payments directly into their account and their clients
have another convenient option to make a payment.

eFunds for Schools
Gone are the days of sending our kids to school with
a check or cash and worrying about the money being
lost. Great for parents and great for schools, eFunds
lunches or
allows parents to pay for their child’s
athletic fees electronically using an online service to
deduct the payment directly from their bank account.

MOBILE BANKING

Many of our customers utilize their
mobile device for much more than placing calls. Texts,
online access, and organizational tools make mobile
devices an essential tool for many of our customers.
In 2009, mobile banking was added
to our
online banking suite of products. This service
check account balances,
allows
transfer funds, and pay bills using their mobile device.

customers

TRANSFER FUNDS
PAY BILLS
CHECK BALANCES

From the Convenience of
Your Mobile Phone

Go to www.isabellabank.com
for more informati on

commitment

Commitment to Our Shareholders

In 2009, the Investor Relations Link at www.isabellabank.com
was updated with a goal of providing another way for
shareholders, customers, and the local communities to access
our corporate information. Visitors can view the Isabella Bank
Corporation stock price, financial statements, press releases,
SEC filings, annual reports, and learn more about the Isabella
Bank Corporation Board of Directors. The new site also has
an email notification feature that alerts subscribers when new
information has been added.

2009 Dividend History

1st
Quarter
$0.12

2nd
Quarter
$0.13

3rd
Quarter
$0.13

4th
Quarter
$0.13

Special
Year End
$0.19

TOTAL

$0.70

Closing Stock Price (December 31, 2009) : $18.95

Dividend Yield (December 31, 2009): 3.69%

page 14

The new site also has an email notification feature that alerts subscribers when new information has been added.Our financial literacy program reached over 2,700 students
throughout Clare, Gratiot, Isabella, Mecosta, Montcalm, and Saginaw counties in 2009. The program focuses on teaching saving skills and credit awareness to students of all

community

Giving Back to Our Community

Financial Literacy
Our financial literacy program reached over 2,700
students throughout Clare, Gratiot, Isabella, Mecosta,
Montcalm, and Saginaw counties
in 2009. The
program
focuses on teaching saving skills and
credit awareness to students of all ages. Over 50
employees volunteered their time through events
such as job shadow day, bank tours, and other
school programs.

OUR PART

“Our Part” included a special interest rate on
certificates of deposits and business
loans. This
demonstrated the positive momentum that dollars have
when they are deposited locally and reinvested right back
into our local communities. During a year when the
media painted a negative stroke across all members of the
banking industry, “Our Part” created a great way to prove
that we remain devoted to our local communities, we
continue to have money to lend, and we are dedicated
to helping our customers earn more on their
hard-earned dollars.

We believe in supporting local organizations
to help strengthen our communities. This is
a philosophy that we believe in as a company
and it is a philosophy that our employees
strongly believe in.

employees

2009 Isabella Bank Award

Recipients

At the core of any successful business is a
group of talented and engaged employees.

The Bank selected eight recipients of the
prestigious “Izzy” award and two teams to
receive the Team of the Year Award.
Employees and teams were nominated by
teamwork,
their peers
innovation, and customer service. The winners were then
selected by a panel comprised of the local Presidents.

their outstanding

for

2009 “Izzy” winners:

Tama Acker
Amy Andersen
Linda Connell
Paul Craddy
Tammy Kenny
Karen Lewandowski

Debbie Markley
Sharon Parks

Accounting
Six Lakes
Big Rapids
FGIS
Mt. Pleasant
Farwell
Breckenridge
Human Resources

2009 Team of the Year winners:

Collections Department

Chuck Amble, Beth Beltinck, Kim Betts,
Julie Bolt, Kathy Clouse, Don Forster,

Liz Gregus, Dan Sanders

Greenville Teller Line

Angie Antcliff, Lezlie Cushion, Elizabeth
Guzman, Doris Rhines, Jodi Schofield,
Mary Sepanik, Jillian Smith, Lois Solomon,

Holly Vermeulen

359
3,716

years of service

bank employees

3,300

volunteer hours

page 15

Local Decision-Making
Board of Directors and Senior Officers

Isabella Bank Corporation and Isabella Bank Board of Directors

Back Row: W. Michael McGuire | G. Charles Hubscher | Joseph LaFramboise | Ted W. Kortes | Jeffrey J. Barnes

Richard J. Barz | Thomas L. Kleinhardt | W. Joseph Manifold Middle: Dianne C. Morey | Sandra L. Caul

Front Row: David J. Maness | James C. Fabiano | William J. Strickler | Dennis P. Angner | Dale D. Weburg

JAMES C. FABIANO - Chairman
Chairman - Fabiano Brothers, Inc.

TED W. KORTES
President and CEO - Greenville Community Financial Corporation (retired)

RICHARD J. BARZ
Chief Executive Officer - Isabella Bank Corporation

W. JOSEPH MANIFOLD, CPA
President - Federal Broach & Machine Co.

DENNIS P. ANGNER
President and Chief Financial Officer - Isabella Bank Corporation

DAVID J. MANESS
President - Maness Petroleum Corporation

JEFFREY J. BARNES, MD
Physician and Owner - Central Eye Consultants

SANDRA L. CAUL
State Representative (retired)

G. CHARLES HUBSCHER
President - Hubscher and Son, Inc.

JOSEPH LaFRAMBOISE
Sales and Marketing Executive - Ford Motor Company (retired)

THOMAS L. KLEINHARDT
President - McGuire Chevrolet

W. MICHAEL McGUIRE
Attorney - The Dow Chemical Company

DIANNE C. MOREY
Owner - Bandit Industries, Inc.

WILLIAM J. STRICKLER
President - Michiwest Energy, Inc.

DALE D. WEBURG
Partner - Weburg Farms, Inc.

page 16

In addition to the Isabella Bank Board of Directors and the Isabella Bank Corporation Board of Directors, we have local boards in our Breckenridge, Farwell, Greenville, and
Mecosta communities. These boards are essential to us as a community bank. They ensure that customers in each of our locations are represented by members of their own

Isabella Bank Corporation Officers

RICHARD J. BARZ
Chief Executive Officer

DENNIS P. ANGNER
President and Chief Financial Officer

PEGGY L. WHEELER
Senior Vice President

GREGORY S. MAPES
Vice President

DOUGLAS D. McFARLANE
Vice President

BARBARA A. PLACE, CPA
Vice President

PATRICIA A. PLAXTON
Vice President

AMY C. VOGEL
Vice President

Isabella Bank Officers

RICHARD J. BARZ
President and Chief Executive Officer

STEVEN D. PUNG
Chief Operations Officer

DAVID J. REETZ
Senior Vice President

JAMES L. BINDER
Vice President

RANDY J. DICKINSON, CPA
Vice President

BARBARA B. DIEHM
Vice President

DANIEL E. EVERSOLE
Vice President

DAVID D. GILLESPIE
Vice President

MICHAEL K. HUENEMANN
Vice President

ROBERT K. MADSEN
Vice President

PAUL C. SIERS
Vice President

JEFFREY W. SMITH
Vice President

JONATHAN J. WAINWRIGHT
Vice President

PEGGY L. WHEELER
Vice President

LEO R. WICKERT
Vice President

Breckenridge Division
Board of Directors

DALE D. WEBURG - Chairman

DENNIS P. ANGNER
RICHARD J. BARZ
DAVID J. KING
WILSON C. LAUER
TIMOTHY M. MILLER
KIRK L. SMITH
GREGORY V. VARNER

Breckenridge Division Officers

TIMOTHY M. MILLER
President

BRIAN K. GOWARD
Vice President

KENNETH L. HOWELL
Vice President

BARBARA K. McKENZIE
Vice President

JOHN D. RIVETT
Vice President

Farwell Division
Board of Directors

HERBERT R. MILLER - Chairman

DENNIS P. ANGNER
RICHARD J. BARZ
THOMAS E. KEDROWSKI
THOMAS L. KLEINHARDT
W. MICHAEL McGUIRE
LARRY R. SCHOFIELD
THOMAS J. WALLACE

Farwell Division Officers

THOMAS J. WALLACE
President

MELODY M. DARNELL
Vice President

Equal Employment Opportunity

The equal employment opportunity clauses in Section 202 of the Executive Order 11246, as amended; 38 USC 2012,
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 are adhered to and
supported by Isabella Bank Corporation and its subsidiaries.

Greenville Division
Board of Directors

TED W. KORTES - Chairman

DENNIS P. ANGNER
RICHARD J. BARZ
JAE A. EVANS
KIRKWOOD E. FABER, DDS
GREGORY D. MILLARD
JAMES M. MULLENDORE, Jr.
LEALAND T. WALLIN

Greenville Division Officers

JAE A. EVANS
President

KATHY J. KORSON
Vice President

DAVID W. SEPPALA
Vice President

Mecosta Division
Board of Directors

RICHARD J. BARZ
Dr. RALPH P. CREW
LAWRENCE E. EMIG
KEVIN J. DEFEVER
JOSEPH LaFRAMBOISE
JEROME E. SCHWIND

Mecosta Division Officers

JEROME E. SCHWIND
President

KATHY Y. WALKINGTON
Vice President

Financial Group Information Services
Board of Directors

DAVID J. MANESS - Chairman

DENNIS P. ANGNER
RICHARD J. BARZ
JAE A. EVANS
THOMAS L. KLEINHARDT
TIMOTHY M. MILLER
STEVEN D. PUNG
JONATHAN J. WAINWRIGHT
DALE D. WEBURG

Financial Group Information
Services Officers

JONATHAN J. WAINWRIGHT
President

JULIE A. HUBER
Vice President

page 17

Invest Locally . . .

Invest Locally. It is about our customers, it is about our communities, and it is about
you, our shareholders. Invest Locally describes how dollars that are deposited at
Isabella Bank are used to help local growth. As a community bank, our customers’
hard-earned dollars grow locally while helping others in the community buy a new home,
purchase a car, or start a business. Invest Locally describes your commitment as
shareholders to support a local company that is locally managed. And finally,
Invest Locally speaks to our commitment to help our customers and communities
grow and prosper.

Isabella Bank Corporation 401 N. Main Street Mt. Pleasant, MI 48858