ISABELLA BANK CORPORATION
ANNUAL REPORT
2021 Isabella Bank Midland Office, 2222 N. Saginaw Road
Our Vision
is 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 subsidies 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.
by the numbers
$25.50
Closing price for ISBA stock on Dec. 31, 2021,
a 30% increase from Dec. 31, 2020.
$154 million
Total amount of Paycheck Protection Program loans
secured and distributed through Isabella Bank.
Worldwide ATM sites customers can use without a surcharge.
Isabella Bank joined the Allpoint Network in 2021.
55,000+
Strategic actions deliver record results
retired as Chair in May 2021 and remains on the board
as a director. Isabella Bank saw notable achievements
into
under his
Midland, Freeland, Saginaw and Big Rapids; the launch
of mobile and online banking; and asset growth
exceeding $800 million.
including expansions
leadership,
I also want to recognize Sarah Opperman, who was
elected the new board Chair in May. A lifelong mid-
Michigan resident and retired executive of The Dow
Chemical Company, Sarah delivers strong business
acumen and strategic thinking. The board chose Sarah
for her calm and collaborative leadership, thoughtful
guidance and unwavering commitment to Isabella Bank
and the communities we serve.
On a personal note, I close by saluting the bank’s
employees, who remained nimble, dedicated and upbeat
throughout the year. Exuding
professionalism and patience,
they worked long days with
steadfast focus on serving our
customers. I am thankful and
proud to stand beside them.
Together, we are delivering the
services and results you,
our shareholders and
customers, expect.
Jae A. Evans
President and CEO
Isabella Bank Corporation delivered across-
the-board positive results in 2021, including
impressive loan volume, record assets, and
assets under management.
An indication that 2021 would be one of the most
notable years in our history came in June, with the private
placement of $30 million in subordinated notes. The
funds provided low-interest capital to continue executing
on the corporation’s long-term strategic plan.
A portion of the capital was used to repurchase nearly
400,000 shares of the company's stock through a
"modified Dutch auction." The reduction of shares
positively influenced financial measurements, including
earnings per share. At year’s end, ISBA was trading at
$25.50, compared to $19.57 at the close of 2020.
The corporation achieved major milestones by ending
the year with $2.0 billion in assets and $2.8 billion in
assets under management. Reaching record levels of
loans and deposits were the major contributors to these
achievements. What’s more, Isabella Bank welcomed
more than 5,400 new customers across our footprint.
Service improvements included a move to the Allpoint
Network of automatic teller machines across the U.S. and
worldwide. Customers now have surcharge-free access
to their funds at more than 55,000 Allpoint locations and
can locate nearby ATMs online or via a mobile app.
The headwinds of 2021 – low interest rates, compressed
margins, and continued volatility from the COVID
pandemic – clearly continue. However, there are
indications that interest rates will increase as we move
through 2022, which should aid in improving our margin,
combined with solid loan demand and growth of new
relationships.
Highlights of the year would be incomplete without
extending my deep appreciation for Dave Maness, who
skillfully chaired our board of directors for 11 years. He
by the numbers
$30 million
Isabella Bank Corporation completed a private placement of $30
million in 3.25% fixed-to-floating rate subordinated notes due in
2031. The Corporation used a portion of the net proceeds in the
execution of a strategic tender offer, with the remainder planned
for general corporate purposes, including potential repurchases
of ISBA stock and/or merger and acquisition activity.
396,577
Shares of ISBA common stock purchased in a tender offer —
a “modified Dutch auction” — as part of a five-year plan to
improve shareholder value.
Board focus is to enhance shareholder
interests through long-term results
Your Board of Directors is dedicated to
and focused on the long-term success of
this independent community bank. It is a
responsibility each of us takes seriously on
behalf of you, the shareholder.
Isabella Bank’s mission to be the preeminent financial
services provider in our region means assuring strong
financial results not only for today, but for a sustainable
future, as well.
Key decisions and actions in 2021, delivered against
the five-year strategic plan, further enhanced the
corporation’s financial position. Two such Board-approved
initiatives were the $30 million in capital secured through
subordinated notes and the modified Dutch auction
purchase of nearly 400,000 shares of stock.
The bank grew in 2021 to a record $1.7 billion in deposits,
and investment and trust assets managed by Isabella
Wealth hit a record $516 million. The bank is designated
as a well-capitalized institution and entered 2022 in
a strong position to explore organic and non-organic
growth opportunities.
These results don't happen without a strong, committed
team. Isabella Bank has exceptional leaders, including Jae
Evans, Neil McDonnell and Jerome Schwind, and talented,
dedicated employees across our seven counties. Likewise,
the bank has an experienced, engaged Board of Directors,
chaired the past 11 years by Dave Maness. I thank Dave
for his tremendous leadership and for his mentorship.
We are fortunate to have his continued leadership and
counsel on our board.
During 2021, the board also appointed two new
outstanding directors:
Rick McGuirk is President and Operations Manager
of United Apartments and a management consultant
for McGuirk Sand and Gravel. Rick brings operational
and executive management expertise to the board,
as well as deep knowledge of and commitment to our
community.
Chad Payton, CPA, is an Officer and the Managing
Partner with Roslund, Prestage & Company, CPAs, PC.
Chad serves as one of the valued financial experts on
the board and continues to serve on Isabella Bank’s
South Region board as well.
Together, we are a 12-member
board of shareholders, customers
and community members. The
high-quality services and success
of Isabella Bank are as personal
for us as they are for you. We are
proud to represent you, our fellow
shareholders, and we remain firmly
committed to the continued
independent,
success of this
community bank.
Sarah R. Opperman
Chair
The Strength of a Community Bank:
Shareholders, customers, employees all overlap
ISBA shareholders often are more than investors. Many live in the seven counties we serve and
are customers. Some are the latest in multiple generations of shareholders. Our employees
frequently make a career out of working for Isabella Bank and they, too, become shareholders.
Such interconnections among shareholders, customers and employees are part of the fabric of
Isabella Bank and part of our history. Importantly, their stories often reflect the bank’s impact
on and commitment to individuals and communities.
Chad and Petra Estep
Chad Estep is a loyal Isabella Bank customer and
shareholder, and it is because of the hands-on care
East Region President Michael Colby showed him 13
years ago.
The recession in 2008-09 hit Estep’s company hard.
“I almost lost the whole company,” Estep said.
“Michael Colby helped me through it.”
At the time, Colby worked for a different bank. When
Colby joined the Isabella Bank team in 2016, Estep
followed him.
Today, Bay Transport, a trucking company in Auburn,
has 32 employees, is in its 21st year and “is doing
really well,” Estep said. It specializes in over-the-road
refrigerated trucks and also acts as a freight broker,
matching loads to carriers.
It is a family business, with Estep’s wife, Petra, serving as controller. They met when Estep was in the Army and stationed
in Germany. They moved to the Saginaw area afterward.
Estep started buying ISBA shares two years ago, stating that every six months, he purchases the max that he can.
Bill Hauck
Long before he launched a painting company 31
years ago, Bill Hauck opened a savings account at
Isabella Bank to deposit his earnings from the family
farm near Rosebush.
Now the owner of Bill Hauck Painting, he depends
on Isabella Bank every day.
“I have personal loans and a credit line for the
business,” Hauck said. “I also have a business
account.”
Hauck is a third-generation shareholder of ISBA. His
great-grandfather, Harry Hauck, was a shareholder
in Weidman State Bank and his stock transferred
when it became part of Isabella Bank.
Hauck prefers banking in person at the main branch
in downtown Mt. Pleasant because it gives him a chance to say hello to two friends, Chief Lending Officer and Senior
Vice President Dave Reetz and President Jerome Schwind.
It is a classic example of the overlap between shareholders and customers. It also demonstrates why customers and
shareholders across generations are loyal to Isabella Bank.
Sarah Bliven
Sarah Bliven knows Shepherd. She grew up in the
village, graduated from Shepherd High School and
now is manager of the Isabella Bank branch there.
“I love that Isabella Bank is community based,” she
said. “I love working in the community I’m from.
In 2008, when I was first hired, I felt so honored to
be part of this team. The bank has that good of a
reputation in the community.”
Bliven, who builds her shares of ISBA stock through
an employee program, serves as treasurer of the
Shepherd Rotary Club and will lead a craft beer tent
fundraiser later this year. Customers also find her
volunteering at the annual Maple Syrup Festival.
She is an Isabella Bank customer and a shareholder
with her husband, Steve, who owns a drain cleaning
business.
“Over the years, Isabella Bank's products have grown as we have grown; from business accounts that have helped
us meet our growth goals to accounts that have grown with our children. We especially have enjoyed teaching our
children how to bank using the student checking accounts,” Bliven said.
Behind the numbers: Customer-focused
lending plays strong role in record year
Isabella Bank Corporation recorded strong results in every area in 2021. While some mirror
national banking trends, many are distinctly tied to how we do business and reflect the
corporation reaching the mid-point of a five-year strategic plan to enhance shareholder growth.
For instance, our loan department completed more than
1,800 Paycheck Protection Program (PPP) loans in the past
two years — certainly part of the national picture. Key
to Isabella Bank, however, is that the lending team, led
by Chief Lending Officer and Senior Vice President Dave
Reetz, worked with customers to help them understand
the complexities of the program, ensured applications
were complete, and followed up when it was time to
apply for loan forgiveness.
PPP loans exceeded $154 million, and the bank recorded
$4 million in federal administration fees during 2021 for
its role in the process.
About the time PPP loans slowed, commercial lending
took off as regional business leaders gained confidence
in the economy. They turned to Isabella Bank as their
partner, seeking loans for equipment, real estate and
other needs. The loan department proactively nurtured a
pipeline of customers, closing $40 million in commercial
loans —
loans
commercial, agriculture, residential, consumer, and PPP
— totaled a record $1.3 billion in 2021.
in December alone. Isabella Bank
We continue to see growth in our customer base, in part
from individuals and businesses looking to establish new
relationships. These new customers value our history
and our future as an independent, full-service, locally
owned bank.
Customer acquisition played a role in deposit growth
throughout 2021. New clients also were among those
who moved assets into Isabella Wealth, where our
combined investment and trust management team now
manage a record $516 million, up $72 million in one year.
118 years lead to achievement of big milestones
Isabella Bank ended 2021 with tremendous results. Total
assets for the corporation climbed above $2 billion, a
milestone 118 years in the making. We reached the $1
billion threshold in 2008, our 105th year in business. Just
13 years later, we doubled that.
Other key numbers include:
• Net income was the highest ever at $19.5 million.
• $1.7 billion in deposits produced another high-
water mark.
• Earnings per share finished strong at $2.48 for
the year.
A Decade of Growth
Total Assets
2021: $2.03 billion
2020: $1.96 billion
2019: $1.81 billion
2018: $1.84 billion
2017: $1.81 billion
2016: $1.73 billion
It’s an especially exciting time to be part of Isabella Bank,
and I always look forward to seeing many of you at
our annual shareholders BBQ each fall. While
our successful tender offer took 5% of ISBA
shares off the market in 2021, most of our
longtime, community shareholders retained
their stock. We appreciate that deep loyalty,
which is the foundation of Isabella Bank and its
ongoing success.
2015: $1.67 billion
2014: $1.55 billion
2013: $1.49 billion
2012: $1.43 billion
2011: $1.34 billion
Neil M. McDonnell
Chief Financial Officer
ISABELLA BANK CORPORATION
SELECTED FINANCIAL DATA
(Dollars in thousands except per share amounts)
2021
2020
2019
For the years ended
INCOME STATEMENT DATA
Interest income
Interest expense
Net interest income
Provision for loan losses
Noninterest income
Noninterest expenses
Federal income tax expense
Net income
PER SHARE
Basic earnings
Diluted earnings
Dividends
Tangible book value
Quoted market value
High
Low
Close (1)
Common shares outstanding (1)
PERFORMANCE RATIOS
Return on average total assets
Return on average shareholders' equity
Return on average tangible shareholders' equity
Net interest margin yield (fully taxable equivalent)
BALANCE SHEET DATA (1)
Gross loans
Available‐for‐sale securities
Total assets
Deposits
Borrowed funds
Shareholders' equity
Gross loans to deposits
ASSETS UNDER MANAGEMENT (1)
Loans sold with servicing retained
Assets managed by Isabella Wealth
Total assets under management
ASSET QUALITY (1)
Nonperforming loans to gross loans
Nonperforming assets to total assets
Allowance for loan and lease losses to gross loans
CAPITAL RATIOS (1)
Shareholders' equity to assets
Tier 1 leverage
Common equity tier 1 capital
Tier 1 risk‐based capital
Total risk‐based capital
(1) At end of year
$
$
$
60,113
7,412
52,701
(518)
13,822
43,694
3,848
19,499
64,172
13,825
50,347
1,665
14,423
51,233
987
10,885
67,306
17,861
49,445
30
8,039
43,050
1,380
13,024
$
$
$
$
$
$
$
2.48
2.45
1.08
21.61
$
$
$
29.00
19.45
25.50
7,532,641
$
$
$
$
1.37
1.34
1.08
21.29
$
$
$
24.50
15.60
19.57
7,997,247
$
$
$
$
1.65
1.61
1.05
20.45
$
$
$
24.80
22.01
24.31
7,910,804
0.96 %
8.83 %
11.31 %
2.87 %
0.57 %
4.93 %
6.34 %
2.96 %
0.72 %
6.25 %
8.17 %
3.07 %
$
$
$
$
$
$
1,301,037
490,601
2,032,158
1,710,339
99,320
211,048
76.07 %
$
$
$
$
$
$
1,238,311
339,228
1,957,378
1,566,317
158,747
218,588
$
$
$
$
$
$
1,186,570
429,839
1,814,198
1,313,851
275,999
210,182
79.06 %
90.31 %
$
$
$
278,844
516,243
2,827,245
$
$
$
301,377
443,967
2,702,722
$
$
$
259,375
436,181
2,509,754
0.10 %
0.08 %
0.70 %
10.39 %
7.97 %
12.07 %
12.07 %
14.94 %
0.43 %
0.31 %
0.79 %
11.17 %
8.37 %
12.97 %
12.97 %
13.75 %
0.55 %
0.40 %
0.67 %
11.59 %
9.01 %
12.56 %
12.56 %
13.18 %
ISABELLA BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31
Change
2021
2020
$
%
Cash and cash equivalents
ASSETS
Cash and demand deposits due from banks
Interest bearing balances due from banks
Total cash and cash equivalents
Available‐for‐sale securities, at fair value
Mortgage loans available‐for‐sale
Loans
Commercial
Agricultural
Residential real estate
Consumer
Gross loans
Less allowance for loan and lease losses
Net loans
Premises and equipment
Corporate owned life insurance policies
Equity securities without readily determinable fair values
Goodwill and other intangible assets
Accrued interest receivable and other assets
TOTAL ASSETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest bearing
Interest bearing demand deposits
Certificates of deposit under $250 and other savings
Certificates of deposit over $250
Total deposits
Borrowed funds
Federal funds purchased and repurchase agreements
Federal Home Loan Bank advances
Subordinated debt, net of unamortized issuance costs
Total borrowed funds
Accrued interest payable and other liabilities
Total liabilities
Shareholders’ equity
Common stock — no par value 15,000,000 shares
authorized; issued and outstanding 7,532,641 shares
(including 105,654 shares held in the Rabbi Trust) in 2021
and 7,997,247 shares (including 59,162 shares held in the
Rabbi Trust) in 2020
Shares to be issued for deferred compensation obligations
Retained earnings
Accumulated other comprehensive income (loss)
Total shareholders’ equity
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
25,563
79,767
105,330
$
31,296
215,344
246,640
$
(5,733)
(135,577)
(141,310)
490,601
1,735
339,228
2,741
151,373
(1,006)
807,439
93,955
326,361
73,282
1,301,037
9,103
1,291,934
756,686
100,461
307,543
73,621
1,238,311
9,744
1,228,567
50,753
(6,506)
18,818
(339)
62,726
(641)
63,367
24,419
32,472
17,383
48,302
19,982
2,032,158
$
25,140
28,292
17,383
48,331
21,056
1,957,378
$
(721)
4,180
—
(29)
(1,074)
74,780
$
$
448,352
364,563
818,841
78,583
1,710,339
$
375,395
302,444
781,286
107,192
1,566,317
$
72,957
62,119
37,555
(28,609)
144,022
50,162
20,000
29,158
99,320
11,451
1,821,110
68,747
90,000
—
158,747
13,726
1,738,790
129,052
4,545
75,592
1,859
211,048
142,247
4,183
64,460
7,698
218,588
(18,585)
(70,000)
29,158
(59,427)
(2,275)
82,320
(13,195)
362
11,132
(5,839)
(7,540)
(18.32)%
(62.96)%
(57.29)%
44.62 %
(36.70)%
6.71 %
(6.48)%
6.12 %
(0.46)%
5.07 %
(6.58)%
5.16 %
(2.87)%
14.77 %
—%
(0.06)%
(5.10)%
3.82 %
19.43 %
20.54 %
4.81 %
(26.69)%
9.19 %
(27.03)%
(77.78)%
100.00 %
(37.44)%
(16.57)%
4.73 %
(9.28)%
8.65 %
17.27 %
(75.85)%
(3.45)%
$
2,032,158
$
1,957,378
$
74,780
3.82 %
ISABELLA BANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands except per share amounts)
Interest income
Loans, including fees
Available‐for‐sale securities
Taxable
Nontaxable
Federal funds sold and other
Total interest income
Interest expense
Deposits
Borrowings
Federal funds purchased and repurchase agreements
Federal Home Loan Bank advances
Subordinated debt, net of unamortized issuance costs
Total interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Noninterest income
Service charges and fees
Wealth management fees
Net gain on sale of mortgage loans
Earnings on corporate owned life insurance policies
Gains from redemption of corporate owned life insurance
policies
Net income (loss) on joint venture investment
Other
Total noninterest income
Noninterest expenses
Compensation and benefits
Furniture and equipment
Occupancy
Loss on extinguishment of debt
Other
Total noninterest expenses
Income before federal income tax expense
Federal income tax expense
NET INCOME
Earnings per common share
Basic
Diluted
Cash dividends per common share
Year Ended December 31
Change
2021
2020
$
%
$
51,410
$
54,102
$
(2,692)
(4.98)%
4,920
3,077
706
60,113
5,214
3,830
1,026
64,172
(294)
(753)
(320)
(4,059)
(5.64)%
(19.66)%
(31.19)%
(6.33)%
5,442
8,884
(3,442)
(38.74)%
53
1,302
615
7,412
52,701
(518)
53,219
7,614
3,071
1,694
800
271
—
372
13,822
23,749
5,462
3,661
—
10,822
43,694
23,347
36
4,905
—
13,825
50,347
1,665
48,682
6,544
2,578
2,716
755
891
577
362
14,423
23,772
5,787
3,557
7,643
10,474
51,233
11,872
17
(3,603)
615
(6,413)
2,354
(2,183)
4,537
1,070
493
(1,022)
45
(620)
(577)
10
(601)
(23)
(325)
104
(7,643)
348
(7,539)
11,475
3,848
19,499
$
987
10,885
$
2,861
8,614
$
$
$
$
2.48
2.45
1.08
$
$
$
1.37
1.34
1.08
$
$
$
1.11
1.11
—
47.22 %
(73.46)%
100.00 %
(46.39)%
4.68 %
(131.11)%
9.32 %
16.35 %
19.12 %
(37.63)%
5.96 %
(69.58)%
(100.00)%
2.76 %
(4.17)%
(0.10)%
(5.62)%
2.92 %
(100.00)%
3.32 %
(14.72)%
96.66 %
289.87 %
79.14 %
81.02 %
82.84 %
—%
ISABELLA BANK CORPORATION
AVERAGE BALANCES, INTEREST RATE, AND NET INTEREST INCOME
(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 for the last two years. 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 and Federal Home Loan Bank (FHLB) restricted equity
holdings are included in other interest earning assets.
2021
Tax
Equivalent
Interest
Average
Balance
Year Ended December 31
Average
Yield /
Rate
Average
Balance
2020
Tax
Equivalent
Interest
Average
Yield /
Rate
117,997
5
255,246
1,878,746
(9,396)
29,139
24,760
109,625
2,032,874
$
INTEREST EARNING ASSETS
Loans
Taxable investment securities
Nontaxable investment
securities
Fed funds sold
Other
Total earning assets
NONEARNING ASSETS
Allowance for loan losses
Cash and demand deposits due
from banks
Premises and equipment
Accrued income and other
assets
Total assets
INTEREST BEARING LIABILITIES
Interest bearing demand
deposits
Savings deposits
Time deposits
Federal funds purchased and
repurchase agreements
FHLB advances
Subordinated debt, net of
unamortized issuance costs
Total interest bearing
liabilities
NONINTEREST BEARING
LIABILITIES
Demand deposits
Other
Shareholders’ equity
Total liabilities and
shareholders’ equity
Net interest income (FTE)
Net yield on interest
earning assets (FTE)
$
1,208,141
297,357
$
51,410
4,920
4.26 %
1.65 %
$
1,236,169
229,468
$
54,102
5,214
4,235
—
706
61,271
3.59 %
0.02 %
0.28 %
3.26 %
140,665
4
142,717
1,749,023
5,189
—
1,026
65,531
(8,837)
24,987
25,846
118,195
1,909,214
$
$
262,188
456,088
387,881
$
357
1,212
7,315
$
345,015
558,102
336,094
$
216
616
4,610
0.06 %
0.11 %
1.37 %
0.09 %
1.88 %
57,453
69,342
17,000
53
1,302
35,518
210,451
615
3.62 %
—
36
4,905
—
1,383,006
7,412
0.54 %
1,352,126
13,825
1.02 %
416,247
12,858
220,763
$
2,032,874
320,820
15,613
220,655
$
1,909,214
$
53,859
$
51,706
2.87 %
2.96 %
4.38 %
2.27 %
3.69 %
0.06 %
0.72 %
3.75 %
0.14 %
0.27 %
1.89 %
0.10 %
2.33 %
—%
Board of Directors
SARAH R. OPPERMAN- Chair
Vice President (retired),
The Dow Chemical Company
THOMAS L. KLEINHARDT
President,
McGuire Chevrolet
JAE A. EVANS
President & Chief Executive Officer,
Isabella Bank Corporation
Chief Executive Officer,
Isabella Bank
DAVID J. MANESS
President,
Maness Petroleum
JEROME E. SCHWIND
President,
Isabella Bank
RICHARD L. MCGUIRK
Operations Manager/President,
Central Management, Inc.
DR. JEFFREY J. BARNES
Physician and Shareholder,
L.O. Eye Care
CHAD R. PAYTON, CPA
Officer and Managing Partner,
Roslund, Prestage & Company, CPA’s, PC
JILL BOURLAND, CPA, HCCP
Chief Executive Officer & Partner,
Blystone & Bailey, CPAs, PC
VICKI L. RUPP
Corporate Director (retired),
The Dow Chemical Company
G. CHARLES HUBSCHER
President,
Hubscher and Son, Inc.
GREGORY V. VARNER
Research Director (retired),
Michigan Bean Commission
As of March 2022
Senior Officers and Regional Boards
Isabella Bank
Corporation Officers
Isabella Bank Officers
Continued
Regional Boards of
Directors
JAE A. EVANS
President & Chief Executive Officer
JAMES L. BINDER
Vice President, Commercial Loans
JEROME E. SCHWIND
Vice President
NEIL M. McDONNELL
Chief Financial Officer
DEBRA A. CAMPBELL
Vice President, Secretary
JENNIFER L. GILL
Vice President, Controller
MICHAEL P. PRISBY
Vice President, Treasurer
Isabella Bank Officers
JAE A. EVANS
Chief Executive Officer
JEROME E. SCHWIND
President
NEIL M. McDONNELL
Chief Financial Officer
DAVID J. REETZ
Chief Lending Officer
PEGGY L. WHEELER
Chief Operations Officer
JON D. CATLIN
Chief Credit Officer
MICHAEL R. COLBY
President, East Region
BRIAN K. GOWARD
President, South Region
DAVID W. SEPPALA
President, West Region
PATRICK J. MEASE, SPHR, SHRM-SCP
Senior Vice President, Human Resources
THOMAS J. WALLACE
Senior Vice President, Retail Credit
JOSHUA A. ELING
Market President, Big Rapids
MICHAEL D. WILLIAMS
Market President, Midland
ERIKA M. ROSS
Vice President, Chief Risk Officer
JULIE A. SMITH, CGEIT, CRISC
Vice President, Chief Technology Officer
KIMBERLY K. BETTS
Vice President, Collections
JENN A. BRICK
Vice President, Customer Service Operations
DAVID E. BROWN
Vice President, Commercial Loans
DEBRA A. CAMPBELL
Vice President, Shareholder Relations
MARK K. DENOYELLES
Vice President, Isabella Wealth
RANDY J. DICKINSON, CPA, CTFA
Vice President, Isabella Wealth
JENNIFER L. GILL
Vice President, Controller
THOMAS N. GROSS
Vice President, Commercial Loans
CYNDIA S. HEAP, CRCM, CAMS
Vice President, Compliance
MICHAEL K. HUENEMANN
Vice President, Commercial Loans
JOANNA L. KEENAN
Vice President, Isabella Wealth
KATHY J. KORSON
Vice President, Mortgage Loans
KIMBERLY A. LAMBRIGHT
Vice President, Internal Audit
ROBERT Z. MACLEOD
Vice President, Branch Administration
GREGORY S. MAPES
Vice President, Financial Services
MICHELLE L. MEASE
Vice President, Isabella Wealth
MICHAEL P. PRISBY
Vice President, Treasurer
CARRIE S. SMITH
Vice President, Mortgage Loans
JEFFREY W. SMITH
Vice President, Commercial Loans
LESLIE J. THIELEN
Vice President, Consumer Loans
AMY C. VOGEL
Vice President, Core Systems & Special Projects
TIM M. WILSON
Vice President, Regional Branch Manager
TRACY A. ZAYLER
Vice President, Regional Branch Manager
East Region
MICHAEL R. COLBY
MARY F. DRAVES
SMALLWOOD HOLOMAN JR.
CHRISTOPHER J. RADKE
CLARENCE M. RIVETTE
VICKI L. RUPP
JEROME E. SCHWIND
South Region
CINDY M. BOSLEY
BRIAN K. GOWARD
WILLIAM HENDERSON
CHAD R. PAYTON
JEROME E. SCHWIND
JEFFREY E. SHERWOOD
GREGORY V. VARNER
West Region
DR. RALPH P. CREW
MATTHEW L. CURRIE
KEVIN J. DEFEVER
BLAKE R. HOLLENBECK
ALEXANDER R. KEMP
GREGORY D. MILLARD
BRIAN R. SACKETT
JEROME E. SCHWIND
DAVID W. SEPPALA
KATHY J. VANDERLAAN
Northern Advisory
SHARI R. BUCCILLI
MICHAEL L. JENKINS
THOMAS L. KLEINHARDT
JEROME E. SCHWIND
STEVEN L. STARK
As of March 2022
As a community bank,
we’re serious about paying it forward
By 2021, Isabella Bank had served area businesses and residents for 118 years. This statistic
represents thousands of employees, thousands of shareholders and tens of thousands of
customers — intertwined to forge the communities inherent to our identity.
In addition, Isabella Bank:
• Hosted a blood drive with Versiti Blood Center and
TV 9&10.
• Sponsored and participated in Christmas parades
in Breckenridge, Ithaca, Greenville and Mount
Pleasant.
• Volunteered in July with other groups to package
and serve meals at the Saginaw East Side Soup
Kitchen.
• Volunteered in May to plant and maintain the
planter in front of Berry Funeral Home in Shepherd.
• Sponsored the Sacco Field scoreboard used by
Union Township Little League Baseball.
• Remains an active participant at the Mt. Pleasant
Farmers’ Market and Midland Area Farmers Market.
It should be no surprise then, that we prioritize a role
of service across our seven-county region. Isabella Bank
team members serve on volunteer boards, are involved
in civic groups, participate in and help organize local
charitable events and help others through hands-on
efforts and financial contributions.
Here are a few of the ways we supported our
communities in 2021:
• As we do each October, nearly all of our over 350
employees headed out to participate in a service
project in what we call, Compassion into Action.
In 2021, one of those projects involved a daylong
cleanup and repair project at the West Midland
Family Center. We also partnered with other local
nonprofit organizations that day such as United
Way, Habitat for Humanity, Rock the Block and
Underground Railroad.
• We co-sponsored a drive-in movie for families on
the first day of spring on the lot of Krapohl Ford
& Lincoln, another long-time, locally owned and
operated business leader in Mount Pleasant.
• Sponsored the Isabella Bank VIP Club in the new
end zone facility at Kelly/Shorts Stadium at Central
Michigan University. We support CMU as a key
regional employer and an important part of the
area’s economy.
Employee Recognition
In 2021, we celebrated alongside our employees as they achieved both
professional and personal milestones. We recognize the following
individuals on their recent promotions, appointments, and retirements.
Officer Promotions
Jennifer Gill
Vice President, Controller
Kim Lambright
Vice President, Internal Audit
Retirements
Sandy Yuncker, 42 years
Don Forster, 36 years
Deb Wiggins, 34 years
Chari Turnwald, 22 years
Mary Olivieri, 21 years
Barb Steffee, 18 years
Barb Place, 15 years
Patricia (Sue) Hardy, 13 years
Greg Matthews, 8 years
by the numbers
Directors Nominated for Board Election
4
96
Years of Combined Service on ISBA Corporate Board
05.03.22 @ 5 p.m.
Please plan to attend our Virtual Annual Meeting as well as vote
and submit your questions during the live webcast of the meeting.
Visit www.virtualshareholdermeeting.com/ISBA2022 and enter the
16-digit control code number included on your enclosed proxy card.
ISABELLA BANK CORPORATION
401 N. Main St.
Mt. Pleasant, Michigan 48858
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 3, 2022
Notice is hereby given that the Annual Meeting of Shareholders of Isabella Bank Corporation will be held virtually, in lieu of
an in-person meeting, on Tuesday, May 3, 2022 at 5:00 p.m. Eastern Daylight Time. The meeting is for the purpose of
considering and acting upon the following items of business:
1. The election of four directors.
2. To transact such other business as may properly come before the meeting, or any adjournment or adjournments
thereof.
The Board of Directors has fixed March 11, 2022 as the record date for determination of shareholders entitled to notice of, and
to vote at, the meeting or any adjournments thereof.
Shareholders can attend, vote, and submit questions at the virtual Annual Meeting via the internet at
www.virtualshareholdermeeting.com/ISBA2022 and entering their 16-digit control number included on their proxy card.
By order of the Board of Directors
Debra Campbell, Secretary
Dated: March 25, 2022
ISABELLA BANK CORPORATION
401 N. Main St.
Mt. Pleasant, Michigan 48858
PROXY STATEMENT
General Information
This Proxy Statement is furnished in connection with the solicitation of proxies, to be voted at our Annual Meeting of
Shareholders (the “Annual Meeting”) which is to be held virtually, in lieu of an in-person meeting, on Tuesday, May 3, 2022 at
5:00 p.m., or at any adjournment or adjournments thereof, for the purposes set forth in the accompanying Notice of the Annual
Meeting of Shareholders and in this Proxy Statement.
Shareholders can attend, vote, and submit questions at the virtual Annual Meeting via the internet at
www.virtualshareholdermeeting.com/ISBA2022 and entering their 16-digit control number included on their proxy card.
This Proxy Statement has been mailed on March 25, 2022 to all holders of record of common stock as of the record date. If a
shareholder’s shares are held in the name of a broker, bank, or other nominee, then that party should give the shareholder
instructions for voting the shareholder’s shares.
Voting at the Meeting
We have fixed the close of business on March 11, 2022 as the record date for the determination of shareholders entitled to
notice of, and to vote at, the Annual Meeting and any adjournment or adjournments thereof. We have only one class of common
stock and no preferred stock. As of March 11, 2022, there were 7,534,136 shares of stock outstanding. Each outstanding share
entitles the holder thereof to one vote on each separate matter presented for vote at the meeting. You may vote on matters that
are properly presented at the Annual Meeting by attending the meeting and casting a vote, signing and returning the enclosed
proxy, voting on the internet, or voting by phone. You may change your vote or revoke your proxy at any time before it is voted
at the Annual Meeting by filing with the Corporation an instrument revoking it, filing a duly executed proxy bearing a later date
(including a proxy given over the internet or by phone) or by attending the virtual meeting and electing to vote in person. You
are encouraged to vote by mail, internet, or phone.
A quorum must be present in order to hold the Annual Meeting. A quorum is present if a majority of the shares of common
stock entitled to vote are represented in person or by proxy. If you execute and return a proxy, those shares will be counted to
determine if there is a quorum, even if you abstain or fail to vote on any of the proposals.
Your broker may not vote on Proposal 1 if you do not furnish instructions for such proposal. You should use the voting
instruction card provided by us to instruct the broker to vote the shares, or else your shares will be considered “broker non-
votes.” Broker non-votes are shares held by brokers or nominees as to which voting instructions have not been received from
the shares’ beneficial owner or the individual entitled to vote those shares and the broker or nominee does not have
discretionary voting power under rules applicable to broker-dealers. Under these rules, Proposal 1 is not an item on which
brokerage firms may vote in their discretion on your behalf unless you have furnished voting instructions.
At this year’s Annual Meeting, you will elect four directors to serve for a term of three years. You may vote in favor or
withhold your vote with respect to any or all nominees. Directors are elected by a plurality of the votes cast at the Annual
Meeting. Abstentions and shares not voted, including broker non-votes, have no effect on the elections.
Proposal 1 - Election of Directors
The Board of Directors (the “Board”) currently consists of twelve (12) members divided into three classes, with the directors in
each class being elected for a term of three years. At the Annual Meeting, Thomas L. Kleinhardt, Sarah R. Opperman, Chad R.
Payton, and Gregory V. Varner, whose terms expire at the Annual Meeting, have been nominated for election to serve through
the 2025 Annual Meeting.
Except as otherwise specified, proxies will be voted for the election of the four nominees. If a nominee becomes unable or
unwilling to serve, proxies will be voted for such other person, if any, as shall be designated. However, we know of no reason
to anticipate that this will occur. Each of the nominees has agreed to serve as a director if elected.
Nominees and current directors, including their principal occupation for the last five or more years, age, and length of service as
a director, are listed below.
We recommend that you vote FOR the election of each of the nominees.
Director Qualifications
Board members are highly qualified and represent your best interests. We select nominees who:
•
•
•
•
•
•
Have extensive business leadership.
Bring a diverse perspective and experience.
Are objective and collegial.
Have high ethical standards and have demonstrated sound business judgment.
Are willing and able to commit the significant time and effort to effectively fulfill their responsibilities.
Are active in and knowledgeable of their respective communities.
Each nominee and current director possesses these qualities and provides a diverse complement of specific business skills and
experience. In addition to the general qualifications described above, qualifications are included in the biographical summaries
provided below.
The following table identifies individual Board members serving on each of our standing committees:
Director
Sarah R. Opperman
Dr. Jeffrey J. Barnes
Jill Bourland
Jae A. Evans
G. Charles Hubscher
Thomas L. Kleinhardt
David J. Maness
Richard L. McGuirk
Chad R. Payton
Vicki L. Rupp
Jerome E. Schwind
Gregory V. Varner
C — Chairperson
O — Ex-Officio
Audit
Xo
Xc
X
X
X
Nominating
and Corporate
Governance
Xo
X
Compensation
and Human
Resource
Xo
Xc
X
Xc
X
X
X
Director Nominees for Terms Ending in 2025
Thomas L. Kleinhardt (age 67) has been a director of the Bank since 1998 and of Isabella Bank Corporation since 2010.
Mr. Kleinhardt is President of McGuire Chevrolet, active in the Clare Kiwanis Club, and the former coach of the girls Varsity
Basketball team for both Farwell High School and Clare High School. Mr. Kleinhardt's years of experience in managing a
successful automobile dealership and understanding the financing needs of customers are valuable to the Board.
Sarah R. Opperman (age 62) has been a director of Isabella Bank Corporation and of the Bank since 2012 and has served as
chair of both boards since May 2021. Ms. Opperman previously was employed for 28 years by The Dow Chemical Company,
where she held leadership roles in public and government affairs. She served as interim President and Chief Executive Officer
of the Midland Business Alliance from March 1 to December 2018. Ms. Opperman is a member of the Central Michigan
University Advancement Board and MyMichigan Health Foundation. Ms. Opperman's business and leadership expertise, as
well as her depth of community relationships, benefit Board discussions and decisions.
Chad R. Payton (age 53) has been a director of Isabella Bank Corporation and of the Bank since March 2021. Mr. Payton is a
Certified Public Accountant and Partner of Roslund, Prestage & Company, PC, with over 30 years of tax and accounting
experience. Mr. Payton is a member of the American Institute of Certified Public Accountants and Michigan Association of
Certified Public Accountants. Mr. Payton has served as a member of an Isabella Bank regional advisory board since 2019. Mr.
Payton's expertise in accounting and business experience are valuable to the Board.
Gregory V. Varner (age 67) has been a director of Isabella Bank Corporation and of the Bank since 2015. Mr. Varner was the
Research Director for the Michigan Bean Commission for 40 years and retired in 2019. He received a Bachelor of Science in
Agricultural Education and a Master of Science in Crop Science from Michigan State University. Mr. Varner's knowledge and
years of experience in the agricultural field is an asset to the Board.
Current Directors with Terms Ending in 2023
Dr. Jeffrey J. Barnes (age 59) has been a director of the Bank since 2007 and of Isabella Bank Corporation since 2010.
Dr. Barnes is a physician and shareholder in L.O. Eye Care, P.C. He is a former member of the Central Michigan Community
Hospital Board of Directors. Dr. Barnes has experience in business operations and management, as well as knowledge of the
communities we serve, which adds value to the Board.
G. Charles Hubscher (age 68) has been a director of the Bank since 2004 and of Isabella Bank Corporation since 2010.
Mr. Hubscher is President of Hubscher and Son, Inc., a sand and gravel producer. He is a former director of the National Stone,
Sand and Gravel Association, the Michigan Aggregates Association, and served on the Mt. Pleasant Area Community
Foundation Board of Trustees for 20 years. Mr. Hubscher is a former member of the Zoning Board of Appeals for Deerfield
Township. Mr. Hubscher brings his experience in business operations and management to the Board as well as his knowledge
of the communities we serve.
David J. Maness (age 68) has been a director of the Bank since 2003 and of Isabella Bank Corporation since 2004. Mr. Maness
served as Chairman of the Board for the Corporation and the Bank from 2010 to May 2021. He is President of Maness
Petroleum, a geological and geophysical consulting services company. Mr. Maness is currently serving as a director for the
Michigan Oil & Gas Association, and he previously served on the Mt. Pleasant Public Schools Board of Education. The
business experience and community involvement that Mr. Maness brings to the Board is invaluable.
Vicki L. Rupp (age 62) has been a director of Isabella Bank Corporation and of the Bank since 2019. Ms. Rupp retired from
The Dow Chemical Company after a successful thirty-five year career in various positions, including her final position of
Corporate Director of Business Services. Her experience included specialty research & development, environmental, health
and safety, global corporate service management, mergers & acquisition implementation, and organizational management. Ms.
Rupp owns her own consulting company, Vicki Rupp Consulting, for companies seeking operational improvements. She also
serves on the Saginaw Valley State University Foundation Board and Saginaw Valley State University Board of Control as
chair. Ms. Rupp serves her community as a member of the executive committee of United Way and as a DOW/Saginaw Valley
State University Affinity Network leader. Ms. Rupp brings experience in operations and strategic development and a
commitment to community involvement.
Current Directors with Terms Ending in 2024
Jill Bourland (age 51) has been a director of Isabella Bank Corporation and of the Bank since 2017. Ms. Bourland is CEO and
Partner of Blystone & Bailey, CPAs, P.C. Ms. Bourland is a graduate of Central Michigan University, a Certified Public
Accountant, and a Housing Credit Certified Professional. She has over 25 years of audit, tax and accounting experience with a
concentration in small business and affordable housing sectors. She currently serves as Treasurer of the William and Janet
Strickler Nonprofit Center. She formerly served as President of the Mt. Pleasant Area Community Foundation and also as
Treasurer and Chair of its Finance Committee. She is involved with the Gratiot-Isabella Technical Education Center
Accounting/Business Advisory Committee. She is also a member of the American Institute of Certified Public Accountants,
Michigan Association of Certified Public Accountants and Home Builders Association. Ms. Bourland has expertise in
accounting, business experience and a strong commitment to community involvement.
Jae A. Evans (age 65) has been a director of Isabella Bank Corporation and of the Bank since 2014. He has been President and
Chief Executive Officer of the Corporation since 2014 and Chief Executive Officer of the Bank since 2018. Mr. Evans has
been employed by the Corporation since 2008 and served as Chief Operations Officer of the Bank from 2011 to 2013 and
President of the Greenville Division of the Bank from 2008 to 2011. He is a graduate of Central Michigan University and has
over 45 years of banking experience. Mr. Evans currently serves as a board member for The Community Bankers of Michigan,
United Bankers Bank, and the Central Michigan University Advancement Board. Mr. Evans is also past Chair of the EightCap,
Inc. Governing Board, past Vice Chair of the Carson City Hospital, past board member of the McLaren Central Michigan
Hospital, was president of the Greenville Rotary Club, and past Chair of The Community Bankers of Michigan. Mr. Evans
provides the Board with executive leadership, knowledge of commercial banking, and strong community involvement.
Richard L. McGuirk (age 50) was appointed a director of Isabella Bank Corporation and of the Bank at the February 24, 2021
Board meeting, effective March 31, 2021. Mr. McGuirk is the President and Operations Manager of Central Management, Inc.
and a management consultant for McGuirk Sand-Gravel, Inc. Mr. McGuirk is a graduate of Central Michigan University and is
a licensed real estate broker and builder. He currently serves as a board member for the Mt. Pleasant Area Community
Foundation and the Central Michigan University Advancement Board. Mr. McGuirk has expertise in business, and a strong
commitment to community involvement.
Jerome E. Schwind (age 55) has been a director of Isabella Bank Corporation and of the Bank since 2017. Mr. Schwind is
President of the Bank and Vice President of the Corporation. He has been employed by the Bank since 1999 and has served in
various roles at the Bank including Executive Vice President and Chief Operations Officer. Mr. Schwind received his
undergraduate degree from Ferris State University and his MBA from Lake Superior State University. He is also a graduate of
the Dale Carnegie Executive Development program, the Graduate School of Banking at the University of Wisconsin-Madison,
and the Rollie Denison Leadership Institute. He currently serves as the Chair for the Middle Michigan Development
Corporation, is a member of the Finance Advisory Board for the Ferris State University College of Business, the Michigan
Bankers Association Grassroots Advocacy Committee, the Perry School of Banking Board, the Michigan Bankers Association
Board, and also the Great Lakes Bay Alliance Board. Mr. Schwind brings his experience in banking and his many years at
Isabella Bank to the Board in addition to his knowledge of the markets we serve.
Each of the directors has been engaged in their stated professions for more than five years unless otherwise stated.
Other Executive Officers
Neil M. McDonnell (age 58), Chief Financial Officer of Isabella Bank Corporation and of the Bank, joined Isabella Bank
Corporation on January 30, 2018. Mr. McDonnell has over 30 years of banking experience and has served as chief financial
officer, controller, treasurer, compliance & risk officer, and director of finance at large international banks, local community
banks, as well as de novo banks. Prior to joining the Corporation, Mr. McDonnell was the Executive Vice President and Chief
Financial Officer at Patriot Bank, N.A. located in Stamford, CT from January 2016 to May 2017.
David J. Reetz (age 61), Chief Lending Officer of the Bank, has over 35 years of lending experience and has been employed by
the Bank since 1987, serving in his current role since 2003. He is a past President of the Exchange Club of Isabella County,
served as Treasurer of the Isabella County Co-Expo Board and serves as a member of the Summit Clubhouse Advisory Board.
Peggy L. Wheeler (age 62), Chief Operations Officer of the Bank, has been employed by the Bank since 1977. She has over 40
years of banking experience with Isabella Bank, holding various positions including customer service, accounting, Controller,
and Senior Vice President of Operations. She is a member of the grant review committee for the Mt. Pleasant Area Community
Foundation and a member of the Optimist Club in Mt. Pleasant.
Director Independence
Corporate Governance
We have adopted the director independence standards as defined under the NASDAQ listing requirements. We have determined
that Dr. Jeffrey J. Barnes, Jill Bourland, G. Charles Hubscher, Thomas L. Kleinhardt, David J. Maness, Richard L. McGuirk,
Sarah R. Opperman, Chad R. Payton, Vicki L. Rupp, and Gregory V. Varner are independent directors. Jae A. Evans is not
independent as he is employed as President and CEO of Isabella Bank Corporation and CEO of Isabella Bank. Jerome E.
Schwind is not independent as he is employed as President of Isabella Bank and Vice President of Isabella Bank Corporation.
Board Leadership Structure and Risk Oversight
Our Governance Policy provides that only directors who are deemed to be independent as set forth by the NASDAQ listing
requirements and SEC rules are eligible to hold the office of chairperson. Additionally, the chairpersons of Board established
committees must also be independent directors. It is our belief that having a separate chairperson and CEO best serves the
interest of the shareholders. The Board elects its chairperson at the first Board meeting following the Annual Meeting.
Independent members of the Board meet without inside directors at least twice per year.
Management is responsible for our day-to-day risk management and the Board’s role is to engage in informed oversight. The
Board utilizes committees to oversee risks associated with compensation, and governance. The Isabella Bank Board of
Directors is responsible for overseeing credit, investment, information technology, interest rate, and trust risks. The
chairpersons of the respective boards or committees report on their activities on a regular basis.
Our Audit Committee is responsible for overseeing the integrity of our consolidated financial statements, the independent
auditors’ qualifications and independence, the performance of our internal audit function and those of independent auditors, our
system of internal controls, our financial reporting and system of disclosure controls, and our compliance with legal and
regulatory requirements and with our Code of Conduct and Business Ethics.
Committees of the Board of Directors and Meeting Attendance
The Board met 14 times during 2021. No current member of the Board attended less than 75% of the aggregate meetings of the
Board and all committees on which such director served during 2021. The Board has an Audit Committee, a Nominating and
Corporate Governance Committee, and a Compensation and Human Resource Committee.
Audit Committee
The Audit Committee is composed of independent directors. Information regarding the functions performed by the Audit
Committee, its membership, and the number of meetings held during the year, is set forth in the “Audit Committee Report”
included in this Proxy Statement. The Audit Committee is governed by a written charter approved by the Board, which is
available on the Bank’s website: www.isabellabank.com.
In accordance with the provisions of the Sarbanes-Oxley Act of 2002, director Bourland and director Payton met the
requirements of Audit Committee Financial Expert and have been so designated. The Audit Committee also consists of
directors Kleinhardt, Maness, and Opperman (ex-officio).
Nominating and Corporate Governance Committee
We have a standing Nominating and Corporate Governance Committee consisting of independent directors Barnes, Hubscher,
Maness, Opperman (ex-officio), and Varner. The Nominating and Corporate Governance Committee held two meetings in
2021, with all committee members attending each meeting for which they were a member. The Board has approved a
Nominating and Corporate Governance Committee Charter which is available on the Bank’s website: www.isabellabank.com.
The Nominating and Corporate Governance Committee is responsible for evaluating and recommending individuals for
nomination to the Board for approval. This Committee, in evaluating nominees, including incumbent directors and any
nominees put forth by shareholders, considers business experience, skills, character, judgment, leadership experience, and their
knowledge of the geographical markets, business segments or other criteria the Committee deems relevant and appropriate
based on the current composition of the Board. This Committee considers diversity in identifying members with respect to our
geographical markets served, the industry knowledge and experience of the nominee, and community relations of the nominee.
The Nominating and Corporate Governance Committee will consider, as potential nominees, persons recommended by
shareholders. Recommendations should be submitted in writing to the Secretary of the Corporation, 401 N. Main St., Mt.
Pleasant, Michigan 48858 and include the shareholder’s name, address and number of shares of the Corporation owned by the
shareholder. The recommendation should also include the name, age, address and qualifications of the candidate.
Recommendations for the 2023 Annual Meeting of Shareholders should be delivered no later than November 25, 2022. The
Nominating and Corporate Governance Committee evaluates all potential director nominees in the same manner, whether the
nominations are received from a shareholder, or otherwise.
Compensation and Human Resource Committee
The Compensation and Human Resource Committee is responsible for reviewing and recommending to the Board the
compensation of directors and the compensation of the President and CEO, Bank President, and CFO, including benefit plans.
This Committee consists of independent directors Bourland, Kleinhardt, Opperman (ex-officio), and Varner. The Compensation
and Human Resource Committee held five meetings during 2021. This Committee is governed by a written charter approved by
the Board that is available on the Bank’s website: www.isabellabank.com.
Communications with the Board
Shareholders may communicate with the Board by sending written communications to the attention of the Corporation’s
Secretary, Isabella Bank Corporation, 401 N. Main St., Mt. Pleasant, Michigan 48858. Communications will be forwarded to
the Board or the appropriate committee, as soon as practicable.
Code of Ethics
Our Code of Conduct and Business Ethics, which is applicable to the CEO, CFO, and Controller, is available on the Bank’s
website: www.isabellabank.com.
Audit Committee Report
The Audit Committee oversees the financial reporting process on behalf of the Board. The 2021 Audit Committee consisted of
directors Bourland, Kleinhardt, Maness, Opperman (ex-officio), and Payton.
The Audit Committee is responsible for pre-approving all auditing services and permitted non-audit services by our
independent auditors, or any other auditing or accounting firm, if those fees are reasonably expected to exceed 5.0% of the
current year agreed upon fee for independent audit services. The Audit Committee has established general guidelines for the
permissible scope and nature of any permitted non-audit services in connection with its annual review of the audit plan and
reviews the guidelines with the Board.
Management has the primary responsibility for the consolidated financial statements and the reporting process including the
systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited consolidated
financial statements in the Annual Report with management including a discussion of the acceptability of the accounting
principles, the reasonableness of significant judgments, and the clarity of disclosures in the consolidated financial statements.
The Audit Committee also reviewed with management and the independent auditors, management’s assertion on the design and
effectiveness of our internal control over financial reporting as of December 31, 2021.
The Audit Committee reviewed with our independent auditors, who are responsible for expressing an opinion on the conformity
of those audited consolidated financial statements with accounting principles generally accepted in the United States of
America, their judgments as to the acceptability of our accounting principles and such other matters as are required to be
discussed with the Audit Committee by the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), including those described in Auditing Standard No. 1301, “Communications with Audit Committees”, as may be
modified or supplemented. In addition, the Audit Committee has received the written disclosures and the letter from the
independent auditors required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence”, as
may be modified or supplemented, and has discussed this issue with the independent auditors.
The Audit Committee discussed with our internal and independent auditors the overall scope and plans for their respective
audits. The Audit Committee meets with the internal and external independent auditors, with and without management present,
to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial
reporting process. The Audit Committee held five meetings during 2021.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and
the Board has approved) that the audited consolidated financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2021 for filing with the Securities and Exchange Commission. The Audit Committee has
appointed Rehmann Robson LLC as the independent auditors for the 2022 audit.
Respectfully submitted,
Jill Bourland, Audit Committee Chairperson
Thomas L. Kleinhardt
David J. Maness
Sarah R. Opperman (ex-officio)
Chad R. Payton
Executive Officers
Executive officers are compensated in accordance with their employment with the applicable entity. The following table shows
information on compensation earned in each of the last two fiscal years ended December 31, 2021, for the CEO, CFO, and our
next most highly compensated executive officer.
Summary Compensation Table
Name and principal position
Jae A. Evans
President and CEO of Isabella Bank
Corporation and CEO of Isabella Bank
Year
2021
2020
Salary
($)(1)
463,000
449,250
Bonus
($)(2)
89,250
74,366
Stock
Awards
($)(3)
—
74,366
Neil M. McDonnell
CFO of Isabella Bank Corporation and
Isabella Bank(6)
2021
2020
275,687
266,773
30,946
46,253
—
46,253
Change in pension
value and
nonqualified
deferred
compensation
earnings
($)(4)
—
—
—
—
All other
compensation
($)(5)
50,387
49,918
Total
($)
602,637
647,900
149,832
22,379
456,465
381,658
Jerome E. Schwind
President of Isabella Bank and Vice
President of Isabella Bank Corporation
2021
2020
349,209
332,661
44,616
50,731
—
50,731
(4,000)
14,000
51,263
49,557
441,088
497,680
(1) Executive officer salary includes compensation voluntarily deferred under our 401(k) plan. Director fees are also included
and are displayed in the following table for each of the last two years ended December 31, 2021:
Name
Director fees ($)
2021
2020
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,000
24,250
(2)
(3)
(4)
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Includes payouts granted pursuant to the Isabella Bank Corporation Employee Cash Incentive Plans .
Includes shares granted pursuant to the Isabella Bank Corporation Stock Award Incentive Plan.
Includes the aggregate non-cash change in the actuarial present value of the noted executive's accumulated benefit under
the Isabella Bank Corporation Pension Plan.
24,250
28,000
(5) For all named executives, all other compensation includes 401(k) matching contributions and auto allowance. For Neil M.
McDonnell all other compensation includes relocation payment.
(6) Neil M. McDonnell served as Interim Controller from November 5, 2020 to March 1, 2021.
Outstanding Equity Awards at Fiscal Year-End Table
The following table provides information on the unvested shares of restricted stock pursuant to the Isabella Bank Corporation
Restricted Stock Plan as of December 31, 2021:
Name
Stock awards
Number of
shares or units of
stock that have
not vested (#)(1)
Market value of
shares or units of
stock that have
not vested ($)(2)
Grant Date
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4/1/2021
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6/24/2020
Neil M. McDonnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4/1/2021
Neil M. McDonnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6/24/2020
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Shares of restricted stock are subject to a three year vesting period from the date of issuance.
(2) Based on the closing price of the Corporation's common stock as of the grant date.
4/1/2021
6/24/2020
8,000
2,427
3,184
952
4,281
1,279
174,000
42,500
69,250
16,673
93,120
22,383
Pension Benefits
Defined Benefit Pension Plan. We sponsor the Isabella Bank Corporation Pension Plan (“Defined Benefit Pension Plan”), a
frozen defined benefit pension plan. The curtailment, which was effective March 1, 2007, froze the current participant’s accrued
benefits as of that date and limited participation in the plan to eligible employees as of December 31, 2006. Due to the
curtailment of the plan, the number of years of credited service was frozen. As such, the years of credited service for the plan
may differ from the participant’s actual years of service.
Annual contributions are made to the plan as required by accepted actuarial principles, applicable federal tax laws, and to pay
expenses related to operating and maintaining the plan. The amount of contributions on behalf of any one participant cannot be
separately or individually computed.
Pension plan benefits are based on years of service and the employees’ five highest consecutive years of compensation out of
the last ten years of service, through December 31, 2006.
A participant may earn a benefit for up to 35 years of accredited service. Earned benefits are 100% vested after five years of
service. Benefit payments normally start when a participant reaches age 65. A participant with more than five years of service
may elect to take early retirement benefits anytime after reaching age 55. Benefits payable under early retirement are reduced
actuarially for each month prior to age 65 in which benefits begin.
Under the provisions of the plan, participants are eligible for early retirement after reaching the age of 55 with at least five years
of service. The early retirement benefit amount is the accrued benefit payable at normal retirement date reduced by 5/9% for
each of the first 60 months and 5/18% for each of the next 60 months that the benefit commencement date precedes the normal
retirement date.
Retirement Bonus Plan. We sponsor the Isabella Bank Corporation Retirement Bonus Plan (“Retirement Bonus Plan”). This
nonqualified plan is intended to provide eligible employees with additional retirement benefits. To be eligible, the employee
needed to be an employee on January 1, 2007, and be a participant in our frozen Executive Supplemental Income Agreement.
Participants were also required to be an officer with at least 10 years of service as of December 31, 2006. We have sole and
exclusive discretion to add new participants to the Retirement Bonus Plan by authorizing such participation pursuant to action
of the Board.
An initial amount was credited for each eligible employee as of January 1, 2007. Subsequent amounts have been credited on
each allocation date thereafter as defined in the Retirement Bonus Plan. The amount of the initial allocation and the annual
allocation shall be determined pursuant to the payment schedule adopted at our sole and exclusive discretion, as set forth in the
Retirement Bonus Plan.
Under the provisions of the Retirement Bonus Plan, participants are eligible for early retirement upon attaining 55 years of age.
There is no difference between the calculation of benefits payable upon early retirement and normal retirement; however, the
participant would not receive their full benefit under early retirement.
Nonqualified Deferred Compensation
Directors Plan. Under the Isabella Bank Corporation and Related Companies Deferred Compensation Plan for Directors
(“Directors Plan”), directors, including named executive officers who serve as directors, are required to invest at least 25% of
their board fees in our common stock and may invest up to 100% of their earned fees based on their annual election. These
amounts are reflected in footnote 1 to the Summary Compensation Table on the previous page. These stock investments can be
made either through deferred fees or through the purchase of shares through the Isabella Bank Corporation Stockholder
Dividend Reinvestment and Employee Stock Purchase Plan (“DRIP Plan”). Deferred fees, under the Directors Plan, are
converted on a quarterly basis into stock units of our common stock based on the fair value of a share of our common stock as
of the relevant valuation date. Stock units credited to a participant’s account are eligible for stock and cash dividends as paid.
DRIP Plan shares are purchased pursuant to the DRIP Plan.
Distribution of deferred fees from the Directors Plan occurs when the participant retires from the Board or upon the occurrence
of certain other events. The participant is eligible to receive distributions in the form of shares of our common stock of all of the
stock units that are then in his or her account, and any unconverted cash will be converted to and rounded up to a whole share of
stock and distributed, as well. Any common stock issued from deferred fees under the Directors Plan will be considered
restricted stock under the Securities Act of 1933, as amended. Common stock purchased through the DRIP Plan are not
considered restricted stock under the Securities Act of 1933, as amended.
SERP. Under the supplemental executive retirement plan (“SERP”), we may promise deferred compensation benefits to
employees who are members of a select group of management or highly compensated employees, which may include the
named executive officers. The SERP authorizes us to make annual and discretionary credits to a participant’s SERP account
pursuant to a participation agreement with the participant that sets forth the amount and timing of any annual credits and the
vesting, payment, “clawback” and other terms to which the credits are subject.
The SERP provides default terms that may be modified by a participant’s participation agreement, including default vesting,
interest and payment terms. Under the SERP’s default vesting terms, a participant is initially unvested in the participant’s
SERP account and becomes 100% vested upon attaining normal retirement age, retirement, involuntary separation from service
without cause, death, disability or a change in control. Special vesting rules apply to amounts that are credited after a change in
control. Under the SERP’s interest rule, a participant’s account balance is credited with interest annually, the rate of which may
be changed and is based on Federated Investor's Institutional Money Market Management Fund yield (MMPXX) for the current
plan year, updated annually. Under the SERP’s default payment terms, a participant’s vested and nonforfeited account balance
will be paid in a single cash lump sum within 90 days after the first to occur of the participant’s separation from service (subject
to a six-month delay for a “specified employee”), death, disability, or any date specified in the participant’s participation
agreement. The SERP also includes restrictive covenants that restrict a participant’s ability to compete with us and certain
other activities.
Executive Cash Incentive Plan.
On June 24, 2020, we amended and restated the Isabella Bank Corporation Employee Cash
Incentive Plans to create two separate plans: one for non-executive employees and the other, the Isabella Bank Corporation
Executive Cash Incentive Plan for executive employees. The executive plan provides separate potential payouts for the
President and CEO, Bank President and CFO based on achievement of personal and corporate goals. The maximum potential
payouts under the plan range from 20% to 30% of the employee's annual salary. The Compensation and Human Resource
Committee is responsible for establishing personal goals and measuring the achievement of personal goals for the President and
CEO. This Committee also reviews the performance of the President and CEO. The President and CEO recommends to the
Compensation and Human Resource Committee the measurement and achievement of personal and corporate goals for the
Bank President and CFO.
Restricted Stock Plan.
On June 24, 2020 the Board of Directors adopted the Isabella Bank Corporation Restricted Stock
Plan ("RSP"), an equity-based bonus plan. The primary purpose of the plan is to promote our growth and profitability by
attracting and retaining executive officers and key employees of outstanding competence through ownership of equity that
provides them with incentives to achieve corporate objectives. In connection with the adoption of the RSP, the Isabella Bank
Corporation Stock Award Incentive Plan was terminated.
The RSP authorizes the issuance of unvested restricted stock to an eligible employee with a maximum award ranging from 25%
to 40% of the employee’s annual salary, on a calendar year basis. Under the RSP, the Board of Directors may grant restricted
stock awards to eligible employees on an annual basis based on satisfactory achievement of performance targets and measures
established by the Board of Directors. If these grant conditions are not satisfied, then the award of restricted shares will lapse or
be adjusted appropriately, at the discretion of the Board of Directors. Restricted stock awards granted are not fully transferable
or vested until certain conditions are met, as stated in the plan.
Potential Payments Upon Termination or Change in Control
The estimated amounts payable to each named executive officer upon severance from employment, retirement, termination
upon death or disability or termination following a change in control are described below. For all termination scenarios, the
amounts assume such termination took place as of December 31, 2021.
Any Severance of Employment
Regardless of the manner in which a named executive officer’s employment terminates, he or she is entitled to receive amounts
earned during his or her term of employment. Such amounts include:
•
•
•
•
•
•
•
Amounts accrued and vested through the Defined Benefit Pension Plan.
Amounts accrued and vested through the Retirement Bonus Plan.
Amounts credited and vested through the SERP.
Amounts deferred in the Directors Plan.
Amounts vested through the Stock Award Incentive Plan.
Amounts granted and vested through the Restricted Stock Plan.
Eligible unused vacation and short-term disability pay.
Retirement
In the event of the retirement of an executive officer, the officer would receive the benefits identified above.
Death or Disability
In the event of death or disability of an executive officer, in addition to the benefits listed above, the executive officer will also
receive payments under our life insurance plan or under our disability plan as appropriate.
Change in Control
We currently do not have a change in control agreement with any of the executive officers. Under the SERP, each participant
would become 100% vested in their SERP account upon a change in control. Under certain conditions, following a change in
control, if a participant is involuntarily terminated without cause or voluntarily terminates for good reason all uncredited annual
credits would be credited to his or her SERP account. If termination took place on December 31, 2021, that would have
resulted in an additional credit to Jae A. Evans’ SERP account of $0, Neil M. McDonnell's SERP account of $195,000, and
Jerome E. Schwind's SERP account of $490,500 and a total credit for each individual of $837,633, $250,683, and $602,903,
respectively.
Under the RSP, each participant would become 100% vested in their RSP account upon a change in control. Under certain
conditions, following a change in control, if a participant is involuntarily terminated without cause or voluntarily terminates for
good reason all nonvested shares would be fully vested. If termination took place on December 31, 2021, that would have
resulted in vested shares to Jae A. Evans’ RSP account of 10,427 ($216,500), Neil M. McDonnell's RSP account of 4,136
($85,923), and Jerome E. Schwind's RSP account of 5,560 ($115,503).
Director Compensation
The following table summarizes the compensation of each non-employee director who served on the Board during 2021.
Name
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Charles Hubscher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
David J. Maness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees paid in cash
($)(1)
Fees deferred
under Directors
Plan
($)(1)
Total fees earned
($)
1,475
40,900
—
—
—
8,550
51,434
12,950
36,600
30,375
—
31,850
40,700
44,000
2,850
—
9,000
—
31,850
40,900
31,850
40,700
44,000
11,400
51,434
21,950
36,600
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45,550
(1) Directors electing to receive all fees in cash, resulting in no contributions to the Directors Plan, invest at least 25% of their
board fees in our common stock under the DRIP Plan as described in our Directors Plan within the “Executive Officers”
section.
34,162
11,388
We paid $1,500 per board meeting plus a retainer of $10,000 to each member during 2021. Members of the Audit Committee
were paid $750 per Audit Committee meeting attended. Members of the Nominating and Corporate Governance Committee
were paid $350 per meeting attended. Members of the Compensation and Human Resource Committee were paid $350 per
meeting attended. The chairperson of the Board is paid a retainer of $35,000, and the chairperson for the Audit Committee is
paid a retainer of $6,000.
Under the Directors Plan, upon a participant’s retirement from the Board, or the occurrence of certain other events, the
participant is eligible to receive a distribution in the form of shares of our common stock of all of the stock units that are then
credited to the participant's account. The plan does not allow for cash settlement. Stock issued under the Directors Plan is
restricted stock under the Securities Act of 1933, as amended.
We established a Rabbi Trust to supplement the Directors Plan. The Rabbi Trust is an irrevocable grantor trust to which we may
contribute assets for the limited purpose of funding a nonqualified deferred compensation plan. Although we may not reach the
assets of the Rabbi Trust for any purpose other than meeting its obligations under the Directors Plan, the assets of the Rabbi
Trust remain subject to the claims of our creditors. We may contribute cash or common stock to the Rabbi Trust from time to
time for the sole purpose of funding the Directors Plan. The Rabbi Trust will use any cash that we may contribute to purchase
shares of our common stock on the open market.
We transferred $1,095,300 to the Rabbi Trust in 2021, which held 105,654 shares of our common stock for settlement as of
December 31, 2021. As of December 31, 2021, there were 83,710 stock units credited to participants’ accounts; such credits are
unfunded as of such date to the extent that they are in excess of the stock and cash that has been credited to the Rabbi Trust. All
amounts are unsecured claims against our general assets. The net cost of this benefit was $198,824 in 2021.
The following table displays the cumulative number of stock units of our common stock credited to the accounts of current
directors pursuant to the terms of the Directors Plan as of March 11, 2022:
Name
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Charles Hubscher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
David J. Maness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
# of stock units
credited
21,049
1,111
2,546
29,048
40,179
44,475
166
5,265
1,346
—
9,058
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,625
(1) Vicki L. Rupp has elected to receive all fees in cash, resulting in no contributions to the Directors Plan. Ms. Rupp invests at
least 25% of her board fees in our common stock under the DRIP Plan as described in our Directors Plan within the
“Executive Officers” section.
Indebtedness of and Transactions with Management
Certain directors and officers and members of their families were loan customers of the Bank, or have been directors or officers
of corporations, members or managers of limited liability companies, or partners of partnerships which have had transactions
with the Bank. In our opinion, all such transactions were made in the ordinary course of business and were substantially on the
same terms, including collateral and interest rates, as those prevailing at the same time for comparable transactions with
customers not related to the Bank. These transactions do not involve more than normal risk of collectability or present other
unfavorable features. Total loans to these customers were approximately $22,558,000 and $2,977,000 as of December 31, 2021,
and 2020.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of March 11, 2022 as to our common stock owned beneficially by the only
persons known by us to be beneficial owners of more than 5% of our common stock.
Name and Address of Beneficial Owner
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P.O. Box 222 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mt. Pleasant, MI 48804 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Based on information contained in Schedule 13D filed with the SEC on November 5, 2021.
Amount and
Nature of
Beneficial
Ownership (1)
Percent of Class
386,071
5.12 %
The following table sets forth certain information as of March 11, 2022 as to our common stock owned beneficially by: 1) each
director and director nominee, 2) by each named executive officer, and 3) by all directors, director nominees and executive
officers as a group.
Amount and
Nature of
Beneficial
Ownership (1)
Percent of Class
Name of Owner
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Charles Hubscher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
David J. Maness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Neil M. McDonnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,844
1,927
18,863
201,237
56,596
7,633
1,652
386,071
14,012
1,460
3,905
5,767
8,193
0.12 %
0.03 %
0.25 %
2.67 %
0.75 %
0.10 %
0.02 %
5.12 %
0.19 %
0.02 %
0.05 %
0.08 %
0.11 %
9.51 %
All Directors, nominees and Executive Officers as a Group (13) persons . . . . . . . . . . . . . . . .
716,160
(1) Beneficial ownership is defined by rules of the SEC and includes shares that the person has or shares voting or investment
power over and shares that the person has a right to acquire within 60 days from March 11, 2022. Consequently, with
respect to shares acquired under the Directors Plan, participants may not be eligible to convert their stock units to shares
within 60 days from March 11, 2022 as a result of distribution elections and plan conditions. For stock units credited to
each participant's account as of March 11, 2022, refer to the “Director Compensation” section of this report.
Independent Registered Public Accounting Firm
The Audit Committee has appointed Rehmann Robson LLC as our independent auditors for the year ending December 31,
2022.
A representative of Rehmann Robson LLC is expected to be present at the Annual Meeting to respond to appropriate questions
from shareholders and to make any comments Rehmann Robson LLC believes are appropriate.
Fees for Professional Services Provided by Rehmann Robson LLC
The following table shows the aggregate fees billed by Rehmann Robson LLC for the audit and other services provided for:
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Audit related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
2020
335,579 $
321,310
18,250
36,425
2,250
25,025
25,010
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
392,504 $
371,345
The audit fees were for performing the integrated audit of our consolidated annual financial statements and the internal control
report related to the Federal Deposit Insurance Corporation Improvement Act, reviews of interim quarterly financial statements
included in our Quarterly Reports on Form 10-Q, and services that are normally provided by Rehmann Robson LLC in
connection with statutory and regulatory filings or engagements.
The audit related fees are typically for various discussions related to the adoption and interpretation of new accounting
pronouncements. During 2021, this included fees for procedures related to nonrecurring regulatory filings. Also included are
fees for auditing of our employee benefit plans.
The tax fees were for the preparation of our state and federal income tax returns and for consultation on various tax matters. All
other fees were training and consultant related services.
The Audit Committee has considered whether the services provided by Rehmann Robson LLC, other than the audit fees, are
compatible with maintaining Rehmann Robson LLC’s independence and believes that the other services provided are
compatible.
Pre-Approval Policies and Procedures
All non-audit services to be performed by Rehmann Robson LLC must be approved in advance by the Audit Committee if those
fees are reasonably expected to exceed 5.0% of the current year agreed upon fee for independent audit services, so long as such
services were recognized by the Corporation at the time of engagement to be non-audit services, and such services are promptly
brought to the attention of the Audit Committee subsequent to completion of the audit. As permitted by SEC rules, the Audit
Committee has authorized its chairperson to pre-approve audit, audit-related, tax and non-audit services, provided that such
approved service is reported to the full Audit Committee at its next meeting.
As early as practicable in each calendar year, the independent auditor provides to the Audit Committee a schedule of the audit
and other services that the independent auditor expects to provide or may provide during the next twelve months. The schedule
will be specific as to the nature of the proposed services, the proposed fees, timing, and other details that the Audit Committee
may request. The Audit Committee will by resolution authorize or decline the proposed services. Upon approval, this schedule
will serve as the budget for fees by specific activity or service for the next twelve months.
A schedule of additional services proposed to be provided by the independent auditor, or proposed revisions to services already
approved, along with associated proposed fees, may be presented to the Audit Committee for their consideration and approval
at any time. The schedule will be specific as to the nature of the proposed service, the proposed fee, and other details that the
Audit Committee may request. The Audit Committee will by resolution authorize or decline authorization for each proposed
new service.
Applicable SEC rules and regulations permit waiver of the pre-approval requirements for services other than audit, review or
attest services if certain conditions are met. Out of the services characterized above as audit-related, tax and other professional
services, none were billed pursuant to these provisions in 2021 and 2020 without pre-approval.
Shareholder Proposals
Any proposals which you intend to present at the next Annual Meeting must be received before November 25, 2022 to be
considered for inclusion in our Proxy Statement and proxy for that meeting. Proposals should be made in accordance with
Securities and Exchange Commission Rule 14a-8.
Directors’ Attendance at the Annual Meeting of Shareholders
Our directors are encouraged to attend the Annual Meeting. At the 2021 Annual Meeting, all directors, with the exception of
Mr. Kleinhardt, were in attendance.
Other Matters
We will bear the cost of soliciting proxies. In addition to solicitation by mail, officers and other employees may solicit proxies
by telephone or in person, without compensation other than their regular compensation.
As to Other Business Which May Come Before the Meeting
We do not intend to bring any other business before the meeting for action. However, if any other business should be presented
for action, it is the intention of the persons named in the enclosed form of proxy to vote in accordance with their judgment on
such business.
By order of the Board of Directors
Debra Campbell, Secretary
SHAREHOLDERS’ INFORMATION
Financial Information and Annual Report on Form 10-K
Copies of the 2021 Annual Report, Isabella Bank Corporation Annual Report on Form 10-K, and other financial information
not contained herein are available on the Bank’s website (www.isabellabank.com) under the Invest in Us tab, or may be
obtained, without charge, by writing to:
Debra Campbell
Secretary
Isabella Bank Corporation
401 N. Main St.
Mt. Pleasant, Michigan 48858
Stock Information
Isabella Bank Corporation common stock is traded in the over-the-counter market. The common stock
is quoted on the OTCQX tier of the OTC Markets Group, Inc.’s electronic quotation system (otcmarkets.
com) under the symbol “ISBA”. Other trades in the common stock occur in privately negotiated
transactions from time to time of which the Corporation may have limited or no information. Current
stock price and availability can be obtained by contacting Shareholder Services, Isabella Wealth,
Boenning & Scattergood, Inc. or a licensed broker.
Shareholder Ser vices
For more information, contact Debra Campbell
(989) 779-6237 | 401 North Main Street, Mt. Pleasant, MI 48858
or www.isabellabank.com Invest in Us
Transfer Agent
Isabella Bank Corporation
(989) 779-6237 | 401 North Main Street, Mt. Pleasant, MI 48858
Investor Relations Firm
Renmark Financial Communications, LLC
(404) 806-1393 | 5 Concourse Pkwy. 30th Floor, Atlanta, GA 30328
or www.renmarkfinancial.com
Public Relations Firm
Paladin Communications
(734) 277-5843 | 2718 Sable Ct., Mt. Pleasant, MI 48858
or www.paladincomm.net
Corporate Broker
Boenning & Scattergood, Inc.
(866) 326-8113 | 9922 Brewster Lane, Powell, OH 43065
or www.boenninginc.com
Legal Counsel
Foster Swift Collins & Smith, PC
313 South Washington Square, Lansing, MI 48933
or www.fosterswift.com
Independent Certified Public Accounting Firm
Rehmann Robson LLC
5800 Gratiot Rd. Suite 201, Saginaw, MI 48638
or www.rehmann.com
This report 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.
401 NORTH MAIN STREET, MT. PLEASANT, MI 48858