ISABELLA BANK CORPORATION
ANNUAL REPORT 2022
CELEBRATING 120 YEARS
Founded 1903
Table of Contents
Our vision, mission statement, core values ............................. 3
Jae A. Evans, President & CEO; Sarah R. Opperman, Chair:
120 years of steady growth serves shareholders,
customers and communities ................................................ 4-5
Maness, Hubscher helped spur internal,
geographical growth ............................................................. 6-7
Wheeler, Richardson are part of Isabella Bank history ........ 8-9
Employee Recognition ............................................................. 9
Neil M. McDonnell, CFO: Customer growth and interest
rates fuel strong earnings in 2022 .................................... 10-11
Financial Results ................................................................ 12-15
Board of Directors .................................................................. 16
Senior Officers & Regional Boards ......................................... 17
120 years: Barz, Fabiano reflect on the culture,
values, impact of Isabella Bank ......................................... 18-19
New online and mobile platform make banking easier ........ 20
Proxy Statement ................................................................ 21-39
New State Street branch to open in Saginaw ........................ 40
Stock Information .................................................................. 41
Celebrating 120 Years ....................................................... 42-43
celebrating 120 years
1903 - 2023
Isabella Bank has grown throughout the years
by building long-lasting relationships with the
customers and communities we serve. Over
the years, we have adapted our products
and services to fit the changing needs of
our customers, but our core values of being
a community bank have not changed.
2
Local. Growing. Staying.
OUR VI SION
To be recognized as the leading independent
community bank.
M I S SION STATE M ENT
To be the preeminent financial services provider benefiting
our customers, shareholders, and employees.
CO R E VALUE S
Demonstrate unwavering integrity
Community bank focused
Continued stability and independence
Exceptional customer service delivered in a
personal manner
E QUAL E M PLOYM ENT O PP O RTUNIT Y
Isabella Bank Corporation and its subsidiaries adhere to and support the equal
employment opportunity clauses in Section 202 of the Executive Order 11246, as
amended; 38 USC 4212, Vietnam Era Veterans Readjustment Act of 1974; Section
503 of the Rehabilitation Act of 1973, as amended; relative to equal employment
opportunity and implementing rules and regulations of the Secretary of Labor.
3
120 years of steady growth
serves shareholders,
customers and communities
I sabella Bank Corporation
had another outstanding year
in 2022, setting milestones in net
income, earnings per share and
net interest income. These records
were the result of strong relation-
ships with our customers and
communities and the continued
implementation of our five-year
strategic plan.
We again saw growth in the
number of new customers,
increasing market share across
our seven-county footprint and
driving total deposits to $1.74
billion. New and existing business-
es, individuals and families opened
new accounts and began using
new products thanks in part to
our investment in technology.
Supported by an updated website,
and new online and mobile
banking platforms in 2022,
customers made more than
65,000 mobile deposits, up 126%
over the past two years. Our teller
transactions also climbed during
that time, exceeding 1 million
visits in 2022. Just as importantly,
we worked diligently behind the
scenes to safeguard customer
transactions and accounts in an
era of increasing fraud.
We continued to invest in infra-
structure, installing 29 enhanced
ATMs throughout our markets and
breaking ground on a full-service
4
branch on State Street in Saginaw.
This branch expands our presence
in a community we’ve served for
more than 20 years.
Our business portfolios also
expanded. Even in a year buffeted
by rising inflation, interest rate
hikes and recession fears that
negatively
impacted stock
markets, assets under manage-
ment remained strong at $2.8
billion. Core commercial loans
grew by $35.1 million, and Isabella
Wealth, our trust and investment
business, maintained its value at
$514 million as a result of new
business.
These outcomes were fueled by
the dedication and performance
of every person on our team. Our
employees are focused on deliv-
ering outstanding service to
customers. Even away from the
job, they give back as volunteers
in the community, and we are
proud of everyone on our Isabella
Bank team.
The news in March 2023 of the
collapse of Silicon Valley Bank and
Signature Bank created a great
deal of concern throughout the
industry. Reports quickly ensued
of a few other financial institutions
experiencing similar challenges,
generating further apprehension
B Y T H E N U M B E R S
4,700+
>65,000
NEW CUSTOMERS IN 2022
MOBILE DEPOSITS
in 2022, up 126% over two years
Even in a year buffeted by rising inflation,
interest rate hikes and recession fears
that negatively impacted stock
markets, assets under management
remained strong at
$2.8 billion
as of 12/31/2022
about the stability of our nation’s
financial institutions. The FDIC
quickly assumed receivership of
these institutions, and along with
officials from other government
agencies announced all depositors
– both insured and uninsured
would be fully protected.
As noted on the cover of this
year’s annual report, 2023 marks
the 120th year in business for
Isabella Bank. This major accom-
plishment has been reached by
maintaining a conservative, disci-
plined approach to growing the
bank, which in turn has earned
the confidence and trust that you,
our shareholders and customers,
have placed in this institution
throughout its 120 years in
business.
The factors that led to the collapse
of Silicon Valley Bank and Signa-
ture Bank do not exist at Isabella
Bank Corporation. Unlike Silicon
Valley Bank, no concerning levels
of concentration exist within our
loan or deposit portfolios. Further,
Isabella Bank Corporation
maintains capital levels well above
minimum regulatory require-
ments, robust liquidity, as well as
a sound credit portfolio. The
Board and Management of
Isabella Bank are committed to
operating the organization under
a strong risk management system
with these, and other factors in
mind. Isabella Bank Corporation
is financially strong and stable.
In May, two highly regarded direc-
tors will retire from the Board due
to age requirements — G. Charles
Hubscher and David J. Maness.
Both gentlemen have been
dedicated to assuring Isabella
Bank is a strong, stable commu-
nity bank and have reminded us
we must continually earn the right
to remain independent. Their
service and dedication are greatly
appreciated.
In late 2022, Melinda Coffin was
appointed to the Board. Ms. Coffin
is Chief Executive Officer of
Soaring Eagle Gaming Enterprises
and a member of the Saginaw
Chippewa Indian Tribe. She earned
her Bachelor of Business Admin-
istration and MBA from Central
Michigan University. Her business
expertise, as well as her commu-
nity knowledge as a nearly
life-long resident, are invaluable.
As we celebrate Isabella Bank’s
120th anniversary during 2023,
we are reminded of the countless
leaders, customers and commu-
nities with whom Isabella Bank
has had the honor to build
long-lasting relationships. As we
look forward, we remain commit-
ted to operating with discipline
and integrity and to thriving as an
independent community bank.
We are very excited to be expand-
ing operations with the opening
of our new full-service banking
center on State Street in Saginaw.
Additionally, plans are underway
to expand operations into Bay
County with the future opening
of a Loan Production Office (LPO)
in Bay City.
We thank you for your investment
in Isabella Bank and look forward
to maintaining your trust — and
our relationship — with you.
SARAH R. OPPERMAN
Board Chair
JAE A. EVANS
President & Chief Executive Officer
5
Maness, Hubscher
helped spur internal,
geographic growth
David J. Maness
President,
Maness Petroleum
G. Charles Hubscher
President,
Hubscher and Son, Inc.
loans or deposits; we want the
relationship with the customer.
The relationships last longer.”
Maness saw many changes during
his time on the Board. The Presi-
dent of Maness Petroleum, a
geological and geophysical
consulting services company, has
been a director of the Bank since
2003 and of the Isabella Bank
Corporation Board since 2004.
As Board chair from 2010-2021,
he led the Bank through the
COVID-19 pandemic.
“At the end of the day, people
want to go to the bank and get
their money,” Maness said. “The
Bank responded well [to the
pandemic] because good people
who care about their customers
did what they needed to do to get
through it.”
“Mr. Maness has had unwavering
dedication to our community and
the Bank,” said Jae A. Evans, Presi-
dent and Chief Executive Officer.
“His commitment to excellence
positively impacts our organiza-
tion and we are grateful for his
visionary leadership.”
As he concludes his 20 years of
service, Maness hopes customers,
shareholders and the community
recognize the precious nature of
Isabella Bank Corporation.
“We’re a big part of what makes
the Central Michigan area a livable
place,” Maness said. “I’d like to
see it be here for another 100
years.”
We have to earn
the right to remain
independent.
DAVID J. MANESS
I sabella Bank and the Isabella
Bank Corporation have trusted
David J. Maness and G. Charles
Hubscher as directors for the past
20 years and 19 years, respective-
ly. During that time, they led the
Corporation through methodical
growth, both internally and
geographically, while preserving
local decision-making. In 2023,
they will each end their tenures
on the Board knowing they played
a significant role in securing
long-term success for the institu-
tion and for mid-Michigan.
DAVID J . M AN E S S
“We have to earn the right to
remain independent,” was a
mantra for Maness during his 11
years as chair of the Isabella Bank
Corporation Board.
He explained the statement this
way: the Board of Directors
couples employee and leadership
goals for responsiveness and
excellent customer service with
shareholder desire to see a return
on investment.
“People are the life of the organi-
zation, and our people want to
serve their customers,” Maness
said. “We’re not just acquiring
6
“Mr. Hubscher’s vast experience,
community involvement, and
leadership have been invaluable
to Isabella Bank,” Evans said. “His
commitment to our shareholders,
board, and employees is remark-
able and we greatly appreciate
his service.”
As he prepares to retire from the
Board, Hubscher says he is happy
with the direction the Bank is
headed, noting it is positioned
well for the future.
G . CHAR LE S HUB S CH E R
G. Charles Hubscher believes in
the community bank concept —
serving local businesses, families
and helping the community thrive.
As he prepares to step down from
the Board of Isabella Bank and the
Isabella Bank Corporation Board,
he is pleased with how the finan-
cial institution has evolved and its
progress in both financial perfor-
mance and customer relationships.
“It has been fascinating and has
widened my horizons,” Hubscher
said of his 19 years as a director.
“I have a great appreciation for
the customers, the staff, the
management and the culture.”
He is president of Hubscher and
Son, Inc., a sand and gravel
company his grandfather founded
in 1930. A graduate of Mount
Pleasant High School, Hubscher
left the community only briefly to
earn a civil engineering degree
from Michigan Tech. He is the
third generation to lead the family
business.
Hubscher was a former director
of the National Stone and Gravel
Association, a former member of
the Zoning Board of Appeals for
Deerfield Township, and served
on the Board of Trustees for the
Mt. Pleasant Area Community
Foundation for 20 years. He has
served as a director of the Bank
since 2004 and of the Isabella
Bank Corporation Board since
2010.
B Y T H E N U M B E R S
$33.9
million
TOTAL DEPOSIT
INCREASE FROM 2021
$7.8
million
NET INTEREST INCOME
INCREASE FROM 2021,
an all-time high
$652 million
FIVE YEAR LOAN & DEPOSIT GROWTH
7
Wheeler, Richardson are part
of Isabella Bank history
A t 17 years old, each within
a week of high school gradu-
ation, Peggy Casper and Rechelle
Farrell began bookkeeping jobs
at Isabella Bank.
Peggy was well-acquainted with
the Bank, as it had been her
family’s bank for generations. In
fact, her great-grandfather had
taken her father to Isabella Bank
to get his first loan.
Wheeler, 2007
I love that people see the
importance of having a
bank that supports the
communities it serves.
PEGGY WHEELER, COO
8
Richardson, 1991
Rechelle remembers the surprise
among friends that she was
starting one day after gradua-
tion. “You have a job already!?”
She planned to stay a year, then
go to college.
This June will mark 46 years for the
now Peggy Wheeler, who notes
she’s been with the Bank almost
40 percent of its 120-year history.
Before becoming Chief Operations
Officer in 2017, Peggy was a part
of many departments including
bookkeeping, customer service,
the first in-house computer team
and then 30 years in accounting.
The now Rechelle Richardson will
celebrate 45 years, serving the
past 17 as Executive Assistant to
the CEO. She also worked in collec-
tions, marketing (starring in radio
and TV commercials in the 1980s)
and human resources.
Mentoring through Generations
Both reflect on their experiences with supervisors and executives
who encouraged them, accommodating Wheeler as she earned her
accounting degree and tapping Richardson for unexpected promo-
tions. They say it’s their turn to look out for others.
“I like mentoring others and sharing my story,” Wheeler said. “It’s
exciting to see others excel in their role, knowing the opportunities
they have to grow with the Bank.”
“I believe part of my responsibility is to bring a positive attitude with
me to work each day,” Richardson says. “This not only makes my
day brighter, but I believe it inspires others to do the same. From my
very first day, my supervisors, Donna Curtiss and Billie Gostola, led
by example and taught me how to work as a team. As the years have
gone by, their influence and approach to teamwork and leadership
have stuck with me.”
Always Local
Through all the technology advancements, process improvements
and growth in customers, they both agree that Isabella Bank remains
a community bank. Customers still talk with their local bankers, who
work to help them. The Bank supports communities and employees
volunteer to make a difference.
“One woman says, ‘Oh, there’s Miss Isabella Bank’ when she sees
me,” Wheeler said. “I love that people see the importance of having
a bank that supports the communities it serves.”
“Customers from each region recognize and value us as their communi-
ty bank,” Richardson said. “The other day a young girl saw my Isabella
Bank pin and said, ‘I just got my debit card from Isabella Bank! I love
you guys.’ That means everything to me.”
In 1978, Wheeler and Richardson were part of the Isabella Bank and
Trust softball team. Wheeler standing in back row, third from right.
Richardson in second row, third from right.
Employee
Recognition
In 2022, we celebrated alongside
our employees as they achieved
both professional and personal
milestones. We recognize the
following individuals on their
recent promotions, appoint-
ments, and retirements.
I SAB E LL A
BAN K O FFICE R
PROM OTION S
Patrick Mease
Chief Human Resources Officer,
Human Resources
Randy Dickinson
Senior Vice President,
Isabella Wealth
Paul Scoby
Vice President,
Commercial Loans
R E TIR E M ENT S
Carrie Smith, 42 years
Tammy Hoffman, 36 years
Ed Smith, 26 years
Anna Bentley, 24 years
Connie Wudyka, 19 years
Melissa Race, 15 years
Vern Houin, 13 years
Mark DeNoyelles, 11 years
Linda Hegenauer, 11 years
Susan Kemp, 11 years
9
Customer growth and interest
rates fuel strong earnings in 2022
R E SULT S R E FLE C T
E FF O RT S FROM 5 -Y E AR
STR ATEGIC PL AN
2022 proved to be both a
remarkable and historic year
for our shareholders, custom-
ers and employees. It was a year
of returning to a new normal
post-pandemic. Businesses re-
opened, masks and plexi-shields
disappeared, universities returned
to in-person sessions, people
re-entered the labor market,
and consumers felt more confi-
dent about the future. New loan
originations continued through-
out 2022, and new and existing
customer relationships grew.
Advanced technology was imple-
mented to enhance the customer
experience while providing operat-
ing efficiencies for our team.
As a result of consumer spending
and supply chain issues, prices for
consumer goods rose last year.
The Federal Reserve Bank began
increasing the Federal Funds rate
to combat inflation and increased
this short-term rate seven times in
2022 by a total of 425 basis points,
or 4.25%. Additional rate increas-
es are anticipated in 2023. This
rising rate environment benefits
Isabella Bank as our balance sheet
is “asset sensitive”; therefore, our
net interest income increases as
rates rise.
Isabella Bank Corporation
achieved record earnings in
2022. Our strong financial results
10
were not only from interest rate
increases, but also the strategic
plan that began in 2018. Last year,
we completed the elimination
of high-cost Federal Home Loan
Bank borrowings and brokered
certificates of deposit, as well as
increased new customer relation-
ships, which added to our deposit
base. We also invested in our
Isabella Wealth group with the
addition of two experienced
professionals who will further
our initiative to grow fee income.
We continued to repurchase ISBA
shares on the open market. Our
unwavering focus on these and
many other initiatives provided
extraordinary results for our
shareholders.
In 2022, our net income and
earnings per share reached their
highest levels in 119 years. Net
income rose 14% to $22.2 million
in comparison to 2021. Earnings
per share (EPS) of $2.95 surpassed
2021 by $0.47, or 19%. Our Board
of Directors increased our cash
Improving Numbers
dividend in the fourth quarter by
3.7% to $0.28 per share, finishing
the year with a 4.77% dividend
yield. Management continues to
focus on other financial metrics
that improved compared to 2021,
such as return on average equity
(ROAE), return on average assets
(ROAA) and efficiency ratio.
We also keep an eye on another
metric — net interest margin
(NIM). There are several compo-
nents that comprise NIM, but it
is the difference between the
interest earned on loans and
investments and the interest
paid on deposits and borrowings.
In 2018, our NIM was 3%, and
The chart below shows how strategic measures over a five-year period
improved key metrics when considering shareholder value.
METRICS
DEC. 31, 2018
Return on average equity
7.26%
Return on average assets
0.77%
70.04%
Efficiency ratio
Tangible book value per share $18.68
13.26%
Total capital ratio
$1.78
Earnings per share
2.98%
Net interest margin
DEC. 31, 2022
11.41%
1.08%
62.29%
$18.25
15.79%
$2.95
3.18%
B Y T H E N U M B E R S
RECORD NET
INCOME
$22 million
19%
EARNINGS PER SHARE
IMPROVEMENT from 2021
13,000+
NEW BUSINESS AND
CONSUMER ACCOUNTS
with Isabella Bank in 2022
3.7%
CASH DIVIDEND
INCREASE PER SHARE
in fourth quarter
4.77%
ANNUALIZED CASH
DIVIDEND YIELD
at end of 2022
over the past four years, initia-
tives were executed to improve
this percentage to be within
the range of peer banks. With
the size and composition of our
balance sheet, it is challenging to
move this margin quickly. Never-
theless, in the fourth quarter
of 2022, we reported a NIM
of 3.43%.
We finished the year over $2 billion
in total assets. Loans outstanding
of $1.26 billion fell 2.8% since the
end of 2021 as our participation in
a wholesale residential mortgage
funding program declined by $72
million. Demand for new mortgag-
es and refinances dropped as
interest rates rose during the
year. However, our core lending
business increased $35 million
in 2022.
technology provided a number of
alternative methods and ease of
doing business with Isabella Bank.
In a very competitive environ-
ment, deposits grew by $34
million since 2021 reaching a total
of $1.74 billion. What’s important
to note is that noninterest bearing
deposits now represent 28% of
total deposits, which reduces our
overall cost of funds. That is an
improvement compared to 2018’s
18% of total deposits.
This growth in deposits was a
direct correlation to our growth
in new customers. In 2022, over
4,700 new customers joined
Isabella Bank, opening more
than 13,000 accounts. Enhanced
Isabella Bank is a customer
centric, growing community bank
focused on enhancing sharehold-
er value, being a trusted advisor
for our customers, and a commit-
ted partner for the communities
we serve. We are proud of our
achievements in 2022 and look
forward to continued success
in 2023.
NEIL M. MCDONNELL
Chief Financial Officer
11
ISABELLA BANK CORPORATION
SELECTED FINANCIAL DATA
(Dollars in thousands except per share amounts)
2022
2021
2020
$
$
$
65,798
5,317
60,481
483
13,666
46,820
4,606
22,238
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
$
$
$
$
$
$
$
2.95
2.91
1.09
18.25
$
$
$
26.25
21.00
23.50
7,559,421
$
$
$
$
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
1.08 %
11.41 %
15.17 %
3.18 %
0.96 %
8.83 %
11.31 %
2.87 %
0.57 %
4.93 %
6.34 %
2.96 %
$
$
$
$
$
$
1,264,173
580,481
2,030,267
1,744,275
87,016
186,210
72.48 %
$
$
$
$
$
$
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
79.06 %
$
$
$
264,206
513,918
2,808,391
$
$
$
278,844
516,243
2,827,245
$
$
$
301,377
443,967
2,702,722
0.04 %
0.05 %
0.78 %
9.17 %
8.61 %
12.91 %
12.91 %
15.79 %
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 %
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
12
ISABELLA BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31
Change
2022
2021
$
%
Cash and cash equivalents
ASSETS
Cash and demand deposits due from banks
Fed Funds sold and interest bearing balances due from banks
$
27,420
$
25,563
$
1,857
7.26 %
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 7,559,421 shares
(including 154,879 shares held in the Rabbi Trust) in 2022
and 7,532,641 shares (including 105,654 shares held in the
Rabbi Trust) in 2021
Shares to be issued for deferred compensation obligations
Retained earnings
Accumulated other comprehensive income (loss)
Total shareholders’ equity
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
11,504
38,924
580,481
379
79,767
105,330
490,601
1,735
(68,263)
(66,406)
89,880
(1,356)
740,920
104,314
340,885
78,054
1,264,173
9,850
1,254,323
25,553
32,988
15,746
48,287
33,586
2,030,267
$
807,439
93,955
326,361
73,282
1,301,037
9,103
1,291,934
24,419
32,472
17,383
48,302
19,982
2,032,158
$
(66,519)
10,359
14,524
4,772
(36,864)
747
(37,611)
1,134
516
(1,637)
(15)
13,604
(1,891)
$
$
494,346
372,155
810,642
67,132
1,744,275
$
448,352
364,563
818,841
78,583
1,710,339
$
45,994
7,592
(8,199)
(11,451)
33,936
57,771
‐
29,245
87,016
12,766
1,844,057
50,162
20,000
29,158
99,320
11,451
1,821,110
7,609
(20,000)
87
(12,304)
1,315
22,947
(85.58)%
(63.05)%
18.32 %
(78.16)%
(8.24)%
11.03 %
4.45 %
6.51 %
(2.83)%
8.21 %
(2.91)%
4.64 %
1.59 %
(9.42)%
(0.03)%
68.08 %
(0.09)%
10.26 %
2.08 %
(1.00)%
(14.57)%
1.98 %
15.17 %
(100.00)%
0.30 %
(12.39)%
11.48 %
1.26 %
128,651
5,005
89,748
(37,194)
186,210
129,052
4,545
75,592
1,859
211,048
(401)
460
14,156
(39,053)
(24,838)
(0.31)%
10.12 %
18.73 %
(2,100.75)%
(11.77)%
$
2,030,267
$
2,032,158
$
(1,891)
(0.09)%
13
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
Earnings on corporate owned life insurance policies
Net gain on sale of mortgage loans
Gains from redemption of corporate owned life insurance
policies
Other
Total noninterest income
Noninterest expenses
Compensation and benefits
Furniture and equipment
Occupancy
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
2022
2021
Change
$
%
$
53,283
$
51,410
$
1,873
3.64 %
8,363
2,808
1,344
65,798
4,021
79
152
1,065
5,317
60,481
483
4,920
3,077
706
60,113
5,442
53
1,302
615
7,412
52,701
(518)
3,443
(269)
638
5,685
69.98 %
(8.74)%
90.37 %
9.46 %
(1,421)
(26.11)%
26
(1,150)
450
(2,095)
7,780
1,001
49.06 %
(88.33)%
73.17 %
(28.26)%
14.76 %
N/A
59,998
53,219
6,779
12.74 %
8,730
3,005
884
631
57
359
7,614
3,071
800
1,694
271
372
13,666
13,822
24,887
6,006
3,691
12,236
23,749
5,462
3,661
10,822
1,116
(66)
84
(1,063)
(214)
(13)
(156)
1,138
544
30
1,414
46,820
26,844
4,606
22,238
$
43,694
23,347
3,848
19,499
$
3,126
3,497
758
2,739
$
$
$
$
2.95
2.91
1.09
$
$
$
2.48
2.45
1.08
$
$
$
0.47
0.46
0.01
14.66 %
(2.15)%
10.50 %
(62.75)%
(78.97)%
(3.49)%
(1.13)%
4.79 %
9.96 %
0.82 %
13.07 %
7.15 %
14.98 %
19.70 %
14.05 %
18.95 %
18.78 %
0.93 %
14
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.
2022
Tax
Equivalent
Interest
Average
Balance
Year Ended December 31
Average
Yield /
Rate
Average
Balance
2021
Tax
Equivalent
Interest
Average
Yield /
Rate
$
1,249,634
$
53,283
4.26 %
$
1,208,141
$
51,410
477,159
8,294
1.74 %
297,357
3,933
‐
1,344
66,854
3.67 %
2.42 %
1.35 %
3.46 %
117,997
5
255,246
1,878,746
4,920
4,235
‐
706
61,271
4.26 %
1.65 %
3.59 %
0.02 %
0.28 %
3.26 %
Total assets
$
2,054,964
INTEREST BEARING LIABILITIES
Interest bearing demand deposits
INTEREST EARNING ASSETS
Loans (1)
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
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)
107,158
10
99,301
1,933,262
(9,477)
24,708
24,648
81,823
$
374,623
630,574
270,296
49,974
7,863
29,200
482,781
14,695
194,958
(1) Includes loans and mortgages loans available‐for‐sale
(9,396)
29,139
24,760
109,625
$
2,032,874
416,247
12,858
220,763
0.07 %
$
345,015
0.18 %
0.97 %
0.16 %
1.93 %
558,102
336,094
57,453
69,342
216
616
4,610
53
1,302
0.06 %
0.11 %
1.37 %
0.09 %
1.88 %
3.65 %
17,000
615
3.62 %
274
1,135
2,612
79
152
1,065
5,317
1,362,530
0.39 %
1,383,006
7,412
0.54 %
$
2,054,964
$
2,032,874
$
61,537
$
53,859
3.18 %
2.87 %
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.
2022
Tax
Equivalent
Interest
Average
Balance
Year Ended December 31
Average
Yield /
Rate
Average
Balance
2021
Tax
Equivalent
Interest
Average
Yield /
Rate
$
1,249,634
477,159
$
53,283
8,294
4.26 %
1.74 %
$
1,208,141
297,357
$
51,410
4,920
INTEREST EARNING ASSETS
Loans (1)
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)
107,158
10
99,301
1,933,262
(9,477)
24,708
24,648
81,823
2,054,964
$
$
374,623
630,574
270,296
49,974
7,863
29,200
1,362,530
482,781
14,695
194,958
4.26 %
1.65 %
3.59 %
0.02 %
0.28 %
3.26 %
3,933
‐
1,344
66,854
3.67 %
2.42 %
1.35 %
3.46 %
117,997
5
255,246
1,878,746
4,235
‐
706
61,271
(9,396)
29,139
24,760
109,625
2,032,874
$
274
1,135
2,612
79
152
1,065
5,317
0.07 %
0.18 %
0.97 %
0.16 %
1.93 %
$
345,015
558,102
336,094
57,453
69,342
216
616
4,610
53
1,302
0.06 %
0.11 %
1.37 %
0.09 %
1.88 %
3.65 %
17,000
615
3.62 %
0.39 %
1,383,006
7,412
0.54 %
416,247
12,858
220,763
$
2,054,964
$
2,032,874
$
61,537
$
53,859
3.18 %
2.87 %
(1) Includes loans and mortgages loans available‐for‐sale
15
Board of Directors
AS OF MARCH 2023
SARAH R. OPPERMAN - CHAIR
Vice President (retired),
The Dow Chemical Company
JAE A. EVANS
President & Chief Executive Officer,
Isabella Bank Corporation
Chief Executive Officer,
Isabella Bank
JEROME E. SCHWIND
President,
Isabella Bank
DR. JEFFREY J. BARNES
Physician,
L.O. Eye Care
JILL BOURLAND, CPA, HCCP
Chief Executive Officer & Partner,
Blystone & Bailey, CPAs, PC
MELINDA M. COFFIN
Chief Executive Officer,
Soaring Eagle Gaming
Enterprises
16
G. CHARLES HUBSCHER
President,
Hubscher and Son, Inc.
THOMAS L. KLEINHARDT
President,
McGuire Chevrolet
DAVID J. MANESS
President,
Maness Petroleum
RICHARD L. MCGUIRK
Operations Manager/President,
Central Management, Inc.
CHAD R. PAYTON, CPA
Officer and Managing Partner,
Roslund, Prestage & Company, PC
VICKI L. RUPP
Corporate Director (retired),
The Dow Chemical Company
GREGORY V. VARNER
Research Director (retired),
Michigan Bean Commission
Senior Officers & Regional Boards
I SAB E LL A BAN K CO R P O R ATION O FFICE R S
JAE A. EVANS
President & Chief Executive Officer
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
I SAB E LL A BAN K O FFICE R S
R EGIONAL B OAR DS
O F DIR E C TO R S
East
MICHAEL R. COLBY
MARY F. DRAVES
SMALLWOOD HOLOMAN JR.
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
Chief Human Resources Officer,
Human Resources
RANDY J. DICKINSON, CPA, CTFA
Senior Vice President, Isabella Wealth
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
JAMES L. BINDER
Vice President, Commercial Loans
DEBRA A. CAMPBELL
Vice President, Shareholder Relations
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
DANIEL P. MCKUNE
Vice President, Isabella Wealth
MICHELLE L. MEASE
Vice President, Isabella Wealth
MICHAEL P. PRISBY
Vice President, Treasurer
PAUL A. SCOBY
Vice President, Commercial Loans
JEFFREY W. SMITH
Vice President, Commercial Loans
LESLIE J. THIELEN
Vice President, Mortgage Loans
TRISH M. TOMCZAK
Vice President, Marketing
AMY C. VOGEL
Vice President, Core Systems & Special
Projects
RENEÉ S. JOHNSTON
CLARENCE M. RIVETTE
VICKI L. RUPP
JEROME E. SCHWIND
South
CINDY M. BOSLEY
BRIAN K. GOWARD
WILLIAM HENDERSON
CHAD R. PAYTON
JEROME E. SCHWIND
JEFFREY E. SHERWOOD
GREGORY V. VARNER
West
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
North
SHARI R. BUCCILLI
MICHAEL L. JENKINS
THOMAS L. KLEINHARDT
JEROME E. SCHWIND
STEVEN L. STARK
JENN A. BRICK
Vice President, Customer Service Operations
TIM M. WILSON
Vice President, Regional Branch Manager
AS OF MARCH 2023
DAVID E. BROWN
Vice President, Commercial Loans
TRACY A. ZAYLER
Vice President, Regional Branch Manager
17
120 years: Barz, Fabiano reflect
on the culture, values, impact
of Isabella Bank
Rick Barz spent his entire career — 46 years — with Isabella Bank, includ-
ing 13 as Chief Executive Officer. Jim Fabiano served 33 years on its Board
of Directors, including six as chair. Reflecting on their experiences and the
120-year history of what started as Isabella County State Bank in 1903,
they cement what it means to be a strong community bank.
IN SIGHT S FROM
RICHAR D J . BAR Z
Unexpected beginnings
I graduated with a degree in
marketing, but the economy was
soft and jobs were scarce. Since I
had borrowed money for student
loans from the Bank, I stopped in
looking for a job. Timing was
perfect, as they were looking for
a manager for the proposed West
High Street branch. They hired me
in April 1972, and after a year on
the teller line and in other depart-
ments, I was promoted to branch
manager.
Constant growth
When I first started, we were
approximately a $37 million bank
with less than 50 employees.
When I left in 2013, we had assets
under management of $2.1 billion
and over 330 employees. Business
grew in existing offices, we added
new branches, and we acquired
other banks. The first major
change in strategy was when we
18
went east to Midland in 2010 and
then to Saginaw County. We
expanded markets by providing
personalized, local service —
which larger banks tried to do, but
seemed to forget.
Enthusiastic employees
Employees are the heart of our
organization. A lot of our employ-
ees come to work not just because
they have to, but because they
want to. Other banks can’t
compete with that.
When we had our annual
employee recognition event, Dan
Eversole, then VP of Human
Resources, directed a program
complete with scripts - sometimes
50+ pages long. Then we’d have
rehearsals! The first year, the
theme was the Oscars with a red
carpet. Another time it was the
Wizard of “Iz”. We always recog-
and
nized
accomplishments of employees,
complete with the prized “Izzy”
awards.
tenure
the
Challenges are rewarding
Our biggest challenge is compe-
tition! We were always the target
of any new financial institution
Richard J. Barz
Local.
Growing.
Staying.
that came into our area. We were
good, but we still had to study
what others were doing and learn
from them. I learned to accept
that sometimes the best ideas
came from others.
I am most proud that we’re still
here and we’re still Isabella Bank.
I’m proud to know we’ve served
a lot of people well. It’s rewarding
when you see a customer’s
business grow from a seed of an
idea into a major business thanks
in part to support from the Bank.
The Bank’s strength is
remaining a community bank,
thinking like a community bank
and serving the community.
JAMES C. FABIANO,
FORMER CHAIRMAN
IN SIGHT S FROM
JA M E S C . FABIANO
“THE Bank”
Isabella Bank is the most reward-
ing institution I’ve ever been
involved with. I call it “THE Bank,”
because to me, it’s the only one.
To know you’re helping the
community by being involved with
its largest financial institution —
that’s special.
I’m still a little old-school. I like to
go into the Main Branch and see
Lynette Price; she still remembers
me. I go in every month and get
a pack of $2 bills that I pass out
to people, often suggesting they
use it as a bookmark. Readers are
leaders.
Connection across nine decades
I opened my first checking account
in 1964. My dad and uncle opened
their accounts in the ’40s. The
Bank’s strength is remaining a
community bank, thinking like a
community bank and serving the
community.
Biggest challenge/opportunity
The breakdown in the economy
in ’08 and ’09 affected so many
businesses and families. We did
whatever we could do, to the
fullest extent possible, to make
sure they didn’t fail.
Fond memory
My fondest times at the Bank
were spent with the board
members and employees. Being
James Fabiano
and his wife, Lee.
able to interact with Larry Johns
(former President) was very
rewarding. Debbie Campbell is
one of my favorites. She is my
main contact now and great to
work with.
Culture is the foundation
You know something’s right when
a business has employees who
have worked there more than 40
years. The Bank’s culture is hard
to define, but it’s a deep interest
in our customers. Customers from
the outside, and those inside —
meaning employees who interact
with the community, their neigh-
bors, local businesses and friends.
Even when The Bank grows, it’s a
matter of who we’re looking to
take care of and how we’ll take
care of them.
Left to right: Ian Davison
(former Dean of Engineer-
ing & Science at CMU),
former Director Jim
Fabiano, former President
Steve Pung and former CEO
Rick Barz at CMU Fabiano
Botanical Garden, 2012.
19
Annual Shareholder Meeting
M AY 9, 2023 at 5: 0 0 PM
Courtyard by Marriott
2400 East Campus Drive, Mt. Pleasant, MI 48858
New online and mobile
platform make banking easier
The new online and mobile
platforms launched in May 2022.
Both have upgraded security
features and make it easy for
customers to transfer money, pay
bills and find details on transac-
tions. The mobile app includes
biometric security features
including fingerprint and facial
recognition.
The new platforms include Zelle,
a secure method for customers
to quickly send or receive money
from others in real time.
The Bank installed all new and
advanced ATMs throughout our
service area — providing custom-
ers with options for choosing how
they want to interact with their
accounts. This follows Isabella
Bank’s 2021 move to join the
Allpoint ATM Network, which
gives customers surcharge-free
access to over 55,000 ATMs world-
wide.
Isabella Bank also partnered with
ID TheftSmart, a credit monitoring
service that offers help recovering
from fraud. Customers can access
these identity theft services for a
small monthly fee.
We are committed to
digital banking, security
and easy access to money.
JEROME E. SCHWIND,
PRESIDENT, ISABELLA BANK
E nhancements in technology
including online and mobile
services and updated ATMs are
bringing new customers to Isabella
Bank and impressing our longtime
loyal base.
“We are committed to digital
banking, security and easy access
to money,” Jerome E. Schwind,
President of Isabella Bank, said.
“Our technology has changed
in the last year and it is attract-
ing more customers, especially
the younger generations. We
hear from multiple sources that
younger customers don’t want to
always go into the bank.”
20
ISABELLA BANK CORPORATION
401 N. Main St.
Mt. Pleasant, Michigan 48858
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 9, 2023
Notice is hereby given that the Annual Meeting of Shareholders of Isabella Bank Corporation will be held on Tuesday, May 9,
2023 at 5:00 p.m. Eastern Daylight Time, at the Courtyard by Marriott, 2400 East Campus Drive, Mt. Pleasant, Michigan. The
meeting is for the purpose of considering and acting upon the following items of business:
1. The election of three directors.
2. To hold an advisory, non-binding vote on executive compensation of named executive officers.
3. To hold an advisory, non-binding vote on how frequently advisory votes on the executive compensation of named
executive officers should be held.
4. To ratify the appointment of Rehmann Robson LLC as the independent registered public accounting firm for the year
ending December 31, 2023.
5. 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 17, 2023 as the record date for determination of shareholders entitled to notice of, and
to vote at, the meeting or any adjournments thereof.
By order of the Board of Directors
Dated: March 27, 2023
Debra Campbell, Secretary
21
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 held on Tuesday, May 9, 2023 at 5:00 p.m. at the Courtyard by Marriott, 2400
East Campus Drive, Mt. Pleasant, Michigan, 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.
This Proxy Statement has been mailed on March 27, 2023 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 17, 2023 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 17, 2023, there were 7,561,422 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 Isabella Bank Corporation (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 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 Proposals 1-3 if you do not furnish instructions for such proposals. You should 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, Proposals 1-3 are not items on which brokerage firms may vote in their discretion on your behalf unless you
have furnished voting instructions. On the other hand, under these rules your broker will be able to vote on Proposal 4-
ratification of the appointment of Rehmann Robson LLC (“Rehmann”) as our independent registered public accounting firm.
At this year’s Annual Meeting, you will elect three 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.
In voting on the advisory, non-binding proposal to approve the executive compensation disclosed in this proxy statement, a
shareholder may vote in favor of the advisory proposal, vote against the advisory proposal or abstain from voting. A majority of
the shares represented at the annual meeting and entitled to vote on this advisory proposal must be voted in favor of the
proposal for it to pass. While this vote is required by law, it will neither be binding on the Board of Directors, nor will it create
or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on the Board of Directors. In counting
votes on the advisory, non-binding proposal to approve executive compensation matters, abstentions will have the same effect
as a vote against the proposal and broker non-votes will have no effect on the outcome of the vote.
In voting on the advisory, non-binding proposal to approve the frequency of the advisory vote on executive compensation
described in this proxy statement, a shareholder may vote for one year, two years or three years or may abstain from voting.
The option of one year, two years or three years that receives a plurality of votes cast by shareholders will be the frequency for
the advisory vote on executive compensation that has been selected by shareholders. While this vote is also required by law, it
will neither be binding on the Board of Directors, nor will it create or imply any change in the fiduciary duties of, or impose any
additional fiduciary duty on the Board of Directors. In counting votes on the advisory, non-binding proposal to approve the
frequency of the advisory vote on executive compensation, abstentions and broker non-votes will have no effect on the outcome
of the vote.
22
Ratification of the appointment of Rehmann requires that the number of votes cast “FOR” the proposal exceed the number of
votes cast “AGAINST” such proposal. In counting votes on the ratification of the appointment of Rehmann as our independent
registered public accounting firm, abstentions and broker non-votes will have no effect on the outcome of the vote.
Proposal 1 - Election of Directors
The Board of Directors (the “Board”) currently consists of thirteen (13) members divided into three classes, with the directors
in each class being elected for a term of three years. The Board increased from 12 to 13 members with the appointment of
Melinda M. Coffin, effective November 30, 2022. In 2023, the Board will decrease from 13 to 11 members as G. Charles
Hubscher and David J. Maness, whose current terms expire at the Annual Meeting, will retire from the Board. At the Annual
Meeting, Dr. Jeffery J. Barnes, Melinda M. Coffin, and Vicki L. Rupp, whose current terms expire at the Annual Meeting, have
been nominated for election to serve through the 2026 Annual Meeting.
Except as otherwise specified, proxies will be voted for the election of the three 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
Melinda M. Coffin
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
X
X
Xc
X
X
23
Director Nominees for Terms Ending in 2026
Dr. Jeffrey J. Barnes (age 60) has been a director of the Bank since 2007 and of Isabella Bank Corporation since 2010.
Dr. Barnes is a physician at L.O. Eye Care. He is a former member of the Central Michigan Community Hospital Board of
Directors. Dr. Barnes' experience in business operations and management, as well as knowledge of the communities we serve,
benefit the Board.
Melinda M. Coffin (age 48) was appointed a director of Isabella Bank Corporation and of the Bank at the October 26, 2022
Board meeting, effective November 30, 2022. Ms. Coffin has been the CEO of Soaring Eagle Gaming Enterprises since
October 2021. She received her undergraduate degree and MBA from Central Michigan University. Ms. Coffin's knowledge
and experience in compliance and regulatory matters, as well as her community involvement, adds value to the Board.
Vicki L. Rupp (age 63) 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 includes specialty research and development, environmental, health and safety,
global corporate service management, mergers and 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 is chair of the Saginaw Valley State University Board of
Control. Ms. Rupp brings experience in operations and strategic development and a commitment to community service.
Current Directors with Terms Ending in 2023
G. Charles Hubscher (age 69) 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 has 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's experience in business operations and management, as well as his knowledge of the communities we
serve, have been valuable to the Board over his 19 years of service to the Board.
David J. Maness (age 69) 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 added to the Board over the last 20 years was invaluable.
Current Directors with Terms Ending in 2024
Jill Bourland (age 52) 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 President of the William and Janet
Strickler Nonprofit Center. Jill also serves on the Mid Michigan College Foundation Board of Directors. 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 66) 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 46 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 51) 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
24
Director Nominees for Terms Ending in 2026
Dr. Jeffrey J. Barnes (age 60) has been a director of the Bank since 2007 and of Isabella Bank Corporation since 2010.
Dr. Barnes is a physician at L.O. Eye Care. He is a former member of the Central Michigan Community Hospital Board of
Directors. Dr. Barnes' experience in business operations and management, as well as knowledge of the communities we serve,
benefit the Board.
Melinda M. Coffin (age 48) was appointed a director of Isabella Bank Corporation and of the Bank at the October 26, 2022
Board meeting, effective November 30, 2022. Ms. Coffin has been the CEO of Soaring Eagle Gaming Enterprises since
October 2021. She received her undergraduate degree and MBA from Central Michigan University. Ms. Coffin's knowledge
and experience in compliance and regulatory matters, as well as her community involvement, adds value to the Board.
Vicki L. Rupp (age 63) 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 includes specialty research and development, environmental, health and safety,
global corporate service management, mergers and 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 is chair of the Saginaw Valley State University Board of
Control. Ms. Rupp brings experience in operations and strategic development and a commitment to community service.
Current Directors with Terms Ending in 2023
G. Charles Hubscher (age 69) 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 has 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's experience in business operations and management, as well as his knowledge of the communities we
serve, have been valuable to the Board over his 19 years of service to the Board.
David J. Maness (age 69) 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 added to the Board over the last 20 years was invaluable.
Current Directors with Terms Ending in 2024
Jill Bourland (age 52) 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 President of the William and Janet
Strickler Nonprofit Center. Jill also serves on the Mid Michigan College Foundation Board of Directors. 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 66) 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 46 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 51) 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 in Michigan and Florida. He currently serves as a board member for the Central Michigan
University Advancement Board, and is past board member of the Mt. Pleasant Area Community Foundation. Mr. McGuirk has
expertise in business, and a strong commitment to community involvement.
Jerome E. Schwind (age 56) 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. Mr. Schwind is the current chair of the Michigan Bankers Association. He also
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 Perry School of Banking 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.
Current Directors with Terms Ending in 2025
Thomas L. Kleinhardt (age 68) 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 63) 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, the MyMichigan Health Foundation Board, and the Michigan Baseball Foundation Board. Ms.
Opperman's business and leadership expertise, as well as her depth of community relationships, benefit Board discussions and
decisions.
Chad R. Payton (age 54) 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's expertise in accounting and business experience are valuable to the Board.
Gregory V. Varner (age 68) 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 has advised both national and
international dry bean research programs in the United States, Africa and Central America. 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.
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 59), 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 and risk officer, and director of finance at large international banks, local community
banks, as well as de novo banks. He serves on the Board of Mid-Michigan Industries and on the finance committee of Habitat
for Humanity of Isabella County.
David J. Reetz (age 62), Chief Lending Officer of the Bank, has over 40 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
and the Mt. Pleasant Rotary Club.
Peggy L. Wheeler (age 63), Chief Operations Officer of the Bank, has been employed by the Bank since 1977. She has over 45
years of banking experience with Isabella Bank, holding various positions including customer service, accounting, Controller,
and Senior Vice President of Operations. Ms. Wheeler serves on the Board for the Michigan Bankers Association Service
Corporation, RISE Advocacy, Inc. and is a member of the grant review committee for the Mt. Pleasant Area Community
Foundation.
25
Proposal 2 - Advisory Vote on Executive Compensation
The compensation of the Corporation’s principal executive officer, principal financial officer, and our next most highly
compensated executive officer (named executive officers) is provided under the heading “Executive Officers”. Shareholders are
urged to read that section of this proxy statement.
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act") shareholders will be
asked at the Annual Meeting to provide their support with respect to the compensation of the Corporation’s named executive
officers by voting on the following advisory, non-binding resolution:
RESOLVED, that the shareholders of Isabella Bank Corporation approve, on an advisory basis, the compensation paid
to the Corporation’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the
Securities and Exchange Commission, including the compensation table and narrative discussion, for purposes of
Section 14A of the Securities Exchange Act of 1934.
The advisory vote on executive compensation, commonly referred to as a say-on-pay advisory vote, is non-binding on the
Board of Directors. Although non-binding, the Board of Directors and the Compensation and Human Resource Committee
value constructive dialogue on executive compensation and other important governance topics with the Corporation’s
shareholders and encourage all shareholders to vote their shares on this matter. The Board of Directors and the Compensation
and Human Resource Committee will review the voting results and take them into consideration when making future decisions
regarding executive compensation programs.
The Board believes shareholders should consider the following in determining whether to approve this proposal:
•
•
•
Each member of the Compensation and Human Resource Committee is independent under the NASDAQ listing
requirements;
The Compensation and Human Resource Committee continually monitors the Corporation’s performance and adjusts
compensation practices accordingly; and
The Compensation and Human Resource Committee regularly assesses the Corporation’s individual and total
compensation programs against peer companies, the general marketplace and other industry data points.
Unless otherwise instructed, validly executed proxies will be voted “FOR” this resolution.
We unanimously recommend that you vote FOR the non-binding advisory resolution approving the executive
compensation of the named executive officers.
Proposal 3 - Frequency of Advisory Votes On Executive Compensation
In accordance with Section 14A of the Exchange Act, the Corporation is providing a shareholder advisory vote to approve the
compensation of our named executive officers (the say-on-pay advisory vote in Proposal 2 above) this year and will do so at
least once every three years thereafter. Pursuant to Section 14A of the Exchange Act, at the 2023 Annual Meeting, the
Corporation is also asking shareholders to vote on whether future say-on-pay advisory votes on executive compensation should
occur every year, every two years or every three years.
After careful consideration, the Board of Directors recommends that future shareholder say-on-pay advisory votes on executive
compensation be conducted every three years.
Although the Board of Directors recommends a say-on-pay vote every three years, shareholders will be able to specify one of
four choices for this proposal on the proxy card: one year, two years, three years or abstain. Shareholders are not voting to
approve or disapprove the Board of Directors’ recommendation. Although this advisory vote regarding the frequency of say-on-
pay votes is non-binding on the Board of Directors, the Board of Directors and the Compensation and Human Resource
Committee will review the voting results and take them into consideration when deciding how often to conduct future say-on-
pay shareholder advisory votes.
Unless otherwise instructed, validly executed proxies will be voted “FOR” the Three Year frequency option.
We unanimously recommend that you vote FOR the Three Year frequency option.
26
Proposal 4 - Ratification of Independent Registered Public Accounting Firm
The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent
registered public accounting firm. The Audit Committee engages in an annual evaluation of the independent registered public
accounting firm’s qualifications, assessing a wide variety of factors.
After assessing the performance and independence of Rehmann, the Corporation's current independent registered public
accounting firm, the Audit Committee believes it is in the best interest of the Corporation and its shareholders to retain
Rehmann. The Audit Committee has appointed Rehmann as our independent auditors for the year ending December 31, 2023.
The Audit Committee seeks shareholder ratification of this appointment. Rehmann has served as our independent registered
public accounting firm since 1996.
For information related to the Audit Committee's process and Rehmann's fees, refer to the “Independent Registered Public
Accounting Firm” section of this report. A representative of Rehmann is expected to be present at the Annual Meeting to
respond to appropriate questions from shareholders and to make any comments Rehmann believes are appropriate.
In the event shareholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee and the
Board of Directors. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different registered
public accounting firm at any time during the year if it determines that such a change would be in the best interest of the
Corporation and its shareholders.
Unless otherwise instructed, validly executed proxies will be voted “FOR” this resolution.
We unanimously recommend that you vote FOR this proposal to ratify the appointment of Rehmann Robson LLC as
our independent registered public accounting firm for the year ending December 31, 2023.
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, Melinda M. Coffin, 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.
27
Committees of the Board of Directors and Meeting Attendance
The Board met 14 times during 2022. 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 2022. 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, directors Bourland and 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 four meetings in
2022, 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 2024 Annual Meeting of Shareholders should be delivered no later than November 28, 2023. 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), Payton, and Varner. The
Compensation and Human Resource Committee held five meetings during 2022. 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.
28
Audit Committee Report
The Audit Committee oversees the financial reporting process on behalf of the Board. The 2022 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, 2022.
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 2022.
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, 2022 for filing with the Securities and Exchange Commission. The Audit Committee has
appointed Rehmann Robson LLC as the independent auditors for the 2023 audit.
Respectfully submitted,
Jill Bourland, Audit Committee Chairperson
Thomas L. Kleinhardt
David J. Maness
Sarah R. Opperman (ex-officio)
Chad R. Payton
29
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 years ended December 31, 2022, for the CEO, CFO, and our next
most highly compensated executive officer, collectively the named executive officers (“NEOs”).
Summary Compensation Table
Name and principal position
Jae A. Evans
President and CEO of Isabella Bank
Corporation and CEO of Isabella Bank
Neil M. McDonnell
CFO of Isabella Bank Corporation and
Isabella Bank(6)
Jerome E. Schwind
President of Isabella Bank and Vice
President of Isabella Bank Corporation
Year
2022
2021
2022
2021
2022
2021
Salary
($)(1)
478,250
463,000
Bonus
($)(2)
130,500
89,250
Stock
Awards
($)(3)
89,600
174,000
Change in
pension value
and
nonqualified
deferred
compensation
earnings ($)(4)
168
421
All other
compensation
($)(5)
54,171
50,387
Total
($)
752,689
777,058
289,000
275,687
55,137
30,946
36,125
69,250
11
23
35,146
149,832
415,419
525,738
362,321
349,209
68,141
44,616
48,065
93,120
(26,978)
(3,950)
51,056
51,263
502,605
534,258
(1) Executive officer salary includes compensation voluntarily deferred under our 401(k) plan. Director fees are also included
and are displayed in the following table for each of the last two years ended December 31, 2022:
Name
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director fees ($)
2022
2021
30,250
30,250
28,000
28,000
(2)
(3)
(4)
Includes payouts granted pursuant to the Isabella Bank Corporation Executive Cash Incentive Plan.
Includes shares granted pursuant to the Isabella Bank Corporation Restricted Stock Plan disclosed as the aggregate grant
date fair value of the awards computed, in accordance with ASC Topic 718.
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.
(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 in 2021.
(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, 2022:
Name
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Neil M. McDonnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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)
3,583
8,000
2,427
1,444
3,184
952
1,922
4,281
1,279
84,201
188,000
57,035
33,934
74,824
22,372
45,167
100,604
30,057
Grant Date
3/28/2022
4/1/2021
6/24/2020
3/28/2022
4/1/2021
6/24/2020
3/28/2022
4/1/2021
6/24/2020
(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 December 31, 2022 which was $23.50.
30
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.
31
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. The Executive Cash Incentive Plan provides 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. The Isabella Bank Corporation Restricted Stock Plan ("RSP") is 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. 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, 2022.
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 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.
32
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, 2022, that would have
resulted in an additional credit to Jae A. Evans’ SERP account of $0, Neil M. McDonnell's SERP account of $175,000, and
Jerome E. Schwind's SERP account of $456,000 and a total credit for each individual of $837,800, $250,694, and $602,926,
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, 2022, that would have
resulted in vested shares to Jae A. Evans’ RSP account of 10,427 ($329,236), Neil M. McDonnell's RSP account of 4,136
($131,130), and Jerome E. Schwind's RSP account of 5,560 ($175,828).
Pay Versus Performance
The following table presents certain information regarding compensation paid and certain financial performance measures in
each of the last two years ended December 31, 2022, for the CEO and other NEOs, as disclosed in the Summary Compensation
table above.
Summary
compensation table
total for CEO ($)
Compensation
actually paid to
CEO ($)(1)
Average summary
compensation table
total for non-CEO
NEOs ($)
Average
compensation
actually paid to non-
CEO NEOs ($)(2)
Value of initial
fixed $100
investment based on
total shareholder
return ($)
Net income
(in thousands)($)
752,689
777,058
726,436
821,451
459,012
529,998
446,772
550,607
131
136
22,238
19,499
Year
2022
2021
(1)
In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total
compensation for each year to determine the compensation actually paid:
Summary
compensation table
total for CEO ($)
Reported Value of
Granted Equity
Awards ($)
Equity Award Adjustments
Year end fair value of
outstanding and
unvested equity
awards granted in the
year ($)
Change in fair value
of outstanding and
unvested equity
awards granted in
prior years ($)
Compensation
actually paid to CEO
($)
752,689
777,058
(89,600)
(174,000)
84,201
204,000
(20,854)
14,393
726,436
821,451
Year
2022
2021
(2)
In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total
compensation for each year to determine the compensation actually paid:
Equity Award Adjustments
Average summary
compensation table
total for non-CEO
NEOs ($)
Reported Value of
Granted Equity
Awards ($)
Year end fair value of
outstanding and
unvested equity
awards granted in the
year ($)
Change in fair value
of outstanding and
unvested equity
awards granted in
prior years ($)
Average
compensation
actually paid to non-
CEO NEOs ($)
459,012
529,998
(42,095)
(81,185)
39,551
95,179
(9,696)
6,615
446,772
550,607
Year
2022
2021
33
Relationship Between Pay and Performance
Compensation actually paid to the CEO from 2021 to 2022 decreased by $95,015, or 12%, and average compensation actually
paid to the other NEOs decreased $103,835, or 19%. The change in compensation actually paid was driven by a decline in
stock awards, as a result of the achievement of less than 100% of the financial performance goals in connection to the stock
awards and changes in the fair value of unvested awards. Compensation paid to the other NEOs was also impacted by a one-
time relocation payment to the CFO in 2021. Over this same period, cumulative total shareholder return decreased by 4% and
net income increased by 14%.
The following graphs illustrate the relationship during 2021-2022 between compensation actually paid to our CEO and other
NEOs and total shareholder return (“TSR”):
$1,000,000
n
o
i
t
a
s
n
e
p
m
o
C
$750,000
$500,000
$250,000
$—
$140
$130
$120
T
S
R
$110
$100
12/31/21
12/31/22
CEO
Other NEOs
TSR
The following graphs illustrate the relationship during 2021-2022 between compensation actually paid to our CEO and other
NEOs and net income (in thousands):
$1,000,000
n
o
i
t
a
s
n
e
p
m
o
C
$750,000
$500,000
$250,000
$—
$25,000
$20,000
$15,000
$10,000
$5,000
$—
N
e
t
I
n
c
o
m
e
12/31/21
12/31/22
CEO
Other NEOs
Net Income
Under our cash and equity incentive plans, financial performance goals are established by the Compensation and Human
Resource Committee and the Board of Directors. For 2021 and 2022, these financial measures included TSR and net income,
in addition to other metrics as established by the Compensation and Human Resource Committee and the Board of Directors.
34
Director Compensation
The following table summarizes the compensation of each non-employee director who served on the Board during 2022.
Name
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Melinda M. Coffin (2)
G. Charles Hubscher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
David J. Maness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees paid in
cash ($)(1)
Fees deferred
under Directors
Plan ($)(1)
Total fees
earned ($)
—
44,900
—
—
—
—
31,962
54,500
44,983
40,850
36,200
—
1,667
34,450
43,550
27,118
7,321
—
9,000
—
36,200
44,900
1,667
34,450
43,550
27,118
39,283
54,500
53,983
40,850
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,600
(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.
12,650
37,950
(2) Director Coffin was appointed to the Board of Directors effective November 30, 2022.
We paid $1,500 per board meeting plus a retainer of $10,000 to each member during 2022. 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 our 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 $1,045,958 to the Rabbi Trust in 2022, which held 154,879 shares of our common stock for settlement as of
December 31, 2022. As of December 31, 2022, there were 52,961 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 $219,374 in 2022.
35
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 17, 2023:
Name
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Melinda M. Coffin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Charles Hubscher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
David J. Maness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
# of stock units
credited
24,760
1,163
1,844
2,664
31,960
45,072
47,892
890
5,509
1,790
1,663
11,536
17,188
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 $20,963,000 and $22,558,000 as of December 31,
2022 and 2021.
36
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of March 17, 2023 as to our common stock owned beneficially by 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount and
Nature of
Beneficial
Ownership
Percent of Class
391,792 (1)
5.18 %
(1)
Includes 377,278 shares held by McGuirk Investments LLC which Mr. McGuirk has sole investment power over.
The following table sets forth certain information as of March 17, 2023 as to our common stock owned beneficially by: 1) each
director and director nominee, 2) by each NEO, and 3) by all directors, director nominees and NEOs as a group.
Name of Owner
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Melinda M. Coffin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount and
Nature of
Beneficial
Ownership (1)
Percent of Class
8,947
2,787
—
19,962
203,782
56,841
7,978
1,656
391,792
15,451
2,263
5,157
6,069
10,875
733,560
0.12 %
0.04 %
— %
0.26 %
2.70 %
0.75 %
0.11 %
0.02 %
5.18 %
0.20 %
0.03 %
0.07 %
0.08 %
0.14 %
9.70 %
All Directors, nominees and Executive Officers as a Group (14) persons . . . . . . . . . . . . . . .
(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 17, 2023. 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 17, 2023 as a result of distribution elections and plan conditions. For stock units credited to each
participant's account as of March 17, 2023, refer to the “Director Compensation” section of this report.
37
Independent Registered Public Accounting Firm
The Audit Committee has appointed Rehmann as our independent auditors for the year ending December 31, 2023.
Fees for Professional Services Provided by Rehmann
The following table shows the aggregate fees billed by Rehmann for the audit and other services provided for:
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Audit related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022
2021
354,486 $
335,579
24,500
21,725
—
18,250
36,425
2,250
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
400,711 $
392,504
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 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 2022, 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, other than the audit fees, are compatible with
maintaining Rehmann’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 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 2022 and 2021 without pre-approval.
38
Shareholder Proposals
Any proposals which you intend to present at the next Annual Meeting must be received before November 28, 2023 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 2022 Annual Meeting, all directors, with the exception of
Mr. Kleinhardt, were in attendance.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and certain officers and persons who own more than
10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common
stock. These officers, directors, and greater than 10% shareholders are required by SEC regulation to furnish us with copies of
these reports.
During the year ended December 31, 2022, to our knowledge, there were eleven (11) delinquent transactions reported: Directors
Barnes, Bourland, Evans, Hubscher, Kleinhardt, Maness, McGuirk, Opperman, Payton, Schwind, and Varner all filed one late
report for one reportable transaction in March of 2022 related to the quarterly conversion of shares awarded pursuant to our
Directors Plan.
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 2022 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 Investor Relations tab, or may be
obtained, without charge, by writing to:
Debra Campbell
Secretary
Isabella Bank Corporation
401 N. Main St.
Mt. Pleasant, Michigan 48858
39
New State Street branch
to open in Saginaw
FULL- S E RVICE SITE ON
STATE STR E E T HA S TH E
AT TENTION O F
CUSTOM E R S
Months before the newest branch
of Isabella Bank was to open on
State Street in Saginaw, Michael
Colby, President of the East Region
of Isabella Bank, heard the buzz
in the community.
“Some employees went to a
Saginaw Township Business
Association luncheon in January,”
said Colby. “People said they were
excited about the new branch and
were eager to visit.”
The new 4,734-square foot branch
will be Isabella Bank’s third branch
in the city of Saginaw, and the fifth
branch in Saginaw County —
including Freeland and Hemlock.
Colby said the new branch will
serve the western side of Saginaw
County, Saginaw Township and
Thomas Township, just west of
the site.
“There are some fairly different
business districts in Saginaw,”
Colby said. “State Street will allow
us to better work with the
businesses and people who live
and work along that corridor. They
like the stability Isabella Bank
offers, and they like our combina-
tion of modern and traditional
services.”
40
Saginaw State Street branch under construction in February 2023.
The State Street branch is a
full-service site with drive-through
bays, an ATM, and investment and
loan personnel on site. Colby plans
to work from the branch, and he
looks forward to using the meeting
room space.
“We’ve been lacking space to have
meetings,” he said. “And as a
community bank, I can see oppor-
tunities for our partners. One of
our mortgage loan officers is part
of the Saginaw Home Builders
Association. It’s their turn to host
the meeting in May, and it would
be great to have them here.”
The State Street branch gives
Isabella Bank customers 30
branches across seven counties.
Chief Executive Officer Jae A.
Evans said the new branch is a
logical investment for a commu-
nity bank in a vibrant city.
“As an independent community
bank that has grown and evolved
with mid-Michigan for 120 years,
we’re excited to once again
expand our presence in Saginaw,”
Evans said.
Local. Growing. Staying.
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, or a licensed broker.
SHAR E H O LDE R S E RVICE S
For more information, contact Debra Campbell
(989) 779-6237 • 401 North Main Street, Mt. Pleasant, MI 48858
isabellabank.com --> Investor Relations
TR AN S FE R AGENT
Isabella Bank Corporation
(989) 779-6237 • 401 North Main Street, Mt. Pleasant, MI 48858
INV E STO R R E L ATION S FIR M
Renmark Financial Communications, LLC
(404) 806-1393 • 5 Concourse Pkwy. 30th Floor, Atlanta, GA 30328
renmarkfinancial.com
PUB LIC R E L ATION S FIR M
Paladin Communications
(734) 277-5843 • 2718 Sable Ct., Mt. Pleasant, MI 48858
paladincomm.net
LEG AL COUN S E L
Foster Swift Collins & Smith, PC
313 South Washington Square, Lansing, MI 48933
fosterswift.com
INDE PENDENT CE RTIFIE D PUB LIC ACCOUNTING FIR M
Rehmann Robson LLC
5800 Gratiot Rd. Suite 201, Saginaw, MI 48638
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.
41
Celebrating 120 Years
F ounded in 1903, Isabella Bank is one of
Michigan’s oldest banks and a historic
pillar of Central Michigan and surrounding
communities. Starting out as Isabella County
State Bank, we served Mount Pleasant,
Michigan for decades as a single downtown
location. Today, Isabella Bank has grown to
now serve seven counties with 29 branch
locations and continues to look forward to
other ways of serving the community.
I SAB E LL A BAN K HI STO RY
1903
John S. Weidman purchased the private
bank located on the corner of Broadway
and University Streets in Mount Pleasant.
He incorporated under the name, Isabella
County State Bank.
1912
The Bank was remodeled and proclaimed
to be the very latest in modern construc-
tion. The structure was built on a
concrete foundation utilizing steel and
iron reinforcement, adding to the charac-
ter of a bank known by the community to
be "solid as a rock".
42
Original charter for Isabella Bank, 1903
Exterior and interior of original
E. Broadway building, 1900s
Open house announcement in Daily
Times-News celebrating recent remodel
of Broadway location, March 28, 1961
1960s
The first drive-up branch at the corner of
University and Michigan Streets in Mount
Pleasant opened.
1970s
The Bank name changed to Isabella Bank
and Trust.
Four new locations: Weidman, West High
Street, South Mission Street and East
Pickard Street.
1980s
Isabella Bank expanded with three
new locations: Blanchard, Six Lakes and
Shepherd.
The formation of IBT Bancorp, a bank
holding company, was approved by
the shareholders.
1990s
Six new branch locations: Beal City,
Clare North, Clare South, Barryton, Remus
and Canadian Lakes.
IBT Financial Services (now Isabella Wealth)
began to offer brokerage services.
2000s
The Bank unveiled a new image and name, Isabella Bank,
and the holding company name was changed to Isabella
Bank Corporation.
Operations Center and Corporate Office were built to
accommodate increasing technology and bank growth.
A decade full of growth with eight new branches:
Breckenridge, Ithaca, Hemlock, Big Rapids West, Farwell,
Greenville, Stanton and Lake Isabella.
2010s
Six new locations: Big Rapids East, Midland East, Midland
West, Freeland, Saginaw Bay Road and Saginaw Downtown.
2020s
Soon to have in 2023 : Saginaw State Street branch
and Bay City loan production office.
Local. Growing. Staying.
43
Grand opening of Big Rapids
East branch, 2013
401 NORTH MAIN STREET, MT. PLEASANT, MI 48858