23ANNUAL REPORT
20 TABLE OF
CONTENTS
Our Vision, Mission Statement, & Core Values ........................... 3
Shareholder Letter: Sarah R. Opperman, Board Chair .............4-5
CEO Letter: Jerome E. Schwind .................................................6-7
Questions & Answers: Jerome E. Schwind ...............................8-9
Financial Report: Neil M. McDonnell ................................. 10-11
Financial Results ................................................................... 12-15
Board of Directors ...................................................................... 16
Senior Officers & Regional Boards ............................................. 17
Questions & Answers: Jae A. Evans ..................................... 18-19
Employee Recognition ............................................................... 20
Annual Shareholder Meeting .................................................... 21
Proxy Statement ................................................................... 23-41
Stock Information ...................................................................... 42
2
OUR VI SION
To be recognized as the leading independent community bank.
M I SSION 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
DEAR
SHAREHOLDERS,
Isabella Bank’s 120th year of serving customers
and communities was marked by a number
of milestones, including the retirement of
Jae A. Evans, the election of new executive
leadership, and the retirement of two long-serving
Board directors.
Jae Evans, who served as the President and Chief Executive Officer
of the Corporation and Chief Executive Officer of Isabella Bank, is a
respected, effective, and steady leader, which was especially critical
during the last several years of volatility in our nation and specifically
in the banking industry. We thank him for his excellent leadership and
look forward to his continued contributions on our Board of Directors.
Appointing a President and CEO is one of the Board’s most important
roles, and your Board was united in electing Jerome E. Schwind, a
24-year Isabella Bank veteran, to succeed Jae, effective on January 5,
2024. Jerome, who had been president of Isabella Bank since 2015, has
the experience, vision, and drive to lead this organization. His steadfast
focus on customers and communities will guide our continued growth
and success.
He is joined in the executive suite by Neil M. McDonnell, who was
named by the Board to replace Jerome as Bank President, also effective
January 5, 2024. Neil has more than 30 years of banking experience
and joined Isabella Bank in 2018 as Chief Financial Officer.
Jerome and Neil are proof of strong succession planning and make a
powerful team to lead our bank and its employees. Together, and on
your behalf, they and the Board will continue to drive Isabella Bank’s
reputation as this region’s preeminent community bank.
4
In May 2023, two highly respected directors retired from the
Board. Dave Maness had been a member of Isabella Bank’s
corporate board more than 20 years, serving as chair from 2010
until May 2021. Chuck Hubscher also had served two decades,
including chairing the nomination and governance committee.
In closing and on behalf of the Board and you, the
shareholders, I thank Jae, Dave, and Chuck for their
extraordinary service over a combined 65 years of service
to Isabella Bank and congratulate Jerome and Neil on
their new executive leadership roles.
Isabella Bank has a long history of strong community
banking as well as outstanding community banking
leadership. That legacy continues.
Thank you for your continued investment and support.
SARAH R. OPPERMAN
Board Chair
5
CEO
LETTER
As we close the books on
2023, we wrap up a year
that will be remembered
in the finance industry for
its ongoing increases in
interest rates.
At Isabella Bank Corporation, we will proudly remember our ability
to accurately assess the competitive landscape and remain firmly
committed to our vision and mission. Despite the challenging
economic conditions that prevailed elsewhere, we remained
resolute and confidently navigated through the headwinds
with ease.
We had a forward-looking plan for the year and a well-constructed
budget. Our stable, effective management team — supported
by a smart and engaged Board of Directors
— adjusted as necessary. And our strong
liquidity, combined with the high quality of our
expanding loan portfolio, kept us squarely on
solid ground.
We moved forward with a fifth location in Saginaw
County and a loan and wealth office in Bay City,
expanding our service area to eight counties.
6
We also rebuilt our High Street branch in
Mount Pleasant. In each case, we verified
the efficacy of our efforts and kept rolling.
All of those factors point to a nimble,
dynamic bank that’s in business for
the long haul, with the balance sheet,
systems, and strategic plan to serve its
shareholders, customers, and communities
exceptionally well.
The year 2023 marked the 120th
anniversary of Isabella Bank, with a history
built on the shoulders of leaders such as
Jae A. Evans, who retired this January
as President and Chief Executive Officer
of Isabella Bank Corporation and Chief
Executive Officer of Isabella Bank. Jae and
those before him are esteemed for their
banking and business acumen as well
as their profound commitment to the
residents and businesses of the counties
we serve.
Looking forward, the winning banks will
be those that deliver a differentiated
experience — ensuring customers can bank
anywhere, any time, on any device, while
also receiving personalized support when
needed. Customers and communities must
remain part of our value proposition, as
Isabella Bank has proven since 1903.
As your new President and CEO, I assure
you that shareholder value is a top priority.
Neil M. McDonnell, who succeeded me as
Bank President, will oversee our presence
across the region. He joins me, our entire
management team, and our Board of
Directors in the determination to deliver
the results you expect — regardless of
events happening in the world around us.
JEROME E. SCHWIND
President & Chief Executive Officer,
Isabella Bank Corporation
Chief Executive Officer, Isabella Bank
7
QUESTIONS
& ANSWERS
Jerome E. Schwind
PRESIDENT & CHIEF EXECUTIVE OFFICER
Jerome shares insights about Isabella Bank’s
strengths, staying power, and formula for success.
Q What can we expect from Isabella Bank going forward and
from you as the new CEO?
A Community banks have always had a commitment to communities
and relationships that set them apart. Combine that with our
acceleration of technology the past couple of years, and we have
a winning formula that customers and shareholders want. I’m all
in, moving forward, and committed to customers, communities,
employees, and shareholders.
Q You have a reputation statewide as a banking
leader. Why do you choose Isabella Bank?
A Some 25 years ago, I was working for a large,
regional bank, frustrated by a lack of focus on
customers and communities. My wife asked if
I could work anywhere, where would that be?
Without knowing anyone here, I said, “Isabella
Bank,” based 100% on its reputation. She told
me to write a cover letter and send my resume,
or else I needed to stop being frustrated.
Rick Barz was the chief lending officer at
the time, and I’d heard of him and his
commitment to employees, customers, and
8
communities. It is beyond words for me
to sit in the chair he went on to occupy
as CEO. True to Rick’s style, my goal is to
lead this organization in a way worthy of
the effort all of us give to deliver Isabella
Bank’s trademark service and value.
Q What should we know about your
leadership style?
A People tell me I’m a visionary, looking
at what we need today, and also five
and 10 years down the road. I consider
that a vital role. Somebody has to
look out the windshield to ensure we
stay relevant.
Q How does Isabella Bank remain
steadfastly independent?
A It’s an alignment of our Board
of Directors, management team,
employees, and of our shareholders
who decide we are a worthy investment.
We deliver on that value proposition
every day.
Access to capital. Access to credit.
Access to safe places to put your money.
Those are critical in any economy. A
team that knows and supports you —
that’s Isabella Bank.
Local leaders and customers say if a
community bank goes away, it creates
a hole. At Isabella Bank, we agree. We
have a duty to remain a community
bank, as we have for 120 years.
Q What else is Isabella Bank doing to
thrive, no matter what happens in the
industry or world?
A We invest in our people. Even with all
of today’s technology, this industry
requires good people. With the right
team members doing the right thing
at the right time, we’ll take advantage
of all the tailwinds and weather all the
headwinds.
Isabella Bank is strong because of its
people. One of our branch managers
opened an account last year for a couple
that had retired to the area. They were
Central Michigan University students
in the ’70s and said Isabella Bank had
treated them so well back then they
wouldn’t think of going anyplace else.
We’re still that kind of bank.
Q What makes Isabella Bank so valuable
to its stakeholders?
A We’re valuable because we provide
stability in our markets. We’re a safe
harbor for deposits and source of advice
for customers and communities. We’re a
source of credit to assist in the progress
of customers’ dreams and a source of
return for shareholders. Our 120-year
history is proof of this.
Q You say Isabella Bank is strong. What
proves that?
A We’ve recently been through a
pandemic, and I couldn’t be more proud
of our team. We’ve always strategically
nurtured continuity in our management
team, and our employees are
extraordinarily dedicated. Throughout
the pandemic, customers looked to us
for support. Our shareholders stuck
with us, confident we would deliver a
positive return on investment — and we
did. We weren’t experts in pandemics,
but we figured it out collectively —
foreshadowing a nimble, strong future
for Isabella Bank.
9
FINANCIAL REPORT
As we reflect on 2023, the banking industry faced some
significant events. The collapse of three high-profile
regional banks shook consumer confidence, and persistent
inflationary pressure made consumers more cautious in
their banking. However, during one of the most challenging
years in recent history, Isabella Bank remained vigilant
in safeguarding the interests of our customers.
Like many banks across the country, we faced challenges due to higher interest
rates. While these rates benefited banks in many ways, they also sharply
increased interest expenses, which are reflected in their net interest margin
(NIM). Unfortunately, we were no exception, as interest expense outpaced the
growth in interest income. However, despite these challenges, we finished the
year with our NIM holding solid at 3.05%, not far from where we finished in 2022.
Despite these events, we remained competitive for deposits, and our loan portfolio
experienced strong growth in the second half of the year. While other institutions
scaled back on consumer loans, Isabella Bank identified an opportunity to help our
customer base and grow consumer lending, all the while maintaining our robust
credit standards. On the commercial side, loan
customers became more comfortable with
the rate environment and moved forward
with planned projects as they continued to
reinvest in their companies in 2023. Overall,
our loans grew by $85 million in 2023.
10
TOTAL LOAN GROWTH
$85 million
INCREASE IN ASSETS MANAGED
BY ISABELLA WEALTH
25%
NET INTEREST MARGIN
3.05%
With deposits in flux throughout the year,
we’re proud of the fact that Isabella Bank
deposits finished 2023 stable, essentially
matching the previous year’s results. Our
total assets of the Corporation remained
above $2 billion.
Isabella Wealth continues to grow its client
base both with trusts and investment
management. We exceeded our goals in
2023 and saw assets managed by Isabella
Wealth rise 25%.
The year ended with interest rates leveling
off and inflation easing. We continue to
monitor the markets and are cautiously
optimistic that the Federal Reserve will cut
rates in the second half of 2024.
Even during the challenging times of 2023,
our bank was able to navigate the changing
market conditions and maintain its strong
position. We closed the year with $18.2
million in net income and earnings per
share of $2.42.
When you look at where we finished the
year, Isabella Bank has proven again that
the strength of our market position and
strategic approach to serving our customers,
now in eight counties, is a formula for
success. With 120 years of experience
backing us up, we are confident in Isabella
Bank’s future and the value it brings to
its shareholders.
NEIL M. MCDONNELL
Chief Financial Officer, Isabella Bank Corporation
President, Isabella Bank
11
ISABELLA BANK CORPORATION
SELECTED FINANCIAL DATA
(Dollars in thousands except per share amounts)
2023
2022
2021
$
$
$
79,631
21,687
57,944
629
13,827
49,310
3,665
18,167
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
$
$
$
$
$
$
$
2.42
2.40
1.12
20.59
$
$
$
26.00
19.13
21.50
7,485,889
$
$
$
$
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
0.89 %
9.52 %
12.75 %
3.05 %
1.08 %
11.41 %
15.17 %
3.18 %
0.96 %
8.83 %
11.31 %
2.87 %
$
$
$
$
$
$
1,349,463
528,148
2,058,968
1,723,695
116,136
202,402
78.29 %
$
$
$
$
$
$
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 %
$
$
$
248,756
641,027
2,948,751
$
$
$
264,206
513,918
2,808,391
$
$
$
278,844
516,243
2,827,245
0.08 %
0.07 %
0.97 %
9.83 %
8.76 %
12.54 %
12.54 %
15.52 %
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 %
For the years ended
INCOME STATEMENT DATA
Interest income
Interest expense
Net interest income
Provision for credit losses
Noninterest income
Noninterest expenses
Federal income tax expense
Net income
PER SHARE
Basic earnings
Diluted earnings
Dividends
Tangible book value (1)
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, at fair value
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 credit 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)
Cash and cash equivalents
ASSETS
Cash and demand deposits due from banks
Fed Funds sold and interest bearing balances due from
banks
Total cash and cash equivalents
Available‐for‐sale securities, at fair value
Mortgage loans available‐for‐sale
Loans
Less allowance for credit 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 7,485,889 shares
(including 150,581 shares held in the Rabbi Trust) in 2023
and 7,559,421 shares (including 154,879 shares held in the
Rabbi Trust) in 2022
Shares to be issued for deferred compensation obligations
Retained earnings
Accumulated other comprehensive loss
Total shareholders’ equity
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
December 31
Change
2023
2022
$
%
$
25,628
$
27,420
$
(1,792)
(6.54)%
8,044
33,672
528,148
‐
1,349,463
13,108
1,336,355
27,639
33,892
15,848
48,284
35,130
2,058,968
$
11,504
38,924
580,481
379
1,264,173
9,850
1,254,323
25,553
32,988
15,746
48,287
33,586
2,030,267
$
(3,460)
(5,252)
(52,333)
(379)
85,290
3,258
82,032
2,086
904
102
(3)
1,544
28,701
$
$
428,505
320,737
857,768
116,685
1,723,695
$
494,346
372,155
810,642
67,132
1,744,275
$
(65,841)
(51,418)
47,126
49,553
(20,580)
46,801
40,000
29,335
116,136
16,735
1,856,566
57,771
‐
29,245
87,016
12,766
1,844,057
(10,970)
40,000
90
29,120
3,969
12,509
(30.08)%
(13.49)%
(9.02)%
(100.00)%
6.75 %
33.08 %
6.54 %
8.16 %
2.74 %
0.65 %
(0.01)%
4.60 %
1.41 %
(13.32)%
(13.82)%
5.81 %
73.81 %
(1.18)%
(18.99)%
N/A
0.31 %
33.47 %
31.09 %
0.68 %
127,323
3,693
97,282
(25,896)
202,402
128,651
5,005
89,748
(37,194)
186,210
(1,328)
(1,312)
7,534
11,298
16,192
(1.03)%
(26.21)%
8.39 %
(30.38)%
8.70 %
$
2,058,968
$
2,030,267
$
28,701
1.41 %
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 credit losses
Net interest income after provision
for credit losses
Noninterest income
Service charges and fees
Wealth management fees
Earnings on corporate owned life insurance
policies
Net gain on sale of mortgage loans
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
Change
2023
2022
$
%
$
65,670
$
53,283
$
12,387
23.25 %
9,514
2,642
1,805
79,631
18,352
961
1,309
1,065
21,687
57,944
629
8,363
2,808
1,344
65,798
1,151
(166)
461
13,833
13.76 %
(5.91)%
34.30 %
21.02 %
4,021
14,331
356.40 %
79
152
1,065
5,317
60,481
483
882
1,157
‐
16,370
(2,537)
146
N/A
761.18 %
0.00%
307.88 %
(4.19)%
30.23 %
57,315
59,998
(2,683)
(4.47)%
8,297
3,557
920
317
736
13,827
25,905
6,519
3,778
13,108
49,310
8,730
3,005
884
631
416
13,666
24,887
6,006
3,691
12,236
46,820
(433)
552
36
(314)
320
161
1,018
513
87
872
2,490
21,832
3,665
18,167
$
26,844
4,606
22,238
$
(5,012)
(941)
(4,071)
$
$
$
$
2.42
2.40
1.12
$
$
$
2.95
2.91
1.09
$
$
$
(0.53)
(0.51)
0.03
(4.96)%
18.37 %
4.07 %
(49.76)%
76.92 %
1.18 %
4.09 %
8.54 %
2.36 %
7.13 %
5.32 %
(18.67)%
(20.43)%
(18.31)%
(17.97)%
(17.53)%
2.75 %
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.
2023
Tax
Equivalent
Interest
Average
Balance
$
1,308,891
485,718
96,845
12
41,965
$
65,670
9,399
3,780
1
1,804
1,933,431
80,654
Year Ended December 31
Average
Yield /
Rate
Average
Balance
2022
Tax
Equivalent
Interest
Average
Yield /
Rate
5.02 %
1.94 %
3.90 %
5.04 %
4.30 %
4.17 %
$
1,249,634
477,159
107,158
10
99,301
$
53,283
8,294
3,933
‐
1,344
1,933,262
66,854
(12,784)
24,592
26,589
74,319
2,046,147
$
$
346,875
626,027
308,699
43,061
23,699
29,287
1,377,648
461,689
16,043
190,767
(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
274
1,135
2,612
79
152
1,065
5,317
1,086
8,290
8,976
961
1,309
1,065
21,687
0.31 %
1.32 %
2.91 %
2.23 %
5.52 %
3.64 %
1.57 %
4.26 %
1.74 %
3.67 %
2.42 %
1.35 %
3.46 %
0.07 %
0.18 %
0.97 %
0.16 %
1.93 %
3.65 %
0.39 %
INTEREST EARNING ASSETS
Loans (1)
Taxable investment securities
Nontaxable investment securities
Fed funds sold
Other
Total earning assets
NONEARNING ASSETS
Allowance for credit 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)
$
2,046,147
$
2,054,964
$
58,967
$
61,537
3.05 %
3.18 %
(1) Includes loans and mortgages loans available‐for‐sale
15
BOARD OF DIRECTORS
Sarah R. Opperman - Chair
Vice President (retired),
The Dow Chemical Company
Jerome E. Schwind
President & Chief Executive Officer,
Isabella Bank Corporation
Chief Executive Officer,
Isabella Bank
Jae A. Evans
President & Chief Executive Officer (retired),
Isabella Bank Corporation
Chief Executive Officer (retired),
Isabella Bank
Thomas L. Kleinhardt
President,
McGuire Chevrolet
Neil M. McDonnell
President & Chief Financial Officer,
Isabella Bank
Richard L. McGuirk
Operations Manager/President,
United Apartments
Dr. Jeffrey J. Barnes
Physician,
L.O. Eye Care
Chad R. Payton, CPA
Officer and Managing Partner,
Roslund, Prestage & Company, PC
Jill Bourland, CPA, HCCP
Chief Executive Officer & Partner,
Blystone & Bailey, CPAs, PC
Vicki L. Rupp
Corporate Director (retired),
The Dow Chemical Company
Melinda M. Coffin
Chief Executive Officer,
Soaring Eagle Gaming
Enterprises
Gregory V. Varner
Research Director (retired),
Michigan Bean Commission
16
AS OF MARCH 2024
SENIOR OFFICERS
& REGIONAL BOARDS
I SAB E LL A BAN K CO R P O R ATION O FFICE R S
Jerome E. Schwind
President & Chief
Executive Officer
Debra A. Campbell
Vice President, Secretary
Neil M. McDonnell
Chief Financial Officer
Jennifer L. Gill
Vice President, Controller
Michael P. Prisby
Vice President, Treasurer
I SAB E LL A BAN K O FFICE R S
Jerome E. Schwind
Chief Executive Officer
Erika M. Ross
Vice President, Chief Risk Officer
Gregory S. Mapes
Vice President, Treasury Management
Neil M. McDonnell
President & Chief Financial Officer
Kimberly K. Betts
Vice President, Collections
Daniel P. McKune
Vice President, Isabella Wealth
James L. Binder
Vice President, Commercial Loans
Michelle L. Mease
Vice President, Isabella Wealth
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
Jenn A. Brick
Vice President, Customer Service
Operations
David E. Brown
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
Julie A. Smith, CGEIT, CRISC
Senior Vice President, Chief Technology Officer
JoAnna L. Keenan
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
Kathy J. Korson
Vice President, Mortgage Loans
Kimberly A. Lambright
Vice President, Internal Audit
Robert Z. MacLeod
Vice President, Branch Administration
R EGIONAL B OAR DS O F DIR E C TO R S
East
Michael R. Colby
Mary F. Draves
Reneé S. Johnston
Neil M. McDonnell
Clarence M. Rivette
Vicki L. Rupp
Mark K. Wahl
South
Cindy M. Bosley
Brian K. Goward
William W. Henderson
Neil M. McDonnell
Chad R. Payton
Jeffrey E. Sherwood
Gregory V. Varner
West
Dr. Emily A. Coles
Matthew L. Currie
Kevin J. Defever
Blake R. Hollenbeck
Alexander R. Kemp
Neil M. McDonnell
Gregory D. Millard
Brian R. Sackett
David W. Seppala
Lori A. Peterson
Vice President, Director of Marketing
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
Amy C. Vogel
Vice President, Core Systems
& Special Projects
Timothy M. Wilson
Vice President, Regional Branch
Manager
Tracy A. Zayler
Vice President, Regional Branch
Manager
North
Shari R. Buccilli
Michael L. Jenkins
Thomas L. Kleinhardt
Neil M. McDonnell
Steven L. Stark
AS OF MARCH 2024
17
QUESTIONS
& ANSWERS
Jae A. Evans
RETIRED PRESIDENT & CHIEF EXECUTIVE OFFICER
Jae shares his thoughts about his transition and reflects
on the legacy he leaves behind.
Q As you look back on your 10 years as CEO, what would you say makes Isabella Bank
so strong?
A The people who work here and our Board of Directors are the foundation of what makes
Isabella Bank strong. We have great people who love what they do. We also continually
strive to remain relevant to our customers and the communities we serve by offering
products and services people need and want, in a way that builds lasting relationships.
There continues to be a lot of discussion about the need for brick-and-mortar branches,
but banking is a people business in so many aspects. Everyone has moments when they
still need and want to talk with someone for advice and support. Being seen by our
customers as “trusted-advisors” adds to our success.
Q Isabella Bank hit many milestones under your leadership, including record earnings
and assets. Speaking as a state- and national-level banking leader, how unusual is it
for a 120-year-old bank to remain so successful?
A It’s becoming more unusual as we see a continual decline in the number of financial
institutions that achieve our level of longevity. In Michigan alone, we have fewer than
80 state-chartered banks today, compared to almost 400 in the mid 1980’s. There is
a definite correlation between success and longevity. Our success is the result of the
long-term vision and strategy of our Board, management team, and the performance
of dedicated individuals day in and day out. When the vision and commitment to it are
strong, positive long-term results will follow.
18
Q Are there highlights of the past decade that aren’t as well
known yet reflect the staying power and impact of the Bank?
A So much of what we do is highly visible, especially tangible things
like our decade long branch expansion and enhancements to our
online and mobile banking initiatives. What stands out for me
that may not be as well known, or can be taken for granted, is the
effort of our employees to this organization and the communities
we serve. Most may not realize Isabella Bank employs almost
400 individuals today. It is through their dedication and effort,
as well as those that came before them, that has been vital to
us achieving 120 years of service.
Q What advice did you give to Jerome and Neil as they prepared
for their new roles?
A They didn’t need much advice. They’re talented and
experienced professionals, and have great hearts. They
understand and value community banking and will
continue the commitment to advancing the culture that’s
been fostered by generations of Isabella Bank leaders
before them.
Q What message do you have for shareholders?
A It’s been an honor and a privilege for me to finish my 49-year
banking career with Isabella Bank, and to serve as its CEO for
the past 10 years. Thank you for the support you provided
to me and the Bank, both as a shareholder and
as a customer.
Isabella Bank is an organization with a
strong, engaged Board of Directors, an
outstanding team of employees, and an
amazing story of long-term growth and
performance. I’m excited to see what
the future holds.
19
EMPLOYEE
RECOGNITION
In 2023, some of our employees achieved professional and personal
milestones. We recognize and celebrate the following individuals
on their recent promotions and retirements.
I SAB E LL A BAN K O FFICE R PROM OTION S
Julie Smith, CGEIT, CRISC
Senior Vice President, Chief Technology Officer
R E TIR E M ENT S
Amy Andersen, 22 years
Patti Badger, 22 years
Cindy Rau-Griswold, 20 years
Marilyn Schumer, 16 years
Kathy Falcicchio, 14 years
20
ANNUAL
SHAREHOLDER
MEETING
Tuesday, May 7, 2024 at 5:00 P.M.
Courtyard by Marriott
2400 East Campus Drive
Mt. Pleasant, MI 48858
21
22
ISABELLA BANK CORPORATION
401 N. Main St.
Mt. Pleasant, Michigan 48858
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 7, 2024
Notice is hereby given that the Annual Meeting of Shareholders of Isabella Bank Corporation will be held on Tuesday, May 7,
2024 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 ratify the appointment of Rehmann Robson LLC as the independent registered public accounting firm for the year
ending December 31, 2024.
3. 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 15, 2024 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
Debra Campbell, Secretary
Dated: March 25, 2024
23
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 7, 2024 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 25, 2024 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 15, 2024 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 15, 2024, there were 7,498,626 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 Proposal 1 if you do not furnish instructions for such proposal. 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, Proposal 1 is not an item 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 2-
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.
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.
24
Proposal 1 - Election of Directors
The Board of Directors (the “Board”) currently consists of twelve (12) members divided into three classes, with the directors in
each class being elected for a term of three years. The Board decreased from 13 to 11 members in May of 2023 when G.
Charles Hubscher and David J. Maness retired from the Board. The Board increased from 11 to 12 members with the
appointment of Neil M. McDonnell, effective January 31, 2024. The Board will decrease from 12 to 11 members as Richard L.
McGuirk will not stand for re-election at the Annual Meeting. At the Annual Meeting, Jill Bourland, Jae A. Evans, and Jerome
E. Schwind, whose current terms expire at the Annual Meeting, have been nominated for election to serve through the 2027
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
Thomas L. Kleinhardt
Neil M. McDonnell
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
Xc
Compensation
and Human
Resource
Xo
X
X
X
Xc
X
X
25
Director Nominees for Terms Ending in 2027
Jill Bourland (age 53) 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 is a member of the William and Janet Strickler Nonprofit
Center Board, and the Mid-Michigan Community College Foundation Board. She formerly served as President of the William
and Janet Strickler Nonprofit Center, 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 67) has been a director of Isabella Bank Corporation and of the Bank since 2014. He was President and
Chief Executive Officer of the Corporation from 2014 to January 2024 and Chief Executive Officer of the Bank from 2018 to
January 2024. Mr. Evans 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 47 years of banking
experience. Mr. Evans currently serves as a board member for 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.
Jerome E. Schwind (age 57) has been a director of Isabella Bank Corporation and of the Bank since 2017. Mr. Schwind was
appointed President and Chief Executive Officer of the Corporation and Chief Executive Officer of Isabella Bank effective
January 5, 2024. He has over 30 years of banking experience and has been employed by the Bank since 1999, serving in
various roles including President of the Bank and Vice President of the Corporation, 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 past chair of
the Michigan Bankers Association. He is the chair of the Middle Michigan Development Corporation, 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 Michigan Bankers Association 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 Director with Terms Ending in 2024
Richard L. McGuirk (age 52) has been a director of Isabella Bank Corporation and of the Bank since 2021. Mr. McGuirk is the
President and Operations Manager of United Apartments 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 a past board member of the Mt.
Pleasant Area Community Foundation. Mr. McGuirk has expertise in business, and a strong commitment to community
involvement.
Current Directors with Terms Ending in 2025
Thomas L. Kleinhardt (age 69) 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.
Neil M. McDonnell (age 60), was appointed a director of Isabella Bank Corporation and of the Bank effective January 31, 2024.
Mr. McDonnell was appointed President of Isabella Bank effective January 5, 2024 after serving as the Chief Financial Officer
since 2018. He has more than 30 years of banking experience and previously worked in the eastern United States in roles such
as CFO, controller, treasurer, compliance and risk officer, and director of finance at large international banks, local community
banks and de novo banks. He is a newly-elected member of the Board of Directors of Community Bankers of Michigan, a
member of the Mid-Michigan Industries Board of Directors, and volunteers with Habitat for Humanity of Isabella County
Finance Committee.
26
Sarah R. Opperman (age 64) 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 executive leadership roles in public and government affairs. She served as interim President and Chief
Executive Officer of the Midland Business Alliance in 2018. Ms. Opperman is a member of the Central Michigan University
Advancement Board, the Herbert H. and Grace A. Dow 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 55) has been a director of Isabella Bank Corporation and of the Bank since 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 69) 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.
Current Directors with Terms Ending in 2026
Dr. Jeffrey J. Barnes (age 61) 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 49) has been a director of Isabella Bank Corporation and of the Bank since 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 64) 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 served on
the Saginaw Valley State University Foundation Board and the Saginaw Valley State University Board of Control from
2014-2023, serving as Board Chair and Presidential Search Team Chair the last 2 years of her service. She currently serves on
the Saginaw Valley State University Foundation Executive Committee. Ms. Rupp brings experience in operations and strategic
development and a commitment to community service.
Each of the directors has been engaged in their stated professions for more than five years unless otherwise stated.
Other Executive Officers
David J. Reetz (age 63), 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 64), Chief Operations Officer of the Bank, has been employed by the Bank since 1977. She has over 46
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 Mt. Pleasant Area Community Foundation
and serves as chair of their grant review committee. She also serves on the Board for the Michigan Bankers Association
Service Corporation, and RISE Advocacy.
27
Proposal 2 - 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, 2024.
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 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, 2024.
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, Thomas L. Kleinhardt, 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 retired
as President and CEO of Isabella Bank Corporation and CEO of Isabella Bank on January 4, 2024. Jerome E. Schwind is not
independent as he is employed as President and CEO of Isabella Bank Corporation and CEO of Isabella Bank. Neil M.
McDonnell is not independent as he is employed as Chief Financial Officer of Isabella Bank Corporation and President of
Isabella Bank.
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.
28
Committees of the Board of Directors and Meeting Attendance
The Board met 14 times during 2023. No current member of the Board attended less than 75% of the aggregate meetings of the
Board and any committee on which such director served during 2023. 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 Coffin,
Kleinhardt, and Opperman (ex-officio).
Nominating and Corporate Governance Committee
We have a standing Nominating and Corporate Governance Committee consisting of independent directors Barnes, McGuirk,
Opperman (ex-officio), and Varner. The Nominating and Corporate Governance Committee held three meetings in 2023, 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 2025 Annual Meeting of Shareholders should be delivered no later than November 25, 2024. 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, Coffin, Kleinhardt, Opperman (ex-officio), and Payton. The
Compensation and Human Resource Committee held five meetings during 2023 and no member attended less than 75% of the
meetings. 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.
29
Audit Committee Report
The Audit Committee oversees the financial reporting process on behalf of the Board. The 2023 Audit Committee consisted of
directors Bourland, Coffin, Kleinhardt, 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, 2023.
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 2023.
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, 2023 for filing with the Securities and Exchange Commission. The Audit Committee has
appointed Rehmann Robson LLC as the independent auditors for the 2024 audit.
Respectfully submitted,
Jill Bourland, Audit Committee Chairperson
Melinda M. Coffin
Thomas L. Kleinhardt
Sarah R. Opperman (ex-officio)
Chad R. Payton
* As planned, on May 9, 2023, David J. Maness retired from the Board and all committees of the Board, including the Audit
Committee. Therefore, Mr. Maness did not participate in the Audit Committee's review, discussion or recommendation with
respect to matters covered by the Audit Committee's report in this Proxy Statement.
30
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, 2023, 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
Jerome E. Schwind
President of Isabella Bank and Vice
President of Isabella Bank Corporation
Year
2023
2022
2023
2022
2023
2022
Salary
($)(1)
504,500
478,250
Bonus
($)(2)
134,400
130,500
Stock
Awards
($)(3)
—
89,600
Change in
pension value
and
nonqualified
deferred
compensation
earnings ($)(4)
36,863
168
301,300
289,000
49,130
55,137
—
36,125
3,331
11
382,066
362,321
68,093
68,141
—
48,065
9,465
(26,978)
All other
compensation
($)(5)
56,087
54,171
39,636
35,146
49,395
51,056
Total
($)
731,850
752,689
393,397
415,419
509,019
502,605
(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, 2023:
Name
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director fees ($)
2023
2022
34,500
34,500
30,250
30,250
(2)
(3)
(4)
Includes payouts granted pursuant to the Isabella Bank Corporation Executive Cash Incentive Plan.
Includes shares granted pursuant to the Isabella Bank Corporation Restricted Stock Plan disclosed as the aggregate grant
date fair value of the awards computed, in accordance with ASC Topic 718.
Includes the aggregate non-cash change in the actuarial present value of the noted executive's accumulated benefit under
the Isabella Bank Corporation Pension Plan.
(5) For all named executives, all other compensation includes 401(k) matching contributions and auto allowance.
31
Outstanding Equity Awards at Fiscal Year-End Table
The following table provides information on the unvested shares of restricted stock pursuant to the Isabella Bank Corporation
Restricted Stock Plan as of December 31, 2023:
Name
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Neil M. McDonnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock awards
Number of shares
or units of stock
that have not
vested (#)(1)
Market value of
shares or units of
stock that have
not vested ($)(2)
—
3,583
8,000
2,427
—
1,444
3,184
952
—
1,922
4,281
1,279
—
77,035
172,000
52,181
—
31,046
68,456
20,468
—
41,323
92,042
27,499
Grant Date
2/16/2023(3)
3/28/2022
4/1/2021
6/24/2020
2/16/2023(3)
3/28/2022
4/1/2021
6/24/2020
2/16/2023(3)
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, 2023 which was $21.50.
(3) Achievement of financial performance goals in connection to the stock awards were not met in 2023.
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.
32
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. These stock investments can be made either through
deferred fees or through the purchase of shares through the Isabella Bank Corporation Stockholder Dividend Reinvestment and
Employee Stock Purchase Plan (“DRIP Plan”). Deferred fees, under the Directors Plan, are converted on a quarterly basis into
stock units of our common stock based on the fair value of a share of our common stock as of the relevant valuation date. Stock
units credited to a participant’s account are eligible for stock and cash dividends as paid. DRIP Plan shares are purchased
pursuant to the DRIP Plan.
Distribution of deferred fees from the Directors Plan occurs when the participant retires from the Board or upon the occurrence
of certain other events. The participant is eligible to receive distributions in the form of shares of our common stock of all of the
stock units that are then in his or her account, and any unconverted cash will be converted to and rounded up to a whole share of
stock and distributed, as well. Any common stock issued from deferred fees under the Directors Plan will be considered
restricted stock under the Securities Act of 1933, as amended. Common stock purchased through the DRIP Plan are not
considered restricted stock under the Securities Act of 1933, as amended.
SERP. Under the supplemental executive retirement plan (“SERP”), we may promise deferred compensation benefits to
employees who are members of a select group of management or highly compensated employees, which may include the
named executive officers. The SERP authorizes us to make annual and discretionary credits to a participant’s SERP account
pursuant to a participation agreement with the participant that sets forth the amount and timing of any annual credits and the
vesting, payment, “clawback” and other terms to which the credits are subject.
The SERP provides default terms that may be modified by a participant’s participation agreement, including default vesting,
interest and payment terms. Under the SERP’s default vesting terms, a participant is initially unvested in the participant’s
SERP account and becomes 100% vested upon attaining normal retirement age, retirement, involuntary separation from service
without cause, death, disability or a change in control. Special vesting rules apply to amounts that are credited after a change in
control. Under the SERP’s interest rule, a participant’s account balance is credited with interest annually, the rate of which may
be changed and is based on Federated Investor's Institutional Money Market Management Fund yield (MMPXX) for the current
plan year, updated annually. Under the SERP’s default payment terms, a participant’s vested and nonforfeited account balance
will be paid in a single cash lump sum within 90 days after the first to occur of the participant’s separation from service (subject
to a six-month delay for a “specified employee”), death, disability, or any date specified in the participant’s participation
agreement. The SERP also includes restrictive covenants that restrict a participant’s ability to compete with us and certain
other activities.
Executive Cash Incentive Plan. 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 22% to 35% of the employee's annual salary and are subject to “clawback” provisions. 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
33
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, and are subject to “clawback”
provisions.
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, 2023.
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.
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, 2023, that would have
resulted in an additional credit to Jae A. Evans’ SERP account of $0, Neil M. McDonnell's SERP account of $150,000, and
Jerome E. Schwind's SERP account of $416,500 and a total credit for each individual of $874,663, $254,025, and $609,391,
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, 2023, that would have
resulted in vested shares to Jae A. Evans’ RSP account of 14,010 ($301,216), Neil M. McDonnell's RSP account of 5,580
($119,970), and Jerome E. Schwind's RSP account of 7,482 ($160,864).
34
The following table presents certain information regarding compensation paid and certain financial performance measures in
each of the last three years ended December 31, 2023, for the CEO and other NEOs as a group, as disclosed in the Summary
Compensation table above.
Pay Versus Performance
Summary
compensation table
total for CEO ($)
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 $100
investment based on
total shareholder
return ($)
731,850
752,689
777,058
703,830
726,436
821,451
451,208
459,012
529,998
438,146
446,772
550,607
127
131
136
Net income
(in thousands)($)
18,167
22,238
19,499
Year
2023
2022
2021
(1)
In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total
reported compensation for each year to determine the compensation actually paid:
Summary
compensation table
total for CEO ($)
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 ($)
Compensation
actually paid to CEO
($)
731,850
752,689
777,058
—
(89,600)
(174,000)
—
84,201
204,000
(28,020)
(20,854)
14,393
703,830
726,436
821,451
Year
2023
2022
2021
(2)
In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average
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 ($)
451,208
459,012
529,998
—
(42,095)
(81,185)
—
39,551
95,179
(13,062)
(9,696)
6,615
438,146
446,772
550,607
Year
2023
2022
2021
35
Relationship Between Pay and Performance
Compensation actually paid to the CEO from 2021 to 2022 decreased by $95,015, or 12%, and compensation actually paid from
2022 to 2023 decreased by $22,606, or 3%. The average compensation actually paid to the other NEOs as a group over the
same periods decreased $103,835, or 19%, and $8,626, or 2%, respectively. The change in compensation actually paid for all
periods 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. Over the same periods, cumulative
total shareholder return decreased by 4% and 3% and net income increased by 14% and 18%, respectively.
The following graph illustrates the relationship during 2021-2023 between compensation actually paid to our CEO and average
compensation actually paid to other NEOs as a group 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
12/31/23
CEO
Other NEOs
TSR
The following graph illustrates the relationship during 2021-2023 between compensation actually paid to our CEO and average
compensation actually paid to other NEOs as a group 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
$—
N
e
t
I
n
c
o
m
e
12/31/21
12/31/22
12/31/23
CEO
Other NEOs
Net Income
Under our cash and equity incentive plans, financial performance goals are established by the Compensation and Human
Resource Committee and the Board of Directors. For 2021, 2022 and 2023, these financial measures included TSR and net
income, in addition to other metrics as established by the Compensation and Human Resource Committee and the Board of
Directors.
36
Director Compensation
The following table summarizes the compensation of each non-employee director who served on the Board during 2023.
Name
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Melinda M. Coffin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Charles Hubscher (3)
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
David J. Maness (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees paid in
cash ($)(1)
Fees deferred
under Directors
Plan ($)(1)
Total fees
earned ($)(2)
—
55,967
—
—
—
—
33,638
59,500
48,283
6,550
46,483
—
43,350
19,217
49,350
16,683
11,212
—
6,000
44,800
46,483
55,967
43,350
19,217
49,350
16,683
44,850
59,500
54,283
51,350
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54,000
(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.
Includes fees for the fourth quarter of 2022 as a result of a change in the director fee payment structure.
13,500
40,500
(2)
(3) Retired from the Board effective May 9, 2023.
We paid an annual retainer of $40,000 to each non-employee director and $30,000 to each employee director of the Board
during 2023. The chairperson of the Board is paid an additional retainer of $15,000, the Audit Committee chair is paid an
additional retainer of $8,000, the Nominating & Corporate Governance chair is paid an additional retainer of $1,000, and the
chairperson of the Compensation & Human Resource Committee is paid an additional retainer of $4,000.
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 $1,461,971 to the Rabbi Trust in 2023, which held 150,581 shares of our common stock for settlement as of
December 31, 2023. As of December 31, 2023, there were 3,538 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 $210,288 in 2023.
37
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 15, 2024:
Name
Dr. Jeffrey J. Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jill Bourland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Melinda M. Coffin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jae A. Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Neil M. McDonnell (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
Director appointment effective January 31, 2024.
Indebtedness of and Transactions with Management
# of stock units
credited
28,241
1,227
3,983
2,811
49,000
—
939
5,813
2,064
3,064
13,699
18,527
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 $19,527,000 and $20,963,000 as of December 31,
2023 and 2022.
38
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of March 15, 2024 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of Shares
Beneficially
Owned
Percent of Class
398,566 (1)
5.32 %
(1)
Includes 381,959 shares held by McGuirk Investments LLC which Mr. McGuirk has sole investment power over.
The following table sets forth certain information as of March 15, 2024 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas L. Kleinhardt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Neil M. McDonnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard L. McGuirk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah R. Opperman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chad R. Payton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vicki L. Rupp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jerome E. Schwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory V. Varner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of Shares
Beneficially
Owned (1)
Percent of Class
9,065
3,490
—
28,528
57,122
2,608
398,566
17,012
4,821
5,224
7,698
13,088
547,222
0.12 %
0.05 %
— %
0.38 %
0.76 %
0.03 %
5.32 %
0.23 %
0.06 %
0.07 %
0.10 %
0.17 %
7.30 %
All Directors, nominees and Executive Officers as a Group (12) 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 15, 2024. 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 15, 2024 as a result of distribution elections and plan conditions. For stock units credited to each
participant's account as of March 15, 2024, refer to the “Director Compensation” section of this report.
39
Independent Registered Public Accounting Firm
The Audit Committee has appointed Rehmann as our independent auditors for the year ending December 31, 2024.
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
387,700 $
354,486
17,500
21,085
24,500
21,725
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
426,285 $
400,711
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 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 2023, 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.
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 and interim review 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 2023 and 2022 without pre-approval.
40
Shareholder Proposals
Any proposals which you intend to present at the next Annual Meeting must be received before November 25, 2024 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 2023 Annual Meeting, all directors 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, 2023, to our knowledge, there were eight (8) delinquent transactions reported: Directors
Bourland, Evans, McGuirk, Opperman, Payton, Rupp, and Varner all filed one late report for one reportable transaction in
January of 2023 related to director fee purchases pursuant to our Directors Plan. Additionally, director Varner filed one late
report for one reportable transaction in July of 2023 related to a director fee purchase 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 2023 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
41
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
Stonegate Capital Partners, Inc.
500 Crescent Court, Suite 370, Dallas, TX 75201
stonegateinc.com
PUB LIC R E L ATION S FIR M
Paladin Communications
(734) 277-5843 • 2718 Sable Court, 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 Road, Suite 201, Saginaw, MI 48638
rehmann.com
42
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.
43
401 NORTH MAIN STREET
MT. PLEASANT, MI 48858