MT. PLEASANT, MICHIGAN — October 27, 2025 — Isabella Bank Corporation (Nasdaq: ISBA) (“Isabella” or the “Company”) reported net income of $5.2 million for the third quarter 2025 and $14.2 million for the nine months ended September 30, 2025. Earnings per diluted share were $0.71 for the third quarter 2025 and $1.92 for the first nine months of 2025.

•Core loans grew $32 million, or 2%

•Total deposits grew $76 million, or 4%

•Net interest income increased 11.6% compared to third quarter 2024

•Net interest margin ("NIM") was 3.15%, up from 2.96% during the third quarter of 2024

•Strong credit quality, with a ratio of nonperforming loans to total loans of 0.24% as of September 30, 2025

“Our strong third quarter results were driven by continued expansion in core loans and deposits," said Isabella's Chief Executive Officer, Jerome Schwind. "Earning assets continued to reprice with low and stable funding costs, generating NIM growth," he added.

"Our loan growth this year has been driven by the commercial and residential mortgage loan portfolios. Our deposit growth includes larger deposits from not-for-profit entities and while some of our deposit growth is considered short-term, we continue to build new relationships across our geographic footprint.

"We also launched initiatives to strengthen noninterest revenue through fee-based income during the quarter, which coupled with noninterest expense control, have contributed to our overall financial performance.

“Our stock trading volume and price remain robust since uplisting our shares to the Nasdaq Capital Market earlier this year," Schwind added. "Our financial results and stock performance position us well for growth and to continue to deliver long-term value to our shareholders.”

Total assets were $2.3 billion as of September 30, 2025, up $173.4 million, primarily due to an increase of $127.5 million in interest bearing cash balances, $22.9 million in available-for-sale ("AFS") securities, and $10.8 million in the value of bank-owned life insurance ("BOLI") policies.

AFS securities at fair value were $512 million as of September 30, 2025, increasing $11.4 million during the third quarter and $22.9 million compared to December 31, 2024. The increase during the year was largely driven by purchases of $62.1 million and an improvement in unrealized losses of $13.9 million, partially offset by amortizations and maturities totaling $53.1 million. Net unrealized losses on securities totaled $12.6 million as of September 30, 2025, compared to $26.5 million at December 31, 2024. Net unrealized losses as a percentage of total AFS securities decreased to 2% from 5%, primarily due to the treasury portfolio rapidly approaching maturity.

Total loans were $1.4 billion at the end of the third quarter, increasing $34.4 million during the third quarter and $8.3 million since December 31, 2024. While core loans have grown $66.4 million during 2025, advances to mortgage brokers decreased $58 million due to lower participation demand from the counterparty.

During the year, the commercial and industrial and commercial real estate portfolios grew $17.5 million and $34.9 million, respectively. Residential mortgages increased $31.2 million since year-end 2024 with $13.4 million of growth in the third quarter on construction drawdowns and seasonal patterns. Most residential originations were adjustable-rate products, which are retained on the balance sheet rather than sold in the secondary market. The consumer loan portfolio declined $15.4 million as loans continue to roll off amid decreasing demand, competition, and an adherence to credit quality standards.

The allowance for credit losses ("ACL") increased $172 thousand during the third quarter and $254 thousand since December 31, 2024, reaching $13.1 million as of September 30, 2025. The increase for each period reflects core loan growth, offset by improvement in historical loss experience driven by the recovery of previously charged-off loans during the year. Nonaccrual loan balances increased $2.3 million during the quarter to $3.4 million, primarily due to the downgrade of one commercial real estate loan to nonaccrual status during the quarter. Past due and accruing accounts between 30 to 89 days, as a percentage of total loans, was 0.03% compared to 0.40% at December 31, 2024. Overall credit quality remains strong.

BOLI assets were $45.7 million at September 30, 2025, an increase of $10.8 million from December 31, 2024. The growth was mostly driven by a $10.6 million investment of new policies in a separate account product at the beginning of January. During the year, over $13 million of existing general account policies were surrendered and/or exchanged and the funds were redeployed into a separate account BOLI. The separate account BOLI policies are expected to have higher yields than general account policies.

Total deposits were $1.93 billion at September 30, 2025, increasing $76.2 million during the third quarter and $178.5 million since December 31, 2024. Money market deposits have increased $134.3 million during the year, with a large portion related to one relationship with large deposits that is expected to be withdrawn by the customer by the end of the year. Consumer demand for retail certificates of deposit accounts continues based on the current elevated market interest rate environment, resulting in a $17.2 million increase during the year.

Total equity was $227.4 million, or $30.94 per share, at September 30, 2025 compared to $210.3 million, or $28.32 per share, at year-end 2024. Tangible book value per share was $24.37 as of September 30, 2025, compared to $21.82 on December 31, 2024. Net unrealized losses in the AFS securities portfolio reduced tangible book value per share by $1.36 and $2.82 for the respective periods. Share repurchases totaled 19,096 during the third quarter and 122,502 during the first nine months of 2025 at an average price of approximately $32.00 and $26.60, respectively.

Net income in the third quarter of 2025 was $5.2 million, or $0.71 per diluted share, compared with $3.3 million, or $0.44 per diluted share, in the same quarter 2024. Net income for the year-to-date period of 2025 was $14.2 million, or $1.92 per diluted share, compared with $9.9 million, or $1.32 per diluted share, in the same period of 2024.

Net interest income was $16.2 million in the third quarter of 2025 and $14.5 million in the same quarter of 2024, representing 3.15% and 2.96% of earning assets, or NIM, respectively. The book yield from securities was 2.42% and 2.17% during the third quarters of 2025 and 2024, respectively. The yield on loans expanded to 5.78% in the third quarter 2025, up from 5.72% in the same quarter of 2024. The expansion in loan yields was primarily due to higher rates on new loans and variable rate commercial loans that continue to reprice. The cost of interest-bearing liabilities in the third quarter of 2025 decreased to 2.25% from 2.42% in the third quarter of 2024 due to reductions to rates in the money market and certificate of deposit products. NIM is expected to continue to expand as loans reprice and the cost of interest-bearing liabilities stabilizes.

For the first nine months of 2025, net interest income was $45.8 million compared with $41.3 million in the same period of 2024. The comparison of NIM and yield on interest earning assets for the nine months ended September 30, 2025 were 3.12% and 4.80%, respectively, compared to 2.87% and 4.62%, respectively, for the same period in 2024. The yield on loans expanded to 5.75%, from 5.55%, and the cost of interest-bearing liabilities decreased to 2.25% from 2.36% for the first nine months of 2025 and 2024, respectively.

The explanations for the improvement in NIM are consistent with those provided in the year-over-year three month comparison above.

The provision for credit losses in the third quarter of 2025 was $209 thousand, which reflects a $172 thousand increase in the ACL on loans, net charge offs totaling $74 thousand, and an increase in the reserve for unfunded commitments. The provision for loan losses in the same period of 2024 was $946 thousand, reflecting growth in core loans, unfunded commitments, and $1.8 million in charge offs. The increase in charge offs was related to overdrawn deposit accounts from a single customer. The year-to-date provision for credit loss was a credit of $1.0 million, as compared to a provision of $1.5 million in the third quarter 2024. Recoveries during 2025 totaled $2.1 million, of which $1.6 million was related to the overdrawn deposit accounts from a single customer charged off during the third quarter of 2024. The $1.6 million charge off and subsequent recovery, net of tax, impacted diluted earnings per share by $0.17 in 2024 and $0.16 in 2025.

Noninterest income for the three months ended September 30, 2025 and 2024 was $4.3 million and $3.5 million, respectively. Service charges and fees increased $219 thousand and was mostly the result of profitability initiatives designed to increase fee income. Wealth management fees grew $71 thousand due to growth in assets under management throughout the year. Earnings on BOLI policies increased $216 thousand over the prior year quarter due to new investments in a separate account BOLI, which was offset in part by a one-time expense of $120 thousand due to restructuring charges. Noninterest income during the third quarter of 2025 also includes a $163 thousand gain on the redemption of a BOLI policy. For the first nine months of 2025, noninterest income was $11.5 million, compared to $10.6 million in the same period of 2024. Increases in service charges and fees, wealth management fees, earnings on BOLI policies, and other income for the nine-month comparison are the same as the three-month comparison.

Noninterest expenses for the three-month period ended September 30, 2025 increased $757 thousand compared to the same period in 2024. Compensation and benefit expenses increased $379 thousand reflecting annual merit increases in 2025, incentives, and higher medical insurance claims compared to the third quarter of 2024. Other professional services increased $263 thousand primarily due to an increase in outsourced services. For the first nine months of 2025, noninterest expenses were $41.0 million, compared to $38.8 million in the same period of 2024. Compensation and benefits increased $1.3 million for the same reasons as the three-month comparison. Other professional service fees increased $797 thousand principally due to $173 thousand of profitability initiative costs, $168 thousand in legal fees related to our uplisting of the Company's shares of common stock from the OTCQX market to the Nasdaq Capital Market, and an increased reliance on outsourced professional services.

Isabella Bank Corporation (Nasdaq: ISBA) is the parent holding company of Isabella Bank, a state-chartered community bank headquartered in Mt. Pleasant, Michigan. Isabella Bank was established in 1903 and has been committed to serving its customers' and communities' local banking needs for over 120 years. The Bank offers personal and commercial lending and deposit products, as well as investment, trust, and estate planning services. The Bank has locations throughout eight Mid-Michigan counties: Bay, Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw.

For more information about Isabella Bank Corporation, visit the Investor Relations link at www.isabellabank.com.

Lori Peterson, Director of Marketing

Phone: 989-779-6333 Fax: 989-775-5501

The Company maintains an Internet web site at ir.isabellabank.com/overview. The Company makes available, free of charge, on its web site the Company’s annual reports, quarterly earnings reports, and other press releases.

The Company routinely posts important information for investors on its website (www.isabellabank.com and, more specifically, under the News tab at ir.isabellabank.com/news). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company’s website is not incorporated by reference into, and is not a part of, this document.

Information in this press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended and Rule 3b-6 promulgated thereunder. We intend such forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995, and are included in this statement for purposes of these safe harbor provisions. Forward-looking statements generally relate to losses, impact of events, financial condition, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting the Company and its future business and operations. Forward-looking statements are typically identified by words or phrases such as “will likely result”, “expect”, “could”, “may”, “plan”, “believe”, “estimate”, “anticipate”, “strategy”, “trend”, “forecast”, “outlook”, “project”, “intend”, “assume”, “outcome”, “continue”, “remain”, “potential”, “opportunity”, “current”, “position”, “maintain”, “sustain”, “seek”, “achieve” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. Factors that could cause such differences include, but are not limited to: (i) the impact on us or our customers of a decline in general economic conditions, and any regulatory responses thereto; (ii) slower economic growth rates or potential recession in the United States and our market areas; (iii) the impacts related to or resulting from uncertainty in the banking industry as a whole; (iv) increased competition for deposits among traditional and nontraditional financial services companies, and related changes in deposit customer behavior; (v) the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; (vi) the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; (vii) the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; (viii) changes in unemployment rates in the United States and our market areas; (ix) adverse changes in customer spending, borrowing and savings habits; (x) declines in commercial real estate values and prices; (xi) a deterioration of the credit rating for the United States long-term sovereign debt or the impact of uncertain or changing political conditions, including federal government shutdowns and uncertainty regarding United States fiscal debt, deficit and budget matters; (xii) cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; (xiii) severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events, including as a result of in the policies of the current U.S. presidential administration or Congress; (xiv) in the impact of tariffs, sanctions and other trade policies of the United States and its global trading counterparts and the resulting impact on the Company and its customers; (xv) competition and market expansion opportunities; (xvi) changes in non-interest expenditures or in the anticipated benefits of such expenditures; (xvii) the receipt of required regulatory approvals; (xviii) changes in tax laws; (xix) the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; (xx) potential costs related to the impacts of climate change; (xxi) current or future litigation, regulatory examinations or other legal and/or regulatory actions; and (xxii) changes in applicable laws and regulations. These forward-looking statements are based on current information and/or management’s good faith belief as to future events. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Additional information regarding risks and uncertainties to which the Company’s business and future financial performance are subject is contained in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of such documents, and other documents the Company files or furnishes with the SEC from time to time, which are available on the SEC’s website, www.sec.gov. Due to these and other possible uncertainties and risks, the Company cautions you not to unduly rely on forward-looking statements. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans or expectations contemplated by the Company will be achieved. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made, except as required by law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

The following table outlines selected financial data as of, and for the:

			Three Months Ended																														Nine Months Ended
			September 30 2025						June 30 2025						March 31 2025						December 31 2024						September 30 2024						September 30 2025						September 30 2024
PER SHARE
Basic earnings			$	0.71					$	0.68					$	0.53					$	0.54					$	0.44					$	1.93					$	1.32
Diluted earnings			0.71						0.68						0.53						0.54						0.44						1.92						1.32
Dividends			0.28						0.28						0.28						0.28						0.28						0.84						0.84
Book value (1)			30.94						29.95						29.10						28.32						28.63						30.94						28.63
Tangible book value (1) (2)			24.37						23.39						22.58						21.82						22.14						24.37						22.14
Market price (1)			35.25						30.15						23.59						25.99						21.21						35.25						21.21
Common shares outstanding (1) (3)			7,350,567						7,361,684						7,408,010						7,424,893						7,438,720						7,350,567						7,438,720
Average number of diluted common shares outstanding (3)			7,371,652						7,398,109						7,432,162						7,451,718						7,473,184						7,399,441						7,492,404
PERFORMANCE RATIOS
Return on average total assets			0.94		%				0.96		%				0.77		%				0.76		%				0.62		%				0.89		%				0.64		%
Return on average shareholders' equity			9.28		%				9.19		%				7.48		%				7.47		%				6.26		%				8.67		%				6.47		%
Return on average tangible shareholders' equity (1)			11.83		%				11.78		%				9.65		%				9.66		%				8.15		%				11.12		%				8.48		%
Net interest margin yield (fully taxable equivalent) (1)			3.15		%				3.14		%				3.06		%				2.98		%				2.96		%				3.12		%				2.87		%
Efficiency ratio			67.51		%				70.53		%				71.73		%				71.08		%				72.30		%				69.80		%				73.65		%
Gross loan to deposit ratio (1)			74.36		%				75.57		%				76.07		%				81.48		%				79.93		%				74.36		%				79.93		%
Shareholders' equity to total assets (1)			10.06		%				10.23		%				10.25		%				10.08		%				10.11		%				10.06		%				10.11		%
Tangible shareholders' equity to tangible assets (1)			8.10		%				8.17		%				8.14		%				7.95		%				8.00		%				8.10		%				8.00		%
ASSETS UNDER MANAGEMENT
Wealth assets under management (1)			679,724						678,959						656,617						658,042						679,858						679,724						679,858
ASSET QUALITY
Nonaccrual loans (1)			3,443						1,164						173						282						547						3,443						547
Foreclosed assets (1)			1,018						667						649						544						546						1,018						546
Net loan charge-offs (recoveries)			74						(1,432)						(52)						102						1,359						(1,410)						1,798
Net loan charge-offs (recoveries) to average loans outstanding			0.01		%				(0.10)		%				0.00		%				0.01		%				0.10		%				(0.10)		%				0.13		%
Nonperforming loans to gross loans (1)			0.24		%				0.09		%				0.01		%				0.02		%				0.04		%				0.24		%				0.04		%
Nonperforming assets to total assets (1)			0.20		%				0.09		%				0.04		%				0.04		%				0.06		%				0.20		%				0.06		%
Allowance for credit losses to gross loans (1)			0.92		%				0.93		%				0.93		%				0.91		%				0.89		%				0.92		%				0.89		%
CAPITAL RATIOS (1)
Tier 1 leverage			8.71		%				9.04		%				8.96		%				8.86		%				8.77		%				8.71		%				8.77		%
Common equity tier 1 capital			12.37		%				12.46		%				12.58		%				12.21		%				12.08		%				12.37		%				12.08		%
Tier 1 risk-based capital			12.37		%				12.46		%				12.58		%				12.21		%				12.08		%				12.37		%				12.08		%
Total risk-based capital			15.20		%				15.34		%				15.50		%				15.06		%				14.90		%				15.20		%				14.90		%

(1) At end of period.

(2) Non-GAAP financial measure; refer to the Reconciliation of Non-GAAP Financial Measures (Unaudited) in table F

(3) Whole shares

(Dollars in thousands except per share amounts)

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. These schedules also present an analysis of interest income and interest expense for the periods indicated. All interest income is reported on a fully tax 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 ("FRB") restricted equity holdings are included in other interest earning assets.

(1) Includes loans held-for-sale and nonaccrual loans

(2) Average balances for available-for-sale securities are based on amortized cost

(3) Includes average interest-bearing deposits with other banks, net of Federal Reserve daily cash letter.

AVERAGE BALANCES, INTEREST RATE, AND NET INTEREST INCOME (UNAUDITED) (continued)

(1) Includes loans held-for-sale and nonaccrual loans (loan summary below)

(2) Average balances for available-for-sale securities are based on amortized cost

(3) Includes average interest-bearing deposits with other banks, net of Federal Reserve daily cash letter.

(4) Certain amounts reported as commercial and industrial loans have been reclassified as commercial real estate loans to conform to the September 30, 2025 presentation

						September 30 2025						June 30 2025						March 31 2025						December 31 2024						September 30 2024
Gross loans						$	1,431,905					$	1,397,513					$	1,367,724					$	1,423,571					$	1,424,283
Advances to mortgage brokers						5,056						3,005						3,015						63,080						76,187
Core loans						$	1,426,849					$	1,394,508					$	1,364,709					$	1,360,491					$	1,348,096
Total shareholders’ equity						$	227,420					$	220,500					$	215,556					$	210,276					$	212,985
Goodwill and other intangible assets						48,282						48,282						48,282						48,283						48,283
Tangible equity			(A)			179,138						172,218						167,274						161,993						164,702
Common shares outstanding (1)			(B)			7,350,567						7,361,684						7,408,010						7,424,893						7,438,720
Tangible book value per share			(A/B)			24.37						23.39						22.58						21.82						22.14

(1) Whole shares.