Regulatory Capital Requirements under Banking Regulations [Text Block]

Minimum Regulatory Capital Requirements

The Corporation (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the FRB and the FDIC. Failure to meet minimum capital requirements can initiate mandatory and possibly additional discretionary actions by the FRB and the FDIC that, if undertaken, could have a material effect on our financial statements. Under regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that include quantitative measures of assets, liabilities, capital, and certain off-balance-sheet items, as calculated under regulatory accounting standards. Our capital amounts and classifications are also subject to qualitative judgments by the FRB and the FDIC about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios (set forth in the following table) of total capital, tier 1 capital, and common equity tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and tier 1 capital to average assets (as defined). We believe, as of December 31, 2023 and 2022, that we met all capital adequacy requirements.

The FRB has established minimum risk-based capital guidelines. Pursuant to these guidelines, a framework has been established that assigns risk weights to each category of on and off-balance-sheet items to arrive at risk adjusted total assets. Regulatory capital is divided by the risk adjusted assets with the resulting ratio compared to the minimum standard to determine whether a corporation has adequate capital. The common equity tier 1 capital ratio has a minimum requirement of 4.50%. The minimum standard for primary, or Tier 1 capital is 6.00% and the minimum standard for total capital is 8.00%.

As of December 31, 2023 and 2022, the most recent notifications from the FRB and the FDIC categorized us as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain total risk-based, Tier 1 risk-based, Common Equity Tier 1, and Tier 1 leverage ratios as set forth in the following tables. There were no conditions or events since the notifications that we believe have changed our categories. Our actual capital amounts and ratios are also presented in the table.


	Actual				Minimum Capital Requirement				Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2023
Common equity Tier 1 capital to risk weighted assets
Isabella Bank	$	178,316	12.48	%	$	100,043	7.00	%	$	92,897	6.50	%
Consolidated	180,014		12.54	%	100,449		7.00	%	N/A		N/A
Tier 1 capital to risk weighted assets
Isabella Bank	178,316		12.48	%	121,481		8.50	%	114,335		8.00	%
Consolidated	180,014		12.54	%	121,973		8.50	%	N/A		N/A
Total capital to risk weighted assets
Isabella Bank	191,739		13.42	%	150,065		10.50	%	142,919		10.00	%
Consolidated	222,772		15.52	%	150,673		10.50	%	N/A		N/A
Tier 1 capital to average assets
Isabella Bank	178,316		8.71	%	81,935		4.00	%	102,419		5.00	%
Consolidated	180,014		8.76	%	82,154		4.00	%	N/A		N/A


	Actual				Minimum Capital Requirement				Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2022
Common equity Tier 1 capital to risk weighted assets
Isabella Bank	$	190,060	14.07	%	$	94,565	7.00	%	$	87,811	6.50	%
Consolidated	175,112		12.91	%	94,948		7.00	%	N/A		N/A
Tier 1 capital to risk weighted assets
Isabella Bank	190,060		14.07	%	114,829		8.50	%	108,075		8.00	%
Consolidated	175,112		12.91	%	115,295		8.50	%	N/A		N/A
Total capital to risk weighted assets
Isabella Bank	199,910		14.80	%	141,848		10.50	%	135,093		10.00	%
Consolidated	214,207		15.79	%	142,423		10.50	%	N/A		N/A
Tier 1 capital to average assets
Isabella Bank	190,060		9.36	%	81,181		4.00	%	101,476		5.00	%
Consolidated	175,112		8.61	%	81,392		4.00	%	N/A		N/A