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Capital Ratios and Shareholders' Equity | 9 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
Equity | Capital Ratios and Shareholders' Equity As of September 30, 2024 and December 31, 2023, 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. The minimum requirements presented below include the minimum required capital levels based on the Basel III Capital Rules. Capital requirements to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules. There were no conditions or events since the notifications that we believe have changed our categories. The following tables set forth these requirements and our ratios as of:
| September 30, 2024
| Actual |  | Minimum Capital Requirement |  | Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
| Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio
Common equity Tier 1 capital to risk weighted assets |  |  |  |  |  |  |  |  |  |  |
Isabella Bank | $ | 173,019 |  |  | 11.52 | % |  | $ | 105,136 |  |  | 7.00 | % |  | $ | 97,627 |  |  | 6.50 | %
Consolidated | 181,981 |  |  | 12.08 | % |  | 105,507 |  |  | 7.00 | % |  | N/A |  | N/A
Tier 1 capital to risk weighted assets |  |  |  |  |  |  |  |  |  |  |
Isabella Bank | 173,019 |  |  | 11.52 | % |  | 127,665 |  |  | 8.50 | % |  | 120,156 |  |  | 8.00 | %
Consolidated | 181,981 |  |  | 12.08 | % |  | 128,116 |  |  | 8.50 | % |  | N/A |  | N/A
Total capital to risk weighted assets |  |  |  |  |  |  |  |  |  |  |
Isabella Bank | 186,151 |  |  | 12.39 | % |  | 157,704 |  |  | 10.50 | % |  | 150,195 |  |  | 10.00 | %
Consolidated | 224,516 |  |  | 14.90 | % |  | 158,261 |  |  | 10.50 | % |  | N/A |  | N/A
Tier 1 capital to average assets |  |  |  |  |  |  |  |  |  |  |
Isabella Bank | 173,019 |  |  | 8.35 | % |  | 82,851 |  |  | 4.00 | % |  | 103,564 |  |  | 5.00 | %
Consolidated | 181,981 |  |  | 8.77 | % |  | 83,044 |  |  | 4.00 | % |  | N/A |  | N/A
| December 31, 2023
| Actual |  | Minimum Capital Requirement |  | Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
| Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio
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
Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital includes a permissible portion of the allowances for credit losses and subordinated debt, net of unamortized issuance costs. There are no significant regulatory constraints placed on our capital. At September 30, 2024, the Bank exceeded all minimum capital requirements. The following table summarizes the changes in AOCI by component for the:
| Three Months Ended September 30
| 2024 |  | 2023
| Unrealized Gains (Losses) on AFS Securities |  |  |  | Defined Benefit Pension Plan |  | Total |  | Unrealized Gains (Losses) on AFS Securities |  |  |  | Defined Benefit Pension Plan |  | Total
Balance, July 1 | $ | (26,939) |  |  |  |  | $ | (697) |  |  | $ | (27,636) |  |  | $ | (35,051) |  |  |  |  | $ | (1,366) |  |  | $ | (36,417) |
OCI before reclassifications | 13,081 |  |  |  |  | — |  |  | 13,081 |  |  | (6,708) |  |  |  |  | — |  |  | (6,708) |
Amounts reclassified from AOCI | — |  |  |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | — |
Subtotal | 13,081 |  |  |  |  | — |  |  | 13,081 |  |  | (6,708) |  |  |  |  | — |  |  | (6,708) |
Tax effect | (2,724) |  |  |  |  | — |  |  | (2,724) |  |  | 1,394 |  |  |  |  | — |  |  | 1,394 |
OCI, net of tax | 10,357 |  |  |  |  | — |  |  | 10,357 |  |  | (5,314) |  |  |  |  | — |  |  | (5,314) |
Balance, September 30 | $ | (16,582) |  |  |  |  | $ | (697) |  |  | $ | (17,279) |  |  | $ | (40,365) |  |  |  |  | $ | (1,366) |  |  | $ | (41,731) |
| Nine Months Ended September 30
| 2024 |  | 2023
| Unrealized Gains (Losses) on AFS Securities |  | Defined Benefit Pension Plan |  | Total |  | Unrealized Gains (Losses) on AFS Securities |  | Defined Benefit Pension Plan |  | Total
Balance, January 1 | $ | (25,199) |  |  | $ | (697) |  |  | $ | (25,896) |  |  | $ | (35,828) |  |  | $ | (1,366) |  |  | $ | (37,194) |
OCI before reclassifications | 10,858 |  |  | — |  |  | 10,858 |  |  | (5,736) |  |  | — |  |  | (5,736) |
Amounts reclassified from AOCI | — |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | (67) |
Subtotal | 10,858 |  |  | — |  |  | 10,858 |  |  | (5,803) |  |  | — |  |  | (5,803) |
Tax effect | (2,241) |  |  | — |  |  | (2,241) |  |  | 1,266 |  |  | — |  |  | 1,266 |
OCI, net of tax | 8,617 |  |  | — |  |  | 8,617 |  |  | (4,537) |  |  | — |  |  | (4,537) |
Balance, September 30 | $ | (16,582) |  |  | $ | (697) |  |  | $ | (17,279) |  |  | $ | (40,365) |  |  | $ | (1,366) |  |  | $ | (41,731) |
Included in OCI for the three and nine-month periods ended September 30, 2024 and 2023 are changes in unrealized gains and losses related to certain auction rate money market preferred stocks. These investments, for federal income tax purposes, have no deferred federal income taxes related to unrealized gains or losses given the nature of the investments. A summary of the components of unrealized gains on AFS securities included in OCI follows for the:
| Three Months Ended September 30
| 2024 |  | 2023
| Auction Rate Money Market Preferred Stocks |  | All Other AFS Securities |  | Total |  | Auction Rate Money Market Preferred Stocks |  | All Other AFS Securities |  | Total
Unrealized gains (losses) arising during the period | $ | 109 |  |  | $ | 12,972 |  |  | $ | 13,081 |  |  | $ | (67) |  |  | $ | (6,641) |  |  | $ | (6,708) |
Tax effect | — |  |  | (2,724) |  |  | (2,724) |  |  | — |  |  | 1,394 |  |  | 1,394 |
Unrealized gains (losses), net of tax | $ | 109 |  |  | $ | 10,248 |  |  | $ | 10,357 |  |  | $ | (67) |  |  | $ | (5,247) |  |  | $ | (5,314) |
| Nine Months Ended September 30
| 2024 |  | 2023
| Auction Rate Money Market Preferred Stocks |  | All Other AFS Securities |  | Total |  | Auction Rate Money Market Preferred Stocks |  | All Other AFS Securities |  | Total
Unrealized gains (losses) arising during the period | $ | 186 |  |  | $ | 10,672 |  |  | $ | 10,858 |  |  | $ | 228 |  |  | $ | (5,964) |  |  | $ | (5,736) |
Reclassification adjustment for net (gains) losses included in net income | — |  |  | — |  |  | — |  |  | — |  |  | (67) |  |  | (67) |
Net unrealized gains (losses) | 186 |  |  | 10,672 |  |  | 10,858 |  |  | 228 |  |  | (6,031) |  |  | (5,803) |
Tax effect | — |  |  | (2,241) |  |  | (2,241) |  |  | — |  |  | 1,266 |  |  | 1,266 |
Unrealized gains (losses), net of tax | $ | 186 |  |  | $ | 8,431 |  |  | $ | 8,617 |  |  | $ | 228 |  |  | $ | (4,765) |  |  | $ | (4,537) |

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