Key Highlights

  • Record Net Income was $6.6 million, or $0.86 per diluted share, against $5.2 million, or $0.71, a year earlier.
  • Net interest Margin improved to 3.71% from 3.15% in the third quarter of 2025.
  • Net interest income was $19.4 million, versus $16.2 million a year ago.
  • Total deposits rose $73.0 million, or 4.0%, since year-end to $1.9 billion.
  • Regulatory and Shareholder approvals for the Grand River Acquisition are complete, with closing expected on November 2, 2026.

A record quarter built on a wider margin

Isabella Bank (NASDAQ:ISBA) is the parent of Isabella Bank, a state-chartered community bank headquartered in Mt. Pleasant, Michigan, chartered in 1903. The bank serves eight Mid-Michigan counties. The company reported third quarter 2026 results on October 29, 2026.

Net income was a record $6.6 million, or $0.86 per diluted share, compared with $5.2 million, or $0.71, in the third quarter of 2025. That included after-tax expenses of $657,000 tied to the proposed Grand River Commerce acquisition.

For the nine months, net income was $16.6 million, or $2.24 per diluted share, against $14.2 million, or $1.92, a year earlier.

Net interest income climbs as funding costs ease

Net interest income was $19.4 million, up from $16.2 million, a rise of about 20% on a calculated basis. Net interest margin on a fully tax equivalent basis was 3.71%, compared with 3.54% in the second quarter and 3.15% a year ago.

The Loan Yield rose to 5.95% from 5.78%, and the securities book yield was 3.20% versus 2.42%, while the cost of interest-bearing liabilities fell to 2.08% from 2.25% on lower Money Market and Certificate of Deposit rates.

The efficiency ratio improved to 64.74% from 67.62% a year earlier. Noninterest income was $4.6 million versus $4.3 million.

Deposits and securities shift the balance sheet

Total Assets rose $31.1 million, or 1.4%, from December 31, 2025 to $2.2 billion. Cash and cash equivalents increased $112.5 million, while available-for-sale securities fell $88.3 million, or 17.7%, to $409.5 million.

Deposits grew to $1.9 billion, led by a $141.8 million increase in money market accounts. Loans were roughly flat at $1.5 billion, down $556,000, as growth in Commercial Real Estate of $29.9 million and residential real estate of $29.7 million was offset by a $39.0 million drop in advances to Mortgage brokers.

CEO Jerome Schwind said the increase in deposit balances further strengthens the funding position.

Credit metrics and capital

Nonaccrual loans were $7.5 million, compared with $4.6 million at December 31, 2025, and nonperforming loans were 0.49% of total loans. The provision for Credit losses was $50,000 in the quarter. The allowance for credit losses was $14.4 million, or 0.94% of loans.

Total Equity was $245.6 million, or $32.09 per share, up from $231.4 million at year-end, helped by $12.5 million raised through an at-the-market offering. The company paid a Dividend of $0.28 per share in the quarter, unchanged from prior quarters.

Grand River deal and what to watch

All regulatory and shareholder approvals have been received to acquire Grand River Commerce and Grand River Bank, with closing expected on November 2, 2026, subject to customary conditions. Mr. Schwind said the Merger expands the company's presence in West Michigan.

Readers following the name will likely watch whether the margin holds near 3.71% once the transaction closes, how merger-related costs affect results and whether loan balances return to growth.