| Summary of Compliance with Regulatory Capital Requirements |
The following tables set forth these capital requirements and our ratios, both on a bank-only and on a consolidated basis, as of the dates indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | Actual | | Minimum Capital
Required Plus Capital Conservation Buffer | | Minimum Capital Required To Be Considered Well Capitalized (1) | | (dollars in thousands) | Amount | | Ratio | | Amount | | Ratio | | Amount | | Ratio | | Common equity Tier 1 capital to risk weighted assets | | | | | | | | | | | | | Isabella Bank | $ | 194,064 | | | 11.49 | % | | $ | 118,197 | | | 7.00 | % | | $ | 109,754 | | | 6.50 | % | | Consolidated | 209,173 | | | 12.34 | % | | 118,619 | | | 7.00 | % | | N/A | | N/A | | Tier 1 capital to risk weighted assets | | | | | | | | | | | | | Isabella Bank | 194,064 | | | 11.49 | % | | 143,525 | | | 8.50 | % | | 135,082 | | | 8.00 | % | | Consolidated | 209,173 | | | 12.34 | % | | 144,037 | | | 8.50 | % | | N/A | | N/A | | Total capital to risk weighted assets | | | | | | | | | | | | | Isabella Bank | 209,147 | | | 12.39 | % | | 177,295 | | | 10.50 | % | | 168,853 | | | 10.00 | % | | Consolidated | 247,903 | | | 14.63 | % | | 177,928 | | | 10.50 | % | | N/A | | N/A | | Tier 1 capital to average assets | | | | | | | | | | | | | Isabella Bank | 194,064 | | | 8.93 | % | | 86,910 | | | 4.00 | % | | 108,638 | | | 5.00 | % | | Consolidated | 209,173 | | | 9.59 | % | | 87,235 | | | 4.00 | % | | N/A | | N/A |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | Actual | | Minimum Capital
Required Plus Capital Conservation Buffer | | Minimum Capital Required To Be Considered Well Capitalized (1) | | (dollars in thousands) | Amount | | Ratio | | Amount | | Ratio | | Amount | | Ratio | | Common equity Tier 1 capital to risk weighted assets | | | | | | | | | | | | | Isabella Bank | $ | 182,116 | | | 11.20 | % | | $ | 113,783 | | | 7.00 | % | | $ | 105,656 | | | 6.50 | % | | Consolidated | 191,137 | | | 11.73 | % | | 114,114 | | | 7.00 | % | | N/A | | N/A | | Tier 1 capital to risk weighted assets | | | | | | | | | | | | | Isabella Bank | 182,116 | | | 11.20 | % | | 138,165 | | | 8.50 | % | | 130,038 | | | 8.00 | % | | Consolidated | 191,137 | | | 11.73 | % | | 138,568 | | | 8.50 | % | | N/A | | N/A | | Total capital to risk weighted assets | | | | | | | | | | | | | Isabella Bank | 196,336 | | | 12.08 | % | | 170,675 | | | 10.50 | % | | 162,547 | | | 10.00 | % | | Consolidated | 234,871 | | | 14.41 | % | | 171,172 | | | 10.50 | % | | N/A | | N/A | | Tier 1 capital to average assets | | | | | | | | | | | | | Isabella Bank | 182,116 | | | 8.45 | % | | 86,170 | | | 4.00 | % | | 107,713 | | | 5.00 | % | | Consolidated | 191,137 | | | 8.84 | % | | 86,476 | | | 4.00 | % | | N/A | | N/A |
(1) “Well-capitalized” minimum Common Equity Tier 1 to Risk-Weighted and Leverage Ratio are not formally defined under applicable regulations for bank holding companies.
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| Summary of the Components of Accumulated Other Comprehensive Income |
The following table summarizes the changes in AOCI by component for the periods indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30 | | 2026 | | 2025 | | (dollars in thousands) | Unrealized
Gains
(Losses) on
AFS
Securities | | | | Defined
Benefit
Pension Plan | | Total | | Unrealized
Gains
(Losses) on
AFS
Securities | | | | Defined
Benefit
Pension Plan | | Total | | March 31 | $ | (8,564) | | | | | $ | (38) | | | $ | (8,602) | | | $ | (17,042) | | | | | $ | (397) | | | $ | (17,439) | | | OCI before reclassifications | (200) | | | | | — | | | (200) | | | 3,879 | | | | | — | | | 3,879 | | | Tax effect | 51 | | | | | — | | | 51 | | | (827) | | | | | — | | | (827) | | | OCI, net of tax | (149) | | | | | — | | | (149) | | | 3,052 | | | | | — | | | 3,052 | | | June 30 | $ | (8,713) | | | | | $ | (38) | | | $ | (8,751) | | | $ | (13,990) | | | | | $ | (397) | | | $ | (14,387) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30 | | 2026 | | 2025 | | (dollars in thousands) | Unrealized
Gains
(Losses) on
AFS
Securities | | Defined
Benefit
Pension Plan | | Total | | Unrealized
Gains
(Losses) on
AFS
Securities | | Defined
Benefit
Pension Plan | | Total | | December 31 | $ | (7,985) | | | $ | (38) | | | $ | (8,023) | | | $ | (20,958) | | | $ | (397) | | | $ | (21,355) | | | OCI before reclassifications | (924) | | | — | | | (924) | | | 8,893 | | | — | | | 8,893 | | | Tax effect | 196 | | | — | | | 196 | | | (1,925) | | | — | | | (1,925) | | | OCI, net of tax | (728) | | | — | | | (728) | | | 6,968 | | | — | | | 6,968 | | | June 30 | $ | (8,713) | | | $ | (38) | | | $ | (8,751) | | | $ | (13,990) | | | $ | (397) | | | $ | (14,387) | |
A summary of the components of unrealized gains on AFS securities included in OCI follows for the periods indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30 | | 2026 | | 2025 | | (dollars in thousands) | Auction Rate Money Market Preferred | | All Other AFS Securities | | Total | | Auction Rate Money Market Preferred | | All Other AFS Securities | | Total | | Unrealized gains (losses) arising during the period | $ | 39 | | | $ | (239) | | | $ | (200) | | | $ | (64) | | | $ | 3,943 | | | $ | 3,879 | | | Tax effect | — | | | 51 | | | 51 | | | — | | | (827) | | | (827) | | | Unrealized gains (losses), net of tax | $ | 39 | | | $ | (188) | | | $ | (149) | | | $ | (64) | | | $ | 3,116 | | | $ | 3,052 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30 | | 2026 | | 2025 | | (dollars in thousands) | Auction Rate Money Market Preferred | | All Other AFS Securities | | Total | | Auction Rate Money Market Preferred | | All Other AFS Securities | | Total | | Unrealized gains (losses) arising during the period | $ | 6 | | | $ | (930) | | | $ | (924) | | | $ | (279) | | | $ | 9,172 | | | $ | 8,893 | | | Tax effect | — | | | 196 | | | 196 | | | — | | | (1,925) | | | (1,925) | | | Unrealized gains (losses), net of tax | $ | 6 | | | $ | (734) | | | $ | (728) | | | $ | (279) | | | $ | 7,247 | | | $ | 6,968 | |
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