Isabella Bank Corporation released its earnings results for the first quarter of 2019.
Article continues below
Isabella Bank Corporation reported net income of $3.5 million or earnings per common share of $0.44 for the first quarter of 2019.
Net income for the three months ended March 31, 2019 and 2018 was $3.50 million and $3.46 million, respectively.
A combination of improved yields and growth in Isabella Bank Corporation loan portfolio over the past twelve months, resulted in an increase of $1.4 million in interest income for the first three months of 2019 compared to the first quarter of 2018.
Isabella Bank Corporation expecta to see continued improvement in the overall yield of the loan portfolio in future quarters.
Due to the rising interest rate environment throughout 2018, interest expense on deposits and borrowings increased $891,000 for the three month period ended March 31, 2019 when compared to the same period in 2018.
Noninterest income was relatively flat for the first three months of 2019 when compared to the same period in 2018.
However, noninterest expenses for the first three months of 2019 exceeded noninterest expenses for the same period in 2018 by $693,000.
Additions to staff related to new positions in growing markets, as well as merit increases, and loan expenses related to growth initiatives, account for the increase.
Isabella Bank Corporation fully taxable equivalent net yield on interest earning assets was 3.01% for the first three months of 2019.
We have implemented various initiatives which, over time, are expected to improve the net yield on interest earning assets.
These initiatives include shifting Isabella Bank Corporation asset mix to an increasing percentage of loans from investment securities, continued growth of the loan portfolio, and enhanced pricing strategies related to loan and deposit products
As of March 31, 2019, total assets were $1.8 billion and assets under management were $2.5 billion.
Assets under management include loans sold and serviced, and assets managed by Investment and Trust Services.
In recent periods, assets managed by Investment and Trust Services reached an all-time high surpassing $500 million.
While the value of these assets declined during the fourth quarter of 2018 due to a drop in the securities markets, assets managed by Investment and Trust Services rebounded $28.1 million or 6.3% during the first three months of 2019.
Loans outstanding as of March 31, 2019 totaled $1.1 billion.
The loan portfolio grew $16.1 million or 1.4% during the first quarter of 2019.
This growth was largely driven by the commercial loan portfolio which increased $18.0 million.
Also contributing to this growth were increases in residential real estate and consumer loans of $1.9 million.
The portfolio did experience a decline of $3.8 million in agricultural related loans; however, this is reflective of seasonal trends within this business sector.
Total deposits decreased $14.7 million during the first quarter of 2019 to $1.3 billion as of March 31, 2019.
This decline can largely be attributed to brokered certificates of deposit accounts, which were intentionally reduced utilizing excess liquidity to reduce high-cost funding.
Conversely, over the last year, we've experienced growth in certificates of deposit, savings and demand deposit accounts as the result of product pricing and a high level of customer service.
Isabella Bank Corporation banking subsidiary, Isabella Bank, continues to be designated as a "well capitalized" institution as its capital ratios exceeded the minimum requirements for this designation.
As of March 31, 2019, the Bank's Tier 1 Leverage Ratio was 8.2%, Tier 1 Capital Ratio was 11.6% and Total Capital Ratio was 12.2%.
From a consolidated perspective, Isabella Bank Corporation Tier 1 Leverage Ratio was 8.9%, Tier 1 Capital Ratio was 12.5% and Total Capital Ratio was 13.1% as of March 31, 2019.
During the first quarter of 2019, Isabella Bank Corporation paid a $0.26 per common share cash dividend.
Based on Isabella Bank Corporation closing stock price of $23.75 as of March 29, 2019, the annualized cash dividend yield was 4.4%. ■