ISABELLA BANK CORP
For the period ended Sep 30, 2026. Filed Oct 30, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 30, 2026
ISBA$40.64+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0000842517-26-000180
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-30.
0000842517-26-000236
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 115 current paragraphs.
85 unchanged; 28 reworded; 2 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
•risks related to rising interest rates;
Current report
The previously disclosed at-the-market offering continued during the quarter. During the three months ended September 30, 2026, the Corporation issued 19,314 shares for aggregate gross sale proceeds of $778,456, at an average gross sale price of $40.31 per share, which yielded net proceeds to the Corporation of $744,999, after issuance costs, including sales commissions equal to 3.0% of gross sale proceeds. During the nine months ended September 30, 2026, the Corporation issued 322,685 shares for aggregate gross sale proceeds of $13.0 million, at an average gross sale price of $40.19 per share, which yielded net proceeds to the Corporation of $12.5 million, after issuance costs, including sales commissions equal to 3.0% of gross sale proceeds. As of September 30, 2026, approximately $17.0 million remains available for issuance under the offering.
Removed paragraphs (3)
Previous report
Upon the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, each voting and non-voting share of common stock of Grand River issued and outstanding immediately prior to the Effective Time, other than certain shares held by Grand River or the Corporation or dissenting shares, will be converted into the right to receive, at the election of the holder thereof, and subject to adjustment and proration, as applicable, (i) an amount of cash equal to the quotient of (A) $18,262,391, divided by (B) the product obtained by multiplying (x) the number of shares of Grand River Common Stock issued and outstanding as of the Effective Time by (y) 0.35, rounded to the nearest cent, or (ii) the number of shares of common stock of the Corporation, no par value, multiplied by the Exchange Ratio.
Previous report
The Exchange Ratio is defined in the Merger Agreement as a number, as adjusted, of shares of Isabella Common Stock equal to the quotient of (A) 839,003 shares of Isabella Common Stock, divided by (B) the difference of (1) the aggregate number of shares of Grand River Common Stock issued and outstanding immediately prior to the Effective Time, other than certain shares held by Grand River or the Corporation or dissenting shares, minus (2) the Cash Conversion Number, rounded to the nearest ten thousandth.
Previous report
Merger Consideration elections by Grand River shareholders will be subject to proration procedures whereby 65% of the shares of Grand River Common Stock will be exchanged for the Per Share Stock Consideration and 35% of the shares of Grand River common stock will be exchanged for the Per Share Cash Consideration. Based on the assumption of 9,136,529 shares of Grand River Common Stock issued and outstanding as of the Effective Time, the Per Share Cash Consideration to be paid is estimated to be approximately $5.71 and the Exchange Ratio is estimated to be approximately 0.1413. At March 31, 2026, Grand River had approximately $511.7 million in total assets, $433.0 million in total loans and $438.9 million in total deposits. The pro forma company is projected to have approximately $2.7 billion in total assets.
Reworded paragraphs (28)
Previous wording
On June 11, 2026, the Corporation, 401 Merger Sub, Inc., a Michigan corporation and a wholly owned subsidiary of the Corporation, and Grand River, entered into an Agreement and Plan of Merger. The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Grand River, with Grand River as the surviving entity, and immediately following the Merger, Grand River will merge with and into the Corporation, with the Corporation as the surviving entity. The Merger Agreement further provides that immediately following the Second Step Merger, Grand River Bank, a Michigan state-chartered member bank and wholly owned subsidiary of Grand River, will merge with and into the Bank, with the Bank as the surviving bank. We expect to complete the Merger in the fourth quarter of 2026, subject to satisfaction of closing conditions, including receipt of customary required regulatory approvals and the approval of the Agreement by the shareholders of Grand River.
Current wording
As previously disclosed, on June 11, 2026, the Corporation, 401 Merger Sub, Inc., a Michigan corporation and a wholly owned subsidiary of the Corporation (“Merger Sub”), and Grand River Commerce, Inc. (“Grand River”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), providing for the merger of Merger Sub with and into Grand River, with Grand River as the surviving entity, immediately followed by the merger of Grand River with and into the Corporation, with the Corporation as the surviving entity. Refer to Note 9 above for additional information.
Previous wording
•risks relating to the proposed Merger including, without limitation: the timing of consummation of the proposed transaction between the Corporation and Grand River; the risk that any condition to closing of the proposed Merger may not be satisfied or waived; the risk that the Merger may not be completed at all; the diversion of management time on issues related to the proposed Merger; the expected impact of the proposed Merger and on the combined entities’ operations, financial condition, and financial results; the businesses of Corporation and Grand River may not be combined successfully, or such combination may take longer to accomplish than expected; the cost savings from the proposed Merger may not be fully realized or may take longer to realize than expected; operating costs, customer loss and business disruption following the proposed Merger, including adverse effects on relationships with employees, may be greater than expected; the risk of deposit and customer attrition; increased competitive pressures on solicitations of customers by competitors; regulatory approvals of the proposed Merger may not be obtained, or adverse conditions may be imposed in connection with regulatory approvals of the proposed Merger; and the risk that the Grand River shareholders may not approve the proposed Merger;
Current wording
•risks relating to the proposed Merger including, without limitation: the timing of consummation of the proposed transaction between the Corporation and Grand River; the risk that any condition to closing of the proposed Merger may not be satisfied or waived; the risk that the Merger may not be completed at all; the diversion of management time on issues related to the proposed Merger; the expected impact of the proposed Merger and on the combined entities’ operations, financial condition, and financial results; the businesses of Corporation and Grand River may not be combined successfully, or such combination may take longer to accomplish than expected; the cost savings from the proposed Merger may not be fully realized or may take longer to realize than expected; operating costs, customer loss and business disruption following the proposed Merger, including adverse effects on relationships with employees, may be greater than expected; the risk of deposit and customer attrition; and increased competitive pressures on solicitations of customers by competitors;
Previous wording
Total assets increased $10.2 million, or 0.5%, to $2.2 billion as of June 30, 2026. This increase was primarily due to an increase of $53.3 million in loans and an increase of $15.7 million in cash and cash equivalents. These increases were offset by a $58.5 million decline in AFS securities.
Current wording
Total assets increased $31.1 million, or 1.4%, to $2.2 billion as of September 30, 2026. This increase was primarily due to an increase of $112.5 million in cash and cash equivalents, offset by an $88.3 million decline in AFS securities.
Previous wording
The AFS securities portfolio decreased $58.5 million, or 11.8%, to $439.3 million as of June 30, 2026. The decrease was a result of maturities and principal paydowns of $121.8 million, offset by $64.4 million in purchases. Net unrealized losses on AFS securities were $10.8 million as of June 30, 2026, compared to $9.9 million at December 31, 2025. Net unrealized losses as a percentage of the amortized cost of AFS securities were consistent compared to December 31, 2025, at 2%.
Current wording
The AFS securities portfolio decreased $88.3 million, or 17.7%, to $409.5 million as of September 30, 2026. The decrease was a result of maturities and principal paydowns of $177.1 million, offset by $100.7 million in purchases. Net unrealized losses on AFS securities were $21.7 million as of September 30, 2026, compared to $9.9 million at December 31, 2025. Net unrealized losses as a percentage of the amortized cost of AFS securities increased to 5.0%, compared to 1.9% at December 31, 2025.
Previous wording
Loans increased $53.3 million, or 3.5%, to $1.6 billion as of June 30, 2026, primarily by growth in the commercial real estate and residential real estate portfolios of $33.5 million and $22.1 million, respectively. Most residential originations were adjustable rate products, which are retained on the balance sheet rather than sold in the secondary market. The consumer loan portfolio continues to decrease amid declining demand, competition, and our adherence to credit quality standards.
Current wording
Loans decreased $556,000 to $1.5 billion as of September 30, 2026. The commercial real estate and residential real estate loan portfolios grew $29.9 million and $29.7 million, respectively, but were offset by declines in advances to mortgage brokers and consumer loans of $39.0 million and $10.6 million, respectively. Most residential originations were adjustable-rate products, which are retained on the balance sheet rather than sold in the secondary market. The consumer loan portfolio continues to decrease amid declining demand, continued competition, and our disciplined adherence to credit quality standards.
Previous wording
The ACL increased $752,000, or 5.5%, to $14.5 million as of June 30, 2026. The increase is due to loan growth and an increase in loss rates driven by loans charged off during the year. Nonaccrual loans were $7.8 million as of June 30, 2026 compared to $4.6 million at December 31, 2025. Past due and accruing accounts between 30 to 89 days as a percentage of total loans was 0.06% at June 30, 2026, compared to 0.44% at year-end 2025.
Current wording
The ACL increased $671,000, or 4.9%, to $14.4 million as of September 30, 2026. The increase is due to commercial and residential real estate loan growth and an increase in loss rates driven by loans charged off during the year. Nonaccrual loans were $7.5 million as of September 30, 2026 compared to $4.6 million at December 31, 2025. Past due and accruing accounts between 30 to 89 days as a percentage of total loans was 0.10% at September 30, 2026, compared to 0.44% at year-end 2025.
Previous wording
Total deposits decreased $9.7 million, or 0.5%, to $1.8 billion as of June 30, 2026. The decline was a result of a $20.7 million decline in certificates of deposit, a $14.0 million decline in interest bearing demand deposits, and a $12.3 million decline in noninterest bearing demand deposits. These declines were offset by a $20.4 million increase in savings deposits and a $16.8 million increase in money market accounts.
Current wording
Total deposits increased $73.0 million, or 4.0%, to $1.9 billion as of September 30, 2026. The increase was a result of a $141.8 million increase in money market accounts and a $11.1 million increase in savings deposits. These increases were offset by a $51.3 million decline in certificates of deposit, a $16.6 million decline in noninterest bearing demand deposits, and a $12.1 million decline in interest bearing demand deposits.
Previous wording
Total equity was $248.7 million, or $32.60 per share, at June 30, 2026 compared to $231.4 million, or $31.60 per share, as of December 31, 2025. The increase in total equity is primarily due to the issuance of 303,371 shares as part of the previously announced at-the-market stock offering, increasing total equity by $11.7 million, net of estimated expenses. Tangible book value per share (non-GAAP) was $26.27 as of June 30, 2026, compared to $25.01 as of December 31, 2025. Net unrealized losses in the AFS securities portfolio reduced tangible book value per share (non-GAAP) by $1.14 and $1.09 for the respective periods.
Current wording
Total equity was $245.6 million, or $32.09 per share, at September 30, 2026 compared to $231.4 million, or $31.60 per share, as of December 31, 2025. The increase in total equity is primarily due to the issuance of 322,685 shares of common stock as part of the Corporation’s ongoing at-the-market stock offering, increasing total equity by $12.5 million, net of offering-related expenses. Tangible book value per share (non-GAAP) was $25.78 as of September 30, 2026, compared to $25.01 as of December 31, 2025. Net unrealized losses in the AFS securities portfolio reduced tangible book value per share (non-GAAP) by $2.26 and $1.09 for the respective periods.
Previous wording
As of June 30, 2026, we had $754.8 million of unencumbered sources of liquidity and strong consolidated capital ratios; the Tier 1 Leverage Ratio was 9.59%, Tier 1 risk-based capital was 12.34%, and Total risk-based capital was 14.63%.
Current wording
As of September 30, 2026, we had $850.5 million of unencumbered sources of liquidity and strong consolidated capital ratios. The Tier 1 Leverage Ratio was 9.71%, Tier 1 risk-based capital was 12.96%, and Total risk-based capital was 15.29%.
Previous wording
Comparison of Operating Results for the three and six months ended June 30, 2026, and 2025, unless otherwise noted
Current wording
Comparison of Operating Results for the three and nine months ended September 30, 2026, and 2025, unless otherwise noted
Previous wording
Net income for the three months ended June 30, 2026 was $5.0 million, or $0.69 per diluted share, compared with $5.0 million, or $0.68 per diluted share, for the three months ended June 30, 2025. Net income for the six months ended June 30, 2026 was $10.0 million, or $1.37 per diluted share, compared with $9.0 million, or $1.21 per diluted share, for the six months ended June 30, 2025.
Current wording
Net income for the three months ended September 30, 2026 was $6.6 million, or $0.86 per diluted share, compared with $5.2 million, or $0.71 per diluted share, for the three months ended September 30, 2025. Net income for the nine months ended September 30, 2026 was $16.6 million, or $2.24 per diluted share, compared with $14.2 million, or $1.92 per diluted share, for the nine months ended September 30, 2025.
Previous wording
Net interest income was $18.1 million for the three months ended June 30, 2026 and $15.1 million for the three months ended June 30, 2025, representing 3.54% and 3.14% of earning assets, or NIM on an FTE basis (non-GAAP), respectively. The book yield from securities was 2.82% and 2.38% for the three months ended June 30, 2026 and 2025, respectively. The yield on loans increased to 5.86% for the three months ended June 30, 2026 from 5.71% for the three months ended June 30, 2025. The increase in loan yields was primarily due to higher rates on new loans and variable rate commercial loans that continue to reprice. The cost of interest-bearing liabilities for the three months ended June 30, 2026 decreased to 2.09% from 2.24% for the three months ended June 30, 2025 primarily due to lower rates on money market and certificate of deposit products.
Current wording
Net interest income was $19.4 million for the three months ended September 30, 2026 and $16.2 million for the three months ended September 30, 2025, representing 3.71% and 3.15% of interest earning assets, or NIM on a FTE basis (non-GAAP), respectively. The book yield from securities was 3.20% and 2.42% for the three months ended September 30, 2026 and 2025, respectively. The yield on loans increased to 5.95% for the three months ended September 30, 2026 from 5.78% for the three months ended September 30, 2025. The increase in loan yields was primarily due to higher rates on new loans and variable rate commercial loans that continue to reprice. The cost of interest-bearing liabilities for the three months ended September 30, 2026 decreased to 2.08% from 2.25% for the three months ended September 30, 2025 primarily due to lower rates on money market and certificate of deposit products.
Previous wording
Net interest income was $35.0 million for the six months ended June 30, 2026 and $29.7 million for the six months ended June 30, 2025, representing 3.43% and 3.10% of earning assets, or NIM on an FTE basis (non-GAAP), respectively. The book yield from securities was 2.67% and 2.31% for the six months ended June 30, 2026 and 2025, respectively. The yield on loans increased to 5.82% for the six months ended June 30, 2026 from 5.72% for the six months ended June 30, 2025. The increase in loan yields was primarily due to higher rates on new loans and variable rate commercial loans that continue to reprice. The cost of interest-bearing liabilities for the six months ended June 30, 2026 decreased to 2.12% from 2.25% for the six months ended June 30, 2025 primarily due to lower rates on money market and certificate of deposit products.
Current wording
Net interest income was $54.3 million for the nine months ended September 30, 2026 and $45.8 million for the nine months ended September 30, 2025, representing 3.53% and 3.12% of earning assets, or NIM on a FTE basis (non-GAAP), respectively. The book yield from securities was 2.83% and 2.34% for the nine months ended September 30, 2026 and 2025, respectively. The yield on loans increased to 5.88% for the nine months ended September 30, 2026 from 5.75% for the nine months ended September 30, 2025. The increase in loan yields was primarily due to higher rates on new loans and variable rate commercial loans that continue to reprice. The cost of interest-bearing liabilities for the nine months ended September 30, 2026 decreased to 2.10% from 2.25% for the nine months ended September 30, 2025, primarily due to lower rates on money market and certificate of deposit products.
Previous wording
The provision for credit losses was $895,000 for the three months ended June 30, 2026, driven by a $465,000 increase in the ACL on loans and net charge offs totaling $384,000. The provision for credit losses for the three months ended June 30, 2025 was a credit of $1.1 million, which reflects $1.4 million in net recoveries, offset by a $242,000 increase in the ACL on loans and an increase in the reserve for unfunded commitments. Recoveries of $1.6 million during second quarter 2025 were related to overdrawn deposit accounts from a single customer that were charged off during the third quarter of 2024.
Current wording
The provision for credit losses was $50,000 for the three months ended September 30, 2026, as a result of net charge offs totaling $207,000, offset by an $81,000 decrease in the ACL on loans and a decrease in the reserve for unfunded commitments. The provision for credit losses for the three months ended September 30, 2025 was $209,000, which reflects a $172,000 increase in the ACL and net charge offs totaling $74,000, offset by a decrease in the reserve for unfunded commitments.
Previous wording
The provision for credit losses was $1.5 million for the six months ended June 30, 2026, as compared to a credit of $1.2 million for the six months ended June 30, 2025. Net charge offs for the six months ended June 30, 2026 totaled $637,000, while there were net recoveries of $1.5 million for the six months ended June 30, 2025.
Current wording
The provision for credit losses was $1.5 million for the nine months ended September 30, 2026, as compared to a credit of $997,000 for the nine months ended September 30, 2025. Net charge offs for the nine months ended September 30, 2026 totaled $844,000, while there were net recoveries of $1.4 million for the nine months ended September 30, 2025.
Previous wording
Noninterest income for the three months ended June 30, 2026 and 2025 was $4.4 million and $3.7 million, respectively. Service charges and fees increased $504,000 as a result of internal initiatives designed to align our fees with the market. Earnings on BOLI policies increased $134,000 compared to second quarter 2025 due to additional investments in a separate account BOLI in 2025. Wealth management fees grew $132,000 due to growth in assets under management since second quarter 2025.
Current wording
Noninterest income for the three months ended September 30, 2026 and 2025 was $4.6 million and $4.3 million, respectively. Service charges and fees increased $202,000 and wealth management fees increased $94,000 due to growth in assets under management since second quarter 2025.
Previous wording
Noninterest income for the six months ended June 30, 2026 and 2025 was $8.7 million and $7.2 million, respectively. Service charges and fees increased $907,000 as a result of internal initiatives designed to align our fees with the market. Wealth management fees grew $261,000 due to growth in assets under management. Earnings on BOLI policies increased $210,000 due to additional investments in a separate account BOLI in 2025. Other noninterest income in 2026 includes a $137,000 gain related to a death benefit from a BOLI policy.
Current wording
Noninterest income for the nine months ended September 30, 2026 and 2025 was $13.3 million and $11.5 million, respectively. Service charges and fees increased $1.1 million, wealth management fees increased $355,000 due to growth in assets under management, and earnings on BOLI policies increased $220,000 due to additional investments in a separate account BOLI. Other noninterest income included gains of $137,000 and $163,000 related to death benefits from BOLI policies for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Noninterest expenses for the three months ended June 30, 2026 and 2025 were $15.4 million and $13.7 million, respectively. Compensation and benefit expenses increased $651,000, reflecting annual merit increases, incentives, and higher medical insurance claims. Occupancy and equipment increased $240,000 and merger-related expenses of $505,000 were included in noninterest expenses in second quarter 2026.
Current wording
Noninterest expenses for the three months ended September 30, 2026 and 2025 were $15.6 million and $14.0 million, respectively. Compensation and benefit expenses increased $867,000, reflecting annual merit increases, incentives, and higher medical insurance claims. Occupancy and equipment increased $156,000 and merger-related expenses were $672,000.
Previous wording
Noninterest expenses for the six months ended June 30, 2026 and 2025 were $30.0 million and $27.0 million, respectively. Compensation and benefit expenses increased $1.2 million for the same reasons as the quarterly comparison. Occupancy and equipment expenses increased $480,000 and merger-related expenses during second quarter 2026 totaled $505,000.
Current wording
Noninterest expenses for the nine months ended September 30, 2026 and 2025 were $45.7 million and $41.0 million, respectively. Compensation and benefit expenses increased $2.1 million for the same reasons as the quarterly comparison. Occupancy and equipment expenses increased $636,000 and merger-related expenses were $1.2 million.
Previous wording
Income tax expense for both of the three months ended June 30, 2026 and 2025 was $1.1 million, while the ETR was 18% for both periods. Income tax expense for both of the six months ended June 30, 2026 and 2025 was $2.1 million, while the ETR was 17% for the six months ended June 30, 2026 and 19% for the six months ended June 30, 2025. The ETR in the first six months of 2025 included a one-time tax expense totaling $166,000 due to the taxes owed from the lifetime earnings on BOLI policies that were surrendered during first quarter 2025. Excluding the one-time charge, the ETR was 17% for the first six months of 2025.
Current wording
Income tax expense for the three months ended September 30, 2026 and 2025 was $1.6 million and $1.0 million, respectively. The ETR for the same periods was 20% and 17%, respectively. Income tax expense for the nine months ended September 30, 2026 and 2025 was $3.8 million and $3.1 million, respectively. The ETR was 18% for both the nine months ended September 30, 2026 and 2025. The ETR in the first nine months of 2026 included the impact of certain non-deductible merger-related expenses. The ETR in the first nine months of 2025 included a one-time tax expense related to the lifetime earnings on BOLI policies that were surrendered.
Previous wording
(3)Includes FTE adjustments of $130,000, $138,000, and $178,000, respectively.
Current wording
(3)Includes FTE adjustments of $126,000, $130,000, and $144,000, respectively.
Previous wording
(3)Includes FTE adjustments of $268,000 and $362,000, respectively.
Current wording
(3)Includes FTE adjustments of $394,000 and $506,000, respectively.
Previous wording
Capital consists solely of common stock, retained earnings, and accumulated other comprehensive income (loss). We are authorized to raise capital through the issuance of securities from our shelf registration statement on Form S-3 (the “Registration Statement,” dividend reinvestment, employee and director stock purchases, and shareholder stock purchases. Under the Registration Statement, we established an at-the-market common stock offering program permitting the sale of common stock up to an aggregate gross sales price of $30 million. The at-the-market offering provides us with additional flexibility to access the capital markets efficiently and is intended to be used for general corporate purposes, which may include, without limitation, contribution to the capital of the Bank to support its lending activities and growth. Pursuant to these authorizations, including our at-the-market offering, we issued 310,276 shares, or $12.4 million of common stock, during the first six months of 2026, as compared to 28,830 shares, or $759,000 of common stock, during the same period in 2025.
Current wording
Capital consists solely of common stock, retained earnings, and accumulated other comprehensive income (loss). We are authorized to raise capital through the issuance of securities from our shelf registration statement on Form S-3 (the “Registration Statement”), dividend reinvestment, employee and director stock purchases, and shareholder stock purchases. Under the Registration Statement, we established an at-the-market common stock offering program permitting the sale of common stock up to an aggregate gross sales price of $30 million. The at-the-market offering provides us with additional flexibility to access the capital markets efficiently and is intended to be used for general corporate purposes, which may include, without limitation, contribution to the capital of the Bank to support its lending activities and growth. Pursuant to these authorizations, including our at-the-market offering, we issued 338,399 shares, or $13.5 million of common stock, during the first nine months of 2026, as compared to 36,809 shares, or $1.0 million of common stock, during the same period in 2025.
Previous wording
We also offer the Directors Plan in which participants purchase stock units through deferred fees, in lieu of cash payments. Pursuant to this plan, we increased shareholders’ equity by $190,000 and $201,000 during the six-month periods ended June 30, 2026 and 2025, respectively. We also grant restricted stock awards pursuant to the RSP. Pursuant to this plan, we increased shareholders’ equity by $29,000 during the first six months of 2026, as compared to $21,000 during the same period in 2025.
Current wording
We also offer the Directors Plan in which participants purchase stock units through deferred fees, in lieu of cash payments. Pursuant to this plan, we increased shareholders’ equity by $224,000 and $233,000 during the nine month periods ended September 30, 2026 and 2025, respectively. We also grant restricted stock awards pursuant to the RSP. Pursuant to this plan, we increased shareholders’ equity by $43,000 during the first nine months of 2026, as compared to $45,000 during the same period in 2025.
Previous wording
We have publicly announced a common stock repurchase program. Pursuant to this repurchase program, we repurchased 13,166 shares or $626,000 of common stock during the first six months of 2026 and 103,406 shares or $2.7 million of common stock during the first six months of 2025. As of June 30, 2026, we were authorized to repurchase up to an additional 448,106 shares of common stock under the repurchase program.
Current wording
We have publicly announced a common stock repurchase program. Pursuant to this repurchase program, we repurchased 16,600 shares or $762,000 of common stock during the first nine months of 2026 and 122,502 shares or $3.3 million of common stock during the first nine months of 2025. As of September 30, 2026, we were authorized to repurchase up to an additional 444,672 shares of common stock under the repurchase program.
Previous wording
Our primary sources of liquidity are retail deposits, cash and cash equivalents, and unencumbered AFS securities. Cash, cash equivalents and unencumbered AFS securities totaled $237.9 million, or 10.72% of assets, as of June 30, 2026, compared to $337.0 million, or 15.25%, as of December 31, 2025. The decrease in the amount and percentage of primary liquidity is primarily due to a decrease in AFS securities, offset by an increase in cash and cash equivalents. Liquidity is important for financial institutions because of their need to meet loan funding commitments, depositor withdrawal requests, and various other commitments including expansion of operations, investment opportunities, and payment of cash dividends. Based on these same factors, daily liquidity could vary significantly.
Current wording
Our primary sources of liquidity are retail deposits, cash and cash equivalents, and unencumbered AFS securities. Cash and cash equivalents totaled $138.5 million, or 6.18% of assets, as of September 30, 2026, compared to $26.0 million, or 1.18% of assets, as of December 31, 2025. The increase in cash and cash equivalents was as a result of proceeds from the maturity of AFS securities and deposit growth, offset by the paydown of borrowings and purchases of AFS securities. Cash, cash equivalents and unencumbered AFS securities totaled $324.6 million, or 14.49% of assets, as of September 30, 2026, compared to $337.0 million, or 15.25%, as of December 31, 2025. The decrease in the amount and percentage of primary liquidity is primarily due to a decrease in AFS securities, offset by an increase in cash and cash equivalents. Liquidity is important for financial institutions because of their need to meet loan funding commitments, depositor withdrawal requests, and various other commitments including expansion of operations, investment opportunities, and payment of cash dividends. Based on these same factors, daily liquidity could vary significantly.
Previous wording
Our secondary sources include the ability to borrow from the FHLB, from the FRB, and through various correspondent banks in the form of federal funds purchased and lines of credit. These funding methods typically carry a higher interest rate than traditional market deposit accounts. Some borrowed funds, including FHLB advances, FRB Discount Window advances, and repurchase agreements, require us to pledge assets, typically in the form of AFS securities or loans, as collateral. As of June 30, 2026, we had available lines of credit of $403.0 million.
Current wording
Our secondary sources include the ability to borrow from the FHLB, from the FRB, and through various correspondent banks in the form of federal funds purchased and lines of credit. These funding methods typically carry a higher interest rate than traditional market deposit accounts. Some borrowed funds, including FHLB advances, FRB Discount Window advances, and repurchase agreements, require us to pledge assets, typically in the form of AFS securities or loans, as collateral. As of September 30, 2026, we had available lines of credit of $411.9 million.
Previous wording
We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. AFS securities, cash flow hedge derivative instruments and certain liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record at fair value other assets on a nonrecurring basis, such as mortgage loans AFS, collateral dependent loans, goodwill, foreclosed assets, OMSR, and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write downs of individual assets.
Current wording
We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. AFS securities and certain liabilities are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record at fair value other assets on a nonrecurring basis, such as mortgage loans HFS, collateral dependent loans, goodwill, foreclosed assets, OMSR, and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write downs of individual assets.