8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 27, 2016

ISABELLA BANK CORPORATION

(Exact name of registrant as specified in its charter)

MICHIGAN

(State or other jurisdiction of incorporation)

000-18415	38-2830092
(Commission File Number)	(IRS Employer Identification No.)

401 North Main Street, Mt. Pleasant, Michigan	48858-1649
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (989) 772-9471

Not Applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.l4a-l2)

¨ Pre-commencement communications pursuant to Rule l4d-2(b) under the Exchange Act (17 CFR 240.l4d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.l3e-4(c))

Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition.

On October 27, 2016, Isabella Bank Corporation issued a press release announcing its results of operations for the three and nine month periods ended September 30, 2016. Similarly, on October 27, 2016, the Corporation issued a letter to its shareholders announcing its results of operations for the three and nine month periods ended September 30, 2016.

Copies of the press release and shareholder letter are filed as Exhibits 99.1 and 99.2, respectively to this Form 8-K and are incorporated herein by reference.

The information in this Item 2.02 of Form 8-K and Exhibits 99.1 and 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing made by the registrant under the Securities Act of 1933, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.	Description
99.1	Press release issued October 27, 2016.
99.2	Shareholder letter issued October 27, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		ISABELLA BANK CORPORATION
Dated:	October 27, 2016	By:	/s/ Jae A. Evans
			Jae A. Evans, Chief Executive Officer

EX-99.1

Exhibit 99.1

ISBA Announces Third Quarter 2016 Earnings

Mt. Pleasant, Michigan, October 27, 2016 - Jae A. Evans, Chief Executive Officer of Isabella Bank Corporation (OTCQX:ISBA), announced the Corporation’s third quarter 2016 earnings results. The Corporation reported net income of $3.59 million for the quarter ended September 30, 2016.

“The continued growth in our loan portfolio has led to another successful quarter,” stated Jae Evans, Chief Executive Officer for Isabella Bank Corporation. “Although the interest rate environment continues to be a challenge on our net interest margin, our growth strategies continue to deliver positive results.”

Net Income

The Corporation's third quarter 2016 net income of $3.59 million resulted in earnings per common share of $0.46, compared to $4.06 million and $0.52 for the third quarter 2015. During the nine month periods ended September 30, 2016 and 2015, we reported net income of $10.02 million and $11.83 million, and earnings per common share of $1.28 and $1.52, respectively. While interest income for the first nine months of 2016 increased $1.43 million in comparison to the same period in 2015, the decrease in net income and earnings per common share is due primarily to changes in the provision for loan losses. During the first nine months of 2016, an increase in gross loans during the period of $138.87 million, offset by improvements in various credit quality indicators and increased net loan recoveries, resulted in recording a provision for loan losses in the amount of $185,000. By contrast, during the first nine months of 2015, a reduction in gross loans during the period of $235,000, coupled with significant improvements in various credit quality indicators, resulted in a reversal of the provision for loan losses in the amount of $2.00 million.

Assets

As of September 30, 2016, total assets increased to $1.71 billion and assets under management grew to $2.41 billion - which includes loans sold and serviced, and assets managed by the Corporation's Investment and Trust Services Department of $699.61 million.

Loans

The Corporation's $138.87 million growth in the loan portfolio over the nine month period ended September 30, 2016 was largely driven by an increase in the commercial loan portfolio of $106.47 million. During the third quarter of 2016, the Corporation entered into a participation agreement to fund advances to mortgage originators which contributed $27.83 million of the growth in the commercial loan portfolio. Strategies the Corporation implemented during the second quarter of 2016 related to residential mortgage and consumer loans also contributed to the increased volume. Residential mortgage loans and consumer loans at the end of the third quarter 2016 were $260.12 million and $40.76 million, compared to $251.50 million and $34.70 million, respectively, as of December 31, 2015.

Net Interest Income

During the first nine months of 2016, net interest income increased $974,000 in comparison to the same period in 2015, primarily as a result of the loan growth described above which increased interest income by $1.44 million.

The Corporation's net yield on interest earning assets remained historically low at 3.00% for the nine month period ended September 30, 2016. With no anticipated increases in short term interest rates by the Federal Reserve Bank, significant improvements in the net yield on interest earning assets are not expected in the

short term. An increase in net interest income will occur only through continued strategic growth in loans, investments, and other income earning assets.

Dividend

During the third quarter of 2016, the Corporation paid a $0.25 per common share cash dividend which represented a 4.17% increase over the per common share cash dividend for the third quarter of 2015. Based on the Corporation's closing stock price of $27.70 as of September 30, 2016, the annualized cash dividend yield was 3.50%.

About the Corporation

Isabella Bank Corporation (OTCQX: ISBA) is headquartered in Mt. Pleasant, Michigan and employs more than 400 individuals. Isabella Bank, the Corporation’s banking subsidiary, has 29 locations throughout seven Mid-Michigan counties and has been recognized on the Detroit Free Press list of “Top 100 Workplaces” for the past three years.

For further information regarding Isabella Bank Corporation, please visit isabellabank.com.

This press release includes forward-looking statements. To the extent that the foregoing information refers to matters that may occur in the future, please be aware that such forward-looking statements may differ materially from actual results. Additional information concerning some of the factors that could cause materially different results is included in the sections entitled "Risk Factors" and "Forward Looking Statements" set forth in Isabella Bank Corporation's filings with the Securities and Exchange Commission, which are available from the Securities and Exchange Commission's Public Reference facilities and from its website at www.sec.gov.

EX-99.2

Exhibit 99.2

Third Quarter 2016 Earnings

October 27, 2016

Dear Shareholder,

It is my pleasure to announce our financial results for the third quarter of 2016. Our net income for the three month period ended September 30, 2016 was $3.59 million resulting in earnings per common share of $0.46, compared to $4.06 million and $0.52 for the third quarter 2015. During the nine month periods ended September 30, 2016 and 2015, we reported net income of $10.02 million and $11.83 million, and earnings per common share of $1.28 and $1.52, respectively.

While interest income for the first nine months of 2016 increased $1.43 million in comparison to the same period in 2015, the decrease in net income and earnings per common share is due primarily to changes in the provision for loan losses. During the first nine months of 2016, an increase in gross loans during the period of $138.87 million, offset by improvements in various credit quality indicators and increased net loan recoveries, resulted in recording a provision for loan losses in the amount of $185,000. By contrast, during the first nine months of 2015, a reduction in gross loans during the period of $235,000, coupled with significant improvements in various credit quality indicators, resulted in a reversal of the provision for loan losses in the amount of $2.00 million.

The increase in net interest income for the first nine months of 2016 was largely driven by overall growth in the loan portfolio. Gross loans for the period ended September 30, 2016 grew by $138.87 million from December 31, 2015, with $106.47 million of that amount due to growth in the commercial loan portfolio. During the third quarter of 2016, we entered into a participation agreement to fund advances to mortgage originators which contributed $27.83 million of the growth in the commercial loan portfolio. Strategies the Corporation implemented during the second quarter of 2016 related to residential mortgage and consumer loans also contributed to the increased volume. Residential mortgage loans and consumer loans at the end of the third quarter 2016 were $260.12 million and $40.76 million, compared to $251.50 million and $34.70 million, respectively, as of December 31, 2015.

As of September 30, 2016, total assets increased to $1.71 billion and assets under management grew to $2.41 billion which includes loans sold and serviced, and assets managed by the Corporation's Investment and Trust Services Department of $699.61 million. Total assets and total assets under management grew by 2.30% and 1.94% respectively, from December 31, 2015.

(continued on reverse side)

ISABELLA BANK CORPORATION             401 North Main Street, Mt. Pleasant, MI 48858-1649                   www.isabellabank.com

Continued

During the third quarter of 2016, the Corporation also paid a $0.25 per common share cash dividend which represented a 4.17% increase over the per common share cash dividend for the third quarter of 2015. Based on the Corporation’s closing stock price of $27.70 as of September 30, 2016, the annualized cash dividend yield was 3.50%.

This year, we have made significant progress in enhancing our customers' experience. Enhanced services, a complete renovation of our recently acquired Midland office, and improved processes have provided growth opportunities within our markets. As we enter the fourth quarter, we will continue our growth strategy by releasing an updated website, enhancing our brand within our footprint, and opening a new Loan Production Office in the Saginaw market. We look forward to expanding our services within the Saginaw market to better meet the financial needs of the community. These initiatives, among others, provide a solid path toward a successful fourth quarter.

On behalf of our Board of Directors and all of our employees, I would like to thank you for your continued support. If you have any questions or comments, please email me at jevans@isabellabank.com or call me at 989.779.6215.

Jae A. Evans, Chief Executive Officer

This letter includes forward-looking statements. To the extent that the foregoing information refers to matters that may occur in the future, please be aware that such forward-looking statements may differ materially from actual results. Additional information concerning some of the factors that could cause materially different results is included in the sections entitled "Risk Factors" and "Forward Looking Statements" set forth in Isabella Bank Corporation's filings with the Securities and Exchange Commission, which are available from the Securities and Exchange Commission's Public Reference facilities and from its website at www.sec.gov.