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): February 14, 2017

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 February 14, 2017, Isabella Bank Corporation issued a press release announcing its results of operations for the year ended December 31, 2016. Similarly, on February 14, 2017, the Corporation issued a letter to its shareholders announcing its results of operations for the year ended December 31, 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 February 14, 2017.
99.2	Shareholder letter issued February 14, 2017.

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:	February 14, 2017	By:	/s/ Dennis P. Angner
			Dennis P. Angner, President & CFO

EX-99.1

Exhibit 99.1

For Immediate Release

Isabella Bank Corporation

401 North Main Street

Mt. Pleasant, MI 48858-1649

FOR MORE INFORMATION, CONTACT:

Mary Olivieri, Community Relations Officer

Phone: 989-779-6309    Fax: 989-775-5501

ISBA Announces 2016 Earnings

Mt. Pleasant, Michigan, February 14, 2017 - Jae A. Evans, Chief Executive Officer of Isabella Bank Corporation (OTCQX:ISBA), announced the Corporation’s 2016 earnings results. The Corporation reported net income of $13.80 million for the year ended December 31, 2016.

“We are pleased to report 2016 was another successful year for Isabella Bank Corporation,” stated Jae Evans, Chief Executive Officer for Isabella Bank Corporation. “Our success was a result of strong loan growth, continued improvement in our credit quality indicators, and strategies implemented to improve consumer and mortgage loan processes. These strategies, coupled with our community banking philosophy, and focus on delivering excellent customer service, have been instrumental in this achievement.”

Net Income

The Corporation's net income and earnings per common share for 2016 were $13.80 million and $1.77, respectively, compared to $15.13 million, and $1.95, respectively, for 2015. While interest income for 2016 increased $2.16 million in comparison to 2015, the decrease in net income and earnings per common share, in comparison to 2015, is due primarily to changes in the provision for loan losses. Despite significant loan growth during 2016, improvements in various credit quality indicators and increased net loan recoveries, the Corporation recorded a reversal of the provision for loan losses in the amount of $135,000. By contrast, in 2015, light growth in gross loans during the period, coupled with significant improvements in various credit quality indicators, resulted in a reversal of the provision for loan losses in the amount of $2.77 million.

Assets

As of December 31, 2016, total assets increased to $1.73 billion and assets under management grew to a record $2.43 billion - which includes loans sold and serviced, and assets managed by the Corporation's Investment and Trust Services Department of $700.58 million.

Loans

The Corporation's $160.12 million growth in the loan portfolio during 2016 was largely driven by an increase in the commercial loan portfolio of $127.28 million. Strategies the Corporation implemented during the second quarter of 2016 related to the delivery and processing of residential mortgage and consumer loans also contributed to the increased volume. As a result, residential mortgage loans and consumer loans at the end of 2016 were $266.05 million and $42.41 million, respectively, compared to $251.50 million and $34.70 million as of December 31, 2015.

Net Interest Income

During 2016, net interest income increased by $1.46 million in comparison to the year ended December 31, 2015, primarily the result of the loan growth described above. Of the $2.16 million increase in total interest income for 2016 in comparison to 2015, $2.68 million was attributable to loan interest income.

The Corporation's net yield on interest earning assets remained historically low at 3.00% for the year ended December 31, 2016. While the Federal Reserve Bank increased rates 25 basis points in December 2016 with additional increases projected for 2017, significant improvements in the net yield on interest earning assets are not expected in the short term. Increases in net interest income are expected to occur only through continued strategic growth in loans, investments, and other income earning assets.

Dividends

During the fourth quarter of 2016, the Corporation paid a $0.25 per common share cash dividend bringing year-to-date dividends to $0.98 which represented a 4.26% increase over the per common share cash dividend for 2015. Based on the Corporation's closing stock price of $27.85 as of December 30, 2016, the annualized cash dividend yield was 3.52%.

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 banking locations and a loan production office throughout seven Mid‐Michigan counties and has been recognized on the Detroit Free Press list of “Top 100 Workplaces” for each of 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

2016 Earnings

February 14, 2017

Dear Shareholder,

It is my pleasure to announce that 2016 was another successful year for Isabella Bank Corporation. During the year ended December 31, 2016, net income and earnings per common share were $13.80 million and $1.77, respectively. During the fourth quarter, we paid a $0.25 per common share cash dividend which represented a 4.17% increase over the fourth quarter of 2015. Year-to-date cash dividends per common share were $0.98 in 2016, an increase of 4.26% over 2015 cash dividends. Based on our closing stock price of $27.85 as of December 30, 2016, the annualized cash dividend yield was 3.52%.

While interest income for 2016 increased $2.16 million in comparison to 2015, the decrease in net income and earnings per common share, in comparison to 2015, is due primarily to changes in the provision for loan losses. Despite significant loan growth during 2016, improvements in various credit quality indicators and increased net loan recoveries, we recorded a reversal of the provision for loan losses in the amount of $135,000. By contrast, during 2015, light growth in gross loans during the period, coupled with significant improvements in various credit quality indicators, resulted in a reversal of the provision for loan losses in the amount of $2.77 million.

The increase in net interest income for 2016, in comparison to 2015, was largely driven by considerable growth in the loan portfolio. Gross loans as of December 31, 2016 grew by $160.12 million from December 31, 2015, with $127.28 million of that amount occurring within the commercial loan portfolio. Strategies we implemented in 2016 to improve our processes for mortgage and consumer loans also contributed to the increased volume. As a result of these process changes, residential mortgage loans and consumer loans at the end of 2016 were $266.05 million and $42.41 million, respectively, compared to $251.50 million and $34.70 million as of December 31, 2015.

As of December 31, 2016, total assets increased to $1.73 billion and assets under management grew to a record $2.43 billion which includes loans sold and serviced, and assets managed by our Investment and Trust Services Department of $700.58 million. Total assets and total assets under management grew by 3.84% and 3.07% respectively, from December 31, 2015.

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.

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