Corporate Governance

Director Independence

We have adopted the director independence standards as defined under the NASDAQ listing requirements. We have determined that Dr. Jeffrey J. Barnes, Jill Bourland, G. Charles Hubscher, Thomas L. Kleinhardt, ~~Joseph LaFramboise,~~ David J. Maness, ~~W. Joseph Manifold, W. Michael McGuire,~~Richard L. McGuirk, Sarah R. Opperman, Chad R. Payton, Vicki L. Rupp, and Gregory V. Varner are independent directors. Jae A. Evans is not independent as he is employed as President and CEO of Isabella Bank ~~Corporation.~~Corporation and CEO of Isabella Bank. Jerome E. Schwind is not independent as he is employed as President of Isabella ~~Bank.~~Bank and Vice President of Isabella Bank Corporation.

Board Leadership Structure and Risk Oversight

Our Governance Policy provides that only directors who are deemed to be independent as set forth by the NASDAQ listing requirements and SEC rules are eligible to hold the office of chairperson. Additionally, the chairpersons of Board established committees must also be independent directors. It is our belief that having a separate chairperson and CEO best serves the interest of the shareholders. The Board elects its chairperson at the first Board meeting following the Annual Meeting. Independent members of the Board meet without inside directors at least twice per year.

Management is responsible for our day-to-day risk management and the Board’s role is to engage in informed oversight. The Board utilizes committees to oversee risks associated with compensation, and governance. The Isabella Bank Board of Directors is responsible for overseeing credit, investment, information technology, interest rate, and trust risks. The chairpersons of the respective boards or committees report on their activities on a regular basis.

Our Audit Committee is responsible for overseeing the integrity of our consolidated financial statements, the independent auditors’ qualifications and independence, the performance of our internal audit function and those of independent auditors, our system of internal controls, our financial reporting and system of disclosure controls, and our compliance with legal and regulatory requirements and with our Code of ~~Business~~ Conduct and Business Ethics.

Committees of the Board of Directors and Meeting Attendance

The Board met 1514 times during ~~2018.~~2021. No current member of ~~our~~the Board attended less than 75% of the aggregate meetings of the Board and all committees on which such director served during ~~2018.~~2021. The Board has an Audit Committee, a Nominating and Corporate Governance Committee, and a Compensation and Human Resource Committee.

Audit Committee

The Audit Committee is composed of independent directors. Information regarding the functions performed by the Audit Committee, its membership, and the number of meetings held during the year, is set forth in the “Audit Committee Report” included ~~elsewhere~~ in this Proxy Statement. The Audit Committee is governed by a written charter approved by the Board, which is available on the Bank’s website: www.isabellabank.com.

In accordance with the provisions of the Sarbanes-Oxley Act of 2002, ~~directors~~director Bourland ~~Manifold~~ and ~~McGuire meet~~director Payton met the requirements of Audit Committee Financial Expert and have been so designated. The Audit Committee also consists of directors Kleinhardt, Maness, ~~(ex-officio),~~ and ~~Opperman.~~Opperman (ex-officio).

Nominating and Corporate Governance Committee

We have a standing Nominating and Corporate Governance Committee consisting of independent directors Barnes, Hubscher, Maness, Opperman (ex-officio), and ~~McGuire.~~Varner. The Nominating and Corporate Governance Committee held two meetings in ~~2018,~~2021, with all committee members attending each meeting for which they were a member. The Board has approved a Nominating and Corporate Governance Committee Charter which is available on the Bank’s website: www.isabellabank.com.

The Nominating and Corporate Governance Committee is responsible for evaluating and recommending individuals for nomination to the Board for approval. This Committee, in evaluating nominees, including incumbent directors and any nominees put forth by shareholders, considers business experience, skills, character, judgment, leadership experience, and their knowledge of the geographical markets, business segments or other criteria the Committee deems relevant and appropriate based on the current composition of the Board. This Committee considers diversity in identifying members with respect to our geographical markets served, ~~and~~ the ~~business~~industry knowledge and experience of the nominee, and community relations of the nominee.

The Nominating and Corporate Governance Committee will consider, as potential nominees, persons recommended by shareholders. Recommendations should be submitted in writing to the Secretary of the Corporation, 401 N. Main St., Mt. Pleasant, Michigan 48858 and include the shareholder’s name, address and number of shares of the Corporation owned by the

shareholder. The recommendation should also include the name, age, address and qualifications of the candidate.

Recommendations for the ~~2020~~2023 Annual Meeting of Shareholders should be delivered no later than November ~~26, 2019.~~25, 2022. The Nominating and Corporate Governance Committee evaluates all potential director nominees in the same manner, whether the nominations are received from a shareholder, or otherwise.

Compensation and Human Resource Committee

The Compensation and Human Resource Committee is responsible for reviewing and recommending to the Board the compensation of ~~the Chief Executive Officer and other executive officers, benefit plans,~~directors and the ~~overall percentage increase in salaries.~~compensation of the President and CEO, Bank President, and CFO, including benefit plans. This Committee consists of independent directors ~~Barnes,~~ Bourland, ~~Hubscher,~~ Kleinhardt, ~~LaFramboise, Maness, Manifold, McGuire,~~ Opperman (ex-officio), and Varner. The Compensation and Human Resource Committee held ~~two~~five meetings during ~~2018.~~2021. This Committee is governed by a written charter approved by the Board that is available on the Bank’s website: www.isabellabank.com.

Communications with the Board

Shareholders may communicate with the Board by sending written communications to the attention of the Corporation’s Secretary, Isabella Bank Corporation, 401 N. Main St., Mt. Pleasant, Michigan ~~48858~~.48858. Communications will be forwarded to the Board or the appropriate committee, as soon as practicable.

Code of Ethics

Our Code of ~~Business~~ Conduct and Business Ethics, which is applicable to the CEO, CFO, and ~~CFO,~~Controller, is available on the Bank’s website: www.isabellabank.com.

Pension Benefits ~~Table~~

~~The following table indicates the present value of accumulated benefits as of December 31, 2018 for each named executive officer in the summary compensation table.~~

Name Plan name Number of years of vesting service as of
01/01/18 Present value of accumulated benefit
($) Payments during last fiscal year
Jae A. Evans Isabella Bank Corporation Pension Plan N/A $ —
$ —
Isabella Bank Corporation Retirement Bonus Plan N/A —
—
Neil M. McDonnell Isabella Bank Corporation Pension Plan N/A —
—
Isabella Bank Corporation Retirement Bonus Plan N/A —
—
Jerome E. Schwind Isabella Bank Corporation Pension Plan 20 51,000
—
Isabella Bank Corporation Retirement Bonus Plan N/A —
—
David J. Reetz Isabella Bank Corporation Pension Plan 32 234,000
—
Isabella Bank Corporation Retirement Bonus Plan N/A 296,565
—
Peggy L. Wheeler Isabella Bank Corporation Pension Plan 40 203,000
—
Isabella Bank Corporation Retirement Bonus Plan N/A 201,121
—
Rhonda S. Tudor Isabella Bank Corporation Pension Plan N/A —
—
Isabella Bank Corporation Retirement Bonus Plan N/A —
—

Defined ~~benefit pension plan~~Benefit Pension Plan. We sponsor the Isabella Bank Corporation Pension Plan (“Defined Benefit Pension Plan”), a frozen defined benefit pension plan. The curtailment, which was effective March 1, 2007, froze the current participant’s accrued benefits as of that date and limited participation in the plan to eligible employees as of December 31, 2006. Due to the curtailment of the plan, the number of years of credited service was frozen. As such, the years of credited service for the plan may differ from the participant’s actual years of service.

Annual contributions are made to the plan as required by accepted actuarial principles, applicable federal tax laws, and to pay expenses related to operating and maintaining the plan. The amount of contributions on behalf of any one participant cannot be separately or individually computed.

Pension plan benefits are based on years of service and the employees’ five highest consecutive years of compensation out of the last ten years of service, through December 31, 2006.

A participant may earn a benefit for up to 35 years of accredited service. Earned benefits are 100% vested after five years of service. Benefit payments normally start when a participant reaches age 65. A participant with more than five years of service may elect to take early retirement benefits anytime after reaching age 55. Benefits payable under early retirement are reduced actuarially for each month prior to age 65 in which benefits begin.

~~David J. Reetz and Peggy L. Wheeler are eligible for early retirement under the plan.~~ Under the provisions of the plan, participants are eligible for early retirement after reaching the age of 55 with at least 5five years of service. The early retirement benefit amount is the accrued benefit payable at normal retirement date reduced by 5/9% for each of the first 60 months and 5/18% for each of the next 60 months that the benefit commencement date precedes the normal retirement date.

Retirement ~~bonus plan~~Bonus Plan. We sponsor the Isabella Bank Corporation Retirement Bonus ~~Plan.~~Plan (“Retirement Bonus Plan”). This nonqualified plan is intended to provide eligible employees with additional retirement benefits. To be eligible, the employee needed to be an employee on January 1, 2007, and be a participant in our frozen Executive Supplemental Income Agreement. Participants ~~must~~were also required to be an officer with at least 10 years of service as of December 31, 2006. We have sole and exclusive discretion to add new participants to the ~~plan~~Retirement Bonus Plan by authorizing such participation pursuant to action of the Board.

An initial amount was credited for each eligible employee as of January 1, 2007. Subsequent amounts have been credited on each allocation date thereafter as defined in the ~~plan.~~Retirement Bonus Plan. The amount of the initial allocation and the annual allocation shall be determined pursuant to the payment schedule adopted at our sole and exclusive discretion, as set forth in the ~~plan.~~Retirement Bonus Plan.

~~David J. Reetz and Peggy L. Wheeler are eligible for early retirement under the plan.~~ Under the provisions of the ~~plan,~~Retirement Bonus Plan, participants are eligible for early retirement upon attaining 55 years of age. There is no difference between the calculation of benefits payable upon early retirement and normal retirement; however, the participant would not receive their full benefit under early retirement.

Nonqualified Deferred Compensation ~~Table~~

~~The following table shows information concerning non-qualified deferred compensation for 2018.~~

Name Plan Name Executive
contributions in 2018
($) (1) Registrant
contributions in 2018
($) (2) Aggregate
earnings in 2018
($) (3) Aggregate
balance at December 31, 2018
($) (4)
Jae A. Evans Directors Plan $ —
$ —
$ 2,227
$ 49,563
SERP —
105,000
7,166
440,874
Neil M. McDonnell SERP —
10,000
—
10,000
Jerome E. Schwind Directors Plan 29,500
—
3,340
84,609
SERP —
14,000
488
36,892
David J. Reetz Retirement Bonus Plan —
28,275
5,951
296,565
Peggy L. Wheeler Retirement Bonus Plan —
17,959
4,052
201,121


⁽¹⁾	The amounts shown in this column are the amounts deferred by the officers under the Deferred Compensation Plan for Directors (“Directors Plan”) and are included in the “Salary” column in the Summary Compensation Table above.


⁽²⁾	The amounts shown in this column are the amounts we contributed to the officers’ account under the Retirement Bonus Plan and the SERP. These amounts are not included in the Summary Compensation Table.


⁽³⁾	The amounts shown in this column are the earnings in the officers’ accounts under the Directors Plan, Retirement Bonus Plan and the SERP. These amounts are not included in the Summary Compensation Table because the earnings are not preferential.


⁽⁴⁾	~~The amounts shown in this column are the combined balance of the applicable executive officers’ accounts under the Directors Plan, Retirement Bonus Plan and the SERP.~~

Directors Plan. Under the Isabella Bank Corporation and Related Companies Deferred Compensation Plan for Directors ~~Plan,~~(“Directors Plan”), directors, including named executive officers who serve as directors, are required to invest at least 25% of their board fees in our common stock and may invest up to 100% of their earned fees based on their annual election. These amounts are reflected in footnote 1 to the ~~above table.~~Summary Compensation Table on the previous page. These stock investments can be made either through deferred fees or through the purchase of shares through the Isabella Bank Corporation Stockholder Dividend Reinvestment and Employee Stock Purchase Plan ("(“DRIP ~~Plan"~~Plan”). Deferred fees, under the Directors Plan, are converted on a quarterly basis into stock units of our common stock based on the fair value of a share of our common stock as of the relevant valuation date. Stock units credited to a participant’s account are eligible for stock and cash dividends as paid. DRIP Plan shares are purchased pursuant to the DRIP Plan.

Distribution of deferred fees from the Directors Plan occurs when the participant retires from the Board or upon the occurrence of certain other events. The participant is eligible to receive a distributions in the form of shares of our common stock of all of the stock units that are then in his or her account, and any unconverted cash will be converted to and rounded up to ~~the~~a whole ~~shares~~share of stock and distributed, as well. Any common stock issued from deferred fees under the Directors Plan will be considered restricted stock under the Securities Act of 1933, as amended. Common stock purchased through the DRIP Plan are not considered restricted stock under the Securities Act of 1933, as amended.

SERP. Under the ~~SERP,~~supplemental executive retirement plan (“SERP”), we may promise deferred compensation benefits to employees who are members of a select group of management or highly compensated employees, which may include the named executive officers. The SERP authorizes us to make annual and discretionary credits to a participant’s SERP account pursuant to a participation agreement with the participant that sets forth the amount and timing of any annual credits and the vesting, payment, “clawback” and other terms to which the credits are subject.

The SERP provides default terms that may be modified by a participant’s participation agreement, including default vesting, interest and payment terms. Under the SERP’s default vesting terms, a participant is initially unvested in the participant’s SERP account and becomes 100% vested upon attaining normal retirement age, retirement, involuntary separation from service without cause, death, disability or a change in control. Special vesting rules apply to amounts that are credited after a change in control. Under the SERP’s interest rule, a participant’s account balance is credited with interest annually, the rate of which may be changed and is based on Federated Investor's Institutional Money Market Management Fund yield (MMPXX) for the current plan year, updated annually. Under the SERP’s default payment terms, a participant’s vested and nonforfeited account balance will be paid in a single cash lump sum within 90 days after the first to occur of the participant’s separation from service (subject to a ~~6-month~~six-month delay for a “specified employee”), death, disability, or any date specified in the participant’s participation agreement. The SERP also includes restrictive covenants that restrict a participant’s ability to compete with us and certain other activities.

Executive Cash Incentive Plan. On June 24, 2020, we amended and restated the Isabella Bank Corporation Employee Cash Incentive Plans to create two separate plans: one for non-executive employees and the other, the Isabella Bank Corporation Executive Cash Incentive Plan for executive employees. The executive plan provides separate potential payouts for the President and CEO, Bank President and CFO based on achievement of personal and corporate goals. The maximum potential payouts under the plan range from 20% to 30% of the employee's annual salary. The Compensation and Human Resource Committee is responsible for establishing personal goals and measuring the achievement of personal goals for the President and CEO. This Committee also reviews the performance of the President and CEO. The President and CEO recommends to the Compensation and Human Resource Committee the measurement and achievement of personal and corporate goals for the Bank President and CFO.

Restricted Stock Plan. On June 24, 2020 the Board of Directors adopted the Isabella Bank Corporation Restricted Stock Plan ("RSP"), an equity-based bonus plan. The primary purpose of the plan is to promote our growth and profitability by attracting and retaining executive officers and key employees of outstanding competence through ownership of equity that provides them with incentives to achieve corporate objectives. In connection with the adoption of the RSP, the Isabella Bank Corporation Stock Award Incentive Plan was terminated.

The RSP authorizes the issuance of unvested restricted stock to an eligible employee with a maximum award ranging from 25% to 40% of the employee’s annual salary, on a calendar year basis. Under the RSP, the Board of Directors may grant restricted stock awards to eligible employees on an annual basis based on satisfactory achievement of performance targets and measures established by the Board of Directors. If these grant conditions are not satisfied, then the award of restricted shares will lapse or be adjusted appropriately, at the discretion of the Board of Directors. Restricted stock awards granted are not fully transferable or vested until certain conditions are met, as stated in the plan.

Potential Payments Upon Termination or Change in Control

The estimated amounts payable to each named executive officer upon severance from employment, retirement, termination upon death or disability or termination following a change in control are described below. For all termination scenarios, the amounts assume such termination took place as of December 31, ~~2018.~~2021.

Any Severance of Employment

Regardless of the manner in which a named executive officer’s employment terminates, he or she is entitled to receive amounts earned during his or her term of employment. Such amounts include:

•Amounts accrued and vested through the Defined Benefit Pension Plan.

•Amounts accrued and vested through the Retirement Bonus Plan.

•Amounts credited and vested through the SERP.

•Amounts deferred in the Directors Plan.

•Amounts vested through the Stock Award Incentive Plan.

~~Unused~~•Amounts granted and vested through the Restricted Stock Plan.

•Eligible unused vacation and short-term disability pay.

Retirement

In the event of the retirement of an executive officer, the officer would receive the benefits identified above.

Death or Disability

In the event of death or disability of an executive officer, in addition to the benefits listed above, the executive officer will also receive payments under our life insurance plan or under our disability plan as appropriate.

~~In addition to potential payments upon termination available to all employees, the estates for the executive officers listed below would receive the following payments upon death:~~

Name While an Active Employee Subsequent to Retirement
Jae A. Evans $ 750,000
$ 400,000
Neil M. McDonnell —
—
Jerome E. Schwind 576,450
288,225
David J. Reetz 339,840
169,920
Peggy L. Wheeler 311,426
155,713
Rhonda S. Tudor —
—

Change in Control

We currently do not have a change in control agreement with any of the executive officers; provided, however, pursuant to the Retirement Bonus Plan, David J. Reetz and Peggy L. Wheeler, who are currently 100% vested in their benefit under the plan, would be entitled to receive their benefit as disclosed in the ~~Nonqualified Deferred Compensation Table~~ ~~on the previous page, if following a change in control they voluntarily terminate employment or are terminated without just cause.~~

officers. Under the SERP, each participant would become 100% vested in their SERP account upon a change in control. Under certain conditions, following a change in control, if a participant is involuntarily terminated without cause or voluntarily terminates for good reason all uncredited annual credits would be credited to his or her SERP account. If termination took place on December 31, ~~2018,~~2021, that would have resulted in an additional credit to Jae A. Evans’ SERP account of ~~$375,000,~~$0, Neil M. McDonnell's SERP account of ~~$240,000,~~$195,000, and Jerome E. Schwind's SERP account of ~~$564,000~~$490,500 and a total credit for each individual of ~~$815,874, $250,000,~~$837,633, $250,683, and ~~$600,892,~~$602,903, respectively.

Under the RSP, each participant would become 100% vested in their RSP account upon a change in control. Under certain conditions, following a change in control, if a participant is involuntarily terminated without cause or voluntarily terminates for good reason all nonvested shares would be fully vested. If termination took place on December 31, 2021, that would have resulted in vested shares to Jae A. Evans’ RSP account of 10,427 ($216,500), Neil M. McDonnell's RSP account of 4,136 ($85,923), and Jerome E. Schwind's RSP account of 5,560 ($115,503).

Director Compensation

The following table summarizes the compensation of each non-employee director who served on the Board during ~~2018.~~

2021.


Name	Fees paid in cash ($)(1)		Fees deferred under Directors Plan ($)(1)		Total fees earned ($)		Name	Fees paid in cash ($)(1)	Fees deferred under Directors Plan ($)(1)	Total fees earned ($)
Dr. Jeffrey J. Barnes	$	—	$	31,600	$	31,600	Dr. Jeffrey J. Barnes	1,475	30,375	31,850
Richard J. Barz	34,750		—		34,750
Jill Bourland	18,875		18,875		37,750		Jill Bourland	40,900	—	40,900
G. Charles Hubscher	—		31,600		31,600		G. Charles Hubscher	—	31,850	31,850
Thomas L. Kleinhardt	—		35,650		35,650		Thomas L. Kleinhardt	—	40,700	40,700
Joseph LaFramboise	18,000		22,100		40,100
David J. Maness	40,875		13,625		54,500		David J. Maness	—	44,000	44,000
W. Joseph Manifold	—		42,050		42,050
W. Michael McGuire	30,862		10,288		41,150
Richard L. McGuirk							Richard L. McGuirk	8,550	2,850	11,400
Sarah R. Opperman	22,075		21,175		43,250		Sarah R. Opperman	51,434	—	51,434
Chad R. Payton							Chad R. Payton	12,950	9,000	21,950
Vicki L. Rupp							Vicki L. Rupp	36,600	—	36,600
Gregory V. Varner	—		45,675		45,675		Gregory V. Varner	34,162	11,388	45,550


⁽¹⁾ (1) Directors electing to receive all fees in cash, resulting in no contributions to the Directors Plan, invest at least 25% of their board fees in our common stock under the DRIP Plan as described in our Directors Plan within the “Executive Officers” section.	Directors electing to receive all fees in cash, resulting in no contributions to the Directors Plan, invest at least 25% of their board fees in our common stock under the DRIP Plan as described in our Directors Plan within the “Executive Officers” section.

We paid $1,500 per board meeting plus a retainer of $10,000 to each member during ~~2018.~~2021. Members of the Audit Committee were paid $750 per Audit Committee meeting attended. Members of the Nominating and Corporate Governance Committee were paid $350 per meeting attended. Members of the Compensation and Human Resource Committee were paid $350 per meeting attended. The chairperson of the Board is paid a retainer of $35,000, and the chairperson for the Audit Committee is paid a retainer of ~~$6,000, and the vice chairperson for the Audit Committee is paid a retainer of $2,000.~~$6,000.

Under the Directors Plan, upon a participant’s retirement from the Board, or the occurrence of certain other events, the participant is eligible to receive a distribution in the form of shares of our common stock of all of the stock units that are then credited to the participant's account. The plan does not allow for cash settlement. Stock issued under the Directors Plan is restricted stock under the Securities Act of 1933, as amended.

We established a Rabbi Trust to supplement the Directors Plan. The Rabbi Trust is an irrevocable grantor trust to which we may contribute assets for the limited purpose of funding a nonqualified deferred compensation plan. Although we may not reach the assets of the Rabbi Trust for any purpose other than meeting its obligations under the Directors Plan, the assets of the Rabbi Trust remain subject to the claims of our creditors. We may contribute cash or common stock to the Rabbi Trust from ~~time-to-time~~time to time for the sole purpose of funding the Directors Plan. The Rabbi Trust will use any cash that we may contribute to purchase shares of our common stock on the open market.

We transferred ~~$380,888~~$1,095,300 to the Rabbi Trust in ~~2018,~~2021, which held ~~16,673~~105,654 shares of our common stock for settlement as of December 31, ~~2018.~~2021. As of December 31, ~~2018,~~2021, there were ~~203,498~~83,710 stock units credited to participants’ ~~accounts, which~~accounts; such credits are unfunded as of such date to the extent that they are in excess of the stock and cash that has been credited to the Rabbi Trust. All amounts are unsecured claims against our general assets. The net cost of this benefit was ~~$206,201~~$198,824 in ~~2018.~~

2021.

The following table displays the cumulative number of stock units of our common stock credited to the accounts of current directors pursuant to the terms of the Directors Plan as of March 11, ~~2019:~~

2022:



Name		# of stock units credited
Dr. Jeffrey J. Barnes		~~15,411~~21,049
Jill Bourland		~~959~~1,111
Jae A. Evans		~~2,197~~2,546
G. Charles Hubscher		~~20,624~~29,048
Thomas L. Kleinhardt		~~28,943~~40,179
~~Joseph LaFramboise~~	~~13,953~~
David J. Maness		~~31,271~~44,475
~~W. Joseph Manifold~~Richard L. McGuirk		~~24,230~~166
~~W. Michael McGuire~~	~~10,842~~
Sarah R. Opperman		~~4,543~~5,265
Chad R. Payton		1,346
Vicki L. Rupp (1)		—
Jerome E. Schwind		~~3,750~~9,058
Gregory V. Varner		~~11,932~~15,625

(1) Vicki L. Rupp has elected to receive all fees in cash, resulting in no contributions to the Directors Plan. Ms. Rupp invests at least 25% of her board fees in our common stock under the DRIP Plan as described in our Directors Plan within the “Executive Officers” section.

~~Compensation and Human Resource Committee Interlocks and Insider Participation~~

In 2018, the Compensation and Human Resource Committee members were directors Barnes, Barz, Bourland, Hubscher, Kleinhardt, LaFramboise, Maness, Manifold, McGuire, Opperman, and Varner. No executive officer of the Corporation serves on any board of directors or compensation committee of any entity that compensates any member of the Compensation and Human Resource Committee.

Indebtedness of and Transactions with Management

Certain directors and officers and members of their families were loan customers of the Bank, or have been directors or officers of corporations, members or managers of limited liability companies, or partners of partnerships which have had transactions with the Bank. In our opinion, all such transactions were made in the ordinary course of business and were substantially on the same terms, including collateral and interest rates, as those prevailing at the same time for comparable transactions with customers not related to the Bank. These transactions do not involve more than normal risk of collectability or present other unfavorable features. Total loans to these customers were approximately ~~$3,343,000~~$22,558,000 and $2,977,000 as of December 31, ~~2018. We address transactions with related parties in our Code of Business Conduct~~2021, and ~~Ethics Policy~~. ~~Conflicts of interest are prohibited, except under board approved guidelines.~~

2020.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information as of March 11, ~~2019~~2022 as to our common stock owned beneficially by the only persons known by us to be beneficial owners of more than 5% of our common stock.


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership (1)	Percent of Class
Richard L. McGuirk	386,071	5.12	%
P.O. Box 222
Mt. Pleasant, MI 48804

(1) Based on information contained in Schedule 13D filed with the SEC on November 5, 2021.

The following table sets forth certain information as of March 11, 2022 as to our common stock owned beneficially by: 1) each director and director nominee, 2) by each named executive officer, and 3) by all directors, director nominees and executive officers as a ~~group,~~group.


Name of Owner	Amount and Nature of Beneficial Ownership (1)	Percent of Class
Dr. Jeffrey J. Barnes	8,844	0.12	%
Jill Bourland	1,927	0.03	%
Jae A. Evans	18,863	0.25	%
G. Charles Hubscher	201,237	2.67	%
Thomas L. Kleinhardt	56,596	0.75	%
David J. Maness	7,633	0.10	%
Neil M. McDonnell	1,652	0.02	%
Richard L. McGuirk	386,071	5.12	%
Sarah R. Opperman	14,012	0.19	%
Chad R. Payton	1,460	0.02	%
Vicki L. Rupp	3,905	0.05	%
Jerome E. Schwind	5,767	0.08	%
Gregory V. Varner	8,193	0.11	%
All Directors, nominees and Executive Officers as a Group (13) persons	716,160	9.51	%

(1) Beneficial ownership is defined by rules of the SEC and ~~4) all those known by us~~includes shares that the person has or shares voting or investment power over and shares that the person has a right to acquire within 60 days from March 11, 2022. Consequently, with respect to shares acquired under the Directors Plan, participants may not be ~~beneficial owners~~eligible to convert their stock units to shares within 60 days from March 11, 2022 as a result of ~~more than 5%~~distribution elections and plan conditions. For stock units credited to each participant's account as of ~~our common stock.~~March 11, 2022, refer to the “Director Compensation” section of this report.

Name of Owner Amount and Nature of Beneficial Ownership (1) Percent of Class
Dr. Jeffrey J. Barnes 7,624
0.10 %
Jill Bourland 330
(2 )
Jae A. Evans 13,526
0.17 %
G. Charles Hubscher 180,871
2.30 %
Thomas L. Kleinhardt 54,296
0.69 %
Joseph LaFramboise 1,410
0.02 %
David J. Maness 6,628
0.08 %
W. Joseph Manifold 4,983
0.06 %
Neil M. McDonnell 327
(2 )
W. Michael McGuire 96,361
1.22 %
Sarah R. Opperman 8,263
0.10 %
David J. Reetz 9,655
0.12 %
Jerome E. Schwind 3,210
0.04 %
Rhonda S. Tudor 132
(2 )
Gregory V. Varner 1,476
0.02 %
Peggy L. Wheeler 5,754
0.07 %
All Directors, nominees and Executive Officers as a Group (16) persons 394,846
5.01 %

⁽¹⁾

Beneficial ownership is defined by rules of the SEC and includes shares that the person has or shares voting or investment power over and shares that the person has a right to acquire within 60 days from March 11, 2019. Consequently, with respect to shares acquired under the Directors Plan, participants may not be eligible to convert their stock units to shares within 60 days from March 11, 2019 as a result of distribution elections and plan conditions. For stock units credited to each participant's account as of March 11, 2019, refer to the “Director Compensation” section of this report.


⁽²⁾	~~Percentage is below 0.01%.~~

Independent Registered Public Accounting Firm

The Audit Committee has appointed Rehmann Robson LLC as our independent auditors for the year ending December 31, ~~2019.~~2022.

A representative of Rehmann Robson LLC is expected to be present at the Annual Meeting to respond to appropriate questions from shareholders and to make any comments Rehmann Robson LLC believes are appropriate.

Fees for Professional Services Provided by Rehmann Robson LLC

The following table shows the aggregate fees billed by Rehmann Robson LLC for the audit and other services provided for:


	2018		2017			2021		2020
Audit fees	$	324,866	$	304,255	Audit fees	$	335,579	$	321,310
Audit related fees	48,403		20,651		Audit related fees	18,250		25,025
Tax fees	61,265		23,382		Tax fees	36,425		25,010
All other fees					All other fees	2,250		—
Total	$	434,534	$	348,288	Total	$	392,504	$	371,345

The audit fees were for performing the integrated audit of our consolidated annual financial statements and the internal control ~~attestation~~ report related to the Federal Deposit Insurance Corporation Improvement Act, reviews of interim quarterly financial statements included in our ~~Forms~~Quarterly Reports on Form 10-Q, and services that are normally provided by Rehmann Robson LLC in connection with statutory and regulatory filings or engagements.

The audit related fees are typically for various discussions related to the adoption and interpretation of new accounting pronouncements. During ~~2018,~~2021, this ~~includes~~included fees for procedures related to nonrecurring regulatory filings. Also included are fees for auditing of our employee benefit plans.

The tax fees were for the preparation of our state and federal income tax returns and for consultation on various tax matters. All other fees were training and consultant related services.

The Audit Committee has considered whether the services provided by Rehmann Robson LLC,, other than the audit fees, are compatible with maintaining Rehmann Robson ~~LLC~~’sLLC’s independence and believes that the other services provided are compatible.

Pre-Approval Policies and Procedures

All non-audit services to be performed by Rehmann Robson LLC must be approved in advance by the Audit Committee if those fees are reasonably expected to exceed 5.0% of the current year agreed upon fee for independent audit services, so long as such services were recognized by the Corporation at the time of engagement to be non-audit services, and such services are promptly brought to the attention of the Audit Committee subsequent to completion of the audit. As permitted by SEC rules, the Audit Committee has authorized its chairperson to pre-approve audit, audit-related, tax and non-audit services, provided that such approved service is reported to the full Audit Committee at its next meeting.

As early as practicable in each calendar year, the independent auditor provides to the Audit Committee a schedule of the audit and other services that the independent auditor expects to provide or may provide during the next twelve months. The schedule will be specific as to the nature of the proposed services, the proposed fees, timing, and other details that the Audit Committee may request. The Audit Committee will by resolution authorize or decline the proposed services. Upon approval, this schedule will serve as the budget for fees by specific activity or service for the next twelve months.

A schedule of additional services proposed to be provided by the independent auditor, or proposed revisions to services already approved, along with associated proposed fees, may be presented to the Audit Committee for their consideration and approval at any time. The schedule will be specific as to the nature of the proposed service, the proposed fee, and other details that the Audit Committee may request. The Audit Committee will by resolution authorize or decline authorization for each proposed new service.

Applicable SEC rules and regulations permit waiver of the pre-approval requirements for services other than audit, review or attest services if certain conditions are met. Out of the services characterized above as audit-related, tax and other professional services, none were billed pursuant to these provisions in ~~2018~~2021 and ~~2017~~2020 without pre-approval.

Shareholder Proposals

Any proposals which you intend to present at the next Annual Meeting must be received before November ~~26, 2019~~25, 2022 to be considered for inclusion in our Proxy Statement and proxy for that meeting. Proposals should be made in accordance with Securities and Exchange Commission Rule 14a-8.

Directors’ Attendance at the Annual Meeting of Shareholders

Our directors are encouraged to attend the Annual Meeting. At the ~~2018~~2021 Annual Meeting, all directors, ~~were in attendance.~~

~~Section 16(a) Beneficial Ownership Reporting Compliance~~

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and certain officers and persons who own more than 10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. These officers, directors, and greater than 10% shareholders are required by SEC regulation to furnish us with copies of these reports.

To our knowledge, based solely on review of the copies of such reports furnished, during the year ended December 31, 2018 all Section 16(a) filing requirements were satisfied, with respect to the applicable officers, directors, and greater than 10% beneficial owners with the exception of the following: director Barz filed two late reports for two reportable transactions, director Opperman filed one late report for one reportable transaction, and executive officer Reetz filed 11 late reports for 14 reportable transactions.Mr. Kleinhardt, were in attendance.

Other Matters

We will bear the cost of soliciting proxies. In addition to solicitation by mail, officers and other employees may solicit proxies by telephone or in person, without compensation other than their regular compensation.

As to Other Business Which May Come Before the Meeting

We do not intend to bring any other business before the meeting for action. However, if any other business should be presented for action, it is the intention of the persons named in the enclosed form of proxy to vote in accordance with their judgment on such business.

By order of the Board of Directors

Debra Campbell, Secretary

SHAREHOLDERS’ INFORMATION

Financial Information and Annual Report on Form 10-K

Copies of the ~~2018~~2021 Annual Report, Isabella Bank Corporation Annual Report on Form 10-K, and other financial information not contained herein are available on the Bank’s website (www.isabellabank.com) under the ~~Investors~~Invest in Us tab, or may be obtained, without charge, by writing to:

Debra Campbell

Secretary

Isabella Bank Corporation

401 N. Main St.

Mt. Pleasant, Michigan 48858



	2017 Targets												2017 Performance (1)			Target % Obtained
Target	25.00%			50.00%			75.00%			100.00%			2017 Performance (1)			Target % Obtained
Earnings per share	$	1.79		$	1.82		$	1.84		$	1.87		$	1.69		0.00	%
Net operating expenses to average assets	1.68		%	1.66		%	1.64		%	1.62		%	1.66		%	50.00	%
In market deposit average balance growth	2.72		%	2.97		%	3.22		%	3.47		%	3.40		%	75.00	%
Loan average balance growth	15.85		%	16.10		%	16.35		%	16.60		%	12.84		%	0.00	%



Name and principal position	Year	Salary ($)(1)(5)		Bonus ($)		Stock Awards ($)		Change in pension value and nonqualified deferred compensation earnings ($)(6)			All other compensation ($)(2)		Total ($)
Jae A. Evans	2018	$	429,500	$	21,803	$	21,803	$	—		$	53,219	$	526,325
President and CEO	2017	402,800		27,396		27,396		—			45,598		503,190
Isabella Bank Corporation	2016	364,473		21,225		21,225		—			48,015		454,938

Neil M. McDonnell (3)	2018	$	225,000	$	—	$	—	$	—		$	54,390	$	279,390
CFO
Isabella Bank Corporation

Jerome E. Schwind	2018	$	317,725	$	14,442	$	14,442	$	(5,000	)	$	43,721	$	385,330
President	2017	293,417		19,515		19,515		7,000			37,081		376,528
Isabella Bank	2016	278,164		14,943		—		3,000			31,466		327,573

David J. Reetz	2018	$	169,920	$	8,148	$	—	$	(19,000	)	$	26,469	$	185,537
Chief Lending Officer	2017	164,971		13,023		—		28,000			26,883		232,877
Isabella Bank	2016	160,166		10,642		—		41,777			25,497		238,082

Peggy L. Wheeler	2018	$	155,713	$	8,265	$	—	$	(15,000	)	$	15,123	$	164,101
Chief Operations Officer	2017	142,160		11,223		—		24,000			14,172		191,555
Isabella Bank	2016	138,020		9,481		—		29,518			14,635		191,654

Rhonda S. Tudor (4)	2018	$	126,208	$	6,679	$	—	$	—		$	9,852	$	142,739
Vice President and Controller (4)	2017	122,235		9,650		—		—			6,649		138,534
Isabella Bank


Name and principal position	Year	Salary ($)(1)	Bonus ($)(2)	Stock Awards ($)(3)	Change in pension value and nonqualified deferred compensation earnings ($)(4)	All other compensation ($)(5)	Total ($)
Jae A. Evans	2021	463,000	89,250	—	—	50,387	602,637
President and CEO of Isabella Bank Corporation and CEO of Isabella Bank	2020	449,250	74,366	74,366	—	49,918	647,900
Neil M. McDonnell	2021	275,687	30,946	—	—	149,832	456,465
CFO of Isabella Bank Corporation and Isabella Bank(6)	2020	266,773	46,253	46,253	—	22,379	381,658
Jerome E. Schwind	2021	349,209	44,616	—	(4,000)	51,263	441,088
President of Isabella Bank and Vice President of Isabella Bank Corporation	2020	332,661	50,731	50,731	14,000	49,557	497,680



	2018
PEO total annual compensation	$	526,325
Median Employee total annual compensation	$	36,167
Ratio of PEO to Median Employee total annual compensation	14.6: 1



Name	Grant date	Number of shares of stock awarded	Grant date fair value of stock awards (1)
Jae A. Evans	4/2/2018	520	$	13,910
Jerome E. Schwind	4/2/2018	377	10,085


2.	~~To transact such other business as may properly come before the meeting, or any adjournment or adjournments thereof.~~


(1)⁽¹⁾	~~Salary amounts are paid on a bi-weekly basis which typically consists of 26 regular pay cycles during the calendar year.~~


⁽²⁾	For all named executives all other compensation includes 401(k) matching contributions. For Jae A. Evans, Jerome E. Schwind, David J. Reetz, and Peggy L. Wheeler, this also includes club dues and auto allowance. For Neil M. McDonnell, this also includes auto allowance.


⁽³⁾	~~Not a named executive officer prior to 2018. Neil M. McDonnell joined the Corporation on January 31, 2018.~~


⁽⁵⁾	Executive officer salary includes compensation voluntarily deferred under our 401(k) plan. Director ~~and advisory board~~ fees are also included and are ~~displayed in the following table for each the last three years ended December 31, 2018:~~



	Director and advisory board fees ($)
Name	2018		2017		2016
Jae A. Evans	$	29,500	$	27,800	$	27,550
Neil M. McDonnell	—		—		—
Jerome E. Schwind	29,500		37,098		23,500
David J. Reetz	—		—		—
Peggy L. Wheeler	—		—		—
Rhonda S. Tudor	—		—		—


⁽⁶⁾	~~Includes the aggregate non-cash change in the actuarial present value of the noted executive’s accumulated benefit under the Isabella Bank Corporation Pension Plan.~~


	Director fees ($)
Name	2021	2020
Jae A. Evans	28,000	24,250
Jerome E. Schwind	28,000	24,250


⁽¹⁾	~~The fair value of stock awards do not reflect amounts in the “Stock Awards” column in the Summary Compensation Table due to applicable payroll taxes withheld from the executive officers.~~



Name	Plan name	Number of years of vesting service as of 01/01/18	Present value of accumulated benefit ($)		Payments during last fiscal year
Jae A. Evans	Isabella Bank Corporation Pension Plan	N/A	$	—	$	—
	Isabella Bank Corporation Retirement Bonus Plan	N/A	—		—
Neil M. McDonnell	Isabella Bank Corporation Pension Plan	N/A	—		—
	Isabella Bank Corporation Retirement Bonus Plan	N/A	—		—
Jerome E. Schwind	Isabella Bank Corporation Pension Plan	20	51,000		—
	Isabella Bank Corporation Retirement Bonus Plan	N/A	—		—
David J. Reetz	Isabella Bank Corporation Pension Plan	32	234,000		—
	Isabella Bank Corporation Retirement Bonus Plan	N/A	296,565		—
Peggy L. Wheeler	Isabella Bank Corporation Pension Plan	40	203,000		—
	Isabella Bank Corporation Retirement Bonus Plan	N/A	201,121		—
Rhonda S. Tudor	Isabella Bank Corporation Pension Plan	N/A	—		—
	Isabella Bank Corporation Retirement Bonus Plan	N/A	—		—


1.	~~The election of four directors.~~



Name	Plan Name	Executive contributions in 2018 ($) (1)		Registrant contributions in 2018 ($) (2)		Aggregate earnings in 2018 ($) (3)		Aggregate balance at December 31, 2018 ($) (4)
Jae A. Evans	Directors Plan	$	—	$	—	$	2,227	$	49,563
	SERP	—		105,000		7,166		440,874
Neil M. McDonnell	SERP	—		10,000		—		10,000
Jerome E. Schwind	Directors Plan	29,500		—		3,340		84,609
	SERP	—		14,000		488		36,892
David J. Reetz	Retirement Bonus Plan	—		28,275		5,951		296,565
Peggy L. Wheeler	Retirement Bonus Plan	—		17,959		4,052		201,121



Name	While an Active Employee		Subsequent to Retirement
Jae A. Evans	$	750,000	$	400,000
Neil M. McDonnell	—		—
Jerome E. Schwind	576,450		288,225
David J. Reetz	339,840		169,920
Peggy L. Wheeler	311,426		155,713
Rhonda S. Tudor	—		—