SecProbe.io

June 30, 2010

  Dennis P. Angner  President and Chief Financial Officer Isabella Bank Corporation 401 N. Main Street  Mt. Pleasant, Michigan 48858
Re: Isabella Bank Corporation
Form 10-K
Filed  March 11, 2010 File No.  000-18415  Form 10-Q Filed  May 7, 2010 File No.  000-18415
 Dear Mr. Angner:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
  Form 10-K for the Fiscal Year Ended December 31, 2009

Item 1A.  Risk Factors

1. Please review your risk factor h eadings and revise future filings to clearly identify the actual
risk to shareholders in the heading of each risk factor.

Dennis P. Angner
 Isabella Bank Corp
 June 30, 2010
 Page 2

 Item 10. Executive Compensation

Compensation Discussion and Analysis, page 8

2. We note your disclosure in response to Item  402(s) of Regulation S-K on page 8 of your
proxy statement.  Please describe the process you undertook to reach the conclusion that the
Corporation’s compensation programs are not reasonable likely to have a material adverse effect of the Corporatio n’s results of operations.
3.
Advise how the particular bonus awar ds were determined for 2009. In your response and in future
filings disclose any targets for EPS, operating performance, shareholder returns or other strategic
goals. D isclose the actual target and the actual performance obtained for each target. See
Instruction 4 to Item 402(b) of Regulation S-K.

4. Please explain how the stock award determina tions were made for 2009. Your CD&A should
explain how you determined the amounts and why you chose to award the stock. Please also
confirm that in future filings, you will incl ude the disclosure required by Item 402(b) of
Regulation 10-K.
 Summary
Compensation Table, page 12
5. In future filings include the aggregate grant da te fair value of stock awards. See Item 402(c).
6. In future filings, please provide the tables requi red by Items 402(d) and (f) of Regulation S-K. Also
provide an accompanying narrative discussion of the material factors involved in any grants
of stock or options, such as a general description of the criter ia applied in determining the
amounts payable or a description of the perfor mance-based conditions and any other material
conditions applicable to the award. Where appr opriate, quantify the obj ective and the actual
performance.
  Part II

Signatures
7. Please amend the signature page to identify ei ther the Principal Accounting Officer or the
Controller, as required by General In struction D(2)(a) of Form 10-K.
 Form 10-Q for the Quarterly Period Ended March 31, 2010

 Note 5 – Investment Securities, page 10

 8. Please expand the disclosure to present the contractual maturities of available for sale securities by major security type pursuant to ASC 320-10-50.

Dennis P. Angner
 Isabella Bank Corp
 June 30, 2010
 Page 3

Note 9 – Financial Instruments R ecorded at Fair Value, page 14
 9. Please tell us and revise your future filings to disclose how often you obtain updated appraisals for your collateral dependent loans.  If this policy varies  by loan type please
disclose that also.  Describe any adjustme nts you make to the appraised values, including
those made as a result of outdated appraisals .  Discuss how you consider the potential for
outdated appraisal values in your determination of the a llowance for loan losses.
 10. We note the disclosure under the heading Invest ment Securities which states that if quoted
prices are not available, fair values are measured using indepe ndent pricing models adjusted
for the security’s credit rating, prepayment assumptions and othe r factors such as credit loss
and liquidity assumptions.  Please expand future  filings to provide quantitative information
about the inputs noted and the nature of the item being measured.  Refer to ASC 820-10-55-
22A & B regarding implementation guidance and illustrations.
  11. Please revise your future filings to provide  the disclosures required by ASC 310-10-50-15a
for impaired loans.  Please note that such disc losures are required as of each balance sheet
date, including quarterly periods.
 Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

Non Performing Assets, page 24

12. Please tell us and expand future filings to include the following:

• a discussion of the composition of the e nding balance of non-accrual loans by type ;

• if a few large credit relationships make up the majority of your non-accrual loans a
discussion of general information about the borrower, type of co llateral securing the
loan, amount of total credit exposure outstan ding, amount of the allowance allocated
to the credit relationship, and why the company believes that the allowance is
appropriate to provide for losse s that may be incurred; and

• Consider disclosing delinquency information on your portfolio and how the specific
changes in delinquencies impacts your calculation of the allowance.

Restructured Loans,  page 24
 13. Please revise to address the following in future filings:

• Discuss how you identify loans to be restructured;

• Quantify the types of concessions you have ma de (e.g. reduction of interest rate, payment
extensions, forgiveness of principal, fo rbearance or other actions) and discuss your

Dennis P. Angner
 Isabella Bank Corp
 June 30, 2010  Page 4

success with the different types of concessions (qualitatively and quant itatively) for these
accruing restructured loans;

• Disclose your policy regarding how many pa yments the borrower needs to make on the
restructured loans before you return  the loan to accrual status.

 We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclo sure in the filing;

• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of  the United States.

You may contact Chris Harley at 202-551-3695 or Marc Thomas at 202-551-3452 if you
have questions regarding comments on the financial statements and related matters.  Please contact Jessica Livings ton at 202-551-3448 or me at 202- 551-3464 with any other questions.

Sincerely,

Kathryn McHale Attorney-Advisor