Isabella Bank Corp. in Mt. Pleasant, Mich., disclosed about $5.6 million in exposure to two customers.
The $2.1 billion-asset company said in a regulatory filing that it had been exposed to a $1.6 million loss tied to a single customer with negative balances on deposit accounts. “The financial impact could be lower and will depend … on the bank’s success in its efforts to recover the funds,” the filing said.
Separately, Isabella warned that it might incur a credit loss from loan agreements and credit lines with a customer and related parties. The total exposure is $4 million, which is secured by commercial real estate, residential real estate and other assets.
The bank, which is continuing to evaluate the situation, said it plans to pursue all available sources of recovery and other means of mitigating the potential losses.