{"url_path":"/sec/isba/8-k/2026-06-15/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Definitive Agreement.","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-06-15","source_url":"https://www.sec.gov/Archives/edgar/data/842517/0000842517-26-000158-index.html","accession_number":"0000842517-26-000158","cik":"0000842517","ticker":"ISBA","issuer_name":"ISABELLA BANK CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/842517/0000842517-26-000158-index.html","primary_entity_key":"0000842517","primary_entity_name":"ISABELLA BANK CORP"},"word_count":2122,"has_tables":true,"body_markdown":"Item 1.01 Entry into a Material Definitive Agreement.\n\nOn June 11, 2026, Isabella Bank Corporation, a Michigan corporation (“Isabella”), 401 Merger Sub, Inc., a Michigan corporation and a wholly owned subsidiary of Isabella (“Merger Sub”), and Grand River Commerce, Inc., a Michigan corporation (“Grand River”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Grand River, with Grand River as the surviving entity (the “Merger”), and immediately following the Merger, Grand River will merge with and into Isabella, with Isabella as the surviving entity (the “Second Step Merger”). The Merger Agreement further provides that immediately following the Second Step Merger, Grand River Bank, a Michigan state-chartered member bank and wholly owned subsidiary of Grand River, will merge with and into Isabella Bank, a Michigan state-chartered member bank and wholly owned subsidiary of Isabella, with Isabella Bank as the surviving bank (the “Bank Merger” and, together with the Merger and the Second Step Merger, the “Transaction”). The Merger Agreement was unanimously approved by the boards of directors of each of Isabella and Grand River.\n\nMerger Consideration\n\nUpon the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each voting and non-voting share of common stock of Grand River (“Grand River Common Stock”) issued and outstanding immediately prior to the Effective Time, other than certain shares held by Grand River or Isabella or dissenting shares, will be converted into the right to receive, at the election of the holder thereof, and subject to adjustment and proration, as applicable, (i) an amount of cash equal to the quotient of (A) $18,262,391 (the “Aggregate Cash Consideration”), divided by (B) the product obtained by multiplying (x) the number of shares of Grand River Common Stock issued and outstanding as of the Effective Time by (y) 0.35 (the “Cash Conversion Number”), rounded to the nearest cent (the “Per Share Cash Consideration”), or (ii) the number of shares of Isabella common stock, no par value (“Isabella Common Stock”), multiplied by the Exchange Ratio (as defined below).\n\nThe Exchange Ratio is defined in the Merger Agreement as a number, as adjusted, of shares of Isabella Common Stock equal to the quotient of (A) 839,003 shares of Isabella Common Stock, divided by (B) the difference of (1) the aggregate number of shares of Grand River Common Stock issued and outstanding immediately prior to the Effective Time, other than certain shares held by Grand River or Isabella or dissenting shares, minus (2) the Cash Conversion Number, rounded to the nearest ten thousandth (the “Per Share Stock Consideration”). The Per Share Cash Consideration and/or the Per Share Stock Consideration are sometimes referred to herein collectively as the “Merger Consideration.”\n\nThe Aggregate Cash Consideration is subject to reduction in the event that Grand River does not deliver at least $45.7 million of total shareholders’ equity as determined in accordance with GAAP, less certain merger costs and reflecting other specified items described in the Merger Agreement.\n\nMerger Consideration elections by Grand River shareholders will be subject to proration procedures whereby 65% of the shares of Grand River Common Stock will be exchanged for the Per Share Stock Consideration and 35% of the shares of Grand River common stock will be exchanged for the Per Share Cash Consideration. Based on the assumption of 9,122,073 shares of Grand River Common Stock issued and outstanding as of the Effective Time, the Per Share Cash Consideration to be paid is estimated to be approximately $5.72 and the Exchange Ratio is estimated to be approximately 0.1415.\n\nHolders of Grand River Common Stock will receive cash in lieu of fractional shares.\n\nTreatment of Grand River’s Equity Awards\n\nUpon the terms and subject to the conditions of the Merger Agreement, at the Effective Time, each stock option in respect of shares of Grand River Common Stock (each such stock option, a “Grand River Stock Option”) granted under Grand River’s equity incentive plans (the “Grand River Stock Plans”) that is outstanding immediately prior to the Effective Time\n\nwill be cancelled and automatically converted into the right to receive a cash payment equal to (i) the number of shares of Grand River Common Stock subject to such Grand River Stock Option at the Effective Time, multiplied by (ii) the amount by which the Per Share Cash Consideration exceeds the per share exercise price of such Grand River Stock Option, less applicable taxes and tax withholdings and without interest. Notwithstanding the foregoing, if the per share exercise price for a Grand River Stock Option immediately prior to the Effective Time is equal to or in excess of the Per Share Cash Consideration, such Grand River Stock Option will be cancelled at the Effective Time in exchange for no consideration.\n\nUpon the terms and subject to the conditions of the Merger Agreement, each restricted share of Grand River Common Stock granted under the Grand River Stock Plans that is outstanding and unvested immediately prior to the Effective Time (each such restricted share, a “Grand River Restricted Stock Award”), shall fully vest and shall have the treatment set forth in the Merger Agreement applicable to shares of Grand River Common Stock.\n\nCertain Other Terms and Conditions of the Merger Agreement\n\nThe Merger Agreement contains customary representations and warranties from both Isabella and Grand River, and each party has agreed to customary covenants, including, among others, covenants relating to (i) the conduct of its business during the interim period between the execution of the Merger Agreement and the Effective Time, (ii) in the case of Grand River, its obligation to call a meeting of its shareholders to approve the Merger Agreement, and, subject to certain exceptions, the obligation of its board of directors to recommend that its shareholders approve the Merger Agreement, (iii) in the case of Grand River, its obligation to call a meeting of its shareholders to approve an amendment to Grand River’s articles of incorporation (“Articles of Amendment”) to create a class of non-voting common stock of Grand River to facilitate the conversion of Grand River’s convertible subordinated debt due 2026 and the obligation of its board of directors to recommend that its shareholders approve the Articles of Amendment, and (iv) Grand River’s non-solicitation obligations related to alternative acquisition proposals. Isabella and Grand River have also agreed to use their reasonable best efforts to prepare and file all applications, notices and other documents to obtain all necessary consents and approvals for consummation of the transactions contemplated by the Merger Agreement, including the Transaction.\n\nThe completion of the Transaction is subject to customary conditions, including (i) approval of the Merger Agreement by the requisite vote of the Grand River shareholders, (ii) authorization for listing on Nasdaq of the shares of Isabella Common Stock to be issued in the Merger, (iii) receipt of required regulatory approvals, including the approval of the Board of Governors of the Federal Reserve System and the Michigan Department of Insurance and Financial Services, Office of Banking, without the imposition of any condition or restriction that would be reasonably expected to have a material and adverse effect on the business, properties, assets, liabilities, results of operations or financial condition of Isabella and its subsidiaries, taken as a whole, after giving effect to the Merger, the Second Step Merger and the Bank Merger, (iv) effectiveness of the registration statement on Form S-4 for the Isabella Common Stock to be issued in the Merger, and (v) the absence of any order, injunction, decree or other legal restraint preventing the completion of the Merger, the Second Step Merger, the Bank Merger or any of the other transactions contemplated by the Merger Agreement or making the completion of the Merger, the Second Step Merger, the Bank Merger or any of the other transactions contemplated by the Merger Agreement illegal. Each party’s obligation to complete the Transaction is also subject to certain additional customary conditions, including (a) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (b) performance in all material respects by the other party of its obligations under the Merger Agreement, and (c) receipt by such party of an opinion from its counsel to the effect that the Merger and the Second Step Merger, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.\n\nThe Merger Agreement provides certain termination rights for both Isabella and Grand River and further provides that a termination fee of $2.18 million will be payable by Grand River upon termination of the Merger Agreement under certain circumstances.\n\nThe representations, warranties and covenants of each party set forth in the Merger Agreement have been made only for purposes of, and were and are solely for the benefit of the parties to, the Merger Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors should not rely on them as statements of fact. In addition, such representations and warranties (i) will not survive consummation of the Merger and (ii) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding Isabella or Grand River, their respective affiliates or their respective businesses. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding Isabella, Grand River, their respective affiliates or their respective businesses, the Merger Agreement, the Merger, the Second Step Merger and the Bank Merger that will be contained in, or incorporated by reference into, the Registration Statement on Form S-4 that will include a proxy statement of Grand River and a prospectus of Isabella, as well as in the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings that Isabella makes with the Securities and Exchange Commission (“SEC”).\n\nThe foregoing description of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.\n\nVoting Agreements\n\nSimultaneously with the execution of the Merger Agreement, Isabella entered into a voting agreement (a “Grand River Voting Agreement”) with each of the directors and executive officers of Grand River. Each Grand River director and executive officer, as a shareholder party to a Grand River Voting Agreement, has agreed, among other things, to vote shares of Grand River Common\n\nStock owned by such shareholder, and over which such shareholder has the right to dispose of and has voting power, (i) in favor of the Merger Agreement and the other transactions contemplated by the Merger Agreement, including the Transaction, (ii) in favor of the Articles of Amendment, and (iii) against any competing acquisition proposal, any action, agreement transaction or proposal which could reasonably be expected to result in a breach of any representation, warranty, covenant, agreement or other obligation of Grand River in the Merger Agreement in any material respect, or other action that is intended or would reasonably be expected to prevent, impede, interfere with, delay, postpone or discourage any of the transactions contemplated by the Merger Agreement. The Grand River Voting Agreements will terminate in certain circumstances, including upon consummation of the Merger or the termination of the Merger Agreement in accordance with its terms.\n\nThe foregoing description of the Grand River Voting Agreements does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Grand River Voting Agreements, the form of which is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference."}