Hills Bancorporation Reports 44.94% Increase in Net Income for Six Months Ending June 30, 2026

Hills Bancorporation reported significant financial growth in its latest 10-Q filing for the six months ending June 30, 2026, with net income reaching $47.96 million, a 44.94% increase from $33.09 million in the same period of 2025. This growth was primarily driven by a $14.67 million increase in net interest income, attributed to higher loan interest income and a favorable credit loss benefit of $2.52 million, compared to a credit loss expense of $5.01 million in the previous year. The company's earnings per share also rose, with basic and diluted earnings per share at $2.74, up from $1.85 in the prior year.

Total assets for Hills Bancorporation increased to $4.796 billion as of June 30, 2026, up from $4.648 billion at the end of 2025. The growth in assets was supported by a rise in loans, net of allowance for credit losses, which reached $3.594 billion, an increase of $87.54 million since December 31, 2025. The company also saw a notable increase in deposits, which rose by $149.64 million during the first half of 2026. The increase in loans was primarily driven by growth in mortgage categories, including multi-family and commercial loans.

Strategically, Hills Bancorporation entered into a definitive agreement on May 11, 2026, to acquire approximately 19.2 acres of land for $20.70 million, aimed at consolidating operational teams and addressing long-term needs. The company has already paid $2 million in earnest money for this project, which is expected to close in the first quarter of 2027. Additionally, the company reported a gain of $1.69 million from the sale of its Visa Class B shares, contributing to the increase in noninterest income.

Operationally, the company maintained a stable loan portfolio with a focus on credit quality. The allowance for credit losses decreased to $54.92 million from $58.20 million at the end of 2025, representing 1.50% of loans held for investment. The company reported a decline in nonperforming assets and a decrease in accruing loans past due 90 days or more, indicating improved customer payment performance. The company continues to monitor credit quality indicators closely, particularly in light of ongoing economic uncertainties.

Looking ahead, Hills Bancorporation remains cautiously optimistic about its financial outlook, with expectations of stable loan demand and continued monitoring of credit quality. The company acknowledges potential risks from economic conditions, including inflation and interest rate fluctuations, which could impact future performance. Management is focused on maintaining adequate capital levels and managing interest rate risk through its asset/liability management strategies.