Hills Bancorporation reported a net income of $14.43 million for the first quarter of 2025, reflecting a 19.28% increase from $12.10 million in the same period of 2024. This growth was primarily driven by a $6.49 million increase in net interest income, which rose to $34.16 million, and a $1.11 million increase in noninterest income, totaling $8.12 million. However, the company also faced a significant rise in credit loss expenses, which increased to $3.87 million from a benefit of $0.36 million in the previous year, indicating a shift in the credit quality of its loan portfolio.
The company's total assets reached $4.564 billion as of March 31, 2025, an increase of $24.07 million since the end of 2024. Notably, net loans increased by $29.75 million to $3.421 billion, with growth observed in agricultural, commercial, and residential loan segments. Deposits also saw a substantial increase of $132.21 million, largely attributed to temporary public funds. Conversely, borrowings decreased significantly by $163.79 million, primarily due to the maturity of $109 million in Bank Term Funding Program debt.
Operationally, Hills Bancorporation's loan portfolio composition remained stable, with agricultural loans at 3.58% and commercial loans at 8.69% of total loans. The company reported an allowance for credit losses of $52.95 million, representing 1.53% of total loans, up from 1.48% at the end of 2024. The increase in the allowance was influenced by rising past due and nonaccrual loans, as well as higher charge-offs.
Looking ahead, Hills Bancorporation's management expressed cautious optimism regarding its ability to navigate the current economic landscape, which includes inflationary pressures and potential credit risks. The company plans to continue monitoring its loan portfolio closely, particularly higher-risk segments, and is prepared to adjust its credit loss provisions as necessary. The outlook remains contingent on economic conditions, interest rate movements, and the overall performance of its loan portfolio.
About HILLS BANCORPORATION
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