Hills Bancorporation reported a significant increase in its financial performance for the fiscal year ending December 31, 2025, with net income rising to $60.5 million, a 27.1% increase from $47.6 million in 2024. Diluted earnings per share also saw a notable rise, reaching $6.81 compared to $5.26 in the previous year. The company's net interest margin improved to 3.45%, up from 2.78% in 2024, driven by a $34.5 million increase in net interest income, primarily due to higher interest rates and growth in average earning assets.
The company's total assets increased by $59.6 million to $4.65 billion, with net loans growing by $119.3 million to $3.51 billion. This growth was attributed to increases in various loan categories, including a $87.8 million rise in 1 to 4 family first mortgages and a $67.1 million increase in commercial mortgages. However, there were decreases in construction loans and commercial and financial loans, indicating a shift in the loan portfolio composition. Total deposits also increased by $21.7 million to $3.37 billion, with a notable rise in noninterest-bearing deposits.
Strategically, Hills Bancorporation has focused on enhancing its operational efficiency and customer service. The company has not made any acquisitions since 2001 but continues to expand its geographic footprint within Iowa, recently opening a branch in Williamsburg in November 2024. The bank's market share in Johnson County increased to 16.94% as of June 30, 2025, reflecting its competitive position in the local banking landscape. The total employee count for the bank stands at 479 full-time and 30 part-time employees, emphasizing its commitment to workforce stability and development.
Despite the positive financial results, the company acknowledged challenges related to credit quality and economic conditions. The allowance for credit losses increased to $58.2 million, reflecting management's cautious approach amid potential economic uncertainties. The company is actively monitoring its loan portfolio, particularly higher-risk segments, and anticipates that credit loss provisions may be necessary in response to evolving market conditions. Looking ahead, Hills Bancorporation remains optimistic about its ability to navigate these challenges while maintaining its capital adequacy, with a Community Bank Leverage Ratio of 12.94%, well above the regulatory minimum of 9.00%.
About HILLS BANCORPORATION
Hills Bancorporation is a bank holding company based in Iowa, operating through its subsidiary bank. It provides a full range of banking services including commercial, real estate, agricultural, and consumer loans, as well as deposit products. Serving primarily Iowa communities, it competes on product offerings, customer service, and pricing, with a focus on community banking, financial stability, and regulatory compliance.
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