Hills Bancorporation Files 10-Q for Q1 2024

TL;DR

<b>Hills Bancorporation has submitted its quarterly report (10-Q) detailing financial performance for the first quarter of 2024.</b>

AI Summary

HILLS BANCORPORATION (HBIA) filed a Quarterly Report (10-Q) with the SEC on May 8, 2024. Hills Bancorporation filed its 10-Q report for the period ending March 31, 2024. The filing covers financial activities for the first quarter of 2024. Key financial statement data from previous periods (2023, 2022, 2021) are referenced. The company's fiscal year ends on December 31st. Hills Bancorporation is classified under 'State Commercial Banks' with SIC code 6022.

Why It Matters

For investors and stakeholders tracking HILLS BANCORPORATION, this filing contains several important signals. This 10-Q filing provides investors and analysts with the latest financial data and operational updates for Hills Bancorporation, crucial for assessing its current financial health and future prospects. Understanding the details within this report allows stakeholders to evaluate the company's performance against previous periods and industry benchmarks, informing investment decisions.

Risk Assessment

Risk Level: low — HILLS BANCORPORATION shows low risk based on this filing. The filing is a standard 10-Q, which is a routine disclosure for public companies and does not contain unusual or high-risk information.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand Hills Bancorporation's Q1 2024 performance and outlook.

Key Numbers

• 2024-03-31 — Period End Date (Conformed Period of Report)
• 2024-05-08 — Filing Date (Filed as of Date)
• 12/31 — Fiscal Year End (Fiscal Year End)
• 6022 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• HILLS BANCORPORATION (company) — Filer name
• 0000732417 (company) — Central Index Key
• IA (company) — State of Incorporation
• 3196792291 (company) — Business Phone
• 20240331 (date) — Conformed Period of Report
• 20240508 (date) — Filed as of Date
• 6022 (industry) — Standard Industrial Classification
• USD (currency) — Currency

FAQ

Industry Context

Hills Bancorporation operates within the State Commercial Banks industry, as indicated by its SIC code 6022.

Regulatory Implications

As a commercial bank, Hills Bancorporation is subject to regulations from various financial authorities, though specific regulatory details are not provided in this header information.

What Investors Should Do

1. Analyze the balance sheet and income statement for Q1 2024.
2. Review any disclosures related to loans, deposits, and investments.
3. Compare Q1 2024 results to prior periods and industry trends.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-08: Filing Date — Date the 10-Q was officially filed with the SEC.

Year-Over-Year Comparison

This filing represents the Q1 2024 10-Q, following previous filings such as annual reports and prior quarterly reports.

Filing Documents

• hbia-20240331.htm (10-Q) — 3533KB
• cecl-exhibit3133124.htm (EX-31) — 20KB
• cecl-exhibit3233124.htm (EX-32) — 10KB
• 0000732417-24-000023.txt (&nbsp;) — 17244KB
• hbia-20240331.xsd (EX-101.SCH) — 58KB
• hbia-20240331_cal.xml (EX-101.CAL) — 119KB
• hbia-20240331_def.xml (EX-101.DEF) — 358KB
• hbia-20240331_lab.xml (EX-101.LAB) — 759KB
• hbia-20240331_pre.xml (EX-101.PRE) — 556KB
• hbia-20240331_htm.xml (XML) — 4693KB

Financial Statements

Item 1. Financial Statements Consolidated balance sheets, March 3 1 , 202 4 (unaudited) and December 31, 202 3 4 Consolidated statements of income (unaudited) for three months ended March 3 1 , 202 4 and 202 3 5 Consolidated statements of comprehensive income (unaudited) for three months ended March 3 1 , 202 4 and 202 3 6 Consolidated statements of stockholders' equity (unaudited) for three months ended March 3 1 , 202 4 and 202 3 7 Consolidated statements of cash flows (unaudited) for three months ended March 3 1 , 202 4 and 202 3 8

Notes to consolidated financial statements (condensed)

Notes to consolidated financial statements (condensed) 10

Management Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations 52

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 64

Controls and Procedures

Item 4. Controls and Procedures 65 Part II OTHER INFORMATION

Legal proceedings

Item 1. Legal proceedings 65

Risk factors

Item 1A. Risk factors 65

Unregistered sales of equity securities and use of proceeds

Item 2. Unregistered sales of equity securities and use of proceeds 66

Defaults upon senior securities

Item 3. Defaults upon senior securities 67

Mine safety disclosures

Item 4. Mine safety disclosures 67

Other information

Item 5. Other information 67

Exhibits

Item 6. Exhibits 68

Signatures

Signatures 69 Page 3 Index HILLS BANCORPORATION CONSOLIDATED BALANCE SHEETS (Amounts In Thousands, Except Share Amounts) March 31, 2024 December 31, 2023 ASSETS (Unaudited) Cash and cash equivalents $ 94,054 $ 59,482 Investment securities available for sale at fair value (amortized cost March 31, 2024 $ 823,091 ; December 31, 2023 $ 814,839 ) 784,030 779,421 Stock of Federal Home Loan Bank 14,422 15,746 Loans held for sale 3,702 2,023 Loans, net of allowance for credit losses March 31, 2024 $ 49,830 ; December 31, 2023 $ 49,410 3,392,930 3,389,372 Property and equipment, net 33,920 34,230 Tax credit real estate investments 7,546 7,910 Accrued interest receivable 21,861 19,786 Deferred income taxes, net 22,279 21,271 Goodwill 2,500 2,500 Other assets 10,803 9,926 Total Assets $ 4,388,047 $ 4,341,667 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Noninterest-bearing deposits $ 572,838 $ 600,398 Interest-bearing deposits 2,789,253 2,682,382 Total deposits $ 3,362,091 $ 3,282,780 Other short-term borrowings, including Bank Term Funding Program and federal funds purchased 329,000 219,000 Federal Home Loan Bank borrowings 152,400 296,648 Accrued interest payable 7,441 6,102 Allowance for credit losses on off-balance sheet credit exposures 4,360 5,110 Other liabilities 20,939 16,888 Total Liabilities $ 3,876,231 $ 3,826,528 Redeemable Common Stock Held by Employee Stock Ownership Plan (ESOP) $ 46,375 $ 44,853 STOCKHOLDERS' EQUITY Common stock, no par value; authorized 20,000,000 shares; issued March 31, 2024 10,346,258 shares; December 31, 2023 10,345,832 shares $ — $ — Paid in capital 64,095 63,827 Retained earnings 543,378 541,329 Accumulated other comprehensive loss ( 29,751 ) ( 27,176 ) Treasury stock at cost (March 31, 2024 1,253,925 shares; December 31, 2023 1,210,112 shares) ( 65,906 ) ( 62,841 ) Total Stockholders' Equity $ 511,816 $ 515,139 Less maximum cash obligation related to ESOP shares 46,375 44,853 Total

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Summary of Significant Accounting Policies Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and with instructions for Form 10-Q and Regulation S-X. These financial statements include all adjustments (consisting of normal recurring accruals) which in the opinion of management are considered necessary for the fair presentation of the financial position and results of operations for the periods shown. The Company considers that it operates as one business segment, a commercial bank. Operating results for the three month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in the Form 10-K Annual Report of Hills Bancorporation and subsidiary (the "Company") for the year ended December 31, 2023 filed with the Securities Exchange Commission on March 5, 2024. The consolidated balance sheet as of December 31, 2023, has been derived from the audited consolidated financial statements for that period. The Company evaluated subsequent events through the filing date of its quarterly report on Form 10-Q with the SEC. Accounting Estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain Significant

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and similar fiduciary activities. Revenue is recognized when our performance obligation is completed each month, which is generally the time that payment is received. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity's obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. As of March 31, 2024 and December 31, 2023, the Company did not have any significant contract balances. An entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. The Company has not incurred or capitalized any contract acquisition costs as of March 31, 2024 and December 31, 2023. Tax credit real estate : Tax credit real estate represents three multi-family rental properties, three assisted living rental properties, a multi-tenant rental property for persons with disabilities, and a multi-family senior living rental property, all of which are affordable housing projects as of March 31, 2024. Th

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For AFS debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes. Impairment may result from credit deterioration of the issuer or collateral underlying the security. In performing an assessment of whether any decline in fair value is due to a credit loss, all relevant information is considered at the individual security level. For asset-backed securities performance indicators considered related to the underlying assets include default rates, delinquency rates, percentage of nonperforming assets, debt-to-collateral ratios, third-party guarantees, current levels of subordination, vintage, geographic concentration, analyst reports and forecasts, credit ratings and other market data. In assessing whether a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. If we intend to sell a debt security or more likely than not we will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged against the allowance for credit losses with any incremental impairment reported in earnings. Accrued i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) segments which consist of agricultural, 1 to 4 family first and junior liens, commercial, and consumer lending. These segments are further disaggregated into loan classes, the level at which credit risk is monitored. For each of these pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data. The following provides the credit quality indicators and risk element

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