Hills Bancorporation Files Q2 2024 10-Q

TL;DR

Hills Bancorporation's Q2 10-Q is in. Check financials.

AI Summary

Hills Bancorporation filed its 10-Q for the period ending June 30, 2024. The filing covers financial performance and operations for the second quarter of 2024. Key financial data and operational details are presented for the reporting period and comparative periods.

Why It Matters

This filing provides investors and analysts with crucial financial information about Hills Bancorporation's performance and financial health for the second quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures.

Key Numbers

• 2024-06-30 — Period End Date (This is the end date for the reporting period of the 10-Q filing.)
• 2024-08-07 — Filing Date (This is the date the 10-Q was officially filed with the SEC.)

Key Players & Entities

• HILLS BANCORPORATION (company) — Filer
• 0000732417 (company) — Central Index Key
• IA (location) — State of Incorporation
• 20240630 (date) — Period of Report

FAQ

Filing Documents

• hbia-20240630.htm (10-Q) — 4087KB
• exhibit3163024.htm (EX-31) — 20KB
• exhibit3263024.htm (EX-32) — 10KB
• 0000732417-24-000030.txt ( ) — 20070KB
• hbia-20240630.xsd (EX-101.SCH) — 60KB
• hbia-20240630_cal.xml (EX-101.CAL) — 119KB
• hbia-20240630_def.xml (EX-101.DEF) — 375KB
• hbia-20240630_lab.xml (EX-101.LAB) — 804KB
• hbia-20240630_pre.xml (EX-101.PRE) — 583KB
• hbia-20240630_htm.xml (XML) — 5665KB

Financial Statements

Item 1. Financial Statements Consolidated balance sheets, June 3 0 , 2024 (unaudited) and December 31, 20 2 3 4 Consolidated statements of income (unaudited) for three and six months ended June 3 0 , 2024 and 2 023 5 Consolidated statements of comprehensive income (unaudited) for three and six months ended June 3 0 , 2024 and 2 023 6 Consolidated statements of stockholders' equity (unaudited) for three and six months ended June 3 0 , 2024 and 20 23 7 Consolidated statements of cash flows (unaudited) for six months ended June 3 0 , 2024 and 20 23 9

Notes to consolidated financial statements (condensed)

Notes to consolidated financial statements (condensed) 11

Management Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations 58

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 73

Controls and Procedures

Item 4. Controls and Procedures 74 Part II OTHER INFORMATION

Legal proceedings

Item 1. Legal proceedings 74

Risk factors

Item 1A. Risk factors 74

Unregistered sales of equity securities and use of proceeds

Item 2. Unregistered sales of equity securities and use of proceeds 75

Defaults upon senior securities

Item 3. Defaults upon senior securities 76

Mine safety disclosures

Item 4. Mine safety disclosures 76

Other information

Item 5. Other information 76

Exhibits

Item 6. Exhibits 77

Signatures

Signatures 78 Page 3 Index HILLS BANCORPORATION CONSOLIDATED BALANCE SHEETS (Amounts In Thousands, Except Share Amounts) June 30, 2024 December 31, 2023 ASSETS (Unaudited) Cash and cash equivalents $ 34,246 $ 59,482 Investment securities available for sale at fair value (amortized cost June 30, 2024 $ 829,085 ; December 31, 2023 $ 814,839 ) 788,979 779,421 Stock of Federal Home Loan Bank 17,459 15,746 Loans held for sale 11,885 2,023 Loans, net of allowance for credit losses June 30, 2024 $ 49,730 ; December 31, 2023 $ 49,410 3,390,013 3,389,372 Property and equipment, net 34,794 34,230 Tax credit real estate investments 7,270 7,910 Accrued interest receivable 20,928 19,786 Deferred income taxes, net 22,725 21,271 Goodwill 2,500 2,500 Other assets 11,294 9,926 Total Assets $ 4,342,093 $ 4,341,667 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Noninterest-bearing deposits $ 575,976 $ 600,398 Interest-bearing deposits 2,657,518 2,682,382 Total deposits $ 3,233,494 $ 3,282,780 Other short-term borrowings, including Bank Term Funding Program and federal funds purchased 375,838 219,000 Federal Home Loan Bank borrowings 177,900 296,648 Accrued interest payable 9,642 6,102 Allowance for credit losses on off-balance sheet credit exposures 4,260 5,110 Other liabilities 19,193 16,888 Total Liabilities $ 3,820,327 $ 3,826,528 Redeemable Common Stock Held by Employee Stock Ownership Plan (ESOP) $ 45,398 $ 44,853 STOCKHOLDERS' EQUITY Common stock, no par value; authorized 20,000,000 shares; issued June 30, 2024 10,347,051 shares; December 31, 2023 10,345,832 shares $ — $ — Paid in capital 64,418 63,827 Retained earnings 555,691 541,329 Accumulated other comprehensive loss ( 30,493 ) ( 27,176 ) Treasury stock at cost (June 30, 2024 1,281,727 shares; December 31, 2023 1,210,112 shares) ( 67,850 ) ( 62,841 ) Total Stockholders' Equity $ 521,766 $ 515,139 Less maximum cash obligation related to ESOP shares 45,398 44,853 Total Stoc

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 six month period ended June 30, 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 Es

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 June 30, 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 June 30, 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 June 30, 2024. The C

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

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