Hills Bancorporation Reports 19% Net Income Growth Amid Rising Credit Losses and Costs

**Hills Bancorporation (OTCMKTS: HBIA)** has recently reported its financial results for the quarter ended March 31, 2025. The following highlights summarize key aspects from the income statement and overall business activities.

Positive Aspects:

• Net Income Growth: Net income increased to $14.43 million, up 19.28% from $12.10 million in the same period last year.
• Net Interest Income: The net interest income grew significantly by $6.49 million, driven predominantly by an increase in loans and investments.
• Deposit Increase: Total deposits increased by $132.21 million, primarily attributed to temporary public funds.
• Return on Equity: For the twelve months ended March 31, 2025, return on average equity improved to 10.33% from 8.36% in the previous year.
• Higher Earnings Per Share: Basic and diluted earnings per share rose to $1.61, compared to $1.33 a year ago.

Negative Aspects:

• Increased Credit Loss Expense: Credit loss expense rose to $3.87 million from a benefit of $(0.36) million in the prior year, reflecting worsening asset quality.
• Noninterest Income Decline: Net gain on loans decreased by 34.58%, indicating potential struggles in generating income from loan sales.
• Noninterest Expenses Rise: Total noninterest expenses increased by 4.24% to $20.65 million, indicating rising operational costs.

Key Points and Statistics:

• Total Assets: $4.564 billion as of March 31, 2025, a decrease from $4.588 billion at year-end 2024.
• Total Net Loans: $3.421 billion, an increase of $29.75 million since December 31, 2024.
• Interest Income: $55.20 million, rising from $48.72 million a year ago.
• Interest Expense: Remained stable at $21.04 million.
• Average Earning Assets: Increased to $4.405 billion in Q1 2025 from $4.257 billion in Q1 2024.
• Credit Loss Allowance: Total allowance for credit losses stood at $52.95 million, which is 1.53% of loans held for investment.
• Dividends Paid: $1.15 per share, up from $1.10 per share in January 2024.

**Summary:** Although Hills Bancorporation demonstrated significant growth in net income and deposits, rising credit loss expenses and increased operational costs reflect challenges in asset quality and ongoing economic uncertainties. Management remains cautiously optimistic about navigating these financial dynamics as they maintain a strong cash and liquidity position.