HILLS BANCORPORATION
For the period ended Dec 31, 2025. Filed Mar 18, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 18, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-14.
0000732417-25-000015
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-18.
0000732417-26-000022
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 173 current paragraphs.
97 unchanged; 53 reworded; 19 added; 9 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 28 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Through the end of 2025, incoming economic data per the Beige Book for the Company's region was little changed over the reporting period with an expected slight decline in activity over the next year. Consumer spending, construction and real estate demand rose slightly; employment was flat; business spending fell slightly; and manufacturing activity declined modestly. Prices rose moderately, wages were up modestly, and financial conditions loosened modestly. Net farm income in 2025 was similar to 2024.
Current report
•Diluted earnings per share were $6.81, $5.26, and $4.16 for the years ended December 31, 2025, 2024 and 2023, respectively.
Current report
•For the years ended December 31, 2025 and 2024, the Company achieved a net interest margin of 3.45% and 2.78%, respectively.
Current report
•Interest expense decreased $4.02 million primarily due to decrease in interest rates.
Current report
•Investment securities available for sale were $955.58 million, an increase of $11.45 million since December 31, 2024.
Current report
•Short-term borrowings increased $40.25 million as of December 31, 2025, primarily due to the increase in FHLB daily reset advances of $149.25 million offset by $109.00 million due to borrowings with the Bank Term Funding Program being paid off. FHLB borrowings decreased $62.72 million.
Current report
The following table presents select lines from the consolidated balance sheets in Item 5, with the addition of the periods ended December 31, 2023, 2022, and 2021.
Current report
(1)Investment securities includes stock of FHLB.
Current report
The following table shows the remaining maturity of loans as of December 31, 2025. Maturities are based upon contractual dates.
Current report
(3)Certain adjustable‑rate mortgage loans (“ARMs”) are included in the variable‑rate category in later maturity periods because these loans contractually reprice from fixed to variable interest rates following their initial fixed‑rate periods (generally 3, 5, 7, or 10 years). Prior to repricing, these loans bear fixed interest rates. The table reflects interest rate characteristics based on contractual terms over the remaining maturities rather than interest rates in effect as of the balance‑sheet date.
Current report
Time certificates issued in amounts of $250,000 or more with maturity in:
Current report
Annual fluctuations in the Company's net income are driven primarily by four factors. The first factor is credit loss expense. The majority of the Company's interest earning assets are in loans outstanding, which were $3.565 billion at December 31, 2025. Credit loss expense was $12.33 million in 2025 compared to $2.21 million in 2024. Because the majority of the Company’s interest‑earning assets are comprised of loans, the level of credit loss expense can vary from year to year based on changes in the loan portfolio and the credit environment. In 2025, credit loss expense increased compared to the prior year largely due to updated economic expectations, growth in outstanding loan balances, and movements in model‑driven assumptions. These included shifts in economic outlook, changes in borrower payment behaviors, and adjustments to qualitative considerations reflecting portfolio trends and overall credit conditions. In addition, net charge‑off activity contributed to higher estimated loss rates for the year. The Company expects that future credit loss expense will continue to be influenced by loan growth, changes in economic conditions within its markets, and trends in asset quality.
Current report
The Company completed a balance sheet repositioning related to its investment securities portfolio at the end of 2025. This consisted of multiple sales of lower-yielding AFS debt securities in 2025, resulting in a pre-tax realized loss on the sales of $9.63 million in total. The sale of these securities was done for the sole purpose of an investment portfolio repositioning. The securities sales executed as part of the Company’s balance sheet repositioning strategy in 2025 resulted in realized losses recognized in earnings, while also contributing to the improvement in accumulated other comprehensive loss and positioning the investment portfolio for enhanced yield and reduced interest rate sensitivity in future periods. Management does not currently anticipate additional material balance-sheet repositioning losses of a similar magnitude.
Current report
Salaries and employee benefits increased $1.63 million or 3.65% in 2025 primarily due to annual salary adjustments.
Current report
Occupancy expenses increased $422,000 or 9.89% in 2025. The primary reasons for the increase are increased bank building ground maintenance and bank building repairs and maintenance.
Current report
Furniture, equipment and software increased$699,000 or 10.34% in 2025. This is primarily due to the yearly rate increase in software maintenance contracts.
Current report
The amounts for 2025 include a loss on disposal of property and equipment of $1.07 million as a result of prior period property and equipment disposals of $36.47 million which were corrected in the current period and are discussed further in Note 1.
Current report
Outside services increased $2.49 million or 17.77% in 2025. This is primarily driven by $1.11 million increase of professional fees related to internal control testing and improvements. Additional increases were a $487,000 increase in debit card and data processing expenses as well as a $434,000 increase in other real estate owned losses over the prior year end.
Current report
Income tax expense was $15.19 million, $12.60 million, and $10.30 million for the years ended December 31, 2025, 2024 and 2023, respectively. Income taxes as a percentage of income before income taxes were 20.07% in 2025, 20.93% in 2024 and 21.24% in 2023. See Note 11 Income Taxes for additional information.
Removed paragraphs (9)
Previous report
Through the end of 2024, incoming economic data per the Beige Book for the Company's region continue to show slight growth in the labor market and consumer spending while construction and real estate activity was flat. Also, prices were up modestly and wages rose moderately. Farm incomes in 2024 were below those of 2023. GDP growth for the fourth quarter of 2.3% was slower than expected with underlying demand from consumers increasing slightly and businesses spending decreasing slighlty, with the national unemployment rate continuing to remain low. Inflation, however, has been slower to come down than expected after the rapid decline observed in 2023, and the cumulative effect of elevated prices compared with the pre-pandemic era may be weighing on consumer sentiment. While many economists continue to expect U.S. economic conditions consistent with a soft-landing as the economy decelerated over the remainder of 2024, persistent inflation may yet force additional Fed rate hikes, further raising the odds of a mild recession.
Previous report
•Short-term borrowings increased $327.64 million as of December 31, 2024, consisting of $109.00 million of borrowings from the Bank Term Funding Program and $437.64 million of federal funds purchased, compared to the Bank Term Funding Program borrowings of $219 million as of December 31, 2023. FHLB borrowings decreased $169.60 million as of December 31, 2024.
Previous report
On January 1, 2021, the Company adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the allowance for credit losses use the current expected credit loss (CECL) methodology. The following is a discussion of the methodologies used by the Company with the adoption of ASC 326.
Previous report
The following table shows the principal payments due on loans as of December 31, 2024:
Previous report
Annual fluctuations in the Company's net income are driven primarily by four factors. The first factor is credit loss expense. The majority of the Company's interest earning assets are in loans outstanding, which amounted to more than $3.438 billion at December 31, 2024. Credit loss expense was $2.21 million in 2024 compared to $15.62 million in 2023. The decrease in expense when compared to 2023 is primarily attributable to not having significant specific relationships with decreasing credit quality resulting in chargeoffs in 2024 when compared to 2023. Another factor leading to lower credit loss expense was decreased outstanding commitments which resulted in a lower allowance for credit losses on off-balance sheet credit exposures. The Company believes that credit loss expense is expected to be dependent on the Company's loan growth, local economic conditions, and asset quality.
Previous report
Other noninterest income increased $0.97 million in 2024 primarily due to the recognition of approximately $1.1 million of incentive and marketing bonuses from the VISA payment network growth agreement.
Previous report
The Company completed a balance sheet repositioning related to its investment securities portfolio in December 2024. This consisted of the sale of lower-yielding AFS debt securities with an amortized cost of $135.05 million, resulting in a pre-tax realized loss on the sale of $5.22 million, which was recorded in December of 2024. All of the proceeds from the sale of these securities were used to purchase AFS debt securities at higher yields to improve income going forward, while maintaining the liquidity provided by the investment portfolio.
Previous report
Other noninterest expenses increased $1.78 million or 92.12% in 2024. The primary reasons for the increase are increased deferred compensation expense of $0.62 million from the increased stock price valuation, increased operating losses from fraudulent ATM and debit card activities of $0.41 million, and the loss on disposal of property of $0.62 million.
Previous report
Income tax expense was $12.60 million, $10.30 million, and $13.11 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company's income tax expense in 2022 included a one-time increase in state income tax expense related to the 2022 enactment of changes in the Iowa bank franchise tax rates. This legislation reduces the Iowa bank franchise tax rate applied to apportioned income for 2023 and future years and required the Company to reduce net deferred tax assets and increase income tax expense. Income taxes as a percentage of income before income taxes were 20.93% in 2024, 21.24% in 2023 and 21.55% in 2022. The amount of tax credits were $0.48 million for 2024, 2023, and 2022.
Reworded paragraphs (53)
Previous wording
•The strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations which may be less favorable than expected and may result in, among other things, a deterioration in the credit quality and value of the Company’s assets. This includes current concerns related to higher inflation, rising energy prices, the Russia-Ukraine war, Israeli-Palestinian conflict, and supply chain imbalances.
Current wording
•The strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations which may be less favorable than expected and may result in, among other things, a deterioration in the credit quality and value of the Company’s assets. This includes current concerns related to higher inflation, rising energy prices, geopolitical conflicts, and supply chain imbalances, including tariffs.
Previous wording
•The financial strength of the counterparties with which the Company or the Company’s customers do business and as to which the Company has investment or financial exposure.
Current wording
•The financial strength of the counterparties with which the Company or the Company’s customers do business and to which the Company has investment or financial exposure.
Previous wording
•The credit quality and credit agency ratings of the securities in the Company’s investment securities portfolio, a deterioration or downgrade of which could lead to recognition of an allowance for credit losses on the affected securities and the recognition of a credit loss.
Current wording
•The credit quality and credit agency ratings of the securities in the Company’s investment securities portfolio, a deterioration or downgrade of which could lead to change in the market value, the recognition of an allowance for credit losses on the affected securities and the recognition of a credit loss.
Previous wording
•The effects of, and changes in, laws, regulations and policies affecting banking, securities, insurance and monetary and financial matters as well as any laws otherwise affecting the Company, including, but not limited to, changes in U.S. tax laws and regulations.
Current wording
•The effects of, and changes in, laws, regulations and policies affecting banking, securities and monetary and financial matters as well as any laws otherwise affecting the Company, including, but not limited to, changes in U.S. tax laws and regulations.
Previous wording
Our credit administration continues to closely monitor and analyze the higher risk segments within the loan portfolio, tracking loan payment deferrals, customer liquidity and providing timely reports to senior management and the board of directors. Based on the Company’s capital levels, prudent underwriting policies, loan concentration diversification and our geographic footprint, senior management is cautiously optimistic that the Company is positioned to continue managing the impact of the varied set of risks and uncertainties currently impacting the economy and remain adequately capitalized. However, the Company may be required to make additional credit loss provisions as warranted by the extremely fluid economic conditions and continued migration in the loan portfolio towards the special mention risk rating category.
Current wording
Our credit administration continues to closely monitor and analyze the higher risk segments within the loan portfolio, tracking loan payment deferrals, customer liquidity and providing timely reports to senior management and the board of directors. Based on the Company’s capital levels, prudent underwriting policies, loan concentration diversification and our geographic footprint, senior management is cautiously optimistic that the Company is positioned to continue managing the impact of the varied set of risks and uncertainties currently impacting the economy and remain adequately capitalized. However, the Company may be required to make additional credit loss provisions as warranted by economic conditions and continued migration in the loan portfolio towards the special mention risk rating category.
Previous wording
The Company’s net income for 2024 was $47.60 million compared to $38.18 million in 2023 and $47.75 million in 2022. Diluted earnings per share were $5.26, $4.16, and $5.15 for the years ended December 31, 2024, 2023 and 2022, respectively.
Current wording
•The Company’s net income for 2025 was $60.50 million compared to $47.60 million in 2024 and $38.18 million in 2023.
Previous wording
The Bank’s net interest income is the largest component of the Bank’s revenue, and is a function of the average earning assets and the net interest margin percentage. Net interest margin is the ratio of net interest income to average earning assets. For the years ended December 31, 2024 and 2023, the Bank achieved a net interest margin of 2.78% and 2.86%, respectively. For the year ended December 31, 2024, net interest income on a tax equivalent basis increased by $3.08 million. In 2024, interest income increased $10.72 million due to growth of $225.10 million in the Bank's average earning assets and increased $22.94 million due to higher interest rates. This was offset by increased interest expense of $15.16 million due to higher interest rates and $15.42 million due to increased volume of certificates of deposit and borrowings.
Current wording
•For the year ended December 31, 2025, net interest income on a tax equivalent basis increased by $34.53 million.
Previous wording
•Total assets were $4.588 billion, an increase of $246.58 million since December 31, 2023, primarily due to increased investment securities as described further below.
Current wording
•Total assets were $4.648 billion, an increase of $59.63 million since December 31, 2024, primarily due to items below.
Previous wording
•Cash and cash equivalents were $123.40 million, an increase of $63.92 million since December 31, 2023.
Current wording
•Cash and cash equivalents were $42.11 million, a decrease of $81.29 million since December 31, 2024.
Previous wording
•Loans, net of allowance for credit losses and unamortized fees and costs, totaling $3.388 billion, a decrease of $1.85 million since December 31, 2023. The decrease is primarily attributable to declines of approximately $35.09 million in construction loans, $47.21 million in 1 to 4 family first mortgages, $2.97 million in junior mortgages, $8.27 million in commercial and financial loans and $5.40 million in farmland mortgages. These decreases were offset by increases of $21.75 million in multi-family mortgages and $81.41 million in commercial mortgages. Increases in multi-family and commercial real estate were primarily due to the completion of large construction projects that were put on permanent financing during 2024. Loans held for sale increased $1.95 million since December 31, 2023.
Current wording
•Loans, net of allowance for credit losses and unamortized fees and costs, totaling $3.507 billion, an increase of $119.30 million since December 31, 2024. The increase is primarily attributable to increases of $87.79 million in 1 to 4 family first mortgages, $1.77 million in junior mortgages, $1.52 million in multi-family mortgages, $1.02 million in farmland mortgages and $67.10 million in commercial mortgages offset by decreases of $20.94 million in construction loans, and $3.30 million in commercial and financial loans. Loans held for sale increased $4.08 million since December 31, 2024.
Previous wording
•Deferred income tax assets were $21.13 million, a decrease of $0.14 million since December 31, 2023.
Current wording
•Deferred income tax assets were $18.47 million, a decrease of $2.67 million since December 31, 2024.
Previous wording
•Deposits increased $63.35 million in 2024 to $3.346 billion primarily due to increases in time deposits of approximately $49.58 million and increases in savings accounts of $27.35 million offset by a decrease of $19.36 million in noninterest-bearing deposits.
Current wording
•Deposits increased $21.70 million in 2025 to $3.368 billion primarily due to an increase in noninterest-bearing deposits of $15.19 million and savings accounts of $114.26 million offset by a decrease of $10.36 million in NOW and other demand and $97.38 million in time deposits.
Previous wording
•Stockholders’ equity increased $22.40 million to $492.69 million in 2024, with dividends having been paid in 2024 of $10.05 million.
Current wording
•Stockholders’ equity increased $55.55 million to $548.23 million in 2025, with dividends having been paid in 2025 of $10.32 million.
Previous wording
The return on average equity was 10.00% in 2024 compared to 8.63% in 2023. The Company remains well-capitalized as of December 31, 2024 with a CBLR of 12.69%. The minimum regulatory guideline is 9%. The Company paid a dividend per share of $1.10 in 2024, $1.05 per share in 2023 and $1.00 in 2022.
Current wording
The return on average equity was 11.84% in 2025 compared to 10.00% in 2024. The Company remains well-capitalized as of December 31, 2025 with a CBLR of 12.94%. The minimum regulatory guideline is 9.00%. The Company paid a dividend per share of $1.15 in 2025, $1.10 per share in 2024 and $1.05 in 2023.
Previous wording
The component of the allowance for credit losses for loans that share common risk characteristics also considers factors for each loan class to adjust for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio related to:
Current wording
The component of the allowance for credit losses for loans that share common risk characteristics also considers factors for each loan class to adjust for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio. Such factors are used to adjust the historical probabilities of default and severity of loss so that they reflect management expectation of future conditions based on a reasonable and supportable forecast.
Previous wording
Such factors are used to adjust the historical probabilities of default and severity of loss so that they reflect management expectation of future conditions based on a reasonable and supportable forecast. Management utilizes a qualitative factor framework to provide a qualitative estimate of the expected credit losses inherent in the loan portfolio in relation to potential limitations of the quantitative model. The framework provides for a level of risk approach to measure risk in each loan segment that may not be captured in the quantitative methodology, including improved risk environment, no additional risk, minimal additional risk, moderate risk and major or significant additional risk. The framework also includes a weighting component for management to consider which qualitative factors would have the highest impact on potential loan losses within each loan segment. Management uses the qualitative factor framework within the allowance for credit losses calculation to assess the risk level environment for each qualitative factor and weightings for each loan segment which is supported by various information including publicly available information, internal information specifically developed by management, or other relevant and reliable information.
Current wording
The framework provides for a level of risk approach to measure risk in each loan segment that may not be captured in the quantitative methodology, including improved risk environment, no additional risk, minimal additional risk, moderate risk and major or significant additional risk. The framework also includes a weighting component for management to consider which qualitative factors would have the highest impact on potential loan losses within each loan segment. Management uses the qualitative factor framework within the allowance for credit losses calculation to assess the risk level environment for each qualitative factor and weightings for each loan segment which is supported by various information including publicly available information, internal information specifically developed by management, or other relevant and reliable information.
Previous wording
Total assets at December 31, 2024 increased $246.58 million, or 5.68%, from the prior year-end. The largest growth in assets in 2024 occurred in investment securities which increased $176.99 million for the year ended December 31, 2024 compared to the prior year. Loans held for sale to the secondary market increased $1.95 million for the year ended December 31, 2024. Loans held for investment represent the largest component of the Bank’s earning assets. Loans held for investment were $3.438 billion and $3.439 billion at December 31, 2024 and 2023, respectively.
Current wording
Total assets at December 31, 2025 increased $59.63 million, or 1.30%, from the prior year-end. This was primarily due to net loans which increased $119.30 million for the year ended December 31, 2025 compared to the prior year. Loans held for sale to the secondary market increased $4.08 million for the year ended December 31, 2025. Loans held for investment represent the largest component of the Bank’s earning assets. Loans held for investment were $3.565 billion and $3.438 billion at December 31, 2025 and 2024, respectively.
Previous wording
Loans held for investment was down slightly for 2024 compared to 2023, with significant changes as follows: declines of approximately $35.09 million in construction loans, $47.21 million in 1 to 4 family first mortgages, $2.97 million in junior mortgages, $8.27 million in commercial and financial loans and $5.40 million in farmland mortgages. These decreases were offset by increases of $21.75 million in multi-family mortgages and $81.41 million in commercial mortgages. Increases in multi-family and commercial real estate were primarily due to the completion of large construction projects that were put on permanent financing during 2024. Given the current economic environment and the potential for lower interest rates, the decrease in net loans in 2024 may not continue into 2025, and as a result, may not be indicative of future performance.
Current wording
Loans held for investment increased in 2025 compared to 2024. This was primarily due to increases of $87.79 million in 1 to 4 family first mortgages, $1.77 million in junior mortgages, $1.52 million in multi-family mortgages, $1.02 million in farmland mortgages and $67.10 million in commercial mortgages offset by declines of $20.94 million in construction loans, $3.30 million in commercial and financial loans. Increases in commercial mortgages and commercial real estate were primarily due to the completion of large construction projects that were put on permanent financing during 2025. Given the current economic environment and the potential for lower interest rates, the increase in net loans in 2025 may continue into 2026.
Previous wording
On a net basis, the Company originated $3.66 million in loans to customers for the year ended December 31, 2024 compared to loans originated of $337.69 million for the year ended December 31, 2023, a significant slowdown in the local economy. The Company has not historically engaged in significant participation activity and does not purchase participations from outside its established trade area. The Company’s policy allows for the purchase or sale of participations related to existing customers or to participate in community development activity. The Company held participations purchased of $16.52, $17.04 and $16.20 million as of December 31, 2024, 2023 and 2022, respectively. The participations purchased were less than one percent of loans held for investment for each of the three years.
Current wording
On a net basis, the Company originated $130.48 million in loans to customers for the year ended December 31, 2025 compared to loans originated of $3.66 million for the year ended December 31, 2024. The Company has not historically engaged in significant participation activity and does not purchase participations from outside its established trade area. The Company’s policy allows for the purchase or sale of participations related to existing customers or to participate in community development activity. The Company held participations purchased of $15.58 million, $16.52 million and $17.04 million as of December 31, 2025, 2024 and 2023, respectively. The participations purchased were less than one percent of loans held for investment for each of the three years.
Previous wording
The Company did experience minimal change in its loans held for investment in 2024 compared to 2023 though the loan composition in 2024 changed compared to 2023 as follows. Residential real estate loans, including first and junior liens, were $1,316.63 million and $1,365.82 million as of December 31, 2024 and 2023, respectively. The dollar total of residential real estate loans decreased 3.60% in 2024 and increased 8.75% in 2023. Residential real estate loans were 38.27% of the loan portfolio at December 31, 2024 and 39.72% at December 31, 2023. Agricultural loans, including production and mortgages, were $394.45 million and $396.95 million as of December 31, 2024 and 2023, respectively, a decrease of 0.63% in 2024 compared to 2023. Agricultural loans represented 11.47% and 11.54% of the Company's loan portfolio as of December 31, 2024 and 2023, respectively. Construction loans were $359.04 million and $394.13 million as of December 31, 2024 and 2023, respectively, an decrease of 8.90% in 2024 compared to 2023. Construction loans represented 10.44% and 11.46% of the Company's loan portfolio as of December 31, 2024 and 2023, respectively. Commercial and financial loans were $298.92 million and $307.19 million as of December 31, 2024 and 2023, respectively, a decrease of 2.69% in 2024 compared to 2023. Commercial and financial loans represented 8.69% and 8.93% of the Company's loan portfolio as of December 31, 2024 and 2023, respectively. Multi-family real estate loans were $492.76 million and $471.01 million as of December 31, 2024 and 2023, respectively, an increase of 4.62% in 2024 compared to 2023. Multi-family real estate loans represented 14.33% and 13.70% of the Company's loan portfolio as of December 31, 2024 and 2023, respectively. Commercial real estate loans totaled $498.08 million at December 31, 2024, a 19.54% increase over the December 31, 2023 total of $416.67 million. Commercial real estate loans represented 14.49% and 12.12% of the Company’s loan portfolio as of December 31, 2024 and 2023, respectively. The Company monitors its commercial real estate level so that it does not have a concentration in that category that exceeds 300% of its capital. Commercial real estate loan concentration was 180.49% of capital as of December 31, 2024.
Current wording
The loan composition in 2025 remained relatively the same compared to 2024 as follows. Residential real estate loans, including first and junior liens, were $1.405 billion and $1.316 billion as of December 31, 2025 and 2024, respectively. Residential real estate loans increased 6.81% in 2025 and decreased 3.60% in 2024. Residential real estate loans were 39.42% of the loan portfolio at December 31, 2025 and 38.27% at December 31, 2024. Agricultural loans, including production and mortgages, were $395.71 million and $394.45 million as of December 31, 2025 and 2024, respectively, an increase of 0.32% in 2025 compared to 2024. Agricultural loans represented 11.10% and 11.47% of the Company's loan portfolio as of December 31, 2025 and 2024, respectively. Construction loans were $338.10 million and $359.04 million as of December 31, 2025 and 2024, respectively, a decrease of 5.83% in 2025 compared to 2024. Construction loans represented 9.48% and 10.44% of the Company's loan portfolio as of December 31, 2025 and 2024, respectively. Commercial and financial loans were $295.62 million and $298.92 million as of December 31, 2025 and 2024, respectively, a decrease of 1.10% in 2025 compared to 2024. Commercial and financial loans represented 8.29% and 8.69% of the Company's loan portfolio as of December 31, 2025 and 2024, respectively. Multi-family real estate loans were $494.28 million and $492.76 million as of December 31, 2025 and 2024, respectively, an increase of 0.31% in 2025 compared to 2024. Multi-family real estate loans represented 13.87% and 14.33% of the Company's loan portfolio as of December 31, 2025 and 2024, respectively. Commercial real estate loans totaled $565.18 million at December 31, 2025, a 13.47% increase over the December 31, 2024 total of $498.08 million. Commercial real estate loans represented 15.85% and 14.49% of the Company’s loan portfolio as of December 31, 2025 and 2024, respectively. The
Previous wording
The overall economy in the Company’s trade area, Johnson, Linn and Washington Counties, remains in stable condition with levels of unemployment below national and state levels. The following table shows unemployment and estimated median income information as of December 31, 2024, 2023 and 2022.
Current wording
The overall economy in the Company’s trade area, Johnson, Linn, Washington, and Iowa Counties, remains in stable condition with levels of unemployment below national and state levels. The following table shows unemployment and estimated median income information as of December 31, 2025, 2024 and 2023.
Previous wording
Total deposits increased by $63.35 million in 2024. Deposits decreased by $74.59 million in 2023. As of June 30, 2024 (latest data available from the FDIC), Johnson County total deposits were $13.546 billion and the Company’s deposits were $2.196 billion, which represent a 16.21% market share. The Company had eight office locations in Johnson County as of June 30, 2024. The total banking locations in Johnson County were 47 as of June 30, 2024. At June 30, 2023, the Company’s deposits were $2.213 billion or a 15.96% market share. As of June 30, 2024, Linn County total deposits were $8.605 billion and there were 99 total banking locations in the county. The seven Linn County offices of the Company had deposits of $704 million or a 8.18% share of the market. The Company’s Linn County deposits at June 30, 2023 were $747 million and represented a 8.8% market share. As of June 30, 2024, the Company’s three Washington County offices had deposits of $335 million which was 34.25% of the County’s total deposits of $978 million. Washington County had a total of 13 banking locations as of June 30, 2024. In 2023, the Company’s Washington County deposits were $324 million or a 33.9% market share.
Current wording
Total deposits increased by $21.70 million in 2025 compared to an increase of $63.35 million in 2024. As of June 30, 2025 (latest data available from the FDIC), Johnson County total deposits for all financial institutions were $13.408 billion and the Company’s deposits were $2.271 billion, which represent a 16.94% market share. At June 30, 2024, the Company’s deposits were $2.196 billion or a 16.21% market share. The Company had nine office locations in Johnson County as of June 30, 2025. The total number of banking locations in Johnson County were 47 as of June 30, 2025. Linn County total deposits for all financial institutions were $8.790 billion as of June 30, 2025 and there were 97 total banking locations in the county. The seven Linn County offices of the Company had deposits of $714.92 million or a 8.13% share of the market. The Company’s Linn County deposits at June 30, 2024 were $703.72 million and represented a 8.18% market share. As of June 30, 2025, the Company’s three Washington County offices had deposits of $336.77 million which was 34.04% of the county’s total deposits of $989.42 million. Washington County had a total of 13 banking locations as of June 30, 2025. In 2024, the Company’s Washington County deposits were $335.02 million or a 34.25% market share. The company's one location in Iowa County had deposits of $14.03 million which was 3.22% of the county's total deposits of $435.74 million. Iowa County had a total of 10 banking locations as of June 30, 2025. This branch was opened in November 2024.
Previous wording
Investment securities increased $176.99 million in 2024. In 2023, investment securities increased by $12.60 million. The investment portfolio consists of $944.14 million of securities that are stated at fair value, with any unrealized gain or loss, net of income taxes, reported as a separate component of stockholders’ equity. The securities portfolio is used for liquidity and pledging purposes and to provide a rate of return that is acceptable to management. The Company completed a balance sheet repositioning related to its investment securities portfolio in December 2024. This consisted of the sale of lower-yielding AFS debt securities with an amortized cost of $135.05 million, resulting in a pre-tax realized loss on the sale of $5.22 million, which was recorded in December of 2024. All of the proceeds from the sale of these securities were used to purchase AFS debt securities at higher yields to improve income going forward, while maintaining the liquidity provided by the investment portfolio.
Current wording
Investment securities increased $15.49 million in 2025 compared to an increase of $176.99 million in 2024. The investment portfolio consists of $955.58 million of securities that are stated at fair value, with any unrealized gain or loss, net of income taxes, reported as a separate component of stockholders’ equity. The securities portfolio is used for liquidity and pledging purposes and to provide a rate of return that is acceptable to management. The Company completed a balance sheet repositioning related to its investment securities portfolio at the end of 2025. This consisted of multiple sales of lower-yielding AFS debt securities in 2025, resulting in a pre-tax realized loss on the sales of $9.63 million in total. The sale of these securities was done for the sole purpose of an investment portfolio repositioning.
Previous wording
During 2024, the major funding source for loans and other assets was from short-term borrowings, primarily federal funds purchased, in addition to FHLB borrowings. In 2023, the major funding source of the growth in loans and other assets was from short-term borrowings in addition to FHLB borrowings. Brokered deposits totaled $34.75 million and $24.22 million as of December 31, 2024 and 2023, respectively. Total advances from the FHLB were $127.05 million at December 31, 2024 and $296,648 million in 2023. Total federal funds purchased were $437.64 million as of December 31, 2024 and none as of December 31, 2023. Total funds purchased from the Bank Term Funding program was $109.00 million as of December 31, 2024 and $219.00 million as December 31, 2023. The federal funds purchased and FHLB funding sources are considered when loan growth exceeds core deposit increases and the interest rates on funds borrowed from the FHLB or other sources are favorable compared to other funding alternatives.
Current wording
During 2025 and 2024, the major funding source for loans and other assets, aside from deposits within the Company's trade area, were from short-term borrowings, primarily FHLB daily reset advances, in addition to FHLB borrowings. Brokered deposits totaled $35.17 million and $34.75 million as of December 31, 2025 and 2024, respectively. Total advances from the FHLB were $64.33 million at December 31, 2025 and $127.05 million in 2024. Total FHLB daily reset advances were $586.88 million as of December 31, 2025 and $437.64 million as of December 31, 2024. There was $109.00 million in funds borrowed from the Bank Term Funding Program as December 31, 2024 and was paid off during 2025. Federal funds purchased and FHLB funding sources are considered when loan growth exceeds core deposit increases and the interest rates on funds borrowed from the FHLB or other sources are favorable compared to other funding alternatives.
Previous wording
Stockholders’ equity was $492.69 million at December 31, 2024 compared to $470.29 million at December 31, 2023. The Company’s capital resources are discussed in detail in the Liquidity and Capital Resources section. Over the last five years, the Company has realized cumulative earnings of $220.27 million and paid shareholders dividends of $46.14 million, or 20.95% of earnings, while maintaining capital ratios in excess of regulatory requirements.
Current wording
Stockholders’ equity was $548.23 million at December 31, 2025 compared to $492.69 million at December 31, 2024. The Company’s capital resources are discussed in detail in the Liquidity and Capital Resources section. Over the last five years, the Company has realized cumulative earnings of $242.12 million and paid shareholders dividends of $48.13 million, or 19.88% of earnings, while maintaining capital ratios in excess of regulatory requirements.
Previous wording
Net income for 2024 increased by $9.43 million or 24.70% and diluted earnings per share increased by 26.44%. In 2024, net interest income, before credit loss expense, increased by $1.94 million due to the following reasons: 1) increase in interest income of $32.52 million primarily due to higher loan and investment balances and higher interest rates; and 2) increase in interest expense of $30.58 million primarily due to increased interest rates on deposits and higher borrowings balances throughout 2024 compared to 2023. Noninterest income, excluding loss on sale of investment securities, increased by $3.43 million primarily due to increased trust fees and net gain on sale of loans. The credit loss expense decreased by $13.41 million and total noninterest expenses increased by $1.84 million primarily due to an increase in other noninterest expenses.
Current wording
Net income for 2025 increased by $12.90 million or 27.09% and diluted earnings per share increased by 29.47%. In 2025, net interest income, before credit loss expense, increased by $34.36 million due to the increase in interest income of $30.33 million primarily due to higher loan and investment balances and higher interest rates. Noninterest income, excluding loss on sale of investment securities, increased by $1.94 million primarily due to increased trust fees and other noninterest income. The credit loss expense increased by $10.12 million and total noninterest expenses increased by $6.28 million primarily due to an increase in outside services, loss on disposal of property and equipment, and salaries and employee benefits.
Previous wording
The second factor affecting the Company’s net income is the interaction between changes in net interest margin and changes in average volumes of the Company's earnings assets. Net interest income of $115.82 million for 2024 was derived from the Company’s $4.281 billion of average earning assets and its tax-equivalent net interest margin of 2.78%. Average earning assets in 2023 were $4.056 billion and the tax-equivalent net interest margin was 2.86%. Net interest income for the Company increased primarily as a result of interest income on higher loan and investment balances and rates offset by increased interest expense from increased interest rates, including on borrowings, certificates of deposit, and interest-bearing deposits as well as higher balances of certificates of deposit and borrowings. The Company expects net interest compression to impact earnings for the foreseeable future due to competition for loans and deposits. The Company believes growth in net interest income will be contingent on the growth of the Company’s earning assets, increasing yield on loans and the ongoing interest rate stance of the Federal Reserve Board.
Current wording
The second factor affecting the Company’s net income is the interaction between changes in net interest margin and changes in average volumes of the Company's earnings assets. Net interest income of $150.18 million for 2025 was derived from the Company’s $4.461 billion of average earning assets and its tax-equivalent net interest margin of 3.45%. Average earning assets in 2024 were $4.281 billion and the tax-equivalent net interest margin was 2.78%. Net interest income for the Company increased primarily as a result of interest income on higher loan and investment balances and rates. Interest expense decreased from decreased interest rates on borrowings, certificates of deposit, and interest-bearing deposits. The Company believes growth in net interest income will be contingent on the growth of the Company’s earning assets, increasing yield on loans and the ongoing interest rate stance of the Federal Reserve Board.
Previous wording
The third factor affecting the Company’s net income is noninterest income, primarily the increase in trust fees. Trust fees were $15.26 million and $13.58 million for the years ended December 31, 2024 and 2023, respectively, an increase of 12.40%. This is primarily driven by the increase in assets under management of $0.267 billion from $2.645 billion as of December 31, 2023 to $2.912 billion as of December 31, 2024, an increase of 10.09%. See the Noninterest Income section later in Item 7.
Current wording
The third factor affecting the Company’s net income is noninterest income, primarily the increase in trust fees. Trust fees were $17.14 million and $15.26 million for the years ended December 31, 2025 and 2024, respectively, an increase of 12.32%. This is primarily driven by the increase in assets under management of $400.74 million from $2.912 billion as of December 31, 2024 to $3.313 billion as of December 31, 2025, an increase of 13.77%. See the Noninterest Income section later in Item 7.
Previous wording
Net interest income is the excess of the interest and fees received on interest-earning assets over the interest paid on the interest-bearing liabilities. The factors that have the greatest impact on net interest income are the volume of average earning assets and interest-bearing liabilities and the net interest margin. The volume of average earning assets has continued to grow each year, primarily due to higher loan and investment balances in 2024. The volume of interest-bearing liabilities increased in 2024 primarily due to increased volume in certificates of deposit and borrowings. Increased interest rates led to increases in interest income as well as interest expense on interest-bearing deposits, certificates of deposit and borrowings. The net interest margin was 2.78% in 2024, 2.86% in 2023 and 3.00% in 2022. The measure is shown on a tax-equivalent basis using a rate of 21% for 2024, 2023 and 2022 to make the interest earned on taxable and nontaxable assets more comparable. Interest income and expense for 2024, 2023 and 2022 are indicated on the following table:
Current wording
Net interest income is the excess of the interest and fees received on interest-earning assets over the interest paid on the interest-bearing liabilities. The factors that have the greatest impact on net interest income are the volume of average earning assets and interest-bearing liabilities and the net interest margin. The volume of average earning assets has continued to grow each year, primarily due to higher loan and investment balances in 2025. The volume of interest-bearing liabilities increased in 2025 primarily due to an increase in deposits. Interest expense on interest-bearing deposits, certificates of deposit and borrowings decreased from 2024. The net interest margin was 3.45% in 2025, 2.78% in 2024 and 2.86% in 2023. Management believes the increase in net interest income and margin in 2025 reflects a combination of balance-sheet repositioning, changes in funding mix, and interest-rate dynamics that may not recur to the same extent in future periods, and future net interest income will depend primarily on loan and deposit growth and pricing, and the direction of market interest rates. The measure is shown on a tax-equivalent basis using a rate of 21% for 2025, 2024 and 2023 to make the interest earned on taxable and nontaxable assets more comparable. Interest income and expense for 2025, 2024 and 2023 are indicated on the following table:
Previous wording
(1) Presented on a tax equivalent basis using a rate of 21% for 2024, 2023 and 2022. Interest income includes certain loan origination and document preparation fees, which comprise approximately 1.4% of the amounts indicated.
Current wording
(1) Presented on a tax equivalent basis using a rate of 21% for 2025, 2024 and 2023. Interest income includes certain loan origination and document preparation fees, which comprise approximately 1.25% of the amounts indicated.
Previous wording
(2)Net interest spread is the difference between the yield on average interest-earning assets and the yield on average interest-paying liabilities stated on a tax equivalent basis using a federal rate of 21% for 2024, 2023 and 2022. The net interest spread decreased 23 basis points in 2024 compared to 2023 and the net interest spread decreased 47 basis points compared to 2022.
Current wording
(2)Net interest spread is the difference between the yield on average interest-earning assets and the yield on average interest-paying liabilities stated on a tax equivalent basis using a federal rate of 21% for 2025, 2024 and 2023. The net interest spread increased 71 basis points in 2025 compared to 2024 and the net interest spread decreased 23 basis points in 2024 compared to 2023.
Previous wording
(3)Net interest margin is net interest income, on a tax equivalent basis, divided by average interest-earning assets. The net interest margin decreased 8 basis points in 2024. The net interest margin decreased 14 basis points in 2023 compared to 2022.
Current wording
(3)Net interest margin is net interest income, on a tax equivalent basis, divided by average interest-earning assets. The net interest margin increased 67 basis points in 2025. The net interest margin decreased 8 basis points in 2024 compared to 2023.
Previous wording
The Federal Open Market Committee met eight times during 2024. The federal funds target rate decreased to 4.50% as of December 31, 2024 from 5.50% as of December 31, 2023. Interest rates on loans are generally affected by the target rate since interest rates for the U.S. Treasury market normally correlate to the Federal Reserve Board federal funds rate. In pricing of loans and deposits, the Bank considers the U.S. Treasury indexes as benchmarks in determining interest rates. As of December 31, 2024, the average rate indexes for the one, three and five year indexes were 4.16%, 4.27% and 4.38%, respectively. The one year index decreased 13.15% from December 31, 2023, the three year index increased 6.48% and the five year index increased 14.06%.
Current wording
The Federal Open Market Committee met eight times during 2025. The federal funds target rate decreased to 3.75% as of December 31, 2025 from 4.50% as of December 31, 2024. Interest rates on loans are generally affected by the target rate since interest rates for the U.S. Treasury market normally correlate to the Federal Reserve Board federal funds rate. In the pricing of loans and deposits, the Bank considers the U.S. Treasury indexes as benchmarks in determining interest rates. As of December 31, 2025, the average rate indexes for the one, three and five year indexes were 3.48%, 3.55% and 3.73%, respectively. The one year index decreased 16.35% compared to December 31, 2024, the one, three and five year indexes were 4.16%, 4.27% and 4.38%, respectively.
Previous wording
Credit loss expense was $2.21 million for the year ended December 31, 2024 compared to expense of $15.62 million in 2023, a decrease of expense of $13.41 million. The credit loss expense includes a reduction of expense of $2.21 million related to the ACL on off-balance sheet credit exposures for the year ended December 31, 2024 compared to $0.68 million expense for 2023. Credit loss expense is the amount necessary to adjust the allowance for credit losses to the level considered by management to appropriately account for the estimated current expected credit losses within the Bank's loan portfolio. Also, under CECL, a significant component in estimating expected credit losses are economic forecasts such as Iowa unemployment and National real gross domestic product (GDP). The Company believes that credit loss expense is expected to be dependent on the Company’s loan growth, local economic conditions and asset quality. The percentage of the allowance to outstanding loans was 1.48% and 1.44% at December 31, 2024 and 2023, respectively. The credit loss expense was $2.21 million in 2024, $15.62 million in 2023 and $6.34 million in 2022. Loan charge-offs net of recoveries were $2.89 million in 2024, loan charge-offs net of recoveries were $6.97 million in 2023 and loan recoveries net of charge-offs were $0.21 million in 2022. Management has determined that the allowance for credit losses was appropriate at December 31, 2024, and that the loan portfolio is diversified and secured, without undue concentration in any specific risk area. This process involves a high degree of management judgment; however, the allowance for credit losses is based on a comprehensive and well-documented applied analysis of the Company’s loan portfolio. This analysis takes into consideration all available information existing as of the financial statement date, including environmental factors such as economic, industry, geographical and political factors. The relative level of allowance for credit losses is reviewed and compared to industry peers. This review encompasses levels of total nonperforming loans and overall levels of net charge-offs. However, there is no assurance losses will not exceed the allowance, and any growth in the loan portfolio or uncertainty in the general economy will require that management continue to evaluate the adequacy of the ACL and make additional provisions in future periods as deemed necessary.
Current wording
Credit loss expense was $12.33 million for the year ended December 31, 2025 compared to expense of $2.21 million in 2024, an increase of expense of $10.12 million. The credit loss expense includes an increase of expense of $1.60 million related to the ACL on off-balance sheet credit exposures for the year ended December 31, 2025 compared to $2.21 million benefit for 2024. Credit loss expense is the amount necessary to adjust the allowance for credit losses to the level considered by management to appropriately account for the estimated current expected credit losses within the Bank's loan portfolio. Also, under CECL, a significant component in estimating expected credit losses are economic forecasts such as Iowa unemployment and National real gross domestic product (GDP). The Company believes that credit loss expense is expected to be dependent on the Company’s loan growth, local economic conditions and asset quality. The percentage of the allowance to outstanding loans was 1.63% and 1.48% at December 31, 2025 and 2024, respectively. The credit loss expense was $12.33 million in 2025, and $2.21 million in 2024 and $15.62 million in 2023. Loan charge-offs net of recoveries were $3.46 million in 2025, loan charge-offs net of recoveries were $2.89 million in 2024 and loan recoveries net of charge-offs were $6.97 million in 2023. Management has determined that the allowance for credit losses was appropriate at December 31, 2025, and that the loan portfolio is diversified and secured, without undue concentration in any specific risk area. This process involves a high degree of management judgment. However, the allowance for credit losses is based on a comprehensive and well-documented applied analysis of the Company’s loan portfolio. This analysis takes into consideration all available information existing as of the financial statement date, including environmental factors such as economic, industry, geographical and political factors. The relative level of allowance for credit losses is reviewed and compared to industry peers. This review encompasses levels of total nonperforming loans and overall levels of net charge-offs. However, there is no assurance losses will not exceed the allowance, and any growth in the loan portfolio or uncertainty in the general economy will require that management continue to evaluate the adequacy of the ACL and make additional provisions in future periods as deemed necessary.
Previous wording
In certain circumstances, the Bank may modify the terms of a loan to maximize the collection of amounts due. In most cases, the modification is either a reduction in interest rate, conversion to interest only payments, deferral of payments or extension of the maturity date. Generally, the borrower is experiencing financial difficulties, so concessionary modification is granted to the borrower that otherwise would not be considered.
Current wording
In certain circumstances, the Bank may modify various terms of a loan to maximize the collection of amounts due. Refer to Note 3 for a summary of modifications made to loans in 2025 and 2024. Generally, the borrower is experiencing financial difficulties, so concessionary modification is granted to the borrower that otherwise would not be considered.
Previous wording
The extent to which collateral secures collateral-dependent loans is provided in the previous individually analyzed loans table and changes in the extent to which collateral secures its collateral-dependent loans are described below. Collateral-dependent loans decreased $6.85 million from December 31, 2023 to December 31, 2024. Collateral-dependent loans include any loan that has been placed on nonaccrual status, accruing loans past due 90 days or more and loans made to borrowers with financial difficulties. Collateral-dependent loans also include loans that, based on management’s evaluation of current information and events, the Company expects to be unable to collect in full according to the contractual terms of the original loan agreement. Collateral-dependent loans were 0.97% of loans held for investment as of December 31, 2024 and 1.17% as of December 31, 2023. The decrease in collateral-dependent loans is primarily due to a decrease in nonaccrual loans of $6.96 million. There were no significant changes noted in the extent to which collateral secures collateral-dependent loans. A description of the Bank's credit quality indicators are discussed in Note 3 to the Company's Consolidated Financial Statements.
Current wording
Collateral-dependent loans decreased $2.06 million from December 31, 2024 to December 31, 2025. Collateral-dependent loans include any loan that has been placed on nonaccrual status, accruing loans past due 90 days or more and loans made to borrowers with financial difficulties. Collateral-dependent loans also include loans that, based on management’s evaluation of current information and events, the Company expects to be unable to collect in full according to the contractual terms of the original loan agreement. Collateral-dependent loans were 0.88% of loans held for investment as of December 31, 2025 and 0.97% as of December 31, 2024. The decrease in collateral-dependent loans is primarily due to a decrease in nonaccrual loans of $6.31 million. There were no significant changes noted in the extent to which collateral secures collateral-dependent loans. A description of the Bank's credit quality indicators are discussed in Note 3 to the Company's Consolidated Financial Statements.
Previous wording
(2)Total TDR loans were $7.66, $10.20, and $13.22 million as of December 31, 2022, 2021, and 2020, respectively. Included in the total nonaccrual loans were $1.75, $2.28, and $2.97 million of TDR loans as of December 31, 2022, 2021, and 2020, respectively.
Current wording
(2)Total TDR loans were $7.66 million and $10.20 million as of December 31, 2022 and 2021, respectively. Included in the total nonaccrual loans were $1.75 million and $2.28 million of TDR loans as of December 31, 2022 and 2021, respectively.
Previous wording
The ratio of allowance for credit losses to non-performing loans increased to 152.08% as of December 31, 2024 compared to 122.47% as of December 31, 2023. The increase in 2024 is primarily due to the slight increase in the allowance for credit losses and the decrease in nonaccrual loans compared to 2023. The ratio of non-performing loans to total gross loans was 0.97% and 1.17% at December 31, 2024 and 2023, respectively. The decrease in the 2024 ratio is primarily due to the decrease in nonaccrual loans.
Current wording
The ratio of allowance for credit losses to non-performing loans increased to 197.54% as of December 31, 2025 compared to 152.08% as of December 31, 2024. The increase in 2025 is primarily due to the increase in the allowance for credit losses and the decrease in nonaccrual loans compared to 2024. The ratio of non-performing loans to total gross loans was 0.83% and 0.97% at December 31, 2025 and 2024, respectively. The decrease in the 2025 ratio is primarily due to the decrease in nonaccrual loans.
Previous wording
Other factors that are considered in determining the credit quality of the Company’s loan portfolio are the vacancy rates for both residential and commercial space, current equity the borrower has in the property and overall financial strength of the customer including cash flow to continue to fund loan payments. The Company also considers the state of the total economy including unemployment levels. In most instances, the borrowers have used in their rental projections of income at least a 10% vacancy rate. As of December 31, 2024, the unemployment levels in Johnson County and Linn County were 2.2% and 3.2%, respectively, compared to 2.0% and 3.0% in December of 2023. These levels compare favorably to the State of Iowa at 3.2% and the national unemployment level at 4.1% in December 2024 compared to 3.2% and 3.7%, respectively in December 2023.
Current wording
Other factors that are considered in determining the credit quality of the Company’s loan portfolio are the vacancy rates for both residential and commercial space, current equity the borrower has in the property and overall financial strength of the customer including cash flow to continue to fund loan payments. The Company also considers the state of the total economy including unemployment levels. In most instances, the borrowers have used in their rental projections of income at least a 10.00% vacancy rate. As of December 31, 2025, the unemployment levels in Johnson County and Linn County were 2.40% and 3.40%, respectively, compared to 2.20% and 3.20% in December of 2024. These levels compare favorably to the State of Iowa at 3.50% and the national unemployment level at 4.40% in December 2025 compared to 3.20% and 4.10%, respectively in December 2024.
Previous wording
The residential rental vacancy rates in 2023 and 2024 in Johnson and Linn County were estimated between 6.0% and 8.0%. The State of Iowa vacancy rate is 8.4% and the national rate is 6.9% with the Midwest rate at 7.2%. These vacancy rates one year ago were 7.9%, 6.6% and 6.8%, respectively, so are slightly elevated compared to the prior year. The Company continues to consider those vacancy rates among other factors in its current evaluation of the real estate portion of its loan portfolio. Vacancy rates may continue to rise in 2025 and affect the overall quality of the loan portfolio.
Current wording
The State of Iowa vacancy rate is 7.30% and the national rate is 7.20% with the Midwest rate at 7.20%. These vacancy rates one year ago were 8.40%, 6.90% and 7.20%, respectively, so are slightly lowered compared to the prior year. The Company continues to consider those vacancy rates among other factors in its current evaluation of the real estate portion of its loan portfolio. Vacancy rates may continue to rise in 2026 and affect the overall quality of the loan portfolio.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Highlights with respect to items on the Company’s statement of income for the period ended December 31, 2025 included the following:
Current report — wording carried from elsewhere
•In 2025, interest income on a tax equivalent basis increased $30.50 million due to growth of $180.08 million in the Company's average earning assets and increased $19.49 million due to higher interest rates.
Current report — wording carried from elsewhere
Management utilizes a qualitative factor framework to provide a qualitative estimate of the expected credit losses inherent in the loan portfolio in relation to potential limitations of the quantitative model. The framework considers the following factors:
Current report — wording carried from elsewhere
Company monitors its commercial real estate level so that it does not have a concentration in that category that exceeds 300% of its capital. Commercial real estate loan concentration was 171.72% of risk based capital as of December 31, 2025.