What changed in this filing

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Item 1. Business

2026-03-18 compared with 2025-03-14 · 71 added, 46 removed, 307 unchanged (28% of the section changed)

3 unchanged sentences

Effective July 1, 1996, the Company formed a new subsidiary, Hills Bank, which acquired for cash all the outstanding shares of a bank in Lisbon, Iowa.

Subsequently an office of Hills Bank was opened in Mount Vernon, Iowa, a community that is contiguous to Lisbon.

Effective November 17, 2000, Hills Bank was merged into the Bank.

1 unchanged sentence

Effective October 26, 2001, Hills Bank Kalona was merged into the Bank.

Through its internet website (www.hillsbank.com), the Company makes available the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, and other filings with the Securities and Exchange Commission, as soon as reasonably practicable after they are filed or furnished.

There have been no further acquisitions since 2001.

Through its website (www.hillsbank.com), the Company makes available the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, and other filings with the Securities and Exchange Commission, as soon as reasonably practicable after they are filed or furnished.

The Bank is a full-service commercial bank extending its services to individuals, businesses, governmental units and institutional customers.

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The Bank offers both fixed and variable rate loans for commercial real estate.

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Multi-family real estate loans totaled $494.28 million and were 13.87% of the Bank’s loan portfolio at December 31, 2025.

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At December 31, 2025, consumer loans totaled $28.76 million and were 0.81% of the Bank’s total loan portfolio.

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Loans to State and Political Subdivisions

8 unchanged sentences

Years Ended December 31,

2024 2023 2022

(Amounts In Thousands)

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Time deposits 870,334 916,590 742,855

Other short-term borrowings, including Bank Term Funding Program and federal funds purchased 332,839 214,256 3,648

Other short-term borrowings, including Bank Term Funding Program and FHLB daily reset advances 297,720 332,839 214,256

FHLB borrowings 344,950 191,346 94,373

6 unchanged sentences

As of December 31, 2025, the Company had two employees per the table below and the Bank had 479 full-time and 30 part-time employees.

The Company and the Bank focus on attracting, developing, and retaining, qualified personnel through competitive compensation and benefits, training and professional development, succession planning, and workplace policies intended to support employee engagement and long-term retention.

For additional discussion of the impact of the economy on the financial condition and results of operations of the Company, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Executive Officers of the Registrant

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Name Age Position

Seegmiller 72 Mr.

Seegmiller, who joined the Company in 1975, has served as its President since 1986.

Effective January 1, 2025, Mr.

Seegmiller transitioned to the President and Chief Executive Officer Emeritus role.

Prior to 1986, Mr.

Seegmiller was the Senior Vice President of Lending.

Shileny 49 Ms.

Shileny has held the position of President of the Bank since November 2022 and the position of Chief Operating Officer since December 2021.

Effective January 1, 2025, Ms.

Shileny was appointed President and Chief Executive Officer of the Company and the Bank.

Previously, Ms.

Shileny held the position of Senior Vice President, Director of Administration since 2019 and Senior Vice President, General Counsel from 2016 to 2019 with the Bank.

Roetlin 58 Mr.

Roetlin has held the position of Treasurer, Senior Vice President, Chief Financial Officer and Principal Financial Officer since December 2022.

Previously Mr.

Roetlin held the position of Director of Finance with the City of Coralville.

Asher has held the position of Senior Vice President, Director of Operations since June 2021.

Previously Ms.

Asher held the position of Vice President, Loan Operations with the Bank.

De Young 52 Ms.

De Young has held the position of Senior Vice President, Director of Administration since February 2024.

Previously Ms.

De Young was the Assistant Dean and Chief of Staff at a local university.

DeWaard 65 Ms.

DeWaard has held the position of Senior Vice President, Director of Human Resources since March 2021.

Previously Ms.

DeWaard held the position of Vice President, Learning and Development Manager with the Bank.

Dozier 43 Ms.

Dozier has held the position of Senior Vice President, Director of Relationship Banking since October 2023.

Christensen 54 Mr.

Christensen has held the position of Senior Vice President, Chief Information Officer since June 2025.

Previously Mr.

Christensen held positions of Associate State Chief Information Officer and Chief Information Officer within different departments with the state of Iowa.

Finer has held the position of Director of Commercial Banking since January 2023.

Prior to 2023, Mr.

Finer held the position of Senior Vice President, Director of Lending.

Finer held the position of Senior Vice President, Director of Lending with the Bank.

Globokar 52 Mr.

Globokar has held the position of Senior Vice President, Director of Trust and Wealth Management Services since 2020.

Globokar has held the position of Senior Vice President, Director of Trust and Wealth Management Services since July 2020.

Previously Mr.

Globokar held the position of Senior Vice President, Trust Officer with the Bank.

Hinrichs 52 Mr.

1 unchanged sentence

Previously, Mr.

Hinrichs held the positions of Senior Vice President, Director of Digital Strategy and Systems and Director of Operations and Digital Banking.

Hinrichs held the positions of Senior Vice

President, Director of Digital Strategy and Systems and Director of Operations and Digital

Banking with the Bank.

Hughes 63 Ms.

Hughes has held the position of Senior Vice President, Director of Marketing since October 2024.

Marple 55 Mr.

Marple has held the position of Senior Vice President, Director of Information Services since November 2019.

Previously Ms.

Hughes was the Chief Marketing Officer for other financial institutions.

Nelson 46 Ms.

Nelson has held the position of Senior Vice President, General Counsel since May 2020.

Olson has held the position of Senior Vice President, Director of Mortgage Lending since January 2022.

Shileny 48 Ms.

Shileny has held the position of President of the Bank since November 2022 and the position of Chief Operating Officer since December 2021.

Effective January 1, 2025, Ms.

Shileny was appointed President and Chief Executive Officer of the Company and the Bank.

Previously, Ms.

Shileny held the position of Senior Vice President, Director of Administration since 2019 and Senior Vice President, General Counsel from 2016 to 2019.

Olson has held the position of Senior Vice President, Commercial Lending Sales Manager since October 2025.

Previously Mr.

Olson was the Senior Vice President, Director of Mortgage Lending with the Bank.

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Johnson County

The Bank’s trade area includes the Johnson County communities of Iowa City, Coralville, Hills and North Liberty, located near Interstate 80 and Interstate 380 in Eastern Iowa.

These communities have a combined population of approximately 123,600.

Johnson County, Iowa has a population of approximately 159,400.

The University of Iowa in Iowa City has approximately 30,800 students and 32,900 full and part-time employees, including 12,000 employees of The University of Iowa Hospitals and Clinics.

The Bank’s trade area includes the Johnson County communities of Iowa City, Coralville, Hills, North Liberty, Tiffin, and University Heights, located near Interstate 80 and Interstate 380 in Eastern Iowa.

These communities have a combined population of 124,228.

Johnson County, Iowa has a population of 160,080.

The University of Iowa in Iowa City has approximately 31,500 students and 33,747 full and part-time employees, including 10,339 full time employees of The University of Iowa Hospitals and Clinics.

The Bank's trade area includes the Linn County, Iowa communities of Lisbon, Marion, Mount Vernon and Cedar Rapids, Iowa.

Lisbon has a population of approximately 2,250 and Mount Vernon, located two miles from Lisbon, has a population of approximately 4,750.

Both communities are within easy commuting distances to Cedar Rapids and Iowa City, Iowa.

Cedar Rapids has a metropolitan population of approximately 180,000 including approximately 42,350 from adjoining Marion, Iowa and is located approximately 10 miles west of Lisbon, Iowa and 25 miles north of Iowa City on Interstate 380.

The total population of Linn County is approximately 230,650.

Lisbon has a population of 2,233 and Mount Vernon, located two miles from Lisbon, has a population of 4,527, Both communities are within easy commuting distances to Cedar Rapids and Iowa City, Iowa.

Cedar Rapids has a metropolitan population of 179,245 including 41,535 from adjoining Marion, Iowa and is located approximately 10 miles west of Lisbon, Iowa and 25 miles north of Iowa City on Interstate 380.

The total population of Linn County is 230,299.

The largest employer in the Cedar Rapids area is Collins Aerospace, manufacturer of communications instruments, with approximately 7,000 employees.

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Wellman is located approximately 5 miles west of Kalona.

Kalona has a population of approximately 2,900, Washington has a population of approximately 7,400 and Wellman has a population of approximately 1,500.

The population of Washington County is approximately 22,700.

Kalona has a population of 2,630, Washington has a population of 7,352 and Wellman has a population of 1,524.

The population of Washington County is 22,565.

Kalona, Washington and Wellman are primarily agricultural communities, but are located within easy driving distance for employment in Iowa City, Coralville and North Liberty.

1 unchanged sentence

Williamsburg is located approximately 25 miles west of Iowa City.

Williamsburg has a population of approximately 3,400.

The population of Iowa County is approximately 16,500.

Williamsburg has a population of 3,346.

The population of Iowa County is 16,662.

Competition among financial institutions in attracting and retaining deposits and making loans is intense.

6 unchanged sentences

Technological advances, which may diminish the importance of depository institutions and other financial intermediaries in the transfer of funds between parties, could make it more difficult for the Company to compete in the future.

The Bank is in direct competition for loans and deposits and financial services with a number of other banks and credit unions in Johnson, Linn and Washington County.

A comparison of the number of office locations and deposits in the three counties as of June, 2024 (most recent date of available data from the FDIC and national credit union websites) is as follows:

Johnson County Linn County Washington County

However, the Company could have a local relationship advantage as consolidation of financial institutions continue.

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The Bank is in direct competition for loans and deposits and financial services with a number of other banks and credit unions in Johnson, Linn, Washington and Iowa County.

A comparison of the number of office locations and deposits in the four counties as of June, 2025 (most recent date of available data from the FDIC and national credit union websites) is as follows:

Johnson County Linn County Washington County Iowa County

Offices Deposits

1 unchanged sentence

(in millions) Offices Deposits

(in millions)

25 unchanged sentences

The Company is also required to file with the Federal Reserve periodic reports of the Company’s operations and such additional information regarding the Company and its subsidiary as the Federal Reserve may require.

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Investments and Activities .

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The rule includes a new Common Equity Tier 1 Capital Ratio, an increased Tier 1 Leverage Capital Ratio and an increased Tier 1 Risk-Based Capital Ratio.

Bank holding companies are required to include in Common Equity Tier 1 capital the effects of other comprehensive income adjustments, such as gains and losses on securities held to maturity, that are currently excluded from the definition of Tier 1 capital, but were allowed to make a one-time election not to include those effects.

Bank holding companies are required to include in Common Equity Tier 1 capital the effects of other comprehensive income adjustments, such as gains and losses on securities classified as available for sale and other components of accumulated other comprehensive income, but were allowed to make a one-time election not to include those effects.

The Company and the Bank meet the well-capitalized requirements under the regulatory framework for prompt corrective action and have made the one-time election to exclude the effects of other comprehensive income adjustments on Tier 1 capital.

3 unchanged sentences

As of December 31, 2025, the Company had regulatory capital in excess of the Federal Reserve’s minimum requirement, with a CBLR of 12.94%.

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The ability of the Company to pay dividends to its shareholders is dependent upon the earnings and capital adequacy of its subsidiary Bank, which directly impact the ability of the Bank to pay dividends to the Company.

17 unchanged sentences

In addition, all institutions with deposits insured by the FDIC are required to pay assessments to fund interest payments on bonds issued by the Financing Corporation (FICO), a mixed-ownership government corporation established in the 1980’s to recapitalize the Federal Savings and Loan Insurance Corporation.

The current annualized assessment rate is 5.00 basis points.

The current annualized assessment rate is determined by applicable FDIC regulations and may change from time to time.

Capital Requirements .

3 unchanged sentences

Changes in the capital structure of state banks are also approved by the Superintendent.

State banks must have a Tier 1 risk-based leverage ratio of 6.50% plus a fully-funded loan loss reserve.

State banks must have capital levels determined by the Superintendent of Banking, who has authority to require state banks to maintain capital at levels deemed appropriate in light of supervisory considerations and the risk profile of the institution.

In certain instances, the Superintendent may mandate higher capital, but the Superintendent has not imposed such a requirement on the Bank.

In determining the Tier 1 risk-based leverage ratio, the Superintendent uses total equity capital without unrealized securities gains and the allowance for credit losses less any intangible assets.

At December 31, 2024, the Community Bank Leverage Ratio of the Bank was 12.71% and exceeded the ratio required by the Superintendent.

The Superintendent evaluates capital adequacy using regulatory capital measures and other supervisory metrics considered appropriate under applicable law and guidance.

At December 31, 2025, the Community Bank Leverage Ratio of the Bank was 12.94% and exceeded the minimum level required for the Bank to be considered well-capitalized under applicable regulatory standards.

Capital adequacy for banks took on an added dimension with the establishment of a formal system of prompt corrective action under the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) which provides the federal banking regulators of the Bank with broad power to take prompt corrective action to resolve the problems of undercapitalized banking institutions.

2 unchanged sentences

For example, “undercapitalized banks” must restrict asset growth, obtain prior approval for business expansion, and have an approved plan to restore capital.

“Critically undercapitalized banks” must be placed in receivership or conservatorship within 90 days unless some other action would result in lower long-term costs to the deposit insurance fund.

“Critically undercapitalized banks” must be placed in

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receivership or conservatorship within 90 days unless some other action would result in lower long-term costs to the deposit insurance fund.

The actual amounts of risk-based capital and risk-based capital ratios as of December 31, 2025 and the minimum regulatory requirements for the Company and the Bank are presented below (amounts in thousands):

26 unchanged sentences

Also, the capital conservation buffer discussed previously could limit the amount of payment of dividends if the Company fails to maintain required capital levels.

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Insider Transactions .

The Bank is subject to certain restrictions imposed by federal law on extensions of credit to the Company, on investments in the stock or other securities of the Company and the acceptance of the stock or other securities of the Company as collateral for loans.

the Company, and to related interests of such directors, officers and principal stockholders.

Certain limitations and reporting requirements are also placed on extensions of credit by the Bank to its directors and officers, to directors and officers of the Company and its subsidiary, to principal stockholders of the Company, and to related interests of such directors, officers and principal stockholders.

In addition, federal law and regulations may affect the terms upon which any person becoming a director or officer of the Company or one of its subsidiaries or a principal stockholder of the Company may obtain credit from banks with which the Bank maintains a correspondent relationship.

26 unchanged sentences

Treasury Department has issued a number of regulations that apply various requirements of the USA Patriot Act to financial institutions such as the Bank.

These regulations impose obligations on financial institutions to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing and to verify the identity of their customers.

These regulations impose obligations on financial institutions to

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maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing and to verify the identity of their customers.

Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution.

13 unchanged sentences

Additional information, including a summary of certain provisions of the Dodd-Frank Act, is available on the Federal Deposit Insurance Corporation website at www.fdic.gov/regulations/reform/dfa_selections.html.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business