Business Description

Page 3 Market Area Page 7 Competition Page 7 Supervision and Regulation Page 8 Item 1A. Risk Factors Page 14 Item 1B. Unresolved Staff Comments Page 24 Item 1C. Cybersecurity Page 24 Item 2. Properties Page 25 Item 3. Legal Proceedings Page 26 Item 4. Mine Safety Disclosures Page 26 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Page 26 Item 6. [Reserved] Page 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation Page 29 Item 7A. Quantitative and Qualitative Disclosures about Market Risk Page 53 Item 8. Consolidated Financial Statements and Supplementary Data Page 55 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure Page 120 Item 9A. Controls and Procedures Page 120 Item 9B. Other Information Page 122 PART III Item 10. Directors, Executive Officers and Corporate Governance Page 122 Item 11. Executive Compensation Page 123 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Page 123 Item 13. Certain Relationships and Related Transactions, and Director Independence Page 123 Item 14. Principal Accounting Fees and Services Page 123 PART IV Item 15. Exhibits, Consolidated Financial Statement Schedules Page 124 Page 2 T able of Content s PART I References in this report to “we,” “us,” “our,” “Bank,” or the “Company” or similar terms refer to Hills Bancorporation and its subsidiary. Item 1. Business GENERAL Hills Bancorporation (the "Company") is a holding company principally engaged, through its subsidiary bank, in the business of banking. The Company was incorporated December 12, 1982 and all operations are conducted within the state of Iowa. The Company became owner of 100% of the outstanding stock of Hills Bank and Trust Company, Hills, Iowa (“Hills Bank and Trust” or the “Bank”) as of January 23, 1984 when stockholders of Hills Bank and Trust exchanged their shares for shares of the Company. 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. Effective November 17, 2000, Hills Bank was merged into the Bank. On September 20, 1996, another subsidiary, Hills Bank Kalona, acquired cash and other assets and assumed the deposits of the Kalona, Iowa office of Boatmen's Bank Iowa, N.A. Effective October 26, 2001, Hills Bank Kalona was merged into the Bank. 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. The Bank is actively engaged in all areas of commercial banking, including acceptance of demand, savings and time deposits; making commercial, real estate, agricultural and consumer loans; maintaining night and safe deposit facilities; and performing collection, exchange and other banking services tailored for individual customers. The Bank administers estates, personal trusts, and pension plans and provides farm management, investment advisory and custodial services for individuals, corporations and nonprofit organizations. In addition, the Bank earns substantial fees from originating mortgages that are sold on the secondary residential real estate market without mortgage servicing rights being retained. Lending Activities Real Estate Loans Real estate loans totaled $3.080 billion and comprised 86.39% of the Bank’s loan portfolio as of December 31, 2025. The Bank’s real estate loans include construction loans and mortgage loans. Mortgage Loans . The Bank offers residential, commercial and agricultural real estate loans. As of December 31, 2025, mortgage loans totaled $2.741 billion and comprised 76.90% of the Bank’s loan portfolio. Residential real estate loans totaled $1.405 billion and were 39.42% of the Bank’s loan portfolio as of December 31, 2025. These loans include first and junior liens on 1 to 4 family residences. The Bank originates 1 to 4 family mortgage loans to individuals and businesses within its trade area.…