|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
(State or other jurisdiction of incorporation or organization)
|
I.R.S. Employer Identification No.
|
Iowa
|
42-1208067
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
Large accelerated filer
|
☐
|
Accelerated Filer
|
☑
|
Non-accelerated filer
|
☐
|
Small Reporting Company
|
☐
|
Emerging Growth Company
|
☐
|
|
|
|
|
SHARES OUTSTANDING
|
CLASS
|
|
April 30, 2020
|
|
|
|
Common Stock
|
No par value
|
9,371,390
|
|
|
|
|
|
|
|
|
Page
|
|
|
Number
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Item 2.
|
||
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|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
Part II
|
|
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
Item 5.
|
||
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|
Item 6.
|
||
|
|
|
|
||
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
(Unaudited)
|
|
|||||
Cash and cash equivalents
|
$
|
268,293
|
|
|
$
|
241,965
|
|
Investment securities available for sale at fair value (amortized cost March 31, 2020 $367,051; December 31, 2019 $351,069)
|
371,839
|
|
|
355,303
|
|
||
Stock of Federal Home Loan Bank
|
11,374
|
|
|
11,065
|
|
||
Loans held for sale
|
11,592
|
|
|
8,400
|
|
||
Loans, net of allowance for loan losses (March 31, 2020 $38,340; December 31, 2019 $33,760)
|
2,626,399
|
|
|
2,606,277
|
|
||
Property and equipment, net
|
36,767
|
|
|
37,146
|
|
||
Tax credit real estate investment
|
7,945
|
|
|
8,280
|
|
||
Accrued interest receivable
|
13,691
|
|
|
12,442
|
|
||
Deferred income taxes, net
|
9,091
|
|
|
8,018
|
|
||
Goodwill
|
2,500
|
|
|
2,500
|
|
||
Other assets
|
6,747
|
|
|
9,491
|
|
||
Total Assets
|
$
|
3,366,238
|
|
|
$
|
3,300,887
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
Noninterest-bearing deposits
|
$
|
381,171
|
|
|
$
|
387,612
|
|
Interest-bearing deposits
|
2,350,543
|
|
|
2,273,752
|
|
||
Total deposits
|
$
|
2,731,714
|
|
|
$
|
2,661,364
|
|
Federal Home Loan Bank borrowings
|
185,000
|
|
|
185,000
|
|
||
Accrued interest payable
|
2,352
|
|
|
2,474
|
|
||
Other liabilities
|
20,112
|
|
|
25,012
|
|
||
Total Liabilities
|
$
|
2,939,178
|
|
|
$
|
2,873,850
|
|
|
|
|
|
||||
Redeemable Common Stock Held by Employee Stock Ownership Plan (ESOP)
|
$
|
50,249
|
|
|
$
|
51,826
|
|
|
|
|
|
||||
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Common stock, no par value; authorized 20,000,000 shares; issued March 31, 2020 10,328,925 shares; December 31, 2019 10,327,656 shares
|
$
|
—
|
|
|
$
|
—
|
|
Paid in capital
|
59,733
|
|
|
55,943
|
|
||
Retained earnings
|
408,260
|
|
|
409,509
|
|
||
Accumulated other comprehensive income
|
1,006
|
|
|
1,415
|
|
||
Treasury stock at cost (March 31, 2020 953,569 shares; December 31, 2019 975,962 shares)
|
(41,939
|
)
|
|
(39,830
|
)
|
||
Total Stockholders' Equity
|
$
|
427,060
|
|
|
$
|
427,037
|
|
Less maximum cash obligation related to ESOP shares
|
50,249
|
|
|
51,826
|
|
||
Total Stockholders' Equity Less Maximum Cash Obligation Related to ESOP Shares
|
$
|
376,811
|
|
|
$
|
375,211
|
|
Total Liabilities & Stockholders' Equity
|
$
|
3,366,238
|
|
|
$
|
3,300,887
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Interest income:
|
|
|
|
||||
Loans, including fees
|
$
|
29,893
|
|
|
$
|
29,573
|
|
Investment securities:
|
|
|
|
||||
Taxable
|
884
|
|
|
758
|
|
||
Nontaxable
|
1,037
|
|
|
1,025
|
|
||
Federal funds sold
|
638
|
|
|
491
|
|
||
Total interest income
|
$
|
32,452
|
|
|
$
|
31,847
|
|
Interest expense:
|
|
|
|
||||
Deposits
|
$
|
6,492
|
|
|
$
|
6,499
|
|
FHLB borrowings
|
1,370
|
|
|
1,575
|
|
||
Total interest expense
|
$
|
7,862
|
|
|
$
|
8,074
|
|
Net interest income
|
$
|
24,590
|
|
|
$
|
23,773
|
|
Provision for loan losses
|
4,649
|
|
|
(1,246
|
)
|
||
Net interest income after provision for loan losses
|
$
|
19,941
|
|
|
$
|
25,019
|
|
Noninterest income:
|
|
|
|
||||
Net gain on sale of loans
|
$
|
658
|
|
|
$
|
286
|
|
Trust fees
|
2,570
|
|
|
2,252
|
|
||
Service charges and fees
|
2,529
|
|
|
2,275
|
|
||
Other noninterest income
|
400
|
|
|
437
|
|
||
Gain on sale of investment securities
|
10
|
|
|
—
|
|
||
|
$
|
6,167
|
|
|
$
|
5,250
|
|
|
|
|
|
||||
Noninterest expenses:
|
|
|
|
||||
Salaries and employee benefits
|
$
|
9,584
|
|
|
$
|
8,722
|
|
Occupancy
|
1,152
|
|
|
1,186
|
|
||
Furniture and equipment
|
1,781
|
|
|
1,673
|
|
||
Office supplies and postage
|
503
|
|
|
459
|
|
||
Advertising and business development
|
759
|
|
|
638
|
|
||
Outside services
|
2,685
|
|
|
2,572
|
|
||
FDIC insurance assessment
|
180
|
|
|
209
|
|
||
Other noninterest expense
|
583
|
|
|
590
|
|
||
|
$
|
17,227
|
|
|
$
|
16,049
|
|
Income before income taxes
|
$
|
8,881
|
|
|
$
|
14,220
|
|
Income taxes
|
1,806
|
|
|
3,017
|
|
||
Net income
|
$
|
7,075
|
|
|
$
|
11,203
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
0.75
|
|
|
$
|
1.20
|
|
Diluted
|
$
|
0.75
|
|
|
$
|
1.20
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
7,075
|
|
|
$
|
11,203
|
|
|
|
|
|
||||
Other comprehensive (loss) income
|
|
|
|
||||
Securities:
|
|
|
|
||||
Net change in unrealized income on securities available for sale
|
$
|
564
|
|
|
$
|
3,293
|
|
Reclassification adjustment for net gains realized in net income
|
(10
|
)
|
|
—
|
|
||
Income taxes
|
(139
|
)
|
|
(821
|
)
|
||
Other comprehensive income on securities available for sale
|
$
|
415
|
|
|
$
|
2,472
|
|
Derivatives used in cash flow hedging relationships:
|
|
|
|
||||
Net change in unrealized loss on derivatives
|
$
|
(1,098
|
)
|
|
$
|
(298
|
)
|
Income taxes
|
274
|
|
|
75
|
|
||
Other comprehensive loss on cash flow hedges
|
$
|
(824
|
)
|
|
$
|
(223
|
)
|
|
|
|
|
||||
Other comprehensive (loss) income, net of tax
|
$
|
(409
|
)
|
|
$
|
2,249
|
|
|
|
|
|
||||
Comprehensive income
|
$
|
6,666
|
|
|
$
|
13,452
|
|
Three Months Ended March 31, 2020 and 2019
|
|||||||||||||||||||||||
|
Paid In Capital
|
|
Retained Earnings
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Treasury Stock
|
|
Maximum Cash
Obligation Related
To ESOP Shares
|
|
Total
|
||||||||||||
Balance, December 31, 2018
|
$
|
52,122
|
|
|
$
|
371,848
|
|
|
$
|
(3,250
|
)
|
|
$
|
(36,968
|
)
|
|
$
|
(48,870
|
)
|
|
$
|
334,882
|
|
Issuance of 84,164 shares of common stock
|
2,932
|
|
|
—
|
|
|
—
|
|
|
2,202
|
|
|
—
|
|
|
5,134
|
|
||||||
Issuance of 1,929 shares of common stock under the employee stock purchase plan
|
105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
||||||
Unearned restricted stock compensation
|
170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170
|
|
||||||
Forfeiture of 703 shares of common stock
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||||
Change related to ESOP shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(981
|
)
|
|
(981
|
)
|
||||||
Net income
|
—
|
|
|
11,203
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,203
|
|
||||||
Cash dividends ($0.82 per share)
|
—
|
|
|
(7,657
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,657
|
)
|
||||||
Purchase of 69,771 shares of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,291
|
)
|
|
—
|
|
|
(4,291
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
2,249
|
|
|
—
|
|
|
—
|
|
|
2,249
|
|
||||||
Balance, March 31, 2019
|
$
|
55,295
|
|
|
$
|
375,394
|
|
|
$
|
(1,001
|
)
|
|
$
|
(39,057
|
)
|
|
$
|
(49,851
|
)
|
|
$
|
340,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, December 31, 2019
|
55,943
|
|
|
409,509
|
|
|
1,415
|
|
|
(39,830
|
)
|
|
(51,826
|
)
|
|
375,211
|
|
||||||
Issuance of 91,274 shares of common stock
|
3,504
|
|
|
—
|
|
|
—
|
|
|
2,429
|
|
|
—
|
|
|
5,933
|
|
||||||
Issuance of 1,712 shares of common stock under the employee stock purchase plan
|
101
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||||
Unearned restricted stock compensation
|
202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
202
|
|
||||||
Forfeiture of 443 shares of common stock
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||||
Share-based compensation
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Change related to ESOP shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,577
|
|
|
1,577
|
|
||||||
Net income
|
—
|
|
|
7,075
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,075
|
|
||||||
Cash dividends ($0.89 per share)
|
—
|
|
|
(8,324
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,324
|
)
|
||||||
Purchase of 68,881 shares of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,538
|
)
|
|
—
|
|
|
(4,538
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
(409
|
)
|
|
—
|
|
|
—
|
|
|
(409
|
)
|
||||||
Balance, March 31, 2020
|
$
|
59,733
|
|
|
$
|
408,260
|
|
|
$
|
1,006
|
|
|
$
|
(41,939
|
)
|
|
$
|
(50,249
|
)
|
|
$
|
376,811
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income
|
$
|
7,075
|
|
|
$
|
11,203
|
|
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
874
|
|
|
847
|
|
||
Provision for loan losses
|
4,649
|
|
|
(1,246
|
)
|
||
Net gain on sale of investment securities available for sale
|
(10
|
)
|
|
—
|
|
||
Forfeiture of common stock
|
(23
|
)
|
|
(34
|
)
|
||
Share-based compensation
|
6
|
|
|
—
|
|
||
Compensation expensed through issuance of common stock
|
89
|
|
|
108
|
|
||
Provision for deferred income taxes
|
(938
|
)
|
|
454
|
|
||
Net gain on sale of other real estate owned and other repossessed assets
|
—
|
|
|
(11
|
)
|
||
Increase in accrued interest receivable
|
(1,249
|
)
|
|
(2,186
|
)
|
||
Amortization of premium on investment securities, net
|
157
|
|
|
100
|
|
||
Decrease in other assets
|
2,649
|
|
|
426
|
|
||
Amortization of operating lease right-of-use assets
|
95
|
|
|
—
|
|
||
Decrease in accrued interest payable and other liabilities
|
(5,918
|
)
|
|
(955
|
)
|
||
Loans originated for sale
|
(55,609
|
)
|
|
(29,847
|
)
|
||
Proceeds on sales of loans
|
53,075
|
|
|
26,850
|
|
||
Net gain on sales of loans
|
(658
|
)
|
|
(286
|
)
|
||
Net cash and cash equivalents provided by operating activities
|
$
|
4,264
|
|
|
$
|
5,423
|
|
|
|
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
|
|
||
Proceeds from maturities of investment securities available for sale
|
$
|
9,076
|
|
|
$
|
10,251
|
|
Proceeds from sales of investment securities available for sale
|
313
|
|
|
—
|
|
||
Purchases of investment securities available for sale
|
(25,827
|
)
|
|
(12,143
|
)
|
||
Loans made to customers, net of collections
|
(24,771
|
)
|
|
(15,208
|
)
|
||
Proceeds on sale of other real estate owned and other repossessed assets
|
—
|
|
|
62
|
|
||
Purchases of property and equipment
|
(495
|
)
|
|
(427
|
)
|
||
Net changes from tax credit real estate investment
|
335
|
|
|
262
|
|
||
Net cash and cash equivalents used in investing activities
|
$
|
(41,369
|
)
|
|
$
|
(17,203
|
)
|
|
|
|
|
||||
Cash Flows from Financing Activities
|
|
|
|
|
|
||
Net increase in deposits
|
$
|
70,350
|
|
|
$
|
175,768
|
|
Issuance of common stock, net of costs
|
5,844
|
|
|
5,026
|
|
||
Purchase of treasury stock
|
(4,538
|
)
|
|
(4,291
|
)
|
||
Proceeds from the issuance of common stock through the employee stock purchase plan
|
101
|
|
|
105
|
|
||
Dividends paid
|
(8,324
|
)
|
|
(7,657
|
)
|
||
Net cash and cash equivalents provided by financing activities
|
$
|
63,433
|
|
|
$
|
168,951
|
|
HILLS BANCORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued) (Amounts In Thousands)
|
|||||||
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Increase in cash and cash equivalents
|
$
|
26,328
|
|
|
$
|
157,171
|
|
Cash and cash equivalents:
|
|
|
|
|
|
||
Beginning of period
|
241,965
|
|
|
43,305
|
|
||
End of period
|
$
|
268,293
|
|
|
$
|
200,476
|
|
|
|
|
|
||||
Supplemental Disclosures
|
|
|
|
|
|
||
Cash payments for:
|
|
|
|
|
|
||
Interest paid to depositors
|
$
|
6,614
|
|
|
$
|
6,260
|
|
Interest paid on other obligations
|
1,370
|
|
|
1,575
|
|
||
|
|
|
|
||||
Noncash activities:
|
|
|
|
|
|
||
(Decrease)/increase in maximum cash obligation related to ESOP shares
|
$
|
(1,577
|
)
|
|
$
|
981
|
|
Transfers to other real estate owned
|
—
|
|
|
51
|
|
||
Right-of-use assets obtained in exchange for operating lease obligations
|
—
|
|
|
3,581
|
|
Note 1.
|
Summary of Significant Accounting Policies
|
•
|
An initial forecast period of one year for all portfolio segments and off-balance-sheet credit exposures. This period reflects management’s expectation of losses based on forward-looking economic scenarios over that time.
|
•
|
A historical loss forecast period covering the remaining contractual life, adjusted for prepayments, by portfolio segment based on the change in key historical economic variables.
|
•
|
A reversion period of up to 3 years connecting the initial loss forecast to the historical loss forecast based on economic conditions at the measurement date.
|
•
|
We will primarily utilize discounted cash flow (DCF) methods to estimate credit losses by portfolio segment. The DCF methods obtain estimated life-time credit losses using the conceptual components described above.
|
Note 2.
|
Earnings Per Share
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Common shares outstanding at the beginning of the period
|
9,351,694
|
|
|
9,336,441
|
|
||
Weighted average number of net shares issued
|
46,232
|
|
|
30,816
|
|
||
Weighted average shares outstanding (basic)
|
9,397,926
|
|
|
9,367,257
|
|
||
Weighted average of potential dilutive shares attributable to stock options granted, computed under the treasury stock method
|
3,754
|
|
|
4,008
|
|
||
Weighted average number of shares (diluted)
|
9,401,680
|
|
|
9,371,265
|
|
||
Net income (In thousands)
|
$
|
7,075
|
|
|
$
|
11,203
|
|
Earnings per share:
|
|
|
|
|
|
||
Basic
|
$
|
0.75
|
|
|
$
|
1.20
|
|
Diluted
|
$
|
0.75
|
|
|
$
|
1.20
|
|
Note 3.
|
Other Comprehensive Income
|
|
March 31,
2020 |
|
December 31, 2019
|
||||
|
(amounts in thousands)
|
||||||
Net unrealized income on available-for-sale securities
|
$
|
4,788
|
|
|
$
|
4,234
|
|
Net unrealized loss on derivatives used for cash flow hedges
|
(3,447
|
)
|
|
(2,349
|
)
|
||
Tax effect
|
$
|
(335
|
)
|
|
$
|
(470
|
)
|
Net-of-tax amount
|
$
|
1,006
|
|
|
$
|
1,415
|
|
Note 4.
|
Securities
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
Securities available for sale
|
|
|
|
|
|
|
|
||||||
U.S. Treasury
|
$
|
148,740
|
|
|
40.00
|
%
|
|
$
|
128,585
|
|
|
36.19
|
%
|
Other securities (FHLB, FHLMC and FNMA)
|
12,826
|
|
|
3.45
|
|
|
15,229
|
|
|
4.29
|
|
||
State and political subdivisions
|
210,273
|
|
|
56.55
|
|
|
211,489
|
|
|
59.52
|
|
||
Total securities available for sale
|
$
|
371,839
|
|
|
100.00
|
%
|
|
$
|
355,303
|
|
|
100.00
|
%
|
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
(Losses)
|
|
Estimated Fair
Value
|
||||||||
March 31, 2020:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury
|
$
|
142,669
|
|
|
$
|
6,071
|
|
|
$
|
—
|
|
|
$
|
148,740
|
|
Other securities (FHLB, FHLMC and FNMA)
|
12,775
|
|
|
51
|
|
|
—
|
|
|
12,826
|
|
||||
State and political subdivisions
|
211,607
|
|
|
1,135
|
|
|
(2,469
|
)
|
|
210,273
|
|
||||
Total
|
$
|
367,051
|
|
|
$
|
7,257
|
|
|
$
|
(2,469
|
)
|
|
$
|
371,839
|
|
December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury
|
$
|
127,096
|
|
|
$
|
1,626
|
|
|
$
|
(137
|
)
|
|
$
|
128,585
|
|
Other securities (FHLB, FHLMC and FNMA)
|
15,287
|
|
|
—
|
|
|
(58
|
)
|
|
15,229
|
|
||||
State and political subdivisions
|
208,686
|
|
|
2,938
|
|
|
(135
|
)
|
|
211,489
|
|
||||
Total
|
$
|
351,069
|
|
|
$
|
4,564
|
|
|
$
|
(330
|
)
|
|
$
|
355,303
|
|
|
Amortized
Cost
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
65,163
|
|
|
$
|
65,416
|
|
Due after one year through five years
|
206,921
|
|
|
212,657
|
|
||
Due after five years through ten years
|
82,468
|
|
|
81,957
|
|
||
Due over ten years
|
12,499
|
|
|
11,809
|
|
||
Total
|
$
|
367,051
|
|
|
$
|
371,839
|
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Sales proceeds
|
$
|
313
|
|
|
$
|
—
|
|
Gross realized gains
|
10
|
|
|
—
|
|
||
Gross realized losses
|
—
|
|
|
—
|
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||||||||||||||||||||
March 31, 2020
Description of Securities |
#
|
|
Fair Value
|
|
Unrealized
Loss
|
|
%
|
|
#
|
|
Fair Value
|
|
Unrealized
Loss
|
|
%
|
|
#
|
|
Fair Value
|
|
Unrealized
Loss
|
|
%
|
||||||||||||||||||
U.S. Treasury
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
State and political subdivisions
|
381
|
|
|
101,743
|
|
|
(2,460
|
)
|
|
2.42
|
|
|
9
|
|
|
1,086
|
|
|
(9
|
)
|
|
0.83
|
|
|
390
|
|
|
102,829
|
|
|
(2,469
|
)
|
|
2.40
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total temporarily impaired securities
|
381
|
|
|
$
|
101,743
|
|
|
$
|
(2,460
|
)
|
|
2.42
|
%
|
|
9
|
|
|
$
|
1,086
|
|
|
$
|
(9
|
)
|
|
0.83
|
%
|
|
390
|
|
|
$
|
102,829
|
|
|
$
|
(2,469
|
)
|
|
2.40
|
%
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||||||||||||||||||||
December 31, 2019
Description of Securities |
#
|
|
Fair Value
|
|
Unrealized
Loss
|
|
%
|
|
#
|
|
Fair Value
|
|
Unrealized
Loss
|
|
%
|
|
#
|
|
Fair Value
|
|
Unrealized
Loss
|
|
%
|
||||||||||||||||||
U.S. Treasury
|
11
|
|
|
$
|
27,932
|
|
|
$
|
(136
|
)
|
|
0.49
|
%
|
|
1
|
|
|
$
|
2,495
|
|
|
$
|
(1
|
)
|
|
0.04
|
%
|
|
12
|
|
|
$
|
30,427
|
|
|
$
|
(137
|
)
|
|
0.45
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
15,229
|
|
|
(58
|
)
|
|
0.38
|
|
|
6
|
|
|
15,229
|
|
|
(58
|
)
|
|
0.38
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
State and political subdivisions
|
66
|
|
|
17,881
|
|
|
(119
|
)
|
|
0.67
|
|
|
20
|
|
|
3,825
|
|
|
(16
|
)
|
|
0.42
|
|
|
86
|
|
|
21,706
|
|
|
(135
|
)
|
|
0.62
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total temporarily impaired securities
|
77
|
|
|
$
|
45,813
|
|
|
$
|
(255
|
)
|
|
0.56
|
%
|
|
27
|
|
|
$
|
21,549
|
|
|
$
|
(75
|
)
|
|
0.35
|
%
|
|
104
|
|
|
$
|
67,362
|
|
|
$
|
(330
|
)
|
|
0.49
|
%
|
Note 5.
|
Loans
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
(Amounts In Thousands)
|
||||||
Agricultural
|
$
|
96,811
|
|
|
$
|
91,317
|
|
Commercial and financial
|
228,074
|
|
|
221,323
|
|
||
Real estate:
|
|
|
|
||||
Construction, 1 to 4 family residential
|
83,445
|
|
|
80,209
|
|
||
Construction, land development and commercial
|
102,820
|
|
|
108,410
|
|
||
Mortgage, farmland
|
246,203
|
|
|
242,730
|
|
||
Mortgage, 1 to 4 family first liens
|
905,951
|
|
|
910,742
|
|
||
Mortgage, 1 to 4 family junior liens
|
148,444
|
|
|
149,227
|
|
||
Mortgage, multi-family
|
357,194
|
|
|
350,761
|
|
||
Mortgage, commercial
|
410,200
|
|
|
402,181
|
|
||
Loans to individuals
|
31,749
|
|
|
32,308
|
|
||
Obligations of state and political subdivisions
|
52,917
|
|
|
49,896
|
|
||
|
$
|
2,663,808
|
|
|
$
|
2,639,104
|
|
Net unamortized fees and costs
|
931
|
|
|
933
|
|
||
|
$
|
2,664,739
|
|
|
$
|
2,640,037
|
|
Less allowance for loan losses
|
38,340
|
|
|
33,760
|
|
||
|
$
|
2,626,399
|
|
|
$
|
2,606,277
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||||||||||||||
|
Agricultural
|
|
Commercial and
Financial
|
|
Real Estate:
Construction and
land development
|
|
Real Estate:
Mortgage,
farmland
|
|
Real Estate:
Mortgage, 1 to 4
family
|
|
Real Estate:
Mortgage, multi-
family and
commercial
|
|
Other
|
|
Total
|
||||||||||||||||
|
(Amounts In Thousands)
|
||||||||||||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance
|
$
|
2,400
|
|
|
$
|
4,988
|
|
|
$
|
2,599
|
|
|
$
|
3,950
|
|
|
$
|
10,638
|
|
|
$
|
7,859
|
|
|
$
|
1,326
|
|
|
$
|
33,760
|
|
Charge-offs
|
(4
|
)
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(229
|
)
|
|
(2
|
)
|
|
(190
|
)
|
|
(440
|
)
|
||||||||
Recoveries
|
10
|
|
|
108
|
|
|
2
|
|
|
—
|
|
|
187
|
|
|
14
|
|
|
50
|
|
|
371
|
|
||||||||
Provision
|
354
|
|
|
1,599
|
|
|
20
|
|
|
146
|
|
|
1,156
|
|
|
1,192
|
|
|
182
|
|
|
4,649
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ending balance
|
$
|
2,760
|
|
|
$
|
6,680
|
|
|
$
|
2,621
|
|
|
$
|
4,096
|
|
|
$
|
11,752
|
|
|
$
|
9,063
|
|
|
$
|
1,368
|
|
|
$
|
38,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance, individually evaluated for impairment
|
$
|
217
|
|
|
$
|
1,534
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
176
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$
|
2,543
|
|
|
$
|
5,146
|
|
|
$
|
2,621
|
|
|
$
|
4,093
|
|
|
$
|
11,576
|
|
|
$
|
9,063
|
|
|
$
|
1,366
|
|
|
$
|
36,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance
|
$
|
96,811
|
|
|
$
|
228,074
|
|
|
$
|
186,265
|
|
|
$
|
246,203
|
|
|
$
|
1,054,395
|
|
|
$
|
767,394
|
|
|
$
|
84,666
|
|
|
$
|
2,663,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ending balance, individually evaluated for impairment
|
$
|
1,884
|
|
|
$
|
3,853
|
|
|
$
|
418
|
|
|
$
|
4,130
|
|
|
$
|
8,773
|
|
|
$
|
3,669
|
|
|
$
|
2
|
|
|
$
|
22,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$
|
94,927
|
|
|
$
|
224,221
|
|
|
$
|
185,847
|
|
|
$
|
242,073
|
|
|
$
|
1,045,622
|
|
|
$
|
763,725
|
|
|
$
|
84,664
|
|
|
$
|
2,641,079
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||||||
|
Agricultural
|
|
Commercial and
Financial
|
|
Real Estate:
Construction and
land development
|
|
Real Estate:
Mortgage,
farmland
|
|
Real Estate:
Mortgage,
1 to 4 family
|
|
Real Estate:
Mortgage, multi-
family and
commercial
|
|
Other
|
|
Total
|
||||||||||||||||
|
(Amounts In Thousands)
|
||||||||||||||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance
|
$
|
2,789
|
|
|
$
|
5,826
|
|
|
$
|
3,292
|
|
|
$
|
3,972
|
|
|
$
|
12,516
|
|
|
$
|
8,165
|
|
|
$
|
1,250
|
|
|
$
|
37,810
|
|
Charge-offs
|
—
|
|
|
(180
|
)
|
|
(8
|
)
|
|
—
|
|
|
(177
|
)
|
|
(4
|
)
|
|
(108
|
)
|
|
(477
|
)
|
||||||||
Recoveries
|
10
|
|
|
184
|
|
|
2
|
|
|
5
|
|
|
110
|
|
|
85
|
|
|
37
|
|
|
433
|
|
||||||||
Provision
|
(258
|
)
|
|
174
|
|
|
(358
|
)
|
|
(106
|
)
|
|
(819
|
)
|
|
(23
|
)
|
|
144
|
|
|
(1,246
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance
|
$
|
2,541
|
|
|
$
|
6,004
|
|
|
$
|
2,928
|
|
|
$
|
3,871
|
|
|
$
|
11,630
|
|
|
$
|
8,223
|
|
|
$
|
1,323
|
|
|
$
|
36,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance, individually evaluated for impairment
|
$
|
258
|
|
|
$
|
1,375
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
74
|
|
|
$
|
483
|
|
|
$
|
59
|
|
|
$
|
2,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$
|
2,283
|
|
|
$
|
4,629
|
|
|
$
|
2,928
|
|
|
$
|
3,871
|
|
|
$
|
11,556
|
|
|
$
|
7,740
|
|
|
$
|
1,264
|
|
|
$
|
34,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance
|
$
|
93,573
|
|
|
$
|
227,403
|
|
|
$
|
179,334
|
|
|
$
|
238,109
|
|
|
$
|
1,068,591
|
|
|
$
|
753,163
|
|
|
$
|
82,892
|
|
|
$
|
2,643,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance, individually evaluated for impairment
|
$
|
2,740
|
|
|
$
|
4,039
|
|
|
$
|
832
|
|
|
$
|
4,189
|
|
|
$
|
6,879
|
|
|
$
|
4,333
|
|
|
$
|
59
|
|
|
$
|
23,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ending balance, collectively evaluated for impairment
|
$
|
90,833
|
|
|
$
|
223,364
|
|
|
$
|
178,502
|
|
|
$
|
233,920
|
|
|
$
|
1,061,712
|
|
|
$
|
748,830
|
|
|
$
|
82,833
|
|
|
$
|
2,619,994
|
|
|
Agricultural
|
|
Commercial and
Financial
|
|
Real Estate:
Construction, 1 to 4
family residential
|
|
Real Estate:
Construction, land
development and
commercial
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Grade:
|
|
|
|
|
|
|
|
||||||||
Excellent
|
$
|
3,710
|
|
|
$
|
3,517
|
|
|
$
|
—
|
|
|
$
|
241
|
|
Good
|
14,405
|
|
|
46,648
|
|
|
9,646
|
|
|
15,969
|
|
||||
Satisfactory
|
45,924
|
|
|
122,917
|
|
|
53,520
|
|
|
48,413
|
|
||||
Monitor
|
26,066
|
|
|
44,584
|
|
|
18,506
|
|
|
30,190
|
|
||||
Special Mention
|
3,606
|
|
|
6,438
|
|
|
747
|
|
|
7,218
|
|
||||
Substandard
|
3,100
|
|
|
3,970
|
|
|
1,026
|
|
|
789
|
|
||||
Total
|
$
|
96,811
|
|
|
$
|
228,074
|
|
|
$
|
83,445
|
|
|
$
|
102,820
|
|
|
Real Estate:
Mortgage,
farmland
|
|
Real Estate:
Mortgage, 1 to 4
family first liens
|
|
Real Estate: Mortgage,
1 to 4 family junior
liens
|
|
Real Estate:
Mortgage, multi-
family
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Grade:
|
|
|
|
|
|
|
|
||||||||
Excellent
|
$
|
6,837
|
|
|
$
|
2,732
|
|
|
$
|
262
|
|
|
$
|
18,974
|
|
Good
|
37,941
|
|
|
32,019
|
|
|
4,086
|
|
|
51,338
|
|
||||
Satisfactory
|
136,433
|
|
|
742,836
|
|
|
135,444
|
|
|
191,849
|
|
||||
Monitor
|
53,050
|
|
|
101,037
|
|
|
5,494
|
|
|
61,677
|
|
||||
Special Mention
|
3,971
|
|
|
10,534
|
|
|
1,341
|
|
|
27,361
|
|
||||
Substandard
|
7,971
|
|
|
16,793
|
|
|
1,817
|
|
|
5,995
|
|
||||
Total
|
$
|
246,203
|
|
|
$
|
905,951
|
|
|
$
|
148,444
|
|
|
$
|
357,194
|
|
|
Real Estate:
Mortgage,
commercial
|
|
Loans to
individuals
|
|
Obligations of state and
political subdivisions
|
|
Total
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Grade:
|
|
|
|
|
|
|
|
||||||||
Excellent
|
$
|
26,494
|
|
|
$
|
—
|
|
|
$
|
7,313
|
|
|
$
|
70,080
|
|
Good
|
81,334
|
|
|
199
|
|
|
14,266
|
|
|
307,851
|
|
||||
Satisfactory
|
214,053
|
|
|
30,871
|
|
|
23,158
|
|
|
1,745,418
|
|
||||
Monitor
|
80,061
|
|
|
387
|
|
|
7,795
|
|
|
428,847
|
|
||||
Special Mention
|
4,967
|
|
|
235
|
|
|
385
|
|
|
66,803
|
|
||||
Substandard
|
3,291
|
|
|
57
|
|
|
—
|
|
|
44,809
|
|
||||
Total
|
$
|
410,200
|
|
|
$
|
31,749
|
|
|
$
|
52,917
|
|
|
$
|
2,663,808
|
|
|
Agricultural
|
|
Commercial and
Financial
|
|
Real Estate:
Construction, 1 to 4
family residential
|
|
Real Estate:
Construction, land
development and
commercial
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Grade:
|
|
|
|
|
|
|
|
||||||||
Excellent
|
$
|
3,594
|
|
|
$
|
3,461
|
|
|
$
|
260
|
|
|
$
|
190
|
|
Good
|
12,380
|
|
|
47,843
|
|
|
8,868
|
|
|
23,217
|
|
||||
Satisfactory
|
43,308
|
|
|
117,114
|
|
|
51,093
|
|
|
47,987
|
|
||||
Monitor
|
24,857
|
|
|
44,543
|
|
|
17,505
|
|
|
29,009
|
|
||||
Special Mention
|
3,110
|
|
|
5,157
|
|
|
2,483
|
|
|
7,428
|
|
||||
Substandard
|
4,068
|
|
|
3,205
|
|
|
—
|
|
|
579
|
|
||||
Total
|
$
|
91,317
|
|
|
$
|
221,323
|
|
|
$
|
80,209
|
|
|
$
|
108,410
|
|
|
Real Estate:
Mortgage,
farmland
|
|
Real Estate:
Mortgage, 1 to 4
family first liens
|
|
Real Estate: Mortgage,
1 to 4 family junior
liens
|
|
Real Estate:
Mortgage, multi-
family
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Grade:
|
|
|
|
|
|
|
|
||||||||
Excellent
|
$
|
3,630
|
|
|
$
|
3,209
|
|
|
$
|
261
|
|
|
$
|
18,955
|
|
Good
|
40,118
|
|
|
32,474
|
|
|
4,233
|
|
|
47,871
|
|
||||
Satisfactory
|
134,738
|
|
|
751,215
|
|
|
136,079
|
|
|
189,391
|
|
||||
Monitor
|
53,147
|
|
|
96,353
|
|
|
5,473
|
|
|
60,965
|
|
||||
Special Mention
|
3,033
|
|
|
11,167
|
|
|
1,469
|
|
|
27,559
|
|
||||
Substandard
|
8,064
|
|
|
16,324
|
|
|
1,712
|
|
|
6,020
|
|
||||
Total
|
$
|
242,730
|
|
|
$
|
910,742
|
|
|
$
|
149,227
|
|
|
$
|
350,761
|
|
|
Real Estate:
Mortgage,
commercial
|
|
Loans to
individuals
|
|
Obligations of state and
political subdivisions
|
|
Total
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Grade:
|
|
|
|
|
|
|
|
||||||||
Excellent
|
$
|
27,017
|
|
|
$
|
—
|
|
|
$
|
7,444
|
|
|
$
|
68,021
|
|
Good
|
79,467
|
|
|
221
|
|
|
14,465
|
|
|
311,157
|
|
||||
Satisfactory
|
206,196
|
|
|
31,385
|
|
|
20,274
|
|
|
1,728,780
|
|
||||
Monitor
|
81,381
|
|
|
437
|
|
|
7,323
|
|
|
420,993
|
|
||||
Special Mention
|
4,802
|
|
|
212
|
|
|
390
|
|
|
66,810
|
|
||||
Substandard
|
3,318
|
|
|
53
|
|
|
—
|
|
|
43,343
|
|
||||
Total
|
$
|
402,181
|
|
|
$
|
32,308
|
|
|
$
|
49,896
|
|
|
$
|
2,639,104
|
|
|
30 - 59 Days
Past Due
|
|
60 - 89 Days
Past Due
|
|
90 Days
or More
Past Due
|
|
Total Past
Due
|
|
Current
|
|
Total
Loans
Receivable
|
|
Accruing Loans
Past Due 90
Days or More
|
||||||||||||||
|
(Amounts In Thousands)
|
||||||||||||||||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Agricultural
|
$
|
1,655
|
|
|
$
|
463
|
|
|
$
|
316
|
|
|
$
|
2,434
|
|
|
$
|
94,377
|
|
|
$
|
96,811
|
|
|
$
|
20
|
|
Commercial and financial
|
2,296
|
|
|
459
|
|
|
256
|
|
|
3,011
|
|
|
225,063
|
|
|
228,074
|
|
|
176
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction, 1 to 4 family residential
|
3,555
|
|
|
190
|
|
|
—
|
|
|
3,745
|
|
|
79,700
|
|
|
83,445
|
|
|
—
|
|
|||||||
Construction, land development and commercial
|
1,464
|
|
|
240
|
|
|
—
|
|
|
1,704
|
|
|
101,116
|
|
|
102,820
|
|
|
—
|
|
|||||||
Mortgage, farmland
|
3,992
|
|
|
112
|
|
|
953
|
|
|
5,057
|
|
|
241,146
|
|
|
246,203
|
|
|
161
|
|
|||||||
Mortgage, 1 to 4 family first liens
|
9,148
|
|
|
250
|
|
|
4,479
|
|
|
13,877
|
|
|
892,074
|
|
|
905,951
|
|
|
528
|
|
|||||||
Mortgage, 1 to 4 family junior liens
|
855
|
|
|
101
|
|
|
149
|
|
|
1,105
|
|
|
147,339
|
|
|
148,444
|
|
|
—
|
|
|||||||
Mortgage, multi-family
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|
357,099
|
|
|
357,194
|
|
|
—
|
|
|||||||
Mortgage, commercial
|
1,162
|
|
|
855
|
|
|
—
|
|
|
2,017
|
|
|
408,183
|
|
|
410,200
|
|
|
—
|
|
|||||||
Loans to individuals
|
226
|
|
|
90
|
|
|
16
|
|
|
332
|
|
|
31,417
|
|
|
31,749
|
|
|
—
|
|
|||||||
Obligations of state and political subdivisions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,917
|
|
|
52,917
|
|
|
—
|
|
|||||||
|
$
|
24,353
|
|
|
$
|
2,855
|
|
|
$
|
6,169
|
|
|
$
|
33,377
|
|
|
$
|
2,630,431
|
|
|
$
|
2,663,808
|
|
|
$
|
885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agricultural
|
$
|
163
|
|
|
$
|
275
|
|
|
$
|
122
|
|
|
$
|
560
|
|
|
$
|
90,757
|
|
|
$
|
91,317
|
|
|
$
|
48
|
|
Commercial and financial
|
1,076
|
|
|
229
|
|
|
101
|
|
|
1,406
|
|
|
219,917
|
|
|
221,323
|
|
|
65
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Construction, 1 to 4 family residential
|
635
|
|
|
—
|
|
|
—
|
|
|
635
|
|
|
79,574
|
|
|
80,209
|
|
|
—
|
|
|||||||
Construction, land development and commercial
|
215
|
|
|
101
|
|
|
—
|
|
|
316
|
|
|
108,094
|
|
|
108,410
|
|
|
—
|
|
|||||||
Mortgage, farmland
|
736
|
|
|
—
|
|
|
610
|
|
|
1,346
|
|
|
241,384
|
|
|
242,730
|
|
|
—
|
|
|||||||
Mortgage, 1 to 4 family first liens
|
5,026
|
|
|
3,100
|
|
|
4,149
|
|
|
12,275
|
|
|
898,467
|
|
|
910,742
|
|
|
354
|
|
|||||||
Mortgage, 1 to 4 family junior liens
|
813
|
|
|
126
|
|
|
233
|
|
|
1,172
|
|
|
148,055
|
|
|
149,227
|
|
|
139
|
|
|||||||
Mortgage, multi-family
|
—
|
|
|
97
|
|
|
—
|
|
|
97
|
|
|
350,664
|
|
|
350,761
|
|
|
—
|
|
|||||||
Mortgage, commercial
|
321
|
|
|
489
|
|
|
—
|
|
|
810
|
|
|
401,371
|
|
|
402,181
|
|
|
—
|
|
|||||||
Loans to individuals
|
226
|
|
|
55
|
|
|
15
|
|
|
296
|
|
|
32,012
|
|
|
32,308
|
|
|
—
|
|
|||||||
Obligations of state and political subdivisions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,896
|
|
|
49,896
|
|
|
—
|
|
|||||||
|
$
|
9,211
|
|
|
$
|
4,472
|
|
|
$
|
5,230
|
|
|
$
|
18,913
|
|
|
$
|
2,620,191
|
|
|
$
|
2,639,104
|
|
|
$
|
606
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
Non-accrual
loans (1)
|
|
Accruing loans
past due 90 days
or more
|
|
TDR loans
|
|
Non-
accrual
loans (1)
|
|
Accruing loans
past due 90 days
or more
|
|
TDR loans
|
||||||||||||
|
(Amounts In Thousands)
|
|
(Amounts In Thousands)
|
||||||||||||||||||||
Agricultural
|
$
|
1,356
|
|
|
$
|
20
|
|
|
$
|
425
|
|
|
$
|
1,192
|
|
|
$
|
48
|
|
|
$
|
404
|
|
Commercial and financial
|
1,295
|
|
|
176
|
|
|
1,859
|
|
|
679
|
|
|
65
|
|
|
1,934
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Construction, 1 to 4 family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Construction, land development and commercial
|
—
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
—
|
|
|
320
|
|
||||||
Mortgage, farmland
|
1,288
|
|
|
161
|
|
|
2,681
|
|
|
1,369
|
|
|
—
|
|
|
2,712
|
|
||||||
Mortgage, 1 to 4 family first liens
|
6,489
|
|
|
528
|
|
|
1,615
|
|
|
6,558
|
|
|
354
|
|
|
1,626
|
|
||||||
Mortgage, 1 to 4 family junior liens
|
240
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|
139
|
|
|
—
|
|
||||||
Mortgage, multi-family
|
95
|
|
|
—
|
|
|
1,709
|
|
|
97
|
|
|
—
|
|
|
1,719
|
|
||||||
Mortgage, commercial
|
1,286
|
|
|
—
|
|
|
579
|
|
|
779
|
|
|
—
|
|
|
593
|
|
||||||
|
$
|
12,049
|
|
|
$
|
885
|
|
|
$
|
9,187
|
|
|
$
|
10,768
|
|
|
$
|
606
|
|
|
$
|
9,308
|
|
(1)
|
There were $4.99 million and $4.34 million of TDR loans included within nonaccrual loans as of March 31, 2020 and December 31, 2019, respectively.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||
|
Number
of
contracts
|
|
Recorded
investment
|
|
Commitments
outstanding
|
|
Number
of
contracts
|
|
Recorded
investment
|
|
Commitments
outstanding
|
||||||||||
|
|
|
(Amounts In Thousands)
|
|
|
|
(Amounts In Thousands)
|
||||||||||||||
Agricultural
|
11
|
|
|
$
|
1,559
|
|
|
$
|
—
|
|
|
9
|
|
|
$
|
1,552
|
|
|
$
|
3
|
|
Commercial and financial
|
17
|
|
|
2,685
|
|
|
85
|
|
|
16
|
|
|
2,641
|
|
|
95
|
|
||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction, 1 to 4 family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Construction, land development and commercial
|
2
|
|
|
319
|
|
|
—
|
|
|
2
|
|
|
320
|
|
|
—
|
|
||||
Mortgage, farmland
|
8
|
|
|
3,969
|
|
|
—
|
|
|
8
|
|
|
4,021
|
|
|
—
|
|
||||
Mortgage, 1 to 4 family first liens
|
16
|
|
|
2,067
|
|
|
—
|
|
|
16
|
|
|
2,083
|
|
|
—
|
|
||||
Mortgage, 1 to 4 family junior liens
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Mortgage, multi-family
|
2
|
|
|
1,709
|
|
|
—
|
|
|
2
|
|
|
1,719
|
|
|
—
|
|
||||
Mortgage, commercial
|
8
|
|
|
1,865
|
|
|
—
|
|
|
7
|
|
|
1,373
|
|
|
—
|
|
||||
Loans to individuals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
64
|
|
|
$
|
14,173
|
|
|
$
|
85
|
|
|
60
|
|
|
$
|
13,709
|
|
|
$
|
98
|
|
|
Three Months Ended March 31, 2020
|
|||||||||
|
Number
of
contracts
|
|
Pre-modification
recorded
investment
|
|
Post-modification
recorded
investment
|
|||||
|
|
|
|
|||||||
Agricultural
|
2
|
|
|
$
|
93
|
|
|
$
|
93
|
|
Commercial and financial
|
1
|
|
|
199
|
|
|
199
|
|
||
Real estate:
|
|
|
|
|
|
|
|
|||
Construction, 1 to 4 family residential
|
—
|
|
|
—
|
|
|
—
|
|
||
Construction, land development and commercial
|
—
|
|
|
—
|
|
|
—
|
|
||
Mortgage, farmland
|
—
|
|
|
—
|
|
|
—
|
|
||
Mortgage, 1 to 4 family first lien
|
—
|
|
|
—
|
|
|
—
|
|
||
Mortgage, 1 to 4 family junior liens
|
—
|
|
|
—
|
|
|
—
|
|
||
Mortgage, multi-family
|
—
|
|
|
—
|
|
|
—
|
|
||
Mortgage, commercial
|
1
|
|
|
513
|
|
|
513
|
|
||
|
4
|
|
|
$
|
805
|
|
|
$
|
805
|
|
|
March 31, 2020
|
|
Three Months Ended
March 31, 2020 |
||||||||||||||||
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average Recorded
Investment
|
|
Interest Income
Recognized
|
||||||||||
With no related allowance recorded:
|
(Amounts In Thousands)
|
||||||||||||||||||
Agricultural
|
$
|
1,584
|
|
|
$
|
2,251
|
|
|
$
|
—
|
|
|
$
|
1,688
|
|
|
$
|
6
|
|
Commercial and financial
|
1,303
|
|
|
2,177
|
|
|
—
|
|
|
1,371
|
|
|
12
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Construction, 1 to 4 family residential
|
99
|
|
|
144
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|||||
Construction, land development and commercial
|
319
|
|
|
334
|
|
|
—
|
|
|
320
|
|
|
4
|
|
|||||
Mortgage, farmland
|
3,969
|
|
|
4,496
|
|
|
—
|
|
|
3,995
|
|
|
39
|
|
|||||
Mortgage, 1 to 4 family first liens
|
6,838
|
|
|
8,630
|
|
|
—
|
|
|
6,896
|
|
|
18
|
|
|||||
Mortgage, 1 to 4 family junior liens
|
95
|
|
|
339
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|||||
Mortgage, multi-family
|
1,804
|
|
|
1,921
|
|
|
—
|
|
|
1,810
|
|
|
20
|
|
|||||
Mortgage, commercial
|
1,865
|
|
|
2,415
|
|
|
—
|
|
|
1,876
|
|
|
7
|
|
|||||
Loans to individuals
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
17,876
|
|
|
$
|
22,721
|
|
|
$
|
—
|
|
|
$
|
18,150
|
|
|
$
|
106
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Agricultural
|
$
|
300
|
|
|
$
|
300
|
|
|
$
|
217
|
|
|
$
|
300
|
|
|
$
|
1
|
|
Commercial and financial
|
2,550
|
|
|
2,718
|
|
|
1,534
|
|
|
2,421
|
|
|
23
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction, 1 to 4 family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Construction, land development and commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Mortgage, farmland
|
161
|
|
|
161
|
|
|
3
|
|
|
161
|
|
|
3
|
|
|||||
Mortgage, 1 to 4 family first liens
|
1,695
|
|
|
1,962
|
|
|
126
|
|
|
1,730
|
|
|
9
|
|
|||||
Mortgage, 1 to 4 family junior liens
|
145
|
|
|
146
|
|
|
50
|
|
|
147
|
|
|
—
|
|
|||||
Mortgage, multi-family
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Mortgage, commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loans to individuals
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|||||
|
$
|
4,853
|
|
|
$
|
5,289
|
|
|
$
|
1,932
|
|
|
$
|
4,761
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Agricultural
|
$
|
1,884
|
|
|
$
|
2,551
|
|
|
$
|
217
|
|
|
$
|
1,988
|
|
|
$
|
7
|
|
Commercial and financial
|
3,853
|
|
|
4,895
|
|
|
1,534
|
|
|
3,792
|
|
|
35
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Construction, 1 to 4 family residential
|
99
|
|
|
144
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|||||
Construction, land development and commercial
|
319
|
|
|
334
|
|
|
—
|
|
|
320
|
|
|
4
|
|
|||||
Mortgage, farmland
|
4,130
|
|
|
4,657
|
|
|
3
|
|
|
4,156
|
|
|
42
|
|
|||||
Mortgage, 1 to 4 family first liens
|
8,533
|
|
|
10,592
|
|
|
126
|
|
|
8,626
|
|
|
27
|
|
|||||
Mortgage, 1 to 4 family junior liens
|
240
|
|
|
485
|
|
|
50
|
|
|
241
|
|
|
—
|
|
|||||
Mortgage, multi-family
|
1,804
|
|
|
1,921
|
|
|
—
|
|
|
1,810
|
|
|
20
|
|
|||||
Mortgage, commercial
|
1,865
|
|
|
2,415
|
|
|
—
|
|
|
1,876
|
|
|
7
|
|
|||||
Loans to individuals
|
2
|
|
|
16
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|||||
|
$
|
22,729
|
|
|
$
|
28,010
|
|
|
$
|
1,932
|
|
|
$
|
22,911
|
|
|
$
|
142
|
|
|
Recorded
Investment
|
|
Unpaid Principal
Balance
|
|
Related
Allowance
|
||||||
With no related allowance recorded:
|
(Amounts In Thousands)
|
||||||||||
Agricultural
|
$
|
1,596
|
|
|
$
|
2,157
|
|
|
$
|
—
|
|
Commercial and financial
|
1,340
|
|
|
2,220
|
|
|
—
|
|
|||
Real estate:
|
|
|
|
|
|
|
|
|
|||
Construction, 1 to 4 family residential
|
101
|
|
|
144
|
|
|
—
|
|
|||
Construction, land development and commercial
|
320
|
|
|
336
|
|
|
—
|
|
|||
Mortgage, farmland
|
4,081
|
|
|
4,613
|
|
|
—
|
|
|||
Mortgage, 1 to 4 family first liens
|
7,157
|
|
|
9,015
|
|
|
—
|
|
|||
Mortgage, 1 to 4 family junior liens
|
—
|
|
|
246
|
|
|
—
|
|
|||
Mortgage, multi-family
|
1,816
|
|
|
1,930
|
|
|
—
|
|
|||
Mortgage, commercial
|
1,302
|
|
|
1,852
|
|
|
—
|
|
|||
Loans to individuals
|
—
|
|
|
14
|
|
|
—
|
|
|||
|
$
|
17,713
|
|
|
$
|
22,527
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|||
Agricultural
|
$
|
134
|
|
|
$
|
134
|
|
|
$
|
87
|
|
Commercial and financial
|
1,402
|
|
|
1,539
|
|
|
792
|
|
|||
Real estate:
|
|
|
|
|
|
|
|
|
|||
Construction, 1 to 4 family residential
|
—
|
|
|
—
|
|
|
—
|
|
|||
Construction, land development and commercial
|
—
|
|
|
—
|
|
|
—
|
|
|||
Mortgage, farmland
|
—
|
|
|
—
|
|
|
—
|
|
|||
Mortgage, 1 to 4 family first liens
|
1,280
|
|
|
1,501
|
|
|
64
|
|
|||
Mortgage, 1 to 4 family junior liens
|
233
|
|
|
233
|
|
|
47
|
|
|||
Mortgage, multi-family
|
—
|
|
|
—
|
|
|
—
|
|
|||
Mortgage, commercial
|
70
|
|
|
70
|
|
|
1
|
|
|||
Loans to individuals
|
93
|
|
|
93
|
|
|
93
|
|
|||
|
$
|
3,212
|
|
|
$
|
3,570
|
|
|
$
|
1,084
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|||
Agricultural
|
$
|
1,730
|
|
|
$
|
2,291
|
|
|
$
|
87
|
|
Commercial and financial
|
2,742
|
|
|
3,759
|
|
|
792
|
|
|||
Real estate:
|
|
|
|
|
|
|
|
|
|||
Construction, 1 to 4 family residential
|
101
|
|
|
144
|
|
|
—
|
|
|||
Construction, land development and commercial
|
320
|
|
|
336
|
|
|
—
|
|
|||
Mortgage, farmland
|
4,081
|
|
|
4,613
|
|
|
—
|
|
|||
Mortgage, 1 to 4 family first liens
|
8,437
|
|
|
10,516
|
|
|
64
|
|
|||
Mortgage, 1 to 4 family junior liens
|
233
|
|
|
479
|
|
|
47
|
|
|||
Mortgage, multi-family
|
1,816
|
|
|
1,930
|
|
|
—
|
|
|||
Mortgage, commercial
|
1,372
|
|
|
1,922
|
|
|
1
|
|
|||
Loans to individuals
|
93
|
|
|
107
|
|
|
93
|
|
|||
|
$
|
20,925
|
|
|
$
|
26,097
|
|
|
$
|
1,084
|
|
Note 6.
|
Leases
|
Year ending December 31:
|
(Amounts In Thousands)
|
||
2020
|
$
|
352
|
|
2021
|
456
|
|
|
2022
|
448
|
|
|
2023
|
301
|
|
|
2024
|
250
|
|
|
Thereafter
|
2,009
|
|
|
Total lease payments
|
3,816
|
|
|
Less imputed interest
|
(679
|
)
|
|
Total operating lease liabilities
|
$
|
3,137
|
|
Note 7.
|
Fair Value Measurements
|
|
March 31, 2020
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated Fair
Value
|
|
Readily
Available
Market
Prices(1)
|
|
Observable
Market
Prices(2)
|
|
Company
Determined
Market
Prices(3)
|
||||||||||
|
(Amounts In Thousands)
|
||||||||||||||||||
Financial instrument assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
268,293
|
|
|
$
|
268,293
|
|
|
$
|
268,293
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment securities
|
383,213
|
|
|
383,213
|
|
|
148,740
|
|
|
234,473
|
|
|
—
|
|
|||||
Loans held for sale
|
11,592
|
|
|
11,592
|
|
|
—
|
|
|
11,592
|
|
|
—
|
|
|||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Agricultural
|
94,051
|
|
|
94,325
|
|
|
—
|
|
|
—
|
|
|
94,325
|
|
|||||
Commercial and financial
|
221,394
|
|
|
222,339
|
|
|
—
|
|
|
—
|
|
|
222,339
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Construction, 1 to 4 family residential
|
82,255
|
|
|
82,626
|
|
|
—
|
|
|
—
|
|
|
82,626
|
|
|||||
Construction, land development and commercial
|
101,389
|
|
|
100,695
|
|
|
—
|
|
|
—
|
|
|
100,695
|
|
|||||
Mortgage, farmland
|
242,107
|
|
|
240,554
|
|
|
—
|
|
|
—
|
|
|
240,554
|
|
|||||
Mortgage, 1 to 4 family first liens
|
896,775
|
|
|
887,278
|
|
|
—
|
|
|
—
|
|
|
887,278
|
|
|||||
Mortgage, 1 to 4 family junior liens
|
146,799
|
|
|
142,083
|
|
|
—
|
|
|
—
|
|
|
142,083
|
|
|||||
Mortgage, multi-family
|
352,986
|
|
|
353,963
|
|
|
—
|
|
|
—
|
|
|
353,963
|
|
|||||
Mortgage, commercial
|
405,345
|
|
|
402,564
|
|
|
—
|
|
|
—
|
|
|
402,564
|
|
|||||
Loans to individuals
|
30,984
|
|
|
32,244
|
|
|
—
|
|
|
—
|
|
|
32,244
|
|
|||||
Obligations of state and political subdivisions
|
52,314
|
|
|
52,850
|
|
|
—
|
|
|
—
|
|
|
52,850
|
|
|||||
Accrued interest receivable
|
13,691
|
|
|
13,691
|
|
|
—
|
|
|
13,691
|
|
|
—
|
|
|||||
Total financial instrument assets
|
$
|
3,303,188
|
|
|
$
|
3,288,310
|
|
|
$
|
417,033
|
|
|
$
|
259,756
|
|
|
$
|
2,611,521
|
|
Financial instrument liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Noninterest-bearing deposits
|
$
|
381,171
|
|
|
$
|
381,171
|
|
|
$
|
—
|
|
|
$
|
381,171
|
|
|
$
|
—
|
|
Interest-bearing deposits
|
2,350,543
|
|
|
2,370,184
|
|
|
—
|
|
|
2,370,184
|
|
|
—
|
|
|||||
Federal Home Loan Bank borrowings
|
185,000
|
|
|
186,018
|
|
|
—
|
|
|
186,018
|
|
|
—
|
|
|||||
Interest rate swaps
|
3,447
|
|
|
3,447
|
|
|
—
|
|
|
3,447
|
|
|
—
|
|
|||||
Accrued interest payable
|
2,352
|
|
|
2,352
|
|
|
—
|
|
|
2,352
|
|
|
—
|
|
|||||
Total financial instrument liabilities
|
$
|
2,922,513
|
|
|
$
|
2,943,172
|
|
|
$
|
—
|
|
|
$
|
2,943,172
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Face Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financial instrument with off-balance sheet risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loan commitments
|
$
|
479,581
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Letters of credit
|
8,447
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total financial instrument liabilities with off-balance-sheet risk
|
$
|
488,028
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Considered Level 1 under Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”).
|
(2)
|
Considered Level 2 under ASC 820.
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
|
December 31, 2019
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated Fair
Value
|
|
Readily
Available
Market
Prices(1)
|
|
Observable
Market
Prices(2)
|
|
Company
Determined
Market
Prices(3)
|
||||||||||
|
(Amounts In Thousands)
|
||||||||||||||||||
Financial instrument assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
241,965
|
|
|
$
|
241,965
|
|
|
$
|
241,965
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment securities
|
366,368
|
|
|
366,368
|
|
|
128,585
|
|
|
237,783
|
|
|
—
|
|
|||||
Loans held for sale
|
8,400
|
|
|
8,400
|
|
|
—
|
|
|
8,400
|
|
|
—
|
|
|||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Agricultural
|
88,917
|
|
|
90,118
|
|
|
—
|
|
|
—
|
|
|
90,118
|
|
|||||
Commercial and financial
|
216,335
|
|
|
217,640
|
|
|
—
|
|
|
—
|
|
|
217,640
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Construction, 1 to 4 family residential
|
79,096
|
|
|
79,954
|
|
|
—
|
|
|
—
|
|
|
79,954
|
|
|||||
Construction, land development and commercial
|
106,924
|
|
|
107,276
|
|
|
—
|
|
|
—
|
|
|
107,276
|
|
|||||
Mortgage, farmland
|
238,780
|
|
|
239,521
|
|
|
—
|
|
|
—
|
|
|
239,521
|
|
|||||
Mortgage, 1 to 4 family first liens
|
902,630
|
|
|
896,676
|
|
|
—
|
|
|
—
|
|
|
896,676
|
|
|||||
Mortgage, 1 to 4 family junior liens
|
147,634
|
|
|
143,261
|
|
|
—
|
|
|
—
|
|
|
143,261
|
|
|||||
Mortgage, multi-family
|
346,938
|
|
|
349,663
|
|
|
—
|
|
|
—
|
|
|
349,663
|
|
|||||
Mortgage, commercial
|
398,145
|
|
|
395,838
|
|
|
—
|
|
|
—
|
|
|
395,838
|
|
|||||
Loans to individuals
|
31,455
|
|
|
32,722
|
|
|
—
|
|
|
—
|
|
|
32,722
|
|
|||||
Obligations of state and political subdivisions
|
49,423
|
|
|
50,564
|
|
|
—
|
|
|
—
|
|
|
50,564
|
|
|||||
Accrued interest receivable
|
12,442
|
|
|
12,442
|
|
|
—
|
|
|
12,442
|
|
|
—
|
|
|||||
Total financial instrument assets
|
$
|
3,235,452
|
|
|
$
|
3,232,408
|
|
|
$
|
370,550
|
|
|
$
|
258,625
|
|
|
$
|
2,603,233
|
|
Financial instrument liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Noninterest-bearing deposits
|
$
|
387,612
|
|
|
$
|
387,612
|
|
|
$
|
—
|
|
|
$
|
387,612
|
|
|
$
|
—
|
|
Interest-bearing deposits
|
2,273,752
|
|
|
2,292,332
|
|
|
—
|
|
|
2,292,332
|
|
|
—
|
|
|||||
Federal Home Loan Bank borrowings
|
185,000
|
|
|
186,091
|
|
|
—
|
|
|
186,091
|
|
|
—
|
|
|||||
Interest rate swaps
|
2,349
|
|
|
2,349
|
|
|
|
|
2,349
|
|
|
|
|||||||
Accrued interest payable
|
2,474
|
|
|
2,474
|
|
|
—
|
|
|
2,474
|
|
|
—
|
|
|||||
Total financial instrument liabilities
|
$
|
2,851,187
|
|
|
$
|
2,870,858
|
|
|
$
|
—
|
|
|
$
|
2,870,858
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Face Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financial instrument with off-balance sheet risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loan commitments
|
$
|
424,165
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Letters of credit
|
8,569
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total financial instrument liabilities with off-balance-sheet risk
|
$
|
432,734
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Considered Level 1 under ASC 820.
|
(2)
|
Considered Level 2 under ASC 820.
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities.
|
|
Level 2
|
Observable inputs other than quoted prices included within Level 1. Observable inputs include the quoted prices for similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable for the asset or liability.
|
|
Level 3
|
Unobservable inputs supported by little or no market activity for financial instruments. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
|
March 31, 2020
|
||||||||||||||
|
Readily
Available
Market
Prices(1)
|
|
Observable
Market Prices(2)
|
|
Company
Determined
Market
Prices(3)
|
|
Total at Fair
Value
|
||||||||
Securities available for sale
|
(Amounts In Thousands)
|
||||||||||||||
U.S. Treasury
|
$
|
148,740
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
148,740
|
|
State and political subdivisions
|
—
|
|
|
210,273
|
|
|
—
|
|
|
210,273
|
|
||||
Other securities (FHLB, FHLMC and FNMA)
|
—
|
|
|
12,826
|
|
|
—
|
|
|
12,826
|
|
||||
Derivative Financial Instruments
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
(3,447
|
)
|
|
$
|
—
|
|
|
(3,447
|
)
|
||
Total
|
$
|
148,740
|
|
|
$
|
219,652
|
|
|
$
|
—
|
|
|
$
|
368,392
|
|
|
December 31, 2019
|
||||||||||||||
|
Readily
Available
Market
Prices(1)
|
|
Observable
Market Prices(2)
|
|
Company
Determined
Market
Prices(3)
|
|
Total at Fair
Value
|
||||||||
Securities available for sale
|
(Amounts In Thousands)
|
||||||||||||||
U.S. Treasury
|
$
|
128,585
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
128,585
|
|
State and political subdivisions
|
—
|
|
|
211,489
|
|
|
—
|
|
|
211,489
|
|
||||
Other securities (FHLB, FHLMC and FNMA)
|
—
|
|
|
15,229
|
|
|
—
|
|
|
15,229
|
|
||||
Derivative Financial Instruments
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
(2,349
|
)
|
|
—
|
|
|
(2,349
|
)
|
||||
Total
|
$
|
128,585
|
|
|
$
|
224,369
|
|
|
$
|
—
|
|
|
$
|
352,954
|
|
(1)
|
Considered Level 1 under ASC 820.
|
(2)
|
Considered Level 2 under ASC 820.
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
|
March 31, 2020
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||
|
Readily
Available
Market
Prices(1)
|
|
Observable
Market
Prices(2)
|
|
Company
Determined
Market
Prices(3)
|
|
Total at
Fair
Value
|
|
Total Losses
|
||||||||||
|
(Amounts in Thousands)
|
|
|
||||||||||||||||
Loans (4)
|
|
|
|
|
|
|
|
|
|
||||||||||
Agricultural
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,371
|
|
|
$
|
1,371
|
|
|
$
|
—
|
|
Commercial and financial
|
—
|
|
|
—
|
|
|
2,099
|
|
|
2,099
|
|
|
—
|
|
|||||
Real Estate:
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Construction, 1 to 4 family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Construction, land development and commercial
|
—
|
|
|
—
|
|
|
215
|
|
|
215
|
|
|
—
|
|
|||||
Mortgage, farmland
|
—
|
|
|
—
|
|
|
3,464
|
|
|
3,464
|
|
|
—
|
|
|||||
Mortgage, 1 to 4 family first liens
|
—
|
|
|
—
|
|
|
7,850
|
|
|
7,850
|
|
|
93
|
|
|||||
Mortgage, 1 to 4 family junior liens
|
—
|
|
|
—
|
|
|
189
|
|
|
189
|
|
|
—
|
|
|||||
Mortgage, multi-family
|
—
|
|
|
—
|
|
|
1,804
|
|
|
1,804
|
|
|
—
|
|
|||||
Mortgage, commercial
|
—
|
|
|
—
|
|
|
1,732
|
|
|
1,732
|
|
|
—
|
|
|||||
Loans to individuals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreclosed assets (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,724
|
|
|
$
|
18,724
|
|
|
$
|
93
|
|
(1)
|
Considered Level 1 under ASC 820.
|
(2)
|
Considered Level 2 under ASC 820.
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
(4)
|
Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero.
|
(5)
|
Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets.
|
|
December 31, 2019
|
|
Year Ended December 31, 2019
|
||||||||||||||||
|
Readily
Available
Market
Prices(1)
|
|
Observable
Market
Prices(2)
|
|
Company
Determined
Market
Prices(3)
|
|
Total at Fair
Value
|
|
Total Losses
|
||||||||||
|
(Amounts in Thousands)
|
|
|
||||||||||||||||
Loans (4)
|
|
|
|
|
|
|
|
|
|
||||||||||
Agricultural
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,272
|
|
|
$
|
1,272
|
|
|
$
|
36
|
|
Commercial and financial
|
—
|
|
|
—
|
|
|
1,803
|
|
|
1,803
|
|
|
499
|
|
|||||
Real Estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction, 1 to 4 family residential
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Construction, land development and commercial
|
—
|
|
|
—
|
|
|
215
|
|
|
215
|
|
|
8
|
|
|||||
Mortgage, farmland
|
—
|
|
|
—
|
|
|
3,576
|
|
|
3,576
|
|
|
—
|
|
|||||
Mortgage, 1 to 4 family first liens
|
—
|
|
|
—
|
|
|
7,986
|
|
|
7,986
|
|
|
370
|
|
|||||
Mortgage, 1 to 4 family junior liens
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
|
—
|
|
|||||
Mortgage, multi-family
|
—
|
|
|
—
|
|
|
1,816
|
|
|
1,816
|
|
|
—
|
|
|||||
Mortgage, commercial
|
—
|
|
|
—
|
|
|
1,237
|
|
|
1,237
|
|
|
125
|
|
|||||
Loans to individuals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreclosed assets (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,954
|
|
|
$
|
17,954
|
|
|
$
|
1,038
|
|
(1)
|
Considered Level 1 under ASC 820.
|
(2)
|
Considered Level 2 under ASC 820.
|
(3)
|
Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
|
(4)
|
Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero.
|
(5)
|
Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets.
|
Note 8.
|
Stock Repurchase Program
|
Note 9.
|
Commitments and Contingencies
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
(Amounts In Thousands)
|
||||||
Firm loan commitments and unused portion of lines of credit:
|
|
|
|
||||
Home equity loans
|
$
|
69,940
|
|
|
$
|
65,203
|
|
Credit cards
|
59,848
|
|
|
57,421
|
|
||
Commercial, real estate and home construction
|
114,387
|
|
|
94,490
|
|
||
Commercial lines and real estate purchase loans
|
235,406
|
|
|
207,051
|
|
||
Outstanding letters of credit
|
8,447
|
|
|
8,569
|
|
Note 10.
|
Income Taxes
|
Note 11.
|
Derivative Financial Instruments
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance
Sheet
Category
|
|
Maturity
|
||||
|
(Amounts in Thousands)
|
|
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||
Interest rate swap
|
$
|
25,000
|
|
|
$
|
(357
|
)
|
|
Other Liabilities
|
|
11/9/2020
|
Interest rate swap
|
25,000
|
|
|
(3,090
|
)
|
|
Other Liabilities
|
|
11/7/2023
|
||
|
|
|
|
|
|
|
|
||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||
Interest rate swap
|
$
|
25,000
|
|
|
$
|
(279
|
)
|
|
Other Liabilities
|
|
11/9/2020
|
Interest rate swap
|
25,000
|
|
|
(2,070
|
)
|
|
Other Liabilities
|
|
11/7/2023
|
|
|
|
|
||||||||||||
|
Recognized
in OCI
|
|
Reclassified from AOCI into
Income
|
|
Recognized in Income on
Derivatives
|
||||||||||
|
Amount of
Gain (Loss)
|
|
Category
|
|
Amount
of Gain
(Loss)
|
|
Category
|
|
Amount
of Gain
(Loss)
|
||||||
|
(Amounts in Thousands)
|
||||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap
|
$
|
(58
|
)
|
|
Interest Expense
|
|
$
|
—
|
|
|
Other Income
|
|
$
|
—
|
|
Interest rate swap
|
(766
|
)
|
|
Interest Expense
|
|
—
|
|
|
Other Income
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest rate swap
|
$
|
(119
|
)
|
|
Interest Expense
|
|
$
|
—
|
|
|
Other Income
|
|
$
|
—
|
|
Interest rate swap
|
(446
|
)
|
|
Interest Expense
|
|
—
|
|
|
Other Income
|
|
—
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
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.
|
•
|
The effects of recent financial market disruptions, and monetary and other governmental actions designed to address such disruptions.
|
•
|
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.
|
•
|
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 other-than-temporary impairment of the affected securities and the recognition of an impairment loss.
|
•
|
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.
|
•
|
The effects of changes in interest rates (including the effects of changes in the rate of prepayments of the Company’s assets) and the policies of the Board of Governors of the Federal Reserve System.
|
•
|
The ability of the Company to compete with other financial institutions as effectively as the Company currently intends due to increases in competitive pressures in the financial services sector.
|
•
|
The ability of the Company to obtain new customers and to retain existing customers.
|
•
|
The timely development and acceptance of products and services, including products and services offered through alternative electronic delivery channels.
|
•
|
Technological changes implemented by the Company and by other parties, including third party vendors, which may be more difficult or more expensive than anticipated or which may have unforeseen consequences to the Company and its customers.
|
•
|
The ability of the Company to develop and maintain secure and reliable electronic systems.
|
•
|
The ability of the Company to retain key executives and employees and the difficulty that the Company may experience in replacing key executives and employees in an effective manner.
|
•
|
Consumer spending and saving habits which may change in a manner that affects the Company’s business adversely.
|
•
|
The economic impact of natural disasters, diseases and/or pandemics, terrorist attacks and military actions.
|
•
|
Business combinations and the integration of acquired businesses and assets which may be more difficult or expensive than expected.
|
•
|
The costs, effects and outcomes of existing or future litigation.
|
•
|
Changes in accounting policies and practices that may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board.
|
•
|
The ability of the Company to manage the risks associated with the foregoing as well as anticipated.
|
•
|
Total assets were $3.366 billion, an increase of $65.35 million since December 31, 2019.
|
•
|
Cash and cash equivalents were $268.29 million, an increase of $26.33 million since December 31, 2019. Cash and cash equivalents growth included approximately $83.56 million of temporary public funds.
|
•
|
Net loans were $2.638 billion, an increase of $23.31 million since December 31, 2019. Loans held for sale increased $3.19 million since December 31, 2019.
|
•
|
Deposits increased $70.35 million since December 31, 2019. Deposit growth included approximately $83.56 million in temporary public funds.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
|
(Amounts In Thousands)
|
|
(Amounts In Thousands)
|
||||||||||
Agricultural
|
$
|
96,811
|
|
|
3.64
|
%
|
|
$
|
91,317
|
|
|
3.46
|
%
|
Commercial and financial
|
228,074
|
|
|
8.56
|
|
|
221,323
|
|
|
8.39
|
|
||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||
Construction, 1 to 4 family residential
|
83,445
|
|
|
3.13
|
|
|
80,209
|
|
|
3.04
|
|
||
Construction, land development and commercial
|
102,820
|
|
|
3.86
|
|
|
108,410
|
|
|
4.11
|
|
||
Mortgage, farmland
|
246,203
|
|
|
9.24
|
|
|
242,730
|
|
|
9.20
|
|
||
Mortgage, 1 to 4 family first liens
|
905,951
|
|
|
34.01
|
|
|
910,742
|
|
|
34.51
|
|
||
Mortgage, 1 to 4 family junior liens
|
148,444
|
|
|
5.57
|
|
|
149,227
|
|
|
5.65
|
|
||
Mortgage, multi-family
|
357,194
|
|
|
13.41
|
|
|
350,761
|
|
|
13.29
|
|
||
Mortgage, commercial
|
410,200
|
|
|
15.40
|
|
|
402,181
|
|
|
15.24
|
|
||
Loans to individuals
|
31,749
|
|
|
1.19
|
|
|
32,308
|
|
|
1.22
|
|
||
Obligations of state and political subdivisions
|
52,917
|
|
|
1.99
|
|
|
49,896
|
|
|
1.89
|
|
||
|
$
|
2,663,808
|
|
|
100.00
|
%
|
|
$
|
2,639,104
|
|
|
100.00
|
%
|
Net unamortized fees and costs
|
931
|
|
|
|
|
|
933
|
|
|
|
|
||
|
$
|
2,664,739
|
|
|
|
|
|
$
|
2,640,037
|
|
|
|
|
Less allowance for loan losses
|
38,340
|
|
|
|
|
|
33,760
|
|
|
|
|
||
|
$
|
2,626,399
|
|
|
|
|
|
$
|
2,606,277
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||
|
Amount
|
|
% of Total
Allowance
|
|
% of Loans to
Total Loans
|
|
Amount
|
|
% of Total
Allowance
|
|
% of Loans to
Total Loans
|
||||||||
|
(In Thousands)
|
|
|
|
|
|
(In Thousands)
|
|
|
|
|
||||||||
Agricultural
|
$
|
2,760
|
|
|
7.20
|
%
|
|
3.64
|
%
|
|
$
|
2,400
|
|
|
7.11
|
%
|
|
3.46
|
%
|
Commercial and financial
|
6,680
|
|
|
17.42
|
|
|
8.56
|
|
|
4,988
|
|
|
14.77
|
|
|
8.39
|
|
||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Construction, 1 to 4 family residential
|
1,190
|
|
|
3.10
|
|
|
3.13
|
|
|
1,113
|
|
|
3.30
|
|
|
3.04
|
|
||
Construction, land development and commercial
|
1,431
|
|
|
3.73
|
|
|
3.86
|
|
|
1,486
|
|
|
4.40
|
|
|
4.11
|
|
||
Mortgage, farmland
|
4,096
|
|
|
10.68
|
|
|
9.24
|
|
|
3,950
|
|
|
11.70
|
|
|
9.20
|
|
||
Mortgage, 1 to 4 family first liens
|
10,107
|
|
|
26.37
|
|
|
34.01
|
|
|
9,045
|
|
|
26.79
|
|
|
34.51
|
|
||
Mortgage, 1 to 4 family junior liens
|
1,645
|
|
|
4.29
|
|
|
5.57
|
|
|
1,593
|
|
|
4.72
|
|
|
5.65
|
|
||
Mortgage, multi-family
|
4,208
|
|
|
10.98
|
|
|
13.41
|
|
|
3,823
|
|
|
11.32
|
|
|
13.29
|
|
||
Mortgage, commercial
|
4,855
|
|
|
12.66
|
|
|
15.40
|
|
|
4,036
|
|
|
11.95
|
|
|
15.24
|
|
||
Loans to individuals
|
765
|
|
|
2.00
|
|
|
1.19
|
|
|
853
|
|
|
2.53
|
|
|
1.22
|
|
||
Obligations of state and political subdivisions
|
603
|
|
|
1.57
|
|
|
1.99
|
|
|
473
|
|
|
1.41
|
|
|
1.89
|
|
||
|
$
|
38,340
|
|
|
100.00
|
%
|
|
100.00
|
%
|
|
$
|
33,760
|
|
|
100.00
|
%
|
|
100.00
|
%
|
|
Actual
|
|
For Capital Adequacy Purposes
|
|
To Be Well Capitalized Under Prompt Corrective Action Provisions
|
||||||
|
Amount
|
|
Ratio
|
|
Ratio
|
|
Ratio
|
||||
As of March 31, 2020:
|
|
|
|
|
|
|
|
||||
Company:
|
|
|
|
|
|
|
|
||||
Community Bank Leverage ratio
|
423,554
|
|
|
12.86
|
|
|
8.000
|
|
|
11.000
|
|
Bank:
|
|
|
|
|
|
|
|
|
|
|
|
Community Bank Leverage ratio
|
423,623
|
|
|
12.87
|
|
|
8.000
|
|
|
11.000
|
|
|
Actual
|
|
For Capital Adequacy Purposes
|
|
To Be Well Capitalized Under Prompt Corrective Action Provisions
|
|||||||
|
Amount
|
|
Ratio
|
|
Ratio
|
|
Ratio
|
|||||
As of December 31, 2019
|
|
|
|
|
|
|
|
|||||
Company:
|
|
|
|
|
|
|
|
|||||
Total risk-based capital
|
$
|
454,452
|
|
|
18.15
|
%
|
|
8.00
|
%
|
|
10.00
|
%
|
Tier 1 risk-based capital
|
423,122
|
|
|
16.90
|
|
|
6.00
|
|
|
8.00
|
|
|
Tier 1 common equity
|
423,122
|
|
|
16.90
|
|
|
4.50
|
|
|
6.50
|
|
|
Leverage ratio
|
423,122
|
|
|
12.77
|
|
|
4.00
|
|
|
5.00
|
|
|
Bank:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
|
455,440
|
|
|
18.20
|
|
|
8.00
|
|
|
10.00
|
|
|
Tier 1 risk-based capital
|
424,127
|
|
|
16.95
|
|
|
6.00
|
|
|
8.00
|
|
|
Tier 1 common equity
|
424,127
|
|
|
16.95
|
|
|
4.50
|
|
|
6.50
|
|
|
Leverage ratio
|
424,127
|
|
|
12.81
|
|
|
4.00
|
|
|
5.00
|
|
•
|
Net interest income increased by $0.82 million, before provision expense.
|
•
|
The provision for loan losses increased by $5.90 million.
|
•
|
Noninterest income increased by $0.92 million.
|
•
|
Noninterest expenses increased by $1.18 million.
|
•
|
Income tax expense decreased by $1.21 million.
|
|
|
|
|
|
Increase (Decrease) in Net Interest Income
|
|||||||||||||
|
Change in
Average Balance
|
|
Change in
Average Rate
|
|
Volume Changes
|
|
Rate Changes
|
|
Net Change
|
|||||||||
|
(Amounts in Thousands)
|
|||||||||||||||||
Interest income:
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans, net
|
$
|
18,909
|
|
|
(0.03
|
)%
|
|
$
|
687
|
|
|
$
|
(363
|
)
|
|
$
|
324
|
|
Taxable securities
|
27,780
|
|
|
(0.07
|
)
|
|
197
|
|
|
(71
|
)
|
|
126
|
|
||||
Nontaxable securities
|
6,044
|
|
|
(0.05
|
)
|
|
41
|
|
|
(25
|
)
|
|
16
|
|
||||
Federal funds sold
|
120,201
|
|
|
(1.14
|
)
|
|
736
|
|
|
(589
|
)
|
|
147
|
|
||||
|
$
|
172,934
|
|
|
|
|
|
$
|
1,661
|
|
|
$
|
(1,048
|
)
|
|
$
|
613
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing demand deposits
|
$
|
106,569
|
|
|
(0.08
|
)%
|
|
$
|
(238
|
)
|
|
$
|
145
|
|
|
$
|
(93
|
)
|
Savings deposits
|
(23,206
|
)
|
|
(0.37
|
)
|
|
180
|
|
|
640
|
|
|
820
|
|
||||
Time deposits
|
70,221
|
|
|
0.19
|
|
|
(393
|
)
|
|
(327
|
)
|
|
(720
|
)
|
||||
FHLB borrowings
|
(30,000
|
)
|
|
—
|
|
|
205
|
|
|
—
|
|
|
205
|
|
||||
Interest-bearing other liabilities
|
(4
|
)
|
|
(1.21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
123,580
|
|
|
|
|
|
$
|
(246
|
)
|
|
$
|
458
|
|
|
$
|
212
|
|
Change in net interest income
|
|
|
|
|
|
|
$
|
1,415
|
|
|
$
|
(590
|
)
|
|
$
|
825
|
|
(Tax Equivalent Basis)
|
|
2020
|
|
2019
|
||
Yield on average interest-earning assets
|
|
4.15
|
%
|
|
4.35
|
%
|
Rate on average interest-bearing liabilities
|
|
1.27
|
|
|
1.39
|
|
Net interest spread
|
|
2.88
|
%
|
|
2.96
|
%
|
Effect of noninterest-bearing funds
|
|
0.28
|
|
|
0.31
|
|
Net interest margin (tax equivalent interest income divided by average interest-earning assets)
|
|
3.16
|
%
|
|
3.27
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Net gain on sale of loans
|
$
|
658
|
|
|
$
|
286
|
|
|
$
|
372
|
|
|
130.07
|
%
|
Trust fees
|
2,570
|
|
|
2,252
|
|
|
318
|
|
|
14.12
|
|
|||
Service charges and fees
|
2,529
|
|
|
2,275
|
|
|
254
|
|
|
11.16
|
|
|||
Other noninterest income
|
400
|
|
|
437
|
|
|
(37
|
)
|
|
(8.47
|
)
|
|||
Gain on sale of investment securities
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|||
|
$
|
6,167
|
|
|
$
|
5,250
|
|
|
$
|
917
|
|
|
17.47
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Salaries and employee benefits
|
$
|
9,584
|
|
|
$
|
8,722
|
|
|
$
|
862
|
|
|
9.88
|
%
|
Occupancy
|
1,152
|
|
|
1,186
|
|
|
(34
|
)
|
|
(2.87
|
)
|
|||
Furniture and equipment
|
1,781
|
|
|
1,673
|
|
|
108
|
|
|
6.46
|
|
|||
Office supplies and postage
|
503
|
|
|
459
|
|
|
44
|
|
|
9.59
|
|
|||
Advertising and business development
|
759
|
|
|
638
|
|
|
121
|
|
|
18.97
|
|
|||
Outside services
|
2,685
|
|
|
2,572
|
|
|
113
|
|
|
4.39
|
|
|||
FDIC insurance assessment
|
180
|
|
|
209
|
|
|
(29
|
)
|
|
(13.88
|
)
|
|||
Other noninterest expense
|
583
|
|
|
590
|
|
|
(7
|
)
|
|
(1.19
|
)
|
|||
|
$
|
17,227
|
|
|
$
|
16,049
|
|
|
$
|
1,178
|
|
|
7.34
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
demand for our products and services may decline, making it difficult to grow assets and income;
|
•
|
if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;
|
•
|
collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase;
|
•
|
our allowance for loan losses may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect our net income;
|
•
|
the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us;
|
•
|
as the result of the decline in the Federal Reserve Board’s target federal funds rate, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income;
|
•
|
a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend;
|
•
|
we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us; and
|
•
|
Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs.
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total number of shares
purchased
|
Average price paid per
share
|
Total number of
shares purchased
as part of publicly
announced plans
or programs
|
Maximum number
of shares that may
yet be purchased
under the plans
or programs (1)
|
|||||
January 1 to January 31
|
3,047
|
|
$
|
65.00
|
|
3,047
|
|
280,950
|
|
February 1 to February 29
|
6,077
|
|
65.12
|
|
6,077
|
|
274,873
|
|
|
March 1 to March 31
|
59,757
|
|
66.00
|
|
59,757
|
|
215,116
|
|
|
Total
|
68,881
|
|
$
|
65.88
|
|
68,881
|
|
215,116
|
|
Item 3.
|
Defaults upon Senior Securities
|
Item 4.
|
Mine Safety Disclosure
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
(1)
|
Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, and are otherwise not subject to liability under these sections.
|
(2)
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
HILLS BANCORPORATION
|
|
|
|
|
Date:
|
May 4 2020
|
|
By: /s/ Dwight O. Seegmiller
|
|
|
|
Dwight O. Seegmiller, Director, President and Chief Executive Officer
|
|
|
|
|
Date:
|
May 4 2020
|
|
By: /s/ Shari DeMaris
|
|
|
|
Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer
|
Exhibit
Number
|
Description
|
Page Number In The Sequential
Numbering System
March 31, 2020 Form 10-Q
|
|
|
|
|
|
10.1
|
62-78
|
|
|
|
|
|
|
31
|
79-80
|
|
|
|
|
|
|
32
|
81
|
|
(a)
|
"Affiliate" means any Parent or Subsidiary of the Company or any other corporation, partnership, joint venture or other entity, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Company, as determined by the Board of Directors in its discretion.
|
(b)
|
"Award" means any grant under this Plan of a Stock Option, Stock Appreciation Right, Restricted Share, Restricted Share Unit or Performance Share to any Plan participant.
|
(c)
|
“Bank” means Hills Bank and Trust Company.
|
(d)
|
"Board of Directors" means the Board of Directors of the Company, as constituted from time to time.
|
(e)
|
"Cause" with respect to an employee of the Bank, the Company or any other affiliate of the Company, who has not entered into an employment agreement with the Bank or the Company, or such an affiliate, means and is limited to (a) criminal dishonesty, (b) refusal to perform duties on an exclusive and substantially full-time basis, (c) refusal to act in accordance with any specific substantive instructions given by the Bank, the Company or any affiliate of the Company with respect to performance of duties normally associated with such employee's position, or (d) engaging in conduct which could be materially damaging to the Bank, the Company or any affiliate of the Company without a reasonable good faith belief that such conduct was in the best interest of the Bank, the Company or any affiliate of the Company. With respect to an employee who is employed pursuant to an employment agreement with the Bank, the Company, or such an affiliate, “Cause” shall mean “cause” as defined in the terms of such employment agreement (as it may be amended from time to time).
|
(f)
|
“Change in Control” shall mean shall mean any one of the following events: (i) the acquisition (A) of ownership, holding or power to vote more than 50% of the Company’s voting stock, (B) of the ability to control the election of a majority of the Company’s directors, or (C) of a controlling influence over the management or policies of the Company by any person or by persons acting as a group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company (the Continuing Directors) cease for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a member of the Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director, provided that such event constitutes a “Change in Ownership,” “Change in Effective Control,” or “Change in Ownership of a Substantial Portion of Assets,” as defined by Treasury Regulation 1.409A-3(i)(5). For purposes of this subparagraph only, the term “person” refers to an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein.
|
(g)
|
"Code" means the Internal Revenue Code of 1986, as amended, and any lawful regulations or guidance promulgated thereunder. Whenever reference is made to a specific Internal Revenue Code section, such reference shall be deemed to be a reference to any successor Internal Revenue Code section or sections with the same or similar purpose.
|
(h)
|
"Committee" means the committee administering this Plan as provided in Section 2.1.
|
(i)
|
"Common Shares" mean the common shares no par value per share, of the Company.
|
(j)
|
"Company" means Hills Bancorporation, a corporation organized under the laws of the State of Iowa and, except for purposes of determining whether a Change in Control has occurred, any corporation or entity that is a successor to Hills Bancorporation or substantially all of the assets of Hills Bancorporation and that assumes the obligations of Hills Bancorporation under this Plan by operation of law or otherwise.
|
(k)
|
"Date of Grant" means the date on which the Committee grants an Award.
|
(l)
|
"Director" means a member of the Board of Directors.
|
(m)
|
"Disability" means the person (a) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving disability or other income replacement benefits for a period of not less than 3 months under an accident and health plan of the Bank, the Company or an affiliate covering the person, or (b) has been determined to be totally disabled by the United States Social Security Administration.
|
(n)
|
"Eligible Participant" is defined in Article 4.
|
(o)
|
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any lawful regulations or guidance promulgated thereunder.
|
(p)
|
"Exercise Price" means the purchase price of a Share pursuant to a Stock Option, or the exercise price per Share related to a Stock Appreciation Right.
|
(q)
|
"Fair Market Value" means with respect to a share of Common Stock, the value as determined from time to time by the Committee in good faith, until such time as the Common Stock may be regularly traded on a stock exchange and the volume of such trading is sufficient to create a reasonable market for the Common Stock. The determination of whether a market for the stock has been established shall be in the sole discretion of the Committee for purposes of the Plan. The Committee may, in its discretion, rely upon a valuation report from an independent consultant to the Company engaged for the purpose of determining the fair value of the Common Stock of the Company or such other reasonable valuation method as may be prescribed by the Committee. Notwithstanding the foregoing, as of any date, the “Fair Market Value” of Common Shares shall be determined in a manner consistent with Code Section 409A and the guidance then-existing thereunder.
|
(r)
|
“Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, and any person sharing the Participant’s household (other than a tenant or employee).
|
(s)
|
"Incentive Stock Option" and "ISO" mean a Stock Option that is identified as such and which is intended to meet the requirements of Section 422 of the Code.
|
(t)
|
"Non-Qualified Stock Option" and "NQSO" mean a Stock Option that: (i) is governed by Section 83 of the Code; and (ii) is not intended to meet the requirements of Section 422 of the Code.
|
(u)
|
"Outside Director" means a nonemployee Director. In addition, at all times during which the Company is subject to the reporting requirements of the Exchange Act, "Outside Director” means a nonemployee Director who meets the definitions of the terms "independent director" set forth in The Nasdaq Stock Market rules, and "non-employee director" set forth in Rule 16b-3, or any successor definitions adopted by The Nasdaq Stock Market and Securities and Exchange Commission, respectively, and similar requirements under any other applicable laws and regulations.
|
(v)
|
"Parent" means any corporation which qualifies as a "parent corporation" of the Company under Section 424(e) of the Code.
|
(w)
|
“Participant” means an Eligible Participant who has been granted an award of Stock Options, Stock Appreciation Rights, Restricted Shares, Restricted Share Units or Performance Shares under this Plan.
|
(x)
|
"Performance Shares" is defined in Article 9.
|
(y)
|
"Performance Period" is defined in Section 9.2.
|
(z)
|
“Permitted Transferees” means (i) a Participant’s Family Member, (ii) one or more trusts in which Family Members have more than fifty percent of the beneficial interest, (iii) a foundation in which the Participant or Family Members control the management of assets; or (iv) any other entity in which the Participants or Family Members own more than fifty percent of the voting interests.
|
(aa)
|
"Plan" means this Hills Bancorporation 2020 Stock Option and Incentive Plan, as amended from time to time.
|
(ab)
|
"Restricted Share Units" is defined in Article 8.
|
(ac)
|
"Restricted Shares" is defined in Article 8.
|
(ad)
|
"Rule 16b-3" means Securities and Exchange Commission Rule 16b-3 under the Securities Exchange Act of 1934, as amended from time to time.
|
(ae)
|
"Share" or "Shares" mean one or more of the Common Shares.
|
(af)
|
"Shareholder" means an individual or entity that owns one or more Shares.
|
(ag)
|
"SOSAR" is defined in Section 7.1(d).
|
(ah)
|
"Stock Appreciation Rights" and "SARs" mean any right to receive the appreciation in Fair Market Value of a specified number of Shares over a specified Exercise Price pursuant to an Award granted under Article 7.
|
(ai)
|
"Stock Option" means any right to purchase a specified number of Shares at a specified price which is granted pursuant to Article 5 and may be an Incentive Stock Option or a Non-Qualified Stock Option.
|
(aj)
|
"Stock Power" means a power of attorney executed by a participant and delivered to the Company which authorizes the Company to transfer ownership of Restricted Shares, Performance Shares or Common Shares from the participant to the Company or a third party.
|
(ak)
|
"Subsidiary" means any corporation which qualifies as a "subsidiary corporation" of the Company under Section 424(f) of the Code.
|
(al)
|
"Vested" means, with respect to a Stock Option, that the time has been reached when the option to purchase Shares first becomes exercisable; and with respect to a Stock Appreciation Right, when the Stock Appreciation Right first becomes exercisable for payment; with respect to Restricted Shares, when the Shares are no longer subject to forfeiture and restrictions on transferability; with respect to Restricted Share Units and Performance Shares, when the units or Performance Shares are no longer subject to forfeiture and are converted to Shares. The words "Vest" and "Vesting" have meanings correlative to the foregoing.
|
(a)
|
The Plan shall be administered by a Committee of at least three Directors who are appointed by the Board of Directors. Unless otherwise determined by the Board of Directors, the Compensation Committee of the Board of Directors (or any subcommittee thereof) shall serve as the Committee, and all of the members of the Committee shall be Outside Directors. Notwithstanding the requirement that the Committee consist exclusively of Outside Directors, no action or determination by the Committee or an individual then considered to be an Outside Director shall be deemed void because a member of the Committee or such individual fails to satisfy the requirements for being an Outside Director, except to the extent required by applicable law.
|
(b)
|
The Committee has the power and authority to grant Awards pursuant to the terms of this Plan to Eligible Participants. The Committee may, at any time and from time to time, at the request of a Participant or at the discretion of the Committee, designate that a portion of such Participant's compensation otherwise payable in cash be payable in
|
(c)
|
The Committee has the sole and exclusive authority, subject to any limitations specifically set forth in this Plan, to:
|
(i)
|
select the Eligible Participants to whom Awards are granted;
|
(ii)
|
determine the types of Awards granted and the timing of such Awards;
|
(iii)
|
determine the number of Shares to be covered by each Award granted hereunder;
|
(iv)
|
determine the other terms and conditions, not inconsistent with the terms of this Plan, of any Award granted hereunder; such terms and conditions include, but are not limited to, the Exercise Price, the time or times when Stock Options or Stock Appreciation Rights may be exercised (which may be based on performance objectives), any Vesting, acceleration or waiver of forfeiture restrictions, any performance criteria applicable to an Award, and any restriction or limitation regarding any Stock Option or Stock Appreciation Right or the Common Shares relating thereto, based in each case on such factors as the Committee, in its sole discretion, shall determine;
|
(v)
|
determine whether any conditions or objectives related to Awards have been met, including but not limited to any determination of whether the performance objectives for Performance Shares or other performance-based awards have been satisfied;
|
(vi)
|
subsequently amend, modify or waive any terms and conditions of Awards, not inconsistent with the terms of this Plan;
|
(vii)
|
adopt, alter and repeal such administrative rules, guidelines and practices governing this Plan as it deems advisable from time to time;
|
(viii)
|
promulgate such administrative forms as it from time to time deems necessary or appropriate for administration of the Plan;
|
(ix)
|
construe, interpret, administer and implement the terms and provisions of this Plan, any Award and any related agreements;
|
(x)
|
correct any defect, supply any omission and reconcile any inconsistency in or between the Plan, any Award and any related agreements;
|
(xi)
|
prescribe any legends to be affixed to certificates representing Shares or other interests granted or issued under the Plan; and
|
(xii)
|
otherwise supervise the administration of this Plan.
|
(d)
|
All decisions made by the Committee pursuant to the provisions of this Plan are final and binding on all persons, including the Company, its shareholders and participants, but may be made by their terms subject to ratification or approval by, the Board of Directors, another committee of the Board of Directors or shareholders.
|
(e)
|
The Company shall furnish the Committee with such clerical and other assistance as is necessary for the performance of the Committee's duties under the Plan.
|
(a)
|
Exercise Price. Subject to Section 3.3, the Exercise Price shall never be less than 100% of the Fair Market Value of the Shares on the Date of Grant. Except as otherwise provided in Section 3.3, no subsequent amendment of an outstanding Stock Option may reduce the Exercise Price to less than 100% of the Fair Market Value of the Shares on the Date of Grant. Nothing in this Section 5.2(a) shall be construed as limiting the Committee's authority to grant premium price Stock Options which do not become exercisable until the Fair Market Value of the underlying Shares exceeds a specified percentage (e.g., 110%) of the Exercise Price; provided, however, that such percentage will never be less than 100%.
|
(b)
|
Option Term. Any unexercised portion of a Stock Option granted hereunder shall expire at the end of the stated term of the Stock Option. The Committee shall determine the term of each Stock Option at the time of grant, which term shall not exceed 10 years from the Date of Grant. The Committee may extend the term of a Stock Option, in its discretion, but not beyond the date immediately prior to the tenth anniversary of the original Date of Grant. If a definite term is not specified by the Committee at the time of grant, then the term is deemed to be 10 years. Nothing in this Section 5.2(b) shall be construed as limiting the Committee's authority to grant Stock Options with a term shorter than 10 years.
|
(c)
|
Vesting. Stock Options or portions thereof, are exercisable at such time or times as determined by the Committee in its discretion at or after grant. The Committee may provide that a vesting schedule shall be specified in an Award Agreement. If the Committee provides that any Stock Option becomes Vested over a period of time or upon performance events, in full or in installments, the Committee may waive or accelerate such Vesting provisions at any time. Unless otherwise determined by the Committee in connection with the grant and set forth in the Award Agreement, all unvested Stock Options shall immediately vest upon the Death or Disability of the holder.
|
(d)
|
Method of Exercise. Vested portions of any Stock Option may be exercised in whole or in part at any time during the option term by giving written notice of exercise to the Company specifying the number of Shares to be purchased. The notice must be given by or on behalf of a person entitled to exercise the Stock Option, accompanied by payment in full of the Exercise Price, along with any tax withholding pursuant to Article 15. Subject to the approval of the Committee, the Exercise Price may be paid:
|
(i)
|
in cash in any manner satisfactory to the Committee;
|
(ii)
|
by tendering (by either actual delivery of Shares or by attestation) unrestricted Shares owned by the person entitled to exercise the Stock Option having an aggregate Fair Market Value on the date of exercise equal to the Exercise Price applicable to such Stock Option exercise, and, with respect to the exercise of NQSOs, including restricted Shares;
|
(iii)
|
by a combination of cash and unrestricted Shares that are owned on the date of exercise by the person entitled to exercise the Stock Option; and
|
(iv)
|
by any other method permitted by law and affirmatively approved by the Committee which assures full and immediate payment or satisfaction of the Exercise Price, which may, during any periods in which the Common Stock is publicly traded, include a broker-assisted cashless exercise.
|
(e)
|
Form. Unless the grant of a Stock Option is expressly designated at the time of grant as an ISO, it is deemed to be an NQSO. ISOs are subject to the additional terms and conditions in Article 6.
|
(f)
|
Special Limitations on Stock Option Awards. Unless an Award Agreement approved by the Committee provides otherwise, Stock Options awarded under this Plan are intended to meet the requirements for exclusion from coverage under Code Section 409A and applicable Treasury regulations and all Stock Option Awards shall be construed and administered accordingly.
|
(a)
|
Term. No ISO may be exercisable on or after the tenth anniversary of the Date of Grant, and no ISO may be granted under this Plan on or after the tenth anniversary of the effective date of this Plan.
|
(b)
|
Ten Percent Shareholder. No Participant may receive an ISO under this Plan if such Participant, at the time the Award is granted, owns (after application of the rules contained in Section 424(d) of the Code) equity securities possessing more than 10% of the total combined voting power of all classes of equity securities of the Company, its Parent or any Subsidiary, unless (i) the option price for such ISO is at least 110% of the Fair Market Value of the Shares as of the Date of Grant, and (ii) such ISO is not exercisable on or after the fifth anniversary of the Date of Grant.
|
(c)
|
Limitation on Grants. The aggregate Fair Market Value (determined with respect to each ISO at the time of grant) of the Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under this Plan or any other plan adopted by the Company or its Parent or its Subsidiary) shall not exceed $100,000. Unless otherwise set forth in an Award Agreement, if such aggregate Fair Market Value shall exceed $100,000, such number of ISOs as shall have an aggregate Fair Market Value equal to the amount in excess of $100,000 shall be treated as NQSOs.
|
(d)
|
Non-Transferability. Notwithstanding any other provision herein to the contrary, no ISO granted hereunder (and, if applicable, related Stock Appreciation Right) may be transferred except by will or by the laws of descent and distribution, nor may such ISO (or related Stock Appreciation Right) be exercisable during the Participant's lifetime other than by him (or his guardian or legal representative to the extent permitted by applicable law).
|
(e)
|
Termination of Employment. No ISO may be exercised more than three months following termination of employment for any reason (including retirement) other than death or Disability, nor more than one year following termination of employment for the reason of death or Disability (as defined in Section 422 of the Code). If the Award Agreement for an ISO permits exercise after such date such option will no longer qualify as an ISO and shall thereafter be, and receive the tax treatment applicable to, an NQSO. For this purpose, a termination of employment is cessation of employment such that no employment relationship exists between the Participant and the Bank, the Company, a Parent or a Subsidiary.
|
(f)
|
Fair Market Value. For purposes of any ISO granted hereunder (or, if applicable, related Stock Appreciation Right), the Fair Market Value of Shares shall be determined in the manner required by Section 422 of the Code and any Treasury regulations thereunder.
|
(a)
|
Term. Any unexercised portion of a Stock Appreciation Right granted hereunder shall expire at the end of the stated term of the Stock Appreciation Right. The Committee shall determine the term of each Stock Appreciation Right at the time of grant, which term shall not exceed ten years from the Date of Grant. The Committee may extend the term of a Stock Appreciation Right, in its discretion, but not beyond the date immediately prior to the tenth anniversary of the original Date of Grant. If a definite term is not specified by the Committee at the time of grant, then the term is deemed to be ten years.
|
(b)
|
Vesting. A Stock Appreciation Right is exercisable, in whole or in part, at such time or times as determined by the Committee at or after the time of grant. Unless otherwise determined by the Committee in connection with the grant and set forth in the Award Agreement, all unvested Stock Appreciation Rights shall immediately vest upon the Death or Disability of the Participant.
|
(c)
|
Exercise Price. Subject to Section 3.3, the Exercise Price of a Stock Appreciation Right will never be less than 100% of the Fair Market Value of the related Shares on the Date of Grant. Except as otherwise provided in Section 3.3, no subsequent amendment of an outstanding Stock Appreciation Right may reduce the Exercise Price to less than 100% of the Fair Market Value of the Shares on the Date of Grant. Nothing in this Section 7.1(c) shall be construed as limiting the Committee's authority to grant premium price Stock Appreciation Rights which do not become exercisable until the Fair Market Value of the related Shares exceeds a specified percentage (e.g., 110%) of the Exercise Price; provided, however, that such percentage will never be less than 100%.
|
(d)
|
Method of Exercise. A Stock Appreciation Right may be exercised in whole or in part during the term by giving written notice of exercise to the Company specifying the number of Shares in respect of which the Stock Appreciation Right is being exercised. The notice must be given by or on behalf of a person entitled to exercise the Stock Appreciation Right. Upon the exercise of a Stock Appreciation Right, subject to satisfaction of the tax withholding requirements pursuant to Article 15, the holder of the Stock Appreciation Right is entitled to receive Shares or cash as specified in the original Award Agreement (as set forth below) equal in value to the excess of the Fair Market Value of a Share on the exercise date over the Exercise Price of the SAR multiplied by the number of Stock Appreciation Rights being exercised. At any time the Fair Market Value of a Share on a proposed exercise date does not exceed the Exercise Price of the SAR, the holder of the Stock Appreciation Right shall not be permitted to exercise such right.
|
(i)
|
Stock Appreciation Right designated as a Stock Only Stock Appreciation Right ("SOSAR") in the original Award Agreement. With respect to an Award designated by the Company in the original Award Agreement as a SOSAR, the Participant shall be entitled to receive only Shares of the Company upon exercise.
|
(ii)
|
All Other Stock Appreciation Rights. With respect to all other Awards the holder shall be entitled to the cash or other property set forth in the Award Agreement.
|
(e)
|
Early Termination Prior to Expiration. If the employment of a Participant with the Bank, the Company or its Affiliates terminates for any reason, all unexercised Stock Appreciation Rights may be exercised only in accordance with rules established by the Committee or as specified in the relevant agreement evidencing such Stock Appreciation Rights. Such rules may provide, as the Committee deems appropriate, for the expiration, continuation (but only to the originally scheduled expiration date), or acceleration of the vesting of all or part of such Stock Appreciation Rights.
|
(a)
|
Purchase Price. The Committee shall determine the prices, if any, at which Restricted Shares are to be issued to a Participant, which may vary from time to time and from Participant to Participant and which may be below the Fair Market Value of such Restricted Shares at the Date of Grant.
|
(b)
|
Restrictions. All Restricted Shares issued under this Plan will be subject to such restrictions as the Committee may determine, which may include, without limitation, the following:
|
(i)
|
a prohibition against the sale, transfer, pledge or other encumbrance of the Restricted Shares, such prohibition to lapse at such time or times as the Committee determines (whether in installments or otherwise, but subject to the Change in Control provisions in Article 11);
|
(ii)
|
a requirement that the Participant forfeit such Restricted Shares in the event of termination of the Participant's employment with the Bank, the Company or its Affiliates prior to Vesting;
|
(iii)
|
a prohibition against employment or retention of the Participant by any competitor of the Bank, the Company or its Affiliates, or against dissemination by the Participant of any secret or confidential information belonging to the Company or an Affiliate;
|
(iv)
|
any applicable requirements arising under the Securities Act of 1933, as amended, other securities laws, the rules and regulations of any stock exchange or transaction reporting system upon which such Restricted Shares may then be listed or quoted and any state laws, rules and regulations, including "blue sky" laws;
|
(v)
|
such additional restrictions as are required to avoid adverse tax consequences under Code Section 409A; and
|
(vi)
|
delivery of a valid election under Code Section 83(b).
|
(c)
|
Performance-Based Restrictions. The Committee may, in its sole discretion, provide restrictions that lapse upon the attainment of specified performance objectives. In such case, the provisions of Sections 9.2 and 9.3 will apply (including, but not limited to, the enumerated performance objectives). If the Award Agreement governing an Award provides that such Award is intended to be performance based compensation, the provisions of Article 9 will also apply.
|
(d)
|
Delivery of Shares. Any Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. At the end of any time period during which the Restricted Shares are subject to forfeiture and restrictions on transfer, and after any tax withholding, such Shares will be delivered free of all restrictions (except for any pursuant to Article 14) to the Participant or other appropriate person and with the foregoing legend removed from the stock certificate.
|
(e)
|
Forfeiture of Shares. If a Participant who holds Restricted Shares fails to satisfy the restrictions, vesting requirements and other conditions relating to the Restricted Shares prior to the lapse, satisfaction or waiver of such restrictions
|
(f)
|
Voting and Other Rights. Except as otherwise required for compliance with the terms of the applicable Restricted Share Agreement, during any period in which Restricted Shares are subject to forfeiture and restrictions on transfer, the Participant holding such Restricted Shares shall have all the rights of a Shareholder with respect to such Shares, including, without limitation, the right to vote such Shares and the right to receive any dividends paid with respect to such Shares.
|
(a)
|
Purchase Price. The Committee shall determine the prices, if any, at which Shares are to be issued to a Participant after Vesting of Restricted Share Units, which may vary from time to time and among Participants and which may be below the Fair Market Value of Shares at the Date of Grant.
|
(b)
|
Restrictions. All Restricted Share Units awarded under this Plan will be subject to such restrictions as the Committee may determine, which may include, without limitation, the following:
|
(i)
|
a prohibition against the sale, transfer, pledge or other encumbrance of the Restricted Share Unit;
|
(ii)
|
a requirement that the Participant forfeit such Restricted Share Unit in the event of termination of the Participant's employment with the Bank, the Company or its Affiliates prior to Vesting;
|
(iii)
|
a prohibition against employment of the Participant by, or provision of services by the Participant to, any competitor of the Bank, the Company or its Affiliates, or against dissemination by the Participant of any secret or confidential information belonging to the Bank, the Company or an Affiliate;
|
(iv)
|
any applicable requirements arising under the Securities Act of 1933, as amended, other securities laws, the rules and regulations of any stock exchange or transaction reporting system upon which the Common Shares may then be listed or quoted and any state laws, rules and interpretations, including "blue sky" laws; and
|
(v)
|
such additional restrictions as are required to avoid adverse tax consequences under Code Section 409A.
|
(c)
|
Performance-Based Restrictions. The Committee may, in its sole discretion, provide restrictions that lapse upon the attainment of specified performance objectives. In such case, the provisions of Sections 9.2 and 9.3 will apply (including, but not limited to, the enumerated performance objectives). If the Award Agreement governing an Award provides that such Award is intended to be performance based compensation, the provisions of Article 9 will also apply.
|
(d)
|
Voting and Other Rights. A Participant holding Restricted Share Units shall not be deemed to be a Shareholder of the Company solely because of such units. Such Participant shall have no rights of a Shareholder with respect to such units; provided, however, that an Award Agreement may provide for payment of an amount of money (or Shares
|
(e)
|
Lapse of Restrictions. If a Participant who holds Restricted Share Units satisfies the restrictions and other conditions relating to the Restricted Share Units prior to the lapse or waiver of such restrictions and conditions, the Restricted Share Units shall be converted to, or replaced with, Shares which are free of all restrictions except for any restrictions pursuant to Article 14.
|
(f)
|
Forfeiture of Restricted Share Units. If a Participant who holds Restricted Share Units fails to satisfy the restrictions, Vesting requirements and other conditions relating to the Restricted Share Units (prior to the lapse, satisfaction or waiver of such restrictions and conditions), except as may otherwise be determined by the Committee, the Participant shall forfeit the Restricted Share Units.
|
(g)
|
Special Limitations on Restricted Share Unit Awards. Unless an Award Agreement approved by the Committee provides otherwise, Restricted Share Units awarded under this Plan are intended to meet the requirements for the short-term deferral exemption from coverage under Code Section 40`9A described in Treasury Regulation Section 1.409A-1(b)(4) and all Restricted Stock Unit Awards shall be construed and administered accordingly.
|
(a)
|
Delivery of Shares. As soon as practicable after the applicable Performance Period has ended, the Participant will receive a distribution of the number of Shares earned during the Performance Period, depending upon the extent to which the applicable performance objectives were achieved. Such Shares will be registered in the name of the Participant and will be free of all restrictions except for any restrictions pursuant to Article 14. Notwithstanding the forgoing, the distribution of Shares provided for herein shall occur not later than two and one-half months following the end of the calendar year in which the Performance Period has ended.
|
(b)
|
Termination. A Performance Share Award or unearned portion thereof will terminate without the issuance of Shares on the termination date specified at the time of grant or upon the termination of employment of the Participant during the Performance Period. If a Participant's employment with the Bank, the Company or its Affiliates terminates by reason of his or her death, disability or retirement, the Committee in its discretion at or after the time of grant may determine, notwithstanding any Vesting requirements, that the Participant (or the heir, legatee or legal representative of the Participant's estate) will receive a distribution based on a portion of the Participant's then-outstanding Performance Share Awards in an amount which is not more than the number of shares which would have been earned by the participant if 100% of the performance objectives for the current Performance Period had been achieved prorated based on the ratio of the number of months of active employment in the Performance Period to the total number of months in the Performance Period.
|
(c)
|
Voting and Other Rights. Awards of Performance Shares do not provide the Participant with voting rights or rights to dividends prior to the Participant becoming the holder of record of Shares issued pursuant to an Award; provided, however, that an Award Agreement may provide for payment of an amount of money (or Shares with a Fair Market Value equivalent to such amount) equal to the dividends paid from time to time on the number of Common Shares that would become payable upon vesting of a Performance Share Award. Prior to the issuance of Shares, Performance Share Awards may not be sold, transferred, pledged, assigned or otherwise encumbered.
|
(a)
|
a leave of absence, approved in writing by the Bank or the Company, for military service, sickness or any other purpose approved by the Bank or the Company, if the period of such leave does not exceed 90 days;
|
(b)
|
a leave of absence in excess of 90 days, approved in writing by the Bank or the Company, but only if the employee's right to reemployment is guaranteed either by a statute or by contract, and provided that, in the case of any such leave of absence, the employee returns to work within 30 days after the end of such leave; and
|
(c)
|
any other absence determined by the Committee in its discretion not to constitute a termination of employment.
|
(a)
|
all Stock Options or SARs, notwithstanding any limitations set forth in the Plan shall become fully Vested and immediately exercisable;
|
(b)
|
all Restricted Shares, notwithstanding any limitations set forth in the Plan shall become fully Vested; and
|
(c)
|
all Restricted Share Units and Performance Shares, notwithstanding any limitations set forth in the Plan, shall become fully Vested.
|
(d)
|
cancel any or all outstanding Stock Options, SARs, Restricted Share Units and Performance Shares in exchange for the kind and amount of shares of the surviving or new corporation, cash, securities, evidences of indebtedness, other property or any combination thereof receivable in respect of one Share upon consummation of the transaction in question (the "Acquisition Consideration") that the holder of the Stock Option, SAR, Restricted Share Unit or Performance Share would have received had the Stock Option, SAR, Restricted Share Unit or Performance Share been exercised or converted into Shares, as applicable, prior to such transaction, less the applicable exercise or purchase price therefor;
|
(e)
|
cause the holders of any or all Stock Options, SARs, Restricted Share Units and Performance Shares to have the right thereafter and during the term of the Stock Option, SAR, Restricted Share Unit or Performance Share to receive upon exercise thereof the Acquisition Consideration receivable upon the consummation of such transaction by a holder of the number of Common Shares which might have been obtained upon exercise or conversion of all or any portion thereof, less the applicable exercise or purchase price therefor, or to convert such Stock Option, SAR, Restricted Share Unit or Performance Share into a stock option, appreciation right, restricted share unit or performance share relating to the surviving or new corporation in the transaction; or
|
(f)
|
take such other action as it deems appropriate to preserve the value of the Award to the Participant, including the cancellation of such Award and the payment of the value of the Acquisition Consideration attributable to the Award, net of payments due from the holder thereof upon exercise if any, in cash.
|
(a)
|
which would materially and adversely affect the rights of a Participant under any Award granted prior to the date such action is adopted by the Board of Directors without the Participant's written consent thereto; and
|
(b)
|
without Shareholder approval, if Shareholder approval is required under applicable laws, regulations or exchange requirements (including Section 422 of the Code with respect to ISOs.
|
(a)
|
payment in full for the Shares and for any tax withholding (see Article 15);
|
(b)
|
completion of any registration or other qualification of such Shares under any Federal or state laws or under the rulings or regulations of the Securities and Exchange Commission or any other regulating body which the Committee in its discretion deems necessary or advisable;
|
(c)
|
admission of such Shares to listing on any stock exchange on which the Shares are listed;
|
(d)
|
in the event the Shares are not registered under the Securities Act of 1933, qualification as a private placement under said Act or qualification for another applicable exemption from registration under the Securities Act of 1933;
|
(e)
|
obtaining of any approval or other clearance from any Federal or state governmental agency which the Committee in its discretion determines to be necessary or advisable; and
|
(f)
|
the Committee is fully satisfied that the issuance and delivery of Shares under this Plan is in compliance with applicable Federal, state or local law, rule, regulation or ordinance or any rule or regulation of any other regulating body, for which the Committee may seek approval of counsel for the Company.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Hills Bancorporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 4 2020
|
|
By: /s/ Dwight O. Seegmiller
|
|
|
|
Dwight O. Seegmiller, Director, President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Hills Bancorporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 4 2020
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By: /s/ Shari DeMaris
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Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer
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Date:
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May 4 2020
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By: /s/ Dwight O. Seegmiller
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Dwight O. Seegmiller, Director, President and Chief Executive Officer
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Date:
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May 4 2020
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By: /s/ Shari DeMaris
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|
|
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Shari DeMaris, Secretary, Treasurer and Chief Accounting Officer
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