HILLS BANCORPORATION EXHIBIT II COMPUTATION OF EARNINGS PER COMMON SHARE Three months ended Six months ended June 30 June 30 ---------------------- --------------------- 2002 2001 2002 2001 --------------------------------------------- Weighted average number of shares outstanding (basic) ................ 1,498,558 1,496,044 1,498,558 1,495,764 Weighted average of potential dilutive shares attributable to stock options granted computed under the treasury stock method .... 12,955 12,689 13,030 12,182 --------------------------------------------- Weighted average number of shares (diluted) .......................... 1,511,513 1,508,733 1,511,588 1,507,946 ============================================= Earnings Per Share: Net income (in thousands) .......... $ 2,673 $ 2,534 $ 5,296 $ 4,841 Earnings per common share: Basic ............................ $ 1.78 $ 1.69 $ 3.53 $ 3.23 Diluted .......................... 1.76 1.68 3.50 3.21 1