HILLS BANCORPORATION EXHIBIT II COMPUTATION OF EARNINGS PER COMMON SHARE Three Months Ended Nine Months Ended September 30 September 30 ----------------------- ----------------------- 1997 1996 1997 1996 ---------- ---------- ---------- ---------- Shares of common stock, beginning..................... 1,467,259 1,463,604 1,465,384 1,463,604 Options exercised during this period ........ - - - - - - 2,055 - - - Shares redeemed during this period .......... - - - - - - (180) - - - ---------- ---------- ---------- ---------- Shares of common stock, ending ....................... 1,467,259 1,463,604 1,467,259 1,463,604 ========== ========== ========== ========== Weighted average number of shares outstanding # ...... 1,482,862 1,476,374 1,481,029 1,476,847 ========== ========== ========== ========== Earnings and Earnings Per Share: Net income (in thousands) ................... $ 1,753 $ 1,580 $ 5,299 $ 4,561 ========== ========== ========== ========== Earnings per common share ................... $ 1.18 $ 1.07 $ 3.58 $ 3.09 ========== ========== ========== ==========