HILLS BANCORPORATION EXHIBIT II COMPUTATION OF EARNINGS PER COMMON SHARE Three Months Ended Nine Months Ended September 30 September 30 --------------------- --------------------- 1998 1997 1998 1997 --------- --------- --------- --------- Weighted average number of shares outstanding (basic) ..... 1,467,754 1,467,259 1,467,754 1,465,384 Weighted average of potential dilutive shares attributable to stock options granted computed under the treasury stock method .................................. 23,270 15,603 22,854 15,645 --------- --------- --------- --------- Weighted average number of shares (diluted) ............... 1,490,984 1,482,862 1,490,608 1,481,029 ========= ========= ========= ========= Earnings Per Share: Net income (in thousands) .............................. $ 1,819 $ 1,753 $ 5,396 $ 5,299 ========== ========== ========= ========= Earnings per common share: Basic ................................................ $ 1.24 $ 1.19 $ 3.68 $ 3.61 ========== ========== ========= ========= Diluted .............................................. 1.22 1.18 3.62 3.58 ========== ========== ========= =========