FORM 10-Q - QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
              (As last amended in Rel. No. 34-26589, eff. 4/12/93.)

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2000

                         Commission file number: 0-12668


                              Hills Bancorporation

Incorporated in Iowa                              I.R.S. Employer Identification
                                                           No. 42-1208067

                          131 MAIN STREET, HILLS, IOWA

                        Telephone number: (319) 679-2291


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.  [X] Yes  [ ] No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date.

                                                             SHARES OUTSTANDING
         CLASS                                                AT July 31, 2000
--------------------------                                   -------------------
Common Stock, no par value                                         1,495,941


<PAGE>


                              HILLS BANCORPORATION

                               Index to Form 10-Q

                                     Part I

                              FINANCIAL INFORMATION

                                                                           Page
                                                                          Number

Item 1.        Financial Statements

               Consolidated balance sheets, June 30, 2000 (unaudited)
                   and December 31, 1999
               Consolidated statements of income, (unaudited) for three
                   and six months ended June 30, 2000 and 1999
               Consolidated statements of comprehensive income, (unaudited)
                   for three and six months ended June 30, 2000 and 1999.
               Consolidated statements of stockholders' equity, (unaudited)
                   for six months ended June 30, 2000 and 1999
               Consolidated statements of cash flows (unaudited) for six
                   months ended June 30, 2000 and 1999
               Notes to consolidated financial statements (unaudited)

Item 2.        Management's discussion and analysis of financial condition
                   and results of operations

Item 3.        Quantitative and Qualitative Disclosures About Market Risk

               The information  appearing on page 11 of item 2 under
               the heading "Market Risk Management" is incorporated herein
               by reference.

                                     Part II

                                OTHER INFORMATION

Item 1.        Legal proceedings

Item 2.        Changes in securities and use of proceeds

Item 3.        Defaults upon senior securities

Item 4.        Submission of matters to vote of security holders

Item 5.        Other information

Item 6.        Exhibits and reports on Form 8-K

COMPUTATION OF EARNINGS PER SHARE

SIGNATURES



<PAGE>


                              HILLS BANCORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                 (In Thousands)
<TABLE>
                                                             June 30,
                                                               2000      December 31,
                                                             Unaudited      1999*
                                                             ------------------------
<S>                                                          <C>         <C>
ASSETS
Cash and due from banks ..................................   $  24,321    $  21,765
Investment securities:
   Available for sale (amortized cost June 30, 2000
    $134,634; December 31, 1999 $133,516) ................     132,849      131,961
   Held to maturity (fair value June 30, 2000 $16,692;
     December 31, 1999 $18,362) ..........................      16,687       18,307
   Stock of Federal Home Loan Bank .......................       7,789        5,930
Federal funds sold .......................................         200          206
Loans, net ...............................................     605,334      565,381
Property and equipment, net ..............................      13,203       11,646
Accrued interest receivable ..............................       7,116        6,376
Deferred income taxes, net ...............................       3,878        3,954
Other assets .............................................       7,890        8,440
                                                             ---------    ---------
                                                             $ 819,267    $ 773,966
                                                             =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Noninterest-bearing deposits .............................   $  72,965    $  66,794
Interest-bearing deposits ................................     525,912      495,292
                                                             ---------    ---------
   Total deposits ........................................   $ 598,877    $ 562,086
Federal funds purchased and securities
   sold under agreements to repurchase ...................      15,753       26,714
Federal Home Loan Bank notes .............................     125,700      108,700
Accrued interest payable .................................       2,253        2,040
Other liabilities ........................................       3,178        3,209
                                                             ---------    ---------
                                                             $ 745,761    $ 702,749
                                                             ---------    ---------
REDEEMABLE COMMON STOCK HELD BY
   EMPLOYEE STOCK OWNERSHIP PLAN
   (ESOP) ................................................   $  11,344    $  10,953
                                                             ---------    ---------
STOCKHOLDERS' EQUITY
Capital stock, common, no par value; authorized 10,000,000
   shares; issued June 30, 2000 - 1,495,941 shares;
   December 31, 1999 - 1,495,941 shares ..................   $  10,214    $  10,214
Retained earnings ........................................      64,418       61,984
Accumulated other comprehensive income, unrealized gains
  (losses) on investment securities, net .................      (1,126)        (981)
                                                             ---------    ---------
                                                             $  73,506    $  71,217
Less, maximum cash obligation related to
   ESOP shares ...........................................      11,344       10,953
                                                             ---------    ---------
                                                             $  62,162    $  60,264
                                                             ---------    ---------
                                                             $ 819,267    $ 773,966
                                                             =========    =========

<FN>
* Derived from audited financial statements.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>


                              HILLS BANCORPORATION
                   UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

                Three and Six Months Ended June 30, 2000 and 1999
                      (In Thousands, Except Per Share Data)

<TABLE>

                                          Three Months Ended   Six Months Ended
                                          ------------------   -----------------
                                               June 30              June 30
                                           -----------------   -----------------
                                             2000     1999       2000      1999
                                           -----------------   -----------------
<S>                                        <C>       <C>       <C>       <C>
Interest Income:
   Interest and fees on loans ..........   $12,225   $10,215   $23,863   $19,878
   Interest on investment securities:
     Taxable ...........................     1,902     1,776     3,735     3,527
     Non-taxable .......................       429       384       845       763
   Interest on federal funds sold ......        95        96       267       357
                                           -----------------   -----------------
   Total interest income ...............   $14,651   $12,471   $28,710   $24,525
                                           -----------------   -----------------

Interest Expense:
   Interest on deposits ................   $ 5,928   $ 5,188   $11,334   $10,278
   Interest on securities sold under
   Interest on FHLB borrowings .........     1,897     1,042     3,850     2,119
                                           -----------------   -----------------

   Total interest expense ..............   $ 7,954   $ 6,324   $15,446   $12,592
                                           -----------------   -----------------
   Net interest income .................   $ 6,697   $ 6,147   $13,264   $11,933

Provision for loan losses ..............       201       204       474       408
                                           -----------------   -----------------

   Net interest income after provision

Other income:
   Loan origination fees ...............   $    65   $   205   $   112   $   404
   Trust fees ..........................       578       500     1,167     1,026
   Deposit account charges and fees ....       630       532     1,199       984
   Other fees and charges ..............       592       440     1,176       918
                                           -----------------   -----------------
                                           $ 1,865   $ 1,677   $ 3,654   $ 3,332
                                           -----------------   -----------------
Other expenses:
   Salaries and employee benefits ......   $ 2,620   $ 2,473   $ 5,280   $ 4,815
   Occupancy ...........................       331       297       671       590
   Furniture and equipment .............       509       459       995       910
   Office supplies and postage .........       259       258       500       524
   Other operating .....................     1,163     1,110     2,331     2,005
                                           -----------------   -----------------
                                           $ 4,882   $ 4,597   $ 9,777   $ 8,844
                                           -----------------   -----------------
   Income before income taxes ..........   $ 3,479   $ 3,023   $ 6,667   $ 6,013

Federal and state income taxes .........     1,080       942     2,064     1,853
                                           -----------------   -----------------

   Net income ..........................   $ 2,399   $ 2,081   $ 4,603   $ 4,160
                                           =================   =================

Earning per common share:
     Basic .............................   $  1.60   $  1.40   $  3.08   $  2.82
     Diluted ...........................      1.59      1.39      3.05      2.79
</TABLE>
<PAGE>


                              HILLS BANCORPORATION
            UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                Three and Six Months Ended June 30, 2000 and 1999

                      (In Thousands, Except Per Share Data)
<TABLE>

                                                   Three Months Ended     Six Months Ended
                                                        June 30                June 30
                                                   -------------------    ------------------
                                                     2000       1999        2000      1999
                                                    ------------------    ------------------
<S>                                                 <C>        <C>        <C>        <C>
Net Income ......................................   $ 2,399    $ 2,081    $ 4,603    $ 4,160

Other comprehensive income:
   Unrealized gains (losses) on debt securities .       137     (1,301)      (230)    (2,156)
   Income tax effect of unrealized gains (losses)       (51)       483         85        798
                                                    ------------------    ------------------

   Comprehensive Income .........................   $ 2,485    $ 1,263    $ 4,458    $ 2,802
                                                    ==================    ==================
</TABLE>
<PAGE>


                              HILLS BANCORPORATION

            UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     Six Months Ended June 30, 2000 and 1999

                                 (In Thousands)
<TABLE>

                                                                                           Less
                                                                                          Maximum
                                                                           Accumulated     Cash
                                                                              Other      Obligation
                                                      Capital   Retained  Comprehensive   To ESOP
                                                       Stock    Earnings     Income        Shares     Total
                                                      -------------------------------------------------------
<S>                                                   <C>       <C>        <C>           <C>         <C>
Balance, January 1, 2000 ..........................   $10,214   $61,984    $  (981)      $(10,953)   $60,264
Net income ........................................       - -     4,603        - -            - -      4,603
Change related to ESOP shares .....................       - -       - -        - -           (391)      (391)
Cash dividends ($1.45 per share) ..................       - -    (2,169)       - -            - -     (2,169)
Other comprehensive income ........................       - -       - -       (145)           - -       (145)
                                                      -------------------------------------------------------
Balance, June 30, 2000 ............................   $10,214   $64,418    $(1,126)      $(11,344)  $ 62,162
                                                      =======================================================


Balance, January 1, 1999 .........................   $ 9,140    $55,428    $ 1,185       $ (9,301)  $ 56,452
Net income ........................................      - -      4,160        - -            - -      4,160
Change related to ESOP shares .....................      - -        - -        - -           (968)      (968)
Cash dividends ($1.30 per share) ..................      - -     (1,911)       - -            - -     (1,911)
Other comprehensive income ........................      - -        - -     (1,372)           - -     (1,372)
Issuance of 24,424 shares of common stock .........      645        - -        - -            - -        645
Income tax benefit related to
  stock options exercised .........................      - -        308        - -            - -        308
                                                     --------------------------------------------------------
Balance, June 30, 1999 ............................  $ 9,785   $ 57,985    $  (187)      $(10,269)  $ 57,314
                                                     ========================================================
</TABLE>
See Notes to Financial Statements.

<PAGE>


                              HILLS BANCORPORATION

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                     Six Months Ended June 30, 2000 and 1999
                                 (In Thousands)
<TABLE>

                                                                                     2000        1999
                                                                                   --------------------
<S>                                                                                <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .....................................................................   $  4,603    $  4,160
Adjustments to reconcile net income to net cash provided by operating
    activities:
    Depreciation ...............................................................        680         714
    Provision for loan losses ..................................................        474         408
    Deferred income taxes ......................................................        161         (60)
    Compensation paid by issuance of common stock ..............................        - -          20
    (Increase) decrease in accrued interest receivable .........................       (740)       (774)
    Amortization of bond discount ..............................................         33         245
    (Increase) in other assets .................................................        378        (849)
    Amortization of intangibles ................................................        172         172
    Increase in accrued interest and other liabilities .........................        182       1,046
                                                                                   --------------------
    Net cash provided by operating activities ..................................   $  5,943    $  5,082
                                                                                   --------------------

CASH FLOWS FROM  INVESTING  ACTIVITIES
  Proceeds  from  maturities of investment securities:
    Available for sale .........................................................   $ 13,531    $ 19,637
    Held to maturity ...........................................................      1,568       2,241
  Purchase of investment securities, available for sale ........................    (16,489)    (26,689)
  Federal funds sold, net ......................................................          6      24,895
  Loans made to customers, net of collections ..................................    (40,427)    (48,877)
  Purchases of property and equipment ..........................................     (2,237)     (1,210)
                                                                                   --------------------
    Net cash (used in) investing activities ....................................   $(44,048)   $(30,003)
                                                                                   --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Net increase (decrease) in deposits ........................................   $ 36,791    $ 10,857
    Net increase (decrease) in fed funds purchased and securities sold under
      agreements to repurchase .................................................    (10,961)     (2,065)
    Borrowings from FHLB .......................................................     40,000      25,000
    Payments on FHLB notes .....................................................    (23,000)     (7,000)
    Stock options exercised ....................................................        - -         625
    Income tax benefits on stock options exercised .............................        - -         308
    Dividends paid .............................................................     (2,169)     (1,911)
                                                                                   --------------------
       Net cash provided by financing activities ...............................   $ 40,661    $ 25,814
                                                                                   --------------------
       Increase in cash and due from banks .....................................   $  2,556    $    893

CASH AND DUE FROM BANKS
    Beginning ..................................................................     21,765      16,427
                                                                                   --------------------
    Ending .....................................................................   $ 24,321    $ 17,320
                                                                                   ====================

SUPPLEMENTAL DISCLOSURES Cash payments for:
       Interest paid to depositors and others ..................................   $ 11,121    $ 10,282
       Interest paid on other obligations ......................................      4,112       2,314
       Non-cash financing transaction, increase in maximum cash obligation
        related to ESOP shares .................................................        391         968
</TABLE>
See Notes to Financial Statements.
<PAGE>


                              HILLS BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (unaudited)



Note 1. Interim Financial Statements

Interim consolidated  financial statements have not been examined by independent
public  accountants,  but include  all  adjustments  (consisting  only of normal
recurring  accruals)  which,  in the opinion of management,  are necessary for a
fair presentation of the results for these periods. The results of operation for
the interim  periods are not  necessarily  indicative  of the results for a full
year.

In reviewing these financial  statements,  reference should be made to the Notes
to Financial Statements contained in the Financial Statements for the year ended
December 31, 1999.

There were no changes in accounting  policies which had a significant  effect on
the interim consolidated financial statements for the periods presented.

For purposes of reporting  cash flows,  cash and due from banks includes cash on
hand and amounts due from banks  (including  cash items in process of clearing).
Cash flows from demand deposits,  NOW accounts,  savings  accounts,  and federal
funds  purchased and sold are reported net since their  original  maturities are
less than three months. Cash flows from loans and time deposits are presented as
net increases or decreases.

Note 2. Loans

The following  tables set forth the  composition  of loans and the allowance for
loan losses:

                                                            (In thousands)
                                                                June 30
                                                       -------------------------
                                                         2000             1999
                                                       -------------------------

Agricultural .................................         $ 30,131         $ 27,997
Commercial and financial .....................           35,927           34,300
Real estate, construction ....................           40,417           38,634
Real estate, mortgage ........................          477,892          382,741
Loans to individuals .........................           30,927           34,935
                                                       --------         --------
                                                       $615,294         $518,607
Less allowance for loan losses ...............            9,960            9,227
                                                       --------         --------
                                                       $605,334         $509,380
                                                       ========         ========

Transactions in the allowance for loan losses are as follows:

                                                            (In thousands)
                                                              Six Months
                                                             Ended June 30
                                                       -------------------------
                                                        2000              1999
                                                       -------------------------

Balance, beginning ...........................         $ 9,750          $ 8,856
  Provision charged to expense ...............             474              408
  Net charge-offs ............................            (264)             (37)
                                                       -------          -------
Balance, ending ..............................         $ 9,960          $ 9,227
                                                       =======          =======
<PAGE>


The following summarizes the Company's  nonaccrual,  past due,  restructured and
impaired loans:

                                                              (In thousands)
                                                                  June 30
                                                            --------------------
                                                              2000       1999
                                                            --------------------

Nonaccrual ..........................................       $    - -   $     - -
Accruing loans, past due 90 days or more ............          2,172       1,749
Restructured loan ...................................            - -         - -
Impaired loans ......................................          8,837       9,413


Note 3. Earnings Per Share

Basic net income per share  amounts are  computed by dividing  net income by the
weighted average number of common shares outstanding during the period.  Diluted
earnings per share are  computed by dividing net income by the weighted  average
number of  common  shares  outstanding  during  the  period  plus the  number of
potential  dilutive  common shares  attributable  to the Company's  stock option
plan.


<PAGE>


                                 PART I, ITEM 2.

                              HILLS BANCORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

              OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Forward Looking Information

Forward looking  information  relating to the financial results or strategies of
the Company are made in the Management's  Discussion and Analysis. The following
paragraphs  identify  forward  looking  statements and the risks that need to be
considered when reading those statements.

Forward looking  statements include such words as believe,  expect,  anticipate,
target,  goal,  objective and other words with similar  meaning.  The Company is
under no obligation to update such statements.

The risks  involved in the  operations  and  strategies  of the Company  include
competition  from  other  financial  institutions,  changes in  interest  rates,
changes in economic or market  conditions  and  changes in  regulatory  factors.
These risks, which are not all inclusive, cannot be estimated.

Recent Activities

During the first six months of 2000 the Company expanded to a new market and two
significant  construction  projects  were  started.  In February we opened a new
office in downtown Cedar Rapids, Iowa, our tenth location. At the end of the six
months our consolidated total assets exceeded $819 million, reflecting continued
growth at all locations. The construction of our new operations center in Hills,
began in March 2000, and continues to be on schedule with a completion  expected
by  February  of  2001.  The  total  cost  of  the  project  is  expected  to be
approximately $3.1 million,  plus capitalized  interest cost during constuction.
Also we began  construction  of a 6,000 square foot  addition to the  Coralville
office,  which will be  primarily  for retail  banking  services  in the growing
Coralville market. The Coralville project also includes a substantial remodeling
of the existing two story Coralville  office.  Total project costs are estimated
to be approximately $2.1 million.

Financial Position

Total  assets at June 30, 2000  totaled  $819.3  million  and  represent a $99.8
million  increase in assets from one year ago. This increase in assets  includes
an increase  in net loans from June 30, 1999 to June 30, 2000 of $96.0  million,
with primarily all the loan growth attributable to real estate loans, consistent
with our loan  growth of the past few  years.  The local  and  national  economy
continues to be strong despite  recent  increases in interest  rates.  Our asset
growth was funded  primarily by deposit growth of $53.9  million,  federal funds
purchased and securities sold under agreements to repurchase of $7.3 million and
a net increase in Federal Home Loan Bank note advances of $32.0 million.  Due to
the continued loan demand and challenges  for funding  sources,  asset-liability
management  continues  to be  very  important.  The  asset-liability  management
encompasses both the management of interest rate sensitivity and the maintenance
of adequate liquidity.  Interest rate sensitivity management attempts to provide
the  optimal  level of net  interest  income  while  managing  exposure to risks
associated with interest rate movements.  Liquidity management involves planning
to meet anticipated funding needs.  Management monitors the rate sensitivity and
liquidity positions on an on-going basis and, when necessary, appropriate action
is taken to minimize any adverse effects of rapid interest rate movements or any
unexpected  liquidity  concerns.  We  believe  that we will be able to  maintain
sufficient liquidity.

In January 2000, Hills Bancorporation paid a dividend of $2,169,000 or $1.45 per
share, an 11.54% increase from the $1.30 paid in January 1999.  After payment of
the  dividend  and  adjustment  for  accumulated  other  comprehensive   income,
stockholders'  equity  as of  June  30,  2000  totaled  $62,162,000.  The  total
stockholders'  equity of Hills  Bancorporation  as of June 30,  2000  before the
reduction for the ESOP shares,  totaled 8.97% of total assets.  Under risk-based
capital rules,  our total risk based capital is 14.13% of risk adjusted  assets,
and substantially in excess of required miniumums.
<PAGE>


Results of Operations

Net income for the  quarter and six months  ended June 30, 2000  compared to the
same periods in 1999 had increases of $318,000 and $443,000,  respectively.  For
both periods the changes were primarily the result of  significant  increases in
net interest  income which was the result of increases in average earning assets
from the prior year.  Average earning assets were  approximately  $102.5 million
higher for the six months  ended June 30,  2000  compared  to the same period in
1999. Other income increased over the prior year by $188,000 for the three month
period  ended June 30 and  $322,000  for the six month  period then ended.  Loan
origination fees for the quarter and six months decreased $140,000 and $292,000,
respectively as interest rates increased significantly from the rates prevailing
during the first six  months of 1999 and this  directly  affected  the volume of
loans sold in the secondary  market.  Trust fees,  deposit  account  charges and
other fees  increased  $328,000  for the three  months and  $614,000 for the six
months  which were the direct  results of volume  increases  in trust assets and
deposit accounts opened, respectively.

Other  expenses  increased  $285,000  and  $933,000  for the three and six month
periods presented.  For the $933,000  increase,  salaries and benefits accounted
for $465,000,  occupancy and  furniture and equipment  expense  $166,000 and all
other expenses  $302,000.  The salaries and employee  benefits  increased as the
result of salary  adjustments  in the first  quarter of 2000 and the addition of
employees  at the new Cedar  Rapids  office.  The East Iowa City branch of Hills
Bank and Trust  Company was opened in June 1999 and the Cedar  Rapids  office of
Hills Bank  opened in  February  2000.  The two new  locations  accounted  for a
portion of the  increase in  occupancy  expense and other  expense  increases in
marketing  and  business  promotion.  Also  early in 2000 the  banks  introduced
on-line banking services and incurred increased promotion expenses. The usage of
on-line service has exceeded our  expectations  and we look forward to continued
increased usage.

Earnings per share, both basic and diluted, increased for the quarter ended June
30, 2000 compared to 1999. For the quarter ended June 30, 2000 basic and diluted
earnings per share  totaled $1.60 and $1.59 in comparison to $1.40 and $1.39 for
the quarter  ended June 30,  1999.  For the six month period ended in June 2000,
basis and diluted  earning per share totaled  $3.08 and $3.05  compared to $2.82
and $2.79 for the same period in 1999.

Market Risk Management

Market risk is the risk of earnings volatility that results from adverse changes
in interest  rates and market  prices.  The  Company's  market risk is comprised
primarily of interest  rate risk arising  form its core  banking  activities  of
lending  and  deposit  taking.  Interest  rate risk is the risk that  changes in
market  interest rates may adversely  affect the Company's net interest  income.
Management  continually  develops and applies  strategies to mitigate this risk.
Management does not believe that the Company's primary market risk exposures and
how those exposures have been managed to-date in 2000 changed significantly when
compared to 1999.

Asset/Liability Management

The Company has a fully integrated  asset/liability  management system to assist
in managing the balance sheet. The process, which is used to project the results
of alternative  investment  decisions,  includes the  development of simulations
that  reflect the effects of various  interest  rate  scenarios  on net interest
income.  Management  analyzes the  simulations to manage interest rate risk, the
net interest margin and levels of net interest income.

The  goal is to  structure  the  balance  sheet  so  that  net  interest  margin
fluctuates  in a narrow range during  periods of changing  interest  rates.  The
Company  currently  believes that net interest  income would fall by less than 4
percent if interest  rates  increased  or  decreased  by 300 basis points over a
one-year time horizon. This is within the Company's policy limits.

To  improve  net  interest  income  and lessen  interest  rate risk,  management
continues its strategy of de-emphasizing  fixed-rate portfolio  residential real
estate  loans with long  repricing  periods.  The Company  continues to focus on
reducing interest rate risk by emphasizing growth in variable-rate  consumer and
commercial loans.  Other actions include the use of fixed-rate Federal Home Loan
Bank  (FHLB)  advances  as  alternatives  to  certificates  of  deposit,  active
management of the available for sale investment  securities portfolio to provide
for cash flows that will facilitate interest rate risk management.

The highly  competitive  banking  environment  in Iowa also greatly  impacts the
Company's net interest margin.  The effect of competition on net interest income
is difficult to predict.


<PAGE>


                              HILLS BANCORPORATION
                           PART II - OTHER INFORMATION



Item 1.       Legal Proceedings

              There are no material pending legal proceedings.

Item 2.       Changes in Securities and use of Proceeds

              There were no changes in securities.

Item 3.       Defaults upon Senior Securities

              Hills Bancorporation has no senior securities.

Item 4.       Submission of Matters to a Vote of Security Holders

              At the Annual Meeting held on April 17, 2000, the security holders
              approved the following:

              1.  Election of Michael E. Hodge to a one year term to the Board
                  of Directors expiring at the 2001 Annual Meeting.

              2.  Election of Willis M. Bywater, Thomas J. Gill, D.D.S.,
                  Donald H. Gringer and Dwight O. Seegmiller to three-year terms
                  to the Board of Directors expiring at the 2003 Annual Meeting.

              3.   Approved the Hills Bancorporation 2000 Stock Option
                   and Incentive Plan.

Item 5.       Other Information

              None

Item 6.       Exhibits and Reports on Form 8-K

              (a)  Exhibit

                   See exhibit II - Statement Re Computation of Earnings Per
                   Common Share

              (b)  Reports on Form 8-K

                   No  reports on Form 8-K have been  filed  during the  quarter
                   ended June 30, 2000.


<PAGE>


                              HILLS BANCORPORATION
                                   EXHIBIT II

                    COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>

                                            Three months ended       Six months ended
                                                   June 30                 June 30
                                            --------------------    -------------------
                                              2000        1999         2000       1999
                                            ---------------------   --------------------
<S>                                         <C>         <C>         <C>         <C>
Weighted average numbe of shares
  outstanding (basic) ...................   1,495,941   1,484,525   1,495,941   1,476,139

Weighted average of potential dilutive
  shares attributable to stock options
  granted computed under the treasury
  stock method ..........................      12,677      11,871      12,631      16,217
                                            ---------------------------------------------
Weighted average number of shares
  (diluted) .............................   1,508,618   1,496,396   1,508,572   1,492,356
                                            =============================================


Earnings Per Share:
  Net income (in thousands) .............   $   2,399   $   2,081   $   4,603   $   4,160
  Earnings per common share:
    Basic ...............................   $    1.60   $    1.40   $    3.08   $    2.82
    Diluted .............................        1.59        1.39        3.05        2.79
</TABLE>
<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned and thereunto duly authorized.

                                     HILLS BANCORPORATION
                                     (Registrant)



August 14, 2000                      /s/ Dwight O. Seegmiller
--------------------                 -------------------------------------------
Date                                 Dwight O. Seegmiller, President
                                     (Duly authorized officer of the registrant)


August 14, 2000                      /s/ James G. Pratt
--------------------                 -------------------------------------------
Date                                 James G. Pratt, Treasurer
                                     (Principal Financial Officer)