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, 1999


                         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, 1999
--------------------------                                    ------------------
Common Stock, no par value                                          1,493,867

<PAGE>


                              HILLS BANCORPORATION
                               Index to Form 10-Q

                                     Part I
                              FINANCIAL INFORMATION


                                                                           Page
                                                                          Number
                                                                          ------

Item 1.        Financial Statements

               Consolidated balance sheets, June 30, 1999 (unaudited)
                   and December 31, 1998
               Consolidated statements of income, (unaudited) for three
                   and six months ended June 30, 1999 and 1998
               Consolidated statements of comprehensive income,
                   (unaudited) for three and six months ended June 30,
                   1999 and 1998.
               Consolidated statements of stockholders' equity,
                   (unaudited) for six months ended June 30, 1999
                   and 1998
               Consolidated statements of cash flows (unaudited) for
                   six months ended June 30, 1999 and 1998
               Notes to consolidated financial statements

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


                                     Part II
                                OTHER INFORMATION

Item 1.        Legal proceedings

Item 2.        Changes in securities

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)


                                                          June 30,
                                                           1999     December 31,
                                                         Unaudited       1998*
                                                         -----------------------
ASSETS
Cash and due from banks .............................    $  17,320    $  16,427
Investment securities:
   Available for sale (amortized cost June 30, 1999
     $128,028; December 31, 1998 $121,974) ..........      127,733      123,835
   Held to maturity (fair value June 30, 1999
     $19,318; December 31, 1998 $21,740) ............       19,076       21,168
   Stock of Federal Home Loan Bank ..................        4,931        4,347
Federal funds sold ..................................       11,916       36,811
Loans, net ..........................................      509,380      460,911
Property and equipment, net .........................       11,689       11,193
Accrued interest receivable .........................        6,659        5,885
Deferred income taxes, net ..........................        2,702        1,838
Other assets ........................................        8,049        7,372
                                                         ----------------------
                                                         $ 719,455    $ 689,787
                                                         ======================

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Noninterest-bearing deposits ........................    $  62,681    $  68,100
Interest-bearing deposits ...........................      482,327      466,051
                                                         ----------------------
   Total deposits ...................................    $ 545,008    $ 534,151
Federal funds purchased and securities sold under
   agreements to repurchase .........................        8,489       10,554
Federal Home Loan Bank notes ........................       93,732       75,732
Accrued interest payable ............................        2,024        2,048
Other liabilities ...................................        2,619        1,549
                                                         ----------------------
                                                         $ 651,872    $ 624,034
                                                         ----------------------

REDEEMABLE COMMON STOCK HELD BY EMPLOYEE STOCK
   OWNERSHIP PLAN (ESOP) ............................    $  10,269    $   9,301
                                                         ----------------------

STOCKHOLDERS' EQUITY
Capital stock, common, no par value; authorized
   10,000,000 shares; issued June 30, 1999 -
   1,493,867 shares; December 31, 1998 -
   1,469,443 shares .................................    $   9,785    $   9,140
Retained earnings ...................................       57,985       55,428
Accumulated other comprehensive income,
   unrealized gains on investment securities, net ...         (187)       1,185
                                                         ----------------------
                                                         $  67,583    $  65,753
Less, maximum cash obligation related to
   ESOP shares ......................................       10,269        9,301
                                                         ----------------------
                                                         $  57,314    $  56,452
                                                         ----------------------
                                                         $ 719,455    $ 689,787
                                                         ======================

*  Derived from audited financial statements.

See Notes to Financial Statements.
<PAGE>


                              HILLS BANCORPORATION
                   UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
                Three and Six Months Ended June 30, 1999 and 1998
                      (In Thousands, Except Per Share Data)


                                           Three Months Ended   Six Months Ended
                                                June 30             June 30
                                           ------------------  -----------------
                                            1999       1998      1999     1998
                                           ------------------  -----------------
Interest Income:
   Interest and fees on loans ..........   $10,215   $ 9,367   $19,878   $18,542
   Interest on investment securities:
     Taxable ...........................     1,776     1,686     3,527     3,366
     Non-taxable .......................       384       330       763       665
   Interest on federal funds sold ......        96       296       357       543
                                           -----------------   -----------------
   Total interest income ...............   $12,471   $11,679   $24,525   $23,116
                                           -----------------   -----------------

Interest Expense:
   Interest on deposits ................   $ 5,188   $ 5,042   $10,278   $10,068
   Interest on securities sold under
     agreements to repurchase ..........        94        81       195       169
   Interest on FHLB borrowings .........     1,042     1,146     2,119     2,171
                                           -----------------   -----------------

   Total interest expense ..............   $ 6,324   $ 6,269   $12,592   $12,408
                                           -----------------   -----------------
   Net interest income .................   $ 6,147   $ 5,410   $11,933   $10,708

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

   Net interest income after provision
     for loan losses ...................   $ 5,943   $ 5,206   $11,525   $10,300
                                           -----------------   -----------------

Other income:
   Loan origination fees ...............   $   205   $   182   $   404   $   334
   Trust fees ..........................       500       406     1,026       863
   Deposit account charges and fees ....       532       459       984       893
   Other fees and charges ..............       440       358       918       731
                                           -----------------   -----------------
                                           $ 1,677   $ 1,405   $ 3,332   $ 2,821
                                           -----------------   -----------------
Other expenses:
   Salaries and employee benefits ......   $ 2,473   $ 2,168   $ 4,815   $ 4,233
   Occupancy ...........................       297       305       590       575
   Furniture and equipment .............       459       418       910       828
   Office supplies and postage .........       258       307       524       589
   Other operating .....................     1,110       965     2,005     1,838
                                           -----------------   -----------------
                                           $ 4,597   $ 4,163   $ 8,844   $ 8,063
                                           -----------------   -----------------
   Income before income taxes ..........   $ 3,023   $ 2,448   $ 6,013   $ 5,058

Federal and state income taxes .........       942       715     1,853     1,481
                                           -----------------   -----------------

   Net income ..........................   $ 2,081   $ 1,733   $ 4,160   $ 3,577
                                           =================   =================

Earning per common share:
     Basic .............................   $  1.40   $  1.18   $  2.80   $  2.44
     Diluted ...........................      1.39      1.16      2.78      2.40

See Notes to Financial Statements
<PAGE>


                              HILLS BANCORPORATION
            UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                Three and Six Months Ended June 30, 1999 and 1998
                      (In Thousands, Except Per Share Data)

<TABLE>

                                                    Three Months Ended     Six Months Ended
                                                          June 30               June 30
                                                    ------------------    ------------------
                                                      1999      1998        1999      1998
                                                    ------------------    ------------------
<S>                                                 <C>        <C>        <C>        <C>
Net Income ......................................   $ 2,081    $ 1,733    $ 4,160    $ 3,577

Other comprehensive income:
   Unrealized gains (losses) on debt securities .    (1,301)      (122)    (2,156)        62
   Income tax effect of unrealized gains (losses)       483         44        784        (24)
                                                    ------------------    ------------------

Comprehensive Income ............................   $ 1,263    $ 1,655    $ 2,788    $ 3,615
                                                    ==================    ==================
</TABLE>
<PAGE>


                              HILLS BANCORPORATION
            UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     Six Months Ended June 30, 1999 and 1998
                                 (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, 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
                                            ==========================================================


Balance, January 1, 1998 ................   $ 9,070    $49,627      $   485       $(7,682)    $ 51,500
Net income ..............................     - - -      3,577        - - -         - - -        3,577
Change related to ESOP shares ...........     - - -      - - -        - - -          (800)        (800)
Cash dividends ($1.20 per share) ........     - - -     (1,763)       - - -         - - -       (1,763)
Other comprehensive income ..............     - - -      - - -           38         - - -           38
                                            ----------------------------------------------------------
Balance, June 30, 1998 ..................   $ 9,070   $ 51,441      $   523       $(8,482)     $52,552
                                            ==========================================================
</TABLE>
See Notes to Financial Statements.
<PAGE>


                              HILLS BANCORPORATION
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Six Months Ended June 30, 1999 and 1998
                                 (In Thousands)
<TABLE>

                                                                                     1999        1998
                                                                                   --------------------
<S>                                                                                <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .....................................................................   $  4,160    $  3,577
Adjustments to reconcile net income to
    net cash provided by operating activities:
    Depreciation ...............................................................        714         658
    Provision for loan losses ..................................................        408         408
    Deferred income taxes ......................................................        (60)      - - -
    Compensation paid by issuance of common stock ..............................         20       - - -
    (Increase) decrease in accrued interest receivable .........................       (774)     (1,497)
    Amortization of bond discount ..............................................        245         139
    (Increase) in other assets .................................................       (849)        346
    Amortization of intangibles ................................................        172         172
    Increase in accrued interest and other liabilities .........................      1,046        (179)
                                                                                   --------------------
    Net cash provided by operating activities ..................................   $  5,082    $  3,624
                                                                                   --------------------

CASH FLOWS FROM  INVESTING  ACTIVITIES
Proceeds  from  maturities of investment securities:
    Available for sale .........................................................   $ 19,637    $ 13,499
    Held to maturity ...........................................................      2,241       2,086
Purchase of investment securities, available for sale ..........................    (26,689)    (14,459)
Federal funds sold, net ........................................................     24,895     (14,684)
Loans made to customers, net of collections ....................................    (48,877)    (15,776)
Purchases of property and equipment ............................................     (1,210)     (1,768)
                                                                                   --------------------
    Net cash (used in) investing activities ....................................   $(30,003)   $(31,102)
                                                                                   --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Net increase (decrease) in deposits ........................................   $ 10,857    $ 10,992
    Net increase (decrease) in fed funds purchased and
       securities sold under agreements to repurchase ..........................     (2,065)     (3,669)
    Borrowings from FHLB .......................................................     25,000      40,000
    Payments on FHLB notes .....................................................     (7,000)    (15,000)
    Stock options exercised ....................................................        625       - - -
    Income tax benefits on stock options exercised .............................        308       - - -
    Dividends paid .............................................................     (1,911)     (1,762)
                                                                                   --------------------
       Net cash provided by financing activities ...............................   $ 25,814    $ 30,561
                                                                                   --------------------
       (Decrease) in cash and due from banks ...................................   $    893    $  3,083

CASH AND DUE FROM BANKS
    Beginning ..................................................................     16,427      15,508
                                                                                   --------------------
    Ending .....................................................................   $ 17,320    $ 18,591
                                                                                   ====================

SUPPLEMENTAL DISCLOSURES
    Cash payments for:
       Interest paid to depositors and others ..................................   $ 10,282    $ 10,164
       Interest paid on other obligations ......................................      2,314       2,340
    Non-cash financing transactions:
       Increase in maximum cash obligation related
        to ESOP shares .........................................................        968         800
       Net unrealized gains (losses) on debt securities ........................     (2,156)         62
</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.

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
                                                    ---------------------------
                                                       1999              1998
                                                    ---------------------------

Agricultural ...............................        $  27,997         $  28,881
Commercial and financial ...................           34,300            34,376
Real estate, construction ..................           38,634            18,618
Real estate, mortgage ......................          382,741           328,229
Loans to individuals .......................           34,935            36,134
                                                    ---------------------------
                                                    $ 518,607         $ 446,238
Less allowance for loan losses .............           (9,227)           (8,109)
                                                    ---------------------------
                                                    $ 509,380         $ 438,129
                                                    ===========================

Transactions in the allowance for loan losses are as follows:

                                                            (In thousands)
                                                       Six Months Ended June 30
                                                       ------------------------
                                                         1999             1998
                                                       ------------------------

Balance, beginning ...........................         $ 8,856          $ 8,010
  Provision charged to expense ...............             408              408
  Net charge-offs ............................             (37)            (309)
                                                       ------------------------
Balance, ending ..............................         $ 9,227          $ 8,109
                                                       ========================

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

                                                 (In thousands)
                                                     June 30
                                                 --------------
                                                  1999    1998
                                                 --------------

Nonaccrual ....................................  $  - -  $  - -
Accruing loans, past due 90 days or more ......   1,749   1,065
Restructured loan .............................     - -     - -
Impaired loans ................................   9,413   7,309


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

The  consolidated  balance  sheet of Hills  Bancorporation  as of June 30,  1999
reflects total assets of $719.5  million,  which is an increase of $29.7 million
from  December  31,  1998.  Net loans  increased  from $460.9  million to $509.4
million,  which  represents an increase of $48.5 million from December 31, 1998.
Compared to one year ago,  total assets have  increased  from $637.1  million to
$719.5  million  for an increase of $82.4  million.  Also during this time,  net
loans  increased  $71.3 million to $509.4 million as of June 30, 1999. The major
portion of the loan increase was in real estate loans, with loans secured by 1-4
family  mortgages  accounting  for the largest  change.  The local and  national
economy continues to be strong and coupled with the interest rates have aided in
the increase in loans outstanding.  Investment  securities in one year increased
from $136.9  million to $151.7 million for the period from June 30, 1998 to June
30, 1999.

The growth in loans and investment  securities in the last year was funded by an
increase in total deposits and securities sold under agreements to repurchase of
$57.4  million  along with a net increase in Federal Home Loan Bank  advances of
$18.0 million.  In addition,  federal funds sold decreased from $17.1 million to
$12.0 million and these funds assisted in the funding of the increase in assets.
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.

In January  1999,  Hills  Bancorporation  paid a dividend of $1.30 per share,  a
8.33%  increase  from the $1.20  paid in January  1998.  The total  dividend  of
$1,911,000  is  deducted  from  stockholders'  equity  and is  reflected  in the
resulting stockholders' equity as of June 30, 1999 of $57,314,000. Stockholders'
equity at June 30,  1999 and  December  31,  1998  reflects  an  adjustment  for
unrealized  gain (losses) on debt  securities,  net of income  taxes.  The total
stockholders'  equity of Hills  Bancorporation  as of June 30,  1999  before the
reduction  for the ESOP  shares,  as a percent of total  assets is 9.39%.  Under
risk-based  capital  rules,  total  capital is 14.63% of risk  adjusted  assets,
compared to the current 8% requirement.

Net income for the quarter and six months  ended June 30, 1999 showed  increases
of $348,000  and  $583,000,  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  $60.5 million higher for the six months ended
June 30, 1999 compared to the same period in 1998.  Other income  increased over
the prior year by $272,000 for the three months ended June 30th and $511,000 for
the six month period shown.  Significant  increases occurred in loan origination
fees,  trust fees and other fees and charges.  Origination fees increased due to
the volume of  secondary  market  loans  processed,  as overall  rates were more
favorable than the prior year.  Trust fees and other fees and charges  increased
by $350,000 for the six months ended June 30, 1999 and was primarily due to more
trust assets under management and more accounts subject to fees and charges.

Other  expenses  for the six months  ended June 30, 1999 were  $8,844,000  or an
increase of $781,000 from the period ended June 30, 1998.  Salaries and employee
benefits  accounted  for $582,000 of the increase and is the result of new staff
additions in 1999, salary  adjustments in January 1999, and increases in medical
insurance claims over 1998 claims.  All other expenses increased from $3,830,000
at June 30,  1998 to  $4,029,000  at June 30,  1999 or  $199,000,  which  was an
increase  of  5.20%.  The  major  category  that  increased  was  furniture  and
equipment, which was $828,000 in 1998 and $910,000 in 1999 and was the result of
major computer hardware and software additions in 1998.

Earnings per share, both basic and diluted increased for the quarter ending June
30, 1999 compared to 1998. For the period ending June 30, 1999 basic and diluted
earnings per share were $1.40 and $1.39 in comparison to $1.18 and $1.16 for the
quarter  ending June 30,  1998.  The earnings per share for the six months ended
June 30,  1999 and June 30,  1998 were  $2.80 and $2.44 for basic  earnings  per
share and $2.78 and $2.40 for diluted earnings per share.
<PAGE>



The  Company's  principal  sources of funds  continue to be  prepayment  of loan
principal and current amortized loan payments.  In addition,  funds are provided
from current operations.  All of the funds are used to fulfill loan commitments,
make  short-term  investments,  and fund any  deposit  withdrawals  needed.  The
Company has no material  commitments or plans which will  materially  affect its
liquidity or capital resources. The acquisition of property and equipment may be
in cash purchases, or they may be financed if favorable terms are available.

Year 2000

The  Year  2000  poses  an  important  business  issue  regarding  how  existing
application  software  programs and operating  systems can accommodate this date
value.  Many computer programs that can only distinguish the final two digits of
the year  entered  are  expected  to read  entries for the Year 2000 as the Year
1900. Like most financial  service  providers,  the Company may be significantly
affected  by the Year 2000  issues due to the nature of  financial  information.
Software,  hardware and equipment  both within and outside the Company's  direct
control and with whom the Company electronically or operationally interfaces are
likely to be  affected.  If  computer  systems  are not  adequately  changed  to
identify  the  Year  2000,  many  computer  applications  could  fail or  create
erroneous  results.  As a result, many calculations  that rely on the data field
information,  such  as  interest,  payment  or due  dates  and  other  operating
functions,  may generate results that could be significantly  misstated, and the
Company  could  experience  a temporary  inability to process  transactions  and
engage in normal business activities.

All of the significant  computer  programs of the Company that could be affected
by this issue are provided by major  third-party  vendors.  In 1998, the Company
completed  the  replacement/upgrading  of  most  of  its  computer  systems  and
programs,  as well as most  equipment,  in order to provide  cost-effective  and
efficient delivery of services to customers,  information to management,  and to
provide additional  capacity for processing  information and transactions due to
acquisitions.  The  third-party  vendors  have advised the Company that all such
computer systems and programs either are or shortly will be Year 2000 compliant.
The Company completed off-site testing of its major applications in 1998.

The  total  cost of the Year  2000  project  was  approximately  $1,180,000  for
capitalized  hardware and software and an additional $88,000 in expenses charged
to earnings in 1998.  Management estimates the cost of the remediation effort to
make the Company's  systems Year 2000 ready will be approximately  $40,000 to be
charged to expense in 1999 and $105,000 to be  capitalized in 1999. In addition,
it is  estimated  that 2,000 man hours  will be  incurred  by Company  personnel
related to Year 2000 issues at an approximate  cost of $40,000.  Such costs will
be charged to expense as they are incurred.

The Company is developing a Year 2000  contingency  plan that  addresses,  among
other issues, critical operations and potential failures thereof, and strategies
for business continuation.  The contingency plan includes back up power sources,
off-site  processing of data and a detailed  listing of  responsibilities  among
various employees of their  contingency plan duties.  The plan is expected to be
finalized during the third quarter of 1999.

The Company  could incur  losses if loan  payments  are delayed due to Year 2000
problems affecting significant borrowers. The Company is communicating with such
parties to assess their progress in evaluating and  implementing  any corrective
measures  required by them to be Year 2000 ready.  To date, the Company has been
advised by such parties that they have plans in place to address and correct the
issues associated with the Year 2000 problem; however, no assurance can be given
as to the adequacy of such plans or to the  timeliness of their  implementation.
As part of the  current  credit  approval  process,  new and  renewed  loans are
evaluated  as to  the  borrower's  Year  2000  readiness.  Management  does  not
anticipate significant loan losses related to this issue.

Although   management  believes  the  Company's  computer  systems  and  service
providers will be Year 2000 ready, there can be no assurance that these systems,
or those systems of other companies on which the Company's systems rely, will be
fully functional in the Year 2000. Such failure could have a significant adverse
impact on the financial  condition and results of operations of the Company.  In
addition,  there could be a material effect to the financial statements if there
are  significant  interruptions  in basic  services,  such as the electric power
grid, telephone services or the banking system. These risks cannot be estimated.
<PAGE>



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.



<PAGE>


                              HILLS BANCORPORATION
                           PART II - OTHER INFORMATION


Item 1.       Legal Proceedings

              There are no material pending legal proceedings.

Item 2.       Changes in Securities

              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 19, 1999, the security holders
              approved the  election of Theodore H. Pacha,  Ann Marie Rhodes and
              Ronald E. Stutsman to  three-year  terms to the Board of Directors
              expiring at the 2002 Annual Meeting.

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, 1999.
<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 13, 1999                      /s/ Dwight O. Seegmiller
---------------------------          -------------------------------------------
Date                                 Dwight O. Seegmiller, President

                                     (Duly authorized officer of the registrant)


                                     /s/ James G. Pratt
                                     -------------------------------------------
                                     James G. Pratt, Treasurer
                                     (Principal Financial Officer)