-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SHzN80t60laWSB2ZYmQXWTiXurJdU28hrR6F5f4cjPCxZxKRwRps1PraKmCJIjd9 EA7nq4cN31JTkff4QJ1l+Q== 0000743530-98-000081.txt : 19981118 0000743530-98-000081.hdr.sgml : 19981118 ACCESSION NUMBER: 0000743530-98-000081 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HILLS BANCORPORATION CENTRAL INDEX KEY: 0000732417 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 421208067 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12668 FILM NUMBER: 98750033 BUSINESS ADDRESS: STREET 1: 131 MAIN ST CITY: HILLS STATE: IA ZIP: 52235 BUSINESS PHONE: 3196792291 MAIL ADDRESS: STREET 1: 131 MAIN ST CITY: HILLS STATE: IA ZIP: 52235 10-Q 1 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 September 30, 1998 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 October 31, 1998 - -------------------------- ------------------- Common Stock, no par value 1,467,754 HILLS BANCORPORATION Index to Form 10-Q Part I FINANCIAL INFORMATION Page Number Item 1. Financial Statements Consolidated balance sheets, September 30, 1998 (unaudited) and December 31, 1997 Consolidated statements of income, (unaudited) for three and nine months ended September 30, 1998 and 1997 Consolidated statements of comprehensive income, (unaudited) for three and nine months ended September 30, 1998 and 1997. Consolidated statements of stockholders' equity, (unaudited) for nine months ended September 30, 1998 and 1997 Consolidated statements of cash flows (unaudited) for nine months ended September 30, 1998 and 1997 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 HILLS BANCORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands) September 30, 1998 December 31, Unaudited 1997* ------------- ------------ ASSETS Cash and due from banks .............................. $ 14,251 $ 15,508 Investment securities: Available for sale (amortized cost September 30, 1998 $118,633; December 31, 1997 $108,718) ..................... 120,610 109,486 Held to maturity (fair value September 30, 1998 $22,518; December 31, 1997 $24,230) ...................... 21,976 23,840 Stock of Federal Home Bank ........................ 4,347 4,738 Federal funds sold ................................... 19,796 2,447 Loans, net ........................................... 447,017 422,761 Property and equipment, net .......................... 10,623 9,437 Accrued interest receivable .......................... 5,941 5,441 Deferred income taxes, net ........................... 1,432 1,859 Other assets ......................................... 8,237 7,585 -------- -------- $654,230 $603,102 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Noninterest-bearing deposits ......................... $ 53,075 $ 52,174 Interest-bearing deposits ............................ 449,173 427,596 -------- -------- Total deposits .................................... $502,248 $479,770 Federal funds purchased and securities sold under agreements to repurchase ............... 8,326 9,008 Federal Home Loan Bank notes ......................... 75,732 50,764 Accrued interest payable ............................. 2,004 2,060 Other liabilities .................................... 2,268 2,318 -------- -------- $590,578 $543,920 -------- -------- REDEEMABLE COMMON STOCK HELD BY EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) ............................................ $ 8,802 $ 7,682 -------- -------- STOCKHOLDERS' EQUITY Capital stock, common, no par value; authorized 10,000,000 shares; issued September 30, 1998 and December 31, 1997 - 1,467,754 shares ........................... $ 9,070 $ 9,070 Retained earnings .................................... 53,338 49,627 Accumulated other comprehensive income, unrealized gains on investment securities, net .... 1,244 485 -------- -------- $ 63,652 $ 59,182 Less, maximum cash obligation related to ESOP shares ....................................... 8,802 7,682 -------- -------- $ 54,850 $ 51,500 -------- -------- $654,230 $603,102 ======== ======== * Derived from audited financial statements. See Notes to Financial Statements. HILLS BANCORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF INCOME Three and Nine Months Ended September 30, 1998 and 1997 (In Thousands, Except Per Share Data) Three Months Ended Nine Months Ended September 30 September 30 1998 1997 1998 1997 -------- -------- -------- -------- Interest Income: Interest and fees on loans ........................ $ 9,566 $ 8,904 $ 28,108 $ 25,460 Interest on investment securities: Taxable ......................................... 1,698 1,680 5,064 5,046 Non-taxable ..................................... 354 306 1,019 898 Interest on federal funds sold .................... 350 54 893 134 -------- -------- -------- -------- Total interest income ............................. $ 11,968 $ 10,944 $ 35,084 $ 31,538 -------- -------- -------- -------- Interest Expense: Interest on deposits .............................. $ 5,185 $ 4,942 $ 15,253 $ 14,264 Interest on securities sold under agreements to repurchase ............................. 88 90 257 288 Interest on FHLB borrowings ....................... 1,106 747 3,277 2,007 -------- -------- -------- -------- Total interest expense ............................ $ 6,379 $ 5,779 $ 18,787 $ 16,559 -------- -------- -------- -------- Net interest income ............................... $ 5,589 $ 5,165 $ 16,297 $ 14,979 Provision for loan losses ............................ 304 195 712 785 -------- -------- -------- -------- Net interest income after provision for loan losses ................................. $ 5,285 $ 4,970 $ 15,585 $ 14,194 -------- -------- -------- -------- Other income: Net gains (losses) on sale of investment securities $ -- $ (62) $ -- $ 992 Loan origination fees ............................. 166 117 500 237 Trust fees ........................................ 403 322 1,266 947 Deposit account charges and fees .................. 458 482 1,351 1,385 Other fees and charges ............................ 348 283 1,079 912 -------- -------- -------- -------- $ 1,375 $ 1,142 $ 4,196 $ 4,473 -------- -------- -------- -------- Other expenses: Salaries and employee benefits .................... $ 2,133 $ 1,858 $ 6,366 $ 5,445 Occupancy ......................................... 284 269 859 756 Furniture and equipment ........................... 421 335 1,249 1,005 Office supplies and postage ....................... 293 208 882 626 Contributions ..................................... 5 17 13 1,109 Other operating ................................... 949 884 2,779 2,598 -------- -------- -------- -------- $ 4,085 $ 3,571 $ 12,148 $ 11,539 -------- -------- -------- -------- Income before income taxes ........................ $ 2,575 $ 2,541 $ 7,633 $ 7,128 Federal and state income taxes ....................... 756 788 2,237 1,829 -------- -------- -------- -------- Net income ........................................ $ 1,819 $ 1,753 $ 5,396 $ 5,299 ======== ======== ======== ======== Earning per common share: Basic ........................................... $ 1.24 $ 1.19 $ 3.68 $ 3.61 Diluted ......................................... 1.22 1.18 3.62 3.58
See Notes to Financial Statements HILLS BANCORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three and Nine Months Ended September 30, 1998 and 1997 (In Thousands, Except Per Share Data) Three Months Ended Nine Months Ended September 30 September 30 ------------------- ------------------ 1998 1997 1998 1997 ------- ------- ------- ------- Net Income ...................................... $ 1,819 $ 1,753 $ 5,396 $ 5,299 Other comprehensive income: Unrealized gains (losses) on debt securities . 1,147 365 1,209 (547) Income tax effect of unrealized gains (losses) (426) (135) (450) 183 ------- ------- ------- ------- Comprehensive Income ......................... $ 2,540 $ 1,983 $ 6,155 $ 4,935 ======= ======= ======= =======
HILLS BANCORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Nine Months Ended September 30, 1998 and 1997 (In Thousands) Capital Retained Unrealized ESOP Stock Earnings Gains (Losses) Obligations Total -------------------------------------------------------- Balance, January 1, 1998 ........ $ 9,070 $49,627 $ 485 $ (7,682) $ 51,500 Net income ...................... - - 5,396 - - - - 5,396 Change related to ESOP shares ... - - - - - - (1,120) (1,120) Cash dividends ($1.20 per share) - - (1,763) - - - - (1,763) Unrealized gains (losses) on debt securities, net ............... - - - - 759 - - 759 Tax savings on restricted stock issued .................. - - 78 - - - - 78 ------- -------- ------- ------- -------- Balance, September 30, 1998 ..... $ 9,070 $ 53,338 $ 1,244 $(8,802) $ 54,850 ======= ======== ======= ======= ======== Balance, January 1, 1997 ........ $ 8,996 $ 44,079 $ 676 $(6,416) $ 47,335 Exercise Stock Options for 2,055 shares .............. 53 - - - - - - 53 Redemption of stock ............. (7) - - - - - - (7) Net income ...................... - - 5,299 - - - - 5,299 Change related to ESOP shares ... - - - - - - (642) (642) Cash dividends ($1.05 per share) - - (1,539) - - - - (1,539) Unrealized gains (losses) on debt securities, net .......... - - - - (364) - - (364) ------- ------- ------- ------- -------- Balance, September 30, 1997 ..... $ 9,042 $47,839 $ 312 $(7,058) $ 50,135 ======= ======= ======= ======= ========
See Notes to Financial Statements. HILLS BANCORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, 1998 and 1997 (In Thousands) 1998 1997 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income ..................................................................... $ 5,396 $ 5,299 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation ............................................................... 987 803 Provision for loan losses .................................................. 712 785 Net gains on disposition of investment securities .......................... - - (992) (Increase) decrease in accrued interest receivable ......................... (500) (776) Amortization of bond discount .............................................. 216 260 (Increase) in other assets ................................................. (910) (344) Amortization of intangibles ................................................ 258 258 Increase in accrued interest and other liabilities ......................... (106) 398 -------- -------- Net cash provided by operating activities .................................. $ 6,053 $ 5,691 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturities of investment securities: Available for sale ......................................................... $ 19,599 $ 15,251 Held to maturity ........................................................... 2,286 1,894 Proceeds from sales of available-for-sale securities ........................... - - 9,366 Purchase of investment securities: Available for sale ......................................................... (29,785) (25,283) Held to maturity ........................................................... - - (5,273) Federal funds sold, net ........................................................ (17,349) 900 Loans made to customers, net of collections .................................... (24,968) (47,450) Purchases of property and equipment ............................................ (2,173) (1,196) -------- -------- Net cash (used in) investing activities .................................... $(52,390) $(51,791) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in deposits ........................................ $ 22,478 $ 18,791 Net increase (decrease) in fed funds purchased and securities sold under agreements to repurchase .......................... (682) 10,033 Borrowings from FHLB ....................................................... 40,000 20,000 Payments on FHLB notes ..................................................... (15,032) (31) Stock options exercised .................................................... - - 53 Redemption of common stock ................................................. - - (7) Tax savings on restricted stock issued ..................................... 78 - - Dividends paid ............................................................. (1,762) (1,539) -------- -------- Net cash provided by financing activities ............................... $ 45,080 $ 47,300 -------- -------- Increase in cash and due from banks ..................................... $ (1,257) $ 1,200 CASH AND DUE FROM BANKS Beginning .................................................................. 15,508 15,036 -------- -------- Ending ..................................................................... $ 14,251 $ 16,236 ======== ======== SUPPLEMENTAL DISCLOSURES Cash payments for: Interest paid to depositors and others .................................. $ 15,309 $ 14,244 Interest paid on other obligations ...................................... 3,534 2,295 Non-cash financing transactions: Increase in maximum cash obligation related to ESOP shares ......................................................... 1,120 642 Net unrealized gains (losses) on debt securities ........................ 1,209 (547)
See Notes to Financial Statements. 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) September 30 -------------------------- 1998 1997 --------- --------- Agricultural ................................ $ 33,946 $ 27,135 Commercial and financial .................... 36,523 33,742 Real estate, construction ................... 24,512 9,887 Real estate, mortgage ....................... 330,525 322,278 Loans to individual ......................... 29,994 29,741 --------- --------- $ 455,500 $ 422,783 Less allowance for loan losses .............. 8,483 (7,854) --------- --------- $ 447,017 $ 414,929 ========= ========= Transactions in the allowance for loan losses are as follows: (In thousands) Nine Months ended September 30 ------------------------ 1998 1997 ------- ------- Balance, beginning ........................... $ 8,010 $ 7,311 Provision charged to expense ............... 712 785 Net charge-offs ............................ (239) (242) ------- ------- Balance, ending .............................. $ 8,483 $ 7,854 ======= ======= The following summarizes the Company's nonaccrual, past due, restructured and impaired loans: (In thousands) September 30 1998 1997 ------ ------ Nonaccrual .................................... $ - - $ - - Accruing loans, past due 90 days or more ...... 1,825 963 Restructured loan ............................. - - - - Impaired loans ................................ 7,996 7,173 Note 3. Changes in Accounting Policies SFAS No. 130, "Reporting Comprehensive Income" was issued in June 1997 and was adopted January 1, 1998 for the initial period ended March 31, 1998. Statement #130 establishes standards for reporting comprehensive income in financial statements. The Company has presented a Statement of Comprehensive Income. SFAS No. 131,"Disclosures About Segments of an Enterprise and Related Information" expands certain reporting and disclosure requirements for segments from current standards. Statement #131 will be effective for the year ended December 31, 1998, but the Company operates in one business segment and the Statement will have no effect on the financial statements. Note 4. 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 weighed 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. 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 September 30, 1998 reflects total assets of $654.2 million which is an increase of $51.1 million from December 31, 1997. Net loans increased from $422.8 million to $447.0 million, which represents an increase of $24.2. Compared to one year ago, total assets have increased from $592.1 million to $654.2 million for an increase of $62.1 million. Also during this year, net loans increased $32.1 million to $438.1 million as of September 30, 1998. Loan demand continues to be very strong due to a continued strong local economy and a favorable low interest rate environment. Single family loans and other real estate loans continued to account for the majority of the loan growth. Other significant balance sheet changes from December 31, 1997 to September 30, 1998 are as follows: o Available for sale investment securities increasing $11.2 million to $120.6 million. o Federal funds sold were $17.3 million higher at September 30th than December 31, 1997. o Deposits including securities sold under agreements to repurchase totaled $510.6 million at September 30, 1998 compared to $488.8 million at December 31, 1997. o Federal Home Loan Bank's borrowings increased a net $25 million as Hills Bank and Trust Company took advantage of lower interest rates on four and five year advances available. o Also due to lower investment rates accumulated other comprehensive income which was all unrealized gains on investment securities increased from $485,000 at December 31, 1997 to $1,244,000 at September 30, 1998. 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 1998, Hills Bancorporation paid a dividend of $1.20 per share, a 14.29% increase from the $1.05 paid in January 1997. The total dividend of $1,763,000 is deducted from stockholders' equity and is reflected in the resulting stockholders' equity as of September 30, 1998 of $54,850,000. Stockholders' equity at September 30, 1998 and December 31, 1997 reflects an adjustment for unrealized gain (losses) on debt securities, net of income taxes. The total stockholders' equity of Hills Bancorporation as of September 30, 1998 before the reduction for the ESOP shares, as a percent of total assets is 9.73%. Under risk-based capital rules, total capital is 15.06% of risk adjusted assets, compared to the current 8% requirement. Net income for the quarter ending September 30, 1998 increased $66,000 from the previous year's quarter. Net interest income increased $424,000 and $1,318,000 for the quarter and the nine months ending September 30, 1998 compared to the same time periods in 1997. The increase in net interest income continues to be due to significant increases in the volume of earning assets during the first nine months of 1998 compared to 1997. The increase in average earning assets for the nine months ending September 30, 1998 compared to the same months in 1997 is approximately $65.8 million and is due primarily to average net loans increasing $42.8 million and the investment in federal funds being $19.3 million higher. The large federal fund balances were the result of funds borrowed from the Federal Home Loan Banks earlier in 1998 to be used for funding of expected loan growth. A significant other income item in the second quarter of 1997 was the recognition of $1,054,000 on the sale of a marketable equity security held by Hills Bancorporation. The equity security was transferred to the Hills Bancorporation Foundation, a private charitable foundation, organized exclusively for charitable and educational purposes to benefit the communities which the banks' serve. As a result of the stock contribution, Hills Bancorporation received an income tax savings of approximately $340,000 which is reflected as tax savings in the federal and state income taxes expense for the second quarter of 1997. Other income changes occurred in loan origination fees which increased $49,000 for the three months ended September 30, 1998 from one year ago and $263,000 for the nine months ending September 30 1998, compared to the same period in 1997. Trust fees showed growth over 1997 with an $81,000 increase for the quarter and $319,000 for the nine months. Other expenses, excluding the contribution discussed above increased $514,000 and $1,705,000 for the third quarter and the nine months ended September 30, 1998 compared to the same period in 1997. The major portion of this increase was $921,000 increase in salaries and employee benefits as full-time equivalent employees increased by thirty and normal yearly increases for existing employees. Also the full service Mount Vernon office opened in February, 1998 and has ten employees. All other operating expenses are up $784,000 as a result of increase in marketing, other professional fees, expenses relating to the new bank in Mount Vernon and other data processing charges. Basic and diluted earnings per share for the three months ending September 30, 1998 were $1.24 and $1.22 in comparison to $1.19 and $1.18 for the quarter ending September 30, 1997. The earnings per share for the nine months ended September 30, 1998 and September 30, 1997 were $3.68 and $3.61 for basic earnings per share and $3.62 and $3.58 for diluted earnings per share for both periods presented. The Bank's principal sources of funds continues 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 Company and its three wholly-owned subsidiary commercial banks, Hills Bank and Trust Company, Hills, Iowa; Hills Bank, Lisbon, Iowa; and Hills Bank Kalona, Kalona, Iowa are taking the appropriate measures to be ready for the Millennium change. The Banks' "Y2K" readiness plan is being implemented and a Year 2000 committee to oversees its progress. To date the Company has completed an inventory and assessment of all computers, equipment and software containing date sensitive functions. Contact has been made with the vendors of these products to determine Year 2000 compatibility. A renovation schedule is being followed to replace or upgrade identified products which are not Year 2000 compliant. In 1998, the Company replaced its primary computer system with a newer Year 2000 compliant system and has received a warranty from the software company that the software will operate after the Year 2000 without error relating to date data. In addition, the Company's critical information systems are in the process of being tested to make certain that by the end of 1998 the systems will be ready - one year ahead of the actual changeover. Contingency Plans The Company is also working on contingency plans that will provide alternate methods of doing business, if needed. The Year 2000 issues for banks depend not only on compliance of the banks' software and equipment, but also on compliance by all of the other institutions with which the banks do business. Four federal regulatory agencies, which share the responsibility for supervising efforts by banks and savings associations to make sure that they are taking the necessary steps now to get ready for the Year 2000 date change. The Banks already keep backup records for account transactions and will continue to do so. These records could be used to correct and identify errors that might affect deposit, loan or other account information due to a Year 2000 problem. Risks In the early weeks of 2000, the Company may experience some random supply chain disruption that may affect its ability to produce and distribute key products. These disruptions will be material if the U.S. experiences significant interruptions in basic services, such as the electric power grid, telephone service or the banking system. Costs The Banks replaced its primary computer system during the first quarter of 1998. Since most of these types of upgrades or renovations will be capitalized as property and equipment and depreciated it is expected that the costs will not have a significant impact on the earnings or future liquidity of the Company. 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. 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 No matters were submitted to a vote of security holders during the quarter ending September 30, 1998. 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 September 30, 1998. 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) November 13, 1998 /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) EX-11 2 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 ========== ========== ========= =========
EX-27 3
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SEPTEMBER 30, 1998 FORM 10-Q FOR HILLS BANCORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 9-MOS DEC-31-1998 SEP-30-1998 14,251 0 19,796 0 120,610 21,976 22,518 455,500 8,483 654,230 502,248 20,326 4,272 63,732 0 0 9,070 45,780 654,230 28,108 6,083 893 35,084 15,253 18,787 16,297 712 0 12,148 7,633 5,396 0 0 5,396 3.68 3.62 0 0 1,825 0 7,996 8,010 239 0 8,483 8,483 0 0
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