Here to get you there.
2024 Annual Report
Founded in 1987, Wilson
Bank & Trust is a full-service
community bank committed
to providing equal access to
credit for everyone. Taking
a personal approach to
business, Wilson Bank & Trust
offers customized banking
needs for customers across
the region. With 31 offices in
ten counties, we remain local,
independent and dedicated
to serving our communities,
neighbors, and friends.
2024 By the Numbers*
31
596
Locations
Employees
10
Counties
*As of February 2025
W I L S O N B A N K H O L D I N G C O M P A N Y 1
Contents
A Year of Strength and Success
Letter to Our Shareholders
A Legacy of Vision
and Family: Donna
and Richard Macon
Banking in the Age of Data: How Do We Use
it Today and Where are We Going
A Shared Vision of Growth and Quality
Small Business Spotlight: Anderson Meats
Partnership Built for Success:
Leisa Byars and Wilson Bank & Trust
2
4
6
8
10
A Year of Growth and
Strategic Expansion
in Chattanooga
Empowering Our
Communities Through
Financial Literacy
12
13
14
Financial Section
Strong Balance Sheet Growth. . . . . . . . . . . . . . . . . . . . . . . . . .16
Management’s Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . 25
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . 63
Consolidated Statements of Earnings . . . . . . . . . . . . . . . . . 64
Consolidated Statements of Changes in
Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Consolidated Statements of Cash Flows. . . . . . . . . . . . . . 67
Notes to Consolidated Financial Statements. . . . . . . . . . 69
Holding Company & Stock Information. . . . . . . . . . . . . . . . 121
Board of Directors and Executive Management. . . . . . .122
Market and Division Leadership . . . . . . . . . . . . . . . . . . . . . . .123
Locations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124
Building a Better
Community Together
W i l s o n B a n k H o l d i n g C o m p a n y
To Our Shareholders:
A Year of Strength
and Success
2
2 0 2 4 A N N U A L R E P O R T
Since our founding in 1987, we have upheld a
simple yet powerful promise - reliability. In an era
where financial institutions often feel impersonal,
we remain steadfast in our mission to provide
trusted, community-focused banking. Whether
supporting a first-time homebuyer, financing a
local business, or offering best-in-class customer
service, our approach is built on the values
that define us: Trust, Heart, Understanding,
Commitment, Responsibility, and Confidence.
These are the qualities that we believe continue
to set us apart and will guide us forward.
Strategic Priorities for 2025
Looking ahead, our strategic plan is designed
to ensure that Wilson Bank remains a leader in
an evolving financial landscape. With increasing
competition and rising customer expectations,
we are focused on four key areas that we believe
will drive our long-term success:
As we reflect on 2024, Wilson Bank & Trust stands stronger than ever. This past year
marked a record-breaking milestone as we surpassed $5 billion in total assets and
achieved record levels of net income. These accomplishments reflect the strength of our
brand, our commitment to sound financial management, and our deep-rooted dedication
to the communities we serve.
“Your trust has been key to our
success, and we are grateful for
your continued confidence in our
holding company. We look forward to
building upon our solid foundation and
delivering continued long-term value
for our shareholders.”
John C. McDearman, III
Chief Executive Officer
Wilson Bank & Trust
• Customer Experience: We will work to strengthen
our ability to attract, grow, and serve small and
medium-sized businesses, equipping our customers
with the financial tools they need to thrive.
• Talent: Our people are our greatest asset. We will
continue to attract, develop, and retain a highly
skilled and engaged workforce.
• Technology & Digital Innovation: We will invest
in advanced technology to enhance digital
capabilities to better serve our customers.
• Process Improvement: By streamlining operations,
we will aim to drive efficiency, reduce costs,
and enhance both employee and customer
satisfaction.
Successful execution of these priorities should ensure
that Wilson Bank & Trust not only remains relevant
but continues to be an industry leader in talent,
technology, and financial strength in our communities.
2024
By the
Numbers
$5.4B
W I L S O N B A N K H O L D I N G C O M P A N Y 3
12.41%
Total Assets
Return on Average
Shareholders’ Equity
13.85%
Increase in Net Loans
$480M
Shareholders’ Equity
Economic and Industry
Trends to Watch
As we enter 2025, we remain proactive in monitoring
economic conditions and industry trends that could
impact our bank and shareholders:
• Economic Environment: Our balance sheet is
built with changes in the economic and interest
rate environment in mind. Today persistent
inflation, slow GDP growth, and uncertain Fed
rate movements, continue to shape financial
markets. Labor market tightness and income
challenges are expected to persist, and your
bank remains focused on monitoring these
conditions and adapting to overcome any
challenges that may arise.
• Customer Expectations: Digital banking
adoption is at an all-time high, yet customers
still seek in-person engagement for financial
advice and problem resolution. We feel the
seamless combination of these two customer
expectations is what sets WBT apart from our
competitors.
• Regulatory & Technological Shifts:
– Support for Federal privacy legislation is
gaining traction, potentially standardizing
data protection laws across states.
– Artificial intelligence and machine learning are
reshaping financial services, bringing oppor-
tunities, challenges and regulatory scrutiny.
– Digital currency and fintech partnerships
are evolving, with federal agencies taking an
increasingly open stance toward innovation.
A Bank Built for You
At Wilson Bank & Trust, we are more than just a
financial institution - we are a trusted partner. Our
reputation is built on being consistent, strategic,
friendly, responsible, and knowledgeable. We
take pride in providing solution-driven products
and personalized services backed by a team that
genuinely cares.
As we step into 2025, we do so with confidence,
knowing that our foundation is strong and our vision
is clear. Thank you for your trust and investment in
Wilson Bank Holding Company. We look forward to
another year of progress, partnership, and prosperity.
Sincerely.
John C. McDearman, III
John Foster
President/CEO
President
Wilson Bank Holding Company
Wilson Bank & Trust
“Our team is committed to providing
the same service that you’ve come
to expect from us. As always, we are
here to get you there.”
John Foster
President
Wilson Bank & Trust
4
2 0 2 4 A N N U A L R E P O R T
A Legacy of Vision and Family:
Donna and Richard Macon
As Wilson Bank & Trust (WBT)
reflects on its growth, it’s
essential to honor the legacy
of those whose dedication and
vision have been integral to the
bank’s success. The partnership
between Donna and Richard
Macon is a story of dedication
and generational investment—
both in their family and in WBT.
The Macons’ roots run deep in
both Wilson County and Smith
County, growing up alongside one
another, and being active members
of both communities throughout
their lives. Their love story began
in high school, when Donna fondly
recalls how Richard would ride his
horse to her grandmother’s home.
That bond blossomed, leading to
their marriage, and together, they
built a life founded on hard work,
vision, and mutual support. While
Richard thrived in various business
ventures, Donna, a dedicated
mathematics educator, recognized
the importance of financial
investment. Combining his hard
work, and her understanding
of finances, they were able to
demonstrate first-hand the
benefits of investing for their family.
In 1983, just before WBT was
founded, the Macons ventured
into the world of real estate,
establishing a business that would
become a cornerstone of their
success. Richard, initially hesitant
about pursuing auctions, was
encouraged by Donna’s sharp eye
for opportunity. Her vision proved
right when Richard excelled in the
auction business, and together,
they created a partnership that
spanned both personal and
professional life.
But Donna’s influence didn’t stop
there. As the matriarch of the
Macon family, she encouraged her
children to invest in WBT, believing
that the bank represented more
than just a financial opportunity—
it was a legacy in the making.
“It’s not just about the stock,”
Donna says, “It’s about investing
in something that will continue
to grow for generations.” This
foresight led to the involvement of
their children and grandchildren
in the bank’s growth, establishing
enduring connections with WBT
that continue today.
The Macons’ impact extended
beyond investment in the bank,
playing an active role in advocating
for WBT’s growth through the
years. Donna served on the bank’s
original Community Counsel,
and together with Richard, they
joined other local real estate
professionals in carving a pathway
for the commercial real estate
bank of choice WBT is known as
today. Richard’s leadership as
President of the Wilson County
Chamber of Commerce further
solidified their position as pillars
of the community.
Shareholder Spotlight:
Donna Macon
W I L S O N B A N K H O L D I N G C O M P A N Y 5
Their relationship with WBT goes
back to the very beginning, when
Randall Clemons invited the
Macons to invest in the fledgling
bank. Donna’s decisive nature was
instrumental in their choice to
invest, and when the bank opened
its doors, she was reassured by the
presence of familiar, trusted faces
like Becky Taylor. “Richard and I
agreed that the reputation of the
original group running the bank
was outstanding,” Donna reflects.
“That legacy continues to live on in
the bank today.”
The impact of the Macon family’s
relationship with WBT spans
generations, as well. Their
youngest daughter, LeaBeth and
her husband Steven financed Pack
Family Practice with the bank,
and they conduct their business
banking with WBT today. Similarly,
their daughter Suzanne, married
to Dwayne Eubank, relies on WBT
for their family business’s banking
and financing needs, owning
and operating Eubank Electric in
Murfreesboro. Their son, Richie,
now living in Knoxville, is a strong
advocate for WBT’s expansion into
East Tennessee, and is excited to
see the bank continue to grow and
serve new communities.
The Macon’s legacy is a testament
to the power of vision, investment,
and unwavering commitment to
family. Their story is a powerful
reminder that when families
invest in what matters most—
relationships, values, and the
future—the impact can last
for generations. Through the
efforts made in the early years of
their marriage, and partnership
with WBT, Donna and Richard
Macon not only secured a lasting
financial legacy for their family
but also helped shape the bank’s
past, present, and future, for
generations to come.
“It’s not just about the stock, It’s about
investing in something that will continue
to grow for generations.”
DONNA MACON
6
2 0 2 4 A N N U A L R E P O R T
As Wilson Bank & Trust (WBT) continues to
prioritize data as a cornerstone of its operations,
we have made significant strides in 2024, and our
goals for 2025 reflect a commitment to deepening
customer relationships, improving decision-
making, and leveraging advanced technologies to
further elevate our service.
In 2024, our primary focus was on modernizing our
data systems to enhance accessibility, accuracy,
and insights. A key initiative was migrating our
existing data to a cloud-based system, replacing
our original in-house system. In addition, data
governance was prioritized as we sought to
improve the privacy, accuracy and completeness
of internal data as part of the data conversion to
the new data system.
Through this process, we revamped our reporting
system, making it more dynamic and responsive
to the needs of various departments. Our
enhanced dashboards allow for more accurate
insights, empowering decision-makers across
the bank with real-time, accurate information.
How Do We Use it Today
and Where are We Going
Banking
in the Age
of Data:
W I L S O N B A N K H O L D I N G C O M P A N Y 7
Additionally, our executive team now has real time
access to financial reporting with the potential
for thousands of combinations, enabling our
leadership to dive deep into every facet of the
business to evaluate opportunities to hone
expertise and improve customer experience.
Looking to 2025, our focus is on organizing the
data into actionable insights that benefit both
our internal teams and, most importantly, our
customers. We are continuing to work on making
this information more accessible, allowing our
marketing, lending, and customer service teams
to better identify who our customers are and how
we can meet their evolving needs.
By using data to predict customer needs, we can
proactively suggest products and services that
best fit their current life stage or financial goals—
whether it’s a savings account for a growing
family or a loan to help with home improvements.
We will also use these insights to understand
where there may be gaps in our product offerings,
ensuring we’re not only meeting customer needs
today but anticipating what they will need in the
future. We want to allow our customers to grow
with us, always looking for additional products on
the market that enhance financial efficiency and
effectiveness for each stage of life, or business.
With the increasing popularity of Artificial
Intelligence Technologies (AIT), it is important
to set guidelines for using these tools. At WBT,
we remain committed to adopting innovative
technologies to aid our mission. However, we
also understand the risks and limitations of AIT
and want to ensure responsible use. Our goal
is to safeguard our associates, customers, and
the company from harm. The bank’s team has
implemented safeguards that provide standards
and procedures for the secure use of AIT.
While AI’s potential to revolutionize customer
service and data analytics is undeniable, we must
be mindful of the risks it poses, particularly around
data privacy and the accuracy of AI-generated
insights. Stephen Jaquish, Chief Information
Officer, says, “WBT continues to actively research
and develop a deeper understanding of how AI fits
into standard operations, in an effort to ensure
that any implementation is done safely, ethically,
and in a way that enhances the customer
experience.” The bank’s leadership is committed
to ensuring they comprehend the magnitude and
intricacies of AI’s influence, which is crucial for
fostering a culture of AI responsibility throughout
the organization.
The progress made in 2024 positions our bank for
a future where data and technology enhance the
personal, community-focused service that has
always been at the heart of Wilson Bank & Trust.
As we continue to evolve, we remain committed to
our core values and to providing the best possible
experience for our customers by equipping them
with the financial tools they need to thrive.
“WBT continues to actively research and
develop a deeper understanding of how
AI fits into standard operations, ensuring
that any implementation is done safely,
ethically, and in a way that enhances
the customer experience.”
Stephen Jaquish
Chief Information Officer
Wilson Bank & Trust
8
2 0 2 4 A N N U A L R E P O R T
A Shared
Vision of
Growth
and Quality
David West and Steve Anderson discuss
growth opportunities at Anderson Meats’
Trousdale County processing facility.
W I L S O N B A N K H O L D I N G C O M P A N Y 9
Steve Anderson’s journey from cattle farmer to small business owner is a testament to vision,
perseverance, and community. In 2000, Steve founded Hat Creek Cattle Company in Smith
County, building on his family’s long lineage of farmers. His son, Craig, now co-owns the business
and oversees their beef cattle herd, while Steve focuses on the family’s processing operation,
Anderson Meats and Processing, in Hartsville, Tennessee.
While Steve leads the operation, his wife, Maria, plays a vital role in
the business. With her background in veterinary services and passion
for long-horn cattle, Maria has influenced the company’s focus on the
humane treatment of livestock. Her deep understanding of animal
welfare has helped shape the business’s approach, ensuring that the
care of animals is prioritized throughout their process.
The idea for Anderson Meats stemmed from a need Steve saw
firsthand. For years, he traveled up to 100 miles to have his cattle
processed at a satisfactory standard, and he quickly realized that
a local facility could help the efficiency of both his farm and other
local farmers. In 2015, he began laying the groundwork for what
would become a state-of-the-art, certified humane processing
facility. By 2021, the Andersons combined their perspectives to
influence operations, successfully opening the facility with a focus on quality,
sanitation, and the humane treatment of livestock – a reflection of their
shared values and commitment to animal care.
Anderson’s relationship with Wilson Bank & Trust (WBT) is grounded in shared
values of community and integrity. He and David West, Market Leader for
Smith and Trousdale Counties, have known each other for decades. Growing
up in the same community, their bond goes beyond business. “It didn’t
matter what was going on, you were just good neighbors,” Anderson recalls,
reminiscent of their youth, and echoing the same sentiment of WBT. When it
came time to refinance his small business loan, he turned to WBT because of
its long-standing reputation and local approach. Anderson refinanced his SBA
loan, lowering his payments by $4,000 per month, giving Anderson Meats the
financial flexibility to grow. Desiring to solidify the relationship, Chief Credit
Officer, Taylor Walker and Head of Small Business Lending, Wes Taylor, visited
the processing facility to better understand the business, ensuring they could
advocate for Anderson’s needs as he continues to develop new efficiencies.
For Steve, working with WBT was a natural choice. “I knew I could trust them
to get it right for my family and my business,” he says. “They’ve always been
good to me, and I know they’ll support me as my business continues to
grow.” That trust is central to the bank’s commitment to its customers. As
Steve’s vision continues to evolve, WBT will be there, helping turn dreams
into reality—just as they have with Anderson Meats.
Steve’s focus on quality, respect for the animals, and dedication to the local
community is reflected in every aspect of his business. “I tell people all the
time, I won’t serve you anything out of here I wouldn’t eat myself,” Steve
says. It’s that kind of care and commitment that WBT values in its business
relationships. And just like Steve, we’re here to ensure the success of our
customers and their communities, every step of the way.
Steve
Anderson
“I knew I could trust them to
get it right for my family and
my business, They’ve always
been good to me, and I know
they’ll support me as my
business continues to grow.”
Small Business Spotlight:
Anderson Meats
10
2 0 2 4 A N N U A L R E P O R T
Leisa Byars has built a thriving portfolio over the past
15 years, growing to six Goddard School locations
across Middle Tennessee, from Hendersonville to
the upcoming Nashville Yards location. Her success
in early childhood education has been fueled by
her commitment to quality, growth, and a trusted
partnership with Wilson Bank & Trust (WBT).
Byars’ journey began when she discovered the
Goddard School franchise, a business model that
aligned perfectly with her passion for early childhood
education. “Having quality education at every level
is super important to me,” Byars shares. “It changed
the trajectory of my life, and I believe giving children
a strong, solid start makes a huge difference.”
After eight years running her first school in
Hendersonville, Byars expanded to Murfreesboro,
Gallatin, and Brentwood. That’s when WBT stepped
in to help her navigate the challenges of growth.
Her relationship with WBT began as she expanded
from one school to two, and from the outset, the
bank played a crucial role in supporting her vision for
growth. “I was drawn to WBT’s community-centered
approach. It felt like a true partnership, not just a
business transaction,” Byars recalls.
The personalized service and expertise from Cody
Wilkins, Vice President Commercial Lender, and
the entire team made a significant impact on Byars’
business. “Cody has been amazing—he’s helped us
through complex financial situations and worked with
us on creative solutions,” says Byars. According to
Byars, this partnership has been vital in her expansion,
providing not only financing but also strategic advice
on aligning each location with her business goals.
“It’s not just about getting a loan; it’s about a plan for
long-term success,” says Byars. “I never feel rushed
or pressured. It’s about sustainability.”
Beyond business, Byars emphasizes the importance
of community in each of her schools, reflecting
the unique needs of local families. “Each location
is different, tailored to the specific needs of the
community,” she says.
This focus on community alignment is shared by
WBT, whose active involvement and personalized
service mirror Byars’ dedication to creating a positive
environment for her families. “WBT feels like family,”
she says. “Whenever I walk into any of the branches—
Brentwood, Cool Springs, Hendersonville, Gallatin, or
Murfreesboro —it’s like seeing old friends. Regardless
of which location, the whole team is always so helpful,
and really know my business.”
Byars’ connection with WBT extends beyond
business, having served on the bank’s advisory
board, and participated in community events. “I’m
not just a customer; I’m a person. I love that WBT
is always involved in making a difference in the
community,” she says.
As Byars looks to the future with exciting new
developments like Nashville Yards and June Lake,
she knows she can count on WBT to continue
supporting her growth. “It’s a true partnership, and I
know Wilson Bank will be right here with me, helping
me get there.”
Commercial Business Spotlight:
The Goddard School
Partnership Built for Success:
Leisa Byars and Wilson Bank & Trust
W I L S O N B A N K H O L D I N G C O M P A N Y 11
“Whenever I walk into any of
the branches—Brentwood,
Cool Springs, Hendersonville,
Gallatin, or Murfreesboro
—it’s like seeing old friends.
Leisa Byars
Franchise Owner
The Goddard School
12
2 0 2 4 A N N U A L R E P O R T
Empowering Our
Communities Through
Financial Literacy
In today’s evolving financial
landscape, financial education is
crucial. Wilson Bank & Trust (WBT)
recognizes this and strives to make
a difference by prioritizing financial
literacy resources and outreach. In
2024, WBT partnered with Banzai,
a financial education platform, to
provide valuable resources that
empower the community with
essential financial knowledge.
WBT’s commitment to financial
education spans all age groups,
with outreach initiatives designed
for everyone, from preschoolers to
adults. Our longstanding program,
School Bank, supports hands-on
learning in over 60 elementary
schools within our footprint, teaching
students key financial lessons
directly from WBT bankers. This
initiative aims to equip students with
the knowledge and confidence they
need to carry forward into adulthood.
During Tennessee Financial Literacy
Week, WBT further demonstrated
its commitment by participating
in the statewide effort to raise
awareness about financial literacy.
This initiative, led by the Tennessee
Bankers Association (TBA), provided
an important platform to promote
financial education across various
demographics.
Partnering
to Empower
Financial Success
for the Future
In Spring 2024, Wilson Bank
& Trust (WBT) partnered with
Tennessee Tech University to
host its first Financial Literacy
Week on campus. The event, part
of the Banking Advisory Board
program, aimed to enhance
understanding and equip
young adults for their financial
future. WBT team members led
engaging sessions on key topics
like homebuying and investing,
while also supporting students
with promotional materials and
monetary giveaways.
The initiative was a success,
with overwhelming positive
feedback from students, many
of whom expressed interest in
more financial literacy events.
The experience highlighted
opportunities to further equip
students with financial skills,
emphasizing the importance of
continued education.
Dr. Alma Nunez, who oversees
the program, praised WBT’s
involvement: “Their commitment
to our students’ education is
invaluable.” This partnership
demonstrates WBT’s dedication
to empowering individuals with
the financial skills needed for
future success and serves as
an example of how the bank
is making a real impact in the
community.
“Financial literacy is not just a priority
initiative for our bank—it’s a cornerstone
of our commitment to empower the
communities we serve.”
John McDearman
Chief Executive Officer
2024 impact:
92
1,196
11,086
hours of state-approved
financial education
completed
92 schools served
(Pre-K – College)
unique individuals
reached on digital
platform
W I L S O N B A N K H O L D I N G C O M P A N Y 13
Wilson Bank & Trust’s Chattanooga office
experienced notable growth in 2024, driven by
increased loan balances and a growing deposit
base. These successes reflect rising demand for
our banking services and set the stage for further
expansion in 2025.
Loan growth has been a standout achievement, with
balances rising from $42.4 million in December 2023
to $56.8 million in December 2024. This increase
shows growing demand for both personal and
business financial solutions. The first half of 2024
saw strong loan demand, demonstrating our ability to
compete with established banks.
Andy Jakes, Regional President for the Chattanooga
Market, commented, “The trust and loyalty we’ve
built with our customers in Chattanooga are key
drivers behind this growth. Our tailored lending
approach has allowed us to meet the unique
financial needs of individuals and businesses alike,
and we’re excited to continue building on this
momentum in the year ahead.”
Deposits also saw a steady increase of nearly 12%.
This reflects our developing financial foundation
in the region and supports future lending activity
while fostering well-rounded banking relationships.
Though deposit growth slowed slightly compared
to 2023, the upward trend reflects enhanced
customer confidence. With growth in both loans and
deposits, there is clear demand for a broader range
of banking services in Chattanooga. While the Loan
Production Office (LPO) has driven loan growth, the
need for deposit services highlights the demand for
a full-service branch to better serve our expanding
customer base.
“We’re seeing a clear demand from our customers for
a broader range of services, and a full-service branch
will allow us to meet those needs more effectively,”
said Ami Ingle, Consumer & Small-Business Lender.
Looking ahead, we are excited to open a new full-
service office in 2025. “The entire WBT team is excited
about the future,” said Jakes. With multiple offices
opening in 2025, Wilson Bank & Trust is poised for
even greater success.
A Year of Growth and Strategic
Expansion in Chattanooga
“The trust and loyalty we’ve built
with our customers in Chattanooga
are key drivers behind this growth.”
Andy Jakes
Regional President
Chattanooga Market
14
2 0 2 4 A N N U A L R E P O R T
W I L S O N B A N K H O L D I N G C O M P A N Y 15
As Wilson Bank & Trust (WBT) opens its new office
in the Century Farms community, our commitment
to supporting local organizations and initiatives
has been on full display. One such example is our
involvement in Southeastern Community Day, an
event dedicated to celebrating the youth and diverse
cultures of Southeast Nashville through food, music,
art, dance, and community engagement.
WBT was proud to sponsor Southeastern
Community Day in 2024 with a substantial $12,500
contribution, a large portion going to support
the event’s fireworks display, a highlight for many
attendees. This sponsorship aligns with our belief
that thriving communities are built through
collaboration and engagement. By supporting such
a vibrant occasion, we aim to empower and uplift
the people of Southeast Nashville, creating a strong
foundation for future growth and togetherness.
Councilwoman Joy Styles,
Southeastern Community Day
Committee Chair, expresses her
appreciation, stating, “We are
excited to have a WBT office in
the Century Farms community.
The bank has already been a
great community partner, from
sponsoring fireworks to the
local Christmas Tree Lighting.
I look forward to doing more
great things together!”
Looking ahead, WBT is committed
to continuing our support of local initiatives. In 2025,
we have pledged increased monetary sponsorship
funds to further strengthen our partnership with
Southeastern Community Day and other important
community organizations. As we settle into the
Century Farms community, we are excited to
contribute to its ongoing success and vitality.
In 2024, Wilson Bank & Trust showcased a
remarkable commitment to community impact,
directing a total of $675,576.61 back into our various
communities through combined sponsorships
and donations. In addition, a significant focus on
school and sport related contributions were made
amounting to $100,117.93, emphasizing the bank’s
dedication to education and athletics within our
local communities.
The “We Believe Together” campaign, initiated
in 2022 as part of the bank’s 35th Anniversary
celebration, continued to make a meaningful impact
in 2024. This annual initiative empowers employees
to contribute to local nonprofits through team-led
fundraising and volunteer efforts
in addition to the company led
donations, illustrating the bank’s
collaborative and philanthropic
culture.
In 2024, our various departments
and offices supported over 30 local
organizations with a cumulative
donation of $32,680.35, and more than
1,000 volunteer hours spread across
our footprint. Wilson Bank & Trust
continues to prioritize commitment
to customers and communities reflecting a
steadfast dedication to collaboration and achieving
philanthropic goals as a unified team.
Building a Better
Community Together
sponsorships and donations
school specific sponsorship
and donation
We Believe Together donations
2024 Impact
$675,576.61
$100,117.93
$32,680.35
Strong Balance
Sheet Growth
Wilson Bank reported total assets of $5.4 billion at December 31, 2024
compared to $4.8 billion at December 31, 2023, an increase of
$512.2 million, or 10.6%.
At December 31, 2024 loans, net of allowance for
credit losses, totaled $4.0 billion, a $491.7 million,
or 13.8%, increase compared to December 31, 2023.
This increase reflects increased marketing efforts
focusing on growing the loan portfolio, and continued
population growth and corporate relocations in our
primary market areas.
Total deposits were $4.8 billion at December 31,
2024 compared to $4.4 billion at December 31, 2023,
representing growth of $462.9 million, or 10.6% during
2024. The increase in total deposits was primarily
attributable to growth in market share and concerted
marketing efforts to drive deposit growth which
resulted in the opening of new deposit accounts. Our
ability to raise deposits in a competitive environment
allowed us to continue to pursue our strategic
objective of growing our loan portfolio.
The allowance for credit losses increased to $49.5
million in 2024 compared to $44.8 million in 2023. This
increase was attributable to growth in our
loan portfolio. The allowance for credit losses was
1.21% of outstanding loans at December 31, 2024
compared to 1.25% at December 31, 2023.
Securities were $827.9 million at December 31, 2024,
an increase of 2.1% from $811.1 million at December 31,
2023. The increase in securities was primarily due to
the purchase of new securities, partially offset by
run-off of declining balance securities in 2024 and
the sale of securities to reposition a portion of our
securities portfolio for future earnings.
16
2 0 2 4 A N N U A L R E P O R T
“Wilson Bank & Trust continues to
demonstrate financial strength and
stability, which should position our
holding company for long-term success.
Our solid performance enhances the
value we deliver to our shareholders, and
we remain focused on maintaining a
strong financial foundation to support
future growth and profitability.”
Kayla Hawkins
Chief Financial Officer
Wilson Bank Holding Company
TOTAL ASSETS
$6.0b
$4.8b
$3.6b
$2.4b
$1.2b
0
10.6%
Increase
TOTAL LOANS, NET OF
ALLOWANCE FOR
CREDIT LOSSES
$4.0b
$3.0b
$2.0b
$1.0b
0
W I L S O N B A N K H O L D I N G C O M P A N Y 17
13.8%
Increase
TOTAL AVAILABLE-FOR-SALE
SECURITIES, AT MARKET
$1b
$750m
$500m
$250m
0
2.1%
Increase
TOTAL DEPOSITS
$5.0b
$4.0b
$3.0b
$2.0b
$1.0b
0
10.6%
Increase
2024
2023
2024
2023
2024
2023
2024
2023
Capital
Shareholders' equity totaled
$479.7 million at December 31,
2024 compared to $429.4 million
at December 31, 2023, an increase
of $50.3 million or 11.7%. Return on
average shareholders’ equity for 2024
was 12.41%, while at December 31,
2024 total capital to risk weighted
assets was 14.5% and the total
capital to assets ratio was 8.95%.
14.5%
Total Capital to Risk
Weighted Assets
8.95%
Total Capital
to Assets Ratio
12.41%
Return on Average
Shareholders’ Equity
$479.7
MILLION
Shareholders’ Equity
18
2 0 2 4 A N N U A L R E P O R T
Wilson Bank Holding Company
W I L S O N B A N K H O L D I N G C O M P A N Y 19
Interest income was $284.1 million in 2024 compared to
$222.6 million in 2023. The increase in interest income
was due to both growth in loans and an increase in
the average yield earned on earning assets as a result
of the Federal Reserve raising rates throughout 2023.
Interest expense was $126.8 million in 2024 compared
to $83.7 million in 2023. The increase in interest
expense in 2024 was attributable to both deposit
growth and an increase in rates paid on deposits
resulting from competitive pressures in our markets
and the elevated short-term interest rate environment.
This resulted in an increase of $18.4 million in net interest
income. Net interest margin was 3.30% for 2024 and
2023. Net interest margin remained the same as a result
of the growth in net interest income and level of average
earning assets off-setting the increases in cost of funds
and the level of average interest bearing liabilities.
The 2024 provision for credit losses on loans was
$5,192,000, a decrease of $1,108,000 from the provision
in 2023. The decrease in provision in 2024 was
attributable to an improvement in macroeconomic
forecasts, offset by an increase in the volume of loans
originated during the period.
Non-interest income for the twelve months ended
December 31, 2024 was $29.0 million compared to
$28.3 million for the same period in 2023. Increases
in non-interest income included brokerage income,
service charges on deposits, other fees and
commissions, and fees and gains on sales of
mortgage loans.
Wilson Bank reported net income of $56.5 million
for the year ended December 31, 2024 compared to
$48.9 million for the same period in 2023. Diluted
earnings per share for the twelve month period ended
December 31, 2024 was $4.78 compared to $4.20 for
the same period in 2023.
Consolidated
Statements of
Earnings
Net Interest
Margin
4%
3%
2%
1%
0
2024
2023
2022
2021
Yield on
Earning Assets
6%
5%
4%
3%
2%
1%
0
2024
2023
2022
2021
Wilson Bank Holding Company
Average
Cost of Funds
4.0%
3.0%
2.0%
1.0%
0
2024
2023
2022
2021
Consolidated Balance Sheets
20
2 0 2 4 A N N U A L R E P O R T
Wilson Bank Holding Company
Dollars in Thousands
2024
2023
Loans, net of allowance for credit losses of $49,497 and $44,848, respectively
$ 4,042,392
$ 3,550,675
Available-for-sale securities, at market (amortized cost $947,341 and $930,439, respectively)
827,893
811,081
Loans held for sale
2,529
2,294
Interest bearing deposits
211,271
213,701
Federal funds sold
9,791
10,159
Restricted equity securities, at cost
3,876
3,436
Total earning assets
5,097,752
4,591,346
Cash and due from banks
26,527
28,775
Premises and equipment, net
61,549
62,398
Accrued interest receivable
16,914
15,197
Deferred income taxes
46,048
45,473
Bank owned life insurance
61,948
59,645
Goodwill
4,805
4,805
Other assets
43,116
38,837
Total assets
$ 5,358,659
$ 4,846,476
Assets
Shareholders’ Equity
W I L S O N B A N K H O L D I N G C O M P A N Y 21
Wilson Bank Holding Company
Dollars in Thousands
2024
2023
Deposits:
Noninterest-bearing
$
383,168
$
389,725
Interest bearing
4,446,866
3,977,381
Total deposits
4,830,034
4,367,106
Accrued interest and other liabilities
48,922
49,965
Total liabilities
$ 4,878,956
$
4,417,071
Liabilities
Dollars in Thousands
2024
2023
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 11,876,770 and
11,686,363 shares issued and outstanding, respectively
$
23,754
$
23,373
Additional paid-in capital
150,739
136,866
Retained earnings
393,238
357,260
Noncontrolling interest in consolidated subsidiary
203
69
Accumulated other comprehensive losses, net of taxes of $31,217 and $31,195, respectively
(88,231)
(88,163)
Total shareholders’ equity
479,703
429,405
Total liabilities and shareholders’ equity
$ 5,358,659
$ 4,846,476
22
2 0 2 4 A N N U A L R E P O R T
Wilson Bank Holding Company
Consolidated Statements of Earnings
Dollars in Thousands (except per share data)
2024
2023
2022
Interest and fees on loans
$
250,273
$
198,739
$
138,161
Interest and dividends on securities:
Taxable securities
21,569
17,597
15,902
Exempt from Federal income taxes
1,488
1,574
1,392
Interest on loans held for sale
189
244
264
Interest on Federal funds sold
513
421
111
Interest on interest bearing deposits
9,753
3,697
1,522
Interest and dividends on restricted equity securities
331
311
188
Total interest income
$
284,116
$
222,583
$
157,540
Interest Expense
Interest on negotiable order of withdrawal accounts
$
8,014
$
5,847
$
2,546
Interest on money market accounts and other savings accounts
40,238
27,394
7,021
Interest on certificates of deposit and individual retirement accounts
78,491
50,341
6,486
Interest on Federal funds purchased
1
24
14
Interest on Federal Home Loan Bank advances
—
2
—
Interest on finance leases
65
71
66
Total interest expense
$
126,809
$
83,679
$
16,133
Net interest income before provision for credit losses
$
157,307
$
138,904
$
141,407
Provision for credit losses - loans
5,192
6,300
8,656
Provision for credit losses - off-balance sheet exposures
(592)
(2,989)
(1,014)
Net interest income after provision for credit losses
$
152,707
$
135,593
$
133,765
Interest Income
Non-Interest Income
Dollars in Thousands (except per share data)
2024
2023
2022
Service charges on deposits
$
8,198
$
7,890
$
7,382
Brokerage income
8,562
7,184
6,929
Debit and credit card interchange income, net
8,627
8,490
8,416
Other fees and commissions
1,590
1,408
1,653
BOLI and annuity earnings
1,817
1,667
1,346
Loss on sale of securities, net
(2,742)
(1,009)
(1,620)
Fees and gains on sales of mortgage loans
3,068
2,635
2,973
Mortgage servicing income (loss), net
(1)
9
(28)
Gain (loss) on sale of fixed assets, net
(303)
(55)
291
Gain (loss) on sale of other assets, net
(8)
(10)
8
Other income (loss)
146
80
(69)
Total non-interest income
$
28,954
$
28,289
$
27,281
Non-Interest Expense
Employee salaries and benefits
$
67,342
$
59,501
$
56,707
Equity-based compensation
1,567
1,528
1,864
Occupancy expenses
5,733
6,532
5,563
Furniture and equipment expenses
3,038
3,225
3,400
Data processing expenses
9,477
8,797
7,337
Advertising & public relations expenses
3,512
3,714
3,455
Accounting, legal & consulting expenses
1,550
1,789
1,409
FDIC insurance
3,129
3,120
1,527
Directors’ fees
816
713
650
Other operating expenses
12,257
12,032
11,058
Total non-interest expense
$
108,421
$
100,951
$
92,970
Earnings before income taxes
73,240
62,931
68,076
Income taxes
16,576
13,939
15,056
Net earnings
$
56,664
$
48,992
$
53,020
Net loss (gain) attributable to noncontrolling interest
(134)
(54)
22
Net earnings attributable to Wilson Bank Holding Company
$
56,530
$
48,938
$
53,042
Basic earnings per common share
$
4.79
$
4.21
$
4.66
Diluted earnings per common share
$
4.78
$
4.20
$
4.65
Weighted average common shares outstanding:
Basic
11,806,822
11,611,690
11,377,617
Diluted
11,838,589
11,641,366
11,408,924
W I L S O N B A N K H O L D I N G C O M P A N Y 2 3
Wilson Bank Holding Company
24
2 0 2 4 A N N U A L R E P O R T
As of or for the year ended December 31,
2024
2023
2022
2021
Total Capital to Risk Weighted Assets
14.5%
14.5%
13.5%
13.9%
Total Capital to Assets Ratio
8.95%
8.86%
8.41%
10.37%
Total Assets
$ 5,358,659,000
$ 4,846,476,000
$
4,285,650,000
$
3,989,596,000
Loans, net of allowance for credit losses
$ 4,042,392,000
$ 3,550,675,000
$
3,113,796,000
$
2,444,282,000
Total Deposits
$ 4,830,034,000
$ 4,367,106,000
$
3,892,705,000
$
3,555,071,000
Net Interest Margin
3.30%
3.30%
3.70%
3.44%
Return on Average Assets
1.12%
1.08%
1.29%
1.35%
As of or for the year ended December 31,
2024
2023
2022
2021
Earnings & Performance Ratios
Net Income
$
56,530,000
$
48,938,000
$
53,042,000
$
49,426,000
Return on Average Equity
12.41%
12.47%
14.36%
12.45%
Diluted Earnings per Share
$
4.78
$
4.20
$
4.65
$
4.43
Weighted Average Diluted Shares Outstanding
11,838,589
11,641,366
11,408,924
11,162,956
For the year ended December 31,
2024
2023
2022
2021
Average Cost of Funds
3.04%
2.27%
0.49%
0.41%
Yield on earning assets
5.92%
5.24%
4.11%
3.77%
Wilson Bank Holding Company
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
25
Forward-Looking Statements
This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding, among other things, the anticipated financial and operating results of the Company. Investors are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes
no obligation to publicly release any modifications or revisions to these forward-looking statements to reflect events or
circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
The Company cautions investors that future financial and operating results may differ materially from those projected in forward-
looking statements made by, or on behalf of, the Company. The words “expect,” “intend,” “should,” “may,” “could,” “believe,”
“suspect,” “anticipate,” “seek,” “plan,” “estimate” and similar expressions are intended to identify such forward-looking
statements, but other statements not based on historical fact may also be considered forward-looking. Such forward-looking
statements involve known and unknown risks and uncertainties, including, but not limited to those described in this annual report
for the year ended December 31, 2024 and also include, without limitation, (i) deterioration in the financial condition of
borrowers resulting in significant increases in credit losses and provisions for these losses, (ii) deterioration in the real estate
market conditions in the Company’s market areas, including demand for residential real estate loans as a result of elevated rates
on residential real estate mortgage loans, (iii) the impact of increased competition with other financial institutions, including
pricing pressures on loans and deposits, and the resulting impact on the Company's results, including as a result of compression
to net interest margin, (iv) adverse conditions in local or national economies, including the economy in the Company’s market
areas, including as a result of the impact of escalating geopolitical tensions (including the ongoing conflicts in Ukraine and the
Middle East or increased terrorist activities in the United States), inflationary pressures and the elevated rate environment,
international trade disputes and retaliatory tariffs, increased terrorist activity in the United States, supply chain disruptions and
labor shortages (including as a result of deportations) on our customers and on their businesses, (v) fluctuations or differences in
interest rates on earning assets and interest bearing liabilities from those that the Company is modeling or anticipating, including
as a result of the Bank's inability to maintain deposit rates or defer increases to those rates in an elevated rate environment or
lower rates in a falling rate environment, (vi) the ability to grow and retain low-cost core deposits, (vii) significant downturns in
the business of one or more large customers, (viii) the inability of the Company to comply with regulatory capital requirements,
including those resulting from changes to capital calculation methodologies, required capital maintenance levels, or regulatory
requests or directives, (ix) changes in state or Federal regulations, policies, or legislation applicable to banks and other financial
service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy,
(x) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions,
examination conclusions, or regulatory developments, (xi) inadequate allowance for credit losses, (xii) the effectiveness of the
Company’s activities in improving, resolving or liquidating lower quality assets, (xiii) results of regulatory examinations, (xiv)
the vulnerability of the Company's network and online banking portals, and the systems of parties with whom the Company
contracts, to unauthorized access, computer viruses, phishing schemes, social engineering, fraud, spam attacks, ransomware
attacks, human error, natural disasters, power loss, and other security breaches, (xv) the possibility of additional increases to
compliance costs or other operational expenses as a result of increased regulatory oversight, (xvi) loss of key personnel, and
(xvii) adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation,
examinations or other legal and/or regulatory actions. These risks and uncertainties may cause the actual results or performance
of the Company to be materially different from any future results or performance expressed or implied by such forward-looking
statements. The Company’s future operating results depend on a number of factors which were derived utilizing numerous
assumptions that could cause actual results to differ materially from those projected in forward-looking statements
General
The Company is a registered bank holding company that owns 100% of the common stock of Wilson Bank and Trust (“Wilson
Bank” or “the Bank”), a Tennessee state-chartered bank headquartered in Lebanon, Tennessee. The Company was formed in
1992. Wilson Bank commenced operations in 1987.
Wilson Bank is a community bank headquartered in Lebanon, Tennessee, principally serving Wilson County, DeKalb County,
Smith County, Trousdale County, Rutherford County, Davidson County, Putnam County, Sumner County, Hamilton County,
and Williamson County, Tennessee as its primary market areas. The markets served by the Bank are largely within the Nashville-
Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical area. At December 31, 2024, Wilson Bank had thirty-one
office locations in Wilson, Davidson, DeKalb, Smith, Sumner, Rutherford, Putnam, Trousdale, Hamilton, and Williamson
counties in Tennessee. Management believes that these counties offer an environment for continued growth, and the Company’s
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
26
target market is local consumers, professionals and small businesses. Wilson Bank offers a wide range of banking services,
including checking, savings and money market deposit accounts, certificates of deposit and loans for consumer, commercial and
real estate purposes. The Company also offers an investment center which offers a full line of investment services to its customers.
Wilson Bank also holds an ownership interest in Encompass Home Loan Lending, LLC ("Encompass"), a company offering
mortgage banking services that is 51% owned by Wilson Bank and 49% owned by two home builders operating in Wilson Bank's
market areas. The results of Encompass, which commenced operations on June 1, 2022, are consolidated in the Company's
financial statements included elsewhere in this Annual Report on From 10-K.
The following discussion and analysis is designed to assist readers in their analysis of the Company’s consolidated financial
statements and should be read in conjunction with such consolidated financial statements and the notes thereto.
Application of Critical Accounting Policies and Accounting Estimates
We follow accounting and reporting policies that conform, in all material respects, to accounting principles generally accepted
in the United States and to general practices within the financial services industry. The preparation of financial statements in
conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base estimates on
historical experience, current information, forecasted economic conditions, and other factors deemed to be relevant, actual results
could differ from those estimates.
We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management
to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have
used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur
from period to period, could have a material impact on our financial statements.
Accounting policies related to the allowance for credit losses on financial instruments including loans and off-balance-sheet
credit exposures are considered to be critical as these policies involve considerable subjective judgment and estimation by
management. As discussed in Note 1 - Summary of Significant Accounting Policies, our policies related to allowances for credit
losses changed on January 1, 2022 in connection with the adoption of a new accounting standard update as codified in Accounting
Standards Codification (“ASC”) Topic 326 (“ASC 326”) Financial Instruments - Credit Losses. In the case of loans, the
allowance for credit losses is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the
amortized cost basis of loans to present the net amount expected to be collected. In the case of off-balance-sheet credit exposures,
the allowance for credit losses is a liability account, calculated in accordance with ASC 326, reported as a component of accrued
interest payable and other liabilities in our consolidated balance sheets. The amount of each allowance account represents
management's best estimate of current expected credit losses on these financial instruments considering available information,
from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument.
Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable
forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to
historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions
or other relevant factors. While management utilizes its best judgment and information available, the ultimate adequacy of our
allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the
economy, changes in interest rates and the view of the regulatory authorities toward classification of assets. For additional
information regarding critical accounting policies, refer to Note 1 - Summary of Significant Accounting Policies and Note 2 -
Loans and Allowance for Credit Losses in the notes to consolidated financial statements contained elsewhere in this Annual
Report.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
27
Selected Financial Data
Set forth below is certain selected financial data related to the Company's operations as of and for the twelve months ended
December 31, 2024, 2023, 2022, 2021, and 2020.
In Thousands, Except Per Share Information
As Of December 31,
2024
2023
2022
2021
2020
CONSOLIDATED BALANCE SHEETS:
Total assets end of year
$5,358,659
4,846,476
4,285,650
3,989,596
3,369,604
Loans, net
$4,042,392
3,550,675
3,113,796
2,444,282
2,282,766
Securities
$ 827,893
811,081
822,812
897,585
580,543
Deposits
$4,830,034
4,367,106
3,892,705
3,555,071
2,960,595
Shareholders’ equity
$ 479,703
429,405
360,452
413,717
380,121
Years Ended December 31,
2024
2023
2022
2021
2020
CONSOLIDATED STATEMENTS OF EARNINGS:
Interest income
$ 284,116
222,583
157,540
129,841
122,968
Interest expense
126,809
83,679
16,133
11,636
18,219
Net interest income
157,307
138,904
141,407
118,205
104,749
Provision for credit losses - loans
5,192
6,300
8,656
1,143
9,696
Provision for credit losses - off-balance sheet exposures
(592)
(2,989)
(1,014)
262
259
Net interest income after provision for credit losses
152,707
135,593
133,765
116,800
94,794
Non-interest income
28,954
28,289
27,281
32,850
29,795
Non-interest expense
108,421
100,951
92,970
85,492
76,479
Earnings before income taxes
73,240
62,931
68,076
64,158
48,110
Income taxes
16,576
13,939
15,056
14,732
9,618
Net earnings
56,664
48,992
53,020
49,426
38,492
Net loss (gain) attributable to noncontrolling interest
(134)
(54)
22
—
—
Net earnings attributable to Wilson Bank Holding
Company
$
56,530
48,938
53,042
49,426
38,492
Cash dividends declared
$
20,552
17,303
20,880
14,909
13,013
PER SHARE DATA:
Basic earnings per common share
$
4.79
4.21
4.66
4.44
3.52
Diluted earnings per common share
$
4.78
4.20
4.65
4.43
3.51
Cash dividends
$
1.75
1.50
1.85
1.35
1.20
Book value
$
40.39
36.74
31.42
36.93
34.58
RATIOS:
Return on average shareholders’ equity
12.41%
12.47
14.36
12.45
10.65
Return on average assets
1.12%
1.08
1.29
1.35
1.24
Total capital to assets
8.95%
8.86
8.41
10.37
11.28
Dividends declared per share as a percentage of basic
earnings per share
36.53%
35.63
39.70
30.41
34.09
Non-GAAP Financial Measures
This Annual Report contains certain financial measures that are not measures recognized under U.S. GAAP and, therefore, are
considered non-GAAP financial measures. Members of Company management use these non-GAAP financial measures in their
analysis of the Company’s performance, financial condition, and efficiency of operations. Management of the Company believes
that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of
results with prior periods. Management of the Company also believes that investors find these non-GAAP financial measures
useful as they assist investors in understanding underlying operating performance and identifying and analyzing ongoing
operating trends. However, the non-GAAP financial measures discussed herein should not be considered in isolation or as a
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
28
substitute for the most directly comparable or other financial measures calculated in accordance with U.S. GAAP. Moreover, the
manner in which the non-GAAP financial measures discussed herein are calculated may differ from the manner in which
measures with similar names are calculated by other companies. You should understand how other companies calculate their
financial measures similar to, or with names similar to, the non-GAAP financial measures we have discussed herein when
comparing such non-GAAP financial measures.
The non-GAAP measures in this Annual Report include “pre-tax pre-provision income,” “pre-tax pre-provision basic earnings
per share,” “pre-tax pre-provision return on average shareholders' equity,” and “pre-tax pre-provision return on average assets.”
A reconciliation of these measures to the comparable GAAP measures is included below.
Selected Financial Information
The executive management and Board of Directors of the Company evaluate key performance indicators (KPIs) on a continuing
basis. These KPIs serve as benchmarks of Company performance and are used in making strategic decisions and, in some cases,
are utilized for purposes of setting performance targets for our executive officers' incentive-based cash compensation. The
following table represents the KPIs that management has determined to be important in making decisions for the Bank, in each
case for the years ended December 31, 2024, 2023 and 2022 (for the per share data and performance ratios) and as of December
31, 2024 and 2023 (for the consolidated balance sheet ratios):
2024
2023
2022
PER SHARE DATA:
Basic earnings per common share (GAAP)
$
4.79
$
4.21
$
4.66
Pre-tax pre-provision basic earnings per share (1)
$
6.58
$
5.70
$
6.66
Diluted earnings per common share (GAAP)
$
4.78
$
4.20
$
4.65
Cash dividends per common share
$
1.75
$
1.50
$
1.85
Dividends declared per common share as a percentage of basic
earnings per common share
36.53%
35.63%
39.70%
(1) Excludes income tax expense, provision for credit losses-loans, provision for credit losses-available for sale securities, and
provision for credit losses on off-balance sheet exposures.
2024
2023
2022
PERFORMANCE RATIOS:
Return on average shareholders' equity (GAAP) (1)
12.41%
12.47%
14.36%
Pre-tax pre-provision return on average shareholders' equity (2)
17.06%
16.86%
20.51%
Return on average assets (GAAP) (3)
1.12%
1.08%
1.29%
Pre-tax pre-provision return on average assets (2)
1.54%
1.47%
1.84%
Efficiency ratio (GAAP) (4)
58.21%
60.38%
55.11%
(1) Return on average shareholders' equity is the result of net income divided by average shareholders' equity.
(2) Excludes income tax expense, provision for credit losses-loans, provision for credit losses-available for sale securities, and
provision for credit losses on off-balance sheet exposures.
(3) Return on average assets is the result of net income divided by average assets.
(4) Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and non-interest income.
December 31,
2024
December 31,
2023
CONSOLIDATED BALANCE SHEET RATIOS:
Total capital to assets ratio
8.95%
8.86%
Equity to assets ratio (Average equity divided by average total assets)
9.00%
8.69%
Tier 1 capital to average assets
10.38%
10.60%
Non-performing asset ratio
0.10%
0.03%
Book value per common share
$
40.39
$
36.74
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
29
Reconciliation of Non-GAAP Financial Measures
December 31,
2024
December 31,
2023
December 31,
2022
Pre-tax pre-provision income:
Net income attributable to common shareholders (GAAP)
$
56,530
$
48,938
$
53,042
Add: provision for credit losses - loans
5,192
6,300
8,656
Add: provision expense (benefit) for credit losses on off-balance
sheet exposures
(592)
(2,989)
(1,014)
Add: Provision for credit losses - available-for-sale securities
—
—
—
Add: income tax expense
16,576
13,939
15,056
Pre-tax pre-provision income
$
77,706
$
66,188
$
75,740
Pre-tax pre-provision basic earnings per share:
Pre-tax pre-provision income
$
77,706
$
66,188
$
75,740
Weighted average shares
11,806,822
11,611,690
11,377,617
Basic earnings per common share (GAAP)
$
4.79
$
4.21
$
4.66
Provision for credit losses - loans
$
0.44
$
0.54
$
0.76
Provision expense (benefit) for credit losses on off-balance sheet
exposures
$
(0.05)
$
(0.26)
$
(0.09)
Provision for credit losses - available-for-sale securities
$
—
$
—
$
—
Income tax expense
$
1.40
$
1.21
$
1.33
Pre-tax pre-provision basic earnings per common share
$
6.58
$
5.70
$
6.66
Pre-tax pre-provision return on average shareholders' equity:
Pre-tax pre-provision income
$
77,706
$
66,188
$
75,740
Average total shareholders' equity
455,466
392,466
369,314
Return on average shareholders' equity (GAAP)
12.41%
12.47%
14.36%
Provision for credit losses - loans
1.14%
1.61%
2.34%
Provision expense (benefit) for credit losses on off-balance sheet
exposures
(0.13)%
(0.76)%
(0.27)%
Provision for credit losses - available-for-sale securities
—%
—%
—%
Income tax expense
3.64%
3.54%
4.08%
Pre-tax pre-provision return on average shareholders' equity
17.06%
16.86%
20.51%
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision income
$
77,706
$
66,188
$
75,740
Average assets
5,060,367
4,517,697
4,107,738
Return on average assets (GAAP)
1.12%
1.08%
1.29%
Provision for credit losses - loans
0.10%
0.14%
0.21%
Provision expense (benefit) for credit losses on off-balance sheet
exposures
(0.01)%
(0.07)%
(0.02)%
Provision for credit losses - available-for-sale securities
—%
—%
—%
Income tax expense
0.33%
0.32%
0.36%
Pre-tax pre-provision return on average assets
1.54%
1.47%
1.84%
Results of Operations
Net earnings for the year ended December 31, 2024 were $56,530,000, an increase of $7,592,000, or 15.51%, compared to net
earnings of $48,938,000 for the year ended December 31, 2023. Our 2023 net earnings were 7.74%, or $4,104,000, lower than
our net earnings of $53,042,000 for 2022. Basic earnings per share were $4.79 in 2024, compared with $4.21 in 2023 and $4.66
in 2022. Diluted earnings per share were $4.78 in 2024, compared to $4.20 in 2023 and $4.65 in 2022. The increase in net
earnings and diluted and basic earnings per share during the year ended December 31, 2024 as compared to the year ended
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
30
December 31, 2023 was primarily due to an increase in net interest income before provision for credit losses and an increase in
non-interest income partially offset by an increase in non-interest expense and an increase in provision for credit losses. The
increase in net interest income was due to an increase in average interest earning asset balances and an increase in the yield
earned on interest earning assets, partially offset by an increase in cost of funds and an increase in average interest bearing deposit
balances. Net interest margin for both the years ended December 31, 2024 and December 31, 2023 was 3.30%, and 3.70% for
the year ended December 31, 2022. Net interest spread for the year ended December 31, 2024 was 2.88%, compared to 2.97%
and 3.62% for the years ended December 31, 2023 and December 31, 2022, respectively. The increase in non-interest expense
was primarily due to increases in salaries and employee benefits and data processing fees. See below for further discussion
regarding variances related to net interest income, provision for credit losses, non-interest income, non-interest expense and
income taxes.
The decrease in net earnings for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was
primarily due to a decrease in net interest income before provision for credit losses and an increase in non-interest expense,
partially offset by an increase in non-interest income and a decrease in provision for credit losses-loans. The decrease in net
interest income was due to an increase in cost of funds between the relevant periods, partially offset by an increase in average
interest earning asset balances and an increase in the yield earned on interest earning assets. The increase in non-interest expense
largely resulted from the Company's continued growth as well as rising costs of employees' salaries and benefits as a result of
competition we experienced for human capital in our market areas.
The increase in Return on Average Assets (ROA) for the year ended December 31, 2024 when compared to December 31, 2023
as set forth in the table above was primarily attributable to an increase in net interest income and an increase in brokerage income,
partially off-set by increases in salaries and employee benefits, data processing costs, an increase in the loss on sale of securities,
an increase in provision for credit losses, and an increase in average assets.
The decrease in ROA for the year ended December 31, 2023 when compared to December 31, 2022 as set forth in the table above
was primarily attributable to net interest margin compression, an increase in salaries and employee benefits, and an increase in
FDIC insurance and data processing costs; partially offset by a decrease in the loss on sale of securities, an increase in service
charges on deposit accounts, and a decrease in the provision for credit losses.
On November 12, 2024, Wilson Bank entered in a purchase and assumption agreement pursuant to which it has agreed to acquire
certain assets, including certain loans, and assume certain liabilities, including certain deposits, of a branch office in Cookeville,
Tennessee that is currently operated by another bank. Total assets to be acquired are estimated to be approximately $17 million
as of the date hereof, while total deposits and other liabilities to be assumed are estimated to be approximately $30 million as of
the date hereof. The Company expects the transaction to close in the first half of 2025. The acquisition is not expected to
significantly impact the Bank's operations.
Subsequent to December 31, 2024, Wilson Bank committed to expand the Chattanooga loan production office to a full service
branch. As a part of this expansion the Bank entered into a lease for the location for the new full service branch and is currently
remodeling the space. The costs associated with this expansion, including construction, equipment and lease expenses, are not
expected to be significant.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
31
Net Interest Income
The schedule which follows indicates the average balances for each major balance sheet item, an analysis of net interest income
and net interest expense and the change in interest income and interest expense attributable to changes in volume and changes in
rates.
The difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities is net interest
income, which is the Company's gross margin. An analysis of net interest income is more meaningful when income from tax-
exempt earning assets is adjusted to a tax equivalent basis. Accordingly, the following schedule includes a tax equivalent
adjustment of tax-exempt earning assets, assuming a weighted average Federal income tax rate of 21% for 2024, 2023 and 2022.
In this schedule, "change due to volume" is the change in volume multiplied by the interest rate for the prior year. "Change due
to rate" is the change in interest rate multiplied by the volume for the prior year. Changes in interest income and expense not due
solely to volume or rate changes have been allocated to the “change due to volume” and “change due to rate” in proportion to
the relationship of the absolute dollar amounts of the change in each category.
Non-accrual loans have been included in the loan category.
Dollars In Thousands
2024
2023
2024/2023 Change
Average
Rates/
Income/
Average
Rates/
Income/
Due to
Due to
Percent
Balance
Yields
Expense
Balance
Yields
Expense
Volume
Rate
Total
Change
Loans, net of
unearned interest
(1) (2)
$3,797,527
6.66%
250,273
$3,398,070
5.93%
198,739
$ 25,085
26,449
51,534
Investment
securities—taxable
780,122
2.76
21,569
731,172
2.41
17,597
1,232
2,740
3,972
Investment
securities—tax
exempt
56,664
2.63
1,488
66,600
2.36
1,574
(250)
164
(86)
Taxable equivalent
adjustment (3)
—
0.70
396
—
0.63
418
(66)
44
(22)
Total tax-exempt
investment
securities
56,664
3.32
1,884
66,600
2.99
1,992
(316)
208
(108)
Total investment
securities
836,786
2.80
23,453
797,772
2.46
19,589
916
2,948
3,864
Loans held for sale
3,000
6.30
189
4,637
5.26
244
(97)
42
(55)
Federal funds sold
9,686
5.30
513
8,157
5.16
421
81
11
92
Interest bearing
deposits
203,372
4.80
9,753
92,655
3.99
3,697
5,181
875
6,056
Restricted equity
securities
3,739
8.85
331
3,551
8.76
311
17
3
20
Total earning
assets
4,854,110
5.92
284,512
4,304,842
5.24
223,001
31,183
30,328
61,511
27.58%
Cash and due from
banks
25,789
25,066
Allowance for
credit losses - loans
(45,523)
(42,214)
Bank premises and
equipment
62,044
62,013
Other assets
163,947
167,990
Total assets
$5,060,367
$4,517,697
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
32
Dollars In Thousands
2024
2023
2024/2023 Change
Average
Rates/
Income/
Average
Rates/
Income/
Due to
Due to
Percent
Balance
Yields
Expense
Balance
Yields
Expense
Volume
Rate
Total
Change
Deposits:
Negotiable order of
withdrawal
accounts
$
927,902
0.86%
8,014
$
976,154
0.60%
5,847
$
(302)
2,469
2,167
Money market
demand accounts
1,237,236
2.79
34,529
1,123,482
2.03
22,769
2,489
9,271
11,760
Time deposits
1,671,006
4.70
78,491
1,264,602
3.98
50,341
18,045
10,105
28,150
Other savings
deposits
329,283
1.73
5,709
322,458
1.43
4,625
100
984
1,084
Total interest-
bearing deposits
4,165,427
3.04
126,743
3,686,696
2.27
83,582
20,332
22,829
43,161
Federal Home Loan
Bank advances
—
—
—
63
3.05
2
(1)
(1)
(2)
Fed funds
purchased
13
6.29
1
541
4.48
24
(30)
7
(23)
Finance leases
2,236
2.91
65
2,266
3.14
71
(1)
(5)
(6)
Total interest-
bearing liabilities
4,167,676
3.04
126,809
3,689,566
2.27
83,679
20,300
22,830
43,130
51.54%
Demand deposits
391,942
399,683
Other liabilities
45,283
35,982
Shareholders’
equity
455,466
392,466
Total liabilities
and shareholders’
equity
$5,060,367
$4,517,697
Net interest income
$ 157,703
$ 139,322
$ 10,883
$
7,498
$ 18,381
13.19%
Net interest margin
(4)
3.30%
3.30%
Net interest spread
(5)
2.88%
2.97%
(1) Yields on loans and total earning assets include the impact of State income tax credits related to incentive loans at below
market rates and tax exempt loans to municipalities of $2.7 million for the years ended December 31, 2024 and 2023.
(2) Loan fees of $15.2 million are included in interest income in 2024. Loan fees of $12.0 million are included in interest
income in 2023.
(3) The tax equivalent adjustments have been computed using a 21% Federal tax rate.
(4) Net interest income on a tax equivalent basis divided by average interest-earning assets.
(5) Average interest rate on interest-earning assets less average interest rate on interest-bearing liabilities.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
33
Dollars In Thousands
2023
2022
2023/2022 Change
Average
Rates/
Income/
Average
Rates/
Income/
Due to
Due to
Percent
Balance
Yields
Expense
Balance
Yields
Expense
Volume
Rate
Total
Change
Loans, net of unearned
interest (1) (2)
$ 3,398,070
5.93%
198,739
$ 2,796,301
5.05%
138,161
$ 33,519
27,059
60,578
Investment securities—
taxable
731,172
2.41
17,597
814,716
1.95
15,902
(1,747)
3,442
1,695
Investment securities—
tax exempt
66,600
2.36
1,574
72,724
1.91
1,392
(124)
306
182
Taxable equivalent
adjustment (3)
—
0.63
418
—
0.51
370
(33)
81
48
Total tax-exempt
investment securities
66,600
2.99
1,992
72,724
2.42
1,762
(157)
387
230
Total investment
securities
797,772
2.46
19,589
887,440
1.99
17,664
(1,904)
3,829
1,925
Loans held for sale
4,637
5.26
244
7,131
3.70
264
(110)
90
(20)
Federal funds sold
8,157
5.16
421
15,486
0.72
111
(76)
386
310
Interest bearing
deposits
92,655
3.99
3,697
204,548
0.74
1,522
(1,238)
3,413
2,175
Restricted equity
securities
3,551
8.76
311
4,768
3.94
188
(58)
181
123
Total earning assets
4,304,842
5.24
223,001
3,915,674
4.11
157,910
30,133
34,958
65,091
41.22%
Cash and due from
banks
25,066
24,087
Allowance for credit
losses - loans
(42,214)
(36,444)
Bank premises and
equipment
62,013
61,807
Other assets
167,990
142,614
Total assets
$ 4,517,697
$ 4,107,738
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
34
Dollars In Thousands
2023
2022
2023/2022 Change
Average
Rates/
Income/
Average
Rates/
Income/
Due to
Due to
Percent
Balance
Yields
Expense
Balance
Yields
Expense
Volume
Rate
Total
Change
Deposits:
Negotiable order of
withdrawal accounts
$
976,154
0.60%
5,847
$1,083,028
0.24%
2,546
$
(274)
3,575
3,301
Money market
demand accounts
1,123,482
2.03
22,769
1,250,916
0.47
5,905
(661)
17,524
16,863
Time deposits
1,264,602
3.98
50,341
601,100
1.08
6,486
12,762
31,094
43,856
Other savings
deposits
322,458
1.43
4,625
332,918
0.34
1,116
(36)
3,545
3,509
Total interest-
bearing deposits
3,686,696
2.27
83,582
3,267,962
0.49
16,053
11,791
55,738
67,529
Federal Home Loan
Bank advances
63
3.05
2
—
—
—
2
—
2
Fed funds purchased
541
4.48
24
256
5.47
14
13
(3)
10
Finance leases
2,266
3.14
71
1,928
3.43
66
11
(6)
5
Total interest-
bearing liabilities
3,689,566
2.27
83,679
3,270,146
0.49
16,133
11,817
55,729
67,546
418.68%
Demand deposits
399,683
434,443
Other liabilities
35,982
33,835
Shareholders’ equity
392,466
369,314
Total liabilities and
shareholders’ equity
$ 4,517,697
$4,107,738
Net interest income
$139,322
$141,777
$ 18,316
$ (20,771)
$
(2,455)
(1.73%)
Net interest margin (4)
3.30%
3.70%
Net interest spread (5)
2.97%
3.62%
(1) Yields on loans and total earning assets include the impact of State income tax credits related to incentive loans
at below market rates and tax exempt loans to municipalities of $2.7 million and $3.0 million for the years ended
December 31, 2023 and 2022, respectively.
(2) Loan fees of $12.0 million are included in interest income in 2023. Loan fees of $12.9 million are included in interest
income in 2022, inclusive of $139,000 in SBA fees related to PPP loans.
(3) The tax equivalent adjustments have been computed using a 21% Federal tax rate.
(4) Net interest income on a tax equivalent basis divided by average interest-earning assets.
(5) Average interest rate on interest-earning assets less average interest rate on interest-bearing liabilities.
The components of our loan yield, a key driver to our net interest margin for the years ended December 31, 2024, 2023 and 2022
were as follows:
December 31, 2024
December 31, 2023
December 31, 2022
Interest
Income
Average
Yield
Interest
Income
Average
Yield
Interest
Income
Average
Yield
Loan yield components:
Contractual interest rates
235,056
6.19%
186,754
5.50%
125,281
4.48%
Origination and other fee income
15,217
0.40%
11,985
0.35%
12,741
0.46%
PPP loan fee income
—
—%
—
—%
139
0.00%
Loan tax credits and tax-exempt loan interest
2,720
0.07%
2,677
0.08%
2,953
0.11%
Total
$252,993
6.66% $201,416
5.93% $141,114
5.05%
Net interest income represents the amount by which interest earned on various earning assets exceeds interest paid on deposits
and other interest-bearing liabilities and is the most significant component of the Company’s earnings. Total interest income in
2024 was $284,116,000, up 27.64% when compared with $222,583,000 in 2023, which was up 41.29% when compared to
$157,540,000 in 2022, in each case excluding tax exempt adjustments relating to tax exempt securities and loans. The increase
in total interest income in 2024 when compared to 2023 was primarily attributable to an increase in interest earned on loans, an
increase in interest and dividends earned on securities, and an increase in interest earned on interest bearing deposits. The increase
in interest earned on loans resulted from an overall increase in average loan balances and an increase in the average yield earned
on loans as new loans were originated at higher contractual interest rates and a portion of the Bank's variable loan portfolio
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
35
repriced to current market rates. Approximately 84% of the loans in our loan portfolio are variable rate loans, primarily indexed
to the Federal Reserve prime rate. Fees earned on loans totaled $15,217,000, $11,985,000 and $12,880,000 for the years ended
2024, 2023 and 2022, respectively. The increase in fees earned on loans for the year ended 2024 when compared to the year
ended 2023 was attributable to an increase in the volume of new loan originations. The total amount of state income tax credits
and tax-exempt loan interest included in our loan yields were $2,720,000, $2,677,000 and $2,953,000 for the years ended
December 31, 2024, 2023 and 2022, respectively. The increase in interest and dividends earned on securities in 2024 when
compared to 2023 resulted from higher yields earned on the securities purchased in December 2023 and throughout 2024 as
management invested liquid funds into the securities portfolio, as well as management's decision to restructure a portion of the
securities portfolio and invest the proceeds in higher yielding securities in 2024. The increase in interest earned on interest bearing
deposits over the same period resulted from an increase in average balances and the yield earned as a result of the Federal Reserve
raising rates throughout 2023.
The ratio of average earning assets to total average assets was 95.9%, 95.3% and 95.3% for each of the years ended December
31, 2024, 2023 and 2022, respectively. Average earning assets increased $549,268,000 from $4,304,842,000 at December 31,
2023 to $4,854,110,000 at December 31, 2024. For the year ended December 31, 2022, average earning assets were
$3,915,674,000. The average rate earned on earning assets for 2024 was 5.92%, compared with 5.24% in 2023 and 4.11% in
2022. The increase in average earning assets was largely due to an increase in the average balance of loans due to loan growth,
an increase in the average balance of interest bearing deposits and an increase in the average balance of securities. The increase
in the average rate earned on earning assets is primarily due to an increase in the average yield earned on loans as new loans were
originated at higher contractual interest rates and a portion of the Bank's variable loan portfolio repriced to current market rates
as mentioned previously.
Total interest expense for 2024 was $126,809,000, an increase of $43,130,000, or 51.54%, compared to total interest expense of
$83,679,000 in 2023. For 2022, total interest expense totaled $16,133,000. Average interest-bearing deposits increased to
$4,165,427,000 for 2024 compared to $3,686,696,000 for 2023. The average rate paid on interest-bearing deposits was 3.04%
for 2024 compared to 2.27% for 2023. The increase in total interest expense in 2024 resulted from an increase in the volume and
rate paid on average interest bearing deposits. Competitive pressures in the elevated short-term interest rate environment required
the Bank to raise, and then subsequently maintain rates paid on deposits at higher levels while the Bank's customers shifting
deposits from lower rate earning or non-interest bearing accounts to higher rate earning accounts and the increase in Certificate
of Deposit Account Registry Service and Insured Cash Sweep products also negatively impacted interest expense. As competitive
pressures began to ease in the second half of 2024 and the 100 basis points in rate cuts by the Federal Reserve took effect, we
began lowering interest rates on some of our deposit products. However, if the competitive pressures begin to rise once again,
the Federal Reserve does not cut the federal funds rate any further or loan growth outpaces deposit growth, the Bank may have
to once again raise the rates it pays on deposits. We expect interest expense to continue to increase due to an increase in overall
deposit balances.
Net interest income for 2024 totaled $157,307,000 as compared to $138,904,000 and $141,407,000 in 2023 and 2022,
respectively. The net interest spread, defined as the effective yield on earning assets less the effective cost of deposits and
borrowed funds (calculated on a fully taxable equivalent basis), decreased to 2.88% in 2024 from 2.97% in 2023. The net interest
spread was 3.62% in 2022. Net interest margin did not change and was 3.30% in 2024 and 2023. The net interest margin was
3.70% in 2022. Net interest margin remained the same in 2024 as it was in 2023 as a result of the growth in net interest income
and the level of average earning assets off-setting the increases in cost of funds and the level of our average interest bearing
liabilities. Changes in interest rates paid on products such as interest checking, savings, and money market accounts will generally
increase or decrease in a manner that is consistent with changes in the short-term environment, but those rates are also impacted
by competitive market conditions.
The direction and speed with which short-term interest rates move has an impact on our net interest income. The Federal Reserve
influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our
loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate decreased by 100 basis points
from September 18, 2024 through December 31, 2024 as the Federal Reserve cut the target rate for the federal funds rate by 100
basis points. The Company believes that short-term interest rates will remain at or near their current levels throughout 2025, and
in such rate environment, expansion of the Company's net interest margin will be dependent upon, in part, whether the Company
is forced to maintain deposit rates at their current levels or further increase them for the reasons noted above. However, if short-
term interest rates decline further the Company's net interest margin and earnings could be negatively impacted if the yields on
loans decrease faster than the Company is able to lower deposit rates, including as a result of loan growth outpacing our ability
to add lower cost core deposits or competitive pressures in our markets limiting our ability to reduce the rates we pay on deposits,
particularly given that 84% of the loans in our loan portfolio are variable rate loans. Alternatively, if the Company is able to
reprice its deposits more quickly than it reprices the rates it earns on loans in such a falling rate environment, the Company
expects its net interest margin would expand.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
36
Provision for Credit Losses
On January 1, 2022, we adopted FASB ASU 2016-13, which introduces the current expected credit losses (CECL) methodology
and requires us to estimate all expected credit losses over the remaining life of our loan portfolio. The provision for credit losses
represents a charge to earnings necessary to establish an allowance for credit losses that, in management's evaluation is adequate
to provide coverage for all expected credit losses. The determination of the amount of the allowance is complex and involves a
high degree of judgment and subjectivity. Refer to Note 1, "Summary of Significant Accounting Policies" in the notes to our
consolidated financial statements appearing elsewhere in this Annual Report on 10-K for a detailed discussion regarding ACL
methodology.
The provision for credit losses-loans in 2024, 2023 and 2022 was $5,192,000, $6,300,000 and $8,656,000, respectively. The
benefit for the allowance for credit losses on off-balance sheet exposures in 2024, 2023 and 2022 was $592,000, $2,989,000 and
$1,014,000, respectively.
The decrease in the provision for credit losses-loans for the year ended December 31, 2024 when compared to the year ended
December 31, 2023 was primarily attributable to an improvement in the macroeconomic forecast in our CECL modeling despite
the increase in the volume of loans originated during the period. The decrease in the provision for credit losses-loans for the year
ended December 31, 2023 when compared to the year ended December 31, 2022 was primarily attributable to a decrease in the
volume of loans originated during the period, partially offset by the macroeconomic forecast in our CECL model reflecting the
potential for a recession.
As discussed below under Financial Condition-Loans, loan growth was higher for the twelve months ended December 31, 2024
compared to the same period in 2023. Gross loan growth totaled $496,992,000, $440,839,000 and $671,824,000 for the years
ended December 31, 2024, 2023 and 2022, respectively.
For the year ended December 31, 2024, an increase in off-balance sheet credit exposures was more than offset by an increase in
our unconditionally cancellable commitments as a percentage of our off-balance sheet commitments, which are excluded from
the calculation of the allowance of credit losses on off-balance sheet credit exposures under ASC 326, resulting in a benefit for
the year.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
37
The following detail provides a breakdown of the provision for credit loss-loans expense and net (charge-offs) recoveries at and
for the twelve months ended December 31, 2024, 2023 and 2022:
In Thousands, Except Percentages
Provision for
Credit Loss -
Loans
Expense
(Benefit)
Net (Charge-
Offs)
Recoveries
Average
Loans
Ratio of
Net
(Charge-
offs)
Recoveries
to Average
Loans
December 31, 2024
Residential 1-4 family real estate
$
928
$
15
1,030,428
—%
Commercial and multi-family real estate
2,781
—
1,406,746
—
Construction, land development and farmland
616
20
907,036
—
Commercial, industrial and agricultural
189
(20)
134,036
(0.01)
1-4 family equity lines of credit
81
—
215,603
—
Consumer and other
597
(558)
103,678
(0.54)
Total
$
5,192
$
(543)
$
3,797,527
(0.01)%
December 31, 2023
Residential 1-4 family real estate
$
1,435
$
20
$
909,742
—%
Commercial and multi-family real estate
2,123
—
1,192,260
—
Construction, land development and farmland
702
20
893,030
—
Commercial, industrial and agricultural
125
(29)
126,499
(0.02)
1-4 family equity lines of credit
639
—
177,398
—
Consumer and other
1,276
(1,276)
99,141
(1.29)
Total
$
6,300
$
(1,265)
$
3,398,070
(0.04)%
December 31, 2022
Residential 1-4 family real estate
$
1,353
$
108
$
762,580
0.01%
Commercial and multi-family real estate
1,886
—
974,101
—
Construction, land development and farmland
3,795
19
736,728
—
Commercial, industrial and agricultural
(117)
6
119,855
0.01
1-4 family equity lines of credit
396
—
120,104
—
Consumer and other
1,343
(1,044)
82,933
(1.26)
Total
$
8,656
$
(911)
$
2,796,301
(0.03)%
Following our adoption of CECL, the provision for credit losses - loans charged to operating expense requires us to estimate all
expected credit losses over the remaining life of our loan portfolio. Other factors which, in management’s judgment, deserve
current recognition in estimating expected credit losses - loans include growth and composition of the loan portfolio, review of
specific problem loans, the relationship of the allowance for credit losses - loans to outstanding loans, relevant information that
may affect our borrowers' ability to repay, the estimated value of any underlying collateral and current economic conditions that
may affect our borrowers' ability to pay.
There was no provision for credit losses on available-for-sale securities for the twelve months ended December 31, 2024, 2023,
or 2022.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
38
Non-Interest Income
The Company's non-interest income is composed of several components, some of which vary significantly between periods.
Service charges on deposit accounts and other non-interest income generally reflect the Company’s growth, while fees for
origination of mortgage loans and brokerage fees and commissions will often reflect home mortgage market and stock market
conditions and fluctuate more widely from period to period.
The following is a summary of our non-interest income for the years ended December 31, 2024, 2023 and 2022 (in thousands):
Twelve Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
$ Increase
(Decrease)
% Increase
(Decrease)
2023
2022
$ Increase
(Decrease)
%
Increase
(Decrease)
Service charges on deposits
$ 8,198
$ 7,890
$
308
3.90
$ 7,890
$ 7,382
$
508
6.88%
Brokerage income
8,562
7,184
1,378
19.18
7,184
6,929
255
3.68
Debit and credit card interchange income, net
8,627
8,490
137
1.61
8,490
8,416
74
0.88
Other fees and commissions
1,590
1,408
182
12.93
1,408
1,653
(245)
(14.82)
BOLI and annuity earnings
1,817
1,667
150
9.00
1,667
1,346
321
23.85
Loss on sale of securities, net
(2,742)
(1,009)
(1,733)
(171.75)
(1,009)
(1,620)
611
37.72
Fees and gains on sales of mortgage loans
3,068
2,635
433
16.43
2,635
2,973
(338)
(11.37)
Mortgage servicing income (loss), net
(1)
9
(10)
(111.11)
9
(28)
37
132.14
Gain (loss) on the sale of fixed assets, net
(303)
(55)
(248)
(450.91)
(55)
291
(346)
(118.90)
Gain (loss) on sale of other assets, net
(8)
(10)
2
20.00
(10)
8
(18)
(225.00)
Other income (loss)
146
80
66
82.50
80
(69)
149
215.94
Total non-interest income
$ 28,954
$ 28,289
$
665
2.35% $ 28,289
$ 27,281
$
1,008
3.69%
2024 v. 2023
The increase in non-interest income for the year ended December 31, 2024 when compared to the year ended December 31, 2023
is primarily attributable to increases in brokerage income, service charges on deposits, other fees and commissions, and fees and
gains on sales of mortgage loans, partially offset by an increase in the loss on sale of securities and an increase in the loss on sale
of fixed assets.
The increase in brokerage income is primarily due to multiple client acquisitions resulting in an increase of overall market share,
the completion of estate planning and corporate benefit cases, and the overall positive performance of financial markets.
The increase in service charges on deposits was due to an increase in overdraft fees as a result of an increase in transaction
volume and an increase in the number of business deposit customers utilizing treasury management services.
The increase in other fees and commissions is primarily due to an increase in fees related to safe deposit box rentals and cashier
checks, as well as an increase in rental income. Beginning in November 2023, the Company entered into a lease agreement with
a third party for use of the Company's unoccupied office building.
The increase in fees and gains on sale of mortgage loans was due to the mortgage interest rate environment positively impacting
the fair value of our hedging instruments, while the mortgage interest rate environment experienced in 2023 negatively impacted
the fair value of our interest hedging instruments.
The loss on sale of securities for 2024 was due to management's decision in the second half of 2024 to restructure a portion of
the securities portfolio in multiple transactions that resulted in the sale of securities in a loss position in an attempt to improve
the Bank's positioning relative to interest rate risk, including the sale of approximately $86.5 million of available-for-sale
securities that resulted in a net loss of $1.4 million in the third quarter of 2024.
The increased loss on sale of fixed assets in 2024 was primarily due to write-offs associated with the closure of a leased branch
location that we closed on January 13, 2024 and the write-off of fixed assets that are no longer in use. The loss on sale of fixed
assets in 2023 was primarily due to the sale of a company vehicle.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
39
2023 v. 2022
The increase in non-interest income for the year ended December 31, 2023 when compared to the year ended December 31, 2022
was primarily attributable to increases in service charges on deposits, brokerage income, BOLI and annuity earnings, and a
decrease in the realized loss on the sale of securities, partially offset by a decrease in fees and gains on sale of mortgage loans
and a decrease in the gain on the sale of fixed assets.
The increase in service charges on deposits was primarily due to an increase in non-sufficient funds due to an increase in the
number of customers and the more challenging economic environment in 2023.
The increase in brokerage income was primarily due to a strong fourth quarter of 2023, driven by multiple client acquisitions and
an increase of overall market share in our market areas as well as the positive performance of financial markets during such
quarter.
The increase in BOLI and annuity earnings was primarily attributable to an increase in rates in the market.
The loss on sale of securities for 2023 and 2022 was due to the Company selling securities in order to restructure the securities
portfolio into higher yielding securities offsetting securities pricing in future periods. In 2023, the Company was able to take
advantage of the improvement in underlying market conditions to limit the amount of realized losses.
The decrease in fees and gains on sale of mortgage loans was due to the higher interest rate environment which contributed to
weakened demand for purchase money mortgage loans and refinancing transactions. The volume of mortgage loans originated
for 2023 was $73,984,000 compared to $106,601,000 for 2022.
The loss on sale of fixed assets in 2023 is primarily due to the sale of a company vehicle. The gain on sale of fixed assets in 2022
was attributable to the sale of a lot which was originally purchased for a future branch location.
Non-Interest Expenses
Non-interest expenses consist primarily of employee costs, FDIC premiums, occupancy expenses, furniture and equipment
expenses, advertising and public relations expenses, data processing expenses, directors’ fees, audit, legal and consulting fees,
and other operating expenses.
The following is a summary of the Company's non-interest expense for the years ended December 31, 2024, 2023 and 2022 (in
thousands):
Twelve Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
$ Increase
(Decrease)
% Increase
(Decrease)
2023
2022
$ Increase
(Decrease)
% Increase
(Decrease)
Employee salaries and benefits
$
67,342
$
59,501
$
7,841
13.18%
$ 59,501
$ 56,707
$
2,794
4.93%
Equity-based compensation
1,567
1,528
39
2.55
1,528
1,864
(336)
(18.03)
Occupancy expenses
5,733
6,532
(799)
(12.23)
6,532
5,563
969
17.42
Furniture and equipment expenses
3,038
3,225
(187)
(5.80)
3,225
3,400
(175)
(5.15)
Data processing expenses
9,477
8,797
680
7.73
8,797
7,337
1,460
19.90
Advertising & public relations expenses
3,512
3,714
(202)
(5.44)
3,714
3,455
259
7.50
Accounting, legal & consulting
expenses
1,550
1,789
(239)
(13.36)
1,789
1,409
380
26.97
FDIC insurance
3,129
3,120
9
0.29
3,120
1,527
1,593
104.32
Directors’ fees
816
713
103
14.45
713
650
63
9.69
Other operating expenses
12,257
12,032
225
1.87
12,032
11,058
974
8.81
Total non-interest expense
$ 108,421
$ 100,951
$
7,470
7.40%
$100,951
$ 92,970
$
7,981
8.58%
2024 v. 2023
The increase in non-interest expenses for the year ended December 31, 2024 when compared to the year ended December 31,
2023 was primarily attributable to an increase in salaries and employee benefits, data processing expenses, and other operating
expenses, partially offset by a decrease in occupancy expenses, furniture and equipment expenses, advertising & public relations
expenses, and accounting, legal and consulting expenses.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
40
Employee salaries and benefits increased for the year ended December 31, 2024 compared to the year ended December 31, 2023
primarily due to an increase in the number of employees necessary to support the Company’s growth in operations, an increase
in incentives and commissions paid due to the increase in loan volume and an increase in clients and production growth within
the investment department.
Data processing expense increased principally due to implementation of a small business online solution and an increase in the
overall number of customers using digital services. The Company anticipates that data processing expenses will continue to
increase as the Company's operations grow, the demand for digital products and services from customers increases, and the cyber
threat environment grows.
The increase in other operating expenses was primarily due to costs associated with a new employee development program,
including engagement activities, and mailing costs associated with account change notices. Also contributing to the increase was
an increase in fees related to ICS and CDARS accounts as a result of an increase in these types of accounts.
The decrease in occupancy expense was primarily due to the closure of a leased branch office location that we closed on January
13, 2024.
The decrease in furniture and equipment expenses for the year ended December 31, 2024 was primarily due to a decrease in
depreciation expense which resulted from the full depreciation of the equipment in the Company's operations building.
The decrease in advertising and public relations expenses was primarily due to the competitive rate environment experienced in
2023, which caused the Bank to increase marketing efforts focused on driving deposit growth in 2023.
The decrease in accounting, legal and consulting expenses was primarily associated with the timing and payment of invoices
received at year-end.
The efficiency ratio is a common and comparable KPI used in the banking industry. The Company uses this metric to monitor
how effective management is at using our internal resources. It is calculated by taking our non-interest expense divided by our
net-interest income plus non-interest income. Our efficiency ratio for the years ended 2024, 2023 and 2022 was 58.21%, 60.38%
and 55.11%, respectively. The improvement in the efficiency ratio in 2024 when compared to 2023 was due to the increases in
net interest income and non-interest income outpacing the increase in non-interest expense.
The Company expects non-interest expense will continue to increase in 2025, including as a result of increased salary and benefits
expense and increased occupancy costs associated with our continued growth.
2023 v. 2022
The increase in non-interest expenses for the year ended December 31, 2023 when compared to the year ended December 31,
2022 was primarily attributable to an increase in salaries and employee benefits, occupancy expenses, data processing expenses,
FDIC insurance, other operating expenses, and advertising expenses.
Salaries and employee benefits increased for the year ended December 31, 2023 compared to the year ended December 31, 2022
primarily due to an increase in the number of employees necessary to support the Company’s growth in operations and branch
count.
The increase in occupancy expense was primarily due to multiple branch renovations, repairs, ongoing branch maintenance, and
costs associated with the termination of a lease associated with the branch closed in January 2024.
Data processing expenses increased due to an increase in computer maintenance, consumer and business online banking, and
computer hardware/license expenses. The computer maintenance expenses increased as a result of, among other items, expenses
associated with additional software applications and the number of open accounts. Enhanced business digital solutions, improved
digital security for consumers, and an increase in the number of customers using digital services accounted for other increases.
FDIC assessment expense increased due to the Company's growth in 2022 as well as an increase in the assessment rate
administered by the FDIC.
The increase in other operating expenses was primarily due to an increase in employee engagement and development, ATM
servicing costs, and write-offs on customer deposit accounts resulting from fraudulent transactions.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
41
The increase in advertising expenses was primarily attributable to an increase in customer acquisition costs, marketing expenses
associated with the opening of two new branches, the advertising of new products, as well as an overall increase in the cost of
marketing resources.
Income Taxes
The Company’s income tax expense was $16,576,000 for 2024, an increase of $2,637,000 from $13,939,000 for 2023, which
was a decrease of $1,117,000 from the 2022 total of $15,056,000. The percentage of income tax expense to earnings before taxes
was 22.6% in 2024, 22.1% in 2023 and 22.1% in 2022. The increase in income tax expense in 2024 from 2023 was due to an
increase in earnings before income taxes, and the decrease in 2023 from 2022 was due to a decrease in earnings before income
taxes. Our effective tax rate represents our blended statutory federal and state rate of 26.135% affected by the impact of
anticipated favorable permanent differences between our book and taxable income such as earnings on bank-owned life
insurance, income earned on tax-exempt securities and loans, and certain federal and state tax credits.
Our income tax expense, deferred tax assets and liabilities reflect management’s best assessment of estimated future taxes to be
paid. We are subject to income taxes at both the federal and state level. Significant judgments and estimates are required in
determining the consolidated income tax expense.
Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and
expense. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence,
including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent
financial operations. In projecting future taxable income, we begin with historical results adjusted for changes in accounting
policies and incorporate assumptions including the amount of future state and federal pretax operating income, the reversal of
temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require
significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to
manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of
cumulative operating income. Changes in current tax laws and rates could also affect recorded deferred tax assets and liabilities
in the future as was the case with the passage of the Tax Cuts and Jobs Act in 2017.
Financial Accounting Standards Board (“FASB”) ASC Topic 740, Income Taxes (“ASC 740”) provides that a tax benefit from
an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination,
including resolutions of any related appeals or litigation processes, based on the technical merits. ASC Topic 740 also provides
guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and
transition.
We recognize tax liabilities in accordance with ASC Topic 740, and we adjust these liabilities when our judgment changes as a
result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the
ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These
differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.
Financial Condition
Balance Sheet Summary
The Company’s total assets increased in 2024 by $512,183,000, or 10.57%, to $5,358,659,000 at December 31, 2024, after
increasing 13.09% in 2023 to $4,846,476,000 at December 31, 2023. Loans, net of allowance for credit losses, totaled
$4,042,392,000 at December 31, 2024, a $491,717,000, or 13.85%, increase compared to December 31, 2023. In 2024,
management targeted owner-occupied commercial real estate, residential real estate lending and small business lending as areas
of focus. The increase in loans in 2024 resulted from the continued population growth and corporate relocations in the Bank's
primary market areas, the continuing impact of opening of new branches, and increased marketing efforts. The Company
continued to grow loans in 2024 at a rate similar to 2023. The Company expects to experience slower loan growth in 2025 as
elevated interest rates are expected to slow loan demand, particularly if a recessionary economic environment develops. In
addition, we expect to continue to moderate the extent of our lending in 2025 to ensure adequate liquidity. At year-end 2024,
securities totaled $827,893,000, an increase of 2.07% from $811,081,000 at December 31, 2023, primarily due to the purchase
of new securities, partially offset by the run-off of declining balance securities and the sale of securities. As a result of loan
growth that outpaced deposit growth, interest bearing deposits at other financial institutions decreased by $2,430,000, to
$211,271,000 at December 31, 2024. Deferred income taxes totaled $46,048,000 at December 31, 2024, a $575,000, or 1.26%,
increase compared to December 31, 2023.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
42
Total liabilities increased by $461,885,000, or 10.46%, to $4,878,956,000 at December 31, 2024 compared to $4,417,071,000 at
December 31, 2023. This increase was composed primarily of the $462,928,000 increase in total deposits to $4,830,034,000, a
10.60% increase from December 31, 2023. The increase in total deposits since December 31, 2023 was primarily attributable to
growth in market share, branching and concerted marketing efforts, including deposit promotions, to drive deposit growth which
resulted in the opening of new deposit accounts. Accrued interest and other liabilities decreased to $48,922,000 from $49,965,000
at respective year ends 2024 and 2023. The decrease in accrued interest and other liabilities was due to a decrease in reserve for
income taxes, a decrease in escrow payable, and a decrease in off-balance sheet commitments, partially offset by an increase in
interest payable on deposits.
Shareholders’ equity increased $50,298,000, or 11.71%, in 2024, due to net earnings, the issuance of common stock pursuant to
the Company’s Dividend Reinvestment Plan and the exercise of stock options. This increase in equity was partially offset by
dividends paid on the Company’s common stock. A more detailed discussion of assets, liabilities and capital follows.
Loans
The following schedule details the loans and percentage of loans in each category of the Company at December 31, 2024 and
2023 (dollars in thousands):
December 31, 2024
December 31, 2023
AMOUNT
%
AMOUNT
%
Residential 1-4 family real estate
$
1,133,966
27.6% $
959,218
26.6%
Commercial and multi-family real estate
1,544,340
37.7
1,313,284
36.4
Construction, land development and farmland
941,193
22.9
901,336
25.0
Commercial, industrial and agricultural
144,619
3.5
127,659
3.5
1-4 family equity lines of credit
235,240
5.7
202,731
5.6
Consumer and other
106,235
2.6
104,373
2.9
Total loans before net deferred loan fees
4,105,593
100.0%
3,608,601
100.0%
Net deferred loan fees
(13,704)
(13,078)
Total loans
4,091,889
3,595,523
Less: Allowance for credit losses
(49,497)
(44,848)
Net loans
$
4,042,392
$
3,550,675
Loans are the largest component of the Company’s assets and are its primary source of income. The Company’s loan portfolio,
net of allowance for credit losses, increased 13.85% at year-end 2024 when compared to year-end 2023. Overall, the Bank's loan
demand and related new loan production remained steady in 2024, with the portfolio growing at a similar rate as it did in 2023.
The net loan growth from December 31, 2023 reflects increased marketing efforts focused on growing the portfolio, and
continued population growth and corporate relocations in our primary market areas. The table above sets forth the loan categories
and the percentage of such loans in the portfolio as of December 31, 2024 and 2023.
As represented in the above table, Wilson Bank experienced loan growth for the year ended December 31, 2024 in all loan
categories. Residential 1-4 family real estate loans increased 18.2% in 2024 and comprised 27.6% of the total loan portfolio at
December 31, 2024, compared to 26.6% at December 31, 2023. The increase in residential 1-4 family real estate loans is
attributable to the Bank successfully growing its residential portfolio through enhanced marketing efforts directed at
homebuilders in the Company's market areas, and the increase the Company experienced in the investor sector of 1-4 family.
Commercial and multi-family real estate loans increased 17.6% in 2024 and comprised 37.7% of the total loan portfolio at
December 31, 2024, compared to 36.4% at December 31, 2023. Construction, land development and farmland loans increased
4.4% in 2024 and comprised 22.9% of the total loan portfolio at December 31, 2024, compared to 25.0% at December 31, 2023.
1-4 family equity lines of credit loans increased 16.0% in 2024 and comprised 5.7% of the total loan portfolio at December 31,
2024, compared to 5.6% at December 31, 2023. The increase in commercial and multi-family real estate, construction, land
development and farmland loans, and 1-4 family equity lines of credit is primarily attributable to continued economic growth
and expansion in the Bank's primary market areas. As noted above, the Company expects loan growth to slightly slow in 2025
as a result of the elevated interest rate environment, particularly if a recessionary economic environment develops.
Because construction loans remain a meaningful portion of our portfolio, the Bank has implemented an additional layer of
monitoring as it seeks to avoid advancing funds that exceed the present value of the collateral securing the loan. The responsibility
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
43
for monitoring percentage of completion and distribution of funds tied to these completion percentages is now monitored and
administered by a Credit Administration Department independent of the lending function. The Bank continues to seek to diversify
its real estate portfolio as it seeks to lessen concentrations in any one type of loan.
Banking regulators define highly leveraged transactions to include leveraged buy-outs, acquisition loans and recapitalization
loans of an existing business. Under the regulatory definition, at December 31, 2024, the Company had no highly leveraged
transactions, and there were no foreign loans outstanding during any of the reporting periods. As of December 31, 2024, the
Company had not underwritten any loans in connection with capital leases.
The following table classifies the Company's fixed and variable rate loans at December 31, 2024 according to contractual
maturities of: (1) one year or less, (2) after one year through five years, (3) after five years through fifteen years, and (4) after
fifteen years (dollars in thousands):
December 31, 2024
One Year
or Less
After One
Year
Through
Five Years
After Five
Years
Through
Fifteen
Years
After
Fifteen
Years
Total
Residential 1-4 family real estate
$
51,742
$
13,860
$
128,274
$
940,090
$ 1,133,966
Commercial and multi-family real estate
69,703
63,530
249,495
1,161,612
1,544,340
Construction, land development and farmland
286,791
190,232
134,367
329,803
941,193
Commercial, industrial and agricultural
17,859
49,250
45,535
31,975
144,619
1-4 family equity lines of credit
23,819
34,714
171,302
5,405
235,240
Consumer and other
19,170
55,937
7,240
23,888
106,235
Total
$
469,084
$
407,523
$
736,213
$ 2,492,773
$ 4,105,593
Loans with fixed interest rates:
Residential 1-4 family real estate
$
50,677
$
3,549
$
14,755
$
139,664
$
208,645
Commercial and multi-family real estate
44,278
23,241
16,056
4,548
88,123
Construction, land development and farmland
137,317
37,931
15,490
31,750
222,488
Commercial, industrial and agricultural
8,700
29,611
5,971
12
44,294
1-4 family equity lines of credit
2,058
903
15
—
2,976
Consumer and other
12,170
47,214
6,585
6,145
72,114
Total
$
255,200
$
142,449
$
58,872
$
182,119
$
638,640
Loans with variable interest rates:
Residential 1-4 family real estate
$
1,065
$
10,311
$
113,519
$
800,426
$
925,321
Commercial and multi-family real estate
25,425
40,289
233,439
1,157,064
1,456,217
Construction, land development and farmland
149,474
152,301
118,877
298,053
718,705
Commercial, industrial and agricultural
9,159
19,639
39,564
31,963
100,325
1-4 family equity lines of credit
21,761
33,811
171,287
5,405
232,264
Consumer and other
7,000
8,723
655
17,743
34,121
Total
$
213,884
$
265,074
$
677,341
$ 2,310,654
$ 3,466,953
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
44
The following table details selected information as to non-accrual loans of the Company at December 31, 2024, 2023 and 2022:
In Thousands, Except Percentages
December 31, 2024
December 31, 2023
December 31, 2022
Non-Accrual Loans
Non-Accrual Loans
Non-Accrual Loans
Total
Loans
Amount
Percent
of Loans
in
Category
Total
Loans
Amount
Percent
of Loans
in
Category
Total
Loans
Amount
Percent
of Loans
in
Category
Residential 1-4 family real
estate
$1,133,966
$
452
0.04%
$
959,218
$
—
—%
$
854,970
$
—
—%
Commercial and multi-
family real estate
1,544,340
3,616
0.23
1,313,284
—
—
1,064,297
—
—
Construction, land
development and farmland
941,193
—
—
901,336
—
—
879,528
—
—
Commercial, industrial and
agricultural
144,619
—
—
127,659
—
—
124,603
—
—
1-4 family equity lines of
credit
235,240
750
0.32
202,731
—
—
151,032
—
—
Consumer and other
106,235
—
—
104,373
—
—
93,332
—
—
Total
$4,105,593
$
4,818
$3,608,601
$
—
$3,167,762
$
—
Allowance for credit
losses on loans
$
49,497
$ 44,848
$ 39,813
Ratio of non-accrual
loans to total loans
outstanding
0.12%
—%
—%
Ratio of allowance for
credit losses on loans to
non-accrual loans
1,027.33%
—%
—%
The accrual of interest income is discontinued when it is determined that collection of interest is less than probable or the
collection of any amount of principal is doubtful. The decision to place a loan on non-accrual status is based on an evaluation of
the borrower’s financial condition, collateral liquidation value, economic and business conditions and other factors that affect
the borrower’s ability to pay. At the time a loan is placed on non-accrual status, the accrued but unpaid interest is also evaluated
as to collectability. If collectability is doubtful, the unpaid interest is charged off. Thereafter, interest on non-accrual loans is
recognized only as received. Non-accrual loans totaled $4,818,000 at December 31, 2024. There were no non-accrual loans at
December 31, 2023 or 2022. For the year ended December 31, 2024, the amount of interest income on non-accrual loans that
would have been recognized if loans were on accruing status was insignificant.
At December 31, 2024, there were five outstanding loan modifications made to borrowers experiencing financial difficulty, with
outstanding balances totaling $25,599,000, all of which were on accrual status. At December 31, 2023, there were four
outstanding loan modifications made to borrowers experiencing financial difficulty, with outstanding balances totaling
$3,446,000, all of which were on accrual status.
At December 31, 2024, and December 31, 2023, there was no other real estate owned outstanding.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
45
The following table sets forth for the reported periods loans that were at least 30 days but less than 60 days past due, 60 days but
less than 90 days past due and nonaccrual loans and those loans past due greater than 89 days:
(In thousands)
30-59 Days
Past Due
60-89
Days
Past Due
Nonaccrual
and Greater
Than 89
Days Past
Due
Total
Nonaccrual
and Past
Due
Current
Total
Loans
Loans
Greater
Than 89
Days Past
Due and
Accruing
Interest
December 31, 2024
Residential 1-4 family real estate
$
5,854
1,462
766
8,082
1,125,884
1,133,966 $
314
Commercial and multi-family real estate
—
2
3,616
3,618
1,540,722
1,544,340
—
Construction, land development and
farmland
742
—
162
904
940,289
941,193
162
Commercial, industrial and agricultural
184
562
113
859
143,760
144,619
113
1-4 family equity lines of credit
960
581
840
2,381
232,859
235,240
90
Consumer and other
568
137
52
757
105,478
106,235
52
Total
$
8,308
2,744
5,549
16,601
4,088,992
4,105,593 $
731
December 31, 2023
Residential 1-4 family real estate
$
1,544
552
1,178
3,274
955,944
959,218 $
1,178
Commercial and multi-family real estate
5,846
—
—
5,846
1,307,438
1,313,284
—
Construction, land development and
farmland
2,959
1
—
2,960
898,376
901,336
—
Commercial, industrial and agricultural
52
—
7
59
127,600
127,659
7
1-4 family equity lines of credit
571
209
106
886
201,845
202,731
106
Consumer and other
350
78
118
546
103,827
104,373
118
Total
$
11,322
840
1,409
13,571
3,595,030
3,608,601 $
1,409
Past due loans, which include nonaccrual loans and loans greater than 89 days past due, totaled $16,601,000 at December 31,
2024, an increase from $13,571,000 at December 31, 2023. The increase in nonaccrual and greater than 89 days past due loans
during the year ended December 31, 2024 of $4,140,000, from $1,409,000 to $5,549,000, was due primarily to the addition of
one large residential 1-4 family real estate loan relationship, one large 1-4 family equity line of credit loan relationship, and one
large commercial and multi-family real estate relationship, all of which were on non-accruing status. The increase in 60-89 days
past due loans during the year ended December 31, 2024 of $1,904,000 was primarily due to the addition of three commercial,
industrial and agricultural loan relationships, two 1-4 family equity lines of credit loan relationships and three residential 1-4
family real estate loan relationships. Management believes that it is probable that it will incur losses on nonaccrual and greater
than 89 days past due loans but believes that these losses should not exceed the amount in the allowance for credit losses already
allocated to these loans, unless there is a severe deterioration of local real estate values.
The net non-performing asset ratio (NPA) is used as a measure of the overall quality of the Company's assets. Our NPA ratio is
calculated by dividing the total of our loans greater than 89 days past due and accruing interest, non-accrual loans, and other real
estate owned by our total assets outstanding. Our NPA ratios for the periods ended December 31, 2024 and December 31, 2023
were 0.10% and 0.03%, respectively. The increase in our NPA ratio was the result of increases in nonaccrual loans and loans
greater than 89 days past due and accruing interest as described above.
Loans may be classified as collateral dependent when the current net worth and financial capacity of the borrower or of the
collateral pledged, if any, is viewed as inadequate and it is probable that the Company will be unable to collect the scheduled
payments of principal and interest due under the contractual terms of the loan agreement. Such loans generally have a well-
defined weakness or weaknesses that jeopardize the liquidation of the debt, and if such deficiencies are not corrected, there is a
probability that the Company will sustain some loss. In such cases, interest income continues to accrue as long as the loan does
not meet the Company’s criteria for nonaccrual status. Collateral dependent loans are measured at the fair value of the collateral
less estimated selling costs. If the fair value of the collateral dependent loan less estimated selling costs is less than the recorded
investment in the loan, the Company shall recognize impairment by creating a valuation allowance with a corresponding charge
to the provision for credit losses or by adjusting an existing valuation allowance for the collateral dependent loan with a
corresponding charge or credit to the provision for credit losses.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
46
At December 31, 2024, the Company had a recorded investment in collateral dependent loans totaling $37,453,000, an increase
from a recorded investment in collateral dependent loans totaling $4,838,000 at December 31, 2023. The increase during the year
ended December 31, 2024 as compared to December 31, 2023 is primarily due to the deterioration in payment performance and
downgrade of a few large borrowers for which we believe the majority of the loans to be well-collateralized. Management has
developed and continues to execute performance improvement plans on these relationships and is working to mitigate the credit
risk of the loans in order to reduce our potential exposure to credit losses. As of December 31, 2024 a $408,000 valuation
allowance was recorded on collateral dependent loans due to one loan relationship. As of December 31, 2023, no valuation
allowance was recorded on collateral dependent loans. The allowance for credit losses for loans related to collateral dependent
loans was measured based upon the estimated fair value of related collateral less estimated selling costs.
The internally classified loans as a percentage of the allowance for credit losses were 97.0% and 13.2%, respectively, at
December 31, 2024 and 2023. At December 31, 2024, loans totaling $48,005,000 were included in the Company’s internal
classified loan list compared to $5,900,000 at December 31, 2023. The increase in internally classified loans was due to the
downgrade of a few large borrowers mentioned above. Of the internally classified loans, $47,215,000 are real estate secured and
$790,000 are secured by various other types of collateral. Such loans are listed as classified when information obtained about
possible credit problems of the borrowers has prompted management to question the ability of the borrower to comply with the
repayment terms of the loan agreement. Management continues to develop and execute performance improvement plans with
these select few borrowers and continues to believe these loans are well collateralized. If economic uncertainty remains in the
market, or management's performance improvement plan proves to be unsuccessful, our classified loan balances could increase
further.
The allowance for credit losses is discussed under “Critical Accounting Estimates”, “Provision for Credit Losses”, and "Summary
of Significant Accounting Policies." The Company maintains its allowance for credit losses at an amount believed by
management to be adequate to absorb expected credit losses inherent in the loan portfolio as of December 31, 2024.
Substantially all of the Company’s loans are from Wilson, DeKalb, Smith, Putnam, Trousdale, Davidson, Rutherford, Sumner,
Williamson, Hamilton and adjacent counties. Although the majority of the Company's loans are in the real estate market, the
Company seeks to exercise prudent risk management in lending through the diversification by loan category within the real estate
segment, including residential 1-4 family real estate, commercial and multi-family real estate, construction, land development
and farmland, and 1-4 family equity lines of credit.
The Company will target owner-occupied commercial real estate, residential real estate lending and consumer lending as areas
of emphasis in 2025. At December 31, 2024, the Company’s total loans equaled 84.7% of its total deposits as compared to 82.3%
at December 31, 2023. The Company may sell portions of the loans it generates to other financial institutions for cash in order
to improve the liquidity of the Company’s loan portfolio or extend its lending capacity.
Allowance for Credit Losses
On January 1, 2022, we adopted FASB ASU 2016-13, which introduces the current expected credit losses (CECL) methodology
and requires us to estimate all expected credit losses over the remaining life of our financial instrument portfolios. The provision
for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management’s
evaluation, is adequate to provide coverage for all expected credit losses.
The allowance for credit losses for loans represents the portion of the loan's amortized cost basis that we do not expect to collect
due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of
future economic conditions considering macroeconomic forecasts. Loan losses are charged against the allowance when we
believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The
allowance for credit losses for loans is based on the loan's amortized cost basis, excluding accrued interest receivable, as we
promptly charge off accrued interest receivable determined to be uncollectible. We determine the appropriateness of the
allowance through quarterly discounted cash flow modeling of the loan portfolio which considers lending-related commitments
and other relevant factors, including macroeconomic forecasts and historical loss rates. In future quarters, we may update
information and forecasts that may cause significant changes in the estimate in those future quarters.
Our allowance for credit losses for loans at December 31, 2024 reflects an amount deemed appropriate to adequately cover all
expected future losses as of the date the allowance is determined based on our allowance for credit losses for loans assessment
methodology. Provision for credit losses for loans in 2024 resulted in an increase of the allowance for credit losses for loans (net
of charge-offs and recoveries) to $49,497,000 at December 31, 2024 from $44,848,000 at December 31, 2023 and $39,813,000
at December 31, 2022. The allowance for credit losses for loans increased 10.37% from December 31, 2023 to December 31,
2024 as compared to the 13.81% increase in total loans over the same period. The allowance for credit losses for loans was 1.21%
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
47
of total loans outstanding at December 31, 2024 compared to 1.25% at December 31, 2023. The allowance for loan losses was
1.26% at December 31, 2022.
The following schedule provides an allocation of the year-end allowance for credit losses for loans by portfolio segment for the
Company as of and for the fiscal years ended December 31, 2024 and 2023:
In Thousands, Except Percentages
Amount of
Allowance
Allocated
Percent of
Loans in
Each
Category to
Total
Loans
Total
Loans
Ratio of
Allowance
Allocated
to Loans in
Each
Category
December 31, 2024
Residential 1-4 family real estate
$
9,708
27.6% $ 1,133,966
0.86%
Commercial and multi-family real estate
20,203
37.7
1,544,340
1.31
Construction, land development and farmland
14,663
22.9
941,193
1.56
Commercial, industrial and agricultural
1,702
3.5
144,619
1.18
1-4 family equity lines of credit
1,890
5.7
235,240
0.80
Consumer and other
1,331
2.6
106,235
1.25
Total
$
49,497
100.0%
4,105,593
1.21
Net deferred loan fees
(13,704)
$ 4,091,889
1.21%
December 31, 2023
Residential 1-4 family real estate
$
8,765
26.6% $
959,218
0.91%
Commercial and multi-family real estate
17,422
36.4
1,313,284
1.33
Construction, land development and farmland
14,027
25.0
901,336
1.56
Commercial, industrial and agricultural
1,533
3.5
127,659
1.20
1-4 family equity lines of credit
1,809
5.6
202,731
0.89
Consumer and other
1,292
2.9
104,373
1.24
Total
$
44,848
100.0%
3,608,601
1.24
Net deferred loan fees
(13,078)
$ 3,595,523
1.25%
The allowance for credit losses for loans is an amount that management believes will be adequate to absorb expected losses on
existing loans that may become uncollectible. The allowance for credit losses for loans as a percentage of total loans outstanding
at December 31, 2024, net of deferred fees, decreased slightly from the year ended December 31, 2023. This decrease was mainly
due to a more favorable macroeconomic forecast, which is discussed below in more detail, combined with portfolio composition
changes towards loans with lower reserve rates.
We measure expected credit losses over the life of each loan utilizing two models. For residential 1-4 family, commercial and
multi-family real estate, construction and land development, commercial and industrial, 1-4 family equity lines of credit,
municipal, and certain other loan types, we use discounted cash flow models which measure probability of default and loss given
default. For farmland, agricultural, credit cards, auto, and other consumer loans we use the remaining life method to estimate
credit losses. The measurement of expected credit losses for loan segments utilizing discounted cash flow is impacted by certain
macroeconomic variables. Models are adjusted to reflect the current impact of certain macroeconomic variables as well as their
expected changes over a reasonable and supportable forecast period.
In estimating expected credit losses as of December 31, 2024, we utilized the Moody’s Analytics December 2024 Baseline
Scenario (the “Baseline Scenario”) to forecast the macroeconomic variables used in our models. The Baseline Scenario was
based on the review of a variety of forecasts of the U.S. economy. The Baseline Scenario projections through the end of the
forecast period in the fourth quarter of 2026 included, (i) a U.S. Gross Domestic Product (“GDP”) annualized quarterly growth
rate in the range of approximately 1.5% to 2.7%; (ii) a U.S. unemployment rate in the range of approximately 4.0% to 4.1%; and
(iii) a Home Price Index annualized quarterly growth rate in the range of approximately 1.1% to 2.4%.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
48
We adjust model results using qualitative factor ("Q-factor") adjustments. Q-Factor adjustments are based upon management's
judgment and current assessment as to the impact of risks related to changes in lending policies and procedures; economic and
business conditions; loan portfolio attributes and credit concentrations; and external factors, among other things, that are not
already captured within the modeling inputs, assumptions and other processes. Management assesses the potential impact of such
items within a range of "major risk" to "improvement" and adjusts the modeled expected credit loss by an aggregate adjustment
percentage based upon the assessment.
Our charge-off policy for collateral dependent loans is similar to our charge-off policy for all loans in that loans are charged-off
in the month when a determination is made that the loan is uncollectible. Net charge-offs decreased to $543,000 in 2024 from
net charge-offs of $1,265,000 in 2023 and net charge-offs of $911,000 in 2022. The ratio of net charge-offs to average total
outstanding loans was 0.01% in 2024, 0.04% in 2023 and 0.03% in 2022. Overall, the Bank experienced minimal charge-offs
during 2024. It is expected that charge-offs will be modest for 2025; however, a deterioration in local economic conditions may
negatively impact charge-offs in the future.
We also maintain an allowance for credit losses on off-balance sheet exposures, which decreased $592,000 from $3,147,000 at
December 31, 2023 to $2,555,000 at December 31, 2024 as a result of an increase in our unconditionally cancellable
commitments as a percentage of our off-balance sheet commitments, which are excluded from the calculation of the allowance
for credit losses on off-balance sheet credit exposure under ASC 326. Off-balance sheet exposures are recognized on the balance
sheet within accrued interest and other liabilities.
The level of the allowance and the amount of the provision for credit losses involve evaluation of uncertainties and matters of
judgment. The Company maintains an allowance for credit losses - loans which management believes is adequate to absorb losses
in the loan portfolio. A formal calculation of the allowance for credit losses - loans is prepared quarterly by the Company's Chief
Financial Officer and provided to the Board of Directors. The calculation includes an evaluation of historical default and loss
experience, current and forecasted economic conditions, an evaluation of qualitative factors, industry and peer bank loan quality
indicators and other factors. See the discussion above under “Application of Critical Accounting Policies and Accounting
Estimates” for more information. Management believes the allowance for credit losses at December 31, 2024 to be adequate, but
if forecasted economic conditions do not meet management’s current expectations, the allowance for credit losses may require
an increase through additional provision for credit loss expense which would negatively impact earnings.
For a detailed discussion regarding our allowance for credit losses, see "Provision for Credit Losses" and Note 2 "Loans and
Allowance for Credit Losses" elsewhere in this Annual Report on Form 10-K.
Securities
Securities increased 2.07% to $827,893,000 at December 31, 2024 from $811,081,000 at December 31, 2023, and comprised the
second largest and other primary component of the Company’s earning assets. Securities increased due to the purchase of new
securities, partially offset by run-off of our declining balance securities in 2024 and the sales of securities in connection with
management's decision to restructure a portion of the portfolio as discussed above. The average yield, including tax equivalent
adjustment, of the securities portfolio at December 31, 2024 was 2.50% with a weighted average life of 7.00 years, as compared
to an average yield of 2.33% and a weighted average life of 8.25 years at December 31, 2023. The weighted average lives on
mortgage-backed securities reflect the repayment rate used for book value calculations.
Certain debt securities that management has the positive intent and ability to hold to maturity are classified as "held-to-maturity"
and recorded at amortized cost. Trading securities are recorded at fair value with changes in fair value included in earnings.
Securities not classified as held to maturity or trading, including equity securities with readily determinable fair values, are
classified as “available-for-sale” and recorded at fair value, with unrealized gains and losses on our available-for-sale securities
excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest
income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the
trade date and are determined using the specific identification method.
Upon and subsequent to adoption of CECL, for available-for-sale debt securities in an unrealized loss position, we evaluate the
securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis is due to
credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive
income, net of applicable taxes. Credit-related impairment is recognized through the allowance for credit losses on the balance
sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings
via provision for credit loss. At December 31, 2024 and December 31, 2023, we determined that the decline we experienced in
fair value of available-for-sale securities below the amortized cost basis of the securities was driven by changes in interest rates
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
49
and not due to credit-related factors. Therefore, there was no provision for credit loss recognized during the twelve months ended
December 31, 2024 with respect to our available-for-sale securities, nor was there an allowance for credit losses on available-
for-sale securities. No securities have been classified as trading securities or held-to-maturity at December 31, 2024,
December 31, 2023, or December 31, 2022.
Investment securities at December 31, 2024 and December 31, 2023 consisted of the following:
December 31, 2024
Securities Available-For-Sale
(In Thousands)
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Market
Cost
Gains
Losses
Value
U.S. Treasury and other U.S. government agencies
$
4,927
—
389
4,538
U.S. Government-sponsored enterprises (GSEs)
183,912
8
21,947
161,973
Mortgage-backed securities
520,729
55
66,588
454,196
Asset-backed securities
51,110
108
401
50,817
Corporate bonds
2,500
—
104
2,396
Obligations of states and political subdivisions
184,163
—
30,190
153,973
$
947,341
171
119,619
827,893
December 31, 2023
Securities Available-For-Sale
(In Thousands)
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Market
Cost
Gains
Losses
Value
U.S. Treasury and other U.S. government agencies
$
4,901
—
472
4,429
U.S. Government-sponsored enterprises (GSEs)
167,738
—
23,570
144,168
Mortgage-backed securities
480,759
230
63,959
417,030
Asset-backed securities
51,183
193
1,403
49,973
Corporate bonds
2,500
—
77
2,423
Obligations of states and political subdivisions
223,358
397
30,697
193,058
$
930,439
820
120,178
811,081
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
50
The following table details the contractual maturities and weighted average yields of investment securities of the Company as of
December 31, 2024. Actual maturities may differ from contractual maturities of mortgage and asset-backed securities because
the mortgages or other assets underlying such securities may be called or prepaid with or without penalty. Therefore, these
securities are not included in the maturity categories noted below as of December 31, 2024:
December 31, 2024
Available-For-Sale Securities
Estimated
Market Value
Weighted
Average Yields
(In Thousands, Except Yields)
Mortgage and asset-backed securities
One year or less
$
992
0.88%
After one year through five years
24,318
1.26
After five years through ten years
88,116
3.40
After ten years
391,587
2.77
Total Mortgage and asset backed securities
505,013
2.80
U.S. Treasury and other U.S. government agencies:
One year or less
—
—
After one year through five years
4,538
1.11
After five years through ten years
—
—
After ten years
—
—
Total U.S. Treasury and other U.S. government agencies:
4,538
1.11
U.S. Government-sponsored enterprises (GSEs):
One year or less
2,006
0.86
After one year through five years
60,356
1.04
After five years through ten years
86,477
2.20
After ten years
13,134
2.43
Total U.S. Government-sponsored enterprises (GSEs)
161,973
1.78
Obligations of states and political subdivisions*:
One year or less
—
—
After one year through five years
25,172
1.72
After five years through ten years
68,353
2.02
After ten years
60,448
2.85
Total obligations of states and political subdivisions
153,973
2.31
Corporate bonds:
One year or less
2,396
4.25
After one year through five years
—
—
After five years through ten years
—
—
After ten years
—
—
Total corporate bonds
2,396
4.25
Total available-for-sale securities
$
827,893
2.50%
* Weighted average yield on tax-exempt obligations is stated on a tax-equivalent basis, assuming a weighted average Federal
income tax rate of 21%.
We computed weighted average yields using coupon interest, adding discount accretion or subtracting premium amortization, as
appropriate, on a ratable basis over the life of each security. We computed the weighted average yield for each maturity range
using the fair value of each security in that range.
Premises and Equipment, net
Premises and equipment decreased $849,000, or 1.36%, from December 31, 2023 to December 31, 2024. The primary reason for
the decrease was due to current year depreciation and amortization of $4,133,000 and write-offs due to the closure of a leased
branch office location, partially offset by the purchase of equipment and furniture and fixtures (primarily in connection with the
remodeling of the Company's main office), and the remodeling of several branches.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
51
The Company has entered into various operating and financing lease arrangements. Future undiscounted payments under such
arrangements as of December 31, 2024 were as follows:
In Thousands
Operating
Finance
Less than 1 year
$
561 $
128
1-3 years
1,138
377
3-5 years
829
397
More than 5 years
695
3,424
Bank Owned Life Insurance
Bank owned life insurance increased $2,303,000, or 3.86%, from December 31, 2023 to December 31, 2024. This increase was
due to the purchase of a policy totaling $515,000 and an increase in the overall cash surrender value of our existing policies of
$1,788,000.
Deposits
The increases in assets in 2024 and 2023 were funded primarily by increases in deposits and the Company’s earnings. Total
deposits, which are the principal source of funds for the Company, totaled $4,830,034,000 at December 31, 2024 compared to
$4,367,106,000 at December 31, 2023, an increase of 10.60%. There were no brokered deposits at December 31, 2024, compared
to $69,135,000 at December 31, 2023. The decrease in brokered deposits from December 31, 2023 to December 31, 2024 was
the result of management's decision to not renew any brokered deposits when they matured, as the Company has been able to
grow lower cost core deposits. The increase in total deposits since December 31, 2023 was primarily attributable to growth in
market share and concerted marketing efforts to drive deposit growth, including a strategic focus on growing customers by
utilizing deposit promotions, which resulted in the opening of new deposit accounts. The Company has targeted consumers,
professionals, small businesses, and municipalities as its central clientele; therefore, deposit instruments in the form of demand
deposits, savings accounts, money market demand accounts, certificates of deposits and individual retirement accounts are
offered to customers. Management believes the markets in which it operates are attractive economic markets offering growth
opportunities for the Company; however, the Company competes with several larger banks and community banks that have
offices in these areas which may negatively impact market growth or maintenance of current market share. Even though the
Company is in a very competitive market, though such competition lessened somewhat in 2024, management currently believes
that its deposit market share can be maintained or expanded, though, as discussed below, such competition may, particularly if
it reintensifies, force the Company to further increase the rates it pays on deposits or seek alternative funding sources as needed
to support loan growth.
The $462,928,000, or 10.60%, growth in deposits in 2024 was due to a $236,187,000, or 15.84%, increase in certificates of
deposits, a $169,019,000, or 14.61%, increase in money market accounts, a $33,489,000, or 3.58%, increase in negotiable order
of withdrawal (NOW) accounts, a $23,593,000, or 7.37%, increase in savings accounts, and a $7,197,000, or 9.59%, increase in
individual retirement accounts. This was partially offset by a $6,557,000, or 1.68%, decrease in demand deposit accounts. The
increase in time deposits and money markets is due to the Bank increasing rates in the first half of 2024 and maintaining these
elevated rates to remain competitive in our market areas and customers shifting to these products from lower earning and non-
interest earning accounts to take advantage of higher rates. The increase in NOW accounts was primarily attributable to the
Bank's strategic initiative to grow business deposits. The increase in savings accounts was primarily attributable to targeted
marketing campaigns to acquire consumer savings deposits. The average rate paid on average total interest-bearing deposits was
3.04% for 2024 compared to 2.27% for 2023. The average rate paid in 2022 was 0.49%. As mentioned above, if the competitive
pressures begin to rise once again, the Federal Reserve does not cut the federal funds rate any further or loan growth outpaces
deposit growth, the Bank may have to once again raise deposit rates, or may be limited in its ability to lower deposit rates should
short-term interest rates fall. If either of these scenarios were to happen, our net interest margin would experience compression
and our results of operations would be negatively impacted.
As noted above, we raised rates on deposits to maintain liquidity levels and offer competitive rates in our markets. The ratio of
average loans to average deposits was 83.3% in 2024, 83.2% in 2023, and 75.5% in 2022.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
52
The average amounts and average interest rates for deposits for 2024 and 2023 are detailed in the following schedule:
2024
2023
Average
Average
Balance
Balance
In
Average
In
Average
Thousands
Rate
Thousands
Rate
Non-interest bearing deposits
$
391,942
—% $
399,683
—%
Interest-bearing deposits:
Negotiable order of withdrawal accounts
927,902
0.86
976,154
0.60
Money market demand accounts
1,237,236
2.79
1,123,482
2.03
Time deposits
1,671,006
4.70
1,264,602
3.98
Other savings
329,283
1.73
322,458
1.43
Total interest-bearing deposits
4,165,427
3.04%
3,686,696
2.27%
Total deposits
$ 4,557,369
2.78% $ 4,086,379
2.05%
At December 31, 2024, we estimate that we had approximately $1.4 billion in uninsured deposits, which are the portion of deposit
amounts that exceed the FDIC insurance limit, compared to $1.2 billion at December 31, 2023. Approximately 30% of our total
deposits exceeded the FDIC deposit insurance limits at December 31, 2024 while approximately 28% exceeded the FDIC deposit
insurance limits at December 31, 2023. However, we offer large depositors access to the Certificate of Deposit Account Registry
Service (“CDARS”) and the Insured Cash Sweep (“ICS Product”), which allows us to divide customers' deposits that exceed the
FDIC insurance limits into smaller amounts, below the FDIC insurance limits, and place those excess deposits in other
participating FDIC insured institutions with the convenience of managing all deposit accounts through our Bank. Our total
deposits in CDARS and the ICS Products increased to $200,650,000, or 4.15% of total deposits, at December 31, 2024, compared
to $104,204,000, or 2.39% of total deposits, at December 31, 2023.
The following schedule details the maturities of estimated uninsured time deposits greater than $250,000 at December 31, 2024:
In Thousands
Time deposits otherwise uninsured with a maturity of:
Three months or less
$
82,238
Over three through six months
180,901
Over six through twelve months
109,920
Over twelve months
66,863
Portion of U.S. time deposits in excess of insurance limit
$
439,922
Off Balance Sheet Arrangements
At December 31, 2024, the Company had unfunded lines of credit of $1.2 billion and outstanding standby letters of credit of
$129 million, compared to unfunded lines of credit of $1.0 billion and outstanding standby letters of credit of $106 million at
December 31, 2023. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally
represent future cash requirements. If needed to fund these outstanding commitments, the Bank has the ability to access interest-
bearing deposits in other financial institutions, liquidate Federal funds sold or securities available-for-sale or on a short-term
basis to borrow and purchase Federal funds from other financial institutions. Additionally, the Bank could sell participations in
these or other loans to correspondent banks. Liquidation of securities available-for-sale could trigger recognition of losses by the
Bank if those securities sold to meet these commitments were in a loss position when sold. As mentioned below, Wilson Bank
has been able to fund its ongoing liquidity needs through its stable core deposit base, brokered deposits, loan repayments, its
investment security maturities, and short-term borrowings.
Quantitative and Qualitative Disclosures About Market Risk
The Company’s primary component of market risk is interest rate volatility. Fluctuations in interest rates will ultimately impact
both the level of income and expense recorded on a large portion of the Company’s assets and liabilities, and the market value
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
53
of all interest-earning assets and interest-bearing liabilities, other than those which possess a short term to maturity. Based upon
the nature of the Company’s operations, the Company is not subject to foreign currency exchange or commodity price risk.
Interest rate risk (sensitivity) management focuses on the earnings risk associated with changing interest rates. Management
seeks to maintain profitability in both short term and long term earnings through funds management/interest rate risk
management. The Company’s rate sensitivity position has an important impact on earnings. Senior management of the Company
meets monthly to analyze the rate sensitivity position. These meetings focus on the spread between the cost of funds and interest
yields generated primarily through loans and investments.
Liquidity and Asset Liability Management
Liquidity
The Company’s management seeks to maximize net interest income by managing the Company’s assets and liabilities within
appropriate constraints on capital, liquidity and interest rate risk. Liquidity is a measure of our ability to meet our cash flow
requirements, including inflows and outflows of cash for depositors and borrowers, while at the same time meeting our operating,
capital and strategic cash flow needs. Several factors influence our liquidity needs, including depositor and borrower activity,
interest rate trends, changes in the economy, maturities, re-pricing and interest rate sensitivity of our debt securities, loan portfolio
and deposits. We strive to maintain appropriate levels of liquidity. We calculate our liquidity ratio by taking cash and due from
banks, interest bearing deposits, federal funds sold, and available-for-sale debt securities not pledged as collateral and dividing
by total assets. Our total liquidity ratios were 10.80% at December 31, 2024 and 13.09% at December 31, 2023. The decrease in
our liquidity ratio is primarily attributable to a decrease in liquid assets as a result of an increase in the dollar amount of our
available-for-sale securities that we have pledged to secure certain of our customers' deposits.
The Company’s primary source of liquidity is a stable core deposit base. In addition, federal funds purchased, advances from the
Federal Home Loan Bank of Cincinnati, and brokered deposits provide a secondary source. These sources of liquidity are
generally short-term in nature and are used to fund asset growth and meet other short-term liquidity needs. Liquidity needs can
also be met from loan payments and investment security sales or maturities. While maturities and scheduled amortization of
loans and debt securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market
interest rates, economic conditions, and competition. At December 31, 2024, the Company’s liquid assets totaled approximately
$578.7 million, a decrease from $634.0 million at December 31, 2023. A portion of these liquid assets include unpledged
available-for-sale securities that are in an unrealized loss position at December 31, 2024. If the Company was required to sell
any of these securities, including to meet liquidity needs, while they are in an unrealized loss position the Company would be
required to recognize the loss on those securities through the income statement when they are sold. Recognition of these losses
would negatively impact the Bank's and the Company's earnings and regulatory capital levels. Additionally, as of December 31,
2024, the Company had available approximately $119.3 million in unused federal funds lines of credit with regional banks and,
subject to certain restrictions and collateral requirements, approximately $546.7 million of borrowing capacity with the Federal
Home Loan Bank of Cincinnati to meet short term funding needs. The Company maintains a formal asset and liability
management process in an effort to quantify, monitor and control interest rate risk, and to assist management as management
seeks to maintain stability in the net interest margin under varying interest rate environments. The Company accomplishes this
process through the development and implementation of lending, funding and pricing strategies designed to maximize net interest
income under varying interest rate environments subject to specific liquidity and interest rate risk guidelines and competitive
market conditions.
The Company’s securities portfolio consists of earning assets that provide interest income. Securities classified as available-for-
sale include securities intended to be used as part of the Company’s asset/liability strategy and/or securities that may be sold in
response to changes in interest rates, prepayment risk, or the need to fund loan demand or other liquidity needs. At December 31,
2024, securities totaling approximately $54.3 million mature or will be subject to rate adjustments within the next twelve months.
A secondary source of liquidity is the Company’s loan portfolio. At December 31, 2024, loans totaling approximately $469.1
million will become due within twelve months from that date.
As for liabilities, at December 31, 2024, certificates of deposit and individual retirement accounts of $250,000 or greater totaling
approximately $675.7 million will become due or reprice during the next twelve months. Historically, there has been no
significant reduction in immediately withdrawable accounts such as negotiable order of withdrawal accounts, money market
demand accounts, demand deposit accounts and regular savings accounts. Management does not anticipate that there will be
significant withdrawals from these accounts in the next twelve months.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
54
Management believes that with present maturities, borrowing capacity in unused federal funds lines of credit and with the Federal
Home Loan Bank of Cincinnati and the efforts of management in its asset/liability management program, the Company has
adequate liquidity to meet all known contractual obligations, unfunded commitments and reasonable requirements of borrowers
and depositors over the next twelve months as well over a longer term.
At December 31, 2024, the Company had no individually significant commitments for capital expenditures. But, the Company
believes the number of its locations, including non-branch locations, will increase over an extended period of time across its
footprint, and that certain of its locations will be in need of required renovations. In future periods, these expansions and
renovation projects may lead to additional equipment and occupancy expenses as well as related increases in salaries and benefits
expense. Additionally, the Company expects it will continue to incur costs associated with planned technology improvements to
enhance its infrastructure.
Asset Liability Management
Analysis of rate sensitivity and rate gap analysis are the primary tools used to assess the direction and magnitude of changes in
net interest income resulting from changes in interest rates. Included in the analysis are cash flows and maturities of financial
instruments held for purposes other than trading, changes in market conditions, loan volumes and pricing and deposit volume
and mix. These assumptions are inherently uncertain, and, as a result, net interest income cannot be precisely estimated nor can
the impact of higher or lower interest rates on net interest income be precisely predicted. Actual results will differ due to timing,
magnitude and frequency of interest rate changes and changes in market conditions and management’s strategies, among other
factors.
Interest Rate Sensitivity Gaps
The following schedule details the Company's interest rate sensitivity gaps for different time periods at December 31, 2024:
Repricing Within
(In Thousands)
Total
0-30 Days
31-90 Days
91-180
Days
181-365
Days
Over 1 Year
Earning assets:
Loans, net of deferred fees
$
4,091,889
690,372
107,006
159,691
372,420
2,762,400
Securities
827,893
48,293
382
387
5,203
773,628
Loans held for sale
2,529
—
—
—
—
2,529
Interest bearing deposits
211,271
211,271
—
—
—
—
Federal funds sold
9,791
9,791
—
—
—
—
Restricted equity securities
3,876
3,876
—
—
—
—
Total earning assets
5,147,249
963,603
107,388
160,078
377,623
3,538,557
Interest-bearing liabilities:
Negotiable order of withdrawal
accounts
968,198
968,198
—
—
—
—
Money market demand accounts
1,325,713
1,325,713
—
—
—
—
Individual retirement accounts
82,259
4,063
10,316
13,734
26,039
28,107
Other savings
343,894
343,894
—
—
—
—
Certificates of deposit
1,726,802
106,720
273,422
534,250
532,355
280,055
Finance leases
3,076
—
—
—
—
3,076
4,449,942
2,748,588
283,738
547,984
558,394
311,238
Interest-sensitivity gap
$
697,307
(1,784,985)
(176,350)
(387,906)
(180,771)
3,227,319
Cumulative gap
(1,784,985)
(1,961,335)
(2,349,241)
(2,530,012)
697,307
Interest-sensitivity gap as % of
total assets
(33.3)%
(3.3)%
(7.2)%
(3.4)%
60.2%
Cumulative gap as % of total
assets
(33.3)%
(36.6)%
(43.8)%
(47.2)%
13.0%
As detailed in the chart, as of December 31, 2024, the Company is forecasted to maintain a liability sensitive position over the
next twelve months, meaning that its liabilities should reprice faster than its assets in a changing interest rate environment.
However, management expects that liabilities of a demand nature will renew and that it will not be necessary to replace them
with significantly higher cost of funds.
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
55
The Company also uses simulation modeling to evaluate both the level of interest rate sensitivity as well as potential balance
sheet strategies. The Company's Asset Liability Committee ("ALCO") meets quarterly to analyze the interest rate shock
simulation. The interest rate shock simulation model is based on a number of assumptions. The assumptions include, but are not
limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and
replacement of asset and liability cash flows and balance sheet management strategies. We model instantaneous change in interest
rates using a growth in the balance sheet as well as a flat balance sheet to understand the impact to earnings and capital. Based
on the Company's IRR simulation, the Company had a slightly liability sensitive interest-rate risk position as of December 31,
2024, though the Company’s net interest margin and earnings could be negatively impacted if the Company's ability to lower
deposit rates (in a falling rate environment) or limit the increases to deposit rates (in a rising rate environment), is limited by
other factors including as a result of competitive pressures re-intensifying or loan growth outpacing our ability to add lower cost
core deposits. The Company also uses Economic Value of Equity (“EVE”) sensitivity analysis to understand the impact of
changes in interest rates on long-term cash flows, income and capital. EVE is calculated by discounting the cash flows for all
balance sheet instruments under different interest rate scenarios. The EVE is a longer term view of interest rate risk because it
measures the present value of the future cash flows. Presented below is the estimated impact on the Bank’s net interest income
and EVE as of December 31, 2024, assuming an immediate shift in interest rates:
% Change from Base Case for Immediate Parallel Changes in Rates
-300 BP
-200 BP
-100 BP
+100 BP
+200 BP
+300 BP
Net interest income
0.33%
(1.57)%
(1.24)%
(2.11)%
(4.48)%
(7.04)%
EVE
(8.57)%
(3.14)%
(0.36)%
(2.43)%
(5.56)%
(9.28)%
While an instantaneous and severe shift in interest rates was used in this analysis to provide an estimate of exposure under these
scenarios, we believe that a gradual shift in interest rates would have a more modest impact. Further, the earnings simulation
model does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve
relationships, and changing product spreads that could mitigate any potential adverse impact of changes in interest rates.
Moreover, since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in
EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year).
Further, EVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield
curve relationships, hedging strategies that we may institute, and changing product spreads that could mitigate any potential
adverse impact of changes in interest rates.
Interest rate risk (sensitivity) management focuses on the earnings risk associated with changing interest rates. Management
seeks to maintain profitability in both immediate and long-term earnings through funds management/interest rate risk
management. The Company’s rate sensitivity position has an important impact on earnings. Senior management of the Company
analyzes the rate sensitivity position quarterly. Management focuses on the spread between the Company’s cost of funds and
interest yields generated primarily through loans and investments.
In addition to the ALCO, the Audit Committee and the Risk Oversight Committee, as well as the Chief Risk Officer are all
responsible for the “risk management framework” of the Company. The ALCO meets monthly and the Audit and Risk Oversight
Committees meet quarterly, with the authority to convene additional meetings as circumstances require.
Impact of Inflation
Although interest rates are significantly affected by inflation, for the fiscal years ended December 31, 2024, 2023 and 2022, the
inflation rate is believed to have had an immaterial impact on the Company's results of operations outside of its indirect impact
on interest rates. Outside of its potential impact on our customers and their ability to make loan payments, we do not expect such
inflation to have a material impact on our operations in 2025 other than any effect it may have on interest rates, though continued
elevated levels of inflation could also negatively impact our non-interest expense.
Capital Resources, Capital Position and Dividends
At December 31, 2024, total shareholders’ equity was $479,703,000, or 8.95% of total assets, which compares with
$429,405,000, or 8.86% of total assets, at December 31, 2023, and $360,452,000 or 8.41% of total assets, at December 31, 2022.
The dollar increase in shareholders’ equity during 2024 is the result of the net effect of $1,128,000 related to stock option
compensation, restricted share awards, restricted share units, and performance share units, the Company’s net earnings of
$56,530,000, proceeds from the issuance of common stock related to exercise of stock options of $575,000 and a decrease of
$68,000 in unrealized losses on investment securities (described elsewhere in this Annual Report on Form 10-K), net of
applicable income taxes of $22,000. Also included was $134,000 of net earnings for the year ended December 31, 2024
WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
56
attributable to the noncontrolling members of Encompass. The increase in total shareholders' equity was partially offset by cash
dividends declared of $20,552,000, net of $14,732,000 reinvested in shares of the Company's common stock under the
Company’s dividend reinvestment plan, and the $2,181,000 repurchase of common stock that occurred in the second quarter of
2024.
For a discussion of the Company's and Wilson Bank's capital levels and required minimum levels of capital each is required to
maintain under applicable regulatory requirements see Note 17, Regulatory Matters and Restrictions on Dividends in the notes
to the Company's consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
WILSON
BANK HOLDING CO.
YOUR FAMILY FINANCIAL CENTER
MANAGEMENT REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
The management of Wilson Bank Holding Company is responsible for establishing and
maintaining adequate internal control over financial reporting. This internal control
system was designed to provide reasonable assurance to the company’s management and
board of directors regarding the preparation and fair presentation of published financial
statements. All internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and presentation.
Wilson Bank Holding Company’s management assessed the effectiveness of the
company’s internal control over financial reporting as of December 31, 2024. In making
this assessment, it used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control-Integrated
Framework (2013). Based on our assessment, we believe that, as of December 31, 2024,
the company’s internal control over financial reporting is effective based on those
criteria. Wilson Bank Holding Company’s independent auditors have issued an audit
report on our assessment of the company’s internal control over financial reporting.
February 28, 2025
John C. McDearman III
Kayla Hawkins
CEO
Executive Vice President and CFO
623 WEST MAIN ST. • P.O. BOX 768 •LEBANON, TN 37088-0768 • 615-444-2265
57
1201 DEMONBREUN STREET • SUITE 1220 • NASHVILLE, TENNESSEE 37203-3140 • (615) 252-6100 • Fax • (615) 252-6105
www.maggartpc.com
58
Stephen M. Maggart, CPA, ABV, CFF
J. Mark Allen, CPA
Chris Conro, CPA
Michael T. Holland, CPA, ABV, CFF
M. Todd Maggart, CPA, ABV, CFF
P. Jason Ricciardi, CPA, CGMA
David B. von Dohlen, CPA
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Wilson Bank Holding Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Wilson Bank Holding Company (the Company) as
of December 31, 2024 and 2023, and the related consolidated statements of earnings, comprehensive earnings, changes in
stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes
(collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally
accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) and our report dated February 28, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standard require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosure in the financial statements. Our audit also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.
59
To the Shareholders and the Board of Directors of
Wilson Bank Holding Company
Page Two
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the account or disclosures to which it relates.
Allowance for Credit Losses on Loans - Reasonable and Supportable Forecasts and Qualitative Adjustments
The Company’s allowance for credit losses on loans (“ACL”) was $49.5 million as of December 31, 2024 and the provision for
credit losses on loans was $5.2 million for the year ended December 31, 2024. Loans were $4.1 billion at December 31,
2024. The Company disclosed information regarding the Company’s financial assets and allowance for credit losses in Note
1 Summary of Significant accounting Policies and Note 2 Loans and Allowance for Credit Losses to the consolidated financial
statements.
The Company primarily used a discounted cash flow (DCF) model to calculate its ACL. DCF calculates the present value of the
future expected cash flows for all loans included in the analysis at the loan’s effective interest rate. The analysis was performed
using a bottom-up approach with the loan-level data. The loan-level calculations were rolled up to the pool level to get the total
amortized cost of cash flow loans by each pool. The amortized cost is then discounted back to the present value. The total dollar
reserve applied to the pool is the total amortized cost net present value.
Within its DCF model, the Company primarily employed a probability of default (“PD”) and loss given default (“LGD”)
modeling approach. The PD assumption of the Company’s ACL model utilized historical correlations between default
experience and certain macroeconomic factors as determined through a statistical regression analysis. Losses are forecasted over
a period of time determined to be reasonable and supportable, and then reverted to long term historical averages. The Company
adjusted it overall ACL with qualitative adjustment that are not inherently considered in the quantitative component of the
methodology.
While the qualitative categories and the measurements utilized to quantify the risks associated with each of the qualitative
adjustments are built primarily upon objective measurements where applicable, they are subjectively developed and interpreted
by management.
The audit procedures over the reasonable and supportable forecast scenarios and qualitative adjustments utilized in management's
methodology involved challenging and subjective auditor judgment. Therefore, we identified auditing the reasonable and
supportable forecast scenarios and qualitative adjustments applied as a critical audit matter.
60
To the Shareholders and the Board of Directors of
Wilson Bank Holding Company
Page Three
The primary audit procedures we performed to address this critical audit matter included the following:
•
Tested the operating effectiveness of controls specific to:
Determining the reasonableness of the forecasted macroeconomic scenarios used in the model.
The identification and application of qualitative adjustments to the ACL model.
The relevance and reliability of data used by the Company’s third-party vendor to develop forecast scenarios.
The Company’s allowance committee’s oversight and review of the overall ACL.
•
Performed substantive testing over the qualitative adjustments including:
Evaluated the reasonableness and appropriateness of the policies and methodologies employed including, but not
limited to, evaluating their conceptual soundness and inspecting and testing significant assumptions and judgments.
Evaluated management’s judgments in the selection and application of the forecasted macroeconomic scenarios.
Evaluated management's rationale for determining qualitative adjustments were relevant and warranted for each loan
segment and assessed the measurement of qualitative factor adjustments applied by management.
Assessed changes in qualitative factors year-over-year against overall trends in credit quality within the Company
and broader trends within the industry and local and national economies to evaluate reasonableness of management’s
qualitative factor adjustments.
We have served as the Company’s auditor since 1987.
Nashville, Tennessee (PCAOB 763)
February 28, 2025
1201 DEMONBREUN STREET • SUITE 1220 • NASHVILLE, TENNESSEE 37203-3140 • (615) 252-6100 • Fax • (615) 252-6105
www.maggartpc.com
61
Stephen M. Maggart, CPA, ABV, CFF
J. Mark Allen, CPA
Chris Conro, CPA
Michael T. Holland, CPA, ABV, CFF
M. Todd Maggart, CPA, ABV, CFF
P. Jason Ricciardi, CPA, CGMA
David B. von Dohlen, CPA
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Wilson Bank Holding Company
Opinion on Internal Control over Financial Reporting
We have audited Wilson Bank Holding Company’s internal control over financial reporting as of December 31, 2024, based on
criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Wilson Bank Holding Company (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, and the related consolidated
statements of earnings, comprehensive earnings, changes in stockholders’ equity and cash flows for each of the three years in the
period ended December 31, 2024, and the related notes and our report dated February 28, 2025 expressed an unqualified opinion
thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
62
To the Shareholders and the Board of Directors of
Wilson Bank Holding Company
Page Two
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Nashville, Tennessee (PCAOB 763)
February 28, 2025
63
WILSON BANK HOLDING COMPANY
Consolidated Balance Sheets
December 31, 2024 and 2023
Dollars in thousands
2024
2023
ASSETS
Loans, net of allowance for credit losses of $49,497 and $44,848, respectively
$
4,042,392
3,550,675
Available-for-sale securities, at market (amortized cost $947,341 and $930,439,
respectively)
827,893
811,081
Loans held for sale
2,529
2,294
Interest bearing deposits
211,271
213,701
Federal funds sold
9,791
10,159
Restricted equity securities, at cost
3,876
3,436
Total earning assets
5,097,752
4,591,346
Cash and due from banks
26,527
28,775
Premises and equipment, net
61,549
62,398
Accrued interest receivable
16,914
15,197
Deferred income taxes
46,048
45,473
Bank owned life insurance
61,948
59,645
Goodwill
4,805
4,805
Other assets
43,116
38,837
Total assets
$
5,358,659
4,846,476
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing
$
383,168
389,725
Interest bearing
4,446,866
3,977,381
Total deposits
4,830,034
4,367,106
Accrued interest and other liabilities
48,922
49,965
Total liabilities
4,878,956
4,417,071
Shareholders’ equity:
Common stock, par value $2.00 per share, authorized 50,000,000 shares,
11,876,770 and 11,686,363 shares issued and outstanding, respectively
23,754
23,373
Additional paid-in capital
150,739
136,866
Retained earnings
393,238
357,260
Noncontrolling interest in consolidated subsidiary
203
69
Accumulated other comprehensive losses, net of taxes of $31,217 and $31,195,
respectively
(88,231)
(88,163)
Total shareholders’ equity
479,703
429,405
Total liabilities and shareholders’ equity
$
5,358,659
4,846,476
See accompanying notes to consolidated financial statements.
64
WILSON BANK HOLDING COMPANY
Consolidated Statements of Earnings
Three Years Ended December 31, 2024
Dollars In Thousands (except per share data)
2024
2023
2022
Interest income:
Interest and fees on loans
$
250,273
198,739
138,161
Interest and dividends on securities:
Taxable securities
21,569
17,597
15,902
Exempt from Federal income taxes
1,488
1,574
1,392
Interest on loans held for sale
189
244
264
Interest on Federal funds sold
513
421
111
Interest on interest bearing deposits
9,753
3,697
1,522
Interest and dividends on restricted equity securities
331
311
188
Total interest income
284,116
222,583
157,540
Interest expense:
Interest on negotiable order of withdrawal accounts
8,014
5,847
2,546
Interest on money market accounts and other savings accounts
40,238
27,394
7,021
Interest on certificates of deposit and individual retirement
accounts
78,491
50,341
6,486
Interest on Federal funds purchased
1
24
14
Interest on Federal Home Loan Bank advances
—
2
—
Interest on finance leases
65
71
66
Total interest expense
126,809
83,679
16,133
Net interest income before provision for credit losses
157,307
138,904
141,407
Provision for credit losses - loans
5,192
6,300
8,656
Provision for credit losses - off-balance sheet exposures
(592)
(2,989)
(1,014)
Net interest income after provision for credit losses
152,707
135,593
133,765
Non-interest income
28,954
28,289
27,281
Non-interest expense
108,421
100,951
92,970
Earnings before income taxes
73,240
62,931
68,076
Income taxes
16,576
13,939
15,056
Net earnings
56,664
48,992
53,020
Net loss (gain) attributable to noncontrolling interest
(134)
(54)
22
Net earnings attributable to Wilson Bank Holding Company
$
56,530
48,938
53,042
Basic earnings per common share
$
4.79
4.21
4.66
Diluted earnings per common share
$
4.78
4.20
4.65
Weighted average common shares outstanding:
Basic
11,806,822
11,611,690
11,377,617
Diluted
11,838,589
11,641,366
11,408,924
See accompanying notes to consolidated financial statements.
65
WILSON BANK HOLDING COMPANY
Consolidated Statements of Comprehensive Earnings
Three Years Ended December 31, 2024
Dollars In Thousands
2024
2023
2022
Net earnings
$
56,664
48,992
53,020
Other comprehensive earnings (losses):
Unrealized gains (losses) on available-for-sale securities
(2,832)
29,136
(142,573)
Reclassification adjustment for net losses (gains) included in net
earnings
2,742
1,009
1,620
Tax effect
22
(7,878)
36,838
Other comprehensive earnings (losses)
(68)
22,267
(104,115)
Comprehensive earnings (losses)
56,596
71,259
(51,095)
Comprehensive earnings (losses) attributable to noncontrolling interest
(134)
(54)
22
Comprehensive earnings (losses) attributable to Wilson Bank Holding
Company
$
56,462
71,205
(51,073)
See accompanying notes to consolidated financial statements.
66
WILSON BANK HOLDING COMPANY
Consolidated Statements of Changes in Shareholders’ Equity
Three Years Ended December 31, 2024
Dollars In Thousands
Common
Stock
Additional
Paid In
Capital
Retained
Earnings
Noncontrolling
Interest
Accumulated
Other
Comprehensive
Earnings
(Loss)
Total
Balance January 1, 2022
$ 22,403
105,177
292,452
—
(6,315)
413,717
Cash dividends declared, $1.85 per share
—
—
(20,880)
—
—
(20,880)
Issuance of 250,365 shares of common stock pursuant to
dividend reinvestment plan
501
15,616
—
—
—
16,117
Issuance of 19,687 shares of common stock pursuant to
exercise of stock options
39
596
—
—
—
635
Vesting of 625 restricted share awards
1
(1)
—
—
—
—
Share based compensation expense
—
910
—
—
—
910
Net change in fair value of available-for-sale securities
during the year, net of taxes of $36,838
—
—
—
—
(104,115)
(104,115)
Cumulative effect of change in accounting principle from
the adoption of ASC 326
—
—
1,011
—
—
1,011
Noncontrolling interest contribution
—
—
—
37
—
37
Net earnings for the year
—
—
53,042
(22)
—
53,020
Balance December 31, 2022
22,944
122,298
325,625
15
(110,430)
360,452
Cash dividends declared, $1.50 per share
—
—
(17,303)
—
—
(17,303)
Issuance of 189,471 shares of common stock pursuant to
dividend reinvestment plan
379
12,600
—
—
—
12,979
Issuance of 24,711 shares of common stock pursuant to
exercise of stock options
50
994
—
—
—
1,044
Share based compensation expense
—
974
—
—
—
974
Net change in fair value of available-for-sale securities
during the year, net of taxes of $(7,878)
—
—
—
—
22,267
22,267
Net earnings for the year
—
—
48,938
54
—
48,992
Balance December 31, 2023
23,373
136,866
357,260
69
(88,163)
429,405
Cash dividends declared, $1.75 per share
—
—
(20,552)
—
—
(20,552)
Issuance of 203,489 shares of common stock pursuant to
dividend reinvestment plan
407
14,325
—
—
—
14,732
Issuance of 14,011 shares of common stock pursuant to
exercise of stock options
28
547
—
—
—
575
Vesting of 369 performance stock units
1
(1)
—
—
—
—
Vesting of 2,725 restricted stock units
5
(5)
—
—
—
—
Repurchase of 30,187 common shares
(60)
(2,121)
—
—
—
(2,181)
Share based compensation expense
—
1,128
—
—
—
1,128
Net change in fair value of available-for-sale securities
during the year, net of taxes of $22
—
—
—
—
(68)
(68)
Net earnings for the year
—
—
56,530
134
—
56,664
Balance December 31, 2024
$ 23,754
150,739
393,238
203
(88,231)
479,703
See accompanying notes to consolidated financial statements.
67
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows
Three Years Ended December 31, 2024
Increase (Decrease) in Cash and Cash Equivalents
Dollars In Thousands
2024
2023
2022
OPERATING ACTIVITIES
Consolidated net income
$
56,664
48,992
53,020
Adjustments to reconcile consolidated net income to net cash provided by
operating activities
Provision for credit losses
4,600
3,311
7,642
Deferred income taxes provision
(551)
(2,029)
(2,051)
Depreciation and amortization of premises and equipment
4,133
4,313
4,462
Loss (gain) on sale of fixed assets
303
55
(291)
Net amortization of securities
1,699
2,879
4,003
Net realized losses on sales of securities
2,742
1,009
1,620
Gains on mortgage loans sold, net
(3,068)
(2,635)
(2,973)
Stock-based compensation expense
1,567
1,948
1,864
Loss (gain) on sale of other assets
8
10
(8)
Increase in value of life insurance and annuity contracts
(1,817)
(1,667)
(1,345)
Mortgage loans originated for resale
(52,549)
(73,984)
(106,601)
Proceeds from sale of mortgage loans
55,382
77,680
118,062
Gain on lease modification
—
(1,463)
—
Right of use asset amortization
407
29
397
Amortization of mortgage servicing rights
343
227
532
Change in
Accrued interest receivable
(1,717)
(3,800)
(3,756)
Other assets
(6,315)
9,146
(284)
Accrued interest payable
1,525
21,055
1,516
Other liabilities
(1,375)
1,028
(2,602)
TOTAL ADJUSTMENTS
5,317
37,112
20,187
NET CASH PROVIDED BY OPERATING ACTIVITIES
61,981
86,104
73,207
INVESTING ACTIVITIES
Activities in available for sale securities
Purchases
(169,439)
(51,116)
(200,075)
Sales
86,248
32,740
42,728
Maturities, prepayments and calls
61,848
56,364
85,544
Redemptions (purchases) of restricted equity securities
(440)
921
732
Net increase in loans
(495,811)
(442,452)
(673,871)
Purchase of buildings, leasehold improvements, and equipment
(3,494)
(4,643)
(5,022)
Proceeds from sale of premises and equipment
—
—
1,758
Proceeds from sale of other assets
65
49
34
Purchase of life insurance and annuity contracts
(710)
—
(10,978)
Redemption of annuity contracts
523
419
248
NET CASH USED IN INVESTING ACTIVITIES
(521,210)
(407,718)
(758,902)
FINANCING ACTIVITIES
Net change in deposits - non-maturing
219,543
(324,417)
163,933
Net change in deposits - time
243,385
798,818
173,701
Change in escrow balances
(1,285)
(1,631)
3,549
Repayment of finance lease obligation
(34)
(30)
(26)
Noncontrolling interest contributions
—
—
37
Issuance of common stock related to exercise of stock options
575
1,044
635
Issuance of common stock pursuant to dividend reinvestment plan
14,732
12,979
16,117
Repurchase of common stock
(2,181)
—
—
Cash dividends paid on common stock
(20,552)
(17,303)
(20,880)
NET CASH PROVIDED BY FINANCING ACTIVITIES
454,183
469,460
337,066
NET CHANGE IN CASH AND CASH EQUIVALENTS
(5,046)
147,846
(348,629)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
252,635
104,789
453,418
CASH AND CASH EQUIVALENTS - END OF YEAR
$
247,589
252,635
104,789
See accompanying notes to consolidated financial statements.
68
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows, Continued
Three Years Ended December 31, 2024
Increase (Decrease) in Cash and Cash Equivalents
Dollars In Thousands
2024
2023
2022
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest
$
125,284
$
62,624
$
14,617
Taxes
$
18,844
$
16,511
$
19,446
Non-cash investing and financing activities:
Change in fair value of securities available-for-sale, net of taxes of $22 in
2024,
$(7,878) in 2023, and $36,838 in 2022,
$
(68)
$
22,267
$
(104,115)
Non-cash transfers from loans to other real estate
$
—
$
—
$
—
Non-cash transfers from other real estate to loans
$
—
$
—
$
—
Non-cash transfers from loans to other assets
$
60
$
—
$
—
See accompanying notes to consolidated financial statements.
69
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
(1) Summary of Significant Accounting Policies
The accounting and reporting policies of Wilson Bank Holding Company (“the Company”) and its wholly owned subsidiary,
Wilson Bank & Trust (“Wilson Bank” or "the Bank"), are in accordance with accounting principles generally accepted in
the United States of America (“U.S. GAAP”) and conform to general practices within the banking industry. The following
is a brief summary of the significant policies.
(a) Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary, Wilson Bank, and
Wilson Bank's 51% owned subsidiary, Encompass Home Lending, LLC ("Encompass"). On June 1, 2022, the Bank began
operations with a newly-formed joint venture, Encompass Home Lending, LLC. Encompass offers residential mortgage
banking services to customers of certain home builders in the Company's markets. All significant intercompany accounts
and transactions have been eliminated in consolidation.
(b) Nature of Operations
Wilson Bank operates under a state bank charter and provides full banking services. As a Tennessee state-chartered bank
that is not a member of the Federal Reserve, Wilson Bank is subject to regulations of the Tennessee Department of Financial
Institutions and the Federal Deposit Insurance Corporation (“FDIC”). The primary areas served by Wilson Bank include
Wilson County, DeKalb County, Rutherford County, Smith County, Trousdale County, Putnam County, Sumner County,
Hamilton County, Davidson County and Williamson County, Tennessee and surrounding counties in Middle Tennessee. As
of December 31, 2024, services were provided at the main office, twenty-nine branch locations and one loan production
office.
(c) Use of Estimates
In preparing consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance
for credit losses - loans and off-balance sheet credit exposures, the valuation of deferred tax assets, determination of any
impairment of goodwill or other intangibles, the valuation of other real estate (if any), and the fair value of financial
instruments.
(d) Significant Group Concentrations of Risk
Most of the Company’s activities are with customers located within Middle Tennessee. The types of securities in which the
Company invests are described in note 3. The types of lending in which the Company engages are described in note 2. The
Company does not have any significant concentrations to any one industry or customer other than as disclosed in note 2.
(e) Loans
The Company grants mortgage, commercial and consumer loans to customers. A substantial portion of the loan portfolio is
represented by mortgage loans throughout Middle Tennessee. The ability of the Company’s debtors to honor their contracts
is dependent upon the real estate and general economic conditions in this area.
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are
reported at their outstanding unpaid principal balances adjusted for unearned income, the allowance for credit losses, and
any unamortized deferred fees or costs on originated loans, and premiums or discounts on purchased loans. Interest income
is accrued on the unpaid principal balance.
Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized
on a straight line basis over the respective term of the loan.
As part of its routine credit monitoring process, the Company performs regular credit reviews of the loan portfolio and loans
receive risk ratings by the assigned credit officer, which are subject to validation by the Company's independent loan review
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
70
department. Risk ratings are categorized as pass, special mention, substandard or doubtful. The Company believes that its
categories follow those outlined by the FDIC, Wilson Bank's primary federal regulator.
Generally the accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due
unless the credit is well-secured and in process of collection. Generally, credit card loans and other personal loans are
typically charged off no later than when they become 90 days past due. Past due status is based on contractual terms of the
loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is
considered doubtful.
All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest
income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to
accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current
and future payments are reasonably assured.
(f)
Allowance for Credit Losses- Loans
On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” as subsequently updated for certain
clarifications, targeted relief and codification improvements. Accounting Standards Codification (“ASC”) Topic 326 (“ASC
326”) replaces the previous “incurred loss” model for measuring credit losses, which encompassed allowances for current
known and inherent losses within the portfolio, with an “expected loss” model, which encompasses allowances for losses
expected to be incurred over the life of the portfolio. The current expected credit loss (“CECL”) model requires the
measurement of all expected credit losses for financial assets measured at amortized cost and certain off-balance-sheet credit
exposures based on historical experience, current conditions, and reasonable and supportable forecasts. ASC 326 also
requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as
the credit quality and underwriting standards of an organization’s portfolio. In addition, ASC 326 includes certain changes
to the accounting for available-for-sale securities including the requirement to present credit losses as an allowance rather
than as a direct write-down for available-for-sale securities management does not intend to sell or believes that it is more
likely than not they will not be required to sell.
Effective January 1, 2022, the Company adopted ASC 326 using the modified retrospective method for all financial assets
measured at amortized cost and off- balance-sheet credit exposures. Upon adoption, the Company recognized an after-tax
cumulative effect increase to retained earnings totaling $1.0 million.
In connection with the adoption of ASC 326, the Company revised certain accounting policies and implemented certain
accounting policy elections. Further information regarding our policies and methodology used to estimate the allowance for
credit losses on loans is presented in Note 2 - Loans and Allowance for Credit Losses.
(g) Allowance for Credit Losses-Off-Balance Sheet Credit Exposures
The allowance for credit losses on off-balance sheet credit exposures is a liability account, calculated in accordance with
ASC 326, representing expected credit losses over the contractual period for which the Company is exposed to credit risk
resulting from a contractual obligation to extend credit. No allowance is recognized if the Company has the unconditional
right to cancel the obligation. Off-balance sheet credit exposures primarily consist of amounts available under outstanding
lines of credit and letters of credit. For the period of exposure, the estimate of expected credit losses considers both the
likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment
or other off-balance sheet exposure. The likelihood and expected amount of funding are based on historical utilization rates.
The amount of the allowance represents management's best estimate of expected credit losses on commitments expected to
be funded over the contractual life of the commitment. The allowance is reported as a component of accrued interest and
other liabilities in the Company's consolidated balance sheets. Adjustments to the allowance are reported in the Company's
income statement as a component of provision for credit losses - off-balance sheet exposures.
Estimating credit losses on amounts expected to be funded uses the same methodology as described for loans above in
paragraph (f) of this Note 1 - Summary of Significant Accounting Policies, as if such commitments were funded.
(h) Debt Securities
Certain debt securities that management has the positive intent and ability to hold to maturity are classified as “held-to-
maturity” and recorded at amortized cost. Trading securities are recorded at fair value with changes in fair value included in
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
71
earnings. Securities not classified as held-to-maturity or trading, including equity securities with readily determinable fair
values, are classified as “available-for-sale” and recorded at fair value based on available market prices, with unrealized
gains and losses excluded from earnings and reported in other comprehensive income (loss) on an after-tax basis. Securities
classified as “available- for-sale” are held for indefinite periods of time and may be sold in response to movements in market
interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. Purchase premiums
and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses
on the sale of securities are recorded on the trade date and are determined using the specific identification method.
A debt security is placed on nonaccrual status at the time any principal and interest payments become 90 days delinquent.
Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.
No securities have been classified as trading securities or held-to-maturity securities at December 31, 2024 or 2023.
(i)
Allowance for Credit Losses - Securities Available-for-Sale
For any securities classified as available-for-sale that are in an unrealized loss position at the balance sheet date, the Company
assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before
recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value
through net earnings. If the Company intends to hold the securities and it is more likely than not that the Company will not
be required to sell before impairment recovery, the securities will be evaluated for credit and non-credit related impairment.
Securities with one or more of the following characteristics will be deemed to have only non-credit related impairment and
will be excluded from further evaluation from credit impairment: Guaranteed by the U.S. government, insured by the FDIC,
a review of market price discount to principal face value, risk weighting under the FDIC’s Simplified Supervisory Formula
Approach, and average credit rating. Securities that are not excluded by the aforementioned characteristics are further
evaluated for credit deterioration. If it is determined a credit impairment has occurred, the portion of the impairment that is
determined to be credit related will be recorded as an allowance for credit losses with an offsetting entry to net earnings.
Non-credit related impairment is recognized in other comprehensive income.
(j)
Equity Securities
Equity securities are carried at fair value, with changes in fair value reported in net income. Equity securities without readily
determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price
changes in orderly transactions for the identical or a similar investment.
(k) Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over
transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains
the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets,
and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them
before their maturity.
(l)
Federal Home Loan Bank (FHLB) Stock
The Company is a member of the FHLB system. Members are required to own a certain amount of stock in the FHLB based
on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified
as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and
stock dividends are reported as income.
(m) Loans Held for Sale
Mortgage loans held for sale are carried at fair value. The fair value of loans held for sale is determined using quoted prices
for similar assets, adjusted for specific attributes of that loan. Gains and losses on sales of mortgage loans are based on the
difference between the selling price and the carrying value of the related loan sold.
(n) Premises and Equipment
Premises and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the estimated
useful lives of the related assets ranging from 3 to 40 years. Gains or losses realized on items retired and otherwise disposed
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
72
of are credited or charged to operations and cost and related accumulated depreciation are removed from the asset and
accumulated depreciation accounts.
Expenditures for major renovations and improvements of premises and equipment are capitalized and those for maintenance
and repairs are charged to earnings as incurred.
(o) Foreclosed Assets
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less the
estimated cost to sell at the date the Company acquires the property, establishing a new cost basis. Subsequent to their
acquisition by the Company, valuations of these assets are periodically performed by management, and the assets are carried
at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the
valuation allowance [i.e. any direct write-downs] are included within non-interest expense.
(p) Goodwill and Other Intangible Assets
Goodwill arises from business combinations and is determined as the excess of fair value of the consideration transferred,
plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities
assumed as of the acquisition date. Goodwill and intangible assets acquired in a business combination and determined to
have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and
circumstances exists that indicate that a goodwill impairment test should be performed. The Company has selected
September 30th as the date to perform the annual impairment test. No impairment was determined as a result of the test
performed by the Company on September 30, 2024. Intangible assets with finite useful lives are amortized over their
estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the
Company's balance sheet.
(q) Leases
Leases are classified as operating or finance leases at the lease commencement date. The Company leases certain locations
and equipment. The Company records leases on the balance sheet in the form of a lease liability for the present value of
future minimum payments under the lease terms and right-of-use asset equal to the lease liability adjusted for items such as
deferred or prepaid rent, lease incentives, and any impairment of the right-of-use asset. The discount rate used in determining
the lease liability is based upon incremental borrowing rates the Company could obtain for similar loans as of the date of
commencement or renewal. The Company does not record leases on the consolidated balance sheets that are classified as
short term (less than one year).
At lease inception, the Company determines the lease term by considering the minimum lease term and all optional renewal
periods that the Company is reasonably certain to renew. The lease term is also used to calculate straight-line rent expense.
The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are
reasonably certain to be renewed. The Company’s leases do not contain residual value guarantees or material variable lease
payments that will impact the Company’s ability to pay dividends or cause the Company to incur additional expenses.
Operating lease expense consists of a single lease cost allocated over the remaining lease term on a straight-line bases,
variable lease payments not included in the lease liability, and any impairment of the right-of-use asset. Rent expense and
variable lease expense are included in occupancy and equipment expense on the Company’s consolidated statements of
earnings. The Company’s variable lease expense include rent escalators that are based on market conditions and include
items such as common area maintenance, utilities, parking, property taxes, insurance and other costs associated with the
lease. The amortization of the right-of- use asset arising from finance leases is expensed through occupancy and equipment
expense and the interest on the related lease liability is expenses through interest expense on borrowings on the Company’s
consolidated statements of earnings.
(r) Mortgage Servicing Rights
When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income
statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing
contracts, when available or alternatively, is based on a valuation model that calculates the present value of estimated future
net servicing income. All classes of servicing assets are subsequently measured using the amortization method which
requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated
future net servicing income of the underlying loans.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
73
Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount.
Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate,
loan type and investor type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent
that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no
longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in
valuation allowances are reported within non-interest income on the income statement. The fair values of servicing rights
are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and
losses.
Servicing fee income, which is reported on the income statement as mortgage servicing income, is recorded for fees earned
for servicing loans. The fees are based on a contractual percentage of the outstanding principal; or a fixed amount per loan
and are recorded as income when earned. The amortization of mortgage servicing rights is netted against servicing fee
income. Servicing fees totaled $(1,000), $9,000, and $(28,000) for the years ended December 31, 2024, 2023 and 2022. Late
fees and ancillary fees related to loan servicing are not significant.
(s) Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, interest-bearing deposits with
maturities fewer than 90 days, amounts due from banks and Federal funds sold. Generally, Federal funds sold are purchased
and sold for one day periods. Management makes deposits only with financial institutions it believes to be financially sound.
(t)
Long-Term Assets
Premises and equipment, intangible assets, and other long-term assets are reviewed for impairment when events indicate
their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at
fair value.
(u) Bank Owned Life Insurance
The Bank has purchased life insurance policies on certain current and former key executives. Bank owned life insurance is
recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender
value adjusted for other charges or other amounts due that are probable at settlement.
(v) Income Taxes
The Company accounts for income taxes in accordance with income tax accounting guidance (FASB ASC 740, Income
Taxes). The Company follows accounting guidance related to accounting for uncertainty in income taxes, which sets out a
consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.
The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income
tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to
the taxable income. The Company determines deferred income taxes using the liability (or balance sheet) method. Under
this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax
bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.
Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets
are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained
upon examination. The term "more-likely-than-not" means a likelihood of more than 50 percent. The terms "examined" and
"upon examination" also include resolution of the related appeals or litigation processes, if any. A tax position that meets
the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit
that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge
of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition
threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s
judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-
likely-than-not that some portion or all of a deferred tax asset will not be realized.
The Company recognizes interest and penalties on income taxes as a component of income tax expense.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
74
(w) Derivatives
Mortgage Banking Derivatives
Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments
for the future delivery of these mortgage loans are accounted for as free standing derivatives. The fair value of the interest
rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected
exercise of the commitment before the loan is funded. Fair values of these mortgage derivatives are estimated based on
changes in mortgage interest rates from the date the interest rate on the loan is locked. The Company enters into forward
commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change
in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included
in net gains on sale of mortgage loans.
Fair Value Hedges
For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument
as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current
earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings
effect of the hedged item. The Company utilizes interest rate swaps designated as fair value hedges to mitigate the effect of
changing interest rates on the fair values of fixed rate loans. The hedging strategy on loans converts the fixed interest rates
to SOFR-based variable interest rates. These derivatives are designated as partial term hedges of selected cash flows covering
specified periods of time prior to the maturity dates of the hedged loans.
(x) Stock-Based Compensation
Stock compensation accounting guidance (FASB ASC 718, “Compensation—Stock Compensation”) requires that the
compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be
measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting
guidance covers a wide range of share-based compensation arrangements including stock options, restricted share awards,
restricted share unit awards, performance-based awards, cash-settled stock appreciation rights (SARs), and employee share
purchase plans. Because cash-settled SARs do not give the grantee the choice of receiving stock, all cash-settled SARs are
accounted for as liabilities, not equity, as expense is accrued over the requisite service period.
The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and
recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting,
compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company
uses the Black-Scholes option pricing model to estimate the grant date fair value of stock options and cash-settled SARs,
and utilizes the price at which the Company's common stock was last traded and of which the Company was aware on the
date closest, but prior to, the date of grant to determine the grant date fair value of restricted share unit awards and restricted
share awards.
(y) Retirement Plans
Employee 401(k) and profit sharing plan expense is the amount of matching contributions and profit sharing contributions.
Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service.
(z) Advertising Costs
Advertising costs are expensed as incurred by the Company and totaled $3,512,000, $3,714,000 and $3,455,000 for 2024,
2023 and 2022, respectively.
(aa) Earnings Per Share
Basic earnings per share represents income available to common shareholders divided by the weighted-average number of
common shares outstanding during the period. Diluted earnings per share reflects additional potential common shares that
would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that
would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to
outstanding stock options, restricted share units, and performance share units and are determined using the treasury stock
method.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
75
(bb) Comprehensive Income (Loss)
Comprehensive income (loss) consists of net income and other comprehensive income. Other comprehensive income
includes unrealized gains and losses on securities available for sale, net of taxes, which are also recognized as separate
components of equity.
(cc) Loss Contingencies
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities
when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not
believe there are such matters that will have a material effect on the financial statements.
(dd) Restrictions on Cash
Cash on hand or on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements.
(ee) Segment Reporting
Management analyzes the operations of the Company assuming one operating segment, banking.
(ff) Fair Value of Financial Instruments
Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully
disclosed in Note 22 - Disclosures About Fair Value of Financial Instruments below. Fair value estimates involve
uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect
the estimates.
(gg) Reclassification
Certain reclassifications have been made to the 2023 and 2022 figures to conform to the presentation for 2024.
(hh) Off-Balance-Sheet Financial Instruments
In the ordinary course of business, Wilson Bank has entered into off-balance-sheet financial instruments consisting of
commitments to extend credit, commitments under credit card arrangements, commercial letters of credit and standby letters
of credit. Such financial instruments are recorded in the financial statements when they are funded or related fees are incurred
or received.
(ii) Subsequent Events
The Company has evaluated subsequent events for recognition and disclosure through February 28, 2025, which is the date
the financial statements were available to be issued.
Subsequent to December 31, 2024, Wilson Bank committed to expand the Chattanooga loan production office to a full
service branch. As a part of this expansion the Bank entered into a lease for the location for the new full service branch and
is currently remodeling the space. The costs associated with this expansion, including construction, equipment and lease
expenses, are not expected to be significant.
(jj) Accounting Standard Updates
ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting
date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced
disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality
and underwriting standards of an organization’s portfolio. As noted above, effective January 1, 2022 the Company adopted
ASU 2016-13, which resulted in a $7.6 million decrease to the allowance for credit losses and a $6.2 million increase to the
reserve for off-balance sheet exposures, resulting in a $1.0 million increase in retained earnings (net of taxes). See Note 2 –
Loans and Allowance for Credit Losses for additional information.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
76
ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial
Reporting.” In March 2020, the FASB issued this ASU and has issued subsequent amendments thereto, which provides
temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional
expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging
relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (LIBOR) or another
reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate
transition period. The guidance was effective for all entities as of March 12, 2020 through December 31, 2022. In December
2022, the FASB issued an update to Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation
of the Effects of Reference Rate Reform on Financial Reporting with Accounting Standards Update 2022-06, Reference Rate
Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which updated the effective date to be March 12, 2020 through
December 31, 2024. The Company implemented a transition plan to identify and modify its loans and other financial
instruments, including certain indebtedness, with attributes that are either directly or indirectly influenced by LIBOR. The
Company has moved all of its LIBOR-based loans to its preferred replacement index, a Secured Overnight Financing Rate
("SOFR") based index.
ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method.” ASU 2022-01 was
issued to expand the scope of assets eligible for portfolio layer method hedging to include all financial assets. The update
also expands the current last-of-layer method that permits only one hedged layer to allow multiple hedged layers of a single
closed portfolio. The last-of-layer method is renamed the portfolio layer method, because more than the last layer of a
portfolio could be hedged. The guidance is effective for public business entities for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2022. The adoption of ASU 2022-01 did not have a significant impact on
our financial statements.
ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.”
ASU 2022-02 was issued to respond to feedback received from post-implementation review of Topic 326. The amendments
eliminate the troubled debt restructuring (TDR) recognition and measurement guidance and now require that an entity
evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments enhance
existing disclosures and include new disclosure requirements related to certain modifications of receivables made to
borrowers experiencing financial difficulty. To improve consistency for vintage disclosures, the ASU requires that public
business entities disclose current-period gross write-offs by year of origination for financing receivables and net investments
in leases within the scope of Subtopic 326-20. The guidance is effective for public business entities for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2022. The adoption of ASU-2022-02 did not have a
significant impact on the Company's financial statements.
ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual
Sale Restrictions, in June 2022, the FASB issued this pronouncement which clarifies the guidance in ASC 820 when
measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of an equity security.
This update also requires specific disclosures related to these types of securities. The guidance is effective for public business
entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The adoption of
ASU 2022-03 did not have a significant impact on our financial statements.
ASU 2023-01, Leases (Topic 842): Common Control Arrangements, in March 2023, the FASB issued this pronouncement
which require entities to amortize leasehold improvements associated with common control leases over the useful life to the
common control group. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning
after December 15, 2023. The adoption of ASU 2023-01 did not have a significant impact on our financial statements.
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, in November 2023, the
FASB issued this pronouncement which requires public entities to provide disclosures of significant segment expenses and
other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable
segment's profit or loss and assets that are currently required annually. The ASU requires a public entity to disclose, for each
reportable segment, the significant expense categories and amounts that are regularly provided to the chief operating
decision-maker (CODM) and included in each reported measure of a segment's profit or loss. ASU 2023-07 also requires
disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of
segment profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective
for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early
adoption is permitted. The guidance is applied retrospectively to all periods presented in the financial statements unless it is
impracticable. The adoption of ASU 2023-07 did not have a significant impact on the Company's financial statements. See
Note 23, Segment Information, for additional information.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
77
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, in December 2023, the FASB issued
this pronouncement which amends the guidance for income tax disclosures to include certain required disclosures related to
tax rate reconciliations, including certain categories of expense requiring disclosure, income taxes paid, including disclosure
of taxes paid disaggregated by nation, state, and foreign taxes, and other disclosures for disaggregation of income before
income tax expense (or benefit) and income tax expense (or benefit) by domestic and foreign allocation. The guidance is
effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December
15, 2024. Early adoption is permitted. An entity should apply ASU 2023-09 on a prospective basis once adopted with
retrospective application permitted. The Company is assessing ASU 2023-09 and its potential impact on its accounting and
disclosures.
ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-
40), in November 2024, the FASB issued this pronouncement which requires public entities to disclose additional
information about specific expense categories in the notes to the financial statements. The guidance (as further clarified
through ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures
(Subtopic 220-40)) is effective for public business entities for fiscal years beginning after December 15, 2026, and interim
reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is assessing ASU 2024-03
and its impact on its consolidated financial statements and accompanying notes.
Other than those previously discussed, there were no other recently issued accounting pronouncements that are expected to
materially impact the Company.
(2) Loans and Allowance for Credit Losses
Loans are reported at their outstanding principal balances adjusted for unearned income, deferred fees net of related costs
on originated loans, and the allowance for credit losses. Interest income on loans is accrued based on the principal balance
outstanding. Loan origination fees, net of certain loan origination costs, are deferred and recognized as an adjustment to the
related loan yield using a method which approximates the interest method.
For financial reporting purposes, the Company classifies its loan portfolio based on the underlying collateral utilized to
secure each loan. This classification is consistent with that utilized in the Quarterly Report of Condition and Income filed
by the Bank with the FDIC.
The classification of loans at December 31, 2024 and 2023 is as follows:
In Thousands
2024
2023
Residential 1-4 family real estate
$
1,133,966
$
959,218
Commercial and multi-family real estate
1,544,340
1,313,284
Construction, land development and farmland
941,193
901,336
Commercial, industrial and agricultural
144,619
127,659
1-4 family equity lines of credit
235,240
202,731
Consumer and other
106,235
104,373
Total loans before net deferred loan fees
4,105,593
3,608,601
Net deferred loan fees
(13,704)
(13,078)
Total loans
4,091,889
3,595,523
Less: Allowance for credit losses
(49,497)
(44,848)
Net loans
$
4,042,392
3,550,675
At December 31, 2024, variable rate and fixed rate loans totaled $3,466,953,000 and $638,640,000, respectively. At
December 31, 2023, variable rate and fixed rate loans totaled $2,977,918,000 and $630,683,000, respectively.
Risk characteristics relevant to each portfolio segment are as follows:
Construction, land development and farmland: Loans for non-owner-occupied real estate construction or land development
are generally repaid through cash flow related to the operation, sale or refinance of the property. The Company also finances
construction loans for owner-occupied properties. A portion of the Company’s construction and land portfolio segment is
comprised of loans secured by residential product types (residential land and single-family construction). With respect to
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
78
construction loans to developers and builders that are secured by non-owner occupied properties that the Company may
originate from time to time, the Company generally requires the borrower to have had an existing relationship with the
Company and have a proven record of success. Construction and land development loans are underwritten utilizing
independent appraisal reviews, sensitivity analysis of absorption and lease rates, market sales activity, and financial analysis
of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated
with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of
substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for
these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property
or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored
by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment
being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the
availability of long-term financing.
Residential 1-4 family real estate: Residential real estate loans represent loans to consumers or investors to finance a
residence. These loans are typically financed on 15 to 30 year amortization terms, but generally with shorter maturities of 5
to 15 years. Many of these loans are extended to borrowers to finance their primary or secondary residence. Loans to an
investor secured by a 1-4 family residence will be repaid from either the rental income from the property or from the sale of
the property. This loan segment also includes closed-end home equity loans that are secured by a first or second mortgage
on the borrower’s residence. This allows customers to borrow against the equity in their home. Loans in this portfolio
segment are underwritten and approved based on a number of credit quality criteria including limits on maximum Loan-to-
Value (LTV), minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is
made directly affect the amount of credit extended and, in addition, changes in these residential property values impact the
depth of potential losses in this portfolio segment.
1-4 family equity lines of credit: This loan segment includes open-end home equity loans that are secured by a first or second
mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home utilizing a revolving
line of credit. These loans are underwritten and approved based on a number of credit quality criteria including limits on
maximum LTV, minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is
made directly affect the amount of credit extended and, in addition, changes in these residential property values impact the
depth of potential losses in this portfolio segment. Because of the revolving nature of these loans, as well as the fact that
many represent second mortgages, this portfolio segment can contain more risk than the amortizing 1-4 family residential
real estate loans.
Commercial and multi-family real estate: Commercial and multi-family real estate loans are subject to underwriting
standards and processes similar to commercial and industrial loans (which are discussed below), in addition to those of real
estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.
Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally
largely dependent on the successful operation of the property securing the loan or the business conducted on the property
securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or
in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type.
This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry.
Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The
Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting
the market areas it serves. In addition, management tracks the level of owner- occupied commercial real estate loans versus
non-owner occupied loans. Non-owner occupied commercial real estate loans are loans secured by multifamily and
commercial properties where the primary source of repayment is derived from rental income associated with the property
(that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated rental income)
or the proceeds of the sale, refinancing, or permanent financing of the property. These loans are made to finance income-
producing properties such as apartment buildings, office and industrial buildings, and retail properties. Owner-occupied
commercial real estate loans are loans where the primary source of repayment is the cash flow from the ongoing operations
and business activities conducted by the party, or affiliate of the party, who owns the property.
Commercial and industrial: The commercial and industrial loan portfolio segment includes commercial and industrial loans
to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or
other expansion projects. Collection risk in this portfolio is driven by the creditworthiness of underlying borrowers,
particularly cash flow from customers’ business operations. Commercial and industrial loans are primarily made based on
the identified cash flows of the borrower and secondarily on the underlying collateral, if any, provided by the borrower. The
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
79
cash flows of borrowers, however, may not be as expected and the collateral securing these loans, if any, may fluctuate in
value. Most commercial and industrial loans are secured by the assets being financed or other business assets such as
accounts receivable or inventory and usually incorporate a personal guarantee; however, some short-term loans may be made
on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of
these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.
Consumer: The consumer loan portfolio segment includes non-real estate secured direct loans to consumers for household,
family, and other personal expenditures. Consumer loans may be secured or unsecured and are usually structured with short
or medium term maturities. These loans are underwritten and approved based on a number of consumer credit quality criteria
including limits on maximum LTV on secured consumer loans, minimum credit scores, and maximum debt to income levels.
Many traditional forms of consumer installment credit have standard monthly payments and fixed repayment schedules of
one to five years. These loans are made with either fixed or variable interest rates that are based on specific indices.
Installment loans fill a variety of needs, such as financing the purchase of an automobile, a boat, a recreational vehicle or
other large personal items, or for consolidating debt. These loans may be unsecured or secured by an assignment of title, as
in an automobile loan, or by money in a bank account. In addition to consumer installment loans, this portfolio segment also
includes secured and unsecured personal lines of credit as well as overdraft protection lines. Loans in this portfolio segment
are sensitive to unemployment and other key consumer economic measures.
The following tables present the Company’s nonaccrual loans, certain credit quality indicators and past due loans as of
December 31, 2024 and 2023.
Loans on Nonaccrual Status
In Thousands
2024
2023
Residential 1-4 family real estate
$
452
$
—
Commercial and multi-family real estate
3,616
—
Construction, land development and farmland
—
—
Commercial, industrial and agricultural
—
—
1-4 family equity lines of credit
750
—
Consumer and other
—
—
Total
$
4,818
$
—
Loans are placed on nonaccrual status when there is a significant deterioration in the financial condition of the borrower,
which often is determined when the principal or interest on the loan is more than 90 days past due, unless the loan is both
well-secured and in the process of collection. Generally, all interest accrued but not collected for loans that are placed on
nonaccrual status, is reversed against current income. Interest income is subsequently recognized only to the extent cash
payments are received while the loan is classified as nonaccrual, but interest income recognition is reviewed on a case-by-
case basis. A nonaccrual loan is returned to accruing status once the loan has been brought current and collection is
reasonably assured or the loan has been “well-secured” through other techniques. Past due status is determined based on the
contractual due date per the underlying loan agreement.
At December 31, 2024, the Company had two collateral dependent loans totaling $4,366,000 that were on non-accruing
interest status. In each case, at the date such loans were placed on nonaccrual status, the Company reversed all previously
accrued interest income. The impact on net interest income for these loans was not material to the Company's results of
operations for the year ended December 31, 2024. At December 31, 2023 the Company had no collateral dependent loans
that were on non-accruing interest status. Accordingly, there was no impact on net interest income given the lack of these
types of loans for the years ended December 31, 2023, and December 31, 2022.
Potential problem loans, which include nonperforming loans, amounted to approximately $48.0 million, or 1.17% of total
loans, at December 31, 2024 compared to $5.9 million, or 0.16% of total loans, at December 31, 2023. Potential problem
loans represent those loans with a well-defined weakness and where information about possible credit problems of borrowers
has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms. This
definition is believed to be substantially consistent with the standards established by the FDIC, Wilson Bank’s primary
federal regulator, for loans classified as special mention, substandard, or doubtful, excluding the impact of nonperforming
loans.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
80
The following table presents our loan balances by primary loan classification and the amount classified within each risk
rating category. Pass rated loans include all credits other than those included in special mention, substandard and doubtful
which are defined as follows:
•
Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected,
these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s
credit position at some future date.
•
Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the
collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize
liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain
some loss if the deficiencies are not corrected.
•
Doubtful loans have all the characteristics of substandard loans with the added characteristics that the weaknesses
make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly
questionable and improbable. The Company considers all doubtful loans to be collateral dependent and places the
loans on nonaccrual status.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
81
Credit Quality Indicators
The following table presents loan balances classified within each risk rating category by primary loan type and based on
year of origination as well as current period gross charge-offs by primary loan type and based on year of origination as of
December 31, 2024.
In Thousands
Revolving
2024
2023
2022
2021
2020
Prior
Loans
Total
December 31, 2024
Residential 1-4 family real estate:
Pass
$ 281,651
136,736
278,556
220,533
76,275
118,960
12,941
1,125,652
Special mention
950
1,817
1,607
196
—
2,528
401
7,499
Substandard
—
—
—
376
—
365
74
815
Total Residential 1-4 family real estate
$ 282,601
138,553
280,163
221,105
76,275
121,853
13,416
1,133,966
Residential 1-4 family real estate:
Current-period gross charge-offs
$
—
—
—
—
—
24
—
24
Commercial and multi-family real
estate:
Pass
$ 285,939
119,202
311,740
347,484
130,226
255,968
61,885
1,512,444
Special mention
—
3,615
23,228
—
705
4,275
—
31,823
Substandard
—
—
—
—
—
73
—
73
Total Commercial and multi-family
real estate
$ 285,939
122,817
334,968
347,484
130,931
260,316
61,885
1,544,340
Commercial and multi-family real
estate:
Current-period gross charge-offs
$
—
—
—
—
—
—
—
—
Construction, land development and
farmland:
Pass
$ 283,747
199,987
153,429
58,913
13,992
12,486
215,394
937,948
Special mention
27
256
135
120
—
45
2,533
3,116
Substandard
—
—
129
—
—
—
—
129
Total Construction, land development
and farmland
$ 283,774
200,243
153,693
59,033
13,992
12,531
217,927
941,193
Construction, land development and
farmland:
Current-period gross charge-offs
$
—
—
—
—
—
—
—
—
Commercial, industrial and
agricultural:
Pass
$
26,697
12,781
29,634
4,071
9,610
22,762
38,586
144,141
Special mention
147
131
73
10
—
—
106
467
Substandard
—
—
—
—
11
—
—
11
Total Commercial, industrial and
agricultural
$
26,844
12,912
29,707
4,081
9,621
22,762
38,692
144,619
Commercial, industrial and
agricultural:
Current-period gross charge-offs
$
—
—
30
4
—
—
8
42
1-4 family equity lines of credit:
Pass
$
—
—
—
—
—
—
231,480
231,480
Special mention
—
—
—
—
—
—
2,754
2,754
Substandard
—
—
—
—
—
—
1,006
1,006
Total 1-4 family equity lines of credit
$
—
—
—
—
—
—
235,240
235,240
1-4 family equity lines of credit:
Current-period gross charge-offs
$
—
—
—
—
—
—
—
—
Consumer and other:
Pass
$
28,133
16,632
7,509
2,525
12,316
9,204
29,604
105,923
Special mention
3
62
104
27
29
14
1
240
Substandard
6
21
37
8
—
—
—
72
Total Consumer and other
$
28,142
16,715
7,650
2,560
12,345
9,218
29,605
106,235
Consumer and other:
Current-period gross charge-offs
$
24
147
141
10
—
—
634
956
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
82
The following table presents loan balances classified within each risk rating category based on year of origination as of
December 31, 2024.
In Thousands
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Total
December 31, 2024
Pass
$
906,167
485,338
780,868
633,526
242,419
419,380
589,890
4,057,588
Special mention
1,127
5,881
25,147
353
734
6,862
5,795
45,899
Substandard
6
21
166
384
11
438
1,080
2,106
Total
$
907,300
491,240
806,181
634,263
243,164
426,680
596,765
4,105,593
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
83
The following table presents loan balances classified within each risk rating category by primary loan type and based on
year of origination as well as current period gross charge-offs by primary loan type and based on year of origination as of
December 31, 2023.
In Thousands
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Total
December 31, 2023
Residential 1-4 family real estate:
Pass
$
165,655
297,535
239,035
89,563
56,092
90,119
16,585
954,584
Special mention
76
859
225
876
137
1,558
—
3,731
Substandard
—
—
—
—
128
775
—
903
Total Residential 1-4 family real
estate
$
165,731
298,394
239,260
90,439
56,357
92,452
16,585
959,218
Residential 1-4 family real estate:
Current-period gross charge-offs
$
—
—
—
—
—
—
—
—
Commercial and multi-family
real
estate:
Pass
$
103,050
321,767
378,418
143,178
91,640
217,645
57,320
1,313,018
Special mention
—
—
155
—
—
31
—
186
Substandard
—
—
—
—
—
80
—
80
Total Commercial and multi-
family real estate
$
103,050
321,767
378,573
143,178
91,640
217,756
57,320
1,313,284
Commercial and multi-family
real
estate:
Current-period gross charge-offs
$
—
—
—
—
—
—
—
—
Construction, land development
and farmland:
Pass
$
231,337
306,056
99,456
26,710
7,586
10,141
219,999
901,285
Special mention
—
—
—
—
—
51
—
51
Substandard
—
—
—
—
—
—
—
—
Total Construction, land
development and farmland
$
231,337
306,056
99,456
26,710
7,586
10,192
219,999
901,336
Construction, land development
and farmland:
Current-period gross charge-offs
$
—
—
—
—
—
—
—
—
Commercial, industrial and
agricultural:
Pass
$
16,811
34,507
7,460
12,272
17,066
7,593
31,832
127,541
Special mention
93
7
6
—
—
—
12
118
Substandard
—
—
—
—
—
—
—
—
Total Commercial, industrial
and
agricultural
$
16,904
34,514
7,466
12,272
17,066
7,593
31,844
127,659
Commercial, industrial and
agricultural:
Current-period gross charge-offs
$
—
30
—
—
—
—
—
30
1-4 family equity lines of credit:
Pass
$
—
—
—
—
—
—
202,189
202,189
Special mention
—
—
—
—
—
—
404
404
Substandard
—
—
—
—
—
—
138
138
Total 1-4 family equity lines of
credit
$
—
—
—
—
—
—
202,731
202,731
1-4 family equity lines of credit:
Current-period gross charge-offs
$
—
—
—
—
—
—
—
—
Consumer and other:
Pass
$
27,998
15,511
5,331
14,497
4,728
6,381
29,638
104,084
Special mention
4
52
57
7
—
—
—
120
Substandard
51
106
—
11
—
1
—
169
Total Consumer and other
$
28,053
15,669
5,388
14,515
4,728
6,382
29,638
104,373
Consumer and other:
Current-period gross charge-offs
$
103
213
98
22
—
1
1,891
2,328
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
84
The following table presents loan balances classified within each risk rating category based on year of origination as of
December 31, 2023.
In Thousands
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Total
December 31, 2023
Pass
$ 544,851
975,376
729,700
286,220
177,112
331,879
557,563
3,602,701
Special mention
173
918
443
883
137
1,640
416
4,610
Substandard
51
106
—
11
128
856
138
1,290
Total
$ 545,075
976,400
730,143
287,114
177,377
334,375
558,117
3,608,601
Age Analysis of Past Due Loans
In Thousands
30-59
Days
Past Due
60-89
Days
Past Due
Nonaccrual
and
Greater
Than 89
Days
Total
Nonaccrual
and Past
Due
Current
Total
Loans
Recorded
Investment
Greater
Than 89
Days and
Accruing
December 31, 2024
Residential 1-4 family real estate
$
5,854
1,462
766
8,082
1,125,884
1,133,966
$
314
Commercial and multi-family real estate
—
2
3,616
3,618
1,540,722
1,544,340
—
Construction, land development and
farmland
742
—
162
904
940,289
941,193
162
Commercial, industrial and agricultural
184
562
113
859
143,760
144,619
113
1-4 family equity lines of credit
960
581
840
2,381
232,859
235,240
90
Consumer and other
568
137
52
757
105,478
106,235
52
Total
$
8,308
2,744
5,549
16,601
4,088,992
4,105,593
$
731
December 31, 2023
Residential 1-4 family real estate
$
1,544
552
1,178
3,274
955,944
959,218
$
1,178
Commercial and multi-family real estate
5,846
—
—
5,846
1,307,438
1,313,284
—
Construction, land development and
farmland
2,959
1
—
2,960
898,376
901,336
—
Commercial, industrial and agricultural
52
—
7
59
127,600
127,659
7
1-4 family equity lines of credit
571
209
106
886
201,845
202,731
106
Consumer and other
350
78
118
546
103,827
104,373
118
Total
$
11,322
840
1,409
13,571
3,595,030
3,608,601
$
1,409
Allowance for Credit Losses ("ACL") - Loans
The allowance for credit losses on loans is a contra-asset valuation account, calculated in accordance with ASC 326 that is
deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the
allowance represents management's best estimate of current expected credit losses on loans considering available
information from internal and external sources, relevant to assessing collectability over the loans' contractual terms, adjusted
for expected prepayments when appropriate. Relevant available information includes historical credit loss experience,
current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for
the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current
portfolio-specific risk characteristics, environmental conditions or other relevant factors. The allowance for credit losses is
measured on a collective basis for portfolios of loans when similar risk characteristics exist. Loans that do not share risk
characteristics are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation.
Expected credit losses for collateral dependent loans, including loans where the borrower is experiencing financial difficulty
but foreclosure is not probable, are based on the fair value of the collateral at the reporting date, adjusted for selling costs as
appropriate.
The Company’s discounted cash flow methodology incorporates a probability of default and loss given default model, as
well as expectations of future economic conditions, using reasonable and supportable forecasts. Together, the probability of
default and loss given default models with the use of reasonable and supportable forecasts generate estimates for cash flows
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
85
expected and not expected to be collected over the estimated life of a loan. Estimates of future expected cash flows ultimately
reflect assumptions made concerning net credit losses over the life of a loan. The use of reasonable and supportable forecasts
requires significant judgment. Management leverages economic projections from reputable and independent third parties to
inform and provide its reasonable and supportable economic forecasts. The Company’s model reverts to a straight line basis
for purposes of estimating cash flows beyond a period deemed reasonable and supportable. The Company forecasts
probability of default and loss given default based on economic forecast scenarios over an eight quarter time period before
reverting to a straight line basis for a four quarter time period. The duration of the forecast horizon, the period over which
forecasts revert to a straight line basis, the economic forecasts that management utilizes, as well as additional internal and
external indicators of economic forecasts that management considers, may change over time depending on the nature and
composition of our loan portfolio. Changes in economic forecasts, in conjunction with changes in loan specific attributes,
impact a loan’s probability of default and loss given default, which can drive changes in the determination of the ACL.
Expectations of future cash flows are discounted at the loan’s effective interest rate. The resulting ACL represents the amount
by which the loan’s amortized cost exceeds the net present value of a loan’s discounted cash flows expected to be collected.
The ACL is recorded through a charge to provision for credit losses and is reduced by charge-offs, net of recoveries on loans
previously charged-off. It is the Company’s policy to charge-off loan balances at the time they have been deemed
uncollectible.
For segments where the discounted cash flow methodology is not used, a remaining life methodology is utilized. The
remaining life method uses an average annual charge-off rate applied to the contractual term, further adjusted for estimated
prepayments to determine the unadjusted historical charge-off rate for the remaining balance of assets.
The estimated credit losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in
the quantitative analyses. The qualitative categories and the measurements used to quantify the risks within each of these
categories are subjectively selected by management. The data for each measurement may be obtained from internal or
external sources. The current period measurements are evaluated and assigned a factor commensurate with the current level
of risk relative to past measurements over time. The resulting qualitative adjustments are applied to the relevant collectively
evaluated loan portfolios. These adjustments are based upon the following:
1.
Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off,
and recovery practices not considered elsewhere in estimating credit losses.
2.
Changes in international, national, regional, and local economic and business conditions and developments that affect
the collectability of the portfolio, including the condition of various market segments.
3.
Changes in the nature and volume of the portfolio and in the terms of loans.
4.
Changes in the experience, ability, and depth of lending management and other relevant staff.
5.
Changes in the volume and severity of past-due loans, the volume of non-accrual loans, and the volume and severity of
adversely classified or graded loans.
6.
Changes in the quality of the Company's loan review system.
7.
Changes in the value of underlying collateral for collateral-dependent loans.
8.
The existence and effect of any concentrations of credit, and changes in the level of such concentrations.
9.
The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated
credit losses in the Company’s existing portfolio.
The qualitative allowance allocation, as determined by the processes noted above, is increased or decreased for each loan
segment based on the assessment of these various qualitative factors.
Loans that do not share similar risk characteristics with the collectively evaluated pools are evaluated on an individual basis
and are excluded from the collectively evaluated pools. Individual evaluations are generally performed for loans greater than
$500,000 which have experienced significant credit deterioration. Such loans are evaluated for credit losses based on either
discounted cash flows or the fair value of collateral. When management determines that foreclosure is probable, expected
credit losses are based on the fair value of the collateral, less selling costs. For loans for which foreclosure is not probable,
but for which repayment is expected to be provided substantially through the operation or sale of the collateral, the Company
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
86
has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of collateral,
with selling costs considered in the event sale of the collateral is expected.
In assessing the adequacy of the allowance for credit losses, the Company considers the results of the Company's ongoing
independent loan review process. The Company undertakes this process both to ascertain those loans in the portfolio with
elevated credit risk and to assist in its overall evaluation of the risk characteristics of the entire loan portfolio. Its loan review
process includes the judgment of management, independent internal loan reviewers and reviews that may have been
conducted by third-party reviewers including regulatory examiners. The Company incorporates relevant loan review results
in the allowance.
In accordance with CECL, losses are estimated over the remaining contractual terms of loans, adjusted for prepayments and
curtailment. The contractual term excludes expected extensions, renewals and modifications.
Credit losses are estimated on the amortized cost basis of loans, which includes the principal balance outstanding and
deferred loan fees and costs.
While management utilizes its best judgment and information available, the ultimate appropriateness of the allowance is
dependent upon a variety of factors beyond management's control, including the performance of the loan portfolio, the
economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.
Loans are charged off when management believes that the full collectability of the loan is unlikely. As such, a loan may be
partially charged-off after a “confirming event” has occurred which serves to validate that full repayment pursuant to the
terms of the loan is unlikely.
Transactions in the allowance for credit losses for the years ended December 31, 2024, 2023 and 2022 are summarized as
follows:
In Thousands
Residential
1-4 Family
Real
Estate
Commercial
and Multi-
family Real
Estate
Construction,
Land
Development
and
Farmland
Commercial,
Industrial
and
Agricultural
1-4 family
Equity
Lines of
Credit
Consumer
and Other
Total
December 31, 2024
Allowance for credit losses -
loans:
Beginning balance
$
8,765
17,422
14,027
1,533
1,809
1,292
44,848
Provision
928
2,781
616
189
81
597
5,192
Charge-offs
(24)
—
—
(42)
—
(956)
(1,022)
Recoveries
39
—
20
22
—
398
479
Ending balance
$
9,708
20,203
14,663
1,702
1,890
1,331
49,497
In Thousands
Residential
1-4 Family
Real
Estate
Commercial
and Multi-
family Real
Estate
Construction,
Land
Development
and
Farmland
Commercial,
Industrial
and
Agricultural
1-4 family
Equity
Lines of
Credit
Consumer
and Other
Total
December 31, 2023
Allowance for credit losses -
loans:
Beginning balance
$
7,310
15,299
13,305
1,437
1,170
1,292
39,813
Provision
1,435
2,123
702
125
639
1,276
6,300
Charge-offs
—
—
—
(30)
—
(2,328)
(2,358)
Recoveries
20
—
20
1
—
1,052
1,093
Ending balance
$
8,765
17,422
14,027
1,533
1,809
1,292
44,848
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
87
In Thousands
Residential
1-4 Family
Real
Estate
Commercial
and Multi-
family Real
Estate
Construction,
Land
Development
and
Farmland
Commercial,
Industrial
and
Agricultural
1-4 family
Equity
Lines of
Credit
Consumer
and Other
Total
December 31, 2022
Allowance for credit losses -
loans:
Beginning balance
$
9,242
16,846
9,757
1,329
1,098
1,360
39,632
Impact of adopting ASC 326
(3,393)
(3,433)
(266)
219
(324)
(367)
(7,564)
Provision
1,353
1,886
3,795
(117)
396
1,343
8,656
Charge-offs
(8)
—
(1)
(21)
—
(1,527)
(1,557)
Recoveries
116
—
20
27
—
483
646
Ending balance
$
7,310
15,299
13,305
1,437
1,170
1,292
39,813
The following tables present the amortized cost basis of collateral dependent loans at December 31, 2024 and December 31,
2023 which are individually evaluated to determine expected credit losses:
In Thousands
Real Estate
Other
Total
December 31, 2024
Residential 1-4 family real estate
$
1,485
—
1,485
Commercial and multi-family real estate
31,273
—
31,273
Construction, land development and farmland
2,521
—
2,521
Commercial, industrial and agricultural
—
—
—
1-4 family equity lines of credit
2,009
—
2,009
Consumer and other
—
—
—
$
37,288
—
37,288
In Thousands
Real Estate
Other
Total
December 31, 2023
Residential 1-4 family real estate
$
1,949
—
1,949
Commercial and multi-family real estate
2,889
—
2,889
Construction, land development and farmland
—
—
—
Commercial, industrial and agricultural
—
—
—
1-4 family equity lines of credit
—
—
—
Consumer and other
—
—
—
$
4,838
—
4,838
Loan Modifications to Borrowers Experiencing Financial Difficulty
Effective January 1, 2023, the Company adopted ASU 2022-02 which eliminated the accounting guidance for TDRs and
requires disclosures for certain loan modifications when a borrower is experiencing financial difficulty.
Occasionally, the Company modifies loans to borrowers in financial distress by providing, principal forgiveness, term
extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the
amount of forgiveness is charged-off against the allowance for credit losses.
In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as
a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such
as principal forgiveness, may be granted. For the loans included in the "combination" columns below, multiple types of
modifications have been made on the same loan within the current reporting period. The combination is at least two of the
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
88
following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate
reduction.
The following table presents the amortized cost basis of loans at December 31, 2024 and December 31, 2023 that were both
experiencing financial difficulty and modified during the twelve months ended December 31, 2024 or twelve months ended
December 31, 2023, by class and type of modification. The percentage of the amortized cost basis of loans that were modified
to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also
presented below.
(In Thousands)
Twelve Months Ended December
31, 2024
Principal
Forgiveness
Payment
Delay
Term
Extension
Interest
Rate
Reduction
Combination
Term
Extension
and
Principal
Forgiveness
Combination
Term
Extension
and Interest
Rate
Reduction
Total Class
of
Financing
Receivable
Residential 1-4 family real estate
$
— $
408 $
1,485 $
— $
— $
—
0.17%
Commercial and multi-family real
estate
—
—
23,604
—
—
—
1.53%
Construction, land development and
farmland
—
—
—
—
—
—
—%
Commercial, industrial and
agricultural
—
—
—
—
—
—
—%
1-4 family equity lines of credit
—
—
—
—
—
—
—%
Consumer and other
—
—
—
—
—
—
—%
Total
$
— $
408 $
25,089 $
— $
— $
—
0.62%
As of December 31, 2024, the Company has not committed to lend additional amounts to the borrowers included in the
previous table.
(In Thousands)
Twelve Months Ended
December 31, 2023
Principal
Forgiveness
Payment
Delay
Term
Extension
Interest
Rate
Reduction
Combination
Term
Extension
and
Principal
Forgiveness
Combination
Term
Extension
and Interest
Rate
Reduction
Total Class
of
Financing
Receivable
Residential 1-4 family real estate
$
— $
947 $
— $
— $
— $
—
0.10%
Commercial and multi-family real
estate
—
2,406
—
—
—
—
0.18%
Construction, land development
and farmland
—
—
—
—
—
—
—%
Commercial, industrial and
agricultural
—
—
93
—
—
—
0.07%
1-4 family equity lines of credit
—
—
—
—
—
—
—%
Consumer and other
—
—
—
—
—
—
—%
Total
$
— $
3,353 $
93 $
— $
— $
—
0.10%
As of December 31, 2023 the Company had not committed to lend additional amounts to the borrowers included in the
previous table.
The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to
understand the effectiveness of its modification efforts.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
89
The following table presents the performance of such loans that have been modified within the last twelve months as of
December 31, 2024:
In Thousands
December 31, 2024
30-59 Days Past
Due
60-89 Days Past
Due
Greater Than 89
Days Past Due
Total Past Due
Residential 1-4 family real estate
$
— $
— $
— $
—
Commercial and multi-family real estate
—
—
—
—
Construction, land development and farmland
—
—
—
—
Commercial, industrial and agricultural
—
—
—
—
1-4 family equity lines of credit
—
—
—
—
Consumer and other
—
—
—
—
Total
$
— $
— $
— $
—
As evidenced above, no loans that were modified within the 12 months prior to December 31, 2024 were thirty (30) days or
more past due at December 31, 2024.
The following table presents the performance of such loans that have been modified for the 12 months ended December 31,
2023:
In Thousands
December 31, 2023
30-59 Days Past
Due
60-89 Days Past
Due
Greater Than 89
Days Past Due
Total Past Due
Residential 1-4 family real estate
$
— $
— $
— $
—
Commercial and multi-family real estate
—
—
—
—
Construction, land development and farmland
—
—
—
—
Commercial, industrial and agricultural
—
—
—
—
1-4 family equity lines of credit
—
—
—
—
Consumer and other
—
—
—
—
Total
$
— $
— $
— $
—
As evidenced above, no loans that were modified within the twelve months prior to December 31, 2023 were thirty (30)
days or more past due at December 31, 2023.
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing
financial difficulty for the twelve months ended December 31, 2024 (dollars in thousands):
Twelve Months Ended December 31, 2024
Principal
Forgiveness
Weighted-Average
Interest Rate
Reduction
Weighted-Average
Months of Term
Extension
Weighted-Average
Months of Payment
Delay
Residential 1-4 family real estate
$
—
—%
6
4
Commercial and multi-family real estate
—
—
11
—
Construction, land development and farmland
—
—
—
—
Commercial, industrial and agricultural
—
—
—
—
1-4 family equity lines of credit
—
—
—
—
Consumer and other
—
—
—
—
Total
$
—
—%
9
4
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
90
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing
financial difficulty for the twelve months ended December 31, 2023 (dollars in thousands):
Twelve Months Ended December 31, 2023
Principal
Forgiveness
Weighted-Average
Interest Rate
Reduction
Weighted-Average
Months of Term
Extension
Weighted-Average
Months of Payment
Delay
Residential 1-4 family real estate
$
—
—%
—
10
Commercial and multi-family real estate
—
—
—
3
Construction, land development and farmland
—
—
—
—
Commercial, industrial and agricultural
—
—
37
—
1-4 family equity lines of credit
—
—
—
—
Consumer and other
—
—
—
—
Total
$
—
—%
37
8
The following table presents the amortized cost basis of loans that had a payment default during the twelve months ended
December 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial
difficulty.
In Thousands
Twelve Months Ended December 31, 2024
Principal
Forgiveness
Payment Delay
Term Extension
Interest Rate
Reduction
Residential 1-4 family real estate
$
— $
— $
— $
—
Commercial and multi-family real estate
—
—
—
—
Construction, land development and farmland
—
—
—
—
Commercial, industrial and agricultural
—
—
—
—
1-4 family equity lines of credit
—
—
—
—
Consumer and other
—
—
—
—
Total
$
— $
— $
— $
—
There were no payment defaults during the twelve months ended December 31, 2024 on loans that had been modified in the
twelve months prior to December 31, 2024.
The following table presents the amortized cost basis of loans that had a payment default during the twelve months ended
December 31, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial
difficulty.
In Thousands
Twelve Months Ended December 31, 2023
Principal
Forgiveness
Payment Delay
Term Extension
Interest Rate
Reduction
Residential 1-4 family real estate
$
— $
— $
— $
—
Commercial and multi-family real estate
—
—
—
—
Construction, land development and farmland
—
—
—
—
Commercial, industrial and agricultural
—
—
—
—
1-4 family equity lines of credit
—
—
—
—
Consumer and other
—
—
—
—
Total
$
— $
— $
— $
—
There were no payment defaults during the twelve months ended December 31, 2023 on loans that had been modified in the
twelve months prior to December 31, 2023.
Upon the Company's determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible,
the loan (or a portion of the loan) is charged off. Therefore, the amortized costs basis of the loan is reduced by the amount
deemed uncollectible and the allowance for credit losses is adjusted by the same amount.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
91
TDR Disclosures Prior to Adoption of ASU 2022-02
Prior to the adoption of ASU 2022-02 the restructuring of a loan was considered a TDR if both (i) the borrower was
experiencing financial difficulties and (ii) the creditor had granted a concession. Concessions may have included interest
rate reductions or below market interest rates, principal forgiveness, extension of terms and other actions intended to
minimize potential losses.
The Company did not modify any loan that was considered a TDR during the twelve months ended December 31, 2022.
The following table outlines the amount of each TDR categorized by loan classification for the year ended December 31,
2022 (dollars in thousands):
December 31, 2022
Number of Loans
Pre Modification
Outstanding
Recorded
Investment
Post Modification
Outstanding
Recorded
Investment, Net of
Related Allowance
Residential 1-4 family real estate
—
$
—
$
—
Commercial and multi-family real estate
—
—
—
Construction, land development and farmland
—
—
—
Commercial, industrial and agricultural
—
—
—
1-4 family equity lines of credit
—
—
—
Consumer and other
—
—
—
Total
—
$
—
$
—
As of December 31, 2022 the Company did not have any loan previously classified as a TDR default within twelve months
of the restructuring. A default is defined as an occurrence which violates the terms of the receivable’s contract.
As of December 31, 2024 the Bank had $1,073,000 of consumer mortgage loans in the process of foreclosure. At
December 31, 2023 the Bank had no consumer mortgage loans in the process of foreclosure.
The Company’s principal customers are primarily in Middle Tennessee. Credit is extended to businesses and individuals and
is evidenced by promissory notes. The terms and conditions of the loans including collateral vary depending upon the
purpose of the credit and the borrower’s financial condition. In the normal course of business, Wilson Bank has made loans
at prevailing interest rates and terms to directors and executive officers of the Company and to their affiliates. The aggregate
amount of these loans was $9,388,000 and $7,768,000 at December 31, 2024 and 2023, respectively. None of these loans
were restructured, charged-off or involved more than the normal risk of collectibility or presented other unfavorable features
during the three years ended December 31, 2024.
An analysis of the activity with respect to such loans to related parties is as follows:
In Thousands
December 31,
2024
2023
Balance, January 1
$
7,768
$
6,859
New loans and renewals during the year
13,562
9,860
Repayments (including loans paid by renewal) during the year
(11,942)
(8,951)
Balance, December 31
$
9,388
$
7,768
In 2024, 2023 and 2022, Wilson Bank originated mortgage loans for sale into the secondary market of $52,549,000,
$73,984,000 and $106,601,000, respectively. The fees and gain on sale of these loans totaled $3,068,000, $2,635,000 and
$2,973,000 in 2024, 2023 and 2022, respectively.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
92
In some instances, Wilson Bank sells loans that contain provisions which permit the buyer to seek recourse against Wilson
Bank in certain circumstances. At December 31, 2024 and 2023, total mortgage loans sold with recourse in the secondary
market aggregated $56,896,000 and $69,308,000, respectively. At December 31, 2024, Wilson Bank has not been required
to repurchase a significant amount of the mortgage loans originated by Wilson Bank and sold in the secondary market.
Management expects no significant losses to result from these recourse provisions.
(3) Debt Securities
Debt securities have been classified in the consolidated balance sheet according to management’s intent. Debt securities at
December 31, 2024 consist of the following:
Securities Available-For-Sale
In Thousands
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
U.S. Treasury and other U.S. government agencies
$
4,927
—
389
4,538
U.S. Government-sponsored enterprises (GSEs)
183,912
8
21,947
161,973
Mortgage-backed securities
520,729
55
66,588
454,196
Asset-backed securities
51,110
108
401
50,817
Corporate bonds
2,500
—
104
2,396
Obligations of states and political subdivisions
184,163
—
30,190
153,973
$
947,341
171
119,619
827,893
The Company’s classification of securities at December 31, 2023 was as follows:
Securities Available-For-Sale
In Thousands
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
U.S. Treasury and other U.S. government agencies
$
4,901
—
472
4,429
U.S. Government-sponsored enterprises (GSEs)
167,738
—
23,570
144,168
Mortgage-backed securities
480,759
230
63,959
417,030
Asset-backed securities
51,183
193
1,403
49,973
Corporate bonds
2,500
—
77
2,423
Obligations of states and political subdivisions
223,358
397
30,697
193,058
$
930,439
820
120,178
811,081
As of December 31, 2024 and December 31, 2023, there was no allowance for credit losses on available-for-sale securities.
Included in mortgage-backed securities are collateralized mortgage obligations totaling $146,369,000 (fair value of
$126,426,000) and $145,179,000 (fair value of $124,005,000) at December 31, 2024 and 2023, respectively.
The amortized cost and estimated market value of debt securities at December 31, 2024, by contractual maturity, are shown
below. Expected maturities will differ from contractual maturities of mortgage and asset-backed securities because
borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
In Thousands
Securities Available-For-Sale
Amortized
Cost
Fair Value
Due in one year or less
$
5,566
5,394
Due after one year through five years
126,543
114,384
Due after five years through ten years
277,680
242,946
Due after ten years
537,552
465,169
$
947,341
827,893
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
93
Results from sales of debt securities are as follows:
In Thousands
2024
2023
2022
Gross proceeds
$
86,248
32,740
42,728
Gross realized gains
$
4,587
17
—
Gross realized losses
(7,329)
(1,026)
(1,620)
Net realized gains (losses)
$
(2,742)
(1,009)
(1,620)
Securities carried on the balance sheet of approximately $581,017,000 (approximate market value of $499,585,000) and
$500,046,000 (approximate market value of $429,705,000) were pledged to secure public deposits and for other purposes
as required or permitted by law at December 31, 2024 and 2023, respectively.
At December 31, 2024, there were no holdings of securities of any one issuer, other than U.S. Government and its agencies,
in an amount greater than 10% of shareholders' equity.
Included in the securities above are $104,000,000 (approximate market value of $87,000,000) and $116,000,000
(approximate market value of $99,000,000) at December 31, 2024 and 2023, respectively, in obligations of political
subdivisions located within the states of Tennessee, Alabama, and Texas.
The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale securities with
unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous
unrealized loss position at December 31, 2024 and 2023.
In Thousands, Except Number of Securities
Less than 12 Months
12 Months or More
Total
2024
Fair
Value
Unrealized
Losses
Number
of
Securities
Included
Fair
Value
Unrealized
Losses
Number
of
Securities
Included
Fair
Value
Unrealized
Losses
Available-for-Sale Securities:
Debt securities:
U.S. Treasury and other
U.S. government agencies
$
— $
—
—
$
4,538 $
389
2
$
4,538 $
389
U.S. Government-
sponsored enterprises
(GSEs)
12,226
258
3
147,828
21,689
67
160,054
21,947
Mortgage-backed securities
90,776
2,043
24
348,035
64,545
216
438,811
66,588
Asset-backed securities
14,103
75
5
17,170
326
7
31,273
401
Corporate bonds
—
—
—
2,396
104
1
2,396
104
Obligations of states and
political subdivisions
5,108
77
3
148,865
30,113
168
153,973
30,190
$ 122,213 $
2,453
35
$ 668,832 $
117,166
461
$ 791,045 $
119,619
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
94
In Thousands, Except Number of Securities
Less than 12 Months
12 Months or More
Total
2023
Fair
Value
Unrealized
Losses
Number
of
Securities
Included
Fair
Value
Unrealized
Losses
Number
of
Securities
Included
Fair
Value
Unrealized
Losses
Available-for-Sale Securities:
Debt securities:
U.S. Treasury and other U.S.
government agencies
$
— $
—
—
$
4,429 $
472
2
$
4,429 $
472
U.S. Government-sponsored
enterprises (GSEs)
—
—
—
144,169
23,569
55
144,169
23,569
Mortgage-backed securities
8,889
63
7
390,557
63,897
221
399,446
63,960
Asset-backed securities
2,500
44
1
30,666
1,359
26
33,166
1,403
Corporate bonds
—
—
—
2,423
77
1
2,423
77
Obligations of states and
political subdivisions
5,375
14
2
171,157
30,683
193
176,532
30,697
$
16,764 $
121
10
$ 743,401 $
120,057
498
$ 760,165 $
120,178
The applicable date for determining when securities are in an unrealized loss position is December 31, 2024 and 2023. As
such, it is possible that a security had a market value less than its amortized cost on other days during the twelve-month
periods ended December 31, 2024 and 2023, but is not in the "Investments with an Unrealized Loss of less than 12 months"
category above.
As shown in the tables above, at December 31, 2024 and 2023, the Company had unrealized losses of $119.6 million and
$120.2 million on $791.0 million and $760.2 million, respectively, of securities in an unrealized loss position at those dates.
As described in Note 1. Summary of Significant Accounting Policies, for any security classified as available-for-sale that is
in an unrealized loss position at the balance sheet date, the Company assesses whether or not it intends to sell the security,
or more-likely-than-not will be required to sell the security, before recovery of its amortized cost basis which would require
a write-down to fair value through net income. Because the Company currently does not intend to sell those securities that
have an unrealized loss at December 31, 2024, and it is not more-likely-than-not that the Company will be required to sell
the securities before recovery of their amortized cost bases, which may be maturity, the Company has determined that no
write-down is necessary. These securities must then be evaluated for credit and non-credit related impairment. Securities
with one or more of the following characteristics will be deemed to have only non-credit related impairment and will be
excluded from further evaluation from credit impairment: Guaranteed by the U.S. government, insured by the FDIC, a review
of market price discount to principal face value does not indicate the market's expectation of imminent principal loss, risk
weighting under the FDIC’s Simplified Supervisory Formula Approach, and average credit rating. Securities that are not
excluded by the aforementioned characteristics are further evaluated for credit deterioration, which would require the
recognition of an allowance for credit losses. The unrealized losses associated with securities at December 31, 2024 are
driven by changes in interest rates and not due to the credit quality of the securities, and accordingly, no allowance for credit
losses is considered necessary related to available-for-sale securities at December 31, 2024. These securities will continue
to be monitored as a part of the Company's ongoing evaluation of credit quality.
Mortgage-Backed Securities
At December 31, 2024, approximately 98% of the mortgage-backed securities held by the Company were issued by U.S.
government-sponsored entities and agencies. Because the decline in fair value of these securities is primarily attributable to
interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-
backed securities and it is not more-likely-than-not that it will be required to sell the securities before their anticipated
recovery, the Company has determined no allowance for credit losses is necessary at December 31, 2024.
The Company's mortgage-backed securities portfolio includes non-agency collateralized mortgage obligations with a fair
value of $10.8 million which had unrealized losses of approximately $1.5 million at December 31, 2024. These non-agency
mortgage-backed securities were rated A or higher at December 31, 2024. The Company monitors to ensure it has adequate
credit support and does not have the intent to sell these securities and it is not more-likely-than-not that it will be required to
sell the securities before their anticipated recovery. The issuers continue to make timely principal and interest payments on
the bonds.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
95
Obligations of States and Political Subdivisions
Unrealized losses on municipal bonds have not been recognized into income because the issuers' bonds are of high credit
quality (rated A or higher) or the bonds have been refunded. Management does not intend to sell the securities and it is not
more-likely-than-not that management will be required to sell the securities prior to their anticipated recovery, and the
decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make
timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.
Asset-Backed Securities
The Company's asset-backed securities portfolio includes agency and non-agency asset backed and other amortizing debt
securities with a fair value of $50.8 million which had unrealized losses of approximately $0.4 million at December 31,
2024. The Company monitors these securities to ensure it has adequate credit support and does not have the intent to sell
these securities and it is not more-likely-than-not that it will be required to sell the securities before their anticipated recovery.
The issuers continue to make timely principal and interest payments on the bonds.
Corporate Bonds
The Company's lone corporate debt security with a fair value of $2.4 million had an unrealized loss of approximately $0.1
million at December 31, 2024. The Company monitors this security to ensure it has adequate credit support and does not
have the intent to sell this security and it is not more-likely-than-not that it will be required to sell the security before its
anticipated recovery. The issuer continues to make timely principal and interest payments on the bond.
(4) Restricted Equity Securities
Restricted equity securities consists of stock of the FHLB of Cincinnati amounting to $3,876,000 and $3,436,000 at
December 31, 2024 and 2023, respectively. The stock can be sold back only at par or a value as determined by the issuing
institution and only to the respective financial institution or to another member institution. These securities are recorded at
cost.
(5) Premises and Equipment
The detail of premises and equipment at December 31, 2024 and 2023 is as follows:
In Thousands
2024
2023
Land
$
20,762
$
20,822
Buildings
52,664
49,784
Leasehold improvements
1,934
1,710
Furniture and equipment
19,097
16,524
Automobiles
511
345
Construction-in-progress
300
2,469
95,268
91,654
Less accumulated depreciation
(33,719)
(29,256)
$
61,549
$
62,398
During 2024, 2023 and 2022, payments of $1,100,000, $1,442,000 and $379,000, respectively, were made to an entity
owned by a director for the construction of buildings utilized by Wilson Bank and repair work on existing buildings
utilized by Wilson Bank.
Depreciation expense was $4,040,000, $4,221,000 and $4,370,000 for the years ended December 31, 2024, 2023 and
2022, respectively.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
96
(6) Goodwill
The Company's intangible assets result from the excess of purchase price over the applicable book value of the net assets
acquired related to outside ownership of two previously 50% owned subsidiaries that the Company acquired 100% of in
2005.
In Thousands
2024
2023
Goodwill:
Balance at January 1,
$
4,805
4,805
Goodwill acquired during year
—
—
Impairment loss
—
—
Balance at December 31,
$
4,805
4,805
(7) Leases
Lessee Accounting
The majority of leases in which the Company is the lessee are comprised of real estate property for branches and office space
and are recorded as operating leases with terms extending beyond 2029. The Company has two finance leases, which were
entered into in 2022 and 2024, with lease terms through 2038 and 2046. These leases are classified as operating or finance
leases at commencement. Right-of-use assets representing the right to use the underlying asset and lease liabilities
representing the obligation to make future lease payments are recognized on the balance sheet. These assets and liabilities
are estimated based on the present value of future lease payments discounted using the Company's incremental secured
borrowing rates as of the commencement date of the lease. Certain lease agreements contain renewal options which are
considered in the determination of the lease term if they are deemed reasonably certain to be exercised. The Company has
elected not to recognize leases with an original term of less than 12 months on the balance sheet.
The following table represents lease assets and lease liabilities as of December 31, 2024 and 2023 (in thousands).
Lease right-of-use assets
Classification
December 31,
2024
December 31, 2023
Operating lease right-of-use assets
Other Assets
$
2,556
3,542
Finance lease right-of-use assets
Other Assets
2,889
2,123
Lease liabilities
Classification
December 31, 2024
December 31, 2023
Operating lease liabilities
Other Liabilities
$
2,750
3,736
Finance lease liabilities
Other Liabilities
3,076
2,251
The total lease cost related to operating leases and short term leases is recognized on a straight-line basis over the lease term.
For finance leases, right-of-use assets are amortized on a straight-line basis over the lease term and interest imputed on the
lease liability is recognized using the effective interest method. The components of the Bank's total lease cost were as follows
for the years ended December 31, 2024 and 2023.
In Thousands
2024
2023
2022
Operating lease cost
$
554
637
563
Finance lease cost:
Right-of-use asset amortization
94
87
93
Interest expense
65
71
66
Short-term lease cost
—
—
—
Net lease cost
$
713
795
722
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
97
The weighted average remaining lease term and weighted average discount rate for operating leases at December 31, 2024
and 2023 were as follows:
2024
2023
Operating Leases
Weighted average remaining lease term (in years)
7.95
10.10
Weighted average discount rate
4.08%
4.31%
The weighted average remaining lease term and weighted average discount rate for finance leases at December 31, 2024 and
2023 were as follows:
2024
2023
Finance Leases
Weighted average remaining lease term (in years)
20.05
23.34
Weighted average discount rate
3.47%
2.90%
Cash flows related to operating and finance leases during the year ended December 31, 2024 and 2023 were as follows:
In Thousands
2024
2023
2022
Operating cash flows related to operating leases
$
553
595
547
Operating cash flows related to finance leases
65
71
66
Financing cash flows related to finance leases
34
30
26
Future undiscounted lease payments for operating leases with initial terms of more than 12 months at December 31, 2024
and 2023 were as follows:
In Thousands
2024
2023
Operating Leases
2025
$
561
553
2026
568
560
2027
570
568
2028
469
576
2029
360
547
Thereafter
695
1,854
Total undiscounted lease payments
3,223
4,658
Less: imputed interest
(473)
(922)
Net lease liabilities
$
2,750
$
3,736
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
98
Future undiscounted lease payments for finance leases with initial terms of more than 12 months at December 31, 2024 and
2023 were as follows:
In Thousands
2024
2023
Finance Leases
2025
$
128
$
98
2026
186
101
2027
191
105
2028
196
108
2029
201
111
Thereafter
3,424
2,676
Total undiscounted lease payments
4,326
3,199
Less: imputed interest
(1,250)
(948)
Net lease liabilities
$
3,076
$
2,251
(8) Mortgage Servicing Rights
The Company sells residential mortgage loans in the secondary market and typically retains the rights to service the loans.
Mortgage loans serviced for others are not reported as assets. Mortgage servicing rights are recognized on the balance sheet
within other assets. The principal balances of these loans as of December 31, 2024 and December 31, 2023 are as follows:
In Thousands
December 31, 2024
December 31, 2023
Mortgage loan portfolios serviced
for:
FHLMC
$
114,771
99,441
For the years ended December 31, 2024 and 2023, the change in carrying value of the Company's mortgage servicing rights
accounted for under the amortization method was as follows:
In Thousands
December 31, 2024
December 31, 2023
Balance at beginning of period
$
1,083
1,065
Servicing rights retained from loans
sold
399
245
Amortization
(343)
(227)
Valuation Allowance Provision
—
—
Balance at end of period
$
1,139
1,083
Fair value, end of period
$
1,654
1,398
The key data and assumptions used in estimating the fair value of the Company's mortgage servicing rights as of December
31, 2024 and 2023 were as follows:
December 31, 2024
December 31, 2023
Prepayment speed
8.08%
7.92%
Weighted-average life (in years)
8.42
8.55
Weighted-average note rate
5.11%
4.73%
Weighted-average discount rate
9.00%
9.00%
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
99
(9) Deposits
Deposits at December 31, 2024 and 2023 are summarized as follows:
In Thousands
2024
2023
Demand deposits
$
383,168
389,725
Savings accounts
343,894
320,301
Negotiable order of withdrawal accounts
968,198
934,709
Money market demand accounts
1,325,713
1,156,694
Certificates of deposit $250,000 or greater
772,678
548,269
Other certificates of deposit
954,124
942,346
Individual retirement accounts $250,000 or greater
15,543
11,018
Other individual retirement accounts
66,716
64,044
Total
$
4,830,034
4,367,106
Principal maturities of certificates of deposit and individual retirement accounts at December 31, 2024 are as follows:
(In
Thousands)
Maturity
Total
2025
$ 1,500,899
2026
223,841
2027
63,366
2028
15,961
2029
4,994
$ 1,809,061
The aggregate amount of overdrafts reclassified as loans receivable was $1,147,000 and $858,000 at December 31, 2024
and 2023, respectively. The aggregate balances of related party deposits at December 31, 2024 and 2023 were $14,668,000
and $15,640,000, respectively.
As of December 31, 2024 and 2023, Wilson Bank was not required to maintain a cash balance with the Federal Reserve.
(10)Non-Interest Income and Non-Interest Expense
The significant components of non-interest income and non-interest expense for the years ended December 31, 2024, 2023
and 2022 are presented below:
In Thousands
2024
2023
2022
Non-interest income:
Service charges on deposits
$
8,198
7,890
7,382
Brokerage income
8,562
7,184
6,929
Debit and credit card interchange income, net
8,627
8,490
8,416
Other fees and commissions
1,590
1,408
1,653
BOLI and annuity earnings
1,817
1,667
1,346
Loss on sale of securities, net
(2,742)
(1,009)
(1,620)
Fees and gains on sales of mortgage loans
3,068
2,635
2,973
Mortgage servicing income (loss), net
(1)
9
(28)
Gain (loss) on sale of fixed assets, net
(303)
(55)
291
Gain (loss) on sale of other assets, net
(8)
(10)
8
Other income (loss)
146
80
(69)
$
28,954
28,289
27,281
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
100
In Thousands
2024
2023
2022
Non-interest expense:
Employee salaries and benefits
$
67,342
59,501
56,707
Equity-based compensation
1,567
1,528
1,864
Occupancy expenses
5,733
6,532
5,563
Furniture and equipment expenses
3,038
3,225
3,400
Data processing expenses
9,477
8,797
7,337
Advertising & public relations expenses
3,512
3,714
3,455
Accounting, legal & consulting expenses
1,550
1,789
1,409
FDIC insurance
3,129
3,120
1,527
Directors’ fees
816
713
650
Other operating expenses
12,257
12,032
11,058
$
108,421
100,951
92,970
(11)Income Taxes
The components of the net deferred tax asset at December 31, 2024 and 2023 were as follows:
In Thousands
2024
2023
Deferred tax asset:
Federal
$
36,851
36,034
State
11,950
11,641
48,801
47,675
Deferred tax liability:
Federal
(2,068)
(1,654)
State
(685)
(548)
(2,753)
(2,202)
Net deferred tax asset
$
46,048
45,473
The tax effects of each type of significant item that gave rise to deferred tax assets (liabilities) at December 31, 2024 and
2023 were:
In Thousands
2024
2023
Financial statement allowance for credit losses in excess of tax allowance
$
12,752
11,509
Excess of depreciation deducted for tax purposes over the amounts deducted in the
financial statements
(2,093)
(1,546)
Financial statement deduction for deferred compensation in excess of deduction for
tax purposes
1,607
1,487
Financial statement income on FHLB stock dividends not recognized for tax
purposes
(327)
(327)
Financial statement off-balance sheet exposure allowance for credit losses in excess
of tax allowance
667
822
Unrealized loss on securities available-for-sale
31,217
31,195
Equity based compensation
1,526
1,355
Other items, net
699
978
Net deferred tax asset
$
46,048
45,473
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
101
The components of income tax expense (benefit) at December 31, 2024, 2023 and 2022 are summarized as follows:
In Thousands
Federal
State
Total
2024
Current
$
14,919
2,208
17,127
Deferred
(386)
(165)
(551)
Total
$
14,533
2,043
16,576
2023
Current
$
14,023
1,945
15,968
Deferred
(1,458)
(571)
(2,029)
Total
$
12,565
1,374
13,939
2022
Current
$
15,096
2,011
17,107
Deferred
(1,565)
(486)
(2,051)
Total
$
13,531
1,525
15,056
A reconciliation of actual income tax expense of $16,576,000, $13,939,000 and $15,056,000 for the years ended
December 31, 2024, 2023 and 2022, respectively, to the “expected” tax expense (computed by applying the Federal statutory
rate of 21% for 2024, 2023 and 2022 to earnings before income taxes) is as follows:
In Thousands
2024
2023
2022
Computed “expected” tax expense
$
15,352
13,204
14,301
State income taxes, net of Federal income tax benefit
1,659
1,120
1,117
Tax exempt interest, net of interest expense exclusion
(180)
(190)
(274)
Earnings on cash surrender value of life insurance
(376)
(344)
(273)
Expenses not deductible for tax purposes
79
74
23
Equity based compensation
(23)
(46)
(55)
Other
65
121
217
$
16,576
13,939
15,056
Total income tax expense (benefit) for 2024, 2023 and 2022, includes $(717,000), $(264,000) and $(423,000) of expense
(benefit) related to the realized gain and loss on sale of securities, respectively.
As of December 31, 2024, 2023 and 2022 the Company has not accrued or recognized interest or penalties related to
uncertain tax positions. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in
income tax expense.
No valuation allowance for deferred tax assets was recorded at December 31, 2024 and 2023 as management believes it is
more likely than not that all of the deferred tax assets will be realized against deferred tax liabilities and projected future
taxable income. There were no unrecognized tax benefits during any of the reported periods.
The Company and Wilson Bank file income tax returns in the United States (“U.S.”), as well as in the State of Tennessee.
The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2021.
(12)Commitments and Contingent Liabilities
From time to time the Company is party to litigation and claims arising in the normal course of business. Management, after
consultation with legal counsel, believes that the liabilities, if any, arising from such litigation and claims will not be material
to the Company's consolidated financial position.
At December 31, 2024 and 2023, respectively, the Company had lines of credit with other correspondent banks totaling
$95,386,000 and $102,485,000. At December 31, 2024 and 2023, respectively, there was no balance outstanding under these
lines of credit.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
102
The Company also has a Cash Management Advance ("CMA") Line of Credit agreement. The CMA is a component of the
Company's Blanket Agreement for advances with the FHLB of Cincinnati. The purpose of the CMA is to assist with short-
term liquidity management. Under the terms of the CMA, the Company may borrow a maximum of $23,875,000, selecting
a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. There were no borrowings outstanding
under the CMA at December 31, 2024 or December 31, 2023.
On November 12, 2024, Wilson Bank entered in a purchase and assumption agreement pursuant to which it has agreed to
acquire certain assets, including certain loans, and assume certain liabilities, including certain deposits, of a branch office in
Cookeville, Tennessee that is currently operated by another bank. Total assets to be acquired are estimated to be
approximately $17 million as of the date hereof, while total deposits and other liabilities to be assumed are estimated to be
approximately $30 million as of the date hereof. The Company expects the transaction to close in the first half of 2025. The
acquisition is not expected to significantly impact the Bank's operations.
Subsequent to December 31, 2024, Wilson Bank committed to expand the Chattanooga loan production office to a full
service branch. As a part of this expansion the Bank entered into a lease for the location for the new full service branch and
is currently remodeling the space. The costs associated with this expansion, including construction, equipment and lease
expenses, are not expected to be significant.
(13)Financial Instruments with Off-Balance-Sheet Risk
The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the
financing needs of its customers. These financial instruments consist primarily of commitments to extend credit. These
instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated
balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in
particular classes of financial instruments.
The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for
commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses
the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.
In Thousands
Contract or Notional Amount
2024
2023
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit
$
1,172,339
1,010,899
Standby letters of credit
128,728
106,420
Total
$
1,301,067
1,117,319
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally
represent future cash requirements. The Company evaluates each customer's credit-worthiness on a case-by-case basis. The
amount of collateral, if deemed necessary by the Company upon extension of credit, is based on management's credit
evaluation of the counterparty. Collateral normally consists of real property.
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer
to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including
commercial paper, bond financing, and similar transactions. Most guarantees extend from one to two years. The credit risk
involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The fair
value of standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements, the likelihood of the counterparties drawing on such financial instruments
and the present creditworthiness of such counterparties. Such commitments have been made on terms which are competitive
in the markets in which the Company operates; thus, the fair value of standby letters of credit equals the carrying value for
the purposes of this disclosure. The maximum potential amount of future payments that the Company could be required to
make under the guarantees totaled $128,728,000 at December 31, 2024.
Allowance For Credit Losses - Off-Balance-Sheet Credit Exposures. The allowance for credit losses on off-balance-sheet
credit exposures is a liability account, calculated in accordance with ASC 326, representing expected credit losses over the
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
103
contractual period for which we are exposed to credit risk resulting from a contractual obligation to extend credit. No
allowance is recognized if we have the unconditional right to cancel the obligation. Off-balance-sheet credit exposures
primarily consist of amounts available under outstanding lines of credit and letters of credit detailed in the table above. For
the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur and the
amount expected to be funded over the estimated remaining life of the commitment or other off-balance-sheet exposure. The
likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents
management's best estimate of expected credit losses on commitments expected to be funded over the contractual life of the
commitment.
Estimating credit losses on amounts expected to be funded uses the same methodology as described for loans in Note 2 -
Loans and Allowance for Credit Losses as if such commitments were funded.
Off-balance-sheet credit exposures are recognized on the balance sheet within accrued interest and other liabilities. The
following table details activity in the allowance for credit losses on off-balance-sheet credit exposures for the years ended
December 31, 2024, 2023 and 2022.
(In Thousands)
2024
2023
2022
Beginning balance, January 1
$
3,147
6,136
955
Impact of adopting ASC 326
—
—
6,195
Credit loss expense (benefit)
(592)
(2,989)
(1,014)
Ending balance, December 31,
$
2,555
3,147
6,136
The Bank originates residential mortgage loans, sells them to third-party purchasers, and may or may not retain the servicing
rights. These loans are originated internally and are primarily to borrowers in the Company’s geographic market footprint.
These sales are typically to investors that follow guidelines of conventional government sponsored entities ("GSE") and the
Department of Housing and Urban Development/U.S. Department of Veterans Affairs ("HUD/VA"). Generally, loans held
for sale are underwritten by the Company, including HUD/VA loans. The Bank participates in a mandatory delivery program
that requires the Bank to deliver a particular volume of mortgage loans by agreed upon dates. A majority of the Bank’s
secondary mortgage volume is delivered to the secondary market via mandatory delivery with the remainder done on a best
efforts basis. The Bank does not realize any exposure delivery penalties as the mortgage department only bids loans post-
closing to ensure that 100% of the loans are deliverable to the investors.
Each purchaser has specific guidelines and criteria for sellers of loans, and the risk of credit loss with regard to the principal
amount of the loans sold is generally transferred to the purchasers upon sale. While the loans are sold without recourse, the
purchase agreements require the Bank to make certain representations and warranties regarding the existence and sufficiency
of file documentation and the absence of fraud by borrowers or other third parties such as appraisers in connection with
obtaining the loan. If it is determined that the loans sold were in breach of these representations or warranties or the loan had
an early payoff or payment default, the Bank has obligations to either repurchase the loan for the unpaid principal balance
and related investor fees or make the purchaser whole for the economic benefits of the loan.
To date, repurchase activity pursuant to the terms of these representations and warranties or due to early payoffs or payment
defaults has been insignificant and has resulted in insignificant losses to the Company.
Based on information currently available, management believes that the Bank does not have significant exposure to
contingent losses that may arise relating to the representations and warranties that it has made in connection with its mortgage
loan sales or for early payoffs or payment defaults of such mortgage loans.
(14)Concentration of Credit Risk
Practically all of the Company’s loans, commitments, and commercial and standby letters of credit have been granted to
customers in the Company’s market area, which is primarily located in Middle Tennessee. Practically all such customers are
depositors of Wilson Bank. The concentrations of credit by type of loan are set forth in Note 2 - Loans and Allowance for
Credit Losses.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
104
Interest bearing deposits totaling $76,597,000 were deposited with five commercial banks at December 31, 2024. In addition,
the Bank has funds deposited with the FHLB of Cincinnati in the amount of $845,000. Funds deposited with the FHLB of
Cincinnati are not insured by the FDIC.
Federal funds sold in the amount of $9,791,000 were deposited with one commercial bank at December 31, 2024.
(15)Employee Benefit Plan
Wilson Bank has in effect a 401(k) plan (the “401(k) Plan”) which covers eligible employees. To be eligible an employee
must have obtained the age of 18. The provisions of the 401(k) Plan provide for both employee and employer contributions.
For the years ended December 31, 2024, 2023 and 2022, Wilson Bank contributed $4,073,000, $3,662,000, and $3,309,000,
respectively, to the 401(k) Plan.
(16)Dividend Reinvestment Plan
Under the terms of the Company’s dividend reinvestment plan (the “DRIP”) holders of common stock may elect to
automatically reinvest cash dividends in additional shares of the Company's common stock. The Company may elect to sell
original issue shares or to purchase shares in the open market for the account of participants in the DRIP. Original issue
shares of 203,489 in 2024, 189,471 in 2023 and 250,365 in 2022 were sold to participants under the terms of the DRIP.
(17)Regulatory Matters and Restrictions on Dividends
Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.
Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures
of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts
and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate
regulatory action. The net unrealized gain or loss on available for sale securities is not included in computing regulatory
capital. Management believes as of December 31, 2024, the Bank and the Company met all capital adequacy requirements
to which they were subject.
Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial
condition. If an institution is classified as adequately capitalized or lower, regulatory approval is required to accept brokered
deposits. If undercapitalized, capital distributions are limited, as is growth and expansion, and capital restoration plans are
required. As of December 31, 2024 and 2023, the most recent regulatory notifications categorized the Bank as well
capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that
notification that management believes have changed the institution’s category.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
105
The Company's and Wilson Bank's actual capital amounts and ratios as of December 31, 2024 and 2023 are presented in
the following tables. The capital conservation buffer of 2.5% is not included in the required minimum ratios of the tables
presented below.
Actual
Minimum Capital
Adequacy
For Classification as
Well Capitalized (1) (2)
Amount
Ratio
Amount
Ratio
Amount
Ratio
(dollars in thousands)
December 31, 2024
Total capital to risk weighted assets:
Consolidated
$ 615,180
14.5% $ 338,916
8.0% $ 423,646
10.0%
Wilson Bank
609,568
14.4
338,788
8.0
423,485
10.0
Tier 1 capital to risk weighted assets:
Consolidated
563,128
13.3
254,188
6.0
254,188
6.0
Wilson Bank
557,516
13.2
254,090
6.0
338,787
8.0
Common equity Tier 1 capital to risk
weighted assets:
Consolidated
562,925
13.3
190,641
4.5
N/A
N/A
Wilson Bank
557,313
13.2
190,568
4.5
275,264
6.5
Tier 1 capital to average assets:
Consolidated
563,128
10.4
216,949
4.0
N/A
N/A
Wilson Bank
557,516
10.3
216,873
4.0
271,092
5.0
Actual
Minimum Capital
Adequacy
For Classification as
Well Capitalized (1) (2)
Amount
Ratio
Amount
Ratio
Amount
Ratio
(dollars in thousands)
December 31, 2023
Total capital to risk weighted assets:
Consolidated
$ 560,757
14.5% $ 308,449
8.0% $ 385,562
10.0%
Wilson Bank
559,224
14.5
308,333
8.0
385,417
10.0
Tier 1 capital to risk weighted assets:
Consolidated
512,762
13.3
231,337
6.0
231,337
6.0
Wilson Bank
511,229
13.3
231,250
6.0
308,334
8.0
Common equity Tier 1 capital to risk
weighted assets:
Consolidated
512,693
13.3
173,503
4.5
N/A
N/A
Wilson Bank
511,160
13.3
173,438
4.5
250,521
6.5
Tier 1 capital to average assets:
Consolidated
512,762
10.6
193,564
4.0
N/A
N/A
Wilson Bank
511,229
10.6
193,492
4.0
241,865
5.0
1.
Ratios for Wilson Bank are those under applicable FDIC regulations for prompt corrective action.
2.
Well-capitalized minimum Common equity Tier 1 capital to risk weighted assets and Tier 1 capital to average assets
are not formally defined under applicable regulations for bank holding companies.
Dividend Restrictions
The Company and the Bank are subject to dividend restrictions set forth by the Tennessee Department of Financial
Institutions and federal banking agencies, as applicable. Generally, the board of directors may not declare dividends in excess
of current year earnings plus the retained net income of the preceding two years without prior approval of the commissioner
of the Tennessee Department of Financial Institutions. Additional restrictions may be imposed by the Tennessee Department
of Financial Institutions and federal banking agencies under the powers granted to them by law.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
106
(18)Salary Deferral Plans
The Company provides some of its officers non-qualified pension benefits through an Executive Salary Continuation Plan
("the Plan") and Supplemental Executive Retirement Plan (SERP) Agreements ("SERP Agreements"). The Plan and SERP
Agreements were established by the Board of Directors to reward executive management for past performance and to provide
additional incentive to retain the service of executive management. The Plan and SERP Agreements generally provide
current and former executives party thereto with benefits of a portion of their salary beginning at retirement through life. As
a result, the Company has accrued a liability for future obligations under the Plan and SERP Agreements. At December 31,
2024 and 2023, the liability related to the Plan totaled $1,362,000 and $1,475,000, respectively. At December 31, 2024 and
2023 the liability related to the SERP Agreements totaled $4,785,000 and $4,219,000, respectively. The expense incurred
for these plans totaled $1,008,000, $547,000 and $789,000 for the year ended December 31, 2024, 2023 and 2022,
respectively.
The Company has purchased life insurance policies to provide the benefits related to the Plan, which at December 31, 2024
and 2023 had an aggregate cash surrender value of $7,156,000 and $6,462,000, respectively, and an aggregate face value of
insurance policies in force of $17,376,000 and $16,407,000 respectively. The life insurance policies remain the sole property
of the Company and are payable to the Company.
The Company has also purchased bank owned life insurance policies on some of its current and former officers. The
insurance policies remain the sole property of the Company and are payable to the Company. The cash surrender value of
the life insurance contracts totaled $54,792,000 and $53,183,000 and the face amount of the insurance policies in force
approximated $122,630,000 and $122,010,000 at December 31, 2024 and 2023, respectively.
The Company has also purchased Flexible Premium Indexed Deferred Annuity Contracts (“Annuity Contracts”) to fund a
portion of the benefits related to the SERP Agreements. The Annuity Contracts remain the sole property of the Company
and are payable to the Company. Included in other assets at December 31, 2024 and 2023 are the Annuity Contracts with an
aggregate value of $23,446,000 and $23,745,000, respectively.
(19)Equity Incentive Plan
In April 2009, the Company’s shareholders approved the Wilson Bank Holding Company 2009 Stock Option Plan (the
“2009 Stock Option Plan”). The 2009 Stock Option Plan was effective as of April 14, 2009. Under the 2009 Stock Option
Plan, awards could be in the form of options to acquire common stock of the Company. Subject to adjustment as provided
by the terms of the 2009 Stock Option Plan, the maximum number of shares of common stock with respect to which awards
could be granted under the 2009 Stock Option Plan was 100,000 shares. The 2009 Stock Option Plan terminated on April
13, 2019, and no additional awards may be issued under the 2009 Stock Option Plan. The awards granted under the 2009
Stock Option Plan prior to the Plan's expiration will remain outstanding until exercised or otherwise terminated. As of
December 31, 2024, the Company had outstanding 1,767 options under the 2009 Stock Option Plan with a weighted average
exercise price of $36.47.
During the second quarter of 2016, the Company’s shareholders approved the Wilson Bank Holding Company 2016 Equity
Incentive Plan, which authorizes awards of up to 750,000 shares of common stock. The 2016 Equity Incentive Plan was
approved by the Board of Directors and effective as of January 25, 2016 and approved by the Company’s shareholders on
April 12, 2016. On September 26, 2016, the Board of Directors approved an amendment and restatement of the 2016 Equity
Incentive Plan (as amended and restated the “2016 Equity Incentive Plan”) to make clear that directors who are not also
employees of the Company may be awarded stock appreciation rights. The primary purpose of the 2016 Equity Incentive
Plan is to promote the interest of the Company and its shareholders by, among other things, (i) attracting and retaining key
officers, employees and directors of, and consultants to, the Company and its subsidiaries and affiliates, (ii) motivating those
individuals by means of performance-related incentives to achieve long-range performance goals, (iii) enabling such
individuals to participate in the long-term growth and financial success of the Company, (iv) encouraging ownership of stock
in the Company by such individuals, and (v) linking their compensation to the long-term interests of the Company and its
shareholders. Except for certain limitations, awards can be in the form of stock options (both incentive stock options and
non-qualified stock options), stock appreciation rights, restricted shares and restricted share units, performance awards and
other stock-based awards. As of December 31, 2024, the Company had 166,362 shares remaining available for issuance
under the 2016 Equity Incentive Plan. As of December 31, 2024, the Company had outstanding under the 2016 Equity
Incentive Plan 191,628 stock options with a weighted average exercise price of $57.85, 142,785 cash-settled stock
appreciation rights with a weighted average exercise price of $55.03, 153 restricted share awards, 24,482 restricted share
unit awards, and 738 performance share unit awards.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
107
Stock Options and Stock Appreciation Rights
As of December 31, 2024, the Company had outstanding 193,395 stock options with a weighted average exercise price of
$57.66 and 142,785 cash-settled stock appreciation rights with a weighted average exercise price of $55.03. Included in
other liabilities at December 31, 2024 and 2023 were $3,521,000 and $3,297,000 in accrued cash-settled stock appreciation
rights, respectively.
The fair value of each stock option and cash-settled SAR grant is estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions used for grants in 2024, 2023 and 2022:
2024
2023
2022
Expected dividends
2.41%
2.38%
1.85%
Expected term (in years)
6.93
8.25
7.78
Expected stock price volatility
33%
38%
37%
Risk-free rate
4.30%
3.54%
3.03%
The expected stock price volatility is based on historical volatility adjusted for consideration of other relevant factors. The
risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in
effect at the time of the grant. The dividend yield and forfeiture rate assumptions are based on the Company’s history and
expectation of dividend payouts and forfeitures.
A summary of the stock option and cash-settled SAR activity for 2024, 2023 and 2022 is as follows:
2024
2023
2022
Weighted
Average
Weighted
Average
Weighted
Average
Shares
Exercise
Price
Shares
Exercise
Price
Shares
Exercise
Price
Outstanding at beginning of year
371,994
$
56.15
414,778
$
55.13
357,254
$
50.18
Granted
1,667
71.50
5,000
69.00
117,665
64.13
Exercised
(31,748)
52.28
(42,617)
47.23
(58,841)
43.27
Forfeited or expired
(5,733)
59.12
(5,167)
60.35
(1,300)
45.50
Outstanding at end of year
336,180
$
56.54
371,994
$
56.15
414,778
$
55.13
Options and cash-settled SARs exercisable at
year end
218,749
$
53.23
186,431
$
50.22
167,918
$
46.09
The weighted average fair value at the grant date of options and cash-settled SARs granted during the years 2024, 2023 and
2022 was $22.87, $24.76 and $22.64, respectively. The total intrinsic value of options and cash-settled SARs exercised
during the years 2024, 2023 and 2022 was $677,000, $959,000 and $1,310,000 respectively.
The following table summarizes information about outstanding and exercisable stock options and cash-settled SARs at
December 31, 2024:
Options and Cash-Settled SARs
Outstanding
Options and Cash-Settled SARs
Exercisable
Range of Exercise Prices
Number
Outstanding
at 12/31/24
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term (In
Years)
Number
Exercisable
at 12/31/24
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term (In
Years)
$35.81 - $54.75
97,245 $
42.15
2.20
96,578 $
42.13
2.20
$55.75 - $71.50
238,935 $
62.40
6.35
122,171 $
62.00
5.77
336,180
218,749
Aggregate intrinsic value (in thousands)
$
6,239
$
4,784
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
108
As of December 31, 2024, there was $2,092,000 of total unrecognized cost related to non-vested stock options and cash-
settled SARs granted under the Company’s equity incentive plans. The cost is expected to be recognized over a weighted-
average period of 2.05 years.
Time-Based Vesting Restricted Shares and Restricted Share Units
A summary of time-based vesting restricted share awards activity for the twelve months ended December 31, 2024, 2023
and 2022 is as follows:
2024
2023
2022
Shares
Weighted
Average
Cost
Shares
Weighted
Average
Cost
Shares
Weighted
Average
Cost
Outstanding at beginning of year
301
$
66.70
1,075
$
64.03
1,250
$
62.10
Granted
—
—
—
—
450
66.70
Vested
(148)
66.70
(774)
62.99
(625)
62.10
Forfeited
—
—
—
—
—
—
Outstanding at December 31,
153
$
66.70
301
$
66.70
1,075
$
64.03
A summary of time-based vesting restricted share unit awards activity for the twelve months ended December 31, 2024 and
2023 is as follows:
2024
2023
Shares
Weighted
Average
Cost
Shares
Weighted
Average
Cost
Outstanding at beginning of year
14,458
$
69.00
—
$
—
Granted
13,957
71.59
14,833
69.00
Vested
(2,725)
69.00
—
—
Forfeited
(1,208)
69.78
(375)
69.00
Outstanding at December 31,
24,482
$
70.44
14,458
$
69.00
The restricted shares and restricted share units vest based on continued service over various time periods. As of December 31,
2024, there was $9,000 of unrecognized compensation cost related to non-vested restricted share awards. The cost is expected
to be expensed over a weighted-average period of 0.88 years. As of December 31, 2024, the fair value of restricted share
awards vested totaled $11,000. As of December 31, 2024, there was $1,342,000 of unrecognized compensation cost related
to non-vested restricted share units. The cost is expected to be expensed over a weighted-average period of 3.66 years. As
of December 31, 2024, the fair value of restricted share units vested totaled $197,000.
Performance-Based Vesting Restricted Stock Units ("PSUs")
The Company periodically awards performance-based restricted stock units to employees of the Bank. Under the terms of
the awards, the number of units that will be earned and thereafter settled in shares of the Company's common stock will be
based on the employee's performance against certain performance metrics over a fixed three-year performance period.
Compensation expense for PSUs is estimated each period based on the fair value of the Company's common stock at the
grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the
performance period of the awards.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
109
A summary of the PSUs activity for the twelve months ended December 31, 2024 and 2023 is as follows:
2024
2023
Shares
Weighted
Average Cost
Shares
Weighted
Average
Cost
Outstanding at beginning of year
1,107
$
67.85
—
$
—
Granted
—
—
1,107
67.85
Vested
(369)
67.85
—
—
Forfeited or expired
—
—
—
—
Outstanding at December 31,
738
$
67.85
1,107
$
67.85
Grant Year
Grant Price
Applicable
Performance
Period
Period in
which units to
be settled
PSUs
Outstanding
2023
$
67.85
2023-2025
2024-2026
738
As of December 31, 2024, there was $28,000 of total unrecognized compensation cost related to non-vested performance
based restricted share units. The cost is expected to be expensed over a weighted-average period of 1.08 years. As of
December 31, 2024, the fair value of performance based restricted share units vested totaled $26,000.
(20)Earnings Per Share
The computation of basic earnings per share is based on the weighted average number of common shares outstanding during
the period. The computation of diluted earnings per share for the Company begins with the basic earnings per share plus the
effect of common shares contingently issuable from stock options, restricted share units and performance share units.
The following is a summary of the components comprising basic and diluted earnings per share (“EPS”):
Years Ended December 31,
2024
2023
2022
Basic EPS Computation:
Numerator – Earnings available to common shareholders
$
56,530
48,938
53,042
Denominator – Weighted average number of common shares
outstanding
11,806,822
11,611,690
11,377,617
Basic earnings per common share
$
4.79
4.21
4.66
Diluted EPS Computation:
Numerator – Earnings available to common shareholders
$
56,530
48,938
53,042
Denominator – Weighted average number of common shares
outstanding
11,806,822
11,611,690
11,377,617
Dilutive effect of stock options, RSUs and PSUs
31,767
29,676
31,307
Weighted average diluted common shares outstanding
11,838,589
11,641,366
11,408,924
Diluted earnings per common share
$
4.78
4.20
4.65
(21)Derivatives
Derivatives Designated as Fair Value Hedges
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company
manages its exposures to a wide variety of business and operational risks through management of its core business activities.
The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount,
the sources and duration of certain balance sheet assets and liabilities. In the normal course of business, the Company also
uses derivative financial instruments to add stability to interest income or expense and to manage its exposure to movements
in interest rates. The Company does not use derivatives for trading or speculative purposes and only enters into transactions
that have a qualifying hedge relationship. The Company's hedging strategies involving interest rate derivatives that are
classified as either cash flow hedges or fair value hedges, depending upon the rate characteristic of the hedged item.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
110
The Company had previously utilized an interest rate swap designated as a fair value hedge to mitigate the effect of changing
interest rates on the fair values of fixed rate loans. The hedging strategy on loans converted the fixed interest rates to variable
interest rates tied to the applicable reference rate.
During the fourth quarter of 2023 the Company voluntarily terminated the interest rate swap with a notional amount of $30.0
million, as the market indicated that rates had peaked, further rate increases were unlikely, and the Company’s balance sheet
could support the market’s current demand for fixed rate loans without the interest rate swap. The termination of the fair
value hedge resulted in an unrealized gain totaling $3,747,000 which is being reclassified to increase interest income over
the original term of the swap contract.
The following table presents the net effects of derivative hedging instruments on the Company's consolidated statements of
income for the twelve months ended December 31, 2024, 2023 and 2022. The effects are presented as an increase to income
before taxes in the relevant caption of the Company's consolidated statements of income.
In Thousands
2024
2023
2022
Location in the Consolidated Statements of Income
Interest income: Interest and fees on loans
$
1,158
271
63
Net increase to income before taxes
$
1,158
271
63
The above effects are presented within the change in other assets line in the operating activities section of the Company's
consolidated statements of cash flows.
Mortgage Banking Derivatives
Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward
commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Company's
practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock
commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its
commitments to fund the loans. At December 31, 2024 and December 31, 2023, the Company had approximately $1,680,000
and $2,265,000, respectively, of interest rate lock commitments and approximately $3,250,000 and $2,500,000, respectively,
of forward commitments for the future delivery of residential mortgage loans. The fair value of these mortgage banking
derivatives was reflected by derivative assets of $34,000 and $65,000 and a derivative asset of $27,000 and derivative
liability of $13,000, respectively, at December 31, 2024 and December 31, 2023. Changes in the fair values of these
mortgage-banking derivatives are included in net gains on sale of loans.
The net gains (losses) relating to free-standing derivative instruments used for risk management is summarized below:
In Thousands
2024
2023
Interest rate contracts for customers
$
(31)
(58)
Forward contracts related to mortgage loans held for sale and
interest rate contracts
40
(75)
The following table reflects the amount and fair value of mortgage banking derivatives included in the consolidated
balance sheet as of December 31, 2024 and December 31, 2023:
In Thousands
2024
2023
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
Included in other assets (liabilities):
Interest rate contracts for customers
$
1,680
34
2,265
65
Forward contracts related to mortgage loans
held-for-sale
3,250
27
2,500
(13)
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
111
(22)Disclosures About Fair Value of Financial Instruments
Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework
for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. The definition of fair value
focuses on the exit price, i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, not the entry price, i.e., the price that would be paid to
acquire the asset or received to assume the liability at the measurement date. The statement emphasizes that fair value is a
market-based measurement; not an entity-specific measurement. Therefore, the fair value measurement should be
determined based on the assumptions that market participants would use in pricing the asset or liability.
Valuation Hierarchy
FASB ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation
hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The
three levels are defined as follows:
•
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in
active markets
•
Level 2 - inputs to the valuation methodology include all prices for similar assets and liabilities in active markets,
and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term
of the financial instrument.
•
Level 3 - inputs to the valuation methodology that are unobservable and significant to the fair value measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and
liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation
hierarchy.
Asset
Securities available-for-sale - Where quoted prices are available for identical securities in an active market, securities are
classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and certain
other financial products. If quoted market prices are not available, then fair values are estimated by using pricing models
that use observable inputs or quoted prices of securities with similar characteristics and are classified within Level 2 of the
valuation hierarchy. In certain cases where there is limited activity or less transparency around inputs to the valuation and
more complex pricing models or discounted cash flows are used, securities are classified within Level 3 of the valuation
hierarchy. Quarterly, the Company will validate prices supplied by its third party vendor by comparison to prices obtained
from third parties.
Hedged loans - The fair value of the Company's hedged loan portfolio is intended to approximate the fair value that a market
participant would realize in a hypothetical orderly transaction.
Collateral dependent loans - Collateral dependent loans are measured at the fair value of the collateral securing the loan less
estimated selling costs. The fair value of real estate collateral is determined based on real estate appraisals which are
generally based on recent sales of comparable properties which are then adjusted for property specific factors. Non-real
estate collateral is valued based on various sources, including third party asset valuations and internally determined values
based on cost adjusted for depreciation and other judgmentally determined discount factors. Collateral dependent loans are
classified within Level 3 of the valuation hierarchy due to the unobservable inputs used in determining their fair value such
as collateral values and the borrower's underlying financial condition.
Other real estate owned - Other real estate owned (“OREO”) represents real estate foreclosed upon by the Company through
loan defaults by customers or acquired in lieu of foreclosure. Upon acquisition, the property is recorded at the lower of cost
or fair value, based on appraised value, less selling costs estimated as of the date acquired with any loss recognized as a
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
112
charge-off through the allowance for credit losses. Additional OREO losses for subsequent valuation downward adjustments
are determined on a specific property basis and are included as a component of noninterest expense along with holding costs.
Any gains or losses realized at the time of disposal are also reflected in noninterest income. OREO is included in Level 3 of
the valuation hierarchy due to the lack of observable market inputs into the determination of fair value. Appraisal values are
property-specific and sensitive to the changes in the overall economic environment.
Mortgage loans held for sale - Mortgage loans held for sale are carried at fair value, and are classified within Level 2 of the
valuation hierarchy. The fair value of mortgage loans held for sale is determined using quoted prices for similar assets,
adjusted for specific attributes of that loan.
Derivative instruments - The fair values of derivatives are based on valuation models using observable market data as of the
measurement date (Level 2).
Other investments - Included in other investments are investments recorded at fair value primarily in certain nonpublic
investments and funds. The valuation of these nonpublic investments requires management judgment due to the absence of
observable quoted market prices, inherent lack of liquidity and the long-term nature of such assets. These investments are
valued initially based upon transaction price. The carrying values of other investments are adjusted either upwards or
downwards from the transaction price to reflect expected exit values as evidenced by financing and sale transactions with
third parties. These investments are included in Level 3 of the valuation hierarchy if the entities and funds are not widely
traded and the underlying investments are in privately-held and/or start-up companies for which market values are not readily
available.The following tables present the financial instruments carried at fair value as of December 31, 2024 and
December 31, 2023, by caption on the consolidated balance sheet and by FASB ASC 820 valuation hierarchy (as described
above) (in thousands):
Measured on a Recurring Basis
Total
Carrying
Value in the
Consolidated
Balance
Sheet
Quoted
Market
Prices in
an Active
Market
(Level 1)
Models with
Significant
Observable
Market
Parameters
(Level 2)
Models with
Significant
Unobservable
Market
Parameters
(Level 3)
December 31, 2024
Investment securities available-for-sale:
U.S. Treasury and other U.S. government
agencies
$
4,538
4,538
—
—
U.S. Government sponsored enterprises
161,973
—
161,973
—
Mortgage-backed securities
454,196
—
454,196
—
Asset-backed securities
50,817
—
50,817
—
Corporate bonds
2,396
—
2,396
—
State and municipal securities
153,973
—
153,973
—
Total investment securities available-for-sale
827,893
4,538
823,355
—
Mortgage loans held for sale
2,529
—
2,529
—
Derivative instruments
61
—
61
—
Other investments
2,191
—
—
2,191
Total assets
$
832,674
4,538
825,945
2,191
Derivative instruments
$
—
—
—
—
Total liabilities
$
—
—
—
—
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
113
Measured on a Recurring Basis
Total
Carrying
Value in the
Consolidated
Balance
Sheet
Quoted
Market
Prices in
an Active
Market
(Level 1)
Models
with
Significant
Observable
Market
Parameters
(Level 2)
Models with
Significant
Unobservable
Market
Parameters
(Level 3)
December 31, 2023
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agencies
$
4,429
4,429
—
—
U.S. Government sponsored enterprises
144,168
—
144,168
—
Mortgage-backed securities
417,030
—
417,030
—
Asset-backed securities
49,973
—
49,973
—
Corporate bonds
2,423
—
2,423
—
State and municipal securities
193,058
—
193,058
—
Total investment securities available-for-sale
811,081
4,429
806,652
—
Mortgage loans held for sale
2,294
—
2,294
—
Derivative instruments
65
—
65
—
Other investments
2,045
—
—
2,045
Total assets
$
815,485
4,429
809,011
2,045
Derivative instruments
$
13
—
—
—
Total liabilities
$
13
—
—
—
Measured on a Non-Recurring Basis
Total
Carrying
Value in the
Consolidated
Balance
Sheet
Quoted
Market
Prices in an
Active
Market
(Level 1)
Models
with
Significant
Observable
Market
Parameters
(Level 2)
Models with
Significant
Unobservable
Market
Parameters
(Level 3)
December 31, 2024
Other real estate owned
$
—
—
—
—
Collateral dependent loans (¹)
37,045
—
—
37,045
Total
$
37,045
—
—
37,045
December 31, 2023
Other real estate owned
$
—
—
—
—
Collateral dependent loans (¹)
4,838
—
—
4,838
Total
$
4,838
—
—
4,838
1.
The carrying value of collateral dependent loans at December 31, 2024 is net of a valuation allowance of $408,000. As of
December 31, 2023 no reserve was recorded on collateral dependent loans.
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring
basis and for which the Company has utilized Level 3 inputs to determine fair value at December 31, 2024 and 2023:
Valuation Techniques
(1)
Significant
Unobservable Inputs
Range (Weighted Average)
Collateral dependent loans
Appraisal
Estimated costs to sell
10%
Other real estate owned
Appraisal
Estimated costs to sell
10%
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
114
1.
The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level
3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.
In the case of its investment securities portfolio, the Company monitors the valuation technique utilized by various pricing
agencies to ascertain when transfers between levels have been affected. The nature of the remaining assets and liabilities is
such that transfers in and out of any level are expected to be rare. For the twelve months ended December 31, 2024, there
were no transfers between Levels 1, 2 or 3.
The table below includes a rollforward of the balance sheet amounts for the year ended December 31, 2024 and 2023
(including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation
hierarchy for assets and liabilities measured at fair value on a recurring basis. When a determination is made to classify a
financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the
unobservable factors to the overall fair value measurement. However, since Level 3 financial instruments typically include,
in addition to the unobservable or Level 3 components, observable components (that is, components that are actively quoted
and can be validated to external sources), the gains and losses in the table below include changes in fair value due in part to
observable factors that are part of the valuation methodology (in thousands):
For the Year Ended December
31,
2024
2023
Other Assets
Other Assets
Fair value, January 1
$
2,045
$
1,965
Total realized gains included in income
146
80
Change in unrealized gains/losses included in other comprehensive income
for assets and liabilities still held at December 31
—
—
Purchases, issuances and settlements, net
—
—
Transfers out of Level 3
—
—
Fair value, December 31
$
2,191
$
2,045
Total realized gains included in income related to financial assets and
liabilities still on the consolidated balance sheet at December 31
$
146
$
80
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial
instruments that are not measured at fair value. In cases where quoted market prices are not available, fair values are based
on estimates using discounted cash flow models. Those models are significantly affected by the assumptions used, including
the discount rates, estimates of future cash flows and borrower creditworthiness. The fair value estimates presented herein
are based on pertinent information available to management as of December 31, 2024 and December 31, 2023. Such amounts
have not been revalued for purposes of these consolidated financial statements since those dates and, therefore, current
estimates of fair value may differ significantly from the amounts presented herein.
Cash and cash equivalents - The carrying amounts of cash and short-term instruments approximate fair values and are
classified as Level 1.
Loans - The fair value of the Company's loan portfolio includes a credit risk factor in the determination of the fair value of
its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a
hypothetical orderly transaction. The Company's loan portfolio is initially fair valued using a segmented approach. The
Company divides its loan portfolio into the following categories: variable rate loans, collateral dependent loans and all other
loans. The results are then adjusted to account for credit risk.
For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying
values. Fair values for collateral dependent loans are estimated using discounted cash flow models or based on the fair value
of the underlying collateral. For other loans, fair values are estimated using discounted cash flow models, using current
market interest rates offered for loans with similar terms to borrowers of similar credit quality. The values derived from the
discounted cash flow approach for each of the above portfolios are then further discounted to incorporate credit risk to
determine the exit price.
Mortgage servicing rights - The fair value of servicing rights is based on the present value of estimated future cash flows of
mortgages sold, stratified by rate and maturity date. Assumptions that are incorporated in the valuation of servicing rights
include assumptions about prepayment speeds on mortgages and the cost to service loans.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
115
Deposits and Federal Home Loan Bank advances - Fair values for deposits and Federal Home Loan Bank advances are
estimated using discounted cash flow models, using current market interest rates offered on deposits with similar remaining
maturities.
Off-balance sheet instruments - The fair values of the Company’s off-balance-sheet financial instruments are based on fees
charged to enter into similar agreements. However, commitments to extend credit do not represent a significant value to the
Company until such commitments are funded.
The following table presents the carrying amounts, estimated fair value and placement in the fair value hierarchy of the
Company’s financial instruments at December 31, 2024 and December 31, 2023. This table excludes financial instruments
for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents,
the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the
instrument and its expected realization.
(in Thousands)
Carrying/Notional
Amount
Estimated
Fair
Value (¹)
Quoted
Market
Prices in
an Active
Market
(Level 1)
Models
with
Significant
Observable
Market
Parameters
(Level 2)
Models with
Significant
Unobservable
Market
Parameters
(Level 3)
December 31, 2024
Financial assets:
Cash and cash equivalents
$
247,589
247,589
247,589
—
—
Loans, net
4,042,392
3,986,187
—
—
3,986,187
Mortgage servicing rights
1,139
1,654
—
1,654
—
Financial liabilities:
Deposits
4,830,034
4,253,072
—
—
4,253,072
December 31, 2023
Financial assets:
Cash and cash equivalents
$
252,635
252,635
252,635
—
—
Loans, net
3,550,675
3,372,166
—
—
3,372,666
Mortgage servicing rights
1,083
1,398
—
1,398
—
Financial liabilities:
Deposits
4,367,106
3,885,724
—
—
3,885,724
(1) Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended
to approximate those that a market- participant would realize in a hypothetical orderly transaction.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
116
(23)Segment Information
Wilson Bank & Trust is a full-service bank operating throughout middle Tennessee which conducts business as
a single operating segment, banking. The Bank offers a wide range of banking services, including checking, savings and
money market deposit accounts, certificates of deposit, loans for consumer, commercial and real estate purposes, and
investment advisory services through a third-party registered broker-dealer investment adviser. Management views the
product offerings as an integrated banking service which is the basis for identifying the single banking segment. Substantially
all revenues are derived from the Company's geographical area identified in paragraph (b) Note 1, Summary of Significant
Accounting Policies. The accounting policies of the banking segment are the same as those described in Note 1.
The Company’s Chief Operating Decision Maker (“CODM”) is made up of the Chief Executive Officer, Chief Financial
Officer, President, Chief Administration Officer, Chief Credit Officer, Chief Risk Officer, Chief Operating Officer, Chief
Experience Officer, and Chief Information Officer. The key measure of banking segment profit or loss that the CODM uses
to allocate resources and assess performance is the Company’s consolidated net earnings, as reported on the Company's
Consolidated Statements of Earnings. The measure of banking segment assets is reported on the Company’s Consolidated
Balance Sheets as total assets.
The CODM uses consolidated net earnings to evaluate income generated from banking segment assets (return on assets) in
deciding whether to reinvest profits into the operations or into other parts of the entity, such as to pay dividends.
Net income is used to monitor budgeted versus actual results. The monitoring of budgeted versus actual results is used in
assessing performance of the banking segment.
All expense categories on the Consolidated Statements of Earnings are significant and there are no other significant segment
expenses that would require disclosure. Assets provided to the CODM are consistent with those reported on the Consolidated
Balance Sheets with particular emphasis on the Company’s available liquidity, including its cash and due from banks, federal
funds sold, and interest-bearing deposits, capital and regulatory capital requirements.
There are no intra-entity sales or transfers and no significant expense categories regularly provided to the CODM beyond
those disclosed in the Consolidated Statements of Earnings. The CODM manages the business using consolidated expense
information, as well as regularly provided budgeted or forecasted expense information for the single operating segment.
The banking segment derives revenues from customers through fees and interest charged on lending, deposits, and
investment products. The banking segment also derives revenue from various investments as permitted under sound banking
practices. The majority of revenues are derived from fees and interest on loans.
Although the Company has a significant amount of long-term customers, there is no reliance or concentration related to any
one customer.
There have been no significant asset investments by the banking segment outside of any items included in the consolidated
financial statements.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
117
The following table reflects consolidated financial data of the Company’s reportable segment for the years ended
December 31, 2024, 2023 and 2022.
Banking Segment
Dollars In Thousands
2024
2023
2022
Interest income
$
284,116
222,583
157,540
Reconciliation of revenue
Other revenues
28,954
28,289
27,281
Total consolidated revenues
$
313,070
250,872
184,821
Less:
Interest expense
126,809
83,679
16,133
Segment net interest income and noninterest income
$
186,261
167,193
168,688
Less:
Provision for credit losses - loans
5,192
6,300
8,656
Provision for credit losses - off-balance sheet exposures
(592)
(2,989)
(1,014)
Employee salaries and benefits
67,342
59,501
56,707
Data processing expenses
9,477
8,797
7,337
Occupancy expenses
5,733
6,532
5,563
Advertising & public relations expenses
3,512
3,714
3,455
Furniture and equipment expenses
3,038
3,225
3,400
FDIC insurance
3,129
3,120
1,527
Other segment items(a)
16,190
16,062
14,981
Income tax expense
16,576
13,939
15,056
Segment net earnings/consolidated net earnings
$
56,664
48,992
53,020
Net loss (gain) attributable to noncontrolling interest
(134)
(54)
22
Net earnings attributable to Wilson Bank Holding Company
$
56,530
48,938
53,042
Banking Segment
Dollars in Thousands
2024
2023
2022
Reconciliation of net earnings
Net earnings for reportable segment
$
56,530
48,938
53,042
Other earnings
—
—
—
Net earnings attributable to Wilson Bank Holding Company
$
56,530
48,938
53,042
Banking Segment
Dollars in Thousands
2024
2023
Reconciliation of assets
Total assets for reportable segment
$
5,358,659
4,846,476
Other assets
—
—
Total consolidated assets
$
5,358,659
4,846,476
(a) Other segment items includes equity-based compensation, accounting, legal & consulting expenses, directors' fees, fees and
licenses, telephone expenses, franchise tax, and other overhead expenses.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
118
(24)Wilson Bank Holding Company -
Parent Company Financial Information
WILSON BANK HOLDING COMPANY
(Parent Company Only)
Balance Sheets
December 31, 2024 and 2023
Dollars In Thousands
2024
2023
ASSETS
Cash
$
7,352
*
3,134
*
Investment in wholly-owned commercial bank subsidiary
474,092
*
427,872
*
Deferred income taxes
1,526
1,356
Refundable income taxes
443
485
Total assets
$
483,413
432,847
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other liabilities
$
3,710
3,442
Total liabilities
3,710
3,442
Shareholders’ equity:
Common stock, par value $2.00 per share, authorized 50,000,000 shares,
11,876,770 and 11,686,363 shares issued and outstanding, respectively
23,754
23,373
Additional paid-in capital
150,739
136,866
Retained earnings
393,238
357,260
Noncontrolling interest in consolidated subsidiary
203
69
Accumulated other comprehensive losses, net of taxes of $31,217 and $31,195,
respectively
(88,231)
(88,163)
Total shareholders’ equity
479,703
429,405
Total liabilities and shareholders’ equity
$
483,413
432,847
* Eliminated in consolidation.
WILSON BANK HOLDING COMPANY
(Parent Company Only)
Statements of Earnings
Three Years Ended December 31, 2024
Dollars In Thousands
2024
2023
2022
Income:
Dividends from Wilson Bank (commercial bank subsidiary)
$
12,000
*
2,500
*
4,200
*
Other income
—
—
—
12,000
2,500
4,200
Expenses:
Directors’ fees
419
387
355
Other
1,817
1,747
2,187
2,236
2,134
2,542
Income before Federal income tax benefits and equity in
undistributed earnings of Wilson Bank
9,764
366
1,658
Federal income tax benefits
613
617
733
10,377
983
2,391
Equity in undistributed earnings of Wilson Bank
46,153
*
47,955
*
50,651
*
Net earnings
$
56,530
48,938
53,042
* Eliminated in consolidation.
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
119
WILSON BANK HOLDING COMPANY
(Parent Company Only)
Statements of Cash Flows
Three Years Ended December 31, 2024
Increase (Decrease) in Cash and Cash Equivalents
Dollars In Thousands
2024
2023
2022
Cash flows from operating activities:
Net earnings
$
56,530
48,938
53,042
Adjustments to reconcile net earnings to net cash used in operating activities:
Equity in earnings of commercial bank subsidiary
(58,153)
(50,455)
(54,851)
Decrease (increase) in refundable income taxes
42
53
(176)
Increase in deferred taxes
(170)
(133)
(195)
Share based compensation expense
1,567
1,528
1,866
Increase in other liabilities
44
19
14
Total adjustments
(56,670)
(48,988)
(53,342)
Net cash used in operating activities
(140)
(50)
(300)
Cash flows from investing activities:
Dividends received from commercial bank subsidiary
12,000
2,500
4,200
Net cash provided by investing activities
12,000
2,500
4,200
Cash flows from financing activities:
Payments made to stock appreciation rights holders
(216)
(277)
(644)
Dividends paid
(20,552)
(17,303)
(20,880)
Repurchase of common stock
(2,181)
—
—
Proceeds from sale of stock pursuant to dividend reinvestment plan
14,732
12,979
16,117
Proceeds from exercise of stock options
575
1,044
635
Net cash used in financing activities
(7,642)
(3,557)
(4,772)
Net increase (decrease) in cash and cash equivalents
4,218
(1,107)
(872)
Cash and cash equivalents at beginning of year
3,134
4,241
5,113
Cash and cash equivalents at end of year
$
7,352
3,134
4,241
(25)Quarterly Financial Data (Unaudited)
Selected quarterly results of operations for the four quarters ended December 31 are as follows:
(In Thousands, except per share data)
2024
2023
2022
Fourth
Third
Second
First
Fourth
Third
Second
First
Fourth
Third
Second
First
Quarter Quarter Quarter Quarter
Quarter Quarter Quarter Quarter
Quarter Quarter Quarter
Quarter
Interest income
$ 76,415
73,814
68,945
64,942
$ 61,809
57,857
53,987
48,930
$ 44,920
42,024
37,097
33,499
Interest expense
34,144
32,799
30,485
29,381
26,548
23,697
19,934
13,500
7,855
3,894
2,240
2,144
Net interest income
42,271
41,015
38,460
35,561
35,261
34,160
34,053
35,430
37,065
38,130
34,857
31,355
Provision for credit losses - loans
1,629
3,563
—
—
619
1,641
2,078
1,962
2,596
2,543
1,625
1,892
Earnings before income taxes
19,515
16,376
20,683
16,666
14,220
14,745
16,039
17,927
15,342
19,706
18,484
14,544
Net earnings attributable to Wilson
Bank Holding Company
14,939
12,686
16,137
12,768
11,222
11,486
12,389
13,841
12,340
15,190
14,139
11,373
Basic earnings per common share
1.26
1.07
1.37
1.09
0.96
0.99
1.07
1.20
1.08
1.33
1.25
1.01
Diluted earnings per common share
1.26
1.07
1.37
1.08
0.95
0.98
1.07
1.20
1.07
1.33
1.24
1.00
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements, Continued
December 31, 2024, 2023 and 2022
120
(26)Revenue from Contracts with Customers
All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. The
following table presents the Company’s sources of non-interest income for the periods presented. Items outside the scope of ASC
Topic 606 are noted as such.
Years ended December 31,
2024
2023
2022
(dollars in thousands)
Fees and gains on sales of mortgage loans(1)
$
3,068
$
2,635
$
2,973
Service charges on deposits
8,198
7,890
7,382
Debit and credit card interchange income, net
8,627
8,490
8,416
Brokerage income
8,562
7,184
6,929
BOLI and annuity earnings(1)
1,817
1,667
1,346
Loss on sale of securities, net(1)
(2,742)
(1,009)
(1,620)
Other non-interest income
1,424
1,432
1,855
Total non-interest income
$
28,954
$
28,289
$
27,281
1.
Not within the scope of ASC Topic 606.
A description of the Company's revenue streams accounted for under ASC Topic 606 follows:
Service charges on deposit accounts - The Company earns fees on its deposit customers for transaction-based, account maintenance,
and overdraft services. Transaction-based fees, which include services such as ATM usage fees, stop payment charges, statement
rendering, and ACH fees are recognized at the time the transaction is executed and the Company fulfills the customer’s request.
Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the
period over which the Company satisfies the performance obligation. Account maintenance fees are recognized in the same month
the Company earns and satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft
occurs. Service charges on deposits are withdrawn from the customer’s account balance.
Debit and credit card interchange income, net - The Company earns interchange fees from debit and credit cardholder transactions
conducted through the Mastercard payment network. Interchange fees from cardholder transactions represent a percentage of the
underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the
cardholder. Certain expenses directly associated with the debit and credit cards are recorded on a net basis with the interchange
income.
Brokerage income - The Company earns fees from investment brokerage services provided to its customers by a third-party service
provider. The Company receives commissions from the third-party service provider on a bi-monthly basis based upon customer
activity for the month. The fees are recognized monthly when the Company satisfies the performance obligation. Because the
Company (1) acts as an agent in arranging the relationship between the customer and third-party service provider and (2) does not
control the services rendered to the customer, investment brokerage fees are presented net of related servicing and administration
costs.
This financial information has not been reviewed for accuracy or relevance by the FDIC.
Holding Company & Stock Information
1. Represents one transaction of 303 shares during the second quarter of 2023 of which the Company is aware where the sale
price was at least $1.15 lower than any other completed trade during the quarter. The volume weighted average stock price
during the second quarter of 2023 was $69.21.
2. Represents one transaction of 102 shares during the third quarter of 2023 of which the Company is aware where the sale price
was at least $4.25 higher than any other completed trade during the quarter. The volume weighted average stock price during
the third quarter of 2023 was $70.07.
3. Represents one transaction of 50 shares during the fourth quarter of 2023 of which the Company is aware where the sale price
was at least $0.25 higher than any other completed trade during the quarter. The volume weighted average stock price during
the fourth quarter of 2023 was $70.90.
4. Represents one transaction of 406 shares and one transaction of 311 shares during the fourth quarter of 2023 of which the
Company is aware where the sale price was at least $.75 lower than any other completed trade during the quarter. The volume
weighted average stock price during the fourth quarter of 2023 was $70.90.
5. Represents one transaction of 23 shares during the second quarter of 2024 of which the Company is aware where the sale
price was at least $1.90 higher than any other completed trade during the quarter. The volume weighted average stock price
during the second quarter of 2024 was $72.29.
6. Represents one transaction of 20 shares during the fourth quarter of 2024 of which the Company is aware where the sale price
was at least $1.00 lower than any other completed trade during the quarter. The volume weighted average stock price during
the fourth quarter of 2024 was $74.41.
Stock Prices
2023
High
Low
First Quarter
$ 69.00
$67.85
Second Quarter
$ 70.00
$67.85 1
Third Quarter
$ 75.00 2
$70.00
Fourth Quarter
$ 71.75 3
$70.00 4
2024
High
Low
First Quarter
$ 72.25
$71.50
Second Quarter
$ 75.00 5
$72.25
Third Quarter
$ 74.10
$73.10
Fourth Quarter
$ 75.10
$73.10 6
Wilson Bank Holding Company
Five Year Performance Index
300
250
200
150
100
50
0
Period Ended
Index
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
Wilson Bank Holding Company 100.00
109.63
120.70
133.23
143.47
154.36
NASDAQ Composite Index
100.00
144.92
177.06
119.45
172.77
223.87
KBW NASDAQ Bank Index
100.00
89.69
124.06
97.52
96.65
132.60
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
Common Stock Market Information
The common stock of Wilson Bank Holding Company is not
traded on an exchange nor is there a known active trading
market. The number of stockholders of record at February 26,
2025 was 4,960. Based solely on information made available
to the Company from limited numbers of buyers and sellers,
the Company believes that the following table sets forth the
quarterly range of sale prices for the Company’s common stock
during the years 2023 and 2024.
On January 1, 2023, a $.75 per share cash dividend was declared
and on July 1, 2023, a $.75 per share cash dividend was declared
and thereafter paid to shareholders of record as of those dates.
On January 1, 2024, a $.75 per share cash dividend was declared
and on July 1, 2024, a $1.00 per share cash dividend was
declared and thereafter paid to shareholders of record on those
dates. Future dividends will be dependent upon the Company’s
profitability, its capital needs, overall financial condition and
economic and regulatory considerations.
Annual Meeting and Information Contacts
The Annual Meeting of Shareholders of Wilson Bank Holding
Company will be held on Thursday, April 24, 2025 at 5:00 p.m.
(CDT) at the Clemons-Richerson Operations Center, located
at 105 North Castle Heights Avenue, Lebanon, TN 37087.
For further information concerning Wilson Bank Holding
Company or Wilson Bank & Trust, or to obtain a copy of the
Company’s Annual Report on Form 10-K as filed with the
Securities and Exchange Commission, which is available
without charge to shareholders, please contact Kayla Hawkins,
CFO, Wilson Bank & Trust, P.O. Box 768, Lebanon, Tennessee
37088-0768, phone (615) 443-5901.
Important Information Regarding Stock Transfers
The Bank serves as the Company’s transfer agent and all
transfers of shares of the capital stock of the Company,
including sales or purchases, shall be made only on the books
of the Company through the Bank, as the Company’s transfer
agent. In order for the Company’s transfer agent to record any
transfer of the capital stock of the Company, the Company’s
transfer agent must be provided with the actual name and
contact information of the transferor(s) and transferee(s)
so the transactions may be recorded on the books of the
Company by the Company’s transfer agent. If a transferor or
transferee is a trust or entity, then the appropriate authority
documentation will need to be provided as deemed necessary
in the reasonable discretion of the Company’s transfer
agent. The Company’s transfer agent will be happy to furnish
customary transaction forms necessary for transfer of the
capital stock of the Company, including by sale or purchase,
upon notice to the Company’s stock department at 615-443-
5900 (or WBHCStocktransfer@wilsonbank.com).
The graph to the right compares the
percentage change in the unaudited
total return on Wilson Bank Holding
Company’s common stock against
the cumulative total return of the
NASDAQ Composite Index and the
KBW NASDAQ Bank Index between
December 31, 2019 and December 31,
2024. The graph assumes the value of
the investment in Wilson Bank Holding
Company’s common stock and each
index was $100 at December 31, 2019 and
that all dividends were reinvested.
l Wilson Bank Holding Company
l NASDAQ Composite Index
l KBW NASDAQ Bank Index
W I L S O N B A N K H O L D I N G C O M P A N Y 1 2 1
Standing, left to right: Anthony Patton, C&T Farms, Elmer Richerson, Retired WBT President, Jack W. Bell, Jack W. Bell Builders, Inc.,
Randall Clemons, Retired WBT CEO, Mike Maynard, Four Star Paving, Will Jordan, Real Estate Investor/Farming Operation Partner,
Jimmy Comer, Board Chairman of Wilson Bank Holding Company, Comerica Enterprises, Seated, left to right: John McDearman, III, CEO,
Wilson Bank Holding Company, Clint Swain, Fakes & Hooker Lumber, Lisa Pominski, Retired WBT CFO
Wilson Bank & Trust
Executive Management
Wilson Bank Holding Company
Board of Directors
Standing, left to right: Taylor Walker, Chief Credit Officer, Scott Jasper, Chief Administration Officer, John Foster, President,
John McDearman, III, Chief Executive Officer, Clark Oakley, Chief Operating Officer, Stephen Jaquish, Chief Information Officer,
Seated, left to right: Amelia Vance, Chief Experience Officer, Rachel Fischer, Chief Risk Offer, Kayla Hawkins, Chief Financial Officer
122
2 0 2 4 A N N U A L R E P O R T
Curt Baker
Regional President
Damon Bates
Investment Center
Manager
Mandy Belcher
Retail & Operations
Manager
Jill Booker
Retail & Operations
Manager
Shannon Bruff
Learning & Development
/Culture & Engagement
Philip Clemmons
Putnam County
Market Leader
Chad Colwell
Regional President
Kalyn Dennis
Marketing &
Communications
Misty Garren
Retail & Operations
Manager
Doug Gold
Community Development
Leader, Commercial
Lender
John Goodman
Regional President
Keely Hall
Williamson County
Market Leader
Keith Hatley
Regional President
Patty Hoppenstedt
Chief Human Resource
Officer
Andy Jakes
Regional President
Westley James
Senior Commercial
Lender
John Page
Mortgage Division
President
Kelly Perdue
Senior Commercial
Lender
Kevin Sanders
Lending Support &
Development
Paul Shearer
Credit Administration
Vickie Shrum
Human Resources
Director
Jennifer Smith
Controller
Rick Spruill
Director of Internal
Audit
Wes Taylor
Consumer, Small
Business & Mortgage
Lending
Price Thompson
General Counsel
Holleigh Upchurch
Enterprise Deposit
Strategist
Jeff Vaught
Collections Manager,
Consumer & Small
Business Credit Admin
David West
Smith & Trousdale
County Market Leader
Wilson Bank & Trust
Market and Division Leadership
Baker
Bates
Belcher
Booker
Bruff
Clemmons
Colwell
Dennis
Garren
Gold
Goodman
Hall
Hatley
Hoppenstedt
Jakes
James
Page
Perdue
Sanders
Shearer
Shrum
Smith
Spruill
Taylor
Thompson
Upchurch
Vaught
West
W I L S O N B A N K H O L D I N G C O M P A N Y 1 2 3
Wilson Bank & Trust
Locations by County
Wilson County
Main Office
623 West Main Street
Lebanon, TN 37087
(615) 444-BANK (2265)
1444 Baddour Pkwy. W.
Lebanon, TN 37087
(615) 444-7560
1130 Castle Heights Ave. N.
Lebanon, TN 37087
(615) 443-0492
440 Hwy. 109 N.
Lebanon, TN 37090
(615) 453-1086
200 Tennessee Blvd.
Lebanon, TN 37087
(615) 443-6178
1476 N. Mt. Juliet Rd.
Mt. Juliet, TN 37122
(615) 754-0600
8875 Stewarts Ferry Pike
Gladeville, TN 37071
(615) 443-6522
11835 Lebanon Rd.
Mt. Juliet, TN 37122
(615) 773-7841
709 S. Mt. Juliet Rd.
Mt. Juliet, TN 37122
(615) 773-7900
402 Public Square
Watertown, TN 37184
(615) 237-3302
Davidson County
2930 West End Ave.
Nashville, TN 37203
(615) 600-0700
217 Donelson Pike
Nashville, TN 37214
(615) 232-5925
4736 Andrew Jackson Pkwy.
Hermitage, TN 37076
(615) 885-0040
2141 Century Farms Parkway
Suite 1009
Antioch, TN 37013
615-819-6150
DeKalb County
576 W. Broad St.
Smithville, TN 37166
(615) 597-4663
306 Brush Creek Rd.
Alexandria, TN 37012
(615) 529-4663
Hamilton County
1101 Broad Street
Suite 110
Chattanooga, TN 37402
(423) 671-7216
Putnam County
320 S. Jefferson Ave.
Cookeville, TN 38501
(931) 528-4928
Rutherford County
4195 Franklin Rd.
Murfreesboro, TN 37128
(615) 904-6340
3110 Memorial Blvd.
Murfreesboro, TN 37129
(615) 904-6350
710 N.W. Broad St.
Murfreesboro, TN 37129
(615) 867-7777
2640 S. Church St.
Murfreesboro, TN 37127
(615) 904-6330
210 Commerce Dr.
Smyrna, TN 37167
(615) 904-6300
Smith County
1300 Main St. N.
Carthage, TN 37030
(615) 735-3990
7 New Middleton Hwy.
Gordonsville, TN 38563
(615) 683-3990
Sumner County
455 West Main St.
Gallatin, TN 37066
(615) 442-1470
175 East Main St.
Hendersonville, TN 37075
(615) 447-2990
1630 Nashville Pike
Suite 100
Gallatin, TN 37066
(615) 442-1480
Trousdale County
127 McMurry Blvd.
Hartsville, TN 37074
(615) 374-4133
Williamson County
9200 Carothers Pkwy.
Suite 108
Franklin, TN 37067
(615) 600-0928
5029 Harpeth Drive
Brentwood, TN 37027
(615) 695-8880
124
2 0 2 4 A N N U A L R E P O R T
Asset Allocation & Management | Portfolio Management | Estate Planning
Financial Planning | Retirement Planning | Education Planning
Stocks, Bonds, and Mutual Funds
Raymond James Trust, N.A. is a subsidiary of Raymond James Financial, Inc. Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are affiliated with
Raymond James Trust. Securities offered through Raymond James Financial Services, Inc., member FINRA / SIPC Investment advisory services offered through Raymond James
Financial Services Advisors, Inc. Wilson Bank and Wilson Bank & Trust Investment Services are not registered broker/dealers and are independent of Raymond James Financial
Services. Investment products are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value.
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