Mail Stop 7010
November 18, 2005
via U.S. mail and facsimile
J. Randall Clemons
President and Chief Executive Officer
Wilson Bank Holding Company
623 West Main Street
Lebanon, Tennessee 37087
Re: Wilson Bank Holding Company
Form 10-K for Fiscal Year Ended December 31, 2004
Filed March 16, 2005
Form 10-K/A for Fiscal Year Ended December 31, 2004
Filed April 29, 2005
Forms 10-Q for Fiscal Quarters Ended March 31, 2005, June 30,
2005,
and September 30, 2005
File No. 0-20402
Dear Mr. Clemons:
We have reviewed your response letter dated October 25, 2005
and have the following additional comments. Where indicated, we
think you should revise your document in response to the comment.
If
you disagree, we will consider your explanation as to why our
comment
is inapplicable or a revision is unnecessary. Please be as
detailed
as necessary in your explanation. In one of our comments, we are
asking you to provide us with information so we may better
understand
your disclosure. After reviewing this information, we may raise
additional comments.
Form 10-K/A for the Fiscal Year Ended December 31, 2004
Report of Management on Internal Control Over Financial Reporting,
page 4
1. We note your response to comment 1 in our letter dated October
6,
2005. Specifically, you acknowledge that Maggart & Associates did
suggest you include certain new disclosures in your annual
financial
statements for the fiscal year ended December 31, 2004, such as
the
impact of any new accounting standards, other than temporary
impairment and your ability to sell the securities, and the
standby
letters of
credit sections. Your response appears to imply that Maggart &
Associates prepared the new disclosures that were "suggested" and
included in your annual financial statements. Furthermore, we
note
that the discounted cash flow spreadsheets you used to calculate
the
fair value for the financial assets and liabilities were
originally
created by Maggart & Associates.
Section II.B.1. of Release No. 33-8183, "Final Rule:
Strengthening
the Commission`s Requirements Regarding Auditor Independence"
states,
"...we are adopting rules stating that all bookkeeping services
would
cause the auditor to lack independence unless it is reasonable to
conclude that the results will not be subject to audit
procedures."
Because an audit includes the examination of evidence supporting
the
disclosures in the financial statements, it would appear that such
participation results in Maggart & Associates auditing its own
work,
thereby impairing Maggart & Associates` independence under the
SEC`s
auditor independence rules.
We note your representation to us in your letters dated September
23,
2005 on page 2 and October 25, 2005 on page 5 that you will be
able
to remedy the material weakness in your internal control over
financial reporting by having your personnel prepare the initial
draft of the annual, audited consolidated financial statements and
audited footnotes for the fiscal year ended December 31, 2005 and
each subsequent fiscal year. Please confirm to us that your
remediation of this material weakness will include preparation of
all
numerical and textual financial statement disclosures by your
personnel for the fiscal year ended December 31, 2005 and each
subsequent fiscal year. If not, please be advised that Maggart &
Associates` continued participation in the preparation of your
financial statements could result in the need for a re-audit by
another auditing firm.
2. We note your response to comment 2 in our letter dated October
6,
2005. You state that you continue to believe that your disclosure
controls and procedures are effective, despite the material
weakness
that led to the conclusion that your internal control over
financial
reporting is ineffective as of December 31, 2004. While we note
that
the definition of disclosure controls and procedures differs from
the
definition of internal control over financial reporting, the
underlying issue surrounding the material weakness identified can
and
often does affect both areas. As such, it remains unclear to us
how
you were able to conclude that your disclosure controls and
procedures are effective as of December 31, 2004 in light of
Maggart
& Associates statement on page 5 of your Form 10-K/A for the
fiscal
year ended December 31, 2004, "The lack of controls could result
in
incomplete or inaccurate disclosures in the financial statements."
Please refer to the definition of disclosure controls and
procedures
in Rule 13a-15(e) of the 1934 Exchange Act, which states
disclosure
controls and procedures "means controls and other procedures of an
issuer
that are designed to ensure that information required to be
disclosed
by the issuer in the reports that it files or submits under the
Act...is recorded, processed, summarized and reported, within the
time periods specified in the Commission`s rules and
forms...controls
and procedures designed to ensure that information required to be
disclosed by an issuer in the reports that it files or submits
under
the Act is accumulated and communicated to the issuer`s
management,
including its principal executive and principal financial
officers,
or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure."
If after further evaluation, you have reached a conclusion that
your
disclosure controls and procedures are ineffective as of December
31,
2004, please amend your Form 10-K for the fiscal year ended
December
31, 2004 to state as such.
If you continue to believe your disclosure controls and procedures
are effective as of December 31, 2004, please amend your Form 10-K
for the fiscal year ended December 31, 2004 to include disclosure
that explains how you were able to conclude that your disclosure
controls and procedures are effective in light of the material
weakness identified. Specifically, please include a comprehensive
discussion in Item 9A. Controls and Procedures, Evaluation of
Disclosure Controls and Procedures that sufficiently addresses
each
of the following points:
* A detailed description of the material weakness;
* The specific reasons why you do not believe this material
weakness
does not result in ineffective disclosure controls and procedures
as
of December 31, 2004, which also should address the statement in
your
auditor`s report on page 5 of the Form 10-K/A noted above; and
* The specific steps you are taking or intend to take to remediate
the material weakness.
* * * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a letter
with
your amendment that keys your responses to our comments and
provides
any requested information. Detailed letters greatly facilitate
our
review. Please file your letter on EDGAR. Please understand that
we
may have additional comments after reviewing your responses to our
comments.
You may contact Tracey Houser, Staff Accountant, at (202)
551-
3736, or me at (202) 551-3255, if you have questions regarding
comments on the financial statements and related matters.
Sincerely,
Nili Shah
Accounting Branch Chief
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J. Randall Clemons
Wilson Bank Holding Company
November 18, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE