1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
Commission file number 0-10402
WILSON BANK HOLDING COMPANY
(Exact name of registrant as specified in its charter)
Tennessee 62-1497076
--------------------------------------- ----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
623 West Main Street
Lebanon, Tennessee 37087
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(615) 444-2265
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $2.00 PAR VALUE PER SHARE
----------------------------------------------------------------------
(Title of class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant on March 15, 1999, was approximately $47,755,593. The market value
calculation was determined using $38.50 per share.
Shares of common stock, $2.00 par value per share, outstanding on March 15,
1999, were 1,455,289.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K Documents from which portions are incorporated by reference
- ----------------- -----------------------------------------------------------
Part II Portions of the Registrant's Annual Report to Shareholders
for the fiscal year ended December 31, 1998 are
incorporated by reference into Items 5, 6, 7, and 8.
Part III Portions of the Registrant's Proxy Statement relating to
the Registrant's Annual Meeting of Shareholders to be held on
April 13, 1999 are incorporated by reference into Items
10, 11, 12 and 13.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
Wilson Bank Holding Company (the "Company") was incorporated on March 17, 1992
under the laws of the State of Tennessee. The purpose of the Company was to
acquire all of the issued and outstanding capital stock of Wilson Bank and Trust
(the "Bank") and act as a one bank holding company. On November 17, 1992, the
Company acquired 100% of the capital stock of the Bank pursuant to the terms of
a plan of share exchange and agreement.
All of the Company's banking business is conducted through the Bank, a state
chartered bank organized under the laws of the State of Tennessee, the Bank's
wholly-owned subsidiary Hometown Finance, Inc., DeKalb Community Bank ("DCB")
and Community Bank of Smith County ("CBSC"). The Bank on December 31, 1998 had
eight full service banking offices located in Wilson County, Tennessee and one
full service banking facility in Trousdale County, Tennessee. Hometown Finance,
Inc., a finance company organized under the Tennessee Industrial Loan and Thrift
Companies Act (the "Finance Company") had one office in Lebanon (Wilson County).
DCB had two full service banking offices in DeKalb County (one office located
in Smithville, Tennessee and one office located in Alexandria, Tennessee). CBSC
had one office located in Carthage, Tennessee (Smith County). The Finance
Company began operations in September 1994, DCB in April 1996 and CBSC in
December 1996. As of December 31, 1998, revenues and expenses of DCB, CBSC, and
the Finance Company have not had a material effect on the earnings of the
Company.
The Company's principal executive office is located at 623 West Main Street,
Lebanon, Tennessee, which is also the principal location of the Bank. The Bank's
branch offices are located at 1444 Baddour Parkway, Lebanon, Tennessee; 200
Tennessee Boulevard, Lebanon, Tennessee; Public Square, Watertown, Tennessee;
8875 Stewart's Ferry Pike, Gladeville, Tennessee; 1476 North Mt. Juliet Road,
Mt. Juliet, Tennessee; 127 McMurry Boulevard, Hartsville, Tennessee (which
opened on March 8, 1998); 1130 Castle Heights Avenue North, Lebanon, Tennessee
(which opened on December 5, 1998); and the Wal-Mart Super Center, Lebanon,
Tennessee. The Finance Company is located at 502 West Main Street, Lebanon,
Tennessee 37087. Management believes that Wilson County and Trousdale County
offer an environment for continued banking growth in the Company's target
market, which consists of local consumers, professionals and small businesses.
The 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 Bank also offers custodial,
trust and discount brokerage services to its customers. The Bank does not have a
concentration of deposits obtained from a single person or entity or a small
group of persons or entities, the loss of which would have a material adverse
affect on the business of the Bank. Furthermore, no concentration of loans
exists within a single industry or group of related industries.
The Bank was organized in 1987 to provide Wilson County a locally owned, locally
managed commercial bank. Since its opening, the Bank has experienced a steady
growth in deposits and loans as a result of providing personal, service oriented
banking services to its targeted market. For the year ended December 31, 1998,
the Company reported net earnings of approximately $4.5 million and had total
assets of approximately $432.0 million.
DeKalb County Bank was organized and began operations as a de novo state
chartered bank in 1996. DCB is 50% owned by the Company and 50% owned by
residents of DeKalb County. DCB operates two full service branches, one in
Smithville and one in Alexandria, Tennessee. DCB is considered a subsidiary of
the Company for purposes of the Bank Holding Company Act of 1956.
Management believes that DeKalb County offers an environment for continued
growth since it is geographically close to Wilson County and two locally-owned
banks in DeKalb County recently were acquired by larger banks. DCB 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. DCB does not have a concentration of deposits obtained from a
single person or entity or a small group of persons or entities, the loss of
which would have a material adverse affect on the business of DCB. Furthermore,
no concentration of loans exists within a single industry or group of related
industries.
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Community Bank of Smith County was organized as a de novo state chartered bank
in 1996. CBSC is 50% owned by the Company and 50% owned by residents of Smith
County. CBSC is considered a subsidiary of the Company for purposes of the Bank
Holding Company Act of 1956. Management believes that Smith County offers an
environment for continued growth since it is contiguous to Wilson County and has
only three other financial institutions. CBSC 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. CBSC does not have a concentration of deposits obtained from a single
person or entity or a small group of persons or entities, the loss of which
would have a material adverse affect on the business of CBSC. Furthermore, no
concentration of loans exists within a single industry or group of related
industries.
FINANCIAL AND STATISTICAL INFORMATION
The Company's audited financial statements, selected financial data and
Management's Discussion and Analysis of Financial Condition and Results of
Operation contained in the Company's Annual Report to Shareholders for the year
ended December 31, 1998 filed as Exhibit 13 to this Form 10-K (the "1998 Annual
Report"), are incorporated herein by reference.
REGULATION AND SUPERVISION
In addition to the information set forth herein, Management's Discussion and
Analysis of Financial Condition and Results of Operations, incorporated by
reference in Item 7 hereof, further discusses recent banking legislation and
regulation and should be reviewed in conjunction herewith.
The Company, the Bank, DCB, CBSC and the Finance Company are subject to
extensive regulation under state and federal statutes and regulations. The
discussion in this section, which briefly summarizes certain of such statutes,
does not purport to be complete, and is qualified in its entirety by reference
to such statutes. Other state and federal legislation and regulations directly
and indirectly affecting banks are likely to be enacted or implemented in the
future; however, such legislation and regulations and their effect on the
business of the Company and its subsidiaries cannot be predicted.
The Company is a bank holding company within the meaning of the Bank Holding
Company Act of 1956 (the "Act") and is registered with the Board of Governors of
the Federal Reserve System (the "Board"). The Company is required to file annual
reports with, and is subject to examination by, the Board. The Bank, DCB, CBSC
and the Finance Company are chartered under the laws of the state of Tennessee
and are subject to the supervision of, and are regularly examined by, the
Tennessee Department of Financial Institutions. The Bank, DCB and CBSC are also
regularly examined by the Federal Deposit Insurance Corporation.
Under the Act, a bank holding company may not directly or indirectly acquire
ownership or control or more than five percent of the voting shares or
substantially all of the assets of any company, including a bank, without the
prior approval of the Board. In addition, bank holding companies are generally
prohibited under the Act from engaging in non-banking activities, subject to
certain exceptions. Under the Act, the Board is authorized to approve the
ownership by a bank holding company of shares of any company whose activities
have been determined by the Board to be so closely related to banking or to
managing or controlling banks as to be a proper incident thereto.
Under the Tennessee Bank Structure Act, a bank holding company which controls
30% or more of the total deposits in all federally insured financial
institutions in Tennessee is prohibited from acquiring any bank in Tennessee.
Furthermore, no bank holding company may acquire any bank in Tennessee that has
been in operation less than five years or organize a new bank in Tennessee,
except in the case of certain interim bank mergers and acquisitions of banks in
financial difficulty. State banks and national banks in Tennessee, however, may
establish branches anywhere in the state.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"IBBEA") authorizes interstate acquisitions of banks and bank holding companies
without geographic limitation beginning on June 1, 1997. In addition, the IBBEA
authorizes a bank to merge with a bank in another state as long as neither of
the states has opted out of interstate branching between the date of enactment
of the IBBEA and May 1, 1997. Tennessee enacted interstate branching laws in
response to the federal law which prohibit the establishment or acquisition in
Tennessee by any bank of a branch office, branch bank or other branch facility
in Tennessee except (i) a Tennessee-Chartered Bank, (ii) a national bank which
has its main office in Tennessee or (iii) a bank which merges or consolidates
with a Tennessee-Chartered bank or national bank with its main office in
Tennessee.
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The Company, Bank, DCB and CBSC are subject to certain restrictions imposed by
the Federal Reserve Act and the Federal Deposit Insurance Act, respectively, on
any extensions of credit to the bank holding company or its subsidiaries, on
investments in the stock or other securities of the bank holding company or its
subsidiary, and on taking such stock or other securities as collateral for loans
of any borrower.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
covers a wide expanse of banking regulatory issues. FDICIA deals with
recapitalization of the Bank Insurance Fund, with deposit insurance reform,
including requiring the FDIC to establish a risk- based premium assessment
system, and with a number of other regulatory and supervisory matters.
The Financial Reform, Recovery and Enforcement Act of 1989 ("FIRREA") provides
that a holding company's controlled insured depository institutions are liable
for any loss incurred by the FDIC in connection with the default of, or any
FDIC-assisted transaction involving, an affiliated insured bank or savings
association.
The maximum permissible rates of interest on most commercial and consumer loans
made by the Bank and the Finance Company are governed by Tennessee's general
usury law and the Tennessee Industrial Loan and Thrift Companies Act
("Industrial Loan Act"). Certain other usury laws affect limited classes of
loans, but the laws referenced above are by far the most significant.
Tennessee's general usury law authorizes a floating rate of 4% per annum over
the average prime or base commercial loan rate, as published by the Federal
Reserve Board from time to time, subject to an absolute 24% per annum limit. The
Industrial Loan Act, which is applicable to the Finance Company and also is
generally applicable to most of the loans made by the Bank in Tennessee,
authorizes an interest rate of up to 24% per annum and also allows certain loan
charges, generally on a more liberal basis than does the general usury law.
COMPETITION
The banking industry is highly competitive. The Company, through its
subsidiaries, competes with national and state banks for deposits, loans, and
trust and other services.
The Bank competes with much larger commercial banks in Wilson County, including
three banks owned by regional multi-bank holding companies headquartered out of
Tennessee and four banks owned by Tennessee multi-bank holding companies. These
institutions enjoy existing depositor relationships and greater financial
resources than the Company and can be expected to offer a wider range of banking
services. In addition the Bank competes with one commercial bank headquartered
in Wilson County and one headquartered in an adjacent county. Two credit unions
provide additional competition.
DCB competes with much larger commercial banks in DeKalb County, including two
banks owned by Tennessee multi-bank holding companies. While these institutions
enjoy existing depositor relationships and greater financial resources than DCB
and can be expected to offer a wider range of banking services, DCB can expect
to attract customers since it is locally owned and most loan and management
decisions will be made at the local level. In addition the Bank competes with
one commercial bank headquartered in DeKalb County.
CBSC competes with three commercial banks in or near Smith County, including two
banks based in Smith County and one based in an adjacent county. These
institutions enjoy existing depositor relationships; however, the Company can be
expected to offer a wider range of banking services at CBSC through its
financial resources as well as programs offered by other subsidiaries of the
Company.
Given the competitive marketplace, the Company makes no predictions as to how
its relative position will change in the future.
MONETARY POLICIES
The results of operations of the Bank and the Company are affected by the
policies of certain regulatory authorities, particularly the Board. An important
function of the Board is to regulate the national supply of bank credit in order
to combat recession and curb inflation. Among the instruments used to attain
these objectives are open market operations in U.S. government securities,
changes in the discount rate on bank borrowings and changes in reserve
requirements relating to member bank deposits. These instruments are used in
varying combinations to influence overall growth and distribution of bank loans,
investments and deposits, and their use may also affect interest rates charged
on loans and paid for deposits. Policies of the regulatory agencies have had a
significant effect on the operating results of commercial banks in the past and
are expected to do so in the future. The effect of such policies upon the future
business and results of operations of the Company, Bank, DCB and CBSC cannot be
predicted with accuracy.
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EMPLOYMENT
As of March 1, 1999, the Company and its subsidiaries collectively employed 176
full-time equivalent employees and 27 part-time employees. Additional personnel
will be hired as needed to meet future growth.
YEAR 2000
As with other companies, advances and changes in technology can have a
significant impact on business and operations. Many computer programs were
originally designed to recognize calendar fields by their last two digits.
Calculations performed using these truncated fields will not work properly with
dates from the Year 2000 and beyond. This "Year 2000" problem can create risks
for a company from unforeseen problems in its own computer systems and from the
systems of the company's vendors and customers.
The Company has implemented a plan in order to avoid any problems related to the
Year 2000 computer issue. Based upon current information, management presently
believes that specific costs related to the Company's Year 2000 systems issues
will not have a material impact on the operations, cash flows or financial
condition of the Company. For further information on Year 2000, please refer to
"Year 2000 Issues" under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 18 and 19 of the
Company's 1998 Annual Report, which is incorporated herein by reference.
STATISTICAL INFORMATION REQUIRED BY GUIDE 3
The statistical information required to be displayed under Item 1 pursuant to
Guide 3, "Statistical Disclosure by Bank Holding Companies," of the Exchange Act
Industry Guides is incorporated herein by reference to the Consolidated
Financial Statements and the notes thereto and the Management's Discussion and
Analysis sections in the Company's 1998 Annual Report. Certain information not
contained in the Company's 1998 Annual Report, but required by Guide 3, is
contained in the tables immediately following:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
I. Distribution of Assets, Liabilities and Stockholders' Equity: Interest Rate
and Interest Differential
The Schedule which follows indicates the average balances for each major balance
sheet item, an analysis of net interest income 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. 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 34%.
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 current year. Changes in interest
income and expense not due solely to volume or rate changes are included in the
"change due to rate" category.
Non-accrual loans have been included in the loan category. Loan fees of
$488,000, $271,000 and $150,000 for 1998, 1997 and 1996, respectively, are
included in loan income and represent an adjustment of the yield on these loans.
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
IN THOUSANDS, EXCEPT INTEREST RATES
--------------------------------------------------------------------------------------------
1998 1997 1998/1997 CHANGE
----------------------------- --------------------------- -----------------------------
Average Interest Income/ Average Interest Income/ Due to Due to
Balance Rate Expense Balance Rate Expense Volume Rate Total
-------- ---- ------- -------- ---- ------- ------ ---- -----
Loans, net of unearned interest $263,605 9.40% 24,790 $215,073 9.52% 20,466 4,620 (296) 4,324
Investment securities - taxable 52,371 6.64 3,480 38,609 6.36 2,457 875 148 1,023
Investment securities - tax exempt 20,356 5.53 1,126 20,346 5.73 1,166 1 (41) (40)
Taxable equivalent adjustment -- 2.85 580 -- 2.95 600 -- (20) (20)
-------- ---- ------ -------- ---- ------ -----
Total tax-exempt
investment securities 20,356 8.38 1,706 20,346 8.68 1,766 1 (61) (60)
-------- ---- ------ -------- ---- ------ -----
Total investment securities 72,727 7.13 5,186 58,955 7.16 4,223 986 (23) 963
-------- ---- ------ -------- ---- ------ -----
Loans held for sale 3,534 6.20 219 2,062 5.38 111 79 29 108
Federal funds sold 26,113 5.11 1,335 18,356 5.13 941 398 (4) 394
-------- ---- ------ -------- ---- ------ -----
Total earning assets 365,979 8.62 31,530 294,446 8.74 25,741 6,252 (463) 5,789
-------- ---- ------ -------- ---- ------ -----
Cash and due from banks 11,041 8,943
Allowance for possible loan losses (3,170) (2,730)
Bank premises and equipment 13,110 10,855
Other assets 4,856 4,113
-------- --------
Total assets $391,816 $315,627
======== ========
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
IN THOUSANDS, EXCEPT INTEREST RATES
--------------------------------------------------------------------------------------------
1998 1997 1998/1997 CHANGE
----------------------------- --------------------------- -----------------------------
Average Interest Income/ Average Interest Income/ Due to Due to
Balance Rate Expense Balance Rate Expense Volume Rate Total
-------- ---- ------- -------- ---- ------- ------ ---- -----
Deposits:
Negotiable order of withdrawal
accounts $ 21,821 1.94% 423 $ 23,232 2.22% 515 (31) (61) (92)
Money market demand accounts 72,828 3.79 2,758 54,222 3.82 2,069 711 22 689
Individual retirement accounts 16,530 5.68 939 13,765 5.72 787 159 7 152
Other savings deposits 18,225 4.57 833 12,766 4.57 583 250 -- 250
Certificates of deposit,
$100,000 and over 66,993 5.82 3,902 51,315 5.76 2,957 903 42 945
Certificates of deposit
under $100,000 117,296 5.76 6,760 95,813 5.65 5,411 1,214 135 1,349
-------- ---- ------ -------- ---- ------ -----
Total interest-bearing
deposits 313,693 4.98 15,615 251,113 4.91 12,322 3,073 220 3,293
Demand 36,513 -- -- 28,865 -- -- --
-------- ---- ------ -------- ---- ------ -----
Total deposits 350,206 4.46 15,615 279,978 4.40 12,322 3,090 203 3,293
-------- ---- ------ -------- ---- ------ -----
Securities sold under repurchase
agreements 8,503 4.54 386 7,326 4.82 353 57 (24) 33
Federal funds purchased 54 3.70 2 -- -- -- 2 -- 2
-------- ---- ------ -------- ---- ------ -----
Total deposits and
borrowed funds 358,763 4.46 16,003 287,304 4.41 12,675 3,151 177 3,328
-------- ---- ------ -------- ---- ------ -----
Other liabilities 6,118 5,458
Stockholders' equity 26,935 22,865
-------- --------
Total liabilities and
stockholders' equity $391,816 $315,627
======== ========
Net interest income 15,527 13,066
====== ======
Net yield on earning assets 4.24% 4.44%
==== ====
Net interest spread 4.16% 4.33%
==== ====
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
IN THOUSANDS, EXCEPT INTEREST RATES
--------------------------------------------------------------------------------------------
1997 1996 1997/1996 CHANGE
----------------------------- --------------------------- -----------------------------
Average Interest Income/ Average Interest Income/ Due to Due to
Balance Rate Expense Balance Rate Expense Volume Rate Total
-------- ---- ------- -------- ---- ------- ------ ---- -----
Loans, net of unearned interest $215,073 9.52% 20,466 165,807 9.48% 15,725 4,670 71 4,741
Investment securities - taxable 38,609 6.36 2,457 32,805 5.90 1,934 342 181 523
Investment securities - tax exempt 20,346 5.73 1,166 19,499 5.95 1,161 50 (45) 5
Taxable equivalent adjustment -- 2.95 600 -- 3.07 598 26 (24) 2
-------- ---- ------ -------- ---- ------ -----
Total tax-exempt
investment securities 20,346 8.68 1,766 19,499 9.02 1,759 76 (69) 7
-------- ---- ------ -------- ---- ------ -----
Total investment securities 58,955 7.16 4,223 52,304 7.06 3,693 470 60 530
-------- ---- ------ -------- ---- ------ -----
Loans held for sale 2,062 5.38 111 1,823 5.81 106 14 (9) 5
Federal funds sold 18,356 5.13 941 9,710 5.32 517 460 (36) 424
Interest-bearing deposits in banks -- -- -- 60 8.33 5 (5) -- (5)
-------- ---- ------ -------- ---- ------ -----
Total earning assets 294,446 8.74 25,741 229,704 8.73 20,046 5,652 43 5,695
-------- ---- ------ -------- ---- ------ -----
Cash and due from banks 8,943 7,644
Allowance for possible loan losses (2,730) (2,165)
Bank premises and equipment 10,855 7,664
Other assets 4,113 2,297
-------- --------
Total assets $315,627 245,144
======== ========
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
IN THOUSANDS, EXCEPT INTEREST RATES
--------------------------------------------------------------------------------------------
1997 1996 1997/1996 CHANGE
----------------------------- --------------------------- -----------------------------
Average Interest Income/ Average Interest Income/ Due to Due to
Balance Rate Expense Balance Rate Expense Volume Rate Total
-------- ---- ------- -------- ---- ------- ------ ---- -----
Deposits:
Negotiable order of withdrawal
accounts $ 23,232 2.22% 515 20,102 2.38% 479 75 (39) 36
Money market demand accounts 54,222 3.82 2,069 41,627 3.62 1,508 455 106 561
Individual retirement accounts 13,765 5.72 787 11,224 5.77 648 147 (8) 139
Other savings deposits 12,766 4.57 583 8,638 4.36 377 180 26 206
Certificates of deposit,
$100,000 and over 51,315 5.76 2,957 33,476 5.79 1,938 1,033 (14) 1,019
Certificates of deposit
under $100,000 95,813 5.65 5,411 78,354 5.65 4,425 986 -- 986
-------- ---- ------ -------- ---- ------ -----
Total interest-bearing
deposits 251,113 4.91 12,322 193,421 4.85 9,375 2,798 149 2,947
Demand 28,865 -- -- 21,807 -- -- --
-------- ---- ------ -------- ---- ------ -----
Total deposits 279,978 4.40 12,322 215,228 4.36 9,375 2,823 124 2,947
-------- ---- ------ -------- ---- ------ -----
Securities sold under repurchase
agreements 7,326 4.82 353 8,226 5.13 422 46 (115) (69)
-------- ---- ------ -------- ---- ------ -----
Total deposits and
borrowed funds 287,304 4.41 12,675 223,454 4.38 9,797 2,797 81 2,878
-------- ---- ------ -------- ---- ------ -----
Other liabilities 5,458 3,271
Stockholders' equity 22,865 18,419
-------- -------
Total liabilities and
stockholders' equity $315,627 245,144
======== =======
Net interest income 13,066 10,249
====== ======
Net yield on earning assets 4.44% 4.46%
==== ====
Net interest spread 4.33% 4.35%
==== ====
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
II. Investment Portfolio
A. Securities at December 31, 1998 consist of the following:
SECURITIES HELD-TO-MATURITY
---------------------------------------------------
(In Thousands)
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
U.S. Treasury and other
U.S. Government
agencies and
corporations $ 1,097 7 -- 1,104
Obligations of state and
political subdivisions 15,202 479 -- 15,681
Mortgage-backed
securities 4,109 15 39 4,085
------- --- ------ ------
$20,408 501 39 20,870
======= === ====== ======
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 and
corporations $49,189 283 43 49,429
Obligations of state and
political subdivisions 2,732 91 -- 2,823
Mortgage-backed
securities 922 7 1 928
------- --- ------ ------
$52,843 381 44 53,180
======= === ====== ======
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
II. Investment Portfolio, Continued
A. Continued
Investment securities at December 31, 1997 consist of the following:
SECURITIES HELD-TO-MATURITY
---------------------------------------------------
(In Thousands)
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
U.S. Treasury and other
U.S. Government
agencies and
corporations $ 1,197 16 -- 1,213
Obligations of state and
political subdivisions 16,989 332 7 17,314
Mortgage-backed
securities 6,065 12 57 6,020
------- --- ------ ------
$24,251 360 64 24,547
======= === ====== ======
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 and
corporations $30,977 82 20 31,039
Obligations of state and
political subdivisions 4,781 123 1 4,903
Mortgage-backed
securities 1,294 19 9 1,304
------- --- ------ ------
$37,052 224 30 37,246
======= === ====== ======
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
II. Investment Portfolio, Continued
B. The following schedule details the estimated maturities and weighted
average yields of investment securities (including mortgage backed
securities) of the Company at December 31, 1998.
Estimated Weighted
Amortized Market Average
Available-For-Sale Securities Cost Value Yields
----------------------------- --------- ---------- ---------
(In Thousands)
Obligations of U.S. Treasury and
other U.S. Government agencies
and corporations, including
mortgage-backed securities:
Less than one year $ 950 956 5.75
One to five years 6,375 6,486 6.12
Five to ten years 35,480 35,589 6.54
More than ten years 6,294 6,314 6.91
------- ------ -----
Total securities of
U.S. Treasury and other
U.S. Government agencies
and corporations 49,099 49,345 6.52
------- ------ -----
Obligations of states and political subdivisions*:
Less than one year 496 503 11.61
One to five years 1,420 1,465 8.83
Five to ten years 517 538 8.91
More than ten years 299 317 8.61
------- ------ -----
Total obligations of states
and political subdivisions 2,732 2,823 9.33
------- ------ -----
Other:
Federal Home Loan Bank stock 1,012 1,012 7.10
------- ------ -----
Total investment securities $52,843 53,180 6.67
======= ====== =====
* Weighted average yield is stated on a tax-equivalent basis, assuming a
weighted average Federal income tax rate of 34%.
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WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
II. Investment Portfolio, Continued
B. Continued
Estimated Weighted
Amortized Market Average
Held-to-Maturity Securities Cost Value Yields
---------------------------- --------- ---------- ---------
(In Thousands)
Obligations of U.S. Treasury and
other U.S. Government agencies
and corporations, including
mortgage-backed securities:
Less than one year $ 254 255 6.03
One to five years 1,543 1,551 8.39
Five to ten years 2,637 2,610 4.99
More than ten years 772 773 7.06
------- ------ -----
Total securities of
U.S. Treasury and other
U.S. Government agencies
and corporations 5,206 5,189 6.36
------- ------ -----
Obligations of states and political subdivisions*:
Less than one year 2,204 2,212 7.76
One to five years 4,081 4,183 8.08
Five to ten years 5,089 5,308 7.97
More than ten years 3,828 3,978 8.10
------- ------ -----
Total obligations of states
and political subdivisions 15,202 15,681 8.00
------- ------ -----
Total investment securities $20,408 20,870 7.58
======= ====== =====
* Weighted average yield is stated on a tax-equivalent basis, assuming a
weighted average Federal income tax rate of 34%.
13
15
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
III. Loan Portfolio:
A. Loan Types
The following schedule details the loans of the Company at December
31, 1998 and 1997.
In Thousands
---------------------------
1998 1997
--------- --------
Commercial, financial and
agricultural $ 100,217 82,515
Real estate - construction 21,809 18,159
Real estate - mortgage 130,927 103,155
Installment 44,299 38,423
--------- --------
Total loans 297,252 242,252
Less unearned interest (1,322) (1,696)
--------- --------
Total loans, net of unearned interest 295,930 240,556
Less allowance for possible loan losses (3,244) (2,890)
--------- --------
Net loans $ 292,686 237,666
========= ========
14
16
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
III. Loan Portfolio, Continued:
B. Maturities and Sensitivities of Loans to Changes in Interest Rates
The following schedule details maturities and sensitivity to interest
rates changes for commercial loans of the Company at December 31,
1998.
1 Year to
Less Than Less Than After 5
1 Year 5 Years Years Total
------- ------ ------- -------
Maturity Distribution:
Commercial, financial
and agricultural $60,761 20,780 18,676 100,217
Real estate -
construction 20,566 240 1,003 21,809
------- ------ ------- -------
$81,327 21,020 19,679 122,026
======= ====== ======= =======
Interest-Rate Sensitivity:
Fixed interest rates $71,334 15,207 7,616 94,157
Floating or adjustable
interest rates 9,993 5,813 12,063 27,869
------- ------ ------- -------
Total commercial,
financial and
agricultural
loans plus
real estate -
construction
loans $81,327 21,020 19,679 122,026
======= ====== ======= =======
* Includes demand loans, bankers acceptances, commercial paper and deposit
notes.
15
17
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
III. Loan Portfolio, Continued
C. Risk Elements
The following schedule details selected information as to
non-performing loans of the Company at December 31, 1998 and 1997.
In Thousands
------------------------------
1998 1997
-------- -------
Non-accrual loans:
Commercial, financial and agricultural $ -- 1
Real estate - construction -- --
Real estate - mortgage 25 6
Installment 198 153
Lease financing receivable -- --
-------- -------
Total non-accrual $ 223 160
======== =======
Loans 90 days past due:
Commercial, financial and agricultural -- 30
Real estate - construction -- --
Real estate - mortgage 118 66
Installment 438 1,123
Lease financing receivable -- --
-------- -------
Total loans 90 days past due $ 556 1,219
======== =======
Renegotiated loans:
Commercial, financial and agricultural $ -- --
Real estate - construction -- --
Real estate - mortgage -- --
Installment -- --
Lease financing receivable -- --
-------- -------
Total renegotiated loans past due $ -- --
======== =======
Loans current - considered uncollectible $ -- --
======== =======
Total non-performing loans $ 779 1,379
======== =======
Total loans, net of unearned interest $295,930 240,556
======== =======
Percent of total loans outstanding,
net of unearned interest 0.26% 0.57%
======== =======
Other real estate $ 138 63
======== =======
16
18
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
III. Loan Portfolio, Continued:
C. Risk Elements, Continued:
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 a
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 a non-accrual status,
the accrued but unpaid interest is also evaluated as to
collectibility. If collectibility is doubtful, the unpaid interest is
charged off. Thereafter, interest on non-accrual loans is recognized
only as received. Non-accrual loans totaled $223,000 at December 31,
1998, $160,000 at December 31, 1997 and $260,000 at December 31, 1996.
Gross interest income on non-accrual loans, that would have been
recorded for the year ended December 31, 1998 if the loans had been
current totaled $16,000 as compared to $11,000 in 1997 and $12,000 in
1996. The amount of interest income recognized on total loans during
1998 totaled $24,790,000 as compared to $20,466,000 in 1997 and
$15,725,000 in 1996.
At December 31, 1998, loans, which include the above, totaling
$1,603,000 were included in the Company's internal classified loan
list. Of these loans $1,186,000 are real estate and $417,000 are
various other types of loans. The collateral values securing these
loans total approximately $2,140,000, ($1,941,000 related to real
property and $199,000 related to the various other types of loans).
Such loans are listed as classified when information obtained about
possible credit problems of the borrower has prompted management to
question the ability of the borrower to comply with the repayment
terms of the loan agreement. The loan classifications do not represent
or result from trends or uncertainties which management expects will
materially impact future operating results, liquidity or capital
resources.
At December 31, 1998 there were no loan concentrations that exceeded
ten percent of total loans other than as included in the preceding
table of types of loans. Loan concentrations are amounts loaned to a
multiple number of borrowers engaged in similar activities which would
cause them to be similarly impacted by economic or other conditions.
At December 31, 1998 and 1997 other real estate totaled $138,000 and
$63,000, respectively.
17
19
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
III. Loan Portfolio, Continued:
C. Risk Elements, Continued:
There were no material amounts of other interest-bearing assets
(interest-bearing deposits with other banks, municipal bonds, etc.) at
December 31, 1998 which would be required to be disclosed as past due,
non-accrual, restructured or potential problem loans, if such
interest-bearing assets were loans.
18
20
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
IV. Summary of Loan Loss Experience
The following schedule details selected information related to the
allowance for possible loan loss account of the Company at December
31, 1998 and 1997 and the years then ended.
In Thousands Except Percentages
----------------------------------
1998 1997
--------- --------
Allowance for loan losses at beginning of period $ 2,890 2,452
--------- --------
Less: net loan charge-offs:
Charge-offs:
Commercial, financial and agricultural -- --
Real estate construction -- --
Real estate - mortgage (100) (9)
Installment (605) (477)
Lease financing -- --
--------- --------
(705) (486)
--------- --------
Recoveries:
Commercial, financial and agricultural -- --
Real estate construction -- --
Real estate - mortgage 2 --
Installment 47 96
Lease financing -- --
--------- --------
49 96
--------- --------
Net loan charge-offs (656) (390)
--------- --------
Provision for loan losses charged to expense 1,010 828
--------- --------
Allowance for loan losses at end of period $ 3,244 2,890
========= ========
Total loans, net of unearned interest, at end of year $ 295,930 240,556
========= ========
Average total loans outstanding,
net of unearned interest, during year $ 263,605 215,073
========= ========
Net charge-offs as a percentage of average
total loans outstanding, net of unearned
interest, during year 0.25% 0.18%
========= ========
Ending allowance for loan losses as a
percentage of total loans outstanding
net of unearned interest, at end of year 1.10% 1.20%
========= ========
19
21
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
IV. Summary of Loan Loss Experience, Continued
The allowance for possible loan losses is an amount that management
believes will be adequate to absorb possible losses on existing loans
that may become uncollectible. The provision for possible loan losses
charged to operating expense is based on past loan loss experience and
other factors which, in management's judgment, deserve current
recognition in estimating possible loan losses. Such other factors
considered by management include growth and composition of the loan
portfolio, review of specific loan problems, the relationship of the
allowance for possible loan losses to outstanding loans, adverse
situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral and current economic
conditions that may affect the borrower's ability to pay.
Management conducts a continuous review of all loans that are
delinquent, previously charged down or loans which are determined to
be potentially uncollectible. Loan classifications are reviewed
periodically by a person independent of the lending function. The
Board of Directors periodically reviews the adequacy of the allowance
for possible loan losses.
The following detail provides a breakdown of the allocation of the
allowance for possible loan losses:
December 31, 1998 December 31, 1997
------------------------------ -----------------------------
Percent Percent
of Loans of Loans
In Each In Each
Category Category
In To Total In To Total
Thousands Loans Thousands Loans
--------- ----- --------- -----
Commercial, financial
and agricultural $ 396 33.7% 483 34.1
Real estate construction 184 7.3 249 7.5
Real estate mortgage 1,785 44.1 1,552 42.6
Installment 879 14.9 606 15.8
------ ----- ----- -----
$3,244 100.0 2,890 100.0
====== ===== ===== =====
20
22
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
V. Deposits
The average amounts and average interest rates for deposits for 1998
and 1997 are detailed in the following schedule:
1998 1997
------------------------------- ------------------------------
Average Average
Balance Balance
------------ Average ------------ Average
In Thousands Rate In Thousands Rate
------------ ---- ------------ ----
Non-interest bearing deposits $ 36,513 --% 28,865 --%
Negotiable order of withdrawal
accounts 21,821 1.94% 23,232 2.22%
Money market demand accounts 72,828 3.79% 54,222 3.82%
Individual retirement accounts 16,530 5.68% 13,765 5.72%
Other savings 18,225 4.57% 12,766 4.57%
Certificates of deposit $100,000
and over 66,993 5.82% 51,315 5.76%
Certificates of deposit under $100,000 117,296 5.76% 95,813 5.65%
-------- ---- ------- ----
$350,206 4.46% 279,978 4.40%
======== ==== ======= ====
The following schedule details the maturities of certificates of
deposit and individual retirement accounts of $100,000 and over at
December 31, 1998.
In Thousands
------------------------------------------------------------
Certificates Individual
of Retirement
Deposit Accounts Total
------------- ----------- -------
Less than three months $23,525 -- 23,525
Three to six months 15,113 578 15,691
Six to twelve months 18,312 1,255 19,567
More than twelve months 17,646 2,786 20,432
------- ------ ------
$74,596 4,619 79,215
======= ====== ======
21
23
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
VI. Return on Equity and Assets
The following schedule details selected key ratios of the Company at
December 31, 1998, 1997, and 1996.
1998 1997 1996
------- ------- -------
Return on assets 1.15% 1.16% 1.27%
(Net income divided by average total assets)
Return on equity 16.72% 16.02% 16.87%
(net income divided by average equity)
Dividend payout ratio 26.98% 28.63% 30.84%
(Dividends declared per share divided
by net income per share)
Equity to assets ratio 6.87% 7.24% 7.51%
(Average equity divided by average
total assets)
Leverage capital ratio 7.78% 8.21% 9.24%
(Equity divided by fourth quarter
average total assets, excluding the net
unrealized loss on available-for-sale
securities and including minority interest)
The minimum leverage capital ratio required by the regulatory agencies
is 4%.
Beginning January 1, 1991, new risk-based capital guidelines were
adopted by regulatory agencies. Under these guidelines, a credit risk
is assigned to various categories of assets and commitments ranging
from 0% to 100% based on the risk associated with the asset.
22
24
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
VI. Return on Equity and Assets, Continued
The following schedule details the Company's risk-based capital at
December 31, 1998 excluding the net unrealized loss on
available-for-sale securities which is shown as an addition to
stockholders' equity in the consolidated financial statements:
In Thousands
------------
Tier I capital:
Stockholders' equity, excluding the net
unrealized gain on available-for-sale
securities $ 29,070
Add: Minority interest (limited to
25% of Tier I capital) 3,587
--------
Total Tier I capital 32,657
Total capital:
Allowable allowance for loan losses
(limited to 1.25% of risk-weighted
assets) 3,244
--------
Total capital $ 35,901
========
Risk-weighted assets $291,556
========
Risk-based capital ratios:
Tier I capital ratio 11.20%
========
Total risk-based capital ratio 12.31%
========
23
25
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 1998
VI. Return on Equity and Assets, Continued
The Company is required to maintain a Total capital to risk-weighted
asset ratio of 8% and a Tier I capital to risk-weighted asset ratio of
4%. At December 31, 1998, the Company and its subsidiary banks were in
compliance with these requirements.
The following schedule details the Company's interest rate sensitivity
at December 31, 1998:
(In Thousands) Repricing Within
------------------------------------------------------------------------------
Total 0-30 Days 31-90 Days 91-180 Days 181-365 Days Over 1 Year
--------- --------- ---------- ----------- ------------ -----------
Earning assets:
Loans, net of
unearned interest $ 295,930 89,847 25,310 28,516 39,909 112,348
Securities 73,588 1,212 1,823 879 1,016 68,658
Loans held for sale 3,881 3,881 -- -- -- --
Federal funds sold 24,976 23,832 1,144 -- -- --
--------- -------- ------- ------- ------- -------
Total earning assets 398,375 118,772 28,277 29,395 40,925 181,006
--------- -------- ------- ------- ------- -------
Interest-bearing liabilities:
Negotiable order of
withdrawal accounts 25,581 25,581 -- -- -- --
Money market demand
accounts 81,638 81,638 -- -- -- --
Individual retirement
accounts 17,800 6,468 768 836 3,137 6,591
Other savings 19,471 19,471 -- -- -- --
Certificates of deposit,
$100,000 and over 74,596 7,148 15,929 15,562 18,312 17,645
Certificates of deposit,
under $100,000 126,674 8,558 13,879 20,208 41,349 42,680
Securities sold under
repurchase agreements 7,258 7,258 -- -- -- --
--------- -------- ------- ------- ------- -------
353,018 156,122 30,576 36,606 62,798 66,916
--------- -------- ------- ------- ------- -------
Interest-sensitivity gap $ 45,357 (37,350) (2,299) (7,211) (21,873) 114,090
========= ======== ======= ======= ======= =======
Cumulative gap (37,350) (39,649) (46,860) (68,733) 45,357
======== ======= ======= ======= =======
Interest-sensitivity gap
as % of total assets (8.65) (0.53) (1.67) (5.06) 26.41
======== ======= ======= ======= =======
Cumulative gap as % of
total assets (8.65) (9.18) (10.85) (15.91) 10.50
======== ======= ======= ======= =======
The Company presently maintains a liability sensitive position over
the next twelve months. 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 funds.
24
26
ITEM 2. DESCRIPTION OF PROPERTY
The Company's main office is owned by the Company and consists of approximately
four acres at 623 West Main Street, Lebanon, Tennessee. The building is a two
story, brick building, with approximately 35,000 square feet. The lot has
approximately 350 feet of road frontage on West Main Street. In addition
thereto, the Bank has nine branch locations located at 1444 Baddour Parkway,
Lebanon, Tennessee; 200 Tennessee Boulevard, Lebanon, Tennessee; 8875 Stewart's
Ferry Pike, Gladeville, Tennessee; Public Square, Watertown, Tennessee; 1476
North Mt. Juliet Road, Mt. Juliet, Tennessee; 1130 Castle Heights Avenue North,
Lebanon, Tennessee; 127 McMurry Blvd., Hartsville, Tennessee; and the Wal-Mart
Supercenter, Lebanon, Tennessee.
The Mt. Juliet office contains approximately 16,000 square feet of space; the
new Castle Heights Office contains 2,400 square feet of space and the new
Hartsville Office contains 8,000 square feet of space. The Gladeville branch
expanded its office building with new office space opening December 6, 1998. The
Gladeville branch now contains approximately 3,400 square feet of space. The
Lebanon facility at Tennessee Boulevard was expanded in 1997 to 2,200 square
feet of space. Each of the branch facilities of the Bank not otherwise described
above contains approximately 1,000 square feet of space. The Bank owns all of
its branch facilities except for the Lebanon facility at Tennessee Boulevard and
its space in the Wal-mart Supercenter, which are leased. The Finance Company's
principal place of business is at 502 West Main Street, Lebanon, Tennessee in a
building of approximately 1,000 square feet, which the Bank leases. The Bank
also leases space at four locations within Wilson County where it maintains and
operates automatic teller machines.
DCB has a bank facility at 576 West Broad Street in Smithville, Tennessee
containing approximately 6,800 square feet of space and a bank facility at 306
Brush Creek Road in Alexandria, Tennessee which occupies approximately 2,400
square feet of space. DCB owns both facilities. This serves as the main office
for DCB. CBSC recently replaced its one and only banking facility with a new
office building it owns at 1300 Main Street North, Carthage, Tennessee. CBSC's
new facility contains approximately 8,000 square feet of space.
A new full service branch facility of the Bank is under construction at 4736
Andrew Jackson Parkway in Hermitage, Tennessee. This Hermitage branch facility
is in Davidson County near the Wilson County border and, when open, will contain
approximately 8,000 square feet of space, a size and appearance similar to the
Bank's Hartsville branch office. The Hermitage branch office is expected to open
in the fall of 1999.
Management believes that each of the branch facilities for the Company's
subsidiaries described above is of a size and design that sufficiently meets
the need of employees, customers, and prospective customers of a full service
banking business at the locations identified.
ITEM 3. LEGAL PROCEEDINGS
There were no material legal proceedings pending at December 31, 1998, against
the Company, the Bank, DCB, CBSC or the Finance Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders in the fourth quarter of
1998.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
Information required by this item is contained under the heading "Wilson Bank
Holding Company Common Stock Market Information" on page 55 of the Company's
1998 Annual Report and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item is contained under the heading "Wilson Bank
Holding Company Financial Highlights (Unaudited)" on page 7 of the Company's
1998 Annual Report and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information required by this item is contained under the heading as set forth
for this item on pages 8 through 19 of the Company's 1998 Annual Report and is
incorporated herein by reference.
ITEM 7A. 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 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.
25
27
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
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.
The following table provides information about the Company's financial
instruments that are sensitive to changes in interest rates as of December 31,
1998. These market risk sensitive instruments have been entered into by the
Company for purposes other than trading. The Company does not hold market risk
sensitive instruments for trading purposes. The information provided by this
table should be read in connection with the Company's audited consolidated
financial statements and Management's Discussion and Analysis of Financial
Condition and Results of Operation contained in the 1998 Annual Report.
- -------------------------------------------------------------------------------
EXPECTED MATURITY DATE - YEAR ENDING DECEMBER 31,
------------------------------------------------- FAIR
1999 2000 2001 2002 2003 THEREAFTER TOTAL VALUE
---- ---- ---- ---- ---- ---------- ----- -----
(Dollars in Thousands)
EARNING ASSETS:
Loans, net of unearned
interest:
Variable rate $ 65,330 8,752 13,107 8,130 8,144 2,429 105,892 105,892
Average interest rate 8.68% 8.83% 8.51% 8.83% 8.83% 7.75% 8.72%
Fixed rate 117,847 11,381 16,915 13,479 13,415 17,001 190,038 190,460
Average interest rate 9.06% 10.48% 10.15% 10.16% 10.16% 7.74% 9.10%
Securities 3,910 5,674 1,880 3,354 1,909 56,861 73,588 74,050
Average interest rate 8.07% 7.05% 7.39% 6.86% 7.52% 6.87% 6.86%
Loans held for sale 3,881 - - - - - 3,881 3,881
Average interest rate 6.20% - - - - - 6.20%
Federal funds sold 24,976 - - - - - 24,976 24,976
Average interest rate 5.11% - - - - - 5.11%
Interest-bearing deposits 266,373 68,653 9,812 336 408 178 345,760 348,375
Average interest rate 4.98% 5.80% 5.79% 6.02% 5.97% 5.73% 5.23%
Short-term borrowings 7,258 - - - - - 7,258 7,258
Average interest rate 4.54% - - - - - 4.82%
- -------------------------------------------------------------------------------
(1) Loan amounts and weighted average interest rates for loans net out any
undisbursed loan proceeds, make no assumptions about loan prepayments, and do
not include any net deferred loan fees or the allowance for loan losses.
(2) Amounts described above do not take into account possible loan, security,
or interest bearing deposit renewals or repricing for such renewals.
(3) Securities include the Company's investment in Federal Home Loan Bank stock
and in obligations of certain political subdivisions within the State of
Tennessee. Average interest rates have not been adjusted for any federal,
state, or municipal tax liability that the Company may incur.
ITEM 8. FINANCIAL STATEMENTS
The consolidated financial statements and the independent auditors report of
Maggart & Associates, P.C. required by this item are contained in pages 20
through 54 and on page 20, respectively, of the Company's 1998 Annual Report and
are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to directors is incorporated
by reference herein by reference to "Election of Directors" in the Company's
Proxy Statement. The information required by this item with respect to executive
officers is set forth below:
James Randall Clemons (46) - Mr. Clemons is President and Chief
Executive Officer of the Company and the Bank. Mr. Clemons also serves
on the Board of Directors of the Company and the Bank. He has held
such positions with the Company since its formation in March 1992 and
has held his Bank positions since the Bank commenced operations in May
1987. Prior to that time, Mr. Clemons served as Senior Vice President
and Cashier for Peoples Bank, Lebanon, Tennessee.
Becky Taylor (54) - Ms. Taylor is the principal accounting officer of
the Company and a Senior Vice-President and Cashier of the Bank. She
has served as Vice President and Cashier of the Bank since May 1987 and
as the principal accounting officer of the Company since its formation
in March 1992. She has held her positions with the Bank since it
commenced operations. From 1963 to 1987, Ms. Taylor was employed by
Lebanon Bank, Lebanon, Tennessee, where her duties included Data
Processing Coordinator, Auditor, Security Officer and Compliance
Officer. Ms. Taylor held the title of Vice President and Cashier of
Lebanon Bank.
Elmer Richerson (46) - Mr. Richerson joined the Bank in February 1989.
Prior to such time, Mr. Richerson was the manager of the Lebanon
branch of Heritage Federal Savings and Loan Association from March
1988 to February 1989. From September 1986 until March 1988, Mr.
Richerson was a liquidation assistant for the Federal Deposit
Insurance Corporation. Mr. Richerson serves as an Executive Vice
President and Senior Loan Officer of the Bank and oversees the branch
administration for the Bank. Mr. Richerson also serves on the Board of
Directors of the Bank and in 1998 was appointed to serve on the Board
of Directors of the Company as well.
Larry Squires (46) - Mr. Squires joined the Bank in 1989 and is
currently Senior Vice President and Investment Officer. Prior to that
time Mr. Squires was Vice President of Liberty State Bank in Lebanon.
His principal duty is overseeing the Bank's investment and brokerage
center.
Gary Whitaker (41) - Mr. Whitaker joined the Bank in May 1996. Prior to
that time Mr. Whitaker was employed with NationsBank of Tennessee, N.A.
in Nashville (and its predecessors) from 1979. He has held positions in
collections, as branch manager, in construction lending, retail
marketing, automobile lending, loan administration, operations analyst,
as Vice President and most recently Senior Vice President. His
principal duties include overseeing the Bank's lending function and
loan operations.
All officers serve at the pleasure of the Board of Directors. No officers are
involved in any legal proceedings which are material to an evaluation of their
ability and integrity.
26
28
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is contained under the caption "Executive
Compensation" in the Company's Proxy Statement and is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item is contained under the caption "Security
Ownership of Certain Beneficial Owners and Management" in the Company's Proxy
Statement and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item is contained under the caption "Certain
Relationships and Related Transactions" in the Company's Proxy Statement and is
incorporated herein by reference.
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
(a)(1) Financial Statements. See Item 8.
(a)(2) Financial Statement Schedules. Inapplicable.
(a)(3) Exhibits. See Index to Exhibits.
(b) Reports on Form 8-K
None.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
29
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WILSON BANK HOLDING COMPANY
By: /s/ J. Randall Clemons
----------------------------------------
J. Randall Clemons
President and Chief Executive Officer
Date: March 24, 1999
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ J. Randall Clemons President, Chief March 24, 1999
- ------------------------------- Executive Officer
J. Randall Clemons and Director
/s/ Becky Taylor Principal March 24, 1999
- ------------------------------- Accounting Officer
Becky Taylor and Chief Financial
Officer
/s/ Elmer Richerson Executive Vice March 24, 1999
- ------------------------------- President & Director
Elmer Richerson
/s/ Charles Bell Director March 24, 1999
- -------------------------------
Charles Bell
/s/ Jack W. Bell Director March 24, 1999
- -------------------------------
Jack W. Bell
/s/ Mackey Bentley Director March 24, 1999
- -------------------------------
Mackey Bentley
/s/ James F. Comer Director March 24, 1999
- -------------------------------
James F. Comer
/s/ Jerry L. Franklin Director March 24, 1999
- -------------------------------
Jerry L. Franklin
/s/ John B. Freeman Director March 24, 1999
- -------------------------------
John B. Freeman
28
30
Signature Title Date
--------- ----- ----
/s/ Marshall Griffith Director March 24, 1999
- -------------------------------
Marshall Griffith
/s/ Harold R. Patton Director March 24, 1999
- ---------------------
Harold R. Patton
/s/ James Anthony Patton Director March 24, 1999
- -------------------------
James Anthony Patton
/s/ John R. Trice Director March 24, 1999
- ------------------
John R. Trice
/s/ Robert T. VanHooser, Jr. Director March 24, 1999
- -----------------------------
Robert T. VanHooser, Jr.
29
31
INDEX TO EXHIBITS
3.1 Charter (previously filed as Exhibit 3(a) to the Company's Registration
Statement on Form S-4 dated March 18, 1992 (Registration No. 33-46469)
and incorporated herein by reference).
3.2 Bylaws (previously filed as Exhibit 3(a) to the Company's Registration
Statement on Form S-4 dated March 18, 1992 (Registration No. 33-46469)
and incorporated herein by reference).
13.1 Selected Portions of the Wilson Bank Holding Company Annual Report to
Shareholders for the year ended December 31, 1998, incorporated by
reference into items 5, 6, 7 and 8.
21.1 Subsidiaries of the Company.
27 Financial Data Schedules (for SEC use only).