##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission File Number 0-20402
 WILSON BANK HOLDING COMPANY
  Tennessee
    
    62-1497076(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)623 West Main Street, Lebanon, TN
    
    37087(Address of principal executive offices)
    
    Zip Code
 (Registrants telephone number, including area code)
 (Former name, former address and former fiscal year, if changed since last report)
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ




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##### 



Part I: FINANCIAL INFORMATIONItem 1. Financial Statements
    
    3The unaudited consolidated financial statements of the Company and its subsidiaries are as follows:Consolidated Balance Sheets  September 30, 2009 and December 31, 2008
    
    3Consolidated Statements of Earnings  For the three months and nine months ended September 30, 2009 and 2008
    
    4Consolidated Statements of Comprehensive Earnings  For the three months and nine months ended September 30, 2009 and 2008
    
    5Consolidated Statements of Cash Flows  For the nine months ended September 30, 2009 and 2008
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    28Disclosures required by Item 3 are incorporated by reference to Managements
Discussion and Analysis of Financial Condition and Results of OperationItem 4. Controls and Procedures
    
    29Part II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    30Item 1A. Risk Factors
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    31Item 3. Defaults Upon Senior Securities
    
    31Item 4. Submission of Matters to a Vote of Security Holders
    
    31Item 5. Other Information
    
    31Item 6. Exhibits
    
    32Signatures
    
    33EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
   2




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 WILSON
BANK HOLDING COMPANY
 
 Consolidated Balance Sheets
September 30, 2009 and December 31, 2008
(Unaudited)
 September 30,
    
    
    December 31,2009
    
    
    2008(Dollars in ThousandsExcept Per Share Amounts)AssetsLoans
    
    $
    1,121,168
    
    
    $
    1,089,185Less: Allowance for loan losses
    
    
    (14,374
    )
    
    
    (12,138
    )Net loans
    
    
    1,106,794
    
    
    
    1,077,047Securities:Held to maturity, at cost (market value $12,304 and $11,021, respectively)
    
    
    11,989
    
    
    
    11,093Available-for-sale, at market (amortized cost $218,316 and $195,087,
respectively)
    
    
    217,363
    
    
    
    194,167Total securities
    
    
    229,352
    
    
    
    205,260Loans held for sale
    
    
    4,667
    
    
    
    3,541Restricted equity securities
    
    
    3,012
    
    
    
    3,100Federal funds sold
    
    
    21,215
    
    
    
    21,170Total earning assets
    
    
    1,365,040
    
    
    
    1,310,118Cash and due from banks
    
    
    18,432
    
    
    
    38,073Bank premises and equipment, net
    
    
    30,319
    
    
    
    31,035Accrued interest receivable
    
    
    8,568
    
    
    
    8,357Deferred income tax
    
    
    3,652
    
    
    
    3,578Other real estate
    
    
    3,603
    
    
    
    4,993Goodwill
    
    
    4,805
    
    
    
    4,805Other intangible assets, net
    
    
    1,003
    
    
    
    1,300Other assets
    
    
    5,689
    
    
    
    4,527Total assets
    
    $
    1,441,111
    
    
    $
    1,406,786Liabilities and Stockholders EquityDeposits
    
    $
    1,288,116
    
    
    $
    1,248,500Securities sold under repurchase agreements
    
    
    5,698
    
    
    
    7,447Federal Home Loan Bank advances
    
    
    204
    
    
    
    13,811Accrued interest and other liabilities
    
    
    9,734
    
    
    
    7,910Total liabilities
    
    
    1,303,752
    
    
    
    1,277,668Stockholders equity:Common stock, $2.00 par value; authorized 10,000,000 shares,
issued 7,132,763 at September 30, 2009 and 7,042,042 shares at
December 31, 2008, respectively
    
    
    14,265
    
    
    
    14,084Additional paid-in capital
    
    
    40,877
    
    
    
    38,078Retained earnings
    
    
    82,805
    
    
    
    77,524Net unrealized losses on available-for-sale securities, net of income
taxes of $365 and $352, respectively
    
    
    (588
    )
    
    
    (568
    )Total stockholders equity
    
    
    137,359
    
    
    
    129,118Total liabilities and stockholders equity
    
    $
    1,441,111
    
    
    $
    1,406,786
  3




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##### Table of Contents



WILSON
BANK HOLDING COMPANY
 
 Consolidated Statements of Earnings
Three Months and Nine Months Ended September 30, 2009 and 2008
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars In Thousands Except Per Share Amounts)Interest income:Interest and fees on loans
    
    $
    18,139
    
    
    $
    18,724
    
    
    $
    53,576
    
    
    $
    56,237Interest and dividends on securities:Taxable securities
    
    
    2,164
    
    
    
    2,773
    
    
    
    6,989
    
    
    
    8,405Exempt from Federal income taxes
    
    
    124
    
    
    
    130
    
    
    
    359
    
    
    
    419Interest on loans held for sale
    
    
    49
    
    
    
    50
    
    
    
    217
    
    
    
    149Interest on Federal funds sold
    
    
    13
    
    
    
    52
    
    
    
    60
    
    
    
    706Interest and dividends on restricted securities
    
    
    27
    
    
    
    2
    
    
    
    111
    
    
    
    58Total interest income
    
    
    20,516
    
    
    
    21,731
    
    
    
    61,312
    
    
    
    65,974Interest expense:Interest on negotiable order of withdrawal accounts
    
    
    597
    
    
    
    930
    
    
    
    1,779
    
    
    
    2,789Interest on money market and savings accounts
    
    
    910
    
    
    
    1,139
    
    
    
    2,579
    
    
    
    3,296Interest on certificates of deposit
    
    
    5,973
    
    
    
    7,274
    
    
    
    18,792
    
    
    
    24,495Interest on securities sold under repurchase agreements
    
    
    24
    
    
    
    43
    
    
    
    83
    
    
    
    140Interest on Federal Home Loan Bank advances
    
    
    97
    
    
    
    171
    
    
    
    415
    
    
    
    523Interest on Federal funds purchased
    
    
    1
    
    
    
    4
    
    
    
    1
    
    
    
    4Total interest expense
    
    
    7,602
    
    
    
    9,561
    
    
    
    23,649
    
    
    
    31,247Net interest income before provision for possible
loan losses
    
    
    12,914
    
    
    
    12,170
    
    
    
    37,663
    
    
    
    34,727Provision for possible loan losses
    
    
    1,164
    
    
    
    1,212
    
    
    
    4,525
    
    
    
    3,352Net interest income after provision for possible
loan losses
    
    
    11,750
    
    
    
    10,958
    
    
    
    33,138
    
    
    
    31,375Non-interest income:Service charges on deposit accounts
    
    
    1,514
    
    
    
    1,570
    
    
    
    4,289
    
    
    
    4,515Other fees and commissions
    
    
    1,340
    
    
    
    1,240
    
    
    
    3,794
    
    
    
    3,763Gain on sale of loans
    
    
    365
    
    
    
    375
    
    
    
    2,088
    
    
    
    1,172Gain (loss) on sale of securities
    
    
    
    
    
    
    (12
    )
    
    
    500
    
    
    
    80Other income
    
    
    
    
    
    
    85
    
    
    
    1
    
    
    
    238Total non-interest income
    
    
    3,219
    
    
    
    3,258
    
    
    
    10,672
    
    
    
    9,768Non-interest expense:Salaries and employee benefits
    
    
    5,050
    
    
    
    5,007
    
    
    
    15,325
    
    
    
    15,125Occupancy expenses, net
    
    
    583
    
    
    
    611
    
    
    
    1,827
    
    
    
    1,706Furniture and equipment expense
    
    
    348
    
    
    
    396
    
    
    
    1,044
    
    
    
    1,128Data processing expense
    
    
    311
    
    
    
    284
    
    
    
    799
    
    
    
    833Directors fees
    
    
    182
    
    
    
    186
    
    
    
    578
    
    
    
    593Advertising
    
    
    224
    
    
    
    263
    
    
    
    654
    
    
    
    792FDIC insurance expense
    
    
    1,145
    
    
    
    210
    
    
    
    1,825
    
    
    
    606Other operating expenses
    
    
    1,702
    
    
    
    1,715
    
    
    
    5,436
    
    
    
    5,030Loss on sale of other real estate
    
    
    240
    
    
    
    136
    
    
    
    434
    
    
    
    202Loss on sale of other assets
    
    
    12
    
    
    
    12
    
    
    
    49
    
    
    
    15Loss on sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20Total non-interest expense
    
    
    9,797
    
    
    
    8,820
    
    
    
    27,971
    
    
    
    26,050Earnings before income taxes
    
    
    5,172
    
    
    
    5,396
    
    
    
    15,839
    
    
    
    15,093Income taxes
    
    
    2,010
    
    
    
    2,107
    
    
    
    6,179
    
    
    
    5,867Net earnings
    
    $
    3,162
    
    
    $
    3,289
    
    
    $
    9,660
    
    
    $
    9,226Weighted average number of shares outstanding-basic
    
    
    7,115,969
    
    
    
    7,015,615
    
    
    
    7,087,938
    
    
    
    6,982,596Weighted average number of shares outstanding-diluted
    
    
    7,136,988
    
    
    
    7,050,506
    
    
    
    7,108,209
    
    
    
    7,016,838Basic earnings per common share
    
    $
    .44
    
    
    $
    .47
    
    
    $
    1.36
    
    
    $
    1.32Diluted earnings per common share
    
    $
    .44
    
    
    $
    .47
    
    
    $
    1.36
    
    
    $
    1.31Dividends per share
    
    $
    .32
    
    
    $
    .30
    
    
    $
    .62
    
    
    $
    .60
  4




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WILSON
BANK HOLDING COMPANY
 
 Consolidated Statements of Comprehensive Earnings
Three Months and Nine Months Ended September 30, 2009 and 2008
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In Thousands)Net earnings
    
    $
    3,162
    
    
    $
    3,289
    
    
    $
    9,660
    
    
    $
    9,226Other comprehensive earnings (losses), net of tax:Unrealized gains (losses) on available-for-sale securities
arising during period, net of income taxes of
$528, $1,368, $178, and $744,
respectively
    
    
    853
    
    
    
    2,206
    
    
    
    289
    
    
    
    (1,200
    )Reclassification adjustment for net losses (gains) included
in net earnings, net of taxes of $5, $191, and $31,
respectively
    
    
    
    
    
    
    7
    
    
    
    (309
    )
    
    
    (49
    )Other comprehensive earnings (losses)
    
    
    853
    
    
    
    2,213
    
    
    
    (20
    )
    
    
    (1,249
    )Comprehensive earnings
    
    $
    4,015
    
    
    $
    5,502
    
    
    $
    9,640
    
    
    $
    7,977
  5




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WILSON
BANK HOLDING COMPANY
 
 Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2009 and 2008
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
 2009
    
    
    2008(In Thousands)Cash flows from operating activities:Interest received
    
    $
    61,203
    
    
    $
    66,465Fees and commissions received
    
    
    8,084
    
    
    
    8,516Proceeds from sale of loans
    
    
    127,970
    
    
    
    54,586Origination of loans held for sale
    
    
    (127,008
    )
    
    
    (51,915
    )Interest paid
    
    
    (24,441
    )
    
    
    (32,194
    )Cash paid to suppliers and employees
    
    
    (22,822
    )
    
    
    (21,013
    )Income taxes paid
    
    
    (7,890
    )
    
    
    (6,506
    )Net cash provided by operating activities
    
    
    15,096
    
    
    
    17,939Cash flows from investing activities:Proceeds from maturities, calls, and principal payments of held-to-maturity
securities
    
    
    1,658
    
    
    
    3,117Proceeds from maturities, calls, and principal payments of available-for-sale
securities
    
    
    206,330
    
    
    
    187,523Purchase of held-to-maturity securities
    
    
    (2,558
    )
    
    
    (1,659
    )Purchase of available-for-sale securities
    
    
    (229,157
    )
    
    
    (176,283
    )Loans made to customers, net of repayments
    
    
    (37,693
    )
    
    
    (98,737
    )Purchase of premises and equipment
    
    
    (521
    )
    
    
    (1,630
    )Proceeds from sale of other real estate
    
    
    4,065
    
    
    
    3,586Proceeds from sale of other assets
    
    
    343
    
    
    
    26Net cash used in investing activities
    
    
    (57,533
    )
    
    
    (84,057
    )Cash flows from financing activities:Net increase in non-interest bearing, savings and NOW
deposit accounts
    
    
    23,360
    
    
    
    34,275Net increase in time deposits
    
    
    16,256
    
    
    
    27,227Net decrease in securities sold under repurchase agreements
    
    
    (1,749
    )
    
    
    (786
    )Repayment of advances from Federal Home Loan Bank
    
    
    (13,607
    )
    
    
    (1,245
    )Dividends paid
    
    
    (4,379
    )
    
    
    (4,168
    )Proceeds from sale of common stock
    
    
    3,458
    
    
    
    3,703Proceeds from exercise of stock options
    
    
    199
    
    
    
    138Repurchase of common stock
    
    
    (697
    )
    
    
    Net cash provided by financing activities
    
    
    22,841
    
    
    
    59,144Net decrease in cash and cash equivalents
    
    
    (19,596
    )
    
    
    (6,974
    )Cash and cash equivalents at beginning of period
    
    
    59,243
    
    
    
    59,575Cash and cash equivalents at end of period
    
    $
    39,647
    
    
    $
    52,601
  6




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WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows, Continued

Nine Months Ended September 30, 2009 and 2008
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
 2009
    
    
    2008(In Thousands)Reconciliation of net earnings to net cash provided byOperating activities:Net earnings
    
    $
    9,660
    
    
    $
    9,226Adjustments to reconcile net earnings to net cash provided by
operating activities:Depreciation and amortization
    
    
    1,636
    
    
    
    1,532Provision for loan losses
    
    
    4,525
    
    
    
    3,352Loss on sale of other real estate
    
    
    434
    
    
    
    202Loss on sale of other assets
    
    
    49
    
    
    
    15Security gains
    
    
    (500
    )
    
    
    (80
    )Loss on write off of restricted equity securities
    
    
    88
    
    
    
    Loss on sale of premises and equipment
    
    
    
    
    
    
    20Increase (decrease) in income tax receivable
    
    
    (1,434
    )
    
    
    176Decrease (increase) in loans held for sale
    
    
    (1,126
    )
    
    
    1,499Increase in deferred tax assets
    
    
    (277
    )
    
    
    (40
    )Decrease (increase) in other assets, net
    
    
    (1,222
    )
    
    
    170Increase in interest receivable
    
    
    (211
    )
    
    
    559Increase in other liabilities
    
    
    4,266
    
    
    
    2,255Decrease in interest payable
    
    
    (792
    )
    
    
    (947
    )Total adjustments
    
    $
    5,436
    
    
    $
    8,713Net cash provided by operating activities
    
    $
    15,096
    
    
    $
    17,939Supplemental schedule of non-cash activities:Unrealized gain (losses) in values of securities
available-for-sale, net of taxes of $204,000
and $775,000 for the nine months ended
September 30, 2009 and 2008, respectively
    
    $
    (20
    )
    
    $
    1,249Non-cash transfers from loans to other real estate
    
    $
    3,109
    
    
    $
    6,089Non-cash transfers from loans to other assets
    
    $
    312
    
    
    $
    36Change in accounting principal related to deferred
compensation plan
    
    $
    
    
    
    $
    120
  7




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WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements
(Unaudited)
 Note 1. Summary of Significant Accounting Policies
 Nature of Business
 Basis of Presentation
  Accounting Standards Codification The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement
of FASB Statement No. 162
 Use of Estimates
  8




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Recently Adopted Accounting Pronouncements
 Fair Value Measurement
   Subsequent Events
 Other-than-temporary impairment 
  9




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Note 2. Loans and Allowance for Loan Losses
  (In Thousands)September 30,
    
    
    December 31,2009
    
    
    2008Commercial, financial & agricultural
    
    $
    370,633
    
    
    $
    359,752Real estate  construction
    
    
    90,857
    
    
    
    99,768Real estate  mortgage
    
    
    599,447
    
    
    
    557,796Installment
    
    
    60,231
    
    
    
    71,869$
    1,121,168
    
    
    $
    1,089,185Allowance for possible losses
    
    
    (14,374
    )
    
    
    (12,138
    )$
    1,106,794
    
    
    $
    1,077,047
  Nine Months EndedSeptember 30,2009
    
    
    2008(In Thousands)Balance, January 1, 2009 and 2008, respectively
    
    $
    12,138
    
    
    $
    9,473Add (deduct):Losses charged to allowance
    
    
    (2,579
    )
    
    
    (2,007
    )Recoveries credited to allowance
    
    
    290
    
    
    
    340Provision for loan losses
    
    
    4,525
    
    
    
    3,352Balance, September 30, 2009 and 2008, respectively
    
    $
    14,374
    
    
    $
    11,158
     10




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Note 3. Securities
  September 30, 2009Securities Available-For-SaleIn ThousandsGross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury and other U.S.
Government agencies and
corporations
    
    $
    215,381
    
    
    $
    614
    
    
    $
    1,611
    
    
    $
    214,384Obligations of states and political
subdivisions
    
    
    1,522
    
    
    
    9
    
    
    
    
    
    
    
    1,531Mortgage-backed securities
    
    
    1,413
    
    
    
    35
    
    
    
    
    
    
    
    1,448$
    218,316
    
    
    $
    658
    
    
    $
    1,611
    
    
    $
    217,363
 September 30, 2009Securities Held-To-MaturityIn ThousandsGross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligations of states and political
subdivisions
    
    $
    11,974
    
    
    $
    354
    
    
    $
    39
    
    
    $
    12,289Mortgage-backed securities
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15$
    11,989
    
    
    $
    354
    
    
    $
    39
    
    
    $
    12,304
 December 31, 2008Securities Available-For-SaleIn ThousandsGross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury and other U.S.
Government agencies and
corporations
    
    $
    146,876
    
    
    $
    464
    
    
    $
    1,582
    
    
    $
    145,758Obligations of states and political
subdivisions
    
    
    1,523
    
    
    
    
    
    
    
    76
    
    
    
    1,447Mortgage-backed securities
    
    
    46,688
    
    
    
    330
    
    
    
    56
    
    
    
    46,962$
    195,087
    
    
    $
    794
    
    
    $
    1,714
    
    
    $
    194,167
 December 31, 2008Securities Held-To-MaturityIn ThousandsGross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligations of states and political
subdivisions
    
    $
    11,074
    
    
    $
    91
    
    
    $
    162
    
    
    $
    11,003Mortgage-backed securities
    
    
    19
    
    
    
    
    
    
    
    1
    
    
    
    18$
    11,093
    
    
    $
    91
    
    
    $
    163
    
    
    $
    11,021
  11




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##### Table of Contents



Available-for-sale
    
    
    Held-to-MaturityIn ThousandsEstimate
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Market
    
    
    Amortized
    
    
    MarketCost
    
    
    Value
    
    
    Cost
    
    
    ValueDue in one year or less
    
    $
    1,000
    
    
    $
    1,008
    
    
    $
    1,262
    
    
    $
    1,283Due after one year
through five years
    
    
    45,097
    
    
    
    45,103
    
    
    
    5,671
    
    
    
    5,883Due after five years
through ten years
    
    
    129,061
    
    
    
    127,861
    
    
    
    3,295
    
    
    
    3,412Due after ten years
    
    
    43,158
    
    
    
    43,391
    
    
    
    1,761
    
    
    
    1,726$
    218,316
    
    
    $
    217,363
    
    
    $
    11,989
    
    
    $
    12,304
  Investments with Unrealized
    
    
    Investments with Unrealized
    
    
    Total Investments with anLoss of Less than 12 months
    
    
    Loss of 12 months or longer
    
    
    Unrealized LossUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedSeptember 30, 2009
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesU.S.
Treasury and other U.S.
Government
Agencies
    
    $
    131,744
    
    
    $
    1,611
    
    
    $
    
    
    
    $
    
    
    
    $
    131,744
    
    
    $
    1,611Obligations of
states
and political sub-Divisions
    
    
    565
    
    
    
    2
    
    
    
    1,322
    
    
    
    37
    
    
    
    1,887
    
    
    
    39$
    132,309
    
    
    $
    1,613
    
    
    $
    1,322
    
    
    $
    37
    
    
    $
    133,631
    
    
    $
    1,650
 Investments with Unrealized
    
    
    Investments with Unrealized
    
    
    Total Investments with anLoss of Less than 12 months
    
    
    Loss of 12 months or longer
    
    
    Unrealized LossUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDecember 31, 2008
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesU.S. Treasury and
other U.S.
Government
Agencies
    
    $
    71,023
    
    
    $
    1,059
    
    
    $
    22,446
    
    
    $
    523
    
    
    $
    93,469
    
    
    $
    1,582Obligations of
states
and political sub-Divisions
    
    
    3,494
    
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    3,494
    
    
    
    238Mortgage-backed
Securities
    
    
    10,363
    
    
    
    56
    
    
    
    10
    
    
    
    1
    
    
    
    10,373
    
    
    
    57$
    84,880
    
    
    $
    1,353
    
    
    $
    22,456
    
    
    $
    524
    
    
    $
    107,336
    
    
    $
    1,877
  12




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##### Table of Contents



Note 4. Earnings Per Share
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in Thousands
    
    
    (Dollars in ThousandsExcept Per Share Amounts)
    
    
    Except Per Share Amounts)Basic EPS Computation:Numerator  Earnings available to common
Stockholders
    
    $
    3,162
    
    
    $
    3,289
    
    
    $
    9,660
    
    
    $
    9,226Denominator  Weighted average number of
common shares outstanding
    
    
    7,115,969
    
    
    
    7,015,615
    
    
    
    7,087,938
    
    
    
    6,982,596Basic earnings per common share
    
    $
    .44
    
    
    $
    .47
    
    
    $
    1.36
    
    
    $
    1.32Diluted EPS Computation:Numerator  Earnings available to common
Stockholders
    
    $
    3,162
    
    
    
    3,289
    
    
    $
    9,660
    
    
    
    9,226Denominator  Weighted average number
of common shares outstanding
    
    
    7,115,969
    
    
    
    7,015,615
    
    
    
    7,087,938
    
    
    
    6,982,596Dilutive effect of stock options
    
    
    21,019
    
    
    
    34,891
    
    
    
    20,271
    
    
    
    34,2427,136,988
    
    
    
    7,050,506
    
    
    
    7,108,209
    
    
    
    7,016,838Diluted earnings per common share
    
    $
    .44
    
    
    $
    .47
    
    
    $
    1.36
    
    
    
    1.31
 Note 5. Fair Value Measurements
   13




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##### Table of Contents



Valuation Hierarchy
  
    
    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 quoted 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 are unobservable and significant to the fair
value measurement.
  Assets
 Securities available for sale 
 Impaired loans 
 Other real estate 
 Other assets
  14




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##### Table of Contents



Fair Value Measurements at September 30, 2009
 Carrying
    
    
    Quoted Prices inValue at
    
    
    Active Markets
    
    
    Significant Other
    
    
    SignificantSeptember 30,
    
    
    for Identical
    
    
    Observable
    
    
    Unobservable(in Thousands)
    
    2009
    
    
    Assets (Level 1)
    
    
    Inputs (Level 2)
    
    
    Inputs (Level 3)Assets:Available-for-sale
securities
    
    $
    217,363
    
    
    $
    1,008
    
    
    $
    216,355
    
    
    $
    Cash surrender
value
    
    
    1,483
    
    
    
    
    
    
    
    
    
    
    
    1,483
  Fair Value Measurements at September 30, 2009
 Carrying
    
    
    Quoted Prices inValue at
    
    
    Active Markets
    
    
    Significant Other
    
    
    SignificantSeptember 30,
    
    
    for Identical
    
    
    Observable
    
    
    Unobservable(in Thousands)
    
    2009
    
    
    Assets (Level 1)
    
    
    Inputs (Level 2)
    
    
    Inputs (Level 3)Assets:Impaired loans
    
    $
    39,765
    
    
    $
    
    
    
    $
    
    
    
    $
    39,765Other real estate
    
    
    3,603
    
    
    
    
    
    
    
    
    
    
    
    3,603Repossesed assets
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    10
 Changes in level 3 fair value measurements
   15




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##### Table of Contents



(in thousands)
 Assets
    
    
    LiabilitiesFair Value, January 1, 2009
    
    $
    1,398
    
    
    $
    Total realized gains included in income
    
    
    85
    
    
    
    Purchases, issuances and settlements, net
    
    
    
    
    
    
    Transfers in and/or (out) of Level 3
    
    
    
    
    
    
    Fair Value, September 30, 2009
    
    $
    1,493
    
    
    $
    Total realized gains (losses) included in income related
to financial assets and liabilities still on the
consolidated balance sheet at September 30, 2009
    
    $
    
    
    
    $
    
  Cash, Due From Banks and Federal Funds Sold
 Securities
 Loans
 Mortgage loans held-for-sale
 Deposits, Securities Sold Under Agreements to Repurchase, Federal Home Loan Bank Advance
  16




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##### Table of Contents



In ThousandsSeptember 30, 2009
    
    
    December 31, 2008Carrying
    
    
    
    
    
    
    CarryingAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueFinancial assets:Cash and short-term
investments
    
    $
    39,647
    
    
    
    39,647
    
    
    $
    59,243
    
    
    
    59,243Securities, held to maturity
    
    
    11,989
    
    
    
    12,304
    
    
    
    11,093
    
    
    
    11,021Loans, net of unearned
interest
    
    
    1,121,168
    
    
    
    
    
    
    
    1,089,185Less: allowance for loan
losses
    
    
    14,374
    
    
    
    
    
    
    
    12,138Loans, net of allowance
    
    
    1,106,794
    
    
    
    1,108,238
    
    
    
    1,077,047
    
    
    
    1,079,607Loans held for sale
    
    
    4,667
    
    
    
    4,667
    
    
    
    3,541
    
    
    
    3,541Restricted equity securities
    
    
    3,012
    
    
    
    3,012
    
    
    
    3,100
    
    
    
    3,100Financial liabilities:Deposits
    
    
    1,288,116
    
    
    
    1,294,466
    
    
    
    1,248,500
    
    
    
    1,257,120Securities sold
under repurchase
agreements
    
    
    5,698
    
    
    
    5,698
    
    
    
    7,447
    
    
    
    7,447Advances from Federal Home
Loan Bank
    
    
    204
    
    
    
    203
    
    
    
    13,811
    
    
    
    13,997
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-Looking Statements
    17




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##### Table of Contents



Critical Accounting Estimates
  Allowance for Loan Losses (allowance).
     18




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##### Table of Contents



Impairment of Intangible Assets 
   19




---



##### Table of Contents



Results of Operations
  Net Interest Income
    20




---



##### Table of Contents



Provision for Possible Loan Losses
   Non-Interest Income
   21




---



##### Table of Contents



Non-Interest Expenses
  Income Taxes
  Financial Condition
 Balance Sheet Summary
   22




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##### Table of Contents



Non Performing Assets
  September 30, 2009
    
    
    December 31, 2008Past Due
    
    
    
    
    
    
    Past Due90 Days
    
    
    Non-Accrual
    
    
    90 Days
    
    
    Non-Accrual(In Thousands)
    
    
    (In Thousands)Real estate loans
    
    $
    3,413
    
    
    
    11,143
    
    
    
    1,989
    
    
    
    10,153Installment loans
    
    
    364
    
    
    
    4
    
    
    
    339
    
    
    
    27Commercial
    
    
    123
    
    
    
    106
    
    
    
    1,388
    
    
    
    228$
    3,900
    
    
    
    11,253
    
    
    
    3,716
    
    
    
    10,408Renegotiated loans
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
    23




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##### Table of Contents



September 30, 2009
    
    
    December 31, 2008Allowance
    
    
    
    
    
    
    AllowanceRecorded
    
    
    For
    
    
    Recorded
    
    
    For(In Thousands)
    
    Investment
    
    
    Loan Loss
    
    
    Investment
    
    
    Loan LossImpaired loans with allowance for
loan loss
    
    $
    16,094
    
    
    
    4,594
    
    
    $
    10,408
    
    
    
    1,810Impaired loans with no allowance for
loan loss
    
    
    23,671
    
    
    
    
    
    
    
    
    
    
    
    $
    39,765
    
    
    
    4,594
    
    
    $
    10,408
    
    
    
    1,810
     September 30,2009(In Thousands)SpecialTotal
    
    
    Mention
    
    
    Substandard
    
    
    DoubtfulCommercial, financial and
agricultural
    
    $
    2,380
    
    
    
    1,570
    
    
    
    810
    
    
    
    Real estate mortgage
    
    
    47,267
    
    
    
    3,715
    
    
    
    43,552
    
    
    
    Real estate construction
    
    
    218
    
    
    
    
    
    
    
    218
    
    
    
    Consumer
    
    
    549
    
    
    
    84
    
    
    
    465
    
    
    
    $
    50,414
    
    
    
    5,369
    
    
    
    45,045
    
    
    
    
  24




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##### Table of Contents



December 31,2008(In Thousands)SpecialTotal
    
    
    Mention
    
    
    Substandard
    
    
    DoubtfulCommercial, financial and
agricultural
    
    $
    1,944
    
    
    
    1,592
    
    
    
    352
    
    
    
    Real estate mortgage
    
    
    24,700
    
    
    
    10,887
    
    
    
    13,813
    
    
    
    Real estate construction
    
    
    155
    
    
    
    
    
    
    
    155
    
    
    
    Consumer
    
    
    1,000
    
    
    
    311
    
    
    
    653
    
    
    
    36$
    27,799
    
    
    
    12,790
    
    
    
    14,973
    
    
    
    36
    September 30, 2009
    
    
    December 31, 2008Percent of
    
    
    
    
    
    
    Percent ofLoans In
    
    
    
    
    
    
    Loans InIn
    
    
    Each Category
    
    
    In
    
    
    Each CategoryThousands
    
    
    To Total Loans
    
    
    Thousands
    
    
    To Total LoansCommercial, financial and
agricultural
    
    $
    2,399
    
    
    
    33.0
    %
    
    $
    3,435
    
    
    
    33.0
    %Real estate construction
    
    
    3,275
    
    
    
    8.1
    
    
    
    704
    
    
    
    9.2Real estate mortgage
    
    
    7,355
    
    
    
    53.5
    
    
    
    6,407
    
    
    
    51.2Installment
    
    
    1,345
    
    
    
    5.4
    
    
    
    1,592
    
    
    
    6.6$
    14,374
    
    
    
    100.0
    %
    
    $
    12,138
    
    
    
    100.0
    %
  25




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##### Table of Contents



Liquidity and Asset Management
          26




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##### Table of Contents



Off Balance Sheet Arrangements
  Capital Position and Dividends
      27




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##### Table of Contents



Wilson Bank HoldingCompany
    
    
    Wilson Bank & TrustAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in Thousands
    
    
    (Dollars in Thousands)September 30, 2009Actual:Total Capital
    
    $
    146,590
    
    
    
    12.66
    %
    
    $
    146,425
    
    
    
    12.67
    %Tier 1 Capital
    
    
    132,139
    
    
    
    11.41
    
    
    
    131,974
    
    
    
    11.42Leverage
    
    
    132,139
    
    
    
    9.23
    
    
    
    131,974
    
    
    
    9.21For Capital Adequacy Purposes:Total Capital
    
    
    
    
    
    
    8.0
    %
    
    
    
    
    
    
    8.0
    %Tier 1 Capital
    
    
    
    
    
    
    4.0
    
    
    
    
    
    
    
    4.0Leverage
    
    
    
    
    
    
    4.0
    
    
    
    
    
    
    
    4.0December 31, 2008Actual:Total Capital
    
    $
    136,142
    
    
    
    12.54
    %
    
    $
    136,672
    
    
    
    12.47
    %Tier 1 Capital
    
    
    123,581
    
    
    
    11.40
    
    
    
    124,111
    
    
    
    11.32Leverage
    
    
    123,581
    
    
    
    8.96
    
    
    
    124,000
    
    
    
    8.96For Capital Adequacy Purposes:Total Capital
    
    
    
    
    
    
    8.0
    %
    
    
    
    
    
    
    8.0
    %Tier 1 Capital
    
    
    
    
    
    
    4.0
    
    
    
    
    
    
    
    4.0Leverage
    
    
    
    
    
    
    4.0
    
    
    
    
    
    
    
    4.0
  Impact of Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
     28




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##### Table of Contents



Item 4. Controls and Procedures
    29




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 1A. RISK FACTORS
  
 Recent negative developments in the U.S. and local economy and in local real estate markets have adversely impacted our
operations and results and may continue to adversely impact our results in the future. Economic conditions in the markets in which we operate have deteriorated significantly since early 2008. As a result,
we have experienced a significant reduction in our earnings, resulting primarily from provisions for loan losses
related to declining collateral values in our construction and development loan portfolio. We believe that this
difficult economic environment will continue at least throughout the remainder of 2009 and into 2010, and we expect
that our results of operations will continue to be negatively impacted as a result. There can be no assurance that the
economic conditions that have adversely affected the financial services industry, and the capital, credit and real
estate markets generally or us in particular, will improve in the near future, or thereafter, in which case we could
continue to experience significant losses and write-downs of assets, and could face capital and liquidity constraints
or other business challenges. Our loan portfolio includes a significant amount of real estate loans, including construction and development loans,
which loans have a greater credit risk than residential mortgage loans. As of
September 30, 2009, approximately 86.6% of our loans held for investment were secured by real estate. Of this
amount, approximately 32.6% were commercial real estate loans, 44.6%
were residential real estate loans, 21.3% were
construction and development loans and 1.5% were other real estate loans. Any sustained period of increased payment
delinquencies, foreclosures or losses caused by adverse market or economic conditions in the markets we serve or in the
State of Tennessee, like those we are currently experiencing, have adversely affected, and could continue to adversely
affect, the value of our assets, our revenues, results of operations and financial condition. In addition, construction
and development lending is generally considered to have more complex credit risks than traditional single-family
residential lending because the principal is concentrated in a limited number of loans with repayment dependent on the
successful operation of the related real estate project. Consequently, these loans are more sensitive to adverse
conditions in the real estate market or the general economy. Throughout 2009, the number of newly constructed homes or
lots sold in our market areas has continued to decline, negatively affecting collateral values and contributing to
increased provision expense and higher levels of non-performing assets. A continued reduction in residential real
estate market prices and demand could result in further price reductions in home and land values adversely affecting the value
of collateral securing the construction and development loans that we hold. These adverse economic and real estate
market conditions may lead to further increases in non-performing loans and other real estate owned, increased charge
offs from the disposition of non-performing assets, and increases in provision for loan losses, all of which would
negatively impact our financial condition and results of operations. We have increased levels of other real estate, primarily as a result of foreclosures, and we anticipate higher levels
of foreclosed real estate expense. As we have begun to resolve non-performing real estate loans, we have increased the level of foreclosed properties
primarily those acquired from builders and from residential land developers. Foreclosed real estate expense consists of
three types of charges: maintenance costs, valuation adjustments owed on new appraisal values and gains or losses on
disposition. These charges will increase as levels of other real estate increase, and also as local real estate values
decline, negatively affecting our results of operations.  30




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A decline in our stock price or expected future cash flows, or a material adverse change in our results of operations
or prospects, could result in impairment of our goodwill. A significant and sustained decline in our stock price and market capitalization below book value, a significant
decline in our expected future cash flows, a significant adverse change in the business climate, slower growth rates or
other factors could result in impairment of our goodwill. If we were to conclude that a write-down of our goodwill is
necessary, then the appropriate charge would likely cause a material loss. Any significant loss would adversely impact
the capacity of the Bank to pay dividends to us without seeking prior regulatory approval, which could adversely affect
our ability to pay required interest payments. Recent legislative and regulatory initiatives that were enacted in response to the recent financial crisis are
beginning to wind down. The U.S. federal, state and foreign governments have taken various actions in an attempt to deal with the worldwide
financial crisis and the severe decline in the global economy. Some of these programs are beginning to expire and the
impact of the wind down on the financial sector and on the economic recovery is unknown. In the United States, the
Emergency Economic Stabilization Act of 2008 or EESA, was enacted on October 3, 2008. The Troubled Asset Relief
Program, or TARP, established pursuant to EESA, includes the Capital Purchase Program, pursuant to which Treasury is
authorized to purchase senior preferred stock and common or preferred stock warrants from participating financial
institutions. TARP also authorized the purchase of other securities and financial instruments for the purpose of
stabilizing and providing liquidity to U.S. financial markets. TARP is scheduled to expire December 31, 2009, although
the Treasury has announced it will likely extend it until October 31, 2010. On September 18, 2009, the Treasury
guarantee on money market mutual funds expired. On October 20, 2009, the FDIC announced that the Temporary Loan
Guaranty Program pursuant to which the FDIC guarantees unsecured debt of banks and certain holding companies would
expire October 31, 2009, except for a temporary emergency facility. The Transaction Account Guarantee portion of the
program, which guarantees non interest bearing bank transaction accounts on an unlimited basis, is scheduled to continue until
June 30, 2010. Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 (a)
    
    None(b)
    
    Not applicable.(c)
    
    None.
 
 Item 3. DEFAULTS UPON SENIOR SECURITIES
 (a)
    
    None(b)
    
    Not applicable
 
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 (a)
    
    None.(b)
    
    Not applicable.(c)
    
    Not applicable.(d)
    
    Not applicable.
 
 Item 5. OTHER INFORMATION
   31




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Item 6. EXHIBITS
 31.1
    
    Certification of the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
  32




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SIGNATURES
  WILSON BANK HOLDING COMPANY
(Registrant)DATE:                  November 9, 2009
    /s/       Randall ClemonsRandall ClemonsPresident and Chief Executive OfficerDATE:                   November 9, 2009
    /s/       Lisa PominskiLisa PominskiSenior Vice President & Chief Financial Officer  33