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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
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, 2001
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
- ----------------------------------------- --------------------------------
(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 25, 2002, was approximately $70,293,094. The market value
calculation was determined using $39.50 per share.
Shares of common stock, $2.00 par value per share, outstanding on March 25, 2002
were 2,079,994.
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, 2001 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 9, 2002 are incorporated by reference into Items
10, 11, 12 and 13.
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, DeKalb
Community Bank ("DCB") and Community Bank of Smith County ("CBSC"). The Bank, on
December 31, 2001, had eight full service banking offices located in Wilson
County, Tennessee, one full service banking facility in Trousdale County,
Tennessee and one full service banking office in western Davidson County. The
Bank's wholly-owned subsidiary, Hometown Finance, Inc., was dissolved in 2001
and its assets and liabilities were distributed to the Bank. 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, Smith County, Tennessee. DCB began operations in April 1996
and CBSC began operations in December 1996. As of December 31, 2001, revenues
and expenses of DCB and CBSC, 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; 1130 Castle
Heights Avenue North, Lebanon, Tennessee; the Wal-Mart Super Center, Lebanon,
Tennessee; and 4736 Andrew Jackson Parkway in Hermitage, Tennessee. 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 effect 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 with 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, 2001, the Company reported net earnings of approximately $6.6
million and had total assets of approximately $667.8 million.
DCB 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. DCB, the only
locally-owned bank in DeKalb County, 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 effect on the business of DCB. Furthermore, no concentration of loans
exists within a single industry or group of related industries.
CBSC 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 serving its residents. 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 effect 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 consolidated financial statements, selected financial data
and Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in the Company's Annual Report to Shareholders for the year
ended December 31, 2001 filed as Exhibit 13 to this Form 10-K (the "2001 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 and CBSC 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 and
CBSC 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 of 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 and the recent modernization of the financial services
industry in connection with the passing of the Gramm-Leach-Bliley Act of 1999.
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.
In November 1999, the Gramm-Leach-Bliley Act of 1999 (the "GLB Act") became law.
Under the GLB Act, a "financial holding company" may engage in activities the
Board determines to be financial in nature or incidental to such financial
activity or complementary to a financial activity and not a substantial risk to
the safety and soundness of such depository institutions or the financial
system. Generally, such companies may engage in a wide range of securities
activities and insurance underwriting and agency activities. The Company has not
made application to the Board to become a "financial holding company."
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") authorized interstate acquisitions of banks and bank holding companies
without geographic limitation beginning on June 1, 1997. In addition, on that
date, the IBBEA authorized 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.
The Company, the 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 subsidiary banks,
on investments in the stock or other securities of the bank holding company or
its subsidiary banks, and on taking such stock or other securities as collateral
for loans of any borrower. The Bank, DCB and CBSC all take Company Common Stock
as collateral for borrowings subject to the aforementioned restrictions.
2
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 Company's bank subsidiaries 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 Company believes that the laws referenced above are 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 generally applicable to most of the
loans made by the Company's bank subsidiaries 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 subsidiary
banks, 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, the Bank's
primary market area, including four banks in Wilson County 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 two credit unions located in Wilson County and two locally-owned
banks which were organized in 2001.
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, the Company
believes that 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 DCB is the only locally-owned 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
believes that CBSC 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 market place, 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, the Company and the Company's other bank
subsidiaries are affected by the policies of the 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, the Bank, DCB and CBSC cannot be predicted with accuracy.
EMPLOYMENT
As of March 25, 2002, the Company and its subsidiaries collectively employed 213
full-time equivalent employees and 30 part-time employees. Additional personnel
will be hired as needed to meet future growth.
3
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 2001 Annual Report. Certain information not
contained in the Company's 2001 Annual Report, but required by Guide 3, is
contained in the tables immediately following:
[REMINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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
$586,000, $508,000 and $394,000 for 2001, 2000 and 1999, respectively,
are included in loan income and represent an adjustment of the yield on
these loans.
5
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
IN THOUSANDS, EXCEPT INTEREST RATES
----------------------------------------------------------------------------------------------
2001 2000 2001/2000 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 $460,556 8.74% 40,262 395,441 9.04% 35,743 5,866 (1,347) 4,519
Investment securities - taxable 84,579 6.07 5,136 68,926 6.86 4,727 1,074 (665) 409
Investment securities -
tax exempt 15,655 5.43 850 14,933 5.55 829 40 (19) 21
Taxable equivalent adjustment -- 2.80 438 -- 2.86 427 21 (10) 11
------------------------------- ------------------------------ -----
Total tax-exempt
investment securities 15,655 8.23 1,288 14,933 8.41 1,256 61 (29) 32
------------------------------- ------------------------------ -----
Total investment securities 100,234 6.41 6,424 83,859 7.13 5,983 1,168 (727) 441
------------------------------- ------------------------------ -----
Loans held for sale 3,907 4.66 182 1,626 5.78 94 132 (44) 88
Federal funds sold 37,317 3.89 1,453 18,114 5.70 1,033 1,095 (675) 420
------------------------------- ------------------------------ -----
Total earning assets 602,014 8.03 48,321 499,040 8.59 42,853 8,845 (3,377) 5,468
------------------------------- ------------------------------ -----
Cash and due from banks 15,149 13,747
Allowance for possible loan
losses (4,879) (4,190)
Bank premises and equipment 15,103 15,867
Other assets 8,408 8,408
-------- -------
Total assets $635,795 532,872
======== =======
6
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
IN THOUSANDS, EXCEPT INTEREST RATES
----------------------------------------------------------------------------------------------
2001 2000 2001/2000 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 $ 36,454 1.41% 515 30,884 1.87% 577 104 (166) (62)
Money market demand
accounts 110,253 3.18 3,506 94,759 3.75 3,549 581 (624) (43)
Individual retirement 26,697 5.93 1,583 22,067 5.97 1,318 276 (541) 265
accounts
Other savings deposits 28,640 3.85 1,104 24,881 4.72 1,175 3,759 (3,830) (71)
Certificates of deposit
$100,000 and over 119,677 5.77 6,906 90,057 6.09 5,483 1,804 (381) 1,423
Certificates of deposit
under $100,000 195,017 5.90 11,511 167,885 6.05 10,159 1,641 (289) 1,352
------------------------------- ------------------------------ -----
Total interest-bearing
deposits 516,738 4.86 25,125 430,533 5.17 22,261 4,457 (1,593) 2,864
Demand 53,764 -- -- 49,300 -- -- -- -- --
------------------------------- ------------------------------ -----
Total deposits 570,502 4.40 25,125 479,833 4.64 22,261 4,207 (1,343) 2,864
------------------------------- ------------------------------ -----
Securities sold under
repurchase agreements 11,541 3.40 392 9,304 5.40 502 121 (231) (110)
Federal funds purchased 164 2.44 4 173 4.62 8 -- (4) (4)
Advances from Federal Home
Loan Bank 1,559 7.18 112 1,234 7.21 89 23 -- 23
------------------------------- ------------------------------ -----
Total deposits and
borrowed funds 583,766 4.39 25,633 490,544 4.67 22,860 4,353 (1,580) 2,773
------------------------------- ------------------------------ -----
Other liabilities 9,676 7,965
Stockholders' equity 42,353 34,363
-------- -------
Total liabilities and
stockholders' equity $635,795 532,872
======== =======
Net interest income 22,688 19,993
====== ======
Net yield on earning assets 3.77% 4.01%
==== ====
Net interest spread 3.64% 3.92%
==== ====
7
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
IN THOUSANDS, EXCEPT INTEREST RATES
----------------------------------------------------------------------------------------------
2000 1999 2000/1999 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 $395,441 9.04% 35,743 326,396 8.87% 28,937 6,124 682 6,806
Investment securities - taxable 68,926 6.86 4,727 66,096 6.61 4,371 187 169 356
Investment securities -
tax exempt 14,933 5.55 829 15,758 5.27 830 (43) 42 (1)
Taxable equivalent adjustment -- 2.86 427 -- 2.72 428 (23) 22 (1)
------------------------------- ------------------------------ -----
Total tax-exempt
investment securities 14,933 8.41 1,256 15,758 7.99 1,258 (66) 64 (2)
------------------------------- ------------------------------ -----
Total investment securities 83,859 7.13 5,983 81,854 6.88 5,629 138 216 354
------------------------------- ------------------------------ -----
Loans held for sale 1,626 5.78 94 2,270 5.64 128 (36) 2 (34)
Federal funds sold 18,114 5.70 1,033 20,151 4.60 927 (94) 200 106
------------------------------- ------------------------------ -----
Total earning assets 499,040 8.59 42,853 430,671 8.27 35,621 5,654 1,578 7,232
------------------------------- ------------------------------ -----
Cash and due from banks 13,747 13,019
Allowance for possible loan
losses (4,190) (3,573)
Bank premises and equipment 15,867 15,274
Other assets 8,408 6,612
-------- -------
Total assets $532,872 462,003
======== =======
8
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
IN THOUSANDS, EXCEPT INTEREST RATES
----------------------------------------------------------------------------------------------
2000 1999 2000/1999 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 $ 30,884 1.87% 577 25,287 1.61% 406 90 81 171
Money market demand
accounts 94,759 3.75 3,549 89,737 3.47 3,117 174 258 432
Individual retirement
accounts 22,067 5.97 1,318 19,444 5.46 1,061 143 114 257
Other savings deposits 24,881 4.72 1,175 20,867 4.07 850 163 162 325
Certificates of deposit
$100,000 and over 90,057 6.09 5,483 80,567 5.34 4,301 507 675 1,182
Certificates of deposit
under $100,000 167,885 6.05 10,159 135,085 5.41 7,312 1,774 1,073 2,847
------------------------------- ------------------------------ -----
Total interest-bearing
deposits 430,533 5.17 22,261 370,987 4.60 17,047 2,739 2,475 5,214
Demand 49,300 -- -- 44,246 -- -- --
------------------------------- ------------------------------ -----
Total deposits 479,833 4.64 22,261 415,233 4.11 17,047 2,655 2,559 5,214
------------------------------- ------------------------------ -----
Securities sold under
repurchase agreements 9,304 5.40 502 9,374 4.35 408 (3) 97 94
Federal funds purchased 173 4.62 8 48 4.17 2 5 1 6
Advances from Federal Home
Loan Bank 1,234 7.21 89 -- -- -- 89 -- 89
------------------------------- ------------------------------ -----
Total deposits and
borrowed funds 490,544 4.67 22,860 424,655 4.11 17,457 2,708 2,695 5,403
------------------------------- ------------------------------ -----
Other liabilities 7,965 6,788
Stockholders' equity 34,363 30,560
-------- -------
Total liabilities and
stockholders' equity $532,872 462,003
======== =======
Net interest income 19,993 18,164
====== ======
Net yield on earning assets 4.01% 4.22%
==== ====
Net interest spread 3.92% 4.16%
==== ====
9
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
II. Investment Portfolio:
A. Investment securities at December 31, 2001 consist of the
following:
SECURITIES HELD-TO-MATURITY
-----------------------------------------------------------
(In Thousands)
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
Obligations of states and
political subdivisions $13,273 292 27 13,538
Mortgage-backed securities 2,857 8 16 2,849
------- ----- ------ ------
$16,130 300 43 16,387
======= ===== ====== ======
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 $79,561 451 300 79,712
Obligations of states and
political subdivisions 2,258 40 7 2,291
Mortgage-backed securities 423 5 -- 428
------- ----- ------ ------
$82,242 496 307 82,431
======= ===== ====== ======
10
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
II. Investment Portfolio, Continued:
A. Continued:
Securities at December 31, 2000 consist of the following:
SECURITIES HELD-TO-MATURITY
-----------------------------------------------------------
(In Thousands)
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
Obligations of states and
political subdivisions $13,966 132 90 14,008
Mortgage-backed securities 3,083 13 52 3,044
------- ----- ------ ------
$17,049 145 142 17,052
======= ===== ====== ======
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 $72,732 38 1,151 71,619
Obligations of states and
political subdivisions 1,851 16 2 1,865
Mortgage-backed securities 530 5 4 531
------- ----- ------ ------
$75,113 59 1,157 74,015
======= ===== ====== ======
11
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
II. Investment Portfolio, Continued:
A. Continued:
Investment securities at December 31, 1999 consist of the
following:
SECURITIES HELD-TO-MATURITY
-----------------------------------------------------------
(In Thousands)
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
Obligations of states and
political subdivisions $13,398 59 298 13,159
Mortgage-backed securities 3,339 14 37 3,316
------- ----- ------ ------
$16,737 73 335 16,475
======= ===== ====== ======
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 $66,859 1 2,882 63,978
Obligations of states and
political subdivisions 2,232 13 8 2,237
Mortgage-backed securities 840 2 14 828
------- ----- ------ ------
$69,931 16 2,904 67,043
======= ===== ====== ======
12
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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,
2001:
Estimated Weighted
Amortized Market Average
Held-To-Maturity Securities Cost Value Yields
--------- --------- --------
(In Thousands, Except Yields)
U.S. Treasury and other U.S. Government
agencies and corporations, including
mortgage-backed securities:
Less than one year $ -- -- -%
One to five years 1 1 10.011
Five to ten years 2,222 2,208 4.900
More than ten years 634 640 5.000
------- ------- -------
Total securities of U.S. Treasury
and other U.S. Government
agencies and corporations 2,857 2,849 4.924
------- ------- -------
Obligations of states and political subdivisions(*):
Less than one year 665 669 7.240
One to five years 4,063 4,187 7.595
Five to ten years 4,341 4,426 7.401
More than ten years 4,204 4,256 7.934
------- ------- -------
Total obligations of states and
political subdivisions 13,273 13,538 7.621
------- ------- -------
Total held-to-maturity securities $16,130 16,387 7.144%
======= ======= =======
(*) Weighted average yield is stated on a tax-equivalent basis, assuming a
weighted average Federal income tax rate of 34%.
13
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
II. Investment Portfolio, Continued:
B. Continued:
Estimated Weighted
Amortized Market Average
Available-For-Sale Securities Cost Value Yields
- ----------------------------- --------- --------- --------
(In Thousands, Except Yields)
U.S. Treasury and other U. S. Government
agencies and corporations, including
mortgage-backed securities:
Less than one year $ 2,555 2,625 5.670%
One to five years 42,631 42,637 4.501
Five to ten years 30,874 30,947 6.158
More than ten years 1,921 1,928 6.554
------- ------ -----
Total securities of U.S. Treasury
and other U.S. Government
agencies and corporations 77,981 78,137 5.246
------- ------ -----
Obligations of states and political subdivisions*:
Less than one year 200 203 7.090
One to five years 824 845 7.860
Five to ten years 1,234 1,243 7.574
More than ten years -- -- --
------- ------ -----
Total obligations of states and
political subdivisions 2,258 2,291 7.635
------- ------ -----
Other:
Bankers Bank stock 88 88 2.431
Federal Home Loan Bank stock 1,915 1,915 6.570
------- ------ -----
Total available-for-sale securities $82,242 82,431 5.339%
======= ====== =====
* Weighted average yield is stated on a tax-equivalent basis, assuming a
weighted average Federal income tax rate of 34%.
14
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
III. Loan Portfolio:
A. Loan Types
The following schedule details the loans of the Company at December 31,
2001, 2000, 1999, 1998 and 1997:
In Thousands
----------------------------------------------------------------------------
2001 2000 1999 1998 1997
-------- -------- -------- -------- --------
Commercial, financial and
agricultural $190,700 157,254 121,438 100,217 82,515
Real estate - construction 25,044 31,531 27,184 21,809 18,159
Real estate - mortgage 228,316 195,480 164,852 130,927 103,155
Installment 50,741 48,198 45,710 44,299 38,423
-------- -------- -------- -------- --------
Total loans 494,801 432,463 359,184 297,252 242,252
Less unearned interest (35) (174) (579) (1,322) (1,696)
-------- -------- -------- -------- --------
Total loans, net of
unearned interest 494,766 432,289 358,605 295,930 240,556
Less allowance for
possible
loan losses (5,489) (4,525) (3,847) (3,244) (2,890)
-------- -------- -------- -------- --------
Net loans $489,277 427,764 354,758 292,686 237,666
======== ======== ======== ======== ========
15
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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, 2001:
In Thousands
--------------------------------------------------------
1 Year to
Less Than Less Than After 5
1 Year 5 Years Years Total
--------- --------- -------- --------
Maturity Distribution:
Commercial, financial
and agricultural $ 98,368 61,757 30,575 190,700
Real estate - construction 24,740 197 107 25,044
-------- -------- -------- --------
$123,108 61,954 30,682 215,744
======== ======== ======== ========
Interest-Rate Sensitivity:
Fixed interest rates $104,539 51,191 16,114 171,844
Floating or adjustable
interest rates 18,569 10,763 14,568 43,900
-------- -------- -------- --------
Total commercial,
financial and
agricultural loans
plus real estate -
construction loans $123,108 61,954 30,682 215,744
======== ======== ======== ========
* Includes demand loans, bankers acceptances, commercial paper and deposit
notes.
16
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
III. Loan Portfolio, Continued:
C. Risk Elements
The following schedule details selected information as to
non-performing loans of the Company at December 31, 2001, 2000, 1999, 1998 and
1997:
In Thousands, Except Percentages
------------------------------------------------------------------------
2001 2000 1999 1998 1997
-------- -------- -------- -------- --------
Non-accrual loans:
Commercial, financial and
agricultural $ -- -- -- -- 1
Real estate - construction -- -- -- -- --
Real estate - mortgage 71 -- -- 25 6
Installment 98 100 84 198 153
Lease financing receivable -- -- -- -- --
-------- -------- -------- -------- --------
Total non-accrual $ 169 100 84 223 160
======== ======== ======== ======== ========
Loans 90 days past due:
Commercial, financial and
agricultural $ -- -- -- -- 30
Real estate - construction 124 -- -- -- --
Real estate - mortgage 194 68 197 118 66
Installment 270 222 225 438 1,123
Lease financing receivable -- -- -- -- --
-------- -------- -------- -------- --------
Total loans 90 days
past due $ 588 290 422 556 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 $ 757 390 506 779 1,379
======== ======== ======== ======== ========
Total loans, net of
unearned interest $494,766 432,289 358,605 295,930 240,556
======== ======== ======== ======== ========
Percent of total
loans
outstanding, net of
unearned interest 0.15% 0.09 0.14 0.26 0.57
======== ======== ======== ======== ========
Other real estate $ 415 425 221 138 63
======== ======== ======== ======== ========
17
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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 $169,000 at December 31, 2001, $100,000 at December
31, 2000, $84,000 at December 31, 1999, $223,000 at December 31, 1998 and
$160,000 at December 31, 1997. Gross interest income on non-accrual loans, that
would have been recorded for the year ended December 31, 2001 if the loans had
been current totaled $12,000 as compared to $17,000 in 2000, $8,000 in 1999,
$16,000 in 1998 and $11,000 in 1997. The amount of interest and fee income
recognized on total loans during 2001 totaled $40,262,000 as compared to
$35,743,000 in 2000, $28,937,000 in 1999, $24,790,000 in 1998 and $20,466,000 in
1997.
At December 31, 2001, loans, which include the above, totaling $3,153,000 were
included in the Company's internal classified loan list. Of these loans
$2,441,000 are real estate and $712,000 are various other types of loans. The
collateral values securing these loans total approximately $4,282,000,
($3,631,000 related to real property and $651,000 related to the various other
types of loans). Such loans are listed as classified when information obtained
about possible credit problems of the borrowers has prompted management to
question the ability of the borrower to comply with the repayment terms of the
loan agreement. 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, 2001 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, 2001 and 2000 other real estate totaled $415,000 and $425,000,
respectively.
18
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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, 2001 which would be required to be disclosed as past due, non-accrual,
restructured or potential problem loans, if such interest-bearing assets were
loans.
19
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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, 2001, 2000, 1999, 1998
and 1997 and the years then ended.
In Thousands, Except Percentages
-----------------------------------------------------------------------------
2001 2000 1999 1998 1997
-------- -------- -------- -------- --------
Allowance for loan losses
at beginning of period $ 4,525 3,847 3,244 2,890 2,452
-------- -------- -------- -------- --------
Less: net of loan
charge-offs:
Charge-offs:
Commercial, financial and
agricultural (311) (6) -- -- --
Real estate construction (83) -- -- -- --
Real estate - mortgage (131) (186) (50) (100) (9)
Installment (726) (681) (539) (605) (477)
Lease financing -- -- -- -- --
-------- -------- -------- -------- --------
(1,251) (873) (589) (705) (486)
-------- -------- -------- -------- --------
Recoveries:
Commercial, financial and
agricultural 4 -- -- -- --
Real estate construction -- -- -- -- --
Real estate - mortgage -- -- -- 2 --
Installment 235 134 89 47 96
Lease financing -- -- -- -- --
-------- -------- -------- -------- --------
239 134 89 49 96
-------- -------- -------- -------- --------
Net loan charge-offs (1,012) (739) (500) (656) (390)
-------- -------- -------- -------- --------
Provision for loan losses
charged to expense 1,976 1,417 1,103 1,010 828
-------- -------- -------- -------- --------
Allowance for loan losses at
end of period $ 5,489 4,525 3,847 3,244 2,890
======== ======== ======== ======== ========
Total loans, net of unearned
interest, at end of year $494,766 432,289 358,605 295,930 240,556
======== ======== ======== ======== ========
Average total loans out-
standing, net of unearned
interest, during year $460,556 395,441 326,396 263,605 215,073
======== ======== ======== ======== ========
Net charge-offs as a
percentage of average total
loans outstanding, net of
unearned interest, during
year 0.22% 0.19 0.15 0.25 0.18
======== ======== ======== ======== ========
Ending allowance for loan
losses as a percentage of
total loans outstanding net
of unearned interest, at
end of year 1.11% 1.05 1.07 1.10 1.20
======== ======== ======== ======== ========
20
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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, 2001 December 31, 2000
---------------------------- ----------------------------
Percent of Percent of
Loans In Loans In
In Each Category In Each Category
Thousands To Total Loans Thousands To Total Loans
--------- -------------- --------- --------------
Commercial, financial
and agricultural $ 651 38.5% $ 480 36.4%
Real estate construction 236 5.1 535 7.3
Real estate mortgage 3,892 46.1 2,981 45.2
Installment 710 10.3 529 11.1
-------- -------- -------- --------
$ 5,489 100.0% $ 4,525 100.0%
======== ======== ======== ========
December 31, 1999 December 31, 1998
---------------------------- ----------------------------
Percent of Percent of
Loans In Loans In
In Each Category In Each Category
Thousands To Total Loans Thousands To Total Loans
--------- -------------- --------- --------------
Commercial, financial
and agricultural $ 463 33.8% $ 396 33.7%
Real estate construction 232 7.6 184 7.3
Real estate mortgage 2,171 45.9 1,785 44.1
Installment 981 12.7 879 14.9
-------- -------- -------- --------
$ 3,847 100.0% $ 3,244 100.0%
======== ======== ======== ========
December 31, 1997
--------------------------
Percent of
Loans In
In Each Category
Thousands To Total Loans
--------- --------------
Commercial, financial
and agricultural $ 483 34.1%
Real estate construction 249 7.5
Real estate mortgage 1,552 42.6
Installment 606 15.8
------ ------
$2,890 100.0%
====== ======
21
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
V. Deposits:
The average amounts and average interest rates for deposits for 2001, 2000 and
1999 are detailed in the following schedule:
2001 2000 1999
------------------------- -------------------------- --------------------------
Average Average Average
Balance Balance Balance
In Average In Average In Average
Thousands Rate Thousands Rate Thousands Rate
--------- -------- --------- -------- --------- --------
Non-interest bearing
deposits $ 53,764 --% 49,300 - % 44,246 --%
Negotiable order of
withdrawal accounts 36,454 1.41% 30,884 1.87% 25,287 1.61%
Money market
demand accounts 110,253 3.18% 94,759 3.75% 89,737 3.47%
Individual retirement
accounts 26,697 5.93% 22,067 5.97% 19,444 5.46%
Other savings 28,640 3.85% 24,881 4.72% 20,867 4.07%
Certificates of deposit
$100,000 and over 119,677 5.77% 90,057 6.09% 80,567 5.34%
Certificates of deposit
under $100,000 195,017 5.90% 167,885 6.05% 135,085 5.41%
-------- -------- -------- -------- -------- --------
$570,502 4.40% 479,833 4.64% 415,233 4.11%
======== ======== ======== ======== ======== ========
The following schedule details the maturities of certificates of deposit and
individual retirement accounts of $100,000 and over at December 31, 2001:
In Thousands
------------------------------------------
Certificates Individual
of Retirement
Deposit Accounts Total
------------ ---------- --------
Less than three months $ 36,880 202 37,082
Three to six months 36,431 468 36,899
Six to twelve months 31,101 1,571 32,672
More than twelve months 10,785 2,923 13,708
-------- -------- --------
$115,197 5,164 120,361
======== ======== ========
22
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
VI. Return on Equity and Assets:
The following schedule details selected key ratios of the Company at December
31, 2001, 2000 and 1999:
2001 2000 1999
----- ----- -----
Return on assets (1) 1.14% 1.14% 1.12%
(Net income divided by average total assets)
Return on equity 15.70% 16.39% 16.04%
(Net income divided by average equity)
Dividend payout ratio 29.14% 28.27% 29.76%
(Dividends declared per share divided by
net income per share) (2)
Equity to asset ratio 6.66% 6.45% 6.61%
(Average equity divided by average total
assets)
Leverage capital ratio 7.42% 7.32% 7.76%
(Equity divided by fourth quarter
average total assets, excluding the net
unrealized gain 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.
(1) Includes minority interest earnings of consolidated subsidiaries.
(2) Per share data has been retroactively adjusted to reflect a 4 for 3 stock
split which occurred effective September 30, 1999.
23
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
VI. Return on Equity and Assets, Continued:
The following schedule details the Company's risk-based capital at December 31,
2001 excluding the net unrealized gain on available-for-sale securities which is
shown as a deduction in stockholders' equity in the consolidated financial
statements:
In Thousands
------------
Tier I capital:
Stockholders' equity, excluding the net unrealized
gain on available-for-sale securities $ 45,858
Add: Minority interest (limited to 25% of Tier I
capital) 4,870
--------
Total Tier I capital 50,728
Total capital:
Allowable allowance for possible loan losses (limited to
1.25% of risk-weighted assets) 5,489
--------
Total capital $ 56,217
========
Risk-weighted assets $462,611
========
Risk-based capital ratios:
Tier I capital ratio 10.97%
========
Total risk-based capital ratio 12.15%
========
24
WILSON BANK HOLDING COMPANY
Form 10-K
December 31, 2001
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,
2001, 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, 2001:
Repricing Within
----------------------------------------------------------------------------------------------
(In Thousands) Total 0-30 Days 31-90 Days 91-180 Days 181-365 Days Over 1 Year
-------- --------- ---------- ----------- ------------ -----------
Earning assets:
Loans, net of
unearned interest $494,766 67,874 30,014 44,642 68,009 284,227
Securities 98,561 5,065 183 235 3,111 89,967
Loans held for sale 4,369 4,369 -- -- -- --
Federal funds sold 31,506 31,506 -- -- -- --
-------- -------- -------- -------- -------- --------
Total earning
assets 629,202 108,814 30,197 44,877 71,120 374,194
-------- -------- -------- -------- -------- --------
Interest-bearing
liabilities:
Negotiable order
of withdrawal
accounts 45,774 45,774 -- -- -- --
Money market demand
accounts 132,115 132,115 -- -- -- --
Individual retirement
accounts 28,681 5,751 2,744 2,911 6,773 10,502
Other savings 30,755 30,755 -- -- -- --
Certificates of
deposit, $100,000
and over 115,197 4,510 29,696 39,004 31,202 10,785
Certificates of
deposit, under $100,000 188,986 2,229 46,191 48,875 63,638 28,053
Securities sold
under repurchase
agreements 8,551 8,551 -- -- -- --
Advances from Federal
Home Loan Bank 1,370 -- -- -- -- 1,370
-------- -------- -------- -------- -------- --------
551,429 229,685 78,631 90,790 101,613 50,710
-------- -------- -------- -------- -------- --------
Interest-sensitivity gap $ 77,773 (120,871) (48,434) (45,913) (30,493) 323,484
======== ======== ======== ======== ======== ========
Cumulative gap (120,871) (169,305) (215,218) (245,711) 77,773
======== ======== ======== ======== ========
Interest-sensitivity gap
as % of total assets (18.10) (7.25) (6.88) (4.57) 48.44
======== ======== ======== ======== ========
Cumulative gap as %
of total assets (18.10) (25.35) (32.23) (36.80) 11.64
======== ======== ======== ======== ========
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.
25
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 the following locations:
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; the Wal-Mart Supercenter, Lebanon, Tennessee; and 4736 Andrew Jackson
Parkway in Hermitage, Tennessee.
The Mt. Juliet office contains approximately 16,000 square feet of space; the
Castle Heights Office contains 2,400 square feet of space and the Hartsville
Office contains 8,000 square feet of space. The Hermitage branch opened in the
fall of 1999 and contains 8,000 square feet of space. The Gladeville branch
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 Bank also leases space at
nine 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 which
was expanded in 2001 and now contains approximately 10,300 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 operates out of a building it owns
at 1300 Main Street North, Carthage, Tennessee. CBSC's facility contains
approximately 8,000 square feet of space.
ITEM 3. LEGAL PROCEEDINGS
As of the date hereof, there are no material pending legal proceedings to which
the Company or any of its subsidiaries is a party or of which any of its
properties are subject; nor are there material proceedings known to the Company
or its subsidiaries to be contemplated by any governmental authority; nor are
there material proceedings known to the Company or its subsidiaries, pending or
contemplated, in which any director, officer or affiliate or any principal
security holder of the Company or any of its subsidiaries or any associate of
any of the foregoing, is a party or has an interest adverse to the Company or
any of its subsidiaries.
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
2001.
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 62 of the Company's
2001 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 12 of the Company's
2001 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 "Management's
Discussion and Analysis of Financial Condition and Results of Operations" as set
forth on pages 13 through 22 of the Company's 2001 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.
26
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. members of senior management of
the Company meet 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,
2001.
===============================================================================================================================
(DOLLARS IN THOUSANDS)
EXPECTED MATURITY DATE - YEAR ENDING DECEMBER 31,
---------------------------------------------------- FAIR
2002 2003 2004 2005 2006 THEREAFTER TOTAL VALUE
-------- ------- ------ ------ ------ ---------- ------- -------
EARNING ASSETS:
Loans, Net of unearned interest:
Variable rate $ 21,124 3,453 3,711 6,587 6,437 179,687 220,999 220,999
Average interest rate 6.53% 6.68% 6.54% 6.74% 6.74% 7.69% 7.55%
Fixed rate 112,424 28,854 21,454 30,734 30,566 49,735 273,767 279,173
Average interest rate 7.77% 8.92% 8.96% 8.06% 8.06% 7.70% 8.03%
Securities 3,424 5,225 13,363 23,550 6,592 46,407 98,561 98,818
Average interest rate 6.06% 4.60% 4.38% 4.88% 5.61% 6.27% 5.53%
Loans held for sale 4,369 -- -- -- -- -- 4,369 4,369
Average interest rate 4.66% -- -- -- -- -- 4.66%
Federal funds sold 31,506 -- -- -- -- -- 31,506 31,506
Average interest rate 3.89% -- -- -- -- -- 3.89%
Interest-bearing deposits 475,389 39,698 23,220 1,325 1,570 306 541,508 546,240
Average interest rate 3.89% 5.83% 5.00% 6.59% 5.74% 4.38% 4.07%
Short-term borrowings 8,551 -- -- -- -- -- 8,551 8,551
Average interest rate 3.40% -- -- -- -- -- 3.40%
Advances from Federal
Home Loan Bank -- -- -- -- -- 1,370 1,370 1,582
Average interest rate -- -- -- -- -- 7.18% 7.18%
===============================================================================================================================
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 23
through 61 and on page 23, respectively, of the Company's 2001 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
herein by reference to the section entitled "Election of Directors" in the
Company's definitive proxy materials filed in connection with the Company's 2002
Annual Meeting of Shareholders. The information required by this item with
respect to executive officers is set forth below:
James Randall Clemons (49) - 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 (57) - 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 (49) - 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 (50) - 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 (44) - 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.
Lisa Sorrell (37) - Ms. Sorrell is Senior Vice President and the Chief Financial
Officer of the Bank. Ms. Sorrell has held several positions including Asst.
Cashier, Asst. Vice President and Vice President since the Bank's formation in
May of 1987. Prior to 1987 Ms. Sorrell was employed by People's Bank, Lebanon,
TN 37087.
27
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.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is incorporated herein by reference to the
section entitled "Executive Compensation" in the Company's definitive proxy
materials filed in connection with the 2002 Annual Meeting of Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item is incorporated herein by reference to the
section entitled "Stock Ownership" in the Company's definitive proxy materials
filed in connection with the 2002 Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item is incorporated herein by reference to the
section entitled "Certain Relationships and Related Transactions" in the
Company's definitive proxy materials filed in connection with the 2002 Annual
Meeting of Shareholders.
PART IV
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]
28
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 29, 2002
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 Executive Officer and Director March 29, 2002
- ---------------------------------------------
J. Randall Clemons
/s/ Becky Taylor Principal Accounting Officer and Chief March 29, 2002
- --------------------------------------------- Financial Officer
Becky Taylor
/s/ Elmer Richerson Executive Vice President & Director March 29, 2002
- ---------------------------------------------
Elmer Richerson
/s/ Charles Bell Director March 29, 2002
- ---------------------------------------------
Charles Bell
/s/ Jack W. Bell Director March 29, 2002
- ---------------------------------------------
Jack W. Bell
/s/ Mackey Bentley Director March 29, 2002
- ---------------------------------------------
Mackey Bentley
/s/ James F. Comer Director March 29, 2002
- ---------------------------------------------
James F. Comer
/s/ Jerry L. Franklin Director March 29, 2002
- ---------------------------------------------
Jerry L. Franklin
/s/ John B. Freeman Director March 29, 2002
- ---------------------------------------------
John B. Freeman
29
/s/ Marshall Griffith Director March 29, 2002
- ---------------------------------------------
Marshall Griffith
/s/ Harold R. Patton Director March 29, 2002
- ---------------------------------------------
Harold R. Patton
/s/ James Anthony Patton Director March 29, 2002
- ---------------------------------------------
James Anthony Patton
/s/ John R. Trice Director March 29, 2002
- ---------------------------------------------
John R. Trice
/s/ Robert T. VanHooser, Jr. Director March 29, 2002
- ---------------------------------------------
Robert T. VanHooser, Jr.
30
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).
10.1 Wilson Bank Holding Company 1999 Stock Option Plan (incorporated herein by reference to the Registrant's definitive Proxy
Statement for the Annual Meeting of Stockholders held April 13, 1999.
10.2 Executive Salary Continuation Agreement by and between the Company and J. Randall Clemons dated as of March 30, 1995
(incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000).*
10.3 Executive Salary Continuation Agreement by and between the Company and Elmer Richerson dated as of March 30, 1995
(incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000).*
10.4 Executive Salary Continuation Agreement by and between the Company and Gary D. Whitaker dated as of March 1, 1998
(incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000).*
10.5 Executive Salary Continuation Agreement by and between the Company and Larry Squires dated September 16, 1996.*
10.6 Amendment to the Wilson Bank and Trust Executive Salary Continuation Agreement dated as of January 1, 2001 by and
between Wilson Bank and Trust and Larry Squires.*
13.1 Selected Portions of the Wilson Bank Holding Company Annual Report to Shareholders for the year ended December 31, 2001
incorporated by reference into items 5, 6, 7 and 8.
21.1 Subsidiaries of the Company.
23 Consent of Independent Auditors
- ---------------
* Management compensatory plan or contract
31