Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
MARK ONE
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003
[ ] 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
- --------------------------------------------------------------------------------
(Exact Name of Registrant As Specified in its Charter)
Tennessee 62-1497076
- ------------------------------- ----------------------------
(State or Other Jurisdiction of (IRS Employer Identification
Incorporation or Organization) Number)
623 West Main Street, Lebanon, TN 37087
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices and Zip Code)
(615) 444-2265
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, including area code)
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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
YES [ ] NO [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock outstanding: 2,133,305 shares at May 14, 2003
PART 1: FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited consolidated financial statements of the registrant and
its subsidiaries are as follows:
Consolidated Balance Sheets - March 31, 2003 and December 31,
2002.
Consolidated Statements of Earnings - For the three months
ended March 31, 2003 and 2002.
Consolidated Statements of Comprehensive Earnings - For the
three months ended March 31, 2003 and 2002.
Consolidated Statements of Cash Flows - For the three months
ended March 31, 2003 and 2002.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Disclosures required by Item 3 are incorporated by reference
to Management's Discussion and Analysis of Financial Condition
and Results of Operation.
Item 4. Controls and Procedures
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
2
WILSON BANK HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2003 AND DECEMBER 31, 2002
(UNAUDITED)
March 31, December 31,
2003 2002
--------- ------------
(In Thousands)
Assets
Loans $562,156 550,601
Less: Allowance for loan losses (7,390) (6,943)
-------- -------
Net loans 554,766 543,658
Securities:
Held to maturity, at cost (market value - $14,435,000 and $14,838,000,
respectively) 13,662 14,213
Available-for-sale, at market (amortized cost - $104,621,000 and $100,230,000,
respectively) 105,893 101,669
-------- -------
Total securities 119,555 115,882
Loans held for sale 5,669 10,859
Other interest bearing assets 2,487 2,460
Federal funds sold 52,728 27,366
-------- -------
Total earning assets 735,205 700,225
Cash and due from banks 19,988 27,797
Bank premises and equipment, net 15,233 15,409
Accrued interest receivable 4,611 4,625
Deferred income tax asset 1,650 1,582
Other real estate 1,099
818
Other assets 2,235 2,330
-------- -------
Total assets $780,021 752,786
======== =======
Liabilities and Stockholders' Equity
Deposits $702,794 679,408
Securities sold under repurchase agreements 8,292 7,868
Federal Home Loan Bank advances 823 997
Accrued interest and other liabilities 4,969 3,713
-------- -------
Total liabilities 716,878 691,986
-------- -------
Minority interest 5,957 5,769
-------- -------
Stockholders' equity:
Common stock, $2.00 par value; authorized 5,000,000 shares, issued
2,133,305 and 2,108,019 shares, respectively 4,267 4,216
Additional paid-in capital 15,018 13,931
Retained earnings 37,149 36,054
Accumulated other comprehensive earnings:
Net unrealized gains on available-for-sale securities, net of income
taxes of $466,000 and $514,000, respectively 752 830
-------- -------
Total stockholders' equity 57,186 55,031
-------- -------
Total liabilities and stockholders' equity $780,021 752,786
======== =======
See accompanying notes to consolidated financial statements (unaudited).
3
WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
2003 2002
---------- ---------
(Dollars In Thousands
Except Per Share Amounts)
Interest income:
Interest and fees on loans $ 10,113 10,176
Interest and dividends on securities:
Taxable securities 1,016 1,099
Exempt from Federal income taxes 167 173
Interest on loans held for sale 111 44
Interest on Federal funds sold 139 194
---------- ---------
Total interest income 11,546 11,686
---------- ---------
Interest expense:
Interest on negotiable order of withdrawal accounts 69 90
Interest on money market and savings accounts 717 931
Interest on certificates of deposit 3,042 3,649
Interest on securities sold under repurchase agreements 35 50
Interest on Federal Home Loan Bank advances 19 24
Interest on Federal funds purchased -- 1
---------- ---------
Total interest expense 3,882 4,745
---------- ---------
Net interest income before provision for possible loan losses 7,664 6,941
Provision for possible loan losses 581 533
---------- ---------
Net interest income after provision for possible loan losses 7,083 6,408
---------- ---------
Non-interest income:
Service charges on deposit accounts 998 916
Other fees and commissions 317 392
Gain on sale of loans 706 268
Gain on sale of other real estate -- 3
---------- ---------
2,021 1,579
---------- ---------
Non-interest expense:
Salaries and employee benefits 2,838 2,579
Occupancy expenses, net 325 323
Furniture and equipment expense 202 305
Data processing expense 90 105
Directors' Fees 180 173
Other operating expenses 1,301 940
Loss on sale of other assets 10 --
Loss on sale of other real estate 45 --
Minority interest in net earnings of subsidiaries 232 216
---------- ---------
5,223 4,641
---------- ---------
Earnings before income taxes 3,881 3,346
Income taxes 1,521 1,299
---------- ---------
Net earnings $ 2,360 2,047
========== =========
Weighted average number of shares outstanding 2,124,595 2,071,071
========== =========
Basic earnings per common share $ 1.11 0.99
========== =========
Diluted earnings per common share $ 1.11 0.99
========== =========
Dividends per share $ 0.60 0.55
========== =========
See accompanying notes to consolidated financial statements (unaudited).
4
WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
2003 2002
------ -----
(In Thousands)
Net earnings $2,360 2,047
------ -----
Other comprehensive losses, net of tax:
Unrealized losses on available-for-sale securities
arising during period, net of tax benefits of $48,000 and
$99,000 respectively (78) (162)
------ -----
Other comprehensive losses (78) (162)
------ -----
Comprehensive earnings $2,282 1,885
====== =====
See accompanying notes to consolidated financial statements (unaudited).
5
WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
2003 2002
-------- --------
(In Thousands)
Cash flows from operating activities:
Interest received $ 11,522 11,448
Fees and commissions received 1,315 1,307
Proceeds from sale of loans 34,580 13,100
Origination of loans held for sale (28,684) (11,134)
Interest paid (3,854) (5,144)
Cash paid to suppliers and employees (4,181) (3,585)
Income taxes paid (645) (420)
-------- --------
Net cash provided by operating activities 10,053 5,572
-------- --------
Cash flows from investing activities:
Purchase of available-for-sale securities (39,143) (13,722)
Proceeds from maturities of available-for sale securities 34,761 11,861
Proceeds from sale of other real estate 58 83
Purchase of held-to-maturity securities (305) (212)
Proceeds from maturities of held-to-maturity securities 858 934
Loans made to customers, net of repayments (12,073) (12,227)
Purchase of premises and equipment (148) (235)
-------- --------
Net cash used in investing activities (15,992) (13,518)
-------- --------
Cash flows from financing activities:
Increase in non-interest bearing, savings
and NOW deposit accounts 19,251 24,143
Net increase in time deposits 4,135 7,201
Increase in securities sold under repurchase agreements 424 1,796
Decrease in Federal Home Loan Bank advances (174) (235)
Dividends paid (1,265) (1,129)
Dividends paid to minority shareholders (184) (162)
Proceeds from sale of stock to minority shareholders 167 145
Proceeds from sale of common stock 1,138 1,023
-------- --------
Net cash provided by financing activities 23,492 32,782
-------- --------
Net increase in cash and cash equivalents 17,553 24,836
Cash and cash equivalents at beginning of period 55,163 51,660
-------- --------
Cash and cash equivalents at end of period $ 72,716 $ 74,496
======== ========
See accompanying notes to consolidated financial statements (unaudited).
6
WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
2003 2002
------- -----
(In Thousands)
Reconciliation of net earnings to net cash provided by
operating activities:
Net earnings $ 2,360 2,047
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 313 277
Provision for loan losses 581 533
Minority interests in net earnings of commercial bank
Subsidiaries 232 216
Loss (gain) on sale of other real estate 45 (3)
Decrease in loans held for sale 5,190 1,699
Increase in deferred tax assets (6) (4)
Increase in taxes payable 882 883
FHLB dividend reinvestment (27) (27)
Decrease (increase) in other assets, net 95 (101)
Increase in other liabilities 346 657
Decrease (increase) in interest receivable 14 (206)
Increase (decrease) in interest payable 28 (399)
------- -----
Total adjustments 7,693 3,525
------- -----
Net cash provided by operating activities $10,053 5,572
======= =====
Supplemental schedule of non-cash activities:
Unrealized loss in values of securities available-for-
sale, net of income tax benefit of $48,000 and
$99,000 for the quarters ended March 31,
2003 and 2002, respectively $ (78) (162)
======= =====
Non-cash transfers from loans to other real estate $ 384 500
======= =====
See accompanying notes to consolidated financial statements (unaudited).
7
WILSON BANK HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The unaudited, consolidated financial statements include the accounts of Wilson
Bank Holding Company (Company), its wholly-owned subsidiary, Wilson Bank and
Trust, DeKalb Community Bank, a 50% owned subsidiary, and Community Bank of
Smith County, a 50% owned subsidiary.
The accompanying consolidated financial statements have been prepared, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations.
In the opinion of management, the consolidated financial statements contain all
adjustments and disclosures necessary to summarize fairly the financial position
of the Company as of March 31, 2003 and December 31, 2002, the results of
operations for the three months ended March 31, 2003 and 2002, comprehensive
earnings for the three months ended March 31, 2003 and 2002 and changes in cash
flows for the three months ended March 31, 2003 and 2002. All significant
intercompany transactions have been eliminated. The interim consolidated
financial statements should be read in conjunction with the notes to the
consolidated financial statements presented in the Company's 2002 Annual Report
to Stockholders. The results for interim periods are not necessarily indicative
of results to be expected for the complete fiscal year.
ALLOWANCE FOR LOAN LOSSES
Transactions in the allowance for loan losses were as follows:
Three Months Ended
March 31,
---------------------
2003 2002
------ ------
(In Thousands)
Balance, January 1, 2003 and 2002, respectively $6,943 $5,489
Add (deduct):
Losses charged to allowance (191) (166)
Recoveries credited to allowance 57 74
Provision for loan losses 581 533
------ ------
Balance, March 31, 2003 and 2002, respectively $7,390 $5,930
====== ======
8
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The purpose of this discussion is to provide insight into the financial
condition and results of operations of the Company and its subsidiaries. This
discussion should be read in conjunction with the consolidated financial
statements. Reference should also be made to the Company's Annual Report on Form
10-K for the year ended December 31, 2002 for a more complete discussion of
factors that impact liquidity, capital and the results of operations.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains certain forward-looking statements regarding,
among other things, the anticipated financial and operating results of the
Company. Investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release any modifications or revisions to
these forward-looking statements to reflect events or circumstances occurring
after the date hereof or to reflect the occurrence of unanticipated events.
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions investors that
future financial and operating results may differ materially from those
projected in forward-looking statements made by, or on behalf of, the Company.
The words "believe," "suspect," "anticipate," "seek," "plan," "estimate" and
similar expressions are intended to identify such forward-looking statements,
but other statements not based on historical fact may also be considered
forward-looking. Such forward-looking statements involve known and unknown risks
and uncertainties, including, but not limited to, increased competition with
other financial institutions, lack of sustained growth in the Company's market
area, rapid fluctuations in interest rates, significant downturns in the
business of one or more large customers, changes in the legislative and
regulatory environment, inadequate allowance for loan losses and loss of key
personnel. These risks and uncertainties may cause the actual results or
performance of the Company to be materially different from any future results or
performance expressed or implied by such forward-looking statements. The
Company's future operating results depend on a number of factors which were
derived utilizing numerous assumptions that could cause actual results to differ
materially from those projected in forward-looking statements.
CRITICAL ACCOUNTING POLICIES
The accounting principles we follow and our methods of applying these
principles conform with accounting principles generally accepted in the United
States and with general practices within the banking industry. In connection
with the application of those principles to the determination of our allowance
for loan losses (ALL) and the recognition of our deferred income tax assets, we
have made judgments and estimates which have significantly impacted our
financial position and results of operations.
ALLOWANCE FOR LOAN LOSSES
Our management assesses the adequacy of the ALL prior to the end of
each calendar quarter. This assessment includes procedures to estimate the ALL
and test the adequacy and appropriateness of the resulting balance. The ALL
consists of two portions (1) an allocated amount representative of specifically
identified credit exposure and exposures readily predictable by historical or
comparative experience; and (2) an unallocated amount representative of inherent
loss which is not readily available. Even though the ALL is composed of two
components, the entire allowance is available to absorb any credit losses.
9
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ALLOWANCE FOR LOAN LOSSES (CONTINUED)
We establish the allocated amount separately for two different risk groups(1)
unique loans(commercial loans, including those loans considered impaired); and
(2) homogenous loans(generally consumer loans). We base the allocation for
unique loans primarily on risk rating grades assigned to each of these loans as
a result of our loan management and review processes. Each risk-rating grade is
assigned an estimated loss ratio, which is determined based on the experience of
management, discussions with banking regulators, historical and current economic
conditions and our independent loan review process. We estimate losses on
impaired loans based on estimated cash flows discounted at the loan's original
effective interest rate or the underlying collateral value. We also assign
estimated loss ratios to our consumer portfolio. However, we base the estimated
loss ratios for these homogenous loans on the category of consumer credit (e.g.,
automobile, residential mortgage, home equity) and not on the results of
individual loan reviews.
The unallocated amount is particularly subjective and does not lend itself to
the exact mathematical calculation. We use the unallocated amount to absorb
inherent losses which may exist as of the balance sheet date for such matters as
changes in the local or national economy, the depth or experience of the lending
staff, any concentrations of credit in any particular industry group, and new
banking laws or regulations. After we assess applicable factors, we evaluate the
aggregate unallocated amount based on our management's experience.
We then test the resulting ALL balance by comparing the balance in the allowance
account to historical trends and peer information. Our management then evaluates
the result of the procedures performed, including the result of our testing, and
concludes on the appropriateness of the balance of the ALL in its entirety. The
loan review and the finance committee of our board of directors review the
assessment prior to the filing of quarterly financial information.
RESULTS OF OPERATIONS
Net earnings increased 15.3% to $ 2,360,000 for the three months ended
March 31, 2003 from $2,047,000 in the first quarter of 2002. The increase in net
earnings was primarily due to a 10.4% increase in net interest income which was
partially offset by a 12.5% increase in non-interest expenses. Non-interest
expense included a $ 16,000 increase in minority interest in net earnings of
subsidiaries.
NET INTEREST INCOME
Net interest income represents the amount by which interest earned on
various earning assets exceeds interest paid on deposits and other
interest-bearing liabilities and is the most significant component of the
Company's earnings. The Company's interest income, excluding tax equivalent
adjustments, decreased $140,000 or 1.2% during the three months ended March 31,
2003 as compared to the first quarter 2002. The decrease in 2003 was primarily
attributable to the interest rate environment. The ratio of average earning
assets to total average assets was 95.7% and 94.7% for the quarters ended March
31, 2003 and March 31, 2002, respectively.
10
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
Interest expense decreased $863,000 for the three months ended March
31, 2003 compared to a decrease of $2,181,000 for the same period in 2002. The
decrease for the quarter ended March 31, 2003 was due primarily to a decrease in
the rates paid on deposits.
The foregoing resulted in an increase in net interest income, before
the provision for loan losses, of $ 723,000 or 10.4% for the first three months
of 2003 as compared to the first quarter 2002.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for loan losses was $ 581,000 and $ 533,000,
respectively, for the first three months of 2003 and 2002. The provision for
loan losses is based on past loan experience and other factors which, in
management's judgment, deserve current recognition in estimating possible loan
losses. Such factors include past loan loss experience, growth and composition
of the loan portfolio, review of specific problem loans, the relationship of the
allowance for loan losses to outstanding loans, and current economic conditions
that may affect the borrower's ability to repay. Management has in place a
system designed for identifying and monitoring its loan portfolio. The provision
for loan losses raised the allowance for possible loan losses (net of charge
offs and recoveries) to $7,390,000, an increase of 6.4% from $6,943,000 at
December 31, 2002. The allowance for possible loan losses was 1.3% of total
loans outstanding at March 31, 2003 and December 31, 2002, respectively.
The level of the allowance and the amount of the provision involve
evaluation of uncertainties and matters of judgment. The Company maintains an
allowance for loan losses which management believes is adequate to absorb losses
inherent in the loan portfolio. A formal review is prepared bi-monthly by the
Loan Review Officer to assess the risk in the portfolio and to determine the
adequacy of the allowance for loan losses. The review includes analysis of
historical performance, the level of non-performing and adversely rated loans,
specific analysis of certain problem loans, loan activity since the previous
assessment, reports prepared by the Loan Review Officer, consideration of
current economic conditions, and other pertinent information. The level of the
allowance to net loans outstanding will vary depending on the overall results of
this bi-monthly assessment. The review is presented to the Finance Committee and
subsequently approved by the Board of Directors. Management believes the
allowance for possible loan losses at March 31, 2003 to be adequate.
11
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
NON-INTEREST INCOME
The components of the Company's non-interest income include
service charges on deposit accounts, other fees and commissions and gain on sale
of loans. Total non-interest income for the three months ended March 31, 2003
increased 28.0% to $2,021,000 from $1,579,000 for the same period in 2002. This
increase was due to an increase of $438,000 or 163.4% in gain on sale of loans
from $268,000 during the first quarter of 2002 to $706,000 for the same period
in 2003. Service charges on deposit accounts increased $82,000 or 9.0% to
$998,000, and other fees and commissions decreased $75,000 or 19.1% to $317,000
compared to $392,000 for the same quarter in 2002.
NON-INTEREST EXPENSES
Non-interest expenses consist primarily of employee costs,
occupancy expenses, furniture and equipment expenses, data processing expenses,
directors' fees, loss on sale of other real estate, other operating expenses and
minority interest in net earnings of subsidiaries. Total non-interest expenses
increased $582,000 or 12.5% during the first three months of 2003 compared to
the same period in 2002. The increases in non-interest expenses are attributable
primarily to increases in employee salaries and benefits associated with an
increase in the number of employees necessary to support the Company's
operations. The number of employees increased from 230 at March 31, 2002 to 238
at March 31, 2003. Increases in occupancy expenses were also due to the
Company's growth. Other operating expenses for the three months ended March 31,
2003 increased to $1,301,000 from $940,000 for the three months ended March 31,
2002. These expenses include Federal deposit insurance premiums, supplies and
general operating costs which increased as a result of continued growth of the
Company.
INCOME TAXES
The Company's income tax expense was $1,521,000 for the three
months ended March 31, 2003, an increase of $222,000 over the comparable period
in 2002. The percentage of income tax expense to net income before taxes was
39.2% and 38.8% for the periods ended March 31, 2003 and 2002, respectively. The
increase in the percentage is due to a decrease in the percentage of tax exempt
interest to taxable income. The effective tax rate exceeds the statutory tax
rate as a result of permanent differences related to life insurance premiums.
EARNINGS PER SHARE
The computation of basic earnings per share is based on the
weighted average number of common shares outstanding during the period. The
computation of diluted earnings per share for the Company begins with the basic
earnings per share plus the effect of common shares contingently issuable from
stock options.
12
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
EARNINGS PER SHARE, CONTINUED
The following is a summary of components comprising basic and
diluted earnings per share (EPS) for the three months ended March 31, 2003 and
2002:
(In Thousands, except share amounts) 2003 2002
---------- ---------
Basic EPS Computation:
Numerator - Earnings available to common stockholders $ 2,360 $ 2,047
---------- ---------
Denominator - Weighted average number of common
shares outstanding 2,124,595 2,071,071
---------- ---------
Basic earnings per common share $ 1.11 $ .99
========== =========
Diluted EPS Computation:
Numerator - Earnings available to common stockholders $ 2,360 $ 2,047
---------- ---------
Denominator:
Weighted average number of common shares
Outstanding 2,124,595 2,071,071
Dilutive effect of stock options 4,525 1,974
---------- ---------
2,129,120 2,073,045
---------- ---------
Diluted earnings per common share $ 1.11 $ .99
========== =========
FINANCIAL CONDITION
BALANCE SHEET SUMMARY
The Company's total assets increased 3.6% to $ 780,021,000 during the
three months ended March 31, 2003 from $ 752,786,000 at December 31, 2002.
Loans, net of allowance for possible loan losses, totaled $554,766,000 at March
31, 2003, a 2.0% increase compared to $543,658,000 at December 31, 2002. This
increase was primarily due to the Company's ability to increase its market share
of loans while maintaining its loan underwriting standards. Securities increased
$3,673,000 or 3.2% to $119,555,000 at March 31, 2003. Federal funds sold
increased $25,362,000 to $52,728,000 at March 31, 2003 from $27,366,000 at
December 31, 2002.
13
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
BALANCE SHEET SUMMARY, CONTINUED
Total liabilities increased by 3.6% to $716,878,000 for the three
months ended March 31, 2003 compared to $691,986,000 at December 31, 2002. This
increase was composed primarily of a $23,386,000 increase in total deposits from
$679,408,000 at December 31, 2002 to $702,794,000 at March 31, 2003. Securities
sold under repurchase agreements increased $424,000 during the quarter ended
March 31, 2003 and Federal Home Loan Bank advances decreased $ 174,000 during
the quarter ended March 31, 2003.
The following schedule details the loans of the Company at March 31,
2003 and December 31, 2002:
(In Thousands)
---------------------------
March 31, December 31,
2003 2002
--------- -----------
Commercial, financial & agricultural $ 89,503 $192,945
Real estate - construction 48,891 30,794
Real estate - mortgage 346,169 267,145
Installment 78,237 59,721
-------- --------
562,800 550,605
Unearned interest (644) (4)
-------- --------
$562,156 $550,601
======== ========
The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan"
and SFAS No. 118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures". These pronouncements apply to impaired loans
except for large groups of smaller-balance homogeneous loans that are
collectively evaluated for impairment including credit card, residential
mortgage, and consumer installment loans.
A loan is impaired when it is probable that the Company will be unable
to collect the scheduled payments of principal and interest due under the
contractual terms of the loan agreement. Impaired loans are measured at the
present value of expected future cash flows discounted at the loan's effective
interest rate, at the loan's observable market price, or the fair value of the
collateral if the loan is collateral dependent. If the measure of the impaired
loan is less than the recorded investment in the loan, the Company shall
recognize an impairment by creating a valuation allowance with a corresponding
charge to the provision for loan losses or by adjusting an existing valuation
allowance for the impaired loan with a corresponding charge or credit to the
provision for loan losses.
14
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
The Company's first mortgage single family residential, consumer and
credit card loans which total approximately $289,561,000, $72,063,000 and
$2,014,000, respectively at March 31, 2003, are divided into various groups of
smaller-balance homogeneous loans that are collectively evaluated for impairment
and thus are not subject to the provisions of SFAS Nos. 114 and 118.
Substantially all other loans of the Company are evaluated for impairment under
the provisions of SFAS Nos. 114 and 118.
The Company considers all loans subject to the provisions of SFAS 114
and 118 that are on nonaccrual status to be impaired. Loans are placed on
nonaccrual status when doubt as to timely collection of principal or interest
exists, or when principal or interest is past due 90 days or more unless such
loans are well-secured and in the process of collection. Delays or shortfalls in
loan payments are evaluated with various other factors to determine if a loan is
impaired. Generally, delinquencies under 90 days are considered insignificant
unless certain other factors are present which indicate impairment is probable.
The decision to place a loan on nonaccrual status is also based on an evaluation
of the borrower's financial condition, collateral, liquidation value, and other
factors that affect the borrower's ability to pay.
Generally, at the time a loan is placed on nonaccrual status, all
interest accrued on the loan in the current fiscal year is reversed from income,
and all interest accrued and uncollected from the prior year is charged off
against the allowance for loan losses. Thereafter, interest on nonaccrual loans
is recognized as interest income only to the extent that cash is received and
future collection of principal is not in doubt. If the collectibility of
outstanding principal is doubtful, such interest received is applied as a
reduction of principal. A nonaccrual loan may be restored to accruing status
when principal and interest are no longer past due and unpaid and future
collection of principal and interest on a timely basis is not in doubt. At March
31, 2003, the Company had nonaccrual loans totaling $488,000 as compared to
$483,000 at December 31, 2002.
Other loans may be classified as impaired when the current net worth
and financial capacity of the borrower or of the collateral pledged, if any, is
viewed as inadequate. In those cases, such loans have a well-defined weakness or
weaknesses that jeopardize the liquidation of the debt, and if such deficiencies
are not corrected, there is a probability that the Company will sustain some
loss. In such cases, interest income continues to accrue as long as the loan
does not meet the Company's criteria for nonaccrual status.
Generally the Company also classifies as impaired any loans the terms
of which have been modified in a troubled debt restructuring after January 1,
1995. Interest is accrued on such loans that continue to meet the modified terms
of their loan agreements. At March 31, 2003, the Company had no loans that have
had the terms modified in a troubled debt restructuring.
The Company's charge-off policy for impaired loans is similar to its
charge-off policy for all loans in that loans are charged-off in the month when
they are considered uncollectible.
15
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
Impaired loans and related allowance for loan loss amounts at
March 31, 2003 and December 31, 2002 were as follows:
March 31, 2003 December 31, 2002
----------------------- -----------------------
Allowance Allowance
Recorded for Recorded For
(In Thousands) Investment Loan Loss Investment Loan Loss
---------- --------- ---------- ---------
Impaired loans with allowance for
loan loss $485 121 483 108
Impaired loans with no allowance for
loan loss -- -- -- --
---- --- --- ---
$485 121 483 108
==== === === ===
The allowance for loan loss related to impaired loans was measured
based upon the estimated fair value of related collateral.
The average recorded investment in impaired loans for the three months
ended March 31, 2003 was $485,000. The amount of interest income recognized on
these loans was insignificant.
The following schedule details selected information as to
non-performing loans of the Company:
March 31, 2003 December 31, 2002
----------------------- ----------------------
Past Due Past Due
90 Days Non-Accrual 90 Days Non-Accrual
-------- ----------- ------- -----------
(In Thousands) (In Thousands)
Real estate loans $290 342 318 327
Installment loans 432 146 407 156
Commercial 5 -- 22
---- --- --- ---
---
$727 488 747 483
==== === === ===
Renegotiated loans $ -- -- -- --
==== === === ===
Non-performing loans, which included non-accrual loans and loans 90
days past due, at March 31, 2003 totaled $ 1,215,000 as compared to $ 1,230,000
at December 31, 2002. The decrease in non- performing loans during the three
months ended March 31, 2003 of $ 15,000 is due primarily to a decrease in
non-performing real estate loans. No material losses on these loans are
anticipated by management.
16
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
The following table presents total internally graded loans as of
March 31, 2003 and December 31, 2002:
March 31, 2003
--------------
(In Thousands) Special
Total Mention Substandard Doubtful
-------------- ------- ----------- --------
Commercial, financial and
agricultural $ 667 156 501 10
Real estate mortgage 4,151 1,073 3,078 --
Real estate construction -- -- -- --
Consumer 959 164 726 69
------ ----- ----- --
$5,777 1,393 4,305 79
====== ===== ===== ==
December 31, 2002
-----------------
(In Thousands) Special
Total Mention Substandard Doubtful
----------------- ------- ----------- --------
Commercial, financial and
agricultural $ 447 100 345 2
Real estate mortgage 2,911 777 2,047 87
Real estate construction -- -- -- --
Consumer 680 141 512 27
------ ----- ----- ---
$4,038 1,018 2,904 116
====== ===== ===== ===
At March 31, 2003, loans totaling $5,777,000 (including the above past
due and non-accrual loans) were included in the Company's internal classified
loan list. Of these loans $ 4,151,000 are real estate and $ 1,626,000 are
personal and other loans. The collateral values securing these loans total
approximately $ 6,662,000, ($4,878,000 related to real property and $1,784,000
related to personal loans). Internally classified loans increased $ 1,740,000 or
43.1% from $4,037,000 at December 31, 2002. Internally classified real estate
loans increased $1,241,000 and personal and other loans increased $499,000 from
December 31, 2002 amounts. Loans are listed as classified when information
obtained about possible credit problems of the borrower has prompted management
to question the ability of the borrower to comply with the repayment terms of
the loan agreement. The loan classifications do not represent or result from
trends or uncertainties which management expects will materially impact future
operating results, liquidity or capital resources.
The increase in the internally graded loans is concentrated in several
loans that were downgraded during the quarter ended March 31, 2003. The loans
were downgraded due to bankruptcies, foreclosures and repossessions.
Residential real estate loans that are internally graded totaling
$4,151,000 and $2,910,000 at March 31, 2003 and December 31, 2002 consist of 43
and 50 individual loans, respectively, that have been graded accordingly due to
bankruptcies, inadequate cash flows and delinquencies. No material losses on
these loans is anticipated by management.
17
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
The following detail provides a breakdown of the allocation of the
allowance for possible loan losses
March 31, 2003 December 31, 2002
----------------------------- -----------------------------
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 $ 622 15.9% $ 828 35.0%
Real estate construction 289 8.7 302 5.6
Real estate mortgage 5,197 61.5 4,723 48.5
Installment 1,822 13.9 1,090 10.9
------ ----- ------ -----
$7,930 100% $6,943 100%
====== ===== ====== =====
LIQUIDITY AND ASSET MANAGEMENT
The Company's management seeks to maximize net interest income by
managing the Company's assets and liabilities within appropriate constraints on
capital, liquidity and interest rate risk. Liquidity is the ability to maintain
sufficient cash levels necessary to fund operations, meet the requirements of
depositors and borrowers and fund attractive investment opportunities. Higher
levels of liquidity bear corresponding costs, measured in terms of lower yields
on short-term, more liquid earning assets and higher interest expense involved
in extending liability maturities.
Liquid assets include cash and cash equivalents and securities and
money market instruments that will mature within one year. At March 31, 2003,
the Company's liquid assets totaled $101,363,000.
The Company maintains a formal asset and liability management process
to quantify, monitor and control interest rate risk and to assist management in
maintaining stability in the net interest margin under varying interest rate
environments. The Company accomplishes this process through the development and
implementation of lending, funding and pricing strategies designed to maximize
net interest income under varying interest rate environments subject to specific
liquidity and interest rate risk guidelines.
Analysis of rate sensitivity and rate gap analysis are the primary
tools used to assess the direction and magnitude of changes in net interest
income resulting from changes in interest rates. Included in the analysis are
cash flows and maturities of financial instruments held for purposes other than
trading, changes in market conditions, loan volumes and pricing and deposit
volume and mix. These assumptions are inherently uncertain, and, as a result,
net interest income can not be precisely estimated nor can the impact of higher
or lower interest rates on net interest income be precisely predicted. Actual
results will differ due to timing, magnitude and frequency of interest rate
changes and changes in market conditions and management's strategies, among
other factors.
18
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
LIQUIDITY AND ASSET MANAGEMENT, CONTINUED
The Company's primary source of liquidity is a stable core deposit
base. In addition loan payments, investment security maturities and short-term
borrowings provide a secondary source.
Interest rate risk (sensitivity) focuses on the earnings risk
associated with changing interest rates. Management seeks to maintain
profitability in both immediate and long term earnings through funds
management/interest rate risk management. The Company's rate sensitivity
position has an important impact on earnings. Senior management of the Company
meets monthly to analyze the rate sensitivity position of the subsidiary banks.
These meetings focus on the spread between the Company's cost of funds and
interest yields generated primarily through loans and investments.
The Company's securities portfolio consists of earning assets that
provide interest income. For those securities classified as held-to-maturity,
the Company has the ability and intent to hold these securities to maturity or
on a long-term basis. Securities classified as available-for-sale include
securities intended to be used as part of the Company's asset/liability strategy
and/or securities that may be sold in response to changes in interest rate,
prepayment risk, the need or desire to increase capital and similar economic
factors. Securities totaling approximately $4.4 million mature or will be
subject to rate adjustments within the next twelve months.
A secondary source of liquidity is the Company's loan portfolio. At
March 31, 2003 loans totaling approximately $234.3 million either will become
due or will be subject to rate adjustments within twelve months from that date.
Continued emphasis will be placed on structuring adjustable rate loans.
At March 31, 2003 we had unfunded loan commitments outstanding of $79.2
million and outstanding standby letters of credit of $3.9 million. Because these
commitments generally have fixed expiration dates and many will expire without
being drawn upon, the total commitment level does not necessarily represent
future cash requirements. If needed to fund these outstanding commitments, the
Company's bank subsidiary has the ability to liquidate Federal funds sold or
securities available-for-sale or on a short-term basis to borrow and purchase
Federal funds from other financial institutions. Additionally, the Company's
bank subsidiary could sell participations in these or other loans to
correspondent banks. As mentioned above, the Company's bank subsidiary has been
able to fund its ongoing liquidity needs through its stable core deposit base,
loan payments, its investment security maturities and short-term borrowings.
As for liabilities, certificates of deposit of $100,000 or greater
totaling approximately $104.0 million will become due or reprice during the next
twelve months. Historically, there has been no significant reduction in
immediately withdrawable accounts such as negotiable order of withdrawal
accounts, money market demand accounts, demand deposit and regular savings.
Management anticipates that there will be no significant withdrawals from these
accounts in the future.
19
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
LIQUIDITY AND ASSET MANAGEMENT, CONTINUED
Management believes that with present maturities, the anticipated
growth in deposit base, and the efforts of management in its asset/liability
management program, liquidity will not pose a problem in the near term future.
At the present time there are no known trends or any known commitments, demands,
events or uncertainties that will result in or that are reasonably likely to
result in the Company's liquidity changing in a materially adverse way.
CAPITAL POSITION AND DIVIDENDS
Capital. At March 31, 2003, total stockholders' equity was
$57,186,000 or 7.3% of total assets, which compares with $55,031,000 or 7.3% of
total assets at December 31, 2002. The dollar increase in stockholders' equity
during the three months ended March 31, 2003 results from the Company's net
income of $2,360,000, the net effect of a $78,000 unrealized loss on investment
securities net of applicable income taxes and cash dividends declared of
$1,265,000 of which $1,138,000 was reinvested under the Company's dividend
reinvestment plan.
In April, 1999, the stockholders of the Company approved the
Wilson Bank Holding Company 1999 Stock Option Plan (the "Stock Option Plan").
The Stock Option Plan provides for the granting of stock options, and authorizes
the issuance of common stock upon the exercise of such options, for up to
100,000 shares of common stock, to officers and other key employees of the
Company and its subsidiaries. Furthermore, the Company may issue additional
shares under the Stock Option Plan as needed in order that the aggregate number
of shares that may be issued during the term of the Plan is equal to five
percent (5%) of the shares of common stock then issued and outstanding. Under
the Stock Option Plan, stock option awards may be granted in the form of
incentive stock options or nonstatutory stock options, and are generally
exercisable for up to ten years following the date such option awards are
granted. Exercise prices of incentive stock options must be equal to or greater
than 100% of the fair market value of the common stock on the grant date. As of
March 31, 2003, the bank has granted key employees options to purchase a total
of 52,067 shares of common stock. At March 31, 2003, 17,028 were exercisable.
SFAS No. 123, "Accounting for Stock Based Compensation" as
amended by SFAS No.148, "Accounting for Stock-Based Compensation - Transition
and Disclosure", sets forth the method for recognition of cost of plans similar
to those of the Company. As is permitted, management has elected to continue
accounting for the plan under APB Opinion 25 and related Interpretations in
accounting for its plan. Accordingly, no compensation cost has been recognized
for the stock option plan. However, under SFAS No. 123, the Company is required
to make proforma disclosures as if cost had been recognized in accordance with
the pronouncement. Had compensation cost for the Company's stock option plan
been determined based on the fair value at the grant dates for awards under the
plan consistent with the method of SFAS No. 123, the Company's net earnings and
basic earnings per common share and diluted earnings per common share for the
quarters ended March 31, 2003 and 2002, respectively, would have been reduced to
the proforma amounts indicated below:
20
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
CAPITAL POSITION AND DIVIDENDS (CONTINUED)
(In Thousands) 2003 2002
------ ------
Net Earnings:
As Reported $2,360 $2,047
Proforma $2,337 $2,041
Basic Earnings per common share:
As Reported $ 1.11 $ .99
Proforma $ 1.10 $ .98
Diluted Earnings per common share:
As Reported $ 1.11 $ .99
Proforma $ 1.10 $ .98
The Company's principal regulators have established minimum risk-based
capital requirements and leverage capital requirements for the Company and its
subsidiary banks. These guidelines classify capital into two categories of Tier
I and total risk-based capital. Total risk-based capital consists of Tier I (or
core) capital (essentially common equity less intangible assets) and Tier II
capital (essentially qualifying long-term debt, of which the Company and
subsidiary banks have none, and a part of the allowance for possible loan
losses). In determining risk-based capital requirements, assets are assigned
risk-weights of 0% to 100%, depending on regulatory assigned levels of credit
risk associated with such assets. The risk-based capital guidelines require the
subsidiary banks and the Company to have a total risk-based capital ratio of
8.0% and a Tier I risk-based capital ratio of 4.0%. At March 31, 2003 the
Company's total risk-based capital ratio was 11.9% and its Tier I risk-based
capital ratio was 10.6%. At December 31, 2002, the Company's total risk-based
capital ratio was 12.9% and its Tier I risk-based capital ratio was 11.7%. At
March 31, 2003 and December 31, 2002, the Company had a leverage ratio of 6.9%
and 7.5% respectively. The required Tier I leverage capital ratio (Tier I
capital to average assets for the most recent quarter) for the Company is 4.0%.
IMPACT OF INFLATION
Although interest rates are significantly affected by inflation, the
inflation rate is immaterial when reviewing the Company's results of operations.
21
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 3. 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.
Interest rate risk (sensitivity) management focuses on the earnings
risk associated with changing interest rates. Management seeks to maintain
profitability in both immediate and long term earnings through funds
management/interest rate risk management. The Company's rate sensitivity
position has an important impact on earnings. Senior management of the Company
meets monthly to analyze the rate sensitivity position. These meetings focus on
the spread between the cost of funds and interest yields generated primarily
through loans and investments.
There have been no material changes in reported market risks during the
three months ended March 31, 2003.
ITEM 4. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures, as defined in Rule
13a-14 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), that are designated to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms and that such information
is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. Within the 90 days prior to the date of this
report, we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the evaluation of these disclosure
controls and procedures, the Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective.
There were no significant changes in our internal controls or in other
factors that could significantly affect the internal controls subsequent to the
date that we completed our evaluation.
22
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
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
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99.1 Certification of the Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
99.2 Certification of the Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for
which this report is filed.
23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILSON BANK HOLDING COMPANY
-----------------------------------------------
(Registrant)
DATE: May 15, 2003 /s/ Randall Clemons
- ------------------ -----------------------------------------------
Randall Clemons
President and Chief Executive Officer
DATE: May 15, 2003 /s/ Lisa Pominski
- ------------------ -----------------------------------------------
Lisa Pominski
Senior Vice President & Chief Financial Officer
24
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Randall Clemons, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Wilson
Bank Holding Company;
(2) Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;
(4) The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as such term is defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
quarterly report ("Evaluation Date"); and
(c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
/s/ Randall Clemons
------------------------------------
Randall Clemons, President and Chief
Executive Officer
Date: May 15, 2003
25
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Lisa T. Pominski, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Wilson
Bank Holding Company;
(2) Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;
(4) The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as such term is defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
quarterly report ("Evaluation Date"); and
(c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
(5) The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of the registrant's board of directors (or persons
performing the equivalent function):
(a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
(6) The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
/s/ Lisa T. Pominski
-------------------------------------------
Lisa T. Pominski, Senior Vice President and
Chief Financial Officer
Date: May 15, 2003
26