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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

MARK ONE

WILSON BANK HOLDING COMPANY

623 West Main Street, Lebanon, TN 37087

(615) 444-2265

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: 4,320,056 shares at November 13, 2003

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WILSON BANK HOLDING COMPANY

Consolidated Balance Sheets

September 30, 2003 and December 31, 2002

(Unaudited)

See accompanying notes to consolidated financial statements (unaudited).

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WILSON BANK HOLDING COMPANY

Consolidated Statements of Earnings

Three Months and Nine Months Ended September 30, 2003 and 2002
(Unaudited)

See accompanying notes to consolidated financial statements (unaudited).

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WILSON BANK HOLDING COMPANY

Consolidated Statements of Comprehensive Earnings

Three Months and Nine Months Ended September 30, 2003 and 2002

(Unaudited)

See accompanying notes to consolidated financial statements (unaudited).

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WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2003 and 2002

Increase (Decrease) in Cash and Cash Equivalents

(Unaudited)

See accompanying notes to consolidated financial statements (unaudited).

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WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows, Continued

Nine Months Ended September 30, 2003 and 2002

Increase (Decrease) in Cash and Cash Equivalents

(Unaudited)

See accompanying notes to consolidated financial statements (unaudited).

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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 (the “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 September 30, 2003 and December 31, 2002, the results of operations for the three months and nine months ended September 30, 2003 and 2002, comprehensive earnings for the three months and nine months ended September 30, 2003 and 2002 and changes in cash flows for the nine months ended September 30, 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. Interim results are subject to customary year-end adjustments.

Allowance for Loan Losses

Transactions in the allowance for loan losses were as follows:

Stock Split

          On October 1, 2003, the Company’s Board of Directors declared a 2 for 1 stock split for shareholders of record as of October 1, 2003 effected as a 100% stock dividend. The stock dividend was distributed to shareholders on October 31, 2003. The split will have no impact on the total capital of the Company. Per share data will be adjusted retroactively for reporting periods subsequent to October 1, 2003.

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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 within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 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 and other important factors 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.

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WILSON BANK HOLDING COMPANY

FORM 10-Q, CONTINUED

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

Allowance for Loan Losses

          Our management assesses the adequacy of the ALL on a bi-monthly basis. 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 identifiable. Even though the ALL is composed of two components, the entire allowance is available to absorb any credit losses.

          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 12.0% to $ 7,180,000 for the nine months ended September 30, 2003 from $ 6,409,000 in the first nine months of 2002. Net earnings were $ 2,420,000 for the quarter ended September 30, 2003, an increase of $187,000 or 8.4% from $ 2,233,000 for the three months ended September 30, 2002 and an increase of $20,000 or 0.8% over the quarter ended June 30, 2003. The increase in net earnings during the nine months ended September 30, 2003 was primarily due to a 7.2% increase in net interest income and an increase of $1,240,000 or 124.0% in gain on sale of loans.

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WILSON BANK HOLDING COMPANY
FORM 10-Q, Continued

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

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 total interest income, excluding tax equivalent adjustments, decreased $ 811,000 or 2.3% during the nine months ended September 30, 2003 as compared to the same period in 2002. The decrease in total interest income was $ 131,000 or 1.1% for the quarter ended September 30, 2003 as compared to the quarter ended September 30, 2002. Interest income increased $ 452,000 or 4.0% over the second quarter of 2003. The decrease in net interest income for the first nine months of 2003 was primarily attributable to the continued decline in the interest rate environment. The ratio of average earning assets to total average assets was 94.7% and 96.5% for the nine months ended September 30, 2003 and September 30, 2002, respectively.

          Interest expense decreased $ 2,361,000 or 17.0% for the nine months ended September 30, 2003 as compared to the same period in 2002. The decrease was $ 761,000 or 16.6% for the three months ended September 30, 2003 as compared to the same period in 2002. The overall decrease in total interest expense for the first nine months of 2003 was primarily attributable to a decrease in the rates paid on deposits.

          The foregoing resulted in an increase in net interest income, before the provision for possible loan losses, of $ 1,550,000 or 7.2% for the first nine months of 2003 as compared to the same period in 2002. The increase was $ 630,000 or 8.6% for the quarter ended September 30, 2003 compared to the quarter ended September 30, 2002 and $ 455,000 or 6.1% when compared to the second quarter of 2003.

Provision for Possible Loan Losses

          The provision for possible loan losses was $ 1,518,000 and $1,697,000 for the first nine months of 2003 and 2002, respectively. The provision for possible loan losses during the three month periods ended September 30, 2003 and 2002 was $ 466,000 and $652,000 respectively. The provision for possible 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 monitoring its loan portfolio in an effort to identify potential problem loans. The provision for possible loan losses raised the allowance for possible loan losses (net of charge offs and recoveries) to $ 7,938,000, an increase of 14.3% from $6,943,000 at December 31, 2002. The allowance for possible loan losses as a percentage of total outstanding loans was 1.36% and 1.26% at September 30, 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

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WILSON BANK HOLDING COMPANY
FORM 10-Q, Continued

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

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 September 30, 2003 to be adequate.

Non-Interest Income

          The components of the Company’s non-interest income include service charges on deposit accounts, other fees and commission, gain on sale of loans and gain on sale of fixed assets. Total non-interest income for the nine months ended September 30, 2003 increased 32.7% to $ 6,766,000 from $5,100,000 for the same period in 2002. The increase was $ 462,000 or 24.8% during the quarter ended September 30, 2003 compared to the third quarter in 2002 and there was a decrease of $ 94,000 or 3.9% as compared to the second quarter of 2003. The increase for the first nine months of 2003 was due primarily to an increase in service charges on deposit accounts and gain on sale of loans. Gain on sale of loans increased $1,240,000 or 124% during the nine months ended September 30, 2003 compared to the same period in 2002. Gain on sale of loans increased $173,000 or 35.8% during the quarter ended September 30, 2003 compared to the same quarter in 2002. The gain on sale of loans increased significantly as a result of borrowers refinancing mortgages at lower interest rates. Service charges on deposit accounts totaled $3,244,000 and $3,068,000 during the nine months ended September 30, 2003 and 2002, respectively, an increase of $176,000 or 5.7% and $1,129,000 and $1,075,000 during the quarters ended September 30, 2003 and 2002, respectively, an increase of $54,000 or 5.0%.

Non-Interest Expenses

          Non-interest expenses consist primarily of employee costs, occupancy expenses, furniture and equipment expenses, data processing expenses, loss on sale of other real estate, loss on sale of other assets, other operating expenses and minority interest in net earnings of subsidiaries. Total non-interest expenses increased $1,898,000 or 13.1% to $16,380,000 during the first nine months of 2003 compared to the same period in 2002. The increases for the quarter ended September 30, 2003 were $882,000 or 18.0% to $5,785,0000 as compared to the comparable quarter in 2002 and there was an increase of $408,000 or 7.6% as compared to the second quarter of 2003. The increase in non-interest expenses is 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 to 267 at September 30, 2003 an increase from 243 at September 30, 2002. Increases in occupancy and furniture and equipment expenses were also due to the Company’s growth. Data processing expenses for the nine months ended September 30, 2003 increased to $ 566,000 from $ 299,000 for the comparable period in 2002. Data processing expenses increased $ 154,000 or 137.5% during the quarter ended September 30, 2003 as compared to the same period in 2002. This expense increased due to current year outsourcing of certain computer maintenance and update testing procedures.

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WILSON BANK HOLDING COMPANY
FORM 10-Q, Continued

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

Income Taxes

          The Company’s income tax expense was $ 4,783,000 for the nine months ended September 30, 2003, an increase of $ 726,000 over the comparable period in 2002. Income tax expense was $1,600,000 for the quarter ended September 30, 2003, and increase of $ 209,000 over the same period in 2002. The percentage of income tax expense to net income before taxes was 40.0% and 38.8% for the nine months ended September 30, 2003 and 2002, respectively and 39.8% and 38.4% for the quarters ended September 30, 2003 and 2002. The percentage of income tax expense to net income before taxes was 40.9% for the second quarter of 2003. The increase in the percentage is due to a decrease in the amount of tax exempt interest income as a percentage of total interest income. This percentage was 1.3% and 1.5% for the nine months ended September 30, 2003 and September 30, 2002, respectively. 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.

          The following is a summary of components comprising basic and diluted earnings per share (EPS) for the three months and nine months ended September 30, 2003 and 2002:

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WILSON BANK HOLDING COMPANY
FORM 10-Q, Continued

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

Financial Condition

Balance Sheet Summary

          The Company’s total assets increased 9.5% to $ 823,964,000 during the nine months ended September 30, 2003 from $752,786,000 at December 31, 2002. Total assets increased $ 36,171,000 or 4.6%, $7,772,000 or 1.0%, and $27,235,000 or 3.6% during the three-month periods ended September 30, 2003, June 30, 2003, and March 31, 2003, respectively. Loans, net of allowance for possible loan losses, totaled $ 576,936,000 at September 30, 2003, a 6.1% increase compared to $ 543,658,000 at December 31, 2002. Net loans increased $ 19,482,000 or 3.5%, $2,688,000 or .5%, and $11,108,000 or 2.0 % during the quarters ended September 30, 2003, June 30, 2003, and March 31, 2003, respectively. These increases were primarily due to the Company’s ability to increase its market share of such loans while maintaining its loan underwriting standards. Securities increased $ 30,267,000 or 26.1% to $146,149,000 at September 30, 2003 from $115,882,000 at December 31, 2002. Securities increased $44,268,000 or 43.5% during the three months ended September 30, 2003. Federal funds sold increased $ 19,137,000 to $ 46,503,000 at September 30, 2003 from $ 27,366,000 at December 31, 2002.

          Total liabilities increased by 9.3% to $ 756,384,000 at September 30, 2003 compared to $691,986,000 at December 31, 2002. The increase by quarter totaled $ 34,423,000 or 4.8%, $5,083,000 or 0.7%, and $24,892,000 or 3.6% during the quarters ended September 30, 2003, June 30, 2003, and March 31, 2003, respectively. These increases were composed primarily of a $ 58,801,000 or 8.7% increase in total deposits and an increase of $ 4,891,000 or 62.2% in securities sold under repurchase agreements during the nine months ended September 30, 2003. Federal Home Loan Bank advances decreased $ 263,000 during the nine months ended September 30, 2003.

          The following schedule details the loans of the Company at September 30, 2003 and December 31, 2002:

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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 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.

          The Company’s first mortgage single family residential, consumer and credit card loans which total approximately $ 301,451,000, $ 69,054,000 and $ 2,253,000, respectively at September 30, 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 September 30, 2003, the Company had nonaccrual loans totaling $ 218,000 as compared to $483,000 at December 31, 2002.

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WILSON BANK HOLDING COMPANY
FORM 10-Q, Continued

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

          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 September 30, 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.

          Impaired loans and related allowance for loan loss amounts at September 30, 2003 and December 31, 2002 were as follows:

          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 September 30, 2003 and September 30, 2002 was insignificant. There was no interest income recognized on these loans during 2003.

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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 schedule details selected information as to non-performing loans of the Company at September 30, 2003 and December 31, 2002: