Exhibit 13.1

Holding Company & Stock Information

Wilson Bank Holding Company Directors and Executive Officers

Jimmy Comer, Chairman; Randall Clemons, President & CEO; Charles Bell; Jack Bell; Mackey Bentley; Jerry Franklin; John Freeman; Harold Patton; James Anthony Patton; Elmer Richerson, Executive Vice President; John R. Trice; Bob VanHooser.

Common Stock Market Information

The common stock of Wilson Bank Holding Company is not traded on an exchange nor is there a known active trading market. The number of stockholders of record at February 1, 2010 was 3,016. Based solely on information made available to the Company from limited numbers of buyers and sellers, the Company believes that the following table sets forth the quarterly range of sale prices for the Company’s stock during the years 2008 and 2009. The information set forth below has been adjusted to reflect a four for three split for shareholders of record as of May 8, 2007.

Stock Prices

2008
First Quarter		$	33.75			$	32.00
Second Quarter		$	34.25			$	33.75
Third Quarter		$	34.75			$	34.25
Fourth Quarter		$	35.25			$	34.75
2009
First Quarter		$	35.75			$	35.25
Second Quarter		$	36.25			$	35.75
Third Quarter		$	36.75			$	36.25
Fourth Quarter		$	37.25			$	36.75

On January 1, 2008, a $.30 per share cash dividend was declared and on July 1, 2008, a $.30 per share cash dividend was declared and paid to shareholders of record on those dates. On January 1, 2009, a $.30 per share cash dividend was declared and on July 1, 2009 a $.32 per share cash dividend was declared and paid to shareholders of record on those dates. Future dividends will be dependent upon the Company’s profitability, its capital needs, overall financial condition, economic and regulatory consideration.

Annual Meeting and Information Contacts

The Annual Meeting of Shareholders will be held in the Main Office of
Wilson Bank Holding Company at 7:00 P.M., April 13, 2010
at 623 West Main Street, Lebanon, Tennessee.

For further information concerning Wilson Bank Holding Company or Wilson Bank & Trust, or to obtain a copy of the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission, which is available without charge to shareholders, please contact Lisa Pominski, CFO; Wilson Bank & Trust; P.O. Box 768; Lebanon, Tennessee 37088-0768, phone (615) 443-6612.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report includes certain forward-looking statements (any statement other than those made solely with respect to historical fact) based upon management’s beliefs, as well as assumptions made by and data currently available to management. This information has been, or in the future may be, included in reliance on the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The words “expect,” “intend,” “should,” “may,” “could,” “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. All forward-looking statements are subject to risks, uncertainties and other facts that may cause the actual results, performance or achievements of Wilson Bank Holding Company (the “Company”) to differ materially from any results expressed or implied by such forward-looking statements. Such factors include those described in “Item 1A.- Risk Factors” of the Company’s Annual Report on Form 10-K and also include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for these losses, (ii) greater than anticipated deterioration in the real estate market conditions in the Company’s market areas, (iii) increased competition with other financial institutions, (iv) the continued deterioration of the economy in the Company’s market area, (v) continuation of the extremely low short-term interest rate environment or rapid fluctuations in short-term interest rates, (vi) significant downturns in the business of one or more large customers, (vii) changes in state or Federal regulations, policies, or legislation applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, (viii) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments: (ix) inadequate allowance for loan losses, (x) results of regulatory examinations, and (xi) loss of key personnel. Many of such factors are beyond the Company’s ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. The Company disclaims any obligation to update or revise any forward-looking statements contained in this discussion, whether as a result of new information, future events or otherwise.

General

The Company is a registered bank holding company that owns 100% of the common stock of Wilson Bank and Trust (“Wilson Bank”), a state bank headquartered in Lebanon, Tennessee. The Company was formed in 1992.

Wilson Bank is a community bank headquartered in Lebanon, Tennessee, serving Wilson County, DeKalb County, Smith County, Trousdale County, Rutherford County, and the eastern part of Davidson County, Tennessee as its primary market areas. Generally, this market is the eastern portion of the Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical area. Wilson Bank has twenty-three locations in Wilson, Davidson, DeKalb, Smith, Rutherford and Trousdale Counties. Management believes that these counties offer an environment for continued growth, and the Company’s target market is local consumers, professionals and small businesses. Wilson 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 Company also offers an investment center which offers a full line of investment services to its customers.

The following discussion and analysis is designed to assist readers in their analysis of the Company’s consolidated financial statements and should be read in conjunction with such consolidated financial statements. The Company’s Board of Directors approved a 4 for 3 stock split for stockholders of record as of May 7, 2007 payable May 31, 2007. Each shareholder received one (1) additional share for each three (3) shares owned with no allowance for fractional shares. Per share data included in this discussion and in the Company’s consolidated financial statements has been restated to give effect to the stock split.

Critical Accounting Estimates

The accounting principles we follow and our methods of applying these principles conform with U.S. generally accepted accounting principles and with general practices within the banking industry. In connection with the application of those principles, we have made judgments and estimates which, in the case of the determination of our allowance for loan losses and the assessment of impairment of the intangibles resulting from our mergers with Dekalb Community Bank and Community Bank of Smith County in 2005 have been critical to the determination of our financial position and results of operations.

Allowance for Loan Losses (“allowance”). Our management assesses the adequacy of the allowance prior to the end of each calendar quarter. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management’s evaluation of the loan portfolios, past loan loss experience, current asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, economic conditions, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. Loan losses are charged off when management believes that the full collectability of the loan is unlikely. A loan may be partially charged-off after a “confirming event” has occurred which serves to validate that full repayment pursuant to the terms of the loan is unlikely. Allocation of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, is deemed to be uncollectible.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Collection of all amounts due according to the contractual terms means that both the interest and principal payments of a loan will be collected as scheduled in the loan agreement.

An impairment allowance is recognized if the fair value of the loan is less than the recorded investment in the loan (recorded investment in the loan is the principal balance plus any accrued interest, net of deferred loan fees or costs and unamortized premium or discount). The impairment is recognized through the allowance. Loans that are impaired are recorded at the present value of expected future cash flows discounted at the loan’s effective interest rate, or if the loan is collateral dependent, impairment measurement is based on the fair value of the collateral, less estimated disposal costs. 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. Management believes it follows appropriate accounting and regulatory guidance in determining impairment and accrual status of impaired loans.

The level of allowance maintained is believed by management to be adequate to absorb probable losses inherent in the portfolio at the balance sheet date. The allowance is increased by provisions charged to expense and decreased by charge-offs, net of recoveries of amounts previously charged-off.

In assessing the adequacy of the allowance, we also consider the results of our ongoing independent loan review process. We undertake this process both to ascertain whether there are loans in the portfolio whose credit quality has weakened over time and to assist in our overall evaluation of the risk characteristics of the entire loan portfolio. Our loan review process includes the judgment of management, the input from our independent loan reviewers, and reviews that may have been conducted by bank regulatory agencies as part of their usual examination process. We incorporate loan review results in the determination of whether or not it is probable that we will be able to collect all amounts due according to the contractual terms of a loan.

As part of management’s quarterly assessment of the allowance, management divides the loan portfolio into twelve segments based on call reporting requirements. Each segment is then analyzed such that an allocation of the allowance is estimated for each loan segment.

The allowance allocation begins with a process of estimating the probable losses inherent for these types of loans. The estimates for these loans are established by category and based on our historical loss data.

The estimated loan loss allocation for all twelve loan portfolio segments is then adjusted for management’s estimate of probable losses for several “environmental” factors. The allocation for environmental factors is particularly subjective and does not lend itself to exact mathematical calculation. This amount represents estimated probable inherent credit losses which exist, but have not yet been identified, as of the balance sheet date, and are based upon quarterly trend assessments in delinquent and nonaccrual loans, unanticipated charge-offs, credit concentration changes, prevailing economic conditions, changes in lending personnel experience, changes in lending policies or procedures and other influencing factors. These environmental factors are considered for each of the twelve loan segments and the allowance allocation, as determined by the processes noted above for each component, is increased or decreased based on the incremental assessment of these various environmental factors.

The assessment also includes an unallocated component. We believe that the unallocated amount is warranted for inherent factors that cannot be practically assigned to individual loan categories. An example is the imprecision in the overall measurement process, in particular the volatility of the national and local economy.

We then test the resulting allowance by comparing the balance in the allowance to industry 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 allowance in its entirety. The board of directors reviews and approves the assessment prior to the filing of quarterly and annual financial information.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Impairment of Intangible Assets — Long-lived assets, including purchased intangible assets subject to amortization, such as our core deposit intangible asset, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated.

Goodwill and intangible assets that have indefinite useful lives are evaluated for impairment annually and are evaluated for impairment more frequently if events and circumstances indicate that the asset might be impaired. That annual assessment date is December 31. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. The goodwill impairment analysis is a two-step test. The first step, used to identify potential impairment, involves comparing each reporting unit’s estimated fair value to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment.

If required, the second step involves calculating an implied fair value of goodwill for each reporting unit for which the first step indicated potential impairment. The implied fair value of goodwill is determined in a manner similar to the amount of goodwill calculated in a business combination, by measuring the excess of the estimated fair value of the reporting unit, as determined in the first step, over the aggregate estimated fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill.

Impairment of Deferred Tax Assets — A recent tax changed signed into law by the President has increased the carry back period for operating losses from two years to five. While the Company has not had and does not anticipate net operating losses, deferred tax assets could be recovered through loss carry backs.

Results of Operations

Net earnings for the year ended December 31, 2009 were $11,567,000, an increase of $169,000, or 1.5%, compared to net earnings of $11,398,000 for 2008. Our 2008 net earnings were 4.2%, or $462,000, above our net earnings of $10,936,000 for 2007. Basic earnings per share were $1.63 in 2009, compared with $1.63 in 2008 and $1.58 in 2007. Diluted earnings per share were $1.63 in 2009, compared to $1.62 in 2008 and $1.58 in 2007. Net interest margin for the year ended December 31, 2009 was 3.62%, compared to 3.54% and 3.34% for the years ended December 31, 2008 and December 31, 2007, respectively. The increase in the net interest margin for 2009 reflects the Company’s ability to reduce deposit rates while growing the funding base, offset in part by the increased level of non accrual loans and the Company’s decision to fund the lower-yielding securities portfolio as loan demand weakened during 2009.

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. Total interest income in 2009 was $80,126,000, compared with $86,357,000 in 2008 and $85,882,000 in 2007. The decrease in total interest income in 2009 was primarily attributable to the impact of rate cuts by the Federal Open Market Committee throughout 2008 to the federal funds rate offset in part by the increase in average earning assets. The ratio of average earning assets to total average assets was 95.6%, 94.2% and 94.0% for each of the years ended December 31, 2009, 2008 and 2007, respectively. Average earning assets increased $64.3 million from December 31, 2008 to December 31, 2009, an increase of 4.9%. The average rate earned on earning assets for 2009 was 5.87%, compared with 6.64% in 2008 and 7.11% in 2007, and in 2008 was negatively impacted by the rate cuts implemented by the Federal Reserve Open Market Committee beginning in August 2007 and described in more detail below which has resulted in extremely low short-term interest rates that continued throughout 2008 and 2009 and by weakened loan demand.

Interest earned on earning assets does not include any interest income which would have been recognized on non-accrual loans if such loans were performing. The amount of interest not recognized on non-accrual loans totaled $978,000 in 2009, $370,000 in 2008 and $128,000 in 2007.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Total interest expense for 2009 was $30,795,000, a decrease of $9,597,000, or 23.8%, compared to total interest expense of $40,392,000 in 2008. The decrease in total interest expense was primarily due to a decrease in rates paid on deposits, particularly time deposits, reflecting the rate cuts by the Federal Open Market Committee described above. Interest expense decreased from $45,721,000 in 2007 to $40,392,000 in 2008, a decrease of $5,329,000, or 11.7%.

Net interest income for 2009 totaled $49,331,000 as compared to $45,965,000 and $40,161,000 in 2008 and 2007, respectively. The net interest spread, defined as the effective yield on earning assets less the effective cost of deposits and borrowed funds (calculated on a fully taxable equivalent basis), increased to 3.3% in 2009 from 3.15% in 2008. The net interest spread was 2.82% in 2007. The increase in the net interest spread for 2008 as compared to the prior period is a result of a declining interest rate environment that began in August 2007 and continued through 2008 and remained low during 2009. Net interest margin, which is net interest income expressed as a percentage of average earning assets, increased to 3.62% for 2009 compared to 3.54% in 2008 and 3.34% in 2007. The Company believes that the Federal Reserve Board will maintain the current discount rate throughout most of 2010. Changes in interest rates paid on products such as interest checking, savings, and money market accounts will generally increase or decrease in a manner that is consistent with changes in the short-term environment. There was a significant decrease in the short term rate environment during 2009 when compared to 2008 and 2007. As a result, the rates for those products experienced a large decrease between the three years. The Company’s liabilities are positioned to re-price faster than its assets such that a short-term declining rate environment should have a positive impact on the Company’s earnings as its interest expense decreases faster than interest income. Management regularly monitors the deposit rates of the Company’s competitors, however, and these rates continue to put pressure on the Company’s deposit pricing. This pressure could negatively impact the Company’s net interest margin and earnings if future short-term rates begin to rise. Management believes that the Company’s net interest margin should expand in 2010, with the improvement being slightly better than the improvement experienced in 2009.

Provision for Loan Losses

The provision for loan losses represents a charge to earnings necessary to establish an allowance for loan losses that, in management’s evaluation, should be adequate to provide coverage for estimated losses on outstanding loans and to provide for uncertainties in the economy. The 2009 provision for loan losses was $7,828,000, an increase of $1,110,000 from the provision of $6,718,000 in 2008. The increase in the provision for the year ended December 31, 2009 was due to the continued weakening of economic conditions in the Company’s market areas, generally, and in the residential real estate construction and development area, specifically. Borrowers that are home builders and developers and sub dividers of land began experiencing stress in 2008 and have continued to experience stress during 2009 as a result of declining residential real estate demand and resulting price and collateral value declines in the Company’s market areas. As a result, the Company increased its provision for loan losses. 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 growth and composition of the loan portfolio, review of specific problem loans, review of updated appraisals and borrower financial information, the recommendations of the Company’s regulators, and current economic conditions that may affect the borrower’s ability to repay.

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. Net charge-offs decreased to $3,319,000 in 2009 from $4,053,000 in 2008. The reduction in charge-offs reflected an increase in charge-offs in 2008 of loans related to the portfolio of a former branch manager who had engaged in what appeared to be inappropriate banking procedures when documenting loans and releasing the underlying collateral. While we believe additional charge-offs will be necessary related to such portfolio, charge-offs related to this portfolio decreased in 2009 and should continue to decrease during 2010. Net charge-offs in 2007 totaled $4,881,000. The ratio of net charge-offs to average total outstanding loans was 0.30% in 2009, 0.39% in 2008 and 0.52% in 2007.

The net charge-offs and provision for loan losses resulted in an increase of the allowance for loan losses (net of charge-offs and recoveries) to $16,647,000 at December 31, 2009 from $12,138,000 at December 31, 2008 and $9,473,000 at December 31, 2007. The allowance increased 37.1% at December 31, 2009 over December 31, 2008 as compared to a 2.4% increase in total loans over the same period. The allowance for loan losses was 1.49% of total loans outstanding at December 31, 2009 compared to 1.11% at December 31, 2008 and 0.95% at December 31, 2007. As a percentage of nonperforming loans at December 31, 2009, 2008 and 2007, the allowance for loan losses represented 57%, 86% and 221%, 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 monthly by the Chief Financial Officer and provided to the Finance Committee 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 monthly assessment. The review is presented to the Finance Committee and subsequently approved by the Board of Directors.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

See the discussion under “Critical Accounting Policies” for more information. Management believes the allowance for possible loan losses at December 31, 2009 to be adequate, but if economic conditions deteriorate beyond management’s current expectations and additional charge-offs are incurred, the allowance for loan losses may require an increase through additional provision for loan losses which would negatively impact earnings.

Non-Interest Income

The components of the Company’s non-interest income include service charges on deposit accounts, other fees and commissions, gains on sales of loans, gains on sales of securities and other income. Total non-interest income for 2009 was $13,359,000 compared with $12,006,000 in 2008 and $10,636,000 in 2007. The 11.3% increase over 2008 was primarily due to an increase in gain on sale of loans, offset in part by a decrease in service charges on deposit accounts and a decrease in other fees and commissions. Gain on sale of loans increased $1,582,000 in 2009 when compared to 2008 reflecting increased residential real estate mortgage refinancing activity, primarily in the first half of 2009 due to lower mortgage interest rates. Other fees and commissions decreased $242,000 in 2009 when compared to 2008. Other fees and commissions include income on brokerage accounts, insurance policies sold and various other fees. Service charges on deposit accounts totaled $5,786,000 and $6,034,000 at December 31, 2009 and 2008, respectively, a decrease of $248,000, or 4.1%, after decreasing $472,000 or 7.2% between December 31, 2007 and December 31, 2008. The decrease in service charges on deposit accounts over 2008 was the result of consumers slowing their spending due to the current economic environment. The Company’s non-interest income in 2009 also benefited from a $500,000 gain on the sale of investments as a result of the Company restructuring its bond portfolio during the first quarter of 2009.

The Company’s non interest income is composed of several components, some of which vary significantly between periods. Service charges on deposit accounts and other non interest income generally reflect the Company’s growth, while fees for origination of mortgage loans and brokerage fees and commissions will often reflect stock and home mortgage market conditions and fluctuate more widely from period to period.

Non-Interest Expenses

Non-interest expenses consist primarily of employee costs, FDIC premiums, occupancy expenses, furniture and equipment expenses, advertising and marketing expenses, data processing expenses, director’s fees, loss on sale of other real estate, and other operating expenses. Total non-interest expenses for 2009 increased 10.0% to $36,115,000 from $32,814,000 in 2008. The 2008 non-interest expense was up 11.3% over non-interest expenses in 2007 which totaled $29,477,000. The increase in non-interest expenses in 2009 resulted primarily from increases in employee salaries and benefits and occupancy expenses associated with the number of employees and facilities necessary to support the Company’s operations and an increase in FDIC insurance premiums. The FDIC insurance premiums for 2009 were $2,504,000 compared with $828,000 in 2008 and $129,000 in 2007. The increase in FDIC insurance premiums reflects both an increase in average deposits and a special assessment in the second quarter of 2009 and an increase in the Company’s deposit assessment rate from 6 basis points of total deposits to approximately 14 basis points. In November 2009, the FDIC approved a final rule that required all insured depository institutions, with limited exceptions, to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009, and for all of 2010, 2011, and 2012. The Company prepaid $7.1 million in risk based assessments at the end of 2009. These prepaid assessments are carried on the Company’s balance sheet as other assets and will be reduced quarterly as the Company expenses its FDIC insurance premiums for the next three years. Other operating expenses increased to $8,334,000 in 2009 from $7,891,000 in 2008. Other operating expenses included advertising and marketing expenses and supplies and general operating expenses, which increased as a result of continued growth of the Company.

Income Taxes

The Company’s income tax expense was $7,180,000 for 2009, an increase of $139,000 from $7,041,000 for 2008, which was up by $802,000 from the 2007 total of $6,239,000. The percentage of income tax expense to earnings before taxes was 38.3% in 2009, 38.2% in 2008 and 36.3% in 2007.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

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 years ended December 31, 2009, 2008 and 2007:

		Years Ended December 31,
		2009				2008				2007
		(Dollars in Thousands Except per share amounts)
Basic EPS Computation
Numerator – Earnings available to common stockholders		$	11,567				11,398				10,936
Denominator – Weighted average number of common shares outstanding			7,101,084				6,996,442				6,901,447
Basic earnings per common share		$	1.63				1.63				1.58
Diluted EPS Computation:
Numerator – Earnings available to common stockholders		$	11,567				11,398				10,936
Denominator – Weighted average number of common shares outstanding			7,101,084				6,996,442				6,901,447
Diluted effect of stock options			11,232				29,379				35,994
			7,112,316				7,025,821				6,937,441
Diluted earnings per common share		$	1.63			$	1.62			$	1.58

Financial Condition

Balance Sheet Summary

The Company’s total assets increased $57,222,000, or 4.1%, to $1,464,008,000 at December 31, 2009, after increasing 5.4% in 2008 to $1,406,786,000 at December 31, 2008. Loans, net of allowance for possible loan losses, totaled $1,098,614,000 at December 31, 2009, a 2.0% increase compared to December 31, 2008. At year end 2009, securities totaled $261,817,000, an increase of 27.6% from $205,260,000 at December 31, 2008. Securities increased during 2009 as a result of the growth in deposits outpacing the growth in loans.

Total liabilities increased by $46,783,000 to $1,324,451,000 at December 31, 2009 compared to $1,277,668,000 at December 31, 2008. This increase was composed primarily of the $62,206,000 increase in total deposits to $1,310,706,000, a 5.0% increase. Federal Home Loan Bank advances decreased to $13,000 from $13,811,000 at the respective year ends 2009 and 2008 and securities sold under repurchase agreements decreased to $6,499,000 from $7,447,000 at the respective year ends 2009 and 2008.

Shareholders’ equity increased $10,439,000, or 8.1% in 2009, due to net earnings and the issuance of stock pursuant to the Company’s Dividend Reinvestment Plan, offset by dividends paid on the Company’s common stock, the repurchase of shares by the Company, and the exercise of stock options. The increase includes a $96,000 decrease in net unrealized losses on available-for-sale securities, net of taxes. A more detailed discussion of assets, liabilities and capital follows.

Loans:

Loan category amounts and the percentage of loans in each category to total loans are as follows:

		December 31, 2009								December 31, 2008
(In Thousands)		AMOUNT				PERCENTAGE				AMOUNT				PERCENTAGE
Commercial, financial and agricultural			82,254				7.4	%			99,864				9.1	%
Installment			63,765				5.7				70,783				6.5
Real estate – mortgage			771,925				69.1				711,747				65.3
Real estate – construction			198,732				17.8				208,083				19.1
TOTAL		$	1,116,676				100.0	%		$	1,090,477				100.0	%

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Loans are the largest component of the Company’s assets and are its primary source of income. The Company’s loan portfolio, net of allowance for possible loan losses, increased 2.0% as of year end 2009 when compared to year end 2008. The loan portfolio is composed of four primary loan categories: commercial, financial and agricultural; installment; real estate-mortgage; and real estate-construction. The table above sets forth the loan categories and the percentage of such loans in the portfolio at December 31, 2009 and 2008.

As represented in the table, primary loan growth was in real estate mortgage loans and offset by a decrease in commercial, financial and agricultural loans. Real estate mortgage loans increased 8.5% in 2009 and comprised 69.1% of the total loan portfolio at December 31, 2009, compared to 65.3% at December 31, 2008. Management believes the increase in real estate mortgage loans was primarily due to the continued favorable interest rate environment, favorable population growth in the Company’s market areas, and the Company’s ability to increase its market share of such loans while maintaining its loan underwriting standards. Commercial, financial and agricultural loans decreased 17.6% in 2009 and comprised 7.4% of the total loan portfolio at December 31, 2009, compared to 9.1% at December 31, 2008. Real estate construction loans decreased 4.5% in 2009 and comprised 17.8% of the portfolio at December 31, 2009, compared to 19.1% at December 31, 2008. The decrease in real estate construction loans during 2009 reflected the overall decrease in such loans in the overall economy.

Banking regulators define highly leveraged transactions to include leveraged buy-outs, acquisition loans and recapitalization loans of an existing business. Under the regulatory definition, at December 31, 2009, the Company had no highly leveraged transactions, and there were no foreign loans outstanding during any of the reporting periods.

Non-performing loans, which include non-accrual loans, loans 90 days past due and renegotiated loans totaled $29,583,000 at December 31, 2009, an increase from $14,124,000 at December 31, 2008, resulting from a $15,106,000, or 145.0%, increase in non-accrual loans. Non-accrual loans are loans on which interest is no longer accrued because management believes collection of such interest is doubtful due to management’s evaluation of the borrower’s financial condition, collateral liquidation value, economic and business conditions and other factors affecting the borrower’s ability to pay. Non-accrual loans totaled $25,514,000 at December 31, 2009 compared to $10,408,000 at December 31, 2008. Included in the increase of non-performing loans and non-accrual loans is one relationship which makes up approximately 50% of the non-accrual loans. This relationship is real estate secured and currently has a loan to value of approximately 60%. The increase in non performing loans relates primarily to the overall deterioration of the economic conditions relating to real estate secured loans. Management believes that it is probable that it will incur losses on these loans but believes that these losses should not exceed the amount in the allowance for loan losses already allocated to loan losses, unless there is further deterioration of local real estate values. At December 31, 2009, the Company had $4,465,000 in commercial real estate loans that were modified in troubled debt restructurings and impaired.

A loan is considered impaired, in accordance with the impairment accounting guidance (FASB ASC 310-10-35-16), when the current net worth and financial capacity of the borrower or of the collateral pledged, if any, is viewed as inadequate and 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. 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. 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 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 considers all loans subject to the provisions of FASB ASC 310-10-35-16 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.

The Company also internally classifies loans which, although current, management questions the borrower’s ability to comply with the present repayment terms of the loan agreement. These internally classified loans totaled $62,700,000, which included the Company’s non-performing loans, at December 31, 2009 as compared to $27,799,000 at December 31, 2008. Of the internally classified loans at December 31, 2009, $58,174,000 are real estate related loans and $4,526,000 are various other types of loans. Included in the internally classified loans is one relationship, which makes up approximately 50 % of the non-accrual loans (a component of internally classified loans), which is a real estate secured loan with a loan to value of approximately 60%.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The internally classified loans as a percentage of the allowance for possible loan losses were 460.5% and 229.0%, respectively, at December 31, 2009 and 2008.

The allowance for possible loan losses is discussed under “Critical Accounting Policies” and “Provision for Possible Loan Losses.” The Company maintains its allowance for possible loan losses at an amount believed by management to be adequate to provide for the possibility of loan losses in the loan portfolio.

Essentially all of the Company’s loans were from Wilson, DeKalb, Smith, Trousdale, Davidson, Rutherford and adjacent counties. The Company seeks to exercise prudent risk management in lending, including diversification by loan category and industry segment as well as by identification of credit risks. At December 31, 2009, no single industry segment accounted for more than 10% of the Company’s portfolio other than real estate loans.

The Company’s management believes there is an opportunity to continue to increase the loan portfolio in the Company’s primary market area. The Company has targeted commercial business lending, commercial and residential real estate lending and consumer lending. Although it is the Company’s objective to achieve a loan portfolio equal to approximately 85% of deposit balances, various factors, including demand for loans which meet its underwriting standards, will likely determine the size of the loan portfolio in a given economic climate. As a practice, the Company generates its own loans and does not buy participations from other institutions. The Company may sell some of the loans it generates to other financial institutions if the transaction profits the Company and improves the liquidity of the loan portfolio or if the size of the loan exceeds the Company’s lending limits.

Securities

Securities increased 27.5% to $261,817,000 at year-end 2009 from $205,260,000 at December 31, 2008, and comprised the second largest and other primary component of the Company’s earning assets. The increase was 27.5% from year end 2008 to 2009 and 21.5% from year end 2007 to year end 2008. The increase was attributed to the Bank’s deposit growth exceeding its loan growth during 2009. The average yield of the securities portfolio at December 31, 2009 was 3.65% with an average maturity of 7.0 years, as compared to an average yield of 5.41% and an average maturity of 11.3 years at December 31, 2008.

Certain debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Trading securities are recorded at fair value with changes in fair value included in earnings. Securities not classified as held to maturity or trading, including equity securities with readily determinable fair values, are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

FASB issued accounting guidance related to the recognition and presentation of other-than-temporary impairment (“Pending Content” of FASB ASC 320-10) on April 1, 2009. See the “Impact of New Accounting Standards” section for additional information.

Prior to the adoption of the accounting guidance on April 1, 2009, management considered, in determining whether other-than-temporary impairment exists, (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Management evaluates the impairment of securities monthly to determine if an other-than-temporary impairment exists.

For equity securities, when the Company has decided to sell an impaired available-for-sale security and the entity does not expect the fair value of the security to fully recover before the expected time of sale, the security is deemed other-than-temporarily impaired in the period in which the decision to sell is made. The Company recognizes an impairment loss when the impairment is deemed other than temporary even if a decision to sell has not been made.

No securities have been classified as trading securities.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The Company’s classification of securities as of December 31, 2009 and December 31, 2008 is as follows:

		December 31, 2009								December 31, 2009
		Held-To-Maturity								Available-For-Sale
		Amortized				Estimated				Amortized				Estimated
(In Thousands)		Cost				Market Value				Cost				Market Value
U.S. Government and Federal Agencies		$	—				—			$	1,000				1,005
U.S. Government-sponsored enterprises(GSEs)*			—				—				246,541				245,692
Mortgage-backed :
Government-sponsored enterprises (GSEs)*residential			14				14				1,349				1,386
Obligations of state and political Subdivision			12,156				12,594				1,522				1,564
		$	12,170			$	12,608			$	250,412				249,647

		December 31, 2008								December 31, 2008
		Held-To-Maturity								Available-For-Sale
		Amortized				Estimated				Amortized				Estimated
(In Thousands)		Cost				Market Value				Cost				Market Value
U.S. Treasury and other
U.S. Government agencies and Corporations		$	—			$	—			$	146,876			$	145,758
Obligations of states and political Subdivisions			11,074				11,003				1,523				1,447
Mortgage-backed securities			19				18				46,688				46,962
		$	11,093				11,021			$	195,087			$	194,167

The classification of a portion of the securities portfolio as available-for-sale was made to provide for more flexibility in asset/liability management and capital management.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following table shows the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2009

		In Thousands, Except Number of Securities
		Less than 12 Months												12 Months or More												Total
										Number
		Fair				Unrealized				of				Fair				Unrealized				Number of				Fair				Unrealized
		Value				Losses				Securities				Value				Losses				Securities				Value				Losses
Held to Maturity Securities:
Debt securities:
Mortgage-backed:
GSE residential		$	2			$	—				1			$	9			$	—				1			$	11			$	—
Obligations of states And political subdivisions			599				9				2				1,040				—				4				1,639				20
		$	601			$	9				3			$	1,049			$	11				5			$	1,650			$	20
Available for Sale Securities:
Debt securities:
U.S. Government and Federal agencies		$	—			$	—				—			$	—			$	—				—			$	—			$	—
GSEs			149,048				1,401				35				2,906				84				1				151,954				1,485
Mortgage-backed:
GSE residential			—				—				—				4				—				2				4				—
Obligations of states And political subdivisions			—				—				—				—				—				—				—				—
		$	149,048			$	1,401				35			$	2,910			$	84				3			$	151,958			$	1,485

The impaired securities are considered high quality investments in line with normal industry investing practices. The unrealized losses are primarily the result of changes in the interest rate and sector environments. Consistent with the original classification, as available-for-sale or held-to-maturity securities, the Company intends and has the ability to hold the above securities until maturity or a market price recovery, and as such the impairment of these securities is not deemed to be other-than-temporarily impaired.

Deposits

The increases in assets in 2009 and 2008 were funded primarily by increases in deposits along with proceeds from the calling of a portion of the Company’s investment securities. Total deposits, which are the principal source of funds for the Company, totaled $1,310,706,000 at December 31, 2009 compared to $1,248,500,000 and $1,182,590,000 at December 31, 2008 and 2007, respectively. The Company has targeted local consumers, professionals and small businesses as its central clientele; therefore, deposit instruments in the form of demand deposits, savings accounts, money market demand accounts, certificates of deposits and individual retirement accounts are offered to customers. Management believes the Wilson County, Davidson County, DeKalb County, Smith County, Rutherford County and Trousdale County areas are attractive economic markets offering growth opportunities for the Company; however, the Company competes with several larger bank holding companies that have bank offices in these counties and, therefore, no assurances of market growth or maintenance of current market share can be given. Even though the Company is in a very competitive market, management currently believes that its market share can be maintained or expanded.

The $62,206,000, or 5.0%, growth in deposits in 2009 reflected increases in several deposit categories. Total certificates of deposit (including individual retirement accounts) increased $18,978,000, or 2.6%, to $755,121,000, while money market accounts increased $6,084,000, or 2.8%, to $224,742,000. NOW accounts increased $27,993,000, or 16.6%, to $196,239,000 and demand deposits increased $4,152,000, or 4.6%, to $94,947,000. The average rate paid on average total interest-bearing deposits was 2.6% for 2009, compared to 3.5% for 2008 reflecting a reduction in short-term interest rates and an improvement in our ability to manage certificates of deposits. The average rate paid in 2007 was 4.3%. Competitive pressure from other banks in our market area relating to deposit pricing continues to adversely affect the rates paid on deposit accounts as it limits our ability to reduce deposit rates in line with short-term rates. The shift by customers to longer term deposit accounts, which earn interest at higher rates, also adversely affected our deposit costs in 2009. The ratio of average loans to average deposits was 86.2% in 2009, 85.5% in 2008, and 81.4% in 2007. The Company anticipates that during 2010 deposits will shift to shorter term time deposits due to the current rate environment in anticipation of a possible rate increase beginning in 2011.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Contractual Obligations

The Company has the following contractual obligations as of December 31, 2009:

		Less than 1												More than 5
(In Thousands)		Year				1 –3 Years				3-5 Years				Years				Total
Long-Term Debt		$	13				—				—				—				13
Operating Leases			139				183				44				4				370
Purchases			—				—				—				—				—
Other Long-Term Liabilities			—				—				—				—				—
Total		$	152			$	183			$	44			$	4			$	383

Long-term debt contractual obligations consist of advances from the Federal Home Loan Bank. The Company leases land for certain branch facilities and automatic teller machine locations. Future minimum rental payments required under the terms of these non cancellable leases are included in operating lease obligations.

Off Balance Sheet Arrangements

At December 31, 2009, the Company had unfunded loan commitments outstanding of $13.2 million, unfunded lines of credit of $152.7 million and outstanding standby letters of credit of $17.6 million. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee since many of these commitments are expected to be drawn upon, the total commitment amounts generally 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 below, Wilson Bank has been able to fund its ongoing liquidity needs through its stable core deposit base, loan payments, investment security maturities and short-term borrowings.

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 associated with extending liability maturities. Liquid assets include cash and cash equivalents and investment securities and money market instruments that will mature within one year. At December 31, 2009, the Company’s liquid assets totaled approximately $177.3 million.

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.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The Company’s primary source of liquidity is a stable core deposit base. In addition, short-term borrowings, loan payments and investment security maturities provide a secondary source. At December 31, 2009, the Company had a liability sensitive position (a negative gap) for 2009. Liability sensitivity means that more of the Company’s liabilities are capable of re-pricing over certain time frames than its assets. The interest rates associated with these liabilities may not actually change over this period but are capable of changing.

Interest rate risk (sensitivity) management focuses on the earnings risk associated with changing interest rates. Management seeks to maintain profitability in both immediate and long term earnings through funds management/interest rate risk management. The Company’s rate sensitivity position has an important impact on earnings. Senior management of the Company meets monthly to analyze the rate sensitivity position. These meetings focus on the spread between the cost of funds and interest yields generated primarily through loans and investments.

The 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. At December 31, 2009, securities totaling approximately $2.1 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 December 31, 2009, loans totaling approximately $483.1 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.

As for liabilities, certificates of deposit of $100,000 or greater totaling approximately $286.0 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.

The following table shows the rate sensitivity gaps for different time periods as of December 31, 2009:

Interest Rate Sensitivity Gaps

														One Year
December 31, 2009		1-90				91-180				181-365				And
(In Thousands)		Days				Days				Days				Longer				Total
Interest-earning assets		$	270,038				85,629				143,092				891,808				1,390,567
Interest-bearing liabilities			715,043				150,186				172,571				184,471				1,222,271
Interest-rate sensitivity gap		$	(445,005	)			(64,557	)			(29,479	)			707,337				168,296
Cumulative gap		$	(445,005	)			(509,562	)			(539,041	)			168,296

The Company also uses a simulation modeling to evaluate both the level of interest rate sensitivity as well as potential balance sheet strategies. Senior management meets quarterly to analyze the interest rate shock simulation. The interest rate simulation model is based on a number of assumptions. The assumptions relate primarily to loan and deposit growth, asset and liability prepayments, the call features of investment securities, interest rates and balance sheet management strategies. As of December 31, 2009, a +200 basis point rate shock was forecast to decrease net interest income an estimated $7.6 million, or 15.1%, over the next twelve months, as compared to rates remaining stable. In addition, the +200 basis point rate shock is estimated to decrease the volatility of equity capital by 25.4%. A -200 basis point rate shock is not considered to be an effective shock considering the current short-term rate environment.

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 any material way.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Capital Resources, Capital Position and Dividends

Capital

At December 31, 2009, total shareholders’ equity was $139,557,000, or 9.5% of total assets, which compares with $129,118,000, or 9.2% of total assets, at December 31, 2008, and $118,185,000, or 8.9% of total assets, at December 31, 2007. The dollar increase in shareholders’ equity during 2009 reflects (i) the Company’s net income of $11,567,000 less cash dividends of $.62 per share totaling $4,379,000, (ii) the issuance of 95,403 shares of common stock for $3,459,000, as reinvestment of cash dividends, (iii) the issuance of 29,630 shares of common stock pursuant to exercise of stock options for $371,000, (iv) the repurchase of 19,493 shares by the Company for $697,000, (v) the net unrealized gain on available-for-sale securities of $96,000, and (vi) a stock based compensation expense of $22,000.

The Company’s principal regulators have established minimum risk-based capital requirements and leverage capital requirements for the Company and its subsidiary bank. 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 Wilson Bank has 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 Wilson Bank 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%. Set forth below is the Company’s and Wilson Bank’s capital ratios as of December 31, 2009 and 2008. Institutions which have a Tier I leverage capital ratio of at least 5%, a Tier I risk-based capital ratio of at least 5%, and a total risk-based capital ratio of at least 10% are defined as “well capitalized”. Management believes it can adequately capitalize its growth for the next few years with retained earnings and dividends reinvested.

																		Minimum To Be Well
																		Capitalized Under
										Minimum Capital								Prompt Corrective Action
		Actual								Requirements								Provision
		Amount				Ratio				Amount				Ratio				Amount				Ratio
December 31, 2009
Total capital to risk Weighted assets:
Consolidated		$	149,678				12.2	%		$	98,149				8.0	%			N/A				N/A
Wilson Bank			149,340				12.2				97,927				8.0			$	122,410				10.0	%
Tier 1 capital to risk Weighted assets:
Consolidated		$	134,320				10.9	%		$	49,292				4.0	%			N/A				N/A
Wilson Bank			133,982				10.9				49,168				4.0				73,752				6.0
Tier 1 capital To average assets
Consolidated		$	134,320				9.3				57,772				4.0				N/A				N/A
Wilson Bank			133,482				9.3				57,412				4.0				71,764				5.0

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

																		Minimum To Be Well
																		Capitalized Under
										Minimum Capital								Prompt Corrective Action
		Actual								Requirements								Provision
		Amount				Ratio				Amount				Ratio				Amount				Ratio
December 31, 2008
Total capital to risk Weighted assets:
Consolidated		$	137,442				12.5	%		$	87,963				8.0	%			N/A				N/A
Wilson Bank			136,672				12.5				87,470				8.0			$	109,338				10.0	%
Tier 1 capital to risk Weighted assets:
Consolidated		$	124,881				11.4	%		$	43,818				4.0	%			N/A				N/A
Wilson Bank			124,111				11.4				43,933				4.0				65,900				6.0
Tier 1 capital to average assets
Consolidated		$	124,881				9.0	%			55,503				4.0	%			N/A				N/A
Wilson Bank			124,111				8.9				55,780				4.0				69,725				5.0

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 short term 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.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following table provides information about the Company’s financial instruments that are sensitive to changes in interest rates as of December 31, 2009.

		(Dollars in Thousands)
		Expected Maturity Date - Year Ending December 31,																												Fair
		2010				2011				2012				2013				2014				Thereafter				Total				Value
Earning assets:
Loans, net of unearned interest:
Variable rate		$	75,889			$	11,296			$	24,643			$	11,791			$	14,429			$	518,432			$	656,480			$	656,480
Average interest rate			5.58	%			6.20	%			6.76	%			6.23	%			6.20	%			6.37	%			6.16	%
Fixed rate			218,300				60,560				43,911				41,164				36,546				58,300				458,781				480,682
Average interest rate			6.02	%			9.24	%			8.17	%			7.9	%			7.2	%			5.91	%			6.12	%
Securities			2,112				18,211				23,346				16,164				16,224				186,525				262,582				262,255
Average interest rate			3.99	%			2.31	%			2.00	%			2.78	%			2.68	%			5.41	%			4.29	%
Loans held for sale			5,027				—				—				—				—				—				5,027				5,027
Average interest rate			3.70	%			—				—				—				—				—				3.70	%
Federal funds sold			5,450				—				—				—				—				—				5,450				5,450
Average interest rate			.26	%			—				—				—				—				—				.26	%
Interest-bearing deposits			1,031,288				98,544				76,359				3,847				5,573				148				1,215,759				1,221,150
Average interest rate			2.78	%			3.44	%			3.11	%			3.70	%			3.11	%			3.05	%			2.56	%
Securities sold under repurchase agreements			6,499				—				—				—				—				—				6,499				6,499
Average interest rate							1.67	%			—				—				—				—				—				1.67	%
Advances from Federal
Home Loan Bank			13				—				—				—				—				—				13				13
Average interest rate			7.09	%			—				—				—				—				—				7.09	%

Impact of Inflation

Although interest rates are significantly affected by inflation, the inflation rate is believed to be immaterial when reviewing the Company’s results of operations.

Disclosures About Fair Value of Financial Instruments

During the first quarter of 2008, the Company adopted FASB ASC 820 “Fair Value Measurements,” which establishes a fair value hierarchy and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

	Level 1:		Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
	Level 2:		Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may based on quoted prices for similar assets or liabilities; quoted prices in market that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Level 3:

Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

Except for marketable securities, other real estate, and repossessed assets, the Company does not account for any other assets or liabilities using fair value. Substantially all marketable securities are considered Level 2 assets since their fair values are determined using observable pricing inputs. Impaired loans, other real estate, and repossessed assets are considered Level 3 assets.

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

		Fair Value Measurements at December 31, 2009
						Quoted Prices in
		Carrying Value at				Active Markets				Significant*				Significant
		December 31,				for Identical				Other Observable				Observable
(in Thousands)		2009				Assets (Level 1)				Inputs (Level 2)				Inputs (Level 3)
Assets:
Available-for-sale Securities		$	249,647			$	1,005			$	248,642				—
Impaired loans			40,492				—				—				40,492
Other real estate			3,924				—				—				3,924
Repossessed assets			22				—				—				22

Available-for-sale securities are measured on a recurring basis and are obtained from an independent pricing service. The fair values are based on quoted market prices of comparable securities, broker quotes or comprehensive interest rate tables and pricing matrices.

The Company does not measure any liabilities at fair value on a recurring basis.

The following table below presents, for the year ended December 31, 2009, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis.

		Assets				Liabilities
Fair value, January 1, 2009		$	1,398				—
Total realized gains included in income			99				—
Purchases, issuances and settlements, net			—				—
Transfers in and/or (out) of Level 3			—				—
Fair value December 31, 2009		$	1,497			$	—
Total realized gains (losses) included in income related to financial assets and liabilities still on the consolidated balance sheet at December 31, 2009		$	—			$	—

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Assets Measured at Fair Value on a Nonrecurring Basis

Under certain circumstances we make adjustments to fair value for our assets and liabilities although they are not measured at fair value on an ongoing basis. The following table presents the financial instruments carried on the consolidated balance sheet by caption and by level in the fair value hierarchy at December 31, 2009, for which a nonrecurring change in fair value has been recorded:

						Fair Value Measurements at December 31, 2009
						Quoted Prices				Significant
		Carrying				in Active				Other				Significant
		Value at				Markets for				Observable				Observable
		December 31,				Identical Assets				Inputs				Inputs
(in 000’s)		2009				(Level 1)				(Level 2)				(Level 3)
Assets:
Impaired loans		$	40,492				—				—				40,492
Other real estate			3,924				—				—				3,924
Repossessed assets			22				—				—				22
		$	44,438				—				—				44,438

Cash and short-term investments

For those short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities

The carrying amounts for short-term securities approximate fair value because they mature in 90 days or less and do not present unanticipated credit concerns. The fair value of longer-term securities and mortgage-backed securities, except certain state and municipal securities, is estimated based on bid prices published in financial newspapers or bid quotations received from securities dealers. The fair value of certain state and municipal securities is not readily available through market sources other than dealer quotations, so fair value estimates are based on quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued.

FASB ASC 825-10-50-10 specifies that fair values should be calculated based on the value of one unit without regard to any premium or discount that may result from concentrations of ownership of a financial instrument, possible tax ramifications, or estimated transaction costs. Accordingly, these considerations have not been incorporated into the fair value estimates.

Loans

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, mortgage, credit card and other consumer. Each loan category is further segmented into fixed and adjustable rate interest terms.

The fair value of the various categories of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining average estimated maturities.

The estimated maturity for mortgages is modified from the contractual terms to give consideration to management’s experience with prepayments. Management has made estimates of fair value discount rates that it believes to be reasonable. However, because there is no market for many of these financial instruments, management has no basis to determine whether the fair value presented in the financial statements would be indicative of the value negotiated in an actual sale.

The value of the loan portfolio is also discounted in consideration of the credit quality of the loan portfolio as would be the case between willing buyers and sellers. Particular emphasis has been given to loans on Wilson Bank’s internal watch list. Valuation of these loans is based upon borrower performance, collateral values (including external appraisals) and certain other factors.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Deposit Liabilities

The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. Under the provision of FASB ASC 825-10-50-10, the fair value estimates for deposits does not include the benefit that results from the low cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market.

Securities Sold Under Repurchase Agreements

The securities sold under repurchase agreements are payable upon demand. For this reason the carrying amount is a reasonable estimate of fair value.

Advances from Federal Home Loan Bank

The fair value of the advances from the Federal Home Loan Bank are estimated by discounting the future cash outflows using the current market rates.

Commitments to Extend Credit, Standby Letters of Credit and Financial Guarantees Written

Loan commitments are made to customers generally for a period not to exceed one year and at the prevailing interest rates in effect at the time the loan is closed. Commitments to extend credit related to construction loans are generally made for a period not to exceed six months with interest rates at the current market rate at the date of closing. In addition, standby letters of credit are issued for periods extending from one to two years with rates to be determined at the date the letter of credit is funded. Fees are only charged for the construction loans and the standby letters of credit, and the amounts unearned at December 31, 2009 and 2008 are insignificant. Accordingly, these commitments have no carrying value, and management estimates the commitments to have no significant fair value.

Off-Balance-Sheet Financial Instruments

In the ordinary course of business Wilson Bank has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, commitments under credit card arrangements, commercial letters of credit and standby letters of credits. Such financial instruments are recorded in the financial statements when they are funded or related fees are incurred ore received.

Impact of New Accounting Standards

The Company adopted new accounting guidance for interim disclosures about fair value of financial instruments (“Pending Content” of FASB ASC 825, Financial Instruments). This recent accounting guidance requires disclosure of qualitative and quantitative information about the fair value of all financial instruments on a quarterly basis, including methods and significant assumptions used to estimate fair value during the period. These disclosures were previously only required annually. The adoption of this guidance had no effect on how the Company accounts for these instruments.

Effective April 1, 2009, the Company adopted the new accounting guidance related to recognition and presentation of other-than-temporary impairment (“Pending Content” of FASB ASC 320-10). This recent accounting guidance amends the recognition guidance for other-than-temporary impairments of debt securities and expands the financial statement disclosures for other-than-temporary impairment loses on debt and equity securities. The recent guidance replaced the “intent and ability” indication in current guidance by specifying that (a) if a company does not have the intent to sell a debt security prior to recovery and (b) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more likely than not, the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. For held-to-maturity debt securities, the amount of an other-than-temporary impairment recorded in other comprehensive income for the noncredit portion of a previous other-than-temporary impairment should be amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security. The adoption of this guidance did not have an impact on the Company’s financial statements.

WILSON BANK HOLDING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The Company adopted new accounting guidance for disclosures about derivative instruments and hedging activities (“Pending Content” of FASB ASC 815-10). The recent derivatives and hedging activities accounting guidance requires expanded qualitative, quantitative and credit-risk disclosures about derivatives and hedging activities and their effects on the Company’s financial position, financial performance and cash flows. This guidance is effective for the Company’s financial statements for the year beginning on January 1, 2009. The adoption of the recent derivative and hedging activities accounting guidance did not impact the Company’s financial condition or results of operations.

The Company adopted new accounting guidance related to noncontrolling interests in consolidated financial statements (“Pending Content” of FASB ASC 810, Consolidation). The recent consolidation accounting guidance requires all entities to report noncontrolling (i.e. minority) interests in subsidiaries as equity in the Consolidated Financial Statements and to account for transactions between an entity and noncontrolling owners as equity transactions if the parent retains its controlling financial interest in the subsidiary. The recent guidance also requires expanded disclosure that distinguishes between the interests of the controlling owners and the interests of the noncontrolling owners of a subsidiary. This consolidation accounting guidance was effective for the Company’s financial statements for the year beginning on January 1, 2009. The adoption had no effect on the Company’s financial statements.

The Company adopted accounting guidance related to fair value measurements and disclosures (FASB ASC 820, Fair Value Measurements and Disclosures). This guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This guidance establishes a fair value hierarchy about the assumptions used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset. The effect of adoption was not material.

The Company adopted accounting guidance related to the fair value option for financial assets and financial liabilities (FASB ASC 825, Financial Instruments). This guidance provides companies with an option to report selected financial assets and liabilities at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. This guidance was effective for the Company on January 1, 2008. The adoption did not have a material effect on the Company’s financial statements.

FASB issued ASU 2009-05 (“Pending Content” of FASB ASC 820) which describes the valuation techniques companies should use to measure the fair value of liabilities for which there is limited observable market data. If a quoted price in an active market is not available for an identical liability, an entity should use one of the following approaches: (1) the quoted price of the identical liability when traded as an asset, (2) quoted prices for similar liabilities or similar liabilities when traded as an asset, or (3) another valuation technique that is consistent with the accounting guidance in FASB ASC 820 for fair value measurements and disclosures. When measuring the fair value of liabilities, this guidance reiterates that companies should apply valuation techniques that maximize the use of relevant observable inputs, which is consistent with existing accounting provisions for fair value measurements. In addition, this guidance clarifies when an entity should adjust quoted prices of identical or similar assets that are used to estimate the fair value of liabilities. This guidance is effective for the Company as of December 31, 2009, with adoption applied prospectively. The Company anticipates no material impact on the financial statements as a result of adopting this standard.

In addition, the following accounting pronouncements were issued by FASB, but are not yet effective.

FASB issued accounting guidance (FASB Statement No. 166) which modifies certain guidance contained in the Transfers and Servicing topic of FASB ASC 860. This standard eliminates the concept of qualifying special purpose entities, provides guidance as to when a portion of a transferred financial asset can be evaluated for sale accounting, provides additional guidance with regard to accounting for transfers of financial assets and requires additional disclosures. This guidance is effective for the Company as of January 1, 2010, with adoption applied prospectively for transfers that occur on and after the effective date. The Company anticipates no material impact on the financial statements as a result of adopting this standard.

FASB also amended several key consolidation provisions related to Variable interest entities (VIEs) (FASB Statement No. 167), which are included in the Consolidation topic of FASB ASC (FASB ASC 810). First, the scope of the recent guidance includes entities that are currently designated as qualifying special purpose entities (QSTEs). Second, this guidance changes the approach companies use to identify the VIEs for which they are deemed to be the primary beneficiary and are required to consolidate. Under existing rules, the primary beneficiary is the entity that absorbs the majority of a VIEs losses and receives the majority of the VIE’s returns. The guidance identifies a VIE’s primary beneficiary as the entity that has the power to direct the VIE’s significant activities, and has an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. Third, this guidance requires companies to continually reassess whether they are the primary beneficiary of a VIE.

Existing rules only require companies to reconsider primary beneficiary conclusions when certain triggering events have occurred. This guidance requires additional disclosures about VIEs. The recent guidance is effective for the Company as of January 1, 2010, and applies to all current QSPEs and VIEs and VIEs created after the effective date. The Company anticipates no material impact on the financial statements as a result of adopting this standard.

WILSON BANK HOLDING COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED)

		In Thousands, Except Per Share Information
		As Of December 31,
		2009				2008				2007				2006				2005
CONSOLIDATED BALANCE SHEETS:
Total assets end of year		$	1,464,008				1,406,786				1,334,245				1,230,285				1,052,263
Loans, net		$	1,098,614				1,077,047				988,053				880,670				801,705
Securities		$	261,817				205,260				223,381				183,830				153,838
Deposits		$	1,310,706				1,248,500				1,182,590				1,086,729				929,589
Stockholders’ equity		$	139,557				129,118				118,185				106,168				95,110

		Years Ended December 31,
		2009				2008				2007				2006				2005
CONSOLIDATED STATEMENTS OF EARNINGS:
Interest income		$	80,126				86,357				85,882				70,690				56,318
Interest expense			30,795				40,392				45,721				32,378				22,150
Net interest income			49,331				45,965				40,161				38,312				34,168
Provision for loan losses			7,828				6,718				4,145				3,806				1,136
Net interest income after provision for loan losses			41,503				39,247				36,016				34,506				33,032
Non-interest income			13,359				12,006				10,636				9,486				8,218
Non-interest expense			36,115				32,814				29,477				26,746				23,407
Earnings before income taxes			18,747				18,439				17,175				17,246				17,843
Income taxes			7,180				7,041				6,239				6,671				6,847
Net earnings		$	11,567				11,398				10,936				10,575				10,996
Minority interest in net earnings of subsidiaries		$	—				—				—				—				236
Cash dividends declared		$	4,379				4,168				2,306				4,525				3,996
PER SHARE DATA: (1)
Basic earnings per common share		$	1.63				1.63				1.58				1.56				1.70
Diluted earnings per common share		$	1.63				1.62				1.58				1.55				1.69
Cash dividends		$	0.62				0.60				0.34				0.68				0.64
Book value		$	19.53				18.34				17.09				15.55				14.28
RATIOS:
Return on average stockholders’ equity			8.60	%			9.26	%			9.86	%			10.51	%			12.59	%
Return on average assets (2)			0.81	%			0.82	%			0.85	%			0.95	%			1.12	%
Capital to assets (3)			9.53	%			9.18	%			8.86	%			8.63	%			9.04	%
Dividends declared per share as percentage of basic earnings per share			38.04	%			36.81	%			21.52	%			43.27	%			37.44	%

WILSON BANK HOLDING COMPANY

Consolidated Financial Statements

December 31, 2009 and 2008

(With Independent Auditor’s Report Thereon)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
Wilson Bank Holding Company:

We have audited the accompanying consolidated balance sheets of Wilson Bank Holding Company and Subsidiary as of December 31, 2009 and 2008, and the related consolidated statements of earnings, comprehensive earnings, changes in stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2009. We also have audited Wilson Bank Holding Company and Subsidiary’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treasury Commission (COSO). Wilson Bank Holding Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financing reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wilson Bank Holding Company and Subsidiary as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Wilson Bank Holding Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

/s/ Maggart & Associates, P.C.

Nashville, Tennessee
January 19, 2010

WILSON BANK HOLDING COMPANY

Consolidated Balance Sheets

December 31, 2009 and 2008

		Dollars In Thousands
		2009				2008
ASSETS
Loans, net of allowance for loan losses of $16,647 and $12,138 respectively		$	1,098,614				1,077,047
Securities:
Held-to-maturity, at amortized cost (market value $12,608 and $11,021, respectively)			12,170				11,093
Available-for-sale, at market (amortized cost $250,412 and $195,087, respectively)			249,647				194,167
Total securities			261,817				205,260
Loans held for sale			5,027				3,541
Federal funds sold			5,450				21,170
Restricted equity securities, at cost			3,012				3,100
Total earning assets			1,373,920				1,310,118
Cash and due from banks			26,062				38,073
Premises and equipment, net			30,865				31,035
Accrued interest receivable			7,563				8,357
Deferred income taxes			5,457				3,578
Other real estate			3,924				4,993
Goodwill			4,805				4,805
Other intangible assets, net			904				1,300
Other assets			10,508				4,527
Total assets		$	1,464,008				1,406,786
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits		$	1,310,706				1,248,500
Securities sold under repurchase agreements			6,499				7,447
Advances from Federal Home Loan Bank			13				13,811
Accrued interest and other liabilities			7,233				7,910
Total liabilities			1,324,451				1,277,668
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 10,000,000 shares, 7,147,582 and 7,042,042 shares issued and outstanding, respectively			14,295				14,084
Additional paid-in capital			41,022				38,078
Retained earnings			84,712				77,524
Net unrealized losses on available-for-sale securities, net of income taxes of $293 and $352, respectively			(472	)			(568	)
Total stockholders’ equity			139,557				129,118
COMMITMENTS AND CONTINGENCIES
Total liabilities and stockholders’ equity		$	1,464,008				1,406,786

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Earnings

Three Years Ended December 31, 2009

		Dollars In Thousands (except per share data)
		2009				2008				2007
Interest income:
Interest and fees on loans		$	70,061				73,731				71,945
Interest and dividends on securities:
Taxable securities			9,069				10,942				10,398
Exempt from Federal income taxes			483				542				585
Interest on loans held for sale			276				187				253
Interest on Federal funds sold			82				773				2,524
Interest and dividends on restricted equity securities			155				182				177
Total interest income			80,126				86,357				85,882
Interest expense:
Interest on negotiable order of withdrawal accounts			2,428				3,628				2,858
Interest on money market accounts and other savings accounts			3,455				4,285				7,019
Interest on certificates of deposit and individual retirement accounts			24,390				31,607				34,746
Interest on securities sold under repurchase agreements			105				180				342
Interest on advances from Federal Home Loan Bank			416				688				756
Interest on Federal funds purchased			1				4				—
Total interest expense			30,795				40,392				45,721
Net interest income before provision for loan losses			49,331				45,965				40,161
Provision for loan losses			(7,828	)			(6,718	)			(4,145	)
Net interest income after provision for loan losses			41,503				39,247				36,016
Non-interest income			13,359				12,006				10,636
Non-interest expense			(36,115	)			(32,814	)			(29,477	)
Earnings before income taxes			18,747				18,439				17,175
Income taxes			7,180				7,041				6,239
Net earnings		$	11,567				11,398				10,936
Basic earnings per common share		$	1.63				1.63				1.58
Diluted earnings per common share		$	1.63				1.62				1.58
Weighted average common shares outstanding:
Basic			7,101,084				6,996,442				6,901,447
Diluted			7,112,316				7,025,821				6,937,441

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Comprehensive Earnings

Three Years Ended December 31, 2009

		Dollars In Thousands
		2009				2008				2007
Net earnings		$	11,567				11,398				10,936
Other comprehensive earnings (losses), net of tax:
Net unrealized gains (losses) on available-for-sale securities arising during period, net of taxes of $250,000, $23,000 and $651,000, respectively			405				(36	)			1,049
Reclassification adjustment for net gains included in net earnings, net of taxes of $191,000 and $88,000 in 2009 and 2008, respectively			(309	)			(143	)			—
Other comprehensive earnings (losses)			96				(179	)			1,049
Comprehensive earnings		$	11,663				11,219				11,985