<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
MARK ONE
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number 0-20402
WILSON BANK HOLDING COMPANY
---------------------------
(Exact Name of Registrant As Specified in Its Charter)
Tennessee 62-1497076
--------- ----------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
623 West Main Street, Lebanon, Tennessee 37087
-----------------------------------------------
(Address of principal executive offices and Zip Code)
(615) 444-2265
--------------
(Registrant's telephone Number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common stock outstanding: 1,378,073 shares at August 10, 1996.
1
<PAGE> 2
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited consolidated financial statements of the registrant and its
wholly-owned subsidiary Wilson Bank & Trust (the "Bank") and its subsidiary
DeKalb Community Bank ("DeKalb") of which there is also a minority interest
ownership are as follows:
Consolidated Balance Sheets - June 30, 1996 and December 31, 1995.
Consolidated Statements of Income - For the six months ended June 30,
1996 and 1995.
Consolidated Statements of Income - For the quarters ended June 30, 1996
and 1995.
Consolidated Statements of Cash Flows - For the six months ended June 30,
1996 and 1995.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II: OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
2
<PAGE> 3
WILSON BANK HOLDING COMPANY
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(In Thousands)
ASSETS
------
<S> <C> <C>
Loans (less allowance for possible loan
losses of $2,172,000 and $1,944,000
respectively) $ 165,212 $ 146,738
Securities:
Held-to-maturity, at cost (market
value of $27,652,000 and $22,558,000
respectively) 27,779 25,391
Available-for-sale, at market (amortized
cost $25,450,000 and $26,350,000,
respectively) 25,288 26,632
--------- ---------
Total securities 53,067 52,023
--------- ---------
Loans held for sale 2,276 1,715
Interest-bearing deposits in financial
institutions 100 100
Federal funds sold 9,498 8,042
---------------------- --------- ---------
Total earning assets 230,153 208,618
---------------------- --------- ---------
Cash and due from banks 7,590 9,147
Bank premises and equipment, net 7,450 6,121
Accrued interest receivable 1,989 1,896
Deferred income tax asset 514 349
Other assets 371 558
--------- ---------
TOTAL ASSETS $ 248,067 $ 226,689
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE> 4
WILSON BANK HOLDING COMPANY
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(In Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
-----------
<S> <C> <C>
Deposits $ 216,772 $ 200,037
Securities sold under agreement to
repurchase 8,222 6,693
Accrued interest 1,455 1,374
Other liabilities 199 187
--------- ---------
Total liabilities 226,648 208,291
--------- ---------
Minority interest in assets of subsidiary 1,733 -
--------- ---------
STOCKHOLDERS' EQUITY
--------------------
Common stock, $2.00 par value per share;
authorized 5,000,000 shares; 1,363,838
and 1,349,616 issued and outstanding at
June 30, 1996 and December 31, 1995,
respectively 2,727 2,699
Additional paid-in capital 6,307 5,944
Retained earnings 10,753 9,580
Net unrealized appreciation (losses) on
available-for-sale securities, net of
tax benefit of $62,000 and taxes
of $107,000, respectively (101) 175
--------- ---------
Total stockholders' equity 19,686 18,398
--------- ---------
Commitments and contingencies
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 248,067 $ 226,689
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE> 5
WILSON BANK HOLDING COMPANY
Consolidated Statements of Earnings
For the Six Months Ended June 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
(Dollars In Thousands
Except Per Share Amounts)
<S> <C> <C>
Interest income:
Interest and fees on loans $7,786 $6,214
Interest and dividends on securities:
Taxable securities 951 808
Exempt from Federal income taxes 561 506
Interest on loans held for sale 43 46
Interest on federal funds sold 333 281
Interest on interest-bearing deposits in
financial institutions 5 4
------ ------
Total interest income 9,679 7,859
------ ------
Interest expense:
Interest on negotiable order of
withdrawal accounts 263 239
Interest on money market and
savings accounts 914 681
Interest on certificates of deposit 3,384 2,799
Interest on securities sold under
agreement to repurchase 162 120
------ ------
Total interest expense 4,723 3,839
------ ------
Net interest income before provisions for
possible loan losses 4,956 4,020
Provision for possible loan losses 277 252
------ ------
Net interest income after provision for
possible loan losses 4,679 3,768
------ ------
Non-interest income:
Service charges on deposit accounts 601 465
Other fees and commissions 140 128
Gain on sale of loans 322 178
Minority interest in net loss of
subsidiary 17 -
------ ------
Total non-interest income 1,080 771
------ ------
</TABLE>
5
<PAGE> 6
WILSON BANK HOLDING COMPANY
Consolidated Statements of Earnings
For the Six Months Ended June 30, 1996 and 1995
(Unaudited)
(Continued)
<TABLE>
<S> <C> <C>
Non-interest expenses:
Salaries and employee benefits 1,902 1,536
Occupancy expenses, net 183 186
Furniture and equipment expense 409 333
Data processing expense 154 138
Other operating expenses 668 704
Security losses, available-for-sale - 4
Loss on sale of other real estate - 10
------ ------
Total non-interest expenses 3,316 2,911
------ ------
Net earnings before income taxes 2,443 1,628
Income taxes 798 476
------ ------
Net earnings $1,645 $1,152
====== ======
Weighted average number of shares of
common stock outstanding 1,361,494 1,332,033
Net earnings per share $ 1.21 .86
Dividends per share $ .35 .35
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE> 7
WILSON BANK HOLDING COMPANY
Consolidated Statements of Earnings
For the Quarters Ended June 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Quarters Ended
June 30,
1996 1995
(Dollars In Thousands
Except Per Share Amounts)
<S> <C> <C>
Interest income:
Interest and fees on loans $4,017 $3,225
Interest and dividends on securities:
Taxable securities 487 416
Exempt from Federal income taxes 278 254
Interest on loans held for sale 20 26
Interest on federal funds sold 148 129
Interest on interest-bearing deposits in
financial institutions 3 2
------ ------
Total interest income 4,953 4,052
------ ------
Interest expense:
Interest on negotiable order of
withdrawal accounts 114 107
Interest on money market and
savings accounts 450 356
Interest on certificates of deposit 1,695 1,492
Interest on securities sold under
agreement to repurchase 92 64
------ ------
Total interest expense 2,351 2,019
------ ------
Net interest income before provisions for
possible loan losses 2,602 2,033
Provision for possible loan losses 146 115
------ ------
Net interest income after provision for
possible loan losses 2,456 1,918
------ ------
Non-interest income:
Service charges on deposit accounts 311 243
Other fees and commissions 24 67
Gain on sale of loans 164 108
Minority interest in net loss of
subsidiary 17 -
------ ------
Total non-interest income 516 418
------ ------
</TABLE>
7
<PAGE> 8
WILSON BANK HOLDING COMPANY
Consolidated Statements of Earnings
For the Quarters Ended June 30, 1996 and 1995
(Unaudited)
(Continued)
<TABLE>
<S> <C> <C>
Non-interest expenses:
Salaries and employee benefits 1,025 793
Occupancy expenses, net 96 108
Furniture and equipment expense 213 149
Data processing expense 81 70
Other operating expenses 338 358
Security losses, available-for-sale - 4
Loss on sale of other real estate - 10
------ ------
Total non-interest expenses 1,753 1,492
------ ------
Net earnings before income taxes 1,219 844
Income taxes 402 247
------ ------
Net earnings $ 817 $ 597
====== ======
Weighted average number of shares of
common stock outstanding 1,363,838 1,334,717
Net earnings per share $ .60 $ .44
Dividends per share $ - -
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
8
<PAGE> 9
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1996 and 1995
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
(In Thousands)
<S> <C> <C>
Cash flows from operating activities:
Interest received $ 9,579 $ 7,428
Fees and commissions received 848 593
Proceeds from sale of loans 13,848 9,787
Origination of loans held for sale (14,087) (9,595)
Interest paid (4,642) (3,628)
Cash paid to suppliers and employees (3,093) (2,798)
Income taxes paid (647) (417)
------- -------
Net cash provided by operating
activities 1,806 1,370
------- -------
Cash flows from investing activities:
Proceeds from maturities of
held-to-maturity securities 1,984 647
Proceeds from maturities of
available-for-sale securities 6,013 541
Proceeds from sales of
available-for-sale securities - 2,461
Purchase of held-to-maturity
securities (4,368) (379)
Purchase of available-for-sale
securities (5,110) (5,955)
Loans made to customers,
net of repayments (18,751) (8,485)
Purchase of premises and equipment (1,608) (454)
------- -------
Net cash used in
investing activities (21,840) (11,624)
------- -------
Cash flows from financing activities:
Net increase in non-interest bearing,
savings and NOW deposit accounts 8,651 4,288
Net increase in time deposits 8,084 12,122
Increase in securities sold
under agreement to repurchase 1,529 1,301
Increase in Federal funds purchased - 250
Sale of minority owned commercial
bank subsidiary common stock 1,750 -
Dividends paid (472) (462)
</TABLE>
9
<PAGE> 10
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1996 and 1995
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(Continued)
<TABLE>
<S> <C> <C>
Proceeds from reinvestment of dividends
- sale of common stock 391 382
------- -------
Net cash provided by financing
activities 19,933 17,881
------- -------
Net increase (decrease) in cash and
cash equivalents (101) 7,627
Cash and cash equivalents at beginning of
period 17,189 17,175
------- -------
Cash and cash equivalents at end of
period $17,088 $24,802
======= =======
Reconciliation of net earnings to net cash
provided by operating activities:
Net earnings $ 1,645 $ 1,152
Adjustments to reconcile net
earnings to net cash
provided by operating
activities:
Depreciation and amortization 305 263
Provision for loan losses 277 252
Loss on sale of investment securities -
available-for-sale - 4
Net loss of minority interest of
commercial bank subsidiary (17) -
Federal Home Loan Bank stock dividends (33) (17)
Decrease in refundable income taxes 80 86
Increase (decrease) in taxes payable 68 (26)
Loss on sale of other real estate - 10
Decrease (increase) in other assets, net 110 (194)
Decrease (increase)in loans held for sale (561) 14
Increase in interest receivable (93) (405)
Increase (decrease) in other liabilities (56) 20
Increase in interest payable 81 211
------- -------
Total adjustments 161 218
------- -------
Net cash provided by operating activities $ 1,806 $ 1,370
======= =======
</TABLE>
10
<PAGE> 11
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1996 and 1995
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(Continued)
<TABLE>
<S> <C> <C>
Supplemental schedule of noncash activities:
Unrealized gain in values of securities
available for sale, net of taxes of
$169,000 and $264,000 for the six
months ended June 30, 1996 and 1995,
respectively. $ (276) $ 432
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
11
<PAGE> 12
WILSON BANK HOLDING COMPANY
Notes to Consolidated Financial Statements
(Unaudited)
BASIS OF PRESENTATION
The unaudited consolidated financial statements include the accounts of Wilson
Bank Holding Company (the "Company") and its wholly-owned subsidiary, Wilson
Bank and Trust (the "Bank") along with DeKalb Community Bank ("DeKalb) of which
the Company owns 50% of the outstanding common stock. DeKalb opened for
business on April 18, 1996. The Bank also has a wholly-owned consolidated
subsidiary, Hometown Finance Company, which is a consumer finance company.
The accompanying consolidated financial statements have been prepared, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. All financial information except per share data has been rounded
to the nearest thousand of dollars for both the financial statements and
management's discussion and analysis of financial condition and results of
operations.
In the opinion of management, the consolidated financial statements contain all
adjustments and disclosures necessary to summarize fairly the financial
position of the Company as of June 30, 1996 and December 31, 1995, and the
results of operations for the six months ended June 30, 1996 and 1995 and the
three months ended June 30, 1996 and 1995 and changes in cash flows for the six
months ended June 30, 1996 and 1995. All significant intercompany transactions
have been eliminated. The interim consolidated financial statements should be
read in conjunction with the notes to the consolidated financial statements
presented in the Company's 1995 Annual Report to Stockholders. The results for
interim periods are not necessarily indicative of results to be expected for
the complete fiscal year.
12
<PAGE> 13
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The purpose of this discussion is to provide insight into the financial
condition and results of operations of the Company and its subsidiaries. This
discussion should be read in conjunction with the consolidated financial
statements.
RESULTS OF OPERATIONS
Net earnings increased 42.8% to $1,645,000 for the six months ended June 30,
1996 from $1,152,000 in the first six months of 1995. Net earnings were
$817,000 for the quarter ended June 30, 1996, an increase of $220,000 or 36.9%
from $597,000 for the three months ended June 30, 1995 and a decrease of
$11,000 or 1.3% from the quarter ended March 31, 1996. The increase in net
earnings during the six months ended June 30, 1996 was primarily due to a 23.3%
increase in net interest income along with a 40.1% increase in non-interest
income as compared to a 13.9% increase in non-interest expenses.
NET INTEREST INCOME
Net interest income represents the amount by which interest earned on various
earning assets exceeds interest paid on deposits and other interest-bearing
liabilities and is the most significant component of the Company's earnings.
The Company's total interest income, excluding tax equivalent adjustments,
increased $1,820,000 or 23.2% during the six months ended June 30, 1996 as
compared to the same period in 1995. The increase in total interest income was
$901,000 or 22.2% for the quarter ended June 30, 1996 as compared to the
quarter ended June 30, 1995 and $227,000 or 4.8% over the first three months of
1996. The increase in 1996 was primarily attributable to an increase in
average earning assets, combined with an increase in weighted average interest
rates. The ratio of average earning assets to total average assets was 94.3%
and 94.9% for the quarters ended June 30, 1996 and March 31, 1996, respectively,
and 94.6% and 93.5% for the six months ended June 30, 1996 and 1995,
respectively.
Interest expense increased $884,000 or 23.0% for the six months ended June 30,
1996 as compared to the same period in 1995. The increase was $332,000 or
16.4% for the three months ended June 30, 1996 as compared to the same period
in 1995. Interest expense decreased $21,000 or 0.89% for the quarter ended
June 30, 1996 over the first three months of 1996. The overall increase in
total interest expense for the first six months of 1996 was primarily
attributable to an increase in weighted average interest-bearing
liabilities. The foregoing resulted in an increase in net interest
income of $936,000 or 23.3% for the first six months of 1996 as compared to the
same period in 1995. The increase in net interest income was $569,000 or 28.0%
for the quarter ended June 30, 1996
13
<PAGE> 14
compared to the quarter ended June 30, 1995 and an increase of $248,000 or
10.5% when compared to the first quarter of 1996.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $277,000 and $252,000, for the first
six months of 1996 and 1995, respectively. The provision for loan losses
during the three month periods ended June 30, 1996 and 1995 was $146,000 and
$115,000, respectively. The provision for possible loan losses is based on
past loan experience and other factors which, in management's judgment, deserve
current recognition in estimating possible loan losses. Such factors include
past loan loss experience, growth and composition of the loan portfolio, review
of specific problem loans, the relationship of the allowance for loan losses to
outstanding loans, and current economic conditions that may affect the
borrower's ability to repay. Management has in place a system designed for
monitoring its loan portfolio in an effort to identify potential problem loans.
The provision for possible loan losses raised the allowance for possible loan
losses to $2,172,000, an increase of 11.7% from $1,944,000 at December 31,
1995. The allowance for possible loan losses as a percentage of total
outstanding loans (excluding loans held for sale) was 1.30% at June 30, 1996
compared to 1.31% at December 31, 1995.
The level of the allowance and the amount of the provision involve evaluation
of uncertainties and matters of judgment. Management believes the allowance
for possible loan losses at June 30, 1996 to be adequate. Transactions related
to the allowance for possible loan losses were as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
(In Thousands)
<S> <C> <C>
Balance, January 1, 1996 and 1995, respectively $1,944 $1,556
Add (deduct):
Losses charged to allowance (55) (45)
Recoveries credited to allowance 6 23
Provision for loan losses 277 252
------ ------
Balance, June 30, 1996 and 1995, respectively $2,172 $1,786
====== ======
</TABLE>
NON-INTEREST INCOME
The components of the Company's non-interest income include service charges on
deposit accounts, other fees and commissions, gain on sale of loans, gain on
sale of investment securities and the offsetting effect of third party
interests in the results of operations of DeKalb. Total non-interest income
for the six months ended June 30, 1996 increased by 40.1% to $1,080,000 from
$771,000 for the same period in 1995. The increase was $98,000 or 23.4% during
the quarter ended June 30, 1996 compared to the second quarter in 1995 and
there was a decrease of $48,000 or 8.5%
14
<PAGE> 15
compared to the first three months of 1996. The increase during the first six
months of 1996 was due primarily to increases in service charges on deposit
accounts as well as an increase in gains on sale of loans. Service charges on
deposit accounts increased $136,000 or 29.2% to $601,000 during the six months
ended June 30, 1996. Service charges on deposit accounts increased $68,000 or
28.0% during the quarter ended June 30, 1996 compared to the same quarter in
1995. Gains on sales of loans totaled $322,000 and $178,000 during the six
months ended June 30, 1996 and 1995, respectively, which represented an
increase of 80.9%, and $164,000 and $108,000 during the quarters ended June 30,
1996 and 1995, respectively, which reflected a 51.9% increase in 1996 over the
corresponding period in 1995.
NON-INTEREST EXPENSES
Non-interest expense consists primarily of employee salaries and benefits,
occupancy, furniture and equipment expense and other operating expenses. Total
non-interest expense increased $405,000 or 13.9% during the first six months of
1996 compared to the same period in 1995. The increase for the quarter ended
June 30, 1996 was $261,000 or 17.5% as compared to the comparable quarter in
1995 and $190,000 or 12.2% as compared to the first three months of 1996. The
increases in non-interest expense are attributable primarily to increases in
employee salaries and benefits associated with an increase in the number of
employees necessary to support the Company's expanded operations, which
included the opening of a new branch in 1995. The number of full-time
equivalent employees increased to 133 at June 30, 1996, an increase from 107 at
June 30, 1995. This included 127 at the Bank and 6 at DeKalb. Increases in
occupancy and furniture and equipment expenses were also due to the Company's
expanded operations. Other operating expenses for the six months ended June
30, 1996 decreased 5.1% to $668,000 from $704,000 for the comparable period in
1995. Other operating expenses decreased $20,000 or 5.6% during the quarter
ended June 30, 1996 as compared to the same period in 1995 and increased $8,000
or 2.4% as compared to the first three months of 1996.
These other operating expenses include Federal Deposit Insurance Corporation
premiums assessed on deposits, supplies and general operating costs which
increased as a result of continued growth of the Company. During 1995 the
Bank's FDIC assessment rate was 0.23% of eligible deposits. The FDIC has
changed the risk-based range of assessments (which had ranged from 0.23% to
0.31% of eligible deposits) to range from 0.04% to 0.31%. The Bank is
currently assessed a maximum of 0.04% and the annual expense for 1996 should be
approximately $2,000. The Bank received a rebate on the premiums paid in early
1995 late last year.
INCOME TAXES
The Company's income tax expense was $798,000 for the six months
15
<PAGE> 16
ended June 30, 1996, an increase of $322,000 over the comparable period in
1995. Income tax expense was $402,000 for the quarter ended June 30, 1996, an
increase of $155,000 over the same period in 1995. The percentage of income
tax expense to net income before taxes was 32.7% and 29.2% for the six months
ended June 30, 1996 and 1995, respectively and 33.0% and 29.3% for the quarters
ended June 30, 1996 and 1995, respectively. The percentage of income tax
expense to net income before taxes was 32.4% for the first three months of
1996. The increase in the percentage is due to a decrease in the amount of tax
exempt interest income as a percentage of total interest income. This
percentage was 5.8% for the six months ended June 30, 1996 compared to 6.4% for
the six months ended June 30, 1995.
FINANCIAL CONDITION
BALANCE SHEET SUMMARY
The Company's total assets increased 9.4% to $248,067,000 during the six months
ended June 30, 1996 from $226,689,000 at December 31, 1995. Total assets
increased $6,616,000 or 2.7% and $14,762,000 or 6.5% during the three-month
periods ended June 30, 1996 and March 31, 1996, respectively. Loans, net of
allowance for possible loan losses ("Net Loans"), totaled $165,212,000 at June
30, 1996 or a 12.6% increase compared to $146,738,000 at December 31, 1995.
Net Loans increased $15,629,000 or 10.4% and $2,845,000 or 1.9% during the
quarters ended June 30, 1996 and March 31, 1996, respectively. These increases
were primarily due to the continued favorable interest rate environment which
motivated the refinancing of mortgages and the Company's ability to increase
its market share of such loans while maintaining its underwriting standards.
Investment securities increased $1,044,000 or 2.0% to $53,067,000 at June 30,
1996 from $52,023,000 at December 31, 1995. Investment securities increased
$1,759,000 or 3.4% during the three months ended June 30, 1996 and decreased
$715,000 or 1.4% during the quarter ended March 31, 1996. The increase in
securities was reduced by a net unrealized loss of $162,000 during the six
month period ending June 30, 1996. Federal funds sold increased $1,456,000 to
$9,498,000 at June 30, 1996 from $8,042,000 at December 31, 1995.
Total liabilities increased by 8.8% to $226,648,000 at June 30, 1996 compared
to $208,291,000 at December 31, 1995. The increase by quarter totaled
$5,951,000 or 2.7% and $12,406,000 or 6.0% during the quarters ended June 30,
1996 and March 31, 1996, respectively. These increases were composed primarily
of a $16,735,000 or 8.4% increase in total deposits and an increase of
$1,529,000 or 22.8% in securities sold under repurchase agreements during the
six months ended June 30, 1996.
16
<PAGE> 17
The following schedule details selected information as to non-performing loans
of the Company at June 30, 1996 and December 31, 1995:
<TABLE>
<CAPTION>
June 30, 1996
---------------------
Past due
90 days
or more Non-accrual
------- -----------
(In Thousands)
<S> <C> <C>
Real estate loans $ 11 $ 5
Installment loans 235 88
Credit cards 11 -
Commercial, financial
and agricultural loans 28 16
------ ------
Total 90 days or more past due and
non-accrual loans $ 285 $ 109
====== ======
Total 90 days or more past due
and non-accrual loans $ 394
Renegotiated loans -
--------
Total 90 days or more past due, non-
accrual and renegotiated loans $ 394
========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
---------------------
Past due
90 days
or more Non-accrual
------- -----------
(In Thousands)
<S> <C> <C>
Real estate loans $ - -
Installment loans 154 113
Credit cards 9 -
Commercial, financial
and agricultural loans 8 4
------ ------
Total 90 days or more past due and
non-accrual loans $ 171 $ 117
====== ======
Total 90 days or more past due
and non-accrual loans $ 288
Renegotiated loans -
--------
Total 90 days or more past due, non-
accrual and renegotiated loans $ 288
========
</TABLE>
Non-performing loans at June 30, 1996 totaled $394,000, an increase of 36.8%
from $288,000 at December 31, 1995. During the three months ended June 30,
1996, non-performing loans decreased $3,000 or 0.8% from $397,000 at March 31,
1996. The increase in non-performing loans in the first six months of 1996 is
due primarily to an increase in the installment loans 90 or more days past due.
At June 30, 1996, loans totaling $514,000 (including the above past due and
non-accrual loans) were included in the Company's internal classified loan
list. Of these loans $260,000 are secured by real
17
<PAGE> 18
estate, $91,000 are commercial and $163,000 are installment loans. The
collateral values securing these loans total approximately $340,000 ($216,000
secured by real property, $49,000 relating to commercial loans and $75,000
related to installment loans). The internally classified loans have declined
from $1,631,000 at December 31, 1995, to $514,000 at June 30, 1996. This
decrease is represented by a decrease of $953,000 in loans secured by real
estate and a decrease of $164,000 of other various types of loans. Loans are
listed as classified when information obtained about possible credit problems of
the borrower has prompted management to question the ability of the borrower to
comply with the repayment terms of the loan agreement. The loan classifications
do not represent or result from trends or uncertainties which management expects
will materially impact future operating results, liquidity or capital resources.
Fixed assets net of depreciation increased $1,329,000 during the first six
months of 1996 to $7,450,000. Of this increase. $394,000 can be attributed to
the addition of DeKalb and $891,000 was the result of a new addition to the
main office of the Bank. Construction is scheduled to be completed in October
1996.
LIQUIDITY AND ASSET MANAGEMENT
The Company's management seeks to maximize net interest income by managing the
Company's assets and liabilities within appropriate constraints on capital,
liquidity and interest rate risk.
Liquidity is the ability to maintain sufficient cash levels necessary to fund
operations, meet the requirements of depositors and borrowers and fund
attractive investment opportunities. Higher levels of liquidity bear
corresponding costs, measured in terms of lower yields on short-term, more
liquid earning assets and higher interest expense involved in extending
liability maturities.
Liquid assets include cash and cash equivalents and securities and
money market instruments that will mature within one year. At June 30, 1996,
the Company's liquid assets totaled $31,266,000.
The Company's primary source of liquidity is a stable core deposit base. In
addition short-term investments, loan payments and investment security
maturities provide a secondary source.
Interest rate risk (sensitivity) focuses on the earnings risk associated with
changing interest rates. Management seeks to maintain profitability in both
immediate and long term earnings through funds management/interest rate risk
management. The Company's rate sensitivity position has an important impact on
earnings. Senior management of the Company meets monthly to analyze the rate
sensitivity position of the Bank. These meetings focus on the spread between
the Company's cost of funds and interest yields generated primarily through
loans and investments.
18
<PAGE> 19
The Company's securities portfolio consists of earning assets that provide
interest income. For those securities classified as held-to-maturity the
Company has the ability and intent to hold these securities to maturity or on a
long-term basis. Securities classified as available-for-sale include
securities intended to be used as part of the Company's asset/liability
strategy and/or securities that may be sold in response to changes in interest
rate, prepayment risk, the need or desire to increase capital and similar
economic factors. Securities totaling $15.1 million mature or will be subject
to rate adjustments within the next twelve months.
A secondary source of liquidity is the Bank's loan portfolio. At June 30, 1996
loans of approximately $107 million either will become due or will be subject
to rate adjustments within twelve months from the respective date. Continued
emphasis will be placed on structuring adjustable rate loans.
As for liabilities, certificates of deposit of $100,000 or greater of
approximately $30.8 million will become due 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 does not anticipate that there will be significant withdrawals from
these accounts in the next twelve months.
Management believes that with present maturities, the anticipated
growth in deposit base, and the efforts of management in its asset/liability
program, management is positioned to effectively manage its liquidity in the
near term.
CAPITAL POSITION AND DIVIDENDS
At June 30, 1996, total stockholders' equity was $19,686,000 or 7.9% of total
assets, which compares with $18,398,000 or 8.1% of total assets at December 31,
1995. The dollar increase in stockholders' equity during the six months ended
June 30, 1996 results from the Company's net income of $1,645,000 less the net
effect of a $276,000 increase in the net unrealized loss on investment
securities net of applicable income taxes and cash dividends declared of
$472,000 (of which $391,000 was reinvested under the Company's dividend
reinvestment plan.)
The Company's principal regulators have established minimum risk-based capital
requirements and leverage capital requirements for the Company, the Bank and
DeKalb. These guidelines classify capital into two categories of Tier I and
Tier II capital. Total capital consists of Tier I (or core) capital
(essentially common equity less intangible assets) and Tier II capital
(essentially qualifying long-term debt, of which the Company Bank and DeKalb
have none, and a part of the allowance for possible loans losses).
19
<PAGE> 20
In determining risk-based capital requirements, assets are assigned risk-weights
of 0% to 100%, depending on regulatory assigned levels of credit risk associated
with such assets. The risk-based capital guidelines require the Company, Bank
and DeKalb to have a total risk-based capital ratio of 8.0% and a Tier I
risk-based capital ratio of 4.0%. At June 30, 1996 the Company's total
risk-based capital ratio was 13.6% and their Tier I risk-based capital ratio was
approximately 12.3% compared to ratios of 13.8% and 12.6%, respectively at
December 31, 1995. At June 30, 1996 the Bank's total risk-based capital ratio
was 12.6% and its Tier I risk-based capital ratio was approximately 11.4%
compared to ratios of 13.8% and 12.5%, respectively at December 31, 1995. At
June 30, 1996 DeKalb's total risk-based capital ratio was 93.7% and its Tier I
risk-based capital ratio was approximately 93.7%.
The required leverage capital ratio (Tier I capital to average assets for the
most recent quarter) for the Company, Bank and DeKalb is 4.0%. At June 30,
1996 the Company had a leverage ratio of 8.4%, compared to 8.2% at December 31,
1995. At June 30, 1996 the Bank had a leverage ratio of 7.7%, compared to 8.1%
at December 31, 1995. At June 30, 1996 DeKalb had a leverage ratio of 120.4%.
Dividends of $472,000 and $462,000 were declared by the Company during the
first six months ended June 30, 1996 and 1995, respectively.
IMPACT OF INFLATION
Although interest rates are significantly affected by inflation, the inflation
rate is immaterial when reviewing the Company's results of operations.
20
<PAGE> 21
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
PART II. OTHER INFORMATION
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders was held April 16, 1996.
(b) Each of the persons named in the Proxy Statement as a nominee for director
was elected and the selection of Maggart & Associates, P.C. as independent
auditors for the Company for 1996 was ratified. The following are the voting
results on each of the matters:
(1) Election of the entire board of directors who are as follows:
Total Number of Shares Voting:
Shares Broker
Voting For Against Withheld Non-Votes
----------------------------------------------
Charles Bell 741,290 740,565 0 725 0
Jack Bell 741,290 740,565 0 725 0
Mackey Bentley 741,290 740,565 0 725 0
Randall Clemons 741,290 740,565 0 725 0
Jimmy Comer 741,290 739,066 1,499 725 0
Jerry Franklin 741,290 740,565 0 725 0
John Freeman 741,290 740,565 0 725 0
Marshall Griffith 741,290 740,565 0 725 0
Harold Patton 741,290 740,565 0 725 0
James Patton 741,290 740,565 0 725 0
John Trice 741,290 740,279 286 725 0
Bob VanHooser 741,290 739,869 696 725 0
(2) The election of Maggart & Associates, P.C. as independent
auditors for the Company was as follows:
Total Number of Shares Voting:
Shares Broker
Voting For Against Abstain Non-Votes
--------------------------------------------------------
741,290 736,892 1,191 3,207 0
21
<PAGE> 22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule (for SEC use only)
(b) No reports on Form 8-K have been filed during the quarter for which this
report is filed.
22
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILSON BANK HOLDING COMPANY
---------------------------
(Registrant)
DATE: August 9, 1996 /s/ Randall Clemons
----------------- -------------------------------------
Randall Clemons, President and
Chief Executive Officer
DATE: August 9, 1996 /s/ Becky Taylor
----------------- -------------------------------------
Becky Taylor, Vice President, Cashier
and Principal Accounting Officer
23
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,590
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 9,498
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25,288
<INVESTMENTS-CARRYING> 27,779
<INVESTMENTS-MARKET> 25,450
<LOANS> 167,384
<ALLOWANCE> 2,172
<TOTAL-ASSETS> 248,067
<DEPOSITS> 216,772
<SHORT-TERM> 8,222
<LIABILITIES-OTHER> 1,654
<LONG-TERM> 0
0
0
<COMMON> 2,727
<OTHER-SE> 16,959
<TOTAL-LIABILITIES-AND-EQUITY> 248,067
<INTEREST-LOAN> 7,786
<INTEREST-INVEST> 1,512
<INTEREST-OTHER> 381
<INTEREST-TOTAL> 9,679
<INTEREST-DEPOSIT> 4,561
<INTEREST-EXPENSE> 4,723
<INTEREST-INCOME-NET> 4,956
<LOAN-LOSSES> 277
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,316
<INCOME-PRETAX> 2,443
<INCOME-PRE-EXTRAORDINARY> 2,443
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,645
<EPS-PRIMARY> 1.21
<EPS-DILUTED> 1.21
<YIELD-ACTUAL> 4.72
<LOANS-NON> 109
<LOANS-PAST> 285
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 514
<ALLOWANCE-OPEN> 1,944
<CHARGE-OFFS> 55
<RECOVERIES> 6
<ALLOWANCE-CLOSE> 2,172
<ALLOWANCE-DOMESTIC> 2,172
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,658
</TABLE>
