<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 MARCH 31, 1997
[ ] 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: 1,392,182 shares at May 11, 1997.
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 ("WB&T" or "Wilson") and its 50%
owned subsidiaries DeKalb Community Bank ("DCB" or "DeKalb") and Community Bank
of Smith County ("CBSC") are as follows:
Consolidated Balance Sheets - March 31, 1997 and December 31, 1996.
Consolidated Statements of Income - For the three months ended March 31,
1997 and 1996.
Consolidated Statements of Cash Flows - For the three months ended March
31, 1997 and 1996.
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 5. Other Information
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
2
<PAGE> 3
WILSON BANK HOLDING COMPANY
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Mar. 31, Dec. 31,
1997 1996
(In Thousands)
ASSETS
------
<S> <C> <C>
Loans (less allowance for possible loan
losses of $2,609,000 and $2,452,000
respectively) $ 195,965 $ 183,642
Securities:
Held-to-maturity, at cost (market
value of $26,313,000 and $26,702,000
respectively) 26,313 26,535
Available-for-sale, at market (amortized
cost $32,317,000 and $28,888,000,
respectively) 32,208 29,010
----------- -----------
Total securities 58,521 55,545
----------- -----------
Loans held for sale 737 2,219
Federal funds sold 25,697 10,626
----------- -----------
Total earning assets 280,920 252,032
----------- -----------
Cash and due from banks 8,580 9,938
Bank premises and equipment, net 10,099 9,614
Accrued interest receivable 2,330 2,063
Other real estate 244 -
Organizational costs 98 104
Deferred income tax asset 682 612
Other assets 931 941
----------- -----------
TOTAL ASSETS $ 303,884 $ 275,304
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
(Continued on following page.)
3
<PAGE> 4
WILSON BANK HOLDING COMPANY
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996
(Unaudited)
(Continued from previous page)
<TABLE>
<CAPTION>
Mar. 31, Dec. 31,
1997 1996
(In Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
-----------
<S> <C> <C>
Deposits $ 270,355 $ 243,250
Securities sold under agreement to
repurchase 6,240 5,616
Accrued interest 1,593 1,356
Other liabilities 465 405
Minority interest in assets of subsidiary 3,378 3,425
----------- -----------
Total liabilities 282,031 254,052
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $2.00 par value per share;
authorized 5,000,000 shares; 1,392,182
and 1,363,838 issued and outstanding at
March 31, 1997 and December 31, 1996,
respectively 2,784 2,756
Additional paid-in capital 7,072 6,684
Retained earnings 12,059 11,737
Net unrealized appreciation (losses) on
available-for-sale securities, net of
tax benefit of $47,000 and income
taxes of $46,000, respectively (62) 75
----------- -----------
Total stockholders' equity 21,853 21,252
----------- -----------
Commitments and contingencies - -
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 303,884 $ 275,304
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE> 5
WILSON BANK HOLDING COMPANY
Consolidated Statements of Earnings
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
Mar. 31,
1997 1996
(Dollars In Thousands
Except Per Share Amounts)
<S> <C> <C>
Interest income:
Interest and fees on loans $ 4,717 $ 3,769
Interest and dividends on securities:
Taxable securities 587 464
Exempt from Federal income taxes 279 283
Interest on loans held for sale 26 23
Interest on federal funds sold 260 185
Interest on interest-bearing deposits in
financial institutions - 2
----------- -----------
Total interest income 5,869 4,726
----------- -----------
Interest expense:
Interest on negotiable order of
withdrawal accounts 167 149
Interest on money market and
savings accounts 541 464
Interest on certificates of deposit 2,045 1,689
Interest on securities sold under
agreement to repurchase 70 70
----------- -----------
Total interest expens 2,823 2,372
----------- -----------
Net interest income before provisions for
possible loan losses 3,046 2,354
Provision for possible loan losses 187 131
----------- -----------
Net interest income after provision for
possible loan losses 2,859 2,223
----------- -----------
Non-interest income:
Service charges on deposit accounts 333 290
Other fees and commissions 81 116
Gain on sale of loans 134 158
Minority interest in net loss of
subsidiary 33 -
----------- -----------
Total non-interest income 581 564
----------- -----------
</TABLE>
(Continued on following page)
5
<PAGE> 6
WILSON BANK HOLDING COMPANY
Consolidated Statements of Earnings
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
(Continued from previous page)
<TABLE>
<CAPTION>
Three Months Ended
Mar. 31,
1997 1996
(Dollars In Thousands
Except Per Share Amounts)
<S> <C> <C>
Non-interest expenses:
Salaries and employee benefits 1,183 877
Occupancy expenses, net 153 87
Furniture and equipment expense 322 196
Data processing expense 139 73
Other operating expenses 441 330
Minority interest in net earnings of
subsidiary 11 -
----------- -----------
Total non-interest expenses 2,249 1,563
----------- -----------
Earnings before income taxes 1,191 1,224
Income taxes 387 396
----------- -----------
Net earnings $ 804 $ 828
=========== ===========
Weighted average number of shares of
common stock outstanding 1,387,479 1,359,149
=========== ===========
Net earnings per share $ 0.58 0.61
=========== ===========
Dividends per share $ 0.35 0.35
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE> 7
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows
For the Three Months March 31, 1997 and 1996
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
Mar. 31,
1997 1996
(Dollars In Thousands
<S> <C> <C>
Cash flows from operating activities:
Interest received $ 5,600 $ 4,677
Fees and commissions received 405 273
Proceeds from sale of loans 9,510 7,582
Origination of loans held for sale (7,894) (7,380)
Interest paid (2,586) (2,265)
Cash paid to suppliers and employees (2,138) (1,338)
Income taxes paid (187) (171)
----------- -----------
Net cash provided by operating
activities 2,710 1,378
----------- -----------
Cash flows from investing activities:
Proceeds from maturities of
held-to-maturity securities 5,619 1,603
Proceeds from maturities of
available-for-sale securities 2,858 5,548
Proceeds from sales of
available-for-sale securities 250 -
Purchase of held-to-maturity
securities (4,046) (3,043)
Purchase of available-for-sale
securities (7,868) (3,616)
Proceeds from sale of fixed assets - 1
Loans made to customers,
net of repayments (12,754) (2,976)
Purchase of premises and equipment (719) (797)
----------- -----------
Net cash used in
investing activities (16,660) (3,280)
----------- -----------
Cash flows from financing activities:
Net increase in non-interest bearing,
savings and NOW deposit accounts 12,608 7,324
Net increase in time deposits 14,497 4,799
Increase (decrease) in securities sold
under agreement to repurchase 624 (56)
Sale of minority owned commercial
bank subsidiary common stock - 1,750
</TABLE>
(Continued on following page)
7
<PAGE> 8
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1997 and 1996
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(Continued from previous page)
<TABLE>
<S> <C> <C>
Dividends paid (482) (472)
Proceeds from reinvestment of
dividends - sale of common stock 416 391
----------- -----------
Net cash provided by financing activities 27,663 13,736
----------- -----------
Net increase (decrease) in cash and
cash equivalents 13,713 11,834
Cash and cash equivalents at beginning of
period 20,564 17,189
----------- -----------
Cash and cash equivalents at end of
period $ 34,277 $ 29,023
=========== ===========
Reconciliation of net earnings to net cash
provided by operating activities:
Net earnings $ 804 $ 828
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 250 145
Provision for loan losses 187 131
Net loss of minority interest of
commercial bank subsidiary (33) -
Net earnings of minority interest of
commercial bank subsidiary 11 -
Federal Home Loan Bank stock dividends (12) (11)
Decrease in refundable income taxes - 80
Increase in taxes payable 200 145
(Increase) decrease in other assets, net 61 (133)
Decrease in loans held for sale 1,482 44
Increase in interest receivable (267) (45)
Increase in deferred tax asset (70) -
Increase (decrease) in other liabilities (140) 87
Increase in interest payable 237 107
----------- -----------
Total adjustments 1,906 550
----------- -----------
Net cash provided by operating activities $ 2,710 $ 1,378
=========== ===========
</TABLE>
(Continued on following page)
8
<PAGE> 9
WILSON BANK HOLDING COMPANY
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1997 and 1996
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(Continued from previous page)
<TABLE>
<S> <C> <C>
Supplemental schedule of noncash activities:
Unrealized gain (loss) in values of
securities available for sale, net
of tax benefit of $93,000 and income
taxes of $86,000 for the three months
ended March 31, 1997 and 1996, respectively. $ (137) $ (141)
=========== ===========
Loans transferred to other real estate $ 244 -
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
9
<PAGE> 10
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 ("WB&T") along with DeKalb Community Bank ("DCB"), a 50% owned
subsidiary, and Community Bank of Smith County ("CBSC"), a 50% owned subsidiary.
DCB opened for business on April 18, 1996 and CBSC opened for business on
December 16, 1996. WB&T also has a wholly-owned consolidated subsidiary,
Hometown Finance Company ("HFC"), 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.
In the opinion of management, the consolidated financial statements contain all
adjustments and disclosures necessary to summarize fairly the financial position
of the Company as of March 31, 1997 and December 31, 1996, and the results of
operations for the three months ended March 31, 1997 and 1996 and changes in
cash flows for the three months ended March 31, 1997 and 1996. 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 1996 Annual Report
to Stockholders. The results for interim periods are not necessarily indicative
of results to be expected for the complete fiscal year.
10
<PAGE> 11
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 and notes thereto.
The unaudited consolidated financial information of the registrant Wilson Bank
Holding Company ("Company") presented here includes its wholly-owned subsidiary
Wilson Bank & Trust ("WB&T") and its consumer finance subsidiary Hometown
Finance Company ("HFC") along with the Company's subsidiaries DeKalb Community
Bank ("DCB") and Community Bank of Smith County ("CBSC") of which there are
minority interest ownerships.
RESULTS OF OPERATIONS
Net earnings decreased 2.9% to $804,000 for the three months ended March 31,
1997 from $828,000 in the first three months of 1996. The decrease in net
earnings during the three months ended March 31, 1997 was primarily due to a
43.9% increase in non-interest expenses and a 2.8% decrease in non-interest
income despite a 29.4% increase in net interest income.
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
$1,143,000 or 24.2% during the three months ended March 31, 1997 as compared to
the same period in 1996. The increase in 1997 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 93.2% and 93.7% for the quarters ended March 31, 1997 and 1996.
Interest expense increased $451,000 or 19.0% for the three months ended March
31, 1997 as compared to the same period in 1996. The overall increase in total
interest expense for the first three months of 1997 was primarily attributable
to an increase in average interest-bearing liabilities. The foregoing resulted
in an increase in net interest income of $692,000 or 29.4% for the first three
months of 1997 as compared to the same period in 1996.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $187,000 and $131,000, for the first
three months of 1997 and 1996, respectively. The provision for possible loan
losses is based on past loan experience
11
<PAGE> 12
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
$2,609,000, an increase of 6.4% from $2,452,000 at December 31, 1996. The
allowance for possible loan losses as a percentage of total outstanding loans
(excluding loans held for sale) was 1.31% at March 30, 1997 compared to 1.32% at
December 31, 1996.
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 March 31, 1997 to be adequate. Transactions related to
the allowance for possible loan losses were as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
(In Thousands)
<S> <C> <C>
Balance, January 1, 1997 and 1996, respectively $ 2,452 $ 1,944
Add (deduct):
Losses charged to allowance (42) (45)
Recoveries credited to allowance 12 24
Provision for loan losses 187 131
----------- -----------
Balance, March 31, 1997 and 1996,
respectively $ 2,609 $ 2,054
=========== ===========
</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 CBSC. Total non-interest income for the three
months ended March 31, 1997 increased by 3.0% to $581,000 from $564,000 for the
same period in 1996. The increase during the first three months of 1997 was due
primarily to increases in service charges on deposit accounts. Service charges
on deposit accounts increased $43,000 or 14.8% to $333,000 during the three
months ended March 31, 1997. Gains on sales of loans totaled $134,000 and
$158,000 during the three months ended March 31, 1997 and 1996, respectively,
which represented a decrease of 15.1%. Other fees and commissions decreased by
$35,000, or 30.1%, during the first quarter of 1997 as compared to the
corresponding quarter in 1996. The Company also recognized income of $33,000
from the portion of the net loss attributable to the minority interest
shareholders of CBSC.
12
<PAGE> 13
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 $686,000 or 43.9% during the first three months
of 1997 compared to the same period in 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 the two
new banks (DCB and CBSC) after the first quarter of 1996. The number of
full-time equivalent employees increased to 159 at March 31, 1997, an increase
from 137 at March 31, 1996. This included 141 at WB&T, 3 at HFC, 9 at DCB and 6
at CBSC.
Increases in occupancy and furniture and equipment expenses were also due to the
Company's expanded operations including the expansion to the main office of WB&T
which was completed in October 1996 as well as the additions of the branch in
Hartsville and the addition of DCB and CBSC. These combined categories totaled
$475,000 for the first quarter of 1997 as compared to $283,000 in the first
quarter of 1996, a 67.8% increase. Data processing expenses increased $66,000,
or 90.4%, during the first quarter of 1997 as compared to the first quarter of
1996 due to the additions of DCB and CBSC as well as some computer system
upgrades including check imaging which was added in late 1996.
Other operating expenses for the three months ended March 31, 1997 increased
33.6% to $441,000 from $330,000 for the comparable period in 1996. These other
operating expenses include supplies, advertising, director fees, postage,
telephone expense and general operating costs which increased as a result of
continued growth of the Company.
INCOME TAXES
The Company's income tax expense was $387,000 for the three months ended March
31, 1997, a decrease of $9,000 over the comparable period in 1996. The
percentage of income tax expense to net income before taxes was 32.5% and 32.4%
for the quarters ended March 31, 1997 and 1996, respectively.
FINANCIAL CONDITION
BALANCE SHEET SUMMARY
The Company's total assets increased 10.4% to $303,884,000 during the three
months ended March 31, 1997 from $275,304,000 at December 31, 1996. Loans, net
of allowance for possible loan losses ("Net Loans"), totaled $195,965,000 at
March 31, 1997 or a 6.7% increase compared to $183,642,000 at December 31, 1996.
These increases
13
<PAGE> 14
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 as well
as growth at the two newer banks. Securities increased $2,976,000 or 5.4% to
$58,521,000 at March 31, 1997 from $55,545,000 at December 31, 1996. The
increase in securities was impacted by a change in fair market value of the
securities available-for-sale by $231,000 during the three month period ending
March 31, 1997. Federal funds sold increased $15,071,000 to $25,697,000 at March
31, 1997 from $10,626,000 at December 31, 1996 due to the growth in deposits at
WB&T as well as DCB and CBSC during the quarter.
Total liabilities increased by 11.0% to $282,031,000 at March 31, 1997 compared
to $254,052,000 at December 31, 1996. These increases were composed primarily of
a $27,105,000 or 11.1% increase in total deposits and an increase of $624,000 or
11.1% in securities sold under repurchase agreements during the three months
ended March 31, 1997.
The following schedule details selected information as to non-performing loans
of the Company at March 31, 1997 and December 31, 1996:
<TABLE>
<CAPTION>
March 31, 1997
--------------
Past due
90 days
or more Non-accrual
------- -----------
(In Thousands)
<S> <C> <C>
Real estate loans $ 298 $ 12
Installment loans 371 219
Credit cards 11 -
Commercial, financial
and agricultural loans 40 39
----------- -----------
Total 90 days or more past due and
non-accrual loans $ 720 $ 270
=========== ===========
Total 90 days or more past due
and non-accrual loans $ 990
Renegotiated loans -
-----------
Total 90 days or more past due, non-
accrual and renegotiated loans $ 990
===========
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
December 31, 1996
-----------------
Past due
90 days
or more Non-accrual
------- -----------
(In Thousands)
<S> <C> <C>
Real estate loans $ 344 59
Installment loans 370 177
Commercial, financial
and agricultural loans 80 24
----------- -----------
Total 90 days or more past due and
non-accrual loans $ 794 $ 260
=========== ===========
Total 90 days or more past due
and non-accrual loans $ 1,054
Renegotiated loans -
-----------
Total 90 days or more past due, non-
accrual and renegotiated loans $ 1,054
===========
</TABLE>
Non-performing loans at March 31, 1997 totaled $990,000, a decrease of 6.1% from
$1,054,000 at December 31, 1996.
At March 31, 1997, loans totaling $575,000 (including the above past due and
non-accrual loans) were included in the Company's internal classified loan list.
Of these loans $182,000 are secured by real estate, $186,000 are commercial and
$207,000 are installment loans. The collateral values securing these loans total
approximately $420,000 ($187,000 secured by real property, $150,000 relating to
commercial loans and $83,000 related to installment loans). The internally
classified loans have increased from $561,000 at December 31, 1996, to $575,000
at March 31, 1997. This increase is represented by an increase of $17,000 in
loans secured by real estate and a decrease of $3,000 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.
Bank premises and equipment net of accumulated depreciation increased $485,000
during the three months of 1997 to $10,099,000. Most of this increase can be
attributed to the expansion of the Tennessee Boulevard branch of WB&T as well as
the addition of a WB&T location in Hartsville.
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.
15
<PAGE> 16
Liquidity is the ability to maintain sufficient cash levels necessary to fund
operations, meet the requirements of depositors and borrowers and fund
attractive investment opportunities. Higher levels of liquidity bear
corresponding costs, measured in terms of lower yields on short-term, more
liquid earning assets and higher interest expense involved in extending
liability maturities.
Liquid assets include cash and cash equivalents and securities and money market
instruments that will mature within one year. At March 31, 1997, the Company's
liquid assets totaled $45,626,000.
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 Company. These meetings focus on the spread between
the Company's cost of funds and interest yields generated primarily through
loans and investments.
The Company's securities portfolio consists of earning assets that provide
interest income. For those securities classified as held-to-maturity the Company
has the ability and intent to hold these securities to maturity or on a
long-term basis. Securities classified as available-for-sale include securities
intended to be used as part of the Company's asset/liability strategy and/or
securities that may be sold in response to changes in interest rate, prepayment
risk, the need or desire to increase capital and similar economic factors.
Securities totaling approximately $18,507,000 mature or will be subject to rate
adjustments within the next twelve months.
A secondary source of liquidity is the Company's loan portfolio. At March 31,
1997 loans of approximately $125,158,000 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 $44,419,000 will become due during the next twelve months.
Certificates of deposit less than $100,000 of approximately $78,683,000 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
16
<PAGE> 17
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 March 31, 1997, total stockholders' equity was $21,853,000 or 7.2% of total
assets, which compares with $21,252,000 or 7.7% of total assets at December 31,
1996. The dollar increase in stockholders' equity during the three months ended
March 31, 1997 results from the Company's net income of $804,000 less $137,000
which is the net effect of the change in the net unrealized loss on securities
available for sale net of applicable income taxes along with cash dividends
declared of $482,000 (of which $416,000 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, WB&T, DCB and
CBSC. 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, WB&T, DCB and CBSC have none,
minority interest and a part of the allowance for possible loans losses). In
determining risk-based capital requirements, assets are assigned risk-weights of
0% to 100%, depending on regulatory assigned levels of credit risk associated
with such assets. The risk-based capital guidelines require the Company, WB&T,
DCB and CBSC to have a total risk-based capital ratio of 8.0% and a Tier I
risk-based capital ratio of 4.0%.
At March 31, 1997 the Company's total risk-based capital ratio was 14.0% and
their Tier I risk-based capital ratio was approximately 12.8% compared to ratios
of 15.0% and 13.7%, respectively at December 31, 1996.
At March 31, 1997 WB&T's total risk-based capital ratio was 11.4% and its Tier I
risk-based capital ratio was approximately 10.2% compared to ratios of 11.7% and
10.4%, respectively at December 31, 1996.
At March 31, 1997 DCB's total risk-based capital ratio was 33.8% and its Tier I
risk-based capital ratio was approximately 32.6% compared to ratios of 40.9% and
39.8%, respectively at December 31, 1996.
At March 31, 1997 CBSC's total risk-based capital ratio was 83.1% and its Tier I
risk-based capital ratio was approximately 82.0%
17
<PAGE> 18
compared to ratios of 256.9% and 256.9%, respectively at December 31, 1996.
The required leverage capital ratio (Tier I capital to average assets for the
most recent quarter) for the Company, WB&T, DCB and CBSC is 4.0%.
At March 31, 1997 the Company had a leverage ratio of 8.7%, compared to 9.2% at
December 31, 1996. At March 31, 1997 WB&T had a leverage ratio of 6.9%, compared
to 7.06% at December 31, 1996. At March 31, 1997 DCB had a leverage ratio of
19.8% compared to 24.6% at December 31, 1996. At March 31, 1997 CBSC had a
leverage ratio of 39.5% compared to 125.0% at December 31, 1996.
IMPACT OF INFLATION
Although interest rates are significantly affected by inflation, the inflation
rate has not materially impacted the Company's results of operations.
18
<PAGE> 19
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
During February 1997, WB&T opened a branch in Hartsville, Tennessee, operating
under the name "Trousdale Bank and Trust, an Office of Wilson Bank and Trust."
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.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILSON BANK HOLDING COMPANY
---------------------------
(Registrant)
DATE: May 12, 1997 /s/ Randall Clemons
------------- --------------------------------------------------
Randall Clemons, President and
Chief Executive Officer
DATE: May 12, 1997 /s/ Becky Taylor
------------- --------------------------------------------------
Becky Taylor, Vice President, Cashier
and Principal Accounting Officer
20
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