10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________________________________

FORM 10-K

__________________________________________________________

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

or 

☐ 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)

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Tennessee	62-1497076
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
623 West Main Street
Lebanon, Tennessee	37087
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(615) 444-2265

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $2.00 par value per share

 (Title of class)

__________________________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒

 No ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   Yes  ☐    No  ☐

The aggregate market value of the voting stock held by non-affiliates of the registrant on June 30, 2019, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $532,621,138.50. For purposes of this calculation, “affiliates” are considered to be the directors and executive officers of the registrant. The market value calculation was determined using $52.25 per share.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐   No  ☒

Shares of common stock, $2.00 par value per share, outstanding on March 12, 2020 were 10,888,745.

DOCUMENTS INCORPORATED BY REFERENCE

Part of Form 10-K	Documents from which portions are incorporated by reference
Part II	Portions of the Registrant’s Annual Report to Shareholders for the fiscal year ended December 31, 2019 are incorporated by reference into Items 1, 5, 6, 7, 7A and 8.
Part III	Portions of the Registrant’s Proxy Statement to be filed relating to the Registrant’s Annual Meeting of Shareholders to be held on April 28, 2020 are incorporated by reference into Items 10, 11, 12, 13 and 14.

PART I

Item 1. Business.

General

Wilson Bank Holding Company (the “Company”) was incorporated on March 17, 1992 under the laws of the State of Tennessee. The purpose of the Company was to acquire all of the issued and outstanding capital stock of Wilson Bank and Trust (the “Bank”) and act as a one-bank holding company. On November 17, 1992, the Company acquired 100% of the capital stock of the Bank pursuant to the terms of an agreement and plan of share exchange.

All of the Company’s banking business is conducted through the Bank, a state chartered bank organized under the laws of the State of Tennessee. The Bank, on December 31, 2019, had eleven full service banking offices located in Wilson County, Tennessee, one full service banking facility in Trousdale County, Tennessee, three full service banking offices in Davidson County, Tennessee, five full service banking offices located in Rutherford County, Tennessee, two full service banking offices in DeKalb County, Tennessee, two full service banking offices in Smith County, Tennessee, two full service banking office in Sumner County, Tennessee, one full service banking office in Putnam County, Tennessee and one full service banking office in Williamson County, Tennessee.

Management believes that Wilson County, Trousdale County, Davidson County, Rutherford County, DeKalb County, Smith County, Sumner County, Putnam County and Williamson County offer an environment for continued banking growth in the Company’s target market, which consists of local consumers, professionals and small-to-medium-sized businesses. The 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 Bank also offers custodial, trust and discount brokerage services to its customers. The Bank does not have a concentration of deposits obtained from a single person or entity or a small group of persons or entities, the loss of which would have a material adverse effect on the business of the Bank.

The Bank was organized in 1987 to provide Wilson County with a locally-owned, locally-managed commercial bank. Since its opening, the Bank has experienced a steady growth in deposits and loans as a result of providing personal, service-oriented banking services to its targeted market. For the year ended December 31, 2019, the Company reported net earnings of approximately $36.04 million and at December 31, 2019 it had total assets of approximately $2.79 billion.

Financial and Statistical Information

The Company’s audited consolidated financial statements, selected financial data and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report to Shareholders for the year ended December 31, 2019 filed as Exhibit 13.1 to this Form 10-K (the “2019 Annual Report”), are incorporated herein by reference.

Regulation and Supervision

The banking industry is generally subject to extensive regulatory oversight. Both the Company and the Bank are subject to extensive state and federal banking laws and regulations that impose restrictions on and provide for general regulatory oversight of the Company’s and the Bank’s operations. These laws and regulations are generally intended to protect depositors and borrowers, and may not necessarily protect shareholders. Many of these laws and regulations have undergone significant change in recent years.

In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law. The Dodd-Frank Act and the regulations promulgated thereunder implements far-reaching reforms of major elements of the financial landscape, particularly for larger financial institutions. Many of its most far-reaching provisions do not directly apply to community-based institutions like the Company or the Bank. For instance, provisions that regulate derivative transactions and limit derivatives trading activity of federally-insured institutions, enhance supervision of “systemically significant” institutions, impose new regulatory authority over hedge funds, limit proprietary trading by banks, and phase-out the eligibility of trust preferred securities for Tier 1 capital for institutions with greater than $15.0 billion in total assets are among the provisions that do not directly impact the Company or the Bank either because of exemptions for institutions below a certain asset size or because of the nature their operations. Those provisions that have been adopted or are expected to be adopted that have impacted and, in some cases, will continue to impact the Company and the Bank include the following:

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• Changing the assessment base for federal deposit insurance from the amount of insured deposits to consolidated assets less tangible capital, eliminating the ceiling and increasing the size of the floor of the Deposit Insurance Fund, and offsetting the impact of the increase in the minimum floor on institutions with less than $10 billion in assets.

• Making permanent the $250,000 limit for federal deposit insurance and increasing the cash limit of Securities Investor Protection Corporation protection to $250,000.

• Repealing the federal prohibition on payment of interest on demand deposits, thereby permitting depositing institutions to pay interest on business transaction and other accounts.

• Centralizing responsibility for consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau (the "CFPB") , responsible for implementing federal consumer protection laws, although banks below $10 billion in assets will continue to be examined and supervised for compliance with these laws by their primary federal banking regulator.

• Imposing new requirements for mortgage lending, including new minimum underwriting standards, prohibitions on certain yield-spread compensation to mortgage originators, special consumer protections for mortgage loans that do not meet certain provision qualifications, prohibitions and limitations on certain mortgage terms and various new mandated disclosures to mortgage borrowers.

• Applying the same leverage and risk-based capital requirements that apply to insured depository institutions to their holding companies.

• Permitting national and state banks to establish de novo interstate branches at any location where a bank based in that state could establish a branch, and requiring that bank holding companies and banks be well-capitalized and well managed in order to acquire banks located outside their home state.

• Imposing new limits on affiliated transactions and causing derivative transactions to be subject to lending limits.

• Implementing certain corporate governance revisions that apply to all public companies.

Failure to comply with the requirements of the Dodd-Frank Act would negatively impact the Company’s results of operations and financial condition and could limit its growth or expansion activities. While the Company cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on it or the Bank, such changes could be materially adverse to the Company’s investors.

The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the “BHC Act”) and is registered with the Board of Governors of the Federal Reserve System (the “FRB”). The Company is required to file annual reports and other information regarding its business operations and those of its bank subsidiary with, and is subject to examination by, the FRB. The Bank is chartered under the laws of the State of Tennessee and is subject to the supervision of, and is regularly examined by, the Tennessee Department of Financial Institutions (the “TDFI”). The Bank is also regularly examined by the Federal Deposit Insurance Corporation (“FDIC”), the government entity that insures the Bank’s deposits subject to applicable limitations.

Under the BHC Act, a bank holding company may not directly or indirectly acquire ownership or control of more than five percent of the voting shares or substantially all of the assets of any company, including a bank, without the prior approval of the FRB unless the bank holding company already owns a majority of such company. In addition, bank holding companies are generally prohibited under the BHC Act from engaging directly or indirectly in activities other than those of banking or managing or controlling banks, or furnishing services to their subsidiaries, subject to certain exceptions and the modernization of the financial services industry in connection with the passing of the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”). The GLB Act amended the BHC Act and expanded the activities in which bank holding companies and affiliates of banks are permitted to engage. Under the BHC Act, as amended by the GLB Act, the FRB is authorized to approve the ownership by a bank holding company of shares of any company whose activities have been determined by the FRB to be so closely related to banking or to managing or controlling banks as to be a proper incident thereto.

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Subject to various exceptions, the BHC Act and the Federal Change in Bank Control Act, together with related regulations, require FRB approval prior to any person or company acquiring "control" of a bank holding company. Control is conclusively presumed to exist if an individual or company acquires 25% or more of any class of voting securities of the bank holding company. Control is rebuttably presumed to exist if a person or company acquires 10% or more, but less than 25%, of any class of voting securities and either:

• The bank holding company has registered securities under Section 12 of the Securities Exchange Act of 1934; or

• No other person owns a greater percentage of that class of voting securities immediately after the transaction.

The Company’s common stock is registered under Section 12 of the Securities Exchange Act of 1934. The regulations provide a procedure for challenge of the rebuttable control presumption.

Under the GLB Act, a “financial holding company” may engage in activities the FRB determines to be financial in nature or incidental to such financial activity or complementary to a financial activity and not a substantial risk to the safety and soundness of such depository institutions or the financial system generally. Generally, such companies may engage in a wide range of securities activities and insurance underwriting and agency activities. The Company has not made application to the FRB to become a “financial holding company.”

Under the BHC Act, a bank holding company, which has not qualified or elected to become a financial holding company, is generally prohibited from engaging in or acquiring direct or indirect control of more than 5% of the voting shares of any company engaged in nonbanking activities unless, prior to the enactment of the GLB Act, the FRB found those activities to be so closely related to banking as to be a proper incident to the business of banking. Activities that the FRB has found to be so closely related to banking as to be a proper incident to the business of banking include:

• Factoring accounts receivable;

• Acquiring or servicing loans;

• Leasing personal property;

• Conducting discount securities brokerage activities;

• Performing selected data processing services;

• Acting as agent or broker in selling credit life insurance and other types of insurance in connection with credit transactions; and

• Underwriting certain insurance risks of the holding company and its subsidiaries.

Despite prior approval, the FRB may order a bank holding company or its subsidiaries to terminate any of these activities or to terminate its ownership or control of any subsidiary when it has reasonable cause to believe that the bank holding company’s continued ownership, activity or control constitutes a serious risk to the financial safety, soundness, or stability of any of its bank subsidiaries.

Under the Tennessee Bank Structure Act, a bank holding company which controls 30% or more of the total deposits (excluding certain deposits) in all federally insured financial institutions in Tennessee is prohibited from acquiring any bank in Tennessee. With prior regulatory approval, Tennessee law permits banks based in the state to either establish new or acquire existing branch offices throughout Tennessee. As a result of the Dodd-Frank Act, the Bank and other state-chartered or national banks generally may establish new branches in another state to the same extent as banks chartered in the other state may establish new branches in that state.

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The Company and the Bank are subject to certain restrictions imposed by the Federal Reserve Act and the Federal Deposit Insurance Act, respectively, on any extensions of credit to the bank holding company or its subsidiary bank, on investments in the stock or other securities of the bank holding company or its subsidiary bank, and on taking such stock or other securities as collateral for loans of any borrower. The Bank takes Company common stock as collateral for borrowings subject to the aforementioned restrictions.

Both the Company and the Bank are subject to the provisions of Section 23A of the Federal Reserve Act. Section 23A places limits on the amount of:

• A bank’s loans or extensions of credit, including purchases of assets subject to an agreement to repurchase, to or for the benefit of affiliates;

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• A bank’s investment in affiliates;

• Assets a bank may purchase from affiliates, except for real and personal property exempted by the FRB;

• The amount of loans or extensions of credit to third parties collateralized by the securities or obligations of affiliates;

• Transactions involving the borrowing or lending of securities and any derivative transaction that results in credit exposure to an affiliate; and

• A bank’s guarantee, acceptance or letter of credit issued on behalf of an affiliate.

The total amount of the above transactions is limited in amount, as to any one affiliate, to 10% of a bank’s capital and surplus and, as to all affiliates combined, to 20% of a bank’s capital and surplus. In addition to the limitation on the amount of these transactions, each of the above transactions must also meet specified collateral requirements. The Bank must also comply with other provisions designed to avoid the taking of low-quality assets.

The Company and the Bank are also subject to the provisions of Section 23B of the Federal Reserve Act which, among other things, prohibits an institution from engaging in the above transactions with affiliates unless the transactions are on terms substantially the same, or at least as favorable to the institution or its subsidiaries, as those prevailing at the time for comparable transactions with nonaffiliated companies.

The Bank is also subject to restrictions on extensions of credit to its executive officers, directors, principal stockholders and their related interests. These extensions of credit (1) must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties, and (2) must not involve more than the normal risk of repayment or present other unfavorable features.

The FRB has the power to prohibit dividends by bank holding companies if their actions constitute unsafe or unsound practices. The FRB has issued a policy statement expressing its view that a bank holding company should pay cash dividends only to the extent that the company’s net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the company’s capital needs, asset quality, and overall financial condition. As noted below, FRB regulations limit dividends, stock repurchases and discretionary bonuses to executive officers if a bank holding company’s capital is below the level of regulatory minimums plus the applicable capital conservation buffer.

The Company is a legal entity separate and distinct from the Bank. Over time, the principal source of the Company’s cash flow, including cash flow to pay dividends to the Company’s common stock shareholders, will be dividends that the Bank pays to the Company as its sole shareholder. Under Tennessee law, the Company is not permitted to pay dividends if, after giving effect to such payment, the Company would not be able to pay its debts as they become due in the normal course of business or the Company’s total assets would be less than the sum of its total liabilities plus any amounts needed to satisfy any preferential rights if the Company were dissolving. In addition, in deciding whether or not to declare a dividend of any particular size, the Company’s board of directors must consider the Company’s current and prospective capital, liquidity, and other needs.

Statutory and regulatory limitations also apply to the Bank’s payment of dividends to the Company. Under Tennessee law, the Bank in any one calendar year can only pay dividends to the Company in an amount equal to or less than the total amount of its net income for that calendar year combined with retained net income for the preceding two years. Payment of dividends in excess of this amount requires the consent of the Commissioner of the TDFI.

The payment of dividends by the Bank and the Company may also be affected by other factors, such as the requirement to maintain adequate capital above regulatory guidelines. The federal banking agencies have indicated that paying dividends that deplete a depository institution’s capital base to an inadequate level would be an unsafe and unsound banking practice. Under the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), a depository institution may not pay any dividend if payment would cause it to become undercapitalized or if it already is undercapitalized. Moreover, the federal agencies have issued policy statements that provide that bank holding companies and insured banks should generally only pay dividends out of current operating earnings.

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Under the Dodd-Frank Act, and previously under FRB policy, the Company is required to act as a source of financial strength for the Bank and to commit resources to support the Bank. This support can be required at times when it would not be in the best interest of the Company’s shareholders or creditors to provide it. Further, if the Bank’s capital levels were to fall below certain minimum regulatory guidelines, the Bank would need to develop a capital plan to increase its capital levels and the Company would be required to guarantee the Bank’s compliance with the capital plan in order for such plan to be accepted by the federal regulatory agency. In the event of bankruptcy, any commitment by the Company to a federal regulatory agency to maintain the capital of the Bank would be assumed by the bankruptcy trustee and entitled to a priority of payment.

Both the Company and the Bank are required to comply with the capital adequacy standards established by the FRB, in the Company’s case, and the FDIC, in the case of the Bank. The FRB has established a risk-based and a leverage measure of capital adequacy for bank holding companies, like the Company. The Bank is also subject to risk-based and leverage capital requirements adopted by the FDIC, which are substantially similar to those adopted by the FRB for bank holding companies. In addition, the FDIC and TDFI may require state banks that are not members of the FRB, like the Bank, to maintain capital at levels higher than those required by general regulatory requirements. Tennessee state banks are required to have the capital structure that the TDFI deems adequate, and the Commissioner of the TDFI as well as federal regulators may require a state bank (or its holding company in the case of federal regulators) to increase its capital levels to the point deemed adequate by the Commissioner or such other federal regulator before granting approval of a branch application, merger application or charter amendment.

The risk-based capital standards are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks and bank holding companies, to account for off-balance-sheet exposure, and to minimize disincentives for holding liquid assets. Assets and off-balance-sheet items, such as letters of credit and unfunded loan commitments, are assigned to broad risk categories, each with appropriate risk weights. The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance-sheet items.

In July 2013, the FRB and the FDIC approved final rules that substantially amend the regulatory capital rules applicable to the Bank and the Company, effective January 1, 2015. The final rules implemented the regulatory capital reforms of the Basel Committee on Banking Supervision reflected in "Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems" (Basel III) and changes required by the Dodd-Frank Act.

Under these rules, the leverage and risk-based capital ratios of bank holding companies may not be lower than the leverage and risk-based capital ratios for insured depository institutions. The final capital rules implementing Basel III, among other things, included new minimum risk-based capital and leverage ratios for banks and their holding companies. Moreover, these rules refined the definition of what constitutes “capital” for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital. Total capital consists of two components, Tier 1 capital and Tier 2 capital. Tier 1 capital generally consists of common stock (plus related surplus) and retained earnings, limited amounts of minority interest in the form of additional Tier 1 capital instruments, and non-cumulative preferred stock and related surplus, subject to certain eligibility standards, less goodwill and other specified intangible assets and other regulatory deductions. Cumulative preferred stock and trust preferred securities issued after May 19, 2010 no longer qualify as Tier 1 capital, but such securities issued prior to May 19, 2010, including in the case of bank holding companies with less than $15.0 billion in total assets as of December 31, 2009, trust preferred securities issued prior to that date, continue to count as Tier 1 capital subject to certain limitations. Tier 2 capital generally consists of perpetual preferred stock and related surplus not meeting the Tier 1 capital definition, qualifying subordinated debt, qualifying mandatorily convertible debt securities, and a limited amount of loan loss reserves.

The minimum capital level requirements applicable to bank holding companies and banks subject to the rules are: (i) a Tier 1 common equity (“CET1”) capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4% for all institutions. The rules also established a "capital conservation buffer" of 2.5% (consisting of CET1 capital) above the regulatory minimum capital ratios, and have resulted in the following minimum ratios: (i) a CET1 capital ratio of 7%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The phase-in of the capital conservation buffer requirement was fully implemented in January 2019. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if capital levels fall below minimum levels plus the buffer amounts. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.

Under the Basel III capital rules, CET1 capital consists of common stock and paid in capital and retained earnings. CET1 capital is reduced by goodwill, certain intangible assets, net of associated deferred tax liabilities, deferred tax assets that arise from tax credit and net operating loss carryforwards, net of any valuation allowance, and certain other items specified in the Basel III capital rules. The Basel III capital rules also provide for a number of deductions from and adjustments to CET1 capital. These include, for example, the requirement that mortgage servicing rights, deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks and significant investments in non-consolidated financial entities be deducted from CET1 capital to the extent that any one such category exceeds 10% of CET1 capital or all such categories in the aggregate exceed 15% of CET1 capital.

The final rules implementing Basel III allow banks and their holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and the Bank each opted out of this requirement.

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Additionally, the FDICIA establishes a system of prompt corrective action ("PCA") to resolve the problems of undercapitalized financial institutions. Under this system, the federal banking regulators have established five capital categories (well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized) into one of which all institutions are categorized. Federal banking regulators are required to take various mandatory supervisory actions and are authorized to take other discretionary actions with respect to institutions in the three undercapitalized categories. The severity of the action depends upon the capital category in which the institution is placed. Generally, subject to a narrow exception, the banking regulator must appoint a receiver or conservator for an institution that is critically undercapitalized. The federal banking agencies have specified by regulation the relevant capital level for each category (excluding the Basel III capital conservation buffer amounts), as set forth in the following table:

	CET1 capital ratio	Total risk-based capital ratio	Tier 1 risk-based capital ratio	Tier 1 leverage ratio
Well capitalized	6.5%	10%	8%	5%
Adequately capitalized	4.5%	8%	6%	4%
Undercapitalized	< 4.5%	< 8%	< 6%	< 4%
Significantly undercapitalized	< 3%	< 6%	< 4%	< 3%
Critically undercapitalized	Tangible Equity/Total Assets ≤ 2%

Failure to meet statutorily mandated capital guidelines or more restrictive ratios separately established for a depository institution or its holding company by its regulators could subject a bank or bank holding company to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting or renewing brokered deposits, limitations on the rates of interest that the institution may pay on its deposits, limitations on the ability to hire senior executive officers or add directors without prior approval and other restrictions on its business. As described above, significant additional restrictions can be imposed on FDIC-insured depository institutions that fail to meet applicable capital requirements.

A state regulated bank which is not a member of the Federal Reserve, like the Bank, is required to be “well-capitalized" under PCA in order to take advantage of expedited procedures on certain applications, such as branches and mergers, and to accept and renew brokered deposits without further regulatory approval.

The Basel III capital rules prescribe a standardized approach for risk weightings that expand the risk-weighting categories from the four Basel I-derived categories (0%, 20%, 50% and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity exposures, and resulting in higher risk weights for a variety of asset categories. Specific changes to the rules impacting the Company’s and the Bank’s determination of risk-weighted assets include, among other things:

• applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans;

• assigning a 150% risk weight to the unsecured portion of non-residential mortgage loans that are 90 days past due or otherwise on nonaccrual status;

• providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (previously set at 0%);

• providing for a risk weight, generally not less than 20% with certain exceptions, for securities lending transactions based on the risk weight category of the underlying collateral securing the transaction; and

• eliminating the 50% cap on the risk weight for OTC derivatives.

In December 2017, the Basel Committee on Banking Supervision published the last version of the Basel III accord, generally referred to as “Basel IV.” The Basel Committee stated that a key objective of the revisions incorporated into the framework is to reduce excessive variability of risk-weighted assets (“RWA”), which will be accomplished by enhancing the robustness and risk sensitivity of the standardized approaches for credit risk and operational risk, which will facilitate the comparability of banks’ capital ratios; constraining the use of internally modeled approaches; and complementing the risk-weighted capital ratio with a finalized leverage ratio and a revised and robust capital floor. Leadership of the federal banking agencies who are tasked with implementing Basel IV has indicated that it is considering how to appropriately apply these revisions in the United States. Although it is uncertain at this time, the Company anticipates some, if not all, of the Basel IV accord may be incorporated into the capital requirements framework applicable to the Company and the Bank.

Banking organizations must have appropriate capital planning processes, with proper oversight from the board of directors. Accordingly, pursuant to a separate, general supervisory letter from the FRB, bank holding companies are expected to conduct and document comprehensive capital adequacy analyses prior to the declaration of any dividends (on common stock, preferred stock, trust preferred securities or other Tier 1 capital instruments), capital redemptions or capital repurchases. Moreover, the federal banking agencies have adopted a joint agency policy statement, noting that the adequacy and effectiveness of a bank’s interest rate risk management process and the level of its interest rate exposures are critical factors in the evaluation of the bank’s capital adequacy. A bank with material weaknesses in its interest rate risk management process or high levels of interest rate exposure relative to its capital will be directed by the relevant federal banking agencies to take corrective actions.

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The FDIC has adopted a risk-based assessment system for insured depository institutions that takes into account the risks attributable to different categories and concentrations of assets and liabilities. Under the Dodd-Frank Act, the FDIC adopted regulations that base deposit insurance assessments on total assets less capital rather than deposit liabilities and include off-balance sheet liabilities of institutions and their affiliates in risk-based assessments.

The Dodd-Frank Act increased the basic limit on federal deposit insurance coverage to $250,000 per depositor at each insured depository institution. The Dodd-Frank Act also repealed the prohibition on paying interest on demand transaction accounts, but did not extend unlimited insurance protection for these accounts.

The FDIC may terminate its insurance of deposits if it finds that a depository institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

The Financial Reform, Recovery and Enforcement Act of 1989 provides that a holding company’s controlled insured depository institutions are liable for any loss incurred by the FDIC in connection with the default of, or any FDIC-assisted transaction involving, an affiliated insured bank or savings association.

The maximum permissible rates of interest on most commercial and consumer loans made by the Bank are governed by Tennessee’s general usury law and the Tennessee Industrial Loan and Thrift Companies Act (“Industrial Loan Act”). Certain other usury laws affect limited classes of loans, but the Company believes that the laws referenced above are the most significant. Tennessee’s general usury law authorizes a floating rate of 4% per annum over the average prime or base commercial loan rate, as published by the FRB from time to time, subject to an absolute 24% per annum limit. The Industrial Loan Act, which is generally applicable to most of the loans made by the Bank in Tennessee, authorizes an interest rate of up to 24% per annum and also allows certain loan charges, generally on a more liberal basis than does the general usury law.

The Bank's loan operations are also subject to federal laws, rules and regulatoins applicable to credit transactions, such as the:

• Federal Truth-In-Lending Act, governing disclosures of credit terms and costs to consumer borrowers giving consumers the right to cancel certain credit transactions, and defining requirements for servicing consumer loans secured by a dwelling;

• Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;

• Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies;

• Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected by collection agencies;

• Service Members' Civil Relief Act, governing the repayment terms of, and property rights underlying, secured obligations of persons in active military service;

• Rules and regulations of the various federal agencies charged with the responsibility of implementing the federal laws;

• Electronic Funds Transfer Act, which regulates fees and other terms of electronic funds transactions;

• Fair and Accurate Credit Transactions Act of 2003, which permanently extended the national credit reporting standards of the Fair Credit Reporting Act, and permits consumers, including the Bank’s customers, to opt out of information sharing among affiliated companies for marketing purposes and requires financial institutions, including banks, to notify a customer if the institution provides negative information about the customer to a national credit reporting agency or if the credit that is granted to the customer is on less favorable terms than those generally available; and

• the Real Estate Settlement and Procedures Act of 1974, which affords consumers greater protection pertaining to federally related mortgage loans by requiring, among other things, improved and streamlined good faith estimate forms including clear summary information and improved disclosure of yield spread premiums.

The Bank’s deposit operations are subject to the:

• Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;

• Electronic Funds Transfer Act and Regulation E issued by the Federal Reserve to implement that act, which govern automatic deposits to and withdrawals from deposit accounts and customers' rights and liabilities (including with respect to the permissibility of overdraft charges) arising from the use of automated teller machines and other electronic banking services;

• the Truth in Savings Act, which requires depository institutions to disclose the terms of deposit accounts to consumers;

• the Expedited Funds Availability Act, which requires financial institutions to make deposited funds available according to specified time schedules and to disclose funds availability policies to consumers; and

• the Check Clearing for the 21st Century Act (“Check 21”), which is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation. Check 21 created a new negotiable instrument called a substitute check and permits, but does not require, banks to truncate original checks, process check information electronically, and deliver substitute checks to banks that wish to continue receiving paper checks.

The Office of Foreign Assets Control (“OFAC”), which is an office in the U.S. Department of the Treasury, is responsible for helping to ensure that U.S. entities do not engage in transactions with “enemies” of the United States, as defined by various Executive Orders and Acts of Congress. OFAC publishes lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts; owned or controlled by, or acting on behalf of target countries, and narcotics traffickers. If a bank finds a name on any transaction, account or wire transfer that is on an OFAC list, it must freeze or block the transactions on the account. The Bank has appointed a compliance officer to oversee the inspection of its accounts and the filing of any notifications. The Bank actively checks high-risk OFAC areas such as new accounts, wire transfers and customer files. These checks are performed using software that is updated each time a modification is made to the lists provided by OFAC and other agencies of Specially Designated Nationals and Blocked Persons.

9

Pursuant to the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act  of 2001 (the “Patriot Act”), as amended, financial institutions are subject to prohibitions against specified financial transactions and account relationships as well as enhanced due diligence and "know your customer" standards in their dealings with foreign financial institutions and foreign customers. 

A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The Bank Secrecy Act (the "BSA") and its implementing regulations and parallel requirements of the federal banking regulators require the Bank to maintain a risk-based anti-money laundering (“AML”) program reasonably designed to prevent and detect money laundering and terrorist financing and to comply with the recordkeeping and reporting requirements of the BSA, including the requirement to report suspicious activity. The Patriot Act substantially broadened the scope of AML laws and regulations by imposing significant new compliance and due diligence obligations on financial institutions, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States. Financial institutions, including banks, are required under final rules implementing Section 326 of the Patriot Act to establish procedures for collecting standard information from customers opening new accounts and verifying the identity of these new account holders within a reasonable period of time. Financial institutions are also prohibited from entering into specified financial transactions and account relationships and must take certain steps to assist government agencies in detecting and preventing money laundering and to report certain types of suspicious transactions. In May 2016, Treasury’s Financial Crimes Enforcement Network issued rules under the BSA requiring financial institutions to identify the beneficial owners who own or control certain legal entity customers at the time an account is opened and to update their AML compliance programs to include risk-based procedures for conducting ongoing customer due diligence. The Bank currently has policies and procedures in place designed to comply with the Patriot Act, the BSA and the other regulations targeting terrorism and money laundering. 

The Community Reinvestment Act of 1977 (the “Community Reinvestment Act”) requires that, in connection with examinations of financial institutions within their respective jurisdictions, the FRB and the FDIC shall evaluate the record of each financial institution in meeting the credit needs of its local communities, including low- and moderate-income neighborhoods consistent with safe and sound operations of the institutions. These facts are also considered in evaluating mergers, acquisitions, and applications to open a branch or facility. Failure to adequately meet these criteria could impose additional requirements and limitations on the Bank. Additionally, banks are required to publicly disclose the terms of various Community Reinvestment Act-related agreements. The Bank received a “satisfactory” Community Reinvestment Act rating from its primary federal regulator on its most recent regulatory examination.

The Bank is also subject to fair lending requirements and reporting obligations involving its home mortgage lending operations. Fair lending laws prohibit discrimination in the provision of banking services, and bank regulators have increasingly focused on the enforcement of these laws. Fair lending laws include the Equal Credit Opportunity Act of 1974 and the Fair Housing Act of 1968, which prohibit discrimination in credit and residential real estate transactions on the basis of prohibited factors including, among others, race, color, national origin, gender and religion. The Bank may be liable, either through administrative enforcement or private civil actions, for policies that result in a disparate treatment of or have a disparate impact on a protected class of applicants or borrowers. If a pattern or practice of lending discrimination is alleged by a regulator, then that agency may refer the matter to the U.S. Department of Justice (“DOJ”) for investigation. Pursuant to a Memorandum of Understanding, the DOJ and  (“ the CFPB”) have agreed to share information, coordinate investigations and generally commit to strengthen their coordination efforts. The Bank is required to have a fair lending program that is of sufficient scope to monitor the inherent fair lending risk of the institution and that appropriately remediates issues which are identified.

State and federal banking regulators have issued various policy statements and, in some cases, regulations, emphasizing the importance of technology risk management and supervision. Such policy statements and regulations indicate that financial institutions should design multiple layers of security controls to establish lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing internet-based services of the financial institution. A financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the institution’s operations after a cyber-attack involving destructive malware. A financial institution is expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the institution or its critical service providers fall victim to this type of cyber-attack.

Federal statutes and regulations, including the GLB Act and the Right to Financial Privacy Act of 1978, limit the Company’s and the Bank’s ability to disclose non-public information about consumers, customers and employees to nonaffiliated third parties. Specifically, the GLB Act requires disclosure of the Company’s privacy policies and practices relating to sharing non-public information and enables retail customers to opt out of the institution’s ability to share information with unaffiliated third parties under certain circumstances. The GLB Act also requires the Company and the Bank to implement a comprehensive information security program that includes administrative, technical and physical safeguards to ensure the security and confidentiality of customer records and information and, if applicable state law is more protective of customer privacy than the GLB Act, financial institutions, including the Bank, will be required to comply with such state law. An increasing number of state laws and regulations have been enacted in recent years to implement privacy and cybersecurity standards and regulations, including data breach notification and data privacy requirements. This trend of state-level activity is expected to continue to expand, requiring continual monitoring of developments in the states in which our customers are located and ongoing investments in our information systems and compliance capabilities.

Other laws and regulations impact the Company’s and the Bank’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes. These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. In connection with the regulations governing the privacy of consumer financial information, the federal banking agencies, including the FDIC, have adopted guidelines for establishing information security standards and programs to protect such information. In addition, the Bank has established a privacy policy that it believes promotes compliance with the federal requirements.

Examination and enforcement by the state and federal banking agencies, and other such enforcement authorities, for non-compliance with consumer protection laws and their implementing regulations have increased and become more intense. The advent of the CFPB further heightens oversight and review of compliance with consumer protection laws and regulations. Due to these heightened regulatory concerns, including increased enforcement of the Community Reinvestment Act by the federal banking agencies, and new powers and authority of the CFPB, the Bank may incur additional compliance costs or be required to expend additional funds for investments in its local community.

10

The Company’s securities are registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As such, the Company is subject to the information, proxy solicitation, insider trading, corporate governance, and other requirements and restrictions of the Exchange Act. As a public company, the Company is also subject to the accounting oversight and corporate governance requirements of the Sarbanes-Oxley Act of 2002, including, among other things, required executive certification of financial presentations, increased requirements for board audit committees and their members, and enhanced requirements relating to disclosure controls and procedures and internal control over financial reporting.

In 2018, the U.S. Congress passed, and the President signed into law, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (the “Growth Act”). The Growth Act, among other things, required the federal banking agencies to issue regulations allowing community bank organizations with total assets of less than $10.0 billion and limited amounts of certain assets and off-balance sheet exposures to access a simpler capital regime focused on a bank’s Tier 1 leverage capital levels rather than risk-based capital levels that are the focus of the capital rules issued under the Dodd-Frank Act implementing Basel III.

In October 2019, the federal banking agencies approved final rules that, as of January 1, 2020, exempt from the risk-based and leverage capital requirements of the capital rules issued under the Dodd-Frank Act any qualifying community bank and its holding company that have leverage ratios (calculated as Tier 1 capital over average total consolidated assets) of greater than 9 percent and hold 25% or less of total assets in off-balance sheet exposures and 5% or less of total assets in trading assets and liabilities. As such, a qualifying community banking organization and its holding company that have chosen the proposed framework are no longer required to calculate the generally applicable risk-based and leverage capital requirements. Such a bank is also considered to have met the capital ratio requirements to be well capitalized for the agencies' PCA rules provided it has a community bank leverage ratio greater than 9 percent.

The Growth Act also raised the eligibility for the small bank holding company policy statement to $3 billion of assets from $1 billion.

The Company is currently evaluating whether or not it will take advantage of these new capital rules under the Growth Act.

New regulations and statutes are regularly proposed that contain wide-ranging provisions for altering the structures, regulations and competitive relationships of the nation’s financial institutions. Throughout 2017, 2018 and 2019, the U.S. Congress has debated, proposed and in some cases, passed changes to the financial institution regulatory landscape, including the Growth Act and other proposed amendments to the Dodd-Frank Act, including raising the asset threshold levels at which financial institutions and their holding companies become subject to enhanced regulatory oversight and compliance requirements. Federal banking regulators have also proposed changes to certain of the rules they adopted pursuant to the Dodd-Frank Act. The Company cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which the Company’s business may be affected by any new regulation or statute or change in applicable rules or regulations. Even if modifications are enacted to existing or proposed regulations, including raising certain assets thresholds above those currently in place, the Company may continue to face enhanced scrutiny from its regulators who may expect it to continue to comply with the current, more stringent requirements as part of their safety and soundness and compliance examinations and general oversight of the Company’s operations.

Competition

The banking business is highly competitive. The Company’s primary market areas consist of Wilson, Trousdale, Davidson, Rutherford, DeKalb, Smith, Sumner, Putnam and Williamson Counties in Tennessee. The Company competes with numerous commercial banks and savings institutions with offices in these market areas. In addition to these competitors, the Company competes for loans with insurance companies, regulated small loan companies, credit unions, and certain government agencies. The Company also competes with numerous companies and financial institutions engaged in similar lines of business, such as mortgage banking companies, brokerage companies and lending companies. Also, technology has lowered barriers to entry and made it possible for nonbanks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems. Many of our non-bank competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than the Bank can. Continued consolidation in the financial services industry, due in part to the regulatory changes made under the Growth Act, including the increased asset threshold for required stress testing, has contributed to increases in the number of large competitors we face in our markets. Some of the Company’s competitors have significantly greater financial resources and offer a greater number of branch locations. To offset this advantage of its larger competitors, the Company believes it can attract customers by providing loan and management decisions at the local level. The Company does not experience significant seasonal trends in its operations.

Monetary Policies

The results of operations of the Bank and the Company are affected by the policies of the regulatory authorities, particularly the FRB. An important function of the FRB is to regulate the national supply of bank credit in order to combat recession and curb inflation. Among the instruments used to attain these objectives are open market operations in U.S. government securities, changes in the discount rate on bank borrowings and changes in reserve requirements relating to member bank deposits. These instruments are used in varying combinations to influence overall growth and distribution of bank loans, investments and deposits, and their use may also affect interest rates charged on loans and paid for deposits. Policies of the regulatory agencies have had a significant effect on the operating results of commercial banks in the past and are expected to do so in the future. The effect of such policies upon the future business and results of operations of the Company and the Bank cannot be predicted with accuracy.

Employment

As of March 12, 2020, the Company and its subsidiary collectively employed 530 full-time equivalent employees.

11

Available Information

The Company’s Internet website is http://www.wilsonbank.com. Please note that the Company’s website address is provided as an inactive textual reference only. The Company makes available free of charge on its website the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after it files or furnishes such materials to the Securities and Exchange Commission (the “SEC”). The information provided on the Company’s website is not part of this report, and is therefore not incorporated by reference herein unless such information is otherwise specifically referenced elsewhere in this report.

Statistical Information Required by Guide 3

The statistical information required to be displayed under Item 1 pursuant to Guide 3, “Statistical Disclosure by Bank Holding Companies,” of the Exchange Act Industry Guides is incorporated herein by reference to the Consolidated Financial Statements and the notes thereto and the Management’s Discussion and Analysis sections in the Company’s 2019 Annual Report. Certain information not contained in the Company’s 2019 Annual Report, but required by Guide 3, is contained in the tables immediately following:

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12

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

 I. Distribution of Assets, Liabilities and Stockholders' Equity;

Interest Rates and Interest Differential 

The schedule which follows indicates the average balances for each major balance sheet item, an analysis of net interest income and net interest expense and the change in interest income and interest expense attributable to changes in volume and changes in rates.

The difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities is net interest income, which is the Company's gross margin. Analysis of net interest income is more meaningful when income from tax-exempt earning assets is adjusted to a tax equivalent basis. Accordingly, the following schedule includes a tax equivalent adjustment of tax-exempt earning assets, assuming a weighted average Federal income tax rate of 34% for 2017 and 21% for 2019 and 2018.

In this schedule, "change due to volume" is the change in volume multiplied by the interest rate for the prior year. "Change due to rate" is the change in interest rate multiplied by the volume for the prior year. Changes in interest income and expense not due solely to volume or rate changes have been allocated to the “change due to volume” and “change due to rate” in proportion to the relationship of the absolute dollar amounts of the change in each category.

Non-accrual loans have been included in the loan category. Loan fees of $7,751,000, $7,400,000 and $6,773,000 for 2019, 2018 and 2017, respectively, are included in loan income and represent an adjustment of the yield on these loans.

	Dollars In Thousands
	2019								2018								2019/2018 Change
	Average						Income/		Average						Income/		Due to			Due to
	Balance			Rates/Yields			Expense		Balance			Rates/Yields			Expense		Volume			Rate			Total
Loans, net of unearned interest (2) (3)	$	2,030,861			5.31	%		105,783	$	1,898,772			5.11	%		94,917	$	6,873			3,993			10,866
Investment securities—taxable		347,873			2.46			8,559		281,154			2.19			6,158		1,580			821			2,401
Investment securities—tax exempt		38,859			1.99			773		40,675			2.51			1,020		(44	)		(203	)		(247	)
Taxable equivalent adjustment (1)		—			0.53			205		—			0.66			271		(12	)		(54	)		(66	)
Total tax-exempt investment securities		38,859			2.52			978		40,675			3.17			1,291		(56	)		(257	)		(313	)
Total investment securities		386,732			2.47			9,537		321,829			2.31			7,449		1,524			564			2,088
Loans held for sale		9,613			3.38			325		5,343			3.44			184		144			(3	)		141
Federal funds sold		14,645			1.88			275		4,801			1.73			83		184			8			192
Interest bearing deposits		121,399			1.78			2,164		55,911			1.75			979		1,167			18			1,185
Restricted equity securities		4,241			4.67			198		3,012			6.11			184		64			(50	)		14
Total earning assets		2,567,491			4.69			118,282		2,289,668			4.62			103,796		9,956			4,530			14,486
Cash and due from banks		10,480								17,820
Allowance for loan losses		(28,073	)							(25,365	)
Bank premises and equipment		58,545								57,712
Other assets		72,487								70,071
Total assets	$	2,680,930							$	2,409,906

13

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

	Dollars In Thousands
	2019							2018							2019/2018 Change
	Average					Income/		Average					Income/		Due to			Due to
	Balance		Rates/Yields			Expense		Balance		Rates/Yields			Expense		Volume			Rate		Total
Deposits:
Negotiable order of withdrawal accounts	$	526,026		0.44	%		2,311	$	503,312		0.36	%		1,823	$	85			403		488
Money market demand accounts		749,366		0.80			6,030		668,007		0.52			3,487		467			2,076		2,543
Time deposits		642,513		2.01			12,896		556,054		1.43			7,944		1374			3,578		4,952
Other savings deposits		136,912		0.60			825		139,664		0.53			744		(15	)		96		81
Total interest-bearing deposits		2,054,817		1.07			22,062		1,867,037		0.75			13,998	$	1,911			6,153		8,064
Federal Home Loan Bank advances		21,712		2.68			581		—		—			—		581			—		581
Securities sold under repurchase agreements		—		—			—		1,090		1.47			16		(16	)		—		(16	)
Federal funds purchased		597		0.67			4		588		0.68			4		—			—		—
Total interest-bearing liabilities		2,077,126		1.09			22,647		1,868,715		0.75			14,018		2,476			6,153		8,629
Demand deposits		270,136							250,328
Other liabilities		14,994							12,342
Stockholders’ equity		318,674							278,521
Total liabilities and stockholders’ equity	$	2,680,930						$	2,409,906
Net interest income							95,635							89,778
Net yield on earning assets (4)				3.81	%						4.01	%
Net interest spread (5)				3.60	%						3.87	%

(1)	The tax equivalent adjustment for 2019 and 2018 have been computed using a 21% Federal tax rate.
(2)	Yields on loans and total earning assets include the impact of State income tax credits related incentive loans at below market rates and tax exempt loans to municipalities.
(3)	Loan fees of $7.8 million and $7.4 million are included in interest income in 2019 and 2018.
(4)	Annualized net interest income on a tax equivalent basis divided by average interest-earning assets.
(5)	Average interest rate on interest-earning assets less average interest rate on interest-bearing liabilities.

14

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

	Dollars In Thousands
	2018								2017								2018/2017 Change
	Average						Income/		Average						Income/		Due to			Due to
	Balance			Rates/Yields			Expense		Balance			Rates/Yields			Expense		Volume			Rate			Total
Loans, net of unearned interest (2) (3)	$	1,898,772			5.11	%		94,917	$	1,727,499			4.84	%		83,120	$	7,623			4,174			11,797
Investment securities—taxable		281,154			2.19			6,158		277,511			1.94			5,397		72			689			761
Investment securities—tax exempt		40,675			2.51			1,020		61,868			1.95			1,208		(478	)		290			(188	)
Taxable equivalent adjustment (1)		—			0.66			271		—			1.01			622		(187	)		(164	)		(351	)
Total tax-exempt investment securities		40,675			3.17			1,291		61,868			2.96			1,830		(665	)		126			(539	)
Total investment securities		321,829			2.31			7,449		339,379			2.13			7,227		(593	)		815			222
Loans held for sale		5,343			3.44			184		8,657			3.74			324		(116	)		(24	)		(140	)
Federal funds sold		4,801			1.73			83		10,475			0.93			97		(70	)		56			(14	)
Interest bearing deposits		55,911			1.75			979		77,606			0.93			723		(245	)		501			256
Restricted equity securities		3,012			6.11			184		3,012			5.01			151		—			33			33
Total earning assets		2,289,668			4.62			103,796		2,166,628			4.25			91,642		6,599			5,555			12,154
Cash and due from banks		17,820								10,581
Allowance for loan losses		(25,365	)							(23,174	)
Bank premises and equipment		57,712								48,888
Other assets		70,071								68,125
Total assets	$	2,409,906							$	2,271,048

15

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

	Dollars In Thousands
	2018							2017							2018/2017 Change
	Average					Income/		Average					Income/		Due to			Due to
	Balance		Rates/Yields			Expense		Balance		Rates/Yields			Expense		Volume			Rate		Total
Deposits:
Negotiable order of withdrawal accounts	$	503,312		0.36	%		1,823	$	478,691		0.27			1,308	$	70			445		515
Money market demand accounts		668,007		0.52			3,487		635,072		0.26			1,681		91			1,715		1,806
Time deposits		556,054		1.43			7,944		519,732		1.03			5,353		396			2,195		2,591
Other savings deposits		139,664		0.53			744		132,557		0.40			530		29			185		214
Total interest-bearing deposits		1,867,037		0.75			13,998		1,766,052		0.50			8,872		586			4,540		5,126
Securities sold under repurchase agreements		1,090		1.47			16		1,382		0.65			9		(2	)		9		7
Federal funds purchased		588		0.68			4		1,176		0.68			8		(4	)		—		(4	)
Total interest-bearing liabilities		1,868,715		0.75			14,018		1,768,610		0.50			8,889		580			4,549		5,129
Demand deposits		250,328							231,409
Other liabilities		12,342							11,352
Stockholders’ equity		278,521							259,677
Total liabilities and stockholders’ equity	$	2,409,906						$	2,271,048
Net interest income							89,778							82,753
Net yield on earning assets (4)				4.01	%						3.84	%
Net interest spread (5)				3.87	%						3.75	%

(1)	The tax equivalent adjustment for 2018 has been computed using a 21% Federal tax rate; whereas, 2017 has been computed using a 34% Federal tax rate.
(2)	Yields on loans and total earning assets include the impact of State income tax credits related incentive loans at below market rates and tax exempt loans to municipalities.
(3)	Loan fees of $7.4 million and $6.8 million are included in interest income in 2018 and 2017.
(4)	Annualized net interest income on a tax equivalent basis divided by average interest-earning assets.
(5)	Average interest rate on interest-earning assets less average interest rate on interest-bearing liabilities.

16

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

II. Investment Portfolio:

A.    Investment securities at December 31, 2019 consist of the following:

	Securities Available-For-Sale
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
U.S. Government-sponsored enterprises (GSEs)	$	59,735		48		204		59,579
Mortgage-backed securities		265,648		2,300		635		267,313
Asset-backed securities		27,531		1		303		27,229
Obligations of states and political subdivisions		67,293		559		828		67,024
	$	420,207		2,908		1,970		421,145

17

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

II. Investment Portfolio, Continued:

A.    Investment securities at December 31, 2018 consist of the following, continued:

	Securities Available-For-Sale
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
U.S. Government-sponsored enterprises (GSEs)	$	71,446		—		2,979		68,467
Mortgage-backed securities		152,375		9		4,874		147,510
Asset-backed securities		22,534		10		844		21,700
Obligations of states and political subdivisions		49,328		22		1,775		47,575
	$	295,683		41		10,472		285,252

18

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

II. Investment Portfolio, Continued:

A.    Investment securities at December 31, 2017 consist of the following, continued:

	Securities Held-To-Maturity
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Mortgage-backed securities	$	9,886		31		156		9,761
Obligations of states and political subdivisions		22,594		66		310		22,350
	$	32,480		97		466		32,111

	Securities Available-For-Sale
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
U.S. Government-sponsored enterprises (GSEs)	$	74,690		4		1,714		72,980
Mortgage-backed securities		200,175		302		2,551		197,926
Asset-backed securities		26,387		—		789		25,598
Obligations of states and political subdivisions		37,197		7		992		36,212
	$	338,449		313		6,046		332,716

19

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

II. Investment Portfolio, Continued:    

B. The following schedule details the contractual maturities and weighted average yields of investment securities of the Company. Actual maturities may differ from contractual maturities of mortgage and asset-backed securities because the mortgages or other assets underlying such securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories noted below as of December 31, 2019:

Available-For-Sale Securities	Amortized Cost		Estimated Market Value		Weighted Average Yields
	(In Thousands, Except Yields)
Mortgage and asset-backed securities	$	293,179		294,542		2.33	%
U.S. Government-sponsored enterprises (GSEs):
Less than one year		—		—		—
One to three years		8,950		8,944		1.77
Three to five years		8,746		8,737		1.96
Five to ten years		35,505		35,402		2.41
More than ten years		6,534		6,496		2.65
Total U.S. Government-sponsored enterprises (GSEs)		59,735		59,579		2.27
Obligations of states and political subdivisions*:
Less than one year		472		471		1.54
One to three years		—		—		—
Three to five years		636		638		2.25
Five to ten years		21,121		21,220		2.39
More than ten years		45,064		44,695		3.24
Total obligations of states and political subdivisions		67,293		67,024		2.95
Total available-for-sale securities	$	420,207		421,145		2.42	%

* Weighted average yield is stated on a tax-equivalent basis, assuming a weighted average Federal income tax rate of 21%.

20

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

III. Loan Portfolio:

A.    Loan Types

The following schedule details the loans of the Company at December 31, 2019, 2018, 2017, 2016 and 2015:

	In Thousands
	2019			2018			2017			2016			2015
Commercial, financial and agricultural	$	108,883		$	89,554			59,266			50,437			41,036
Real estate—construction		425,185			518,245			392,039			297,315			275,319
Real estate—mortgage		1,504,140			1,393,641			1,263,696			1,303,918			1,110,989
Installment		54,834			48,759			43,540			44,755			43,770
Total loans		2,093,042			2,050,199			1,758,541			1,696,425			1,471,114
Deferred loan fees		(7,141	)		(7,020	)		(7,379	)		(6,606	)		(5,035	)
Total loans, net of deferred fees		2,085,901			2,043,179			1,751,162			1,689,819			1,466,079
Less allowance for loan losses		(28,726	)		(27,174	)		(23,909	)		(22,731	)		(22,900	)
Net loans	$	2,057,175		$	2,016,005			1,727,253			1,667,088			1,443,179

21

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

III. Loan Portfolio, Continued:

B.    Maturities and Sensitivities of Loans to Changes in Interest Rates

The following table classifies the Company's fixed and variable rate loans at December 31, 2019 according to contractual maturities of: (1) one year or less, (2) after one year through five years, and (3) after five years. The table also classifies the Company's variable rate loans pursuant to the contractual repricing dates of the underlying loans (dollars in thousands):

	Amounts at December 31, 2019
							At December 31,
	Fixed Rates		Variable Rates		Totals		2019
Based on contractual maturity:
Due within one year	$	205,817		70,290		276,107		13.2	%
Due in one year to five years		166,766		139,425		306,191		14.6
Due after five years		79,468		1,431,276		1,510,744		72.2
Totals	$	452,051		1,640,991		2,093,042		100.0	%
Based on contractual repricing dates:
Daily floating rate	$	—		26,546		26,546		1.3	%
Due within one year		205,817		494,487		700,304		33.4
Due in one year to five years		166,766		956,947		1,123,713		53.7
Due after five years		79,468		163,011		242,479		11.6
Totals	$	452,051		1,640,991		2,093,042		100.0	%

The following table represents the contractual maturities of the loan portfolio as of December 31, 2019 (dollars in thousands):

	Due Within One		Due in One to Five		Due After Five
	Year		Years		Years		Total
Commercial, financial and agricultural	$	16,790		45,425		46,668		108,883
Real estate—construction		157,530		95,982		171,673		425,185
Real estate—mortgage		84,418		136,514		1,283,208		1,504,140
Installment		17,369		28,271		9,194		54,834
	$	276,107		306,192		1,510,743		2,093,042

22

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

III. Loan Portfolio, Continued:

C.    Risk Elements

The following schedule details selected information as to non-performing loans of the Company at December 31, 2019, 2018, 2017, 2016 and 2015:

	In Thousands, Except Percentages
	2019			2018		2017		2016		2015
Non-accrual loans:
Commercial, financial and agricultural	$	—			—		—		—		—
Real estate—construction		—			—		—		—		—
Real estate—mortgage		2,610			2,050		2,039		3,565		4,909
Installment		—			—		1		—		—
Total non-accrual	$	2,610			2,050		2,040		3,565		4,909
Loans 90 days past due still accruing:
Commercial, financial and agricultural	$	—			24		—		14		41
Real estate—construction		594			32		113		22		—
Real estate—mortgage		1,867			1,058		716		1,642		1,883
Installment		46			95		148		129		54
Total loans 90 days past due still accruing	$	2,507			1,209		977		1,807		1,978
Troubled debt restructurings, excluding those included in non-accrual above	$	2,886			2,492		4,084		4,596		4,104
Total non-performing loans	$	8,003			5,751		7,101		9,968		10,991
Total loans, net of deferred fees	$	2,085,901			2,043,179		1,751,162		1,689,819		1,466,079
Percentage of total non-performing loans to total loans outstanding, net of deferred fees		0.38	%		0.28		0.41		0.59		0.75
Other real estate owned	$	697			1,357		1,635		4,527		5,410

23

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

III. Loan Portfolio, Continued:

C.Risk Elements, Continued:

The accrual of interest income is discontinued when it is determined that collection of interest is less than probable or the collection of any amount of principal is doubtful. The decision to place a loan on a non-accrual status is based on an evaluation of the borrower’s financial condition, collateral liquidation value, economic and business conditions and other factors that affect the borrower’s ability to pay. At the time a loan is placed on a non-accrual status, the accrued but unpaid interest is also evaluated as to collectability. If collectability is doubtful, the unpaid interest is charged off. Thereafter, interest on non-accrual loans is recognized only as received. Non-accrual loans totaled $2,610,000 at December 31, 2019, $2,050,000 at December 31, 2018, $2,040,000 at December 31, 2017, $3,565,000 at December 31, 2016 and $4,909,000 at December 31, 2015. The additional interest income on non-accrual loans that would have been recorded for the year ended December 31, 2019 if the loans had been current totaled $85,000 compared to $210,000 in 2018, $117,000 in 2017, $202,000 in 2016 and $291,000 in 2015. The amount of interest and fee income recognized on total loans during 2019 totaled $105,783,000 as compared to $94,917,000 in 2018, $83,120,000 in 2017, $77,024,000 in 2016 and $71,543,000 in 2015.

At December 31, 2019, loans, which include the above non-accrual loans, totaling $10,651,000 were included in the Company’s internal classified loan list. Of these loans $10,432,000 are real estate secured and $219,000 are secured by various other types of collateral. The value collateralizing these loans is estimated by management to be approximately $18,814,000 ($18,631,000 related to real property securing real estate loans and $183,000 related to the various other types of loans). Such loans are listed as classified when information obtained about possible credit problems of the borrowers 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.

At December 31, 2019, real estate construction and mortgage loans made up 20.3% and 71.9%, respectively, of the Company’s loan portfolio.

At December 31, 2019 and 2018, other real estate owned totaled $697,000 and $1,357,000 , respectively.

There were no material amounts of other interest-bearing assets (interest-bearing deposits with other banks, municipal bonds, etc.) at December 31, 2019 which would be required to be disclosed as past due, non-accrual, restructured or potential problem loans, if such interest-bearing assets were loans.

24

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

IV. Summary of Loan Loss Experience:

The following schedule details selected information related to the allowance for loan loss account of the Company at December 31, 2019, 2018, 2017, 2016 and 2015 and for the years then ended:

	In Thousands, Except Percentages
	2019			2018			2017			2016			2015
Allowance for loan losses at beginning of period	$	27,174			23,909			22,731			22,900			22,572
Charge-offs:
Commercial, financial and agricultural		(15	)		—			(16	)		(11	)		—
Real estate – construction		—			(19	)		—			(66	)		(26	)
Real estate – mortgage		(188	)		(492	)		(132	)		(209	)		(414	)
Installment		(1,160	)		(1,152	)		(1,074	)		(674	)		(664	)
		(1,363	)		(1,663	)		(1,222	)		(960	)		(1,104	)
Recoveries:
Commercial, financial and agricultural		15			3			6			15			7
Real estate – construction		423			88			121			34			39
Real estate – mortgage		74			116			174			131			767
Installment		363			423			418			232			231
		875			630			719			412			1,044
Net loan charge-offs		(488	)		(1,033	)		(503	)		(548	)		(60	)
Provision for loan losses charged to expense		2,040			4,298			1,681			379			388
Allowance for loan losses at end of period	$	28,726			27,174			23,909			22,731			22,900
Total loans, net of deferred fees, at end of year	$	2,085,901			2,043,179			1,751,162			1,689,819			1,466,079
Average total loans outstanding, net of deferred fees, during year	$	2,030,861			1,898,772			1,727,499			1,571,528			1,418,561
Net charge-offs as a percentage of average total loans outstanding, net of deferred fees, during year		0.02	%		0.05			0.03			0.04			0.01
Ending allowance for loan losses as a percentage of total loans outstanding net of deferred fees, at end of year		1.38	%		1.33			1.37			1.35			1.56

25

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

 IV.    Summary of Loan Loss Experience, Continued:

The allowance for loan losses is an amount that management believes will be adequate to absorb possible losses on existing loans that may become uncollectible. The provision for loan losses charged to operating expense is based on past loan loss experience and other factors which, in management’s judgment, deserve current recognition in estimating possible loan losses. Such other factors considered by management include growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for loan losses to outstanding loans, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and current economic conditions that may affect the borrower’s ability to pay.

Management conducts a continuous review of all loans that are delinquent, previously charged down or which are determined to be potentially uncollectible. Loan classifications are reviewed periodically by a person independent of the lending function. The Board of Directors of the Company periodically reviews the adequacy of the allowance for loan losses.

The following detail provides a breakdown of the allocation of the allowance for loan losses:

	December 31, 2019					December 31, 2018
			Percent of					Percent of
			Loans In					Loans In
	In		Each Category			In		Each Category
	Thousands		To Total Loans			Thousands		To Total Loans
Commercial, financial and agricultural	$	1,058		5.2	%	$	682		4.3	%
Real estate—construction		5,997		20.3			7,084		25.3
Real estate—mortgage		20,574		71.9			18,601		68.0
Installment		1,097		2.6			807		2.4
	$	28,726		100	%	$	27,174		100	%

	December 31, 2017					December 31, 2016
			Percent of					Percent of
			Loans In					Loans In
	In		Each Category			In		Each Category
	Thousands		To Total Loans			Thousands		To Total Loans
Commercial, financial and agricultural	$	411		3.4	%	$	386		3.0	%
Real estate—construction		6,094		22.3			5,387		17.5
Real estate—mortgage		16,738		71.9			16,396		76.9
Installment		666		2.4			562		2.6
	$	23,909		100	%	$	22,731		100	%

	December 31, 2015
			Percent of
			Loans In
	In		Each Category
	Thousands		To Total Loans
Commercial, financial and agricultural	$	339		2.8	%
Real estate—construction		5,136		18.7
Real estate—mortgage		16,983		75.5
Installment		442		3.0
	$	22,900		100	%

26

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

V. Deposits:

The average amounts and average interest rates for deposits for 2019, 2018 and 2017 are detailed in the following schedule:

	2019					2018					2017
	Average					Average					Average
	Balance					Balance					Balance
	In		Average			In		Average			In		Average
	Thousands		Rate			Thousands		Rate			Thousands		Rate
Non-interest bearing deposits	$	270,136		—	%	$	250,328		—	%	$	231,409		—	%
Negotiable order of withdrawal accounts		526,026		0.44			503,312		0.36			478,691		0.27
Money market demand accounts		749,366		0.80			668,007		0.52			635,072		0.26
Time deposits		642,513		2.01			556,054		1.43			519,732		1.03
Other savings		136,912		0.60			139,664		0.53			132,557		0.40
	$	2,324,953		0.95	%	$	2,117,365		0.66	%	$	1,997,461		0.44	%

The following schedule details the maturities of certificates of deposit and individual retirement accounts of $100,000 and more at December 31, 2019:

	In Thousands
	Certificates		Individual
	of		Retirement
	Deposit		Accounts		Total
Less than three months	$	71,742		2,900		74,642
Three to six months		23,202		2,848		26,050
Six to twelve months		66,864		7,471		74,335
More than twelve months		166,820		20,673		187,493
	$	328,628		33,892		362,520

27

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

VI. Return on Equity and Assets:

The following schedule details selected key ratios of the Company at December 31, 2019, 2018 and 2017:

	2019			2018			2017
Return on assets (Net income divided by average total assets)		1.34	%		1.35	%		1.04	%
Return on equity (Net income divided by average equity)		11.31	%		1.17	%		9.06	%
Dividend payout ratio (Dividends declared per share divided by net income per share)		32.74	%		29.13	%		28.76	%
Equity to asset ratio (Average equity divided by average total assets)		11.88	%		11.56	%		11.43	%
Leverage capital ratio (Equity excluding the net unrealized gain (loss) on available-for-sale securities and intangible assets divided by average total assets)		12.44	%		12.31	%		11.86	%

The minimum leverage capital ratio required by the regulatory agencies is 4%.

28

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

VI. Return on Equity and Assets, Continued: 

The following schedule details the Company’s risk-based capital at December 31, 2019 excluding the net unrealized gain on available-for-sale securities which is shown as an addition in stockholders’ equity in the consolidated financial statements:

	In Thousands
Tier 1 capital:
Stockholders’ equity, excluding the net unrealized gain on available-for-sale securities, intangible assets and goodwill	$	331,485
Total capital:
Allowable allowance for loan losses		29,160
Total capital	$	360,645
Risk-weighted assets	$	2,411,571
Risk-based capital ratios:
Tier 1 capital ratio		13.75	%
Common equity Tier 1 capital ratio		13.75	%
Total capital ratio		14.95	%

29

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2019

VI. Return on Equity and Assets, Continued: 

At December 31, 2019, the Company and the Bank were each required to maintain a total capital to risk-weighted asset ratio of 10.5% and a Tier 1 capital to risk-weighted asset ratio of 8.5% in each case pursuant to the regulations implementing the Basel III guidelines, including the capital conservation buffer. At December 31, 2019, the Company and the Bank were in compliance with these requirements.

The following schedule details the Company’s interest rate sensitivity at December 31, 2019:

	Repricing Within
(In Thousands)	Total		0-30 Days			31-90 Days			91-180 Days			181-365 Days			Over 1 Year
Earning assets:
Loans, net of deferred fees	$	2,085,901		314,596			73,140			108,322			223,651			1,366,192
Securities		421,145		30,874			86			723			3,468			385,994
Loans held for sale		18,179		—			—			—			—			18,179
Interest bearing deposits		126,827		126,827			—			—			—			—
Federal funds sold		20,000		20,000			—			—			—			—
Restricted equity securities		4,680		4,680			—			—			—			—
Total earning assets		2,676,732		496,977			73,226			109,045			227,119			1,770,365
Interest-bearing liabilities:
Negotiable order of withdrawal accounts		558,745		558,745			—			—			—			—
Money market demand accounts		801,986		801,986			—			—			—			—
Individual retirement accounts		74,872		2,648			7,096			7,909			16,378			40,841
Other savings		140,270		140,270			—			—			—			—
Certificates of deposit		557,121		42,211			77,600			54,477			117,893			264,940
FHLB		23,613		—			—			1,000			—			22,613
		2,156,607		1,545,860			84,696			63,386			134,271			328,394
Interest-sensitivity gap	$	520,125		(1,048,883	)		(11,470	)		45,659			92,848			1,441,971
Cumulative gap				(1,048,883	)		(1,060,353	)		(1,014,694	)		(921,846	)		520,125
Interest-sensitivity gap as % of total assets				(37.5	)%		0.4	%		1.6	%		3.3	%		51.6	%
Cumulative gap as % of total assets				(37.5	)%		(37.9	)%		(36.3	)%		(33.0	)%		18.6	%

The Company presently maintains a liability sensitive position over the next twelve months. However, management expects that liabilities of a demand nature will renew and that it will not be necessary to replace them with significantly higher cost funds.

30

Item 1A. Risk Factors.

Investing in the Company’s common stock involves various risks which are particular to the Company, its industry and its market areas. Several risk factors regarding investing in the Company’s common stock are discussed below. If any of the following risks were to occur, the Company may not be able to conduct its business as currently planned and its financial condition or operating results could be materially and negatively impacted. These matters could cause the trading price of the Company’s common stock to decline in future periods.

The Company's yield on earning assets, and consequently its net earnings, are significantly affected by interest rate levels.

The Company’s profitability is dependent to a large extent on net interest income, which is the difference between interest income earned on loans and investment securities and interest expense paid on deposits and other borrowings. The absolute level of interest rates as well as changes in interest rates or that affect the yield curve may affect the Company’s level of interest income, the primary component of its gross revenue, as well as the level of its interest expense. Interest rate fluctuations are caused by many factors which, for the most part, are not under the Company’s direct control. For example, national monetary policy plays a significant role in the determination of interest rates. Additionally, competitor pricing and the resulting negotiations that occur with the Company’s customers also impact the rates the Company collects on loans and the rates it pays on deposits. In addition, changes in the method of determining the London Interbank Offered Rate (LIBOR) or other reference rates, or uncertainty related to such potential changes, may adversely affect the value of reference rate-linked debt securities that the Company holds or issues or its variable pricing loans, which could further impact the Company’s interest rate spread.

              Changes in the level of interest rates also may negatively affect the Company’s ability to originate real estate loans, the value of its assets and its ability to realize gains from the sale of its assets, all of which could ultimately affect the Company’s results of operations and financial condition. A decline in the market value of the Company’s assets may limit the Company’s ability to borrow additional funds. As a result, the Company could be required to sell some of its loans and investments under adverse market conditions, upon terms that are not favorable to the Company, in order to maintain its liquidity. If those sales are made at prices lower than the amortized costs of the investments, the Company will incur losses. Following changes in the general level of interest rates, the Company’s ability to maintain a positive net interest spread is dependent on its ability to increase (in a rising rate environment) or maintain or minimize the decline in (in a falling rate environment) its loan offering rates, minimize increases on its deposit rates in a rising rate environment or promptly reduce the rates it pays on deposits in a falling rate environment, and maintain an acceptable level and mix of funding. Although the Company has implemented strategies it believes will reduce the potential effects of changes in interest rates on its net interest income, these strategies may not always be successful. Accordingly, changes in levels of market interest rates could materially and adversely affect the Company’s net interest income and net yield on earning assets, asset quality, loan origination volume, liquidity, and overall profitability. The Company cannot assure you that it can minimize its interest rate risk.

31

               Short-term interest rates increased from 2016 to early 2019. Thereafter, the FRB reduced the benchmark federal funds rate by a total of 0.75% through three rate cuts during the second half of 2019. Because of significant competitive pressures in the Company’s markets and the negative impact of these pressures on the Company’s deposit and loan pricing, coupled with the fact that a significant portion of the Company’s loan portfolio has variable rate pricing that moves in concert with changes to the FRB’s federal funds rate or LIBOR, the Company’s net yield on earning assets was negatively impacted by these rate cuts and additional rate cuts may further negatively impact the Company’s net yield on earning assets. However, rate increases may also negatively impact the Company’s results of operations if it is unable to increase the rates it charges on loans or earns on its investment securities in excess of the increases it must pay on deposits and its other funding sources.

As interest rates change, the Company expects that it will periodically experience “gaps” in the interest rate sensitivities of its assets and liabilities, meaning that either its interest-bearing liabilities (usually deposits and borrowings) will be more sensitive to changes in market interest rates than its interest-earning assets (usually loans and investment securities), or vice versa. In either event, if market interest rates should move contrary to the Company’s position, this “gap” may work against the Company, and its results of operations and financial condition may be negatively affected. The Company attempts to manage its risk from changes in market interest rates by adjusting the rates, maturity, repricing characteristics, and balances of the different types of interest-earning assets and interest-bearing liabilities. Interest rate risk management techniques are not exact. The Company employs the use of models and modeling techniques to quantify the levels of risk to net interest income, which inherently involve the use of assumptions, judgments, and estimates. While the Company strives to ensure the accuracy of its modeled interest rate risk profile, there are inherent limitations and imprecisions in this determination and actual results may differ.

The Company’s loan portfolio includes a significant amount of real estate loans, including construction and development loans, which loans have a greater credit risk than residential mortgage loans.

                As of December 31, 2019, approximately 92% of the Company’s loans held for investment were secured by real estate. Of this amount, approximately 41% were commercial real estate loans, 31.0% were residential real estate loans, 22% were construction and development loans and 6% were other real estate loans. In total these loans make up approximately 99% of the Company’s non-performing loans at December 31, 2019. Construction and development lending is generally considered to have relatively high credit risks because the principal is concentrated in a limited number of loans with repayment dependent on the successful completion and operation of the related real estate project. Real estate industry pricing dynamics in the geographical markets in which the Company operates can vary from year to year, and with respect to construction, can vary between project funding and project completion. Asset values to which the Company underwrites loans can fluctuate from year to year and impact collateral values and the ability of its borrowers to repay their loans.

                Weakness in residential real estate market prices as well as demand could result in price reductions in home and land values adversely affecting the value of collateral securing some of the construction and development loans that the Company holds. Should the Company experience the return of adverse economic and real estate market conditions similar to those it experienced from 2008 through 2010, the Company may again experience increases in non-performing loans and other real estate owned, increased losses and expenses from the management and disposition of non-performing assets, increased charge-offs from the disposition of non-performing assets, increases in provision for loan losses, and increases in operating expenses as a result of the allocation of management time and resources to the collection and work out of these loans, all of which would negatively impact the Company’s financial condition and results of operations.

              The Company has significant credit exposure to borrowers that are homebuilders and land developers and the Company also targets small to medium-sized businesses.

                At December 31, 2019, the Company had significant credit exposures to borrowers in certain businesses, including new home builders and land subdividers. If the economic environments in the Company’s markets weaken in 2020 or beyond, these industry or other concentrations could result in higher than normal deterioration in credit quality, past dues, loan charge-offs and collateral value declines, all of which would negatively impact the Company’s financial condition and results of operations. Furthermore, any of the Company’s large credit exposures that deteriorate unexpectedly could cause the Company to have to make significant additional loan loss provisions, negatively impacting the Company’s financial condition and results of operations.

              A substantial focus of the Company’s marketing and business strategy is to serve small to medium-sized businesses in its market areas. As a result, a relatively high percentage of the Company’s loan portfolio consists of commercial loans primarily to small to medium-sized businesses. During periods of lower economic growth or recessionary environments, small to medium-sized businesses may be impacted more severely and more quickly than larger businesses. Consequently, the ability of such businesses to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact the Company’s results of operations and financial condition.

Negative developments in the U.S. and local economy may adversely impact the Company’s results in the future.

                   The Company’s financial performance is highly dependent on the business environment in the markets where it operates and in the U.S. as a whole. Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity, investor or business confidence, consumer sentiment, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, natural disasters, international trade disputes and retaliatory tariffs, terrorist attacks, global pandemics, acts of war, or a combination of these or other factors. Economic conditions in the markets in which the Company operates deteriorated significantly between early 2008 and the middle of 2010. These challenges manifested themselves primarily in the form of increased levels of provisions for loan losses and other real estate expense related to declining collateral values in the Company’s real estate loan portfolio and increased costs associated with its portfolio of other real estate owned. A worsening of business and economic conditions generally or specifically in the principal markets in which the Company conducts business could have adverse effects, including the following:

• a decrease in deposit balances or the demand for loans and other products and services the Company offers;

• an increase in the number of borrowers who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to the Company, which could lead to higher levels of nonperforming assets, net charge-offs and provisions for credit losses;

• a decrease in the value of loans and other assets secured by real estate;

• a decrease in net interest income from the Company’s lending and deposit gathering activities; and

• an increase in competition resulting from financial services companies.

          Although economic conditions have strengthened in most of the Company’s markets in recent periods, the Company believes that it is possible it will continue to experience an uncertain and volatile economic environment during 2020, including issues of national security, health crises around the world, prolonged international trade disputes and political uncertainties surrounding the presidential election in 2020. There can be no assurance that these conditions will improve in the near term or that conditions will not worsen. Such conditions could adversely affect the Company’s business, financial condition, and results of operations.

In addition, over the last several years, including from December 22, 2018 until January 25, 2019, the federal government has shut down several times, in some cases for prolonged periods. It is possible that the federal government may shut down again in the future. If a prolonged government shutdown occurs, it could significantly impact business and economic conditions generally or specifically in the Company’s markets, which could have a material adverse effect on the Company’s results of operations and financial condition.

The Company is geographically concentrated in Wilson County, Tennessee and its surrounding counties and changes in local economic conditions could impact its profitability.

The Company operates primarily in Wilson, DeKalb, Smith, Rutherford, Putnam, Davidson, Williamson and Sumner counties in Tennessee and certain of the surrounding counties and substantially all of its loan customers and most of its deposit and other customers live or have operations in this same geographic area. Accordingly, the Company’s success significantly depends upon the growth in population, income levels, and deposits in these areas, along with the continued attraction of business ventures to the area and the area’s economic stability and strength of the housing market, and its profitability is impacted by the changes in general economic conditions in these markets. The Company cannot assure investors that economic conditions in its markets will continue to remain healthy during 2020 or thereafter, and weakened economic conditions in the Company’s markets could cause the Company to constrict its growth rate, affect the ability of its customers to repay their loans and negatively impact the Company’s financial condition and results of operations.

The Company is less able than a larger institution to spread the risks of unfavorable local economic conditions across a large number of diversified economies. Moreover, the Company cannot give any assurance that it will benefit from any market growth or return of more favorable economic conditions in its primary market areas if they do occur.

The Company could sustain losses if its asset quality declines.

The Company’s earnings are significantly affected by its ability to properly originate, underwrite and service loans. The Company could sustain losses if it incorrectly assesses the creditworthiness of its borrowers or fails to detect or respond to deterioration in asset quality in a timely manner. Problems with asset quality, particularly within the commercial real estate segment of the Company’s loan portfolio, could cause the Company’s interest income and net yield on earning assets to decrease and its provisions for loan losses and non-interest expenses to increase, which could adversely affect its results of operations and financial condition.

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An inadequate allowance for loan losses would negatively impact the Company’s results of operations and financial condition.

The risk of credit losses on loans varies with, among other things, general economic conditions, the type of loan being made, the creditworthiness of the borrower over the term of the loan and, in the case of a collateralized loan, the value and marketability of the collateral for the loan. Management maintains an allowance for loan losses based upon, among other things, historical experience, an evaluation of economic conditions and regular reviews of delinquencies and loan portfolio quality. Based upon such factors, management makes various assumptions and judgments about the ultimate collectibility of the loan portfolio, provides an allowance for loan losses based upon a percentage of the outstanding balances and takes a charge against earnings with respect to specific loans when their ultimate collectibility is considered questionable. Actual losses are difficult to forecast especially if those losses stem from factors beyond the Company’s historical experience or are otherwise inconsistent with the Company’s credit quality assessments. If management’s assumptions and judgments prove to be incorrect and the allowance for loan losses is inadequate to absorb losses, the Company’s results of operations and financial condition could be negatively impacted.

In addition, federal and state regulators periodically review the Company’s loan portfolio and may require it to increase its allowance for loan losses or recognize loan charge-offs. Their conclusions about the quality of the Company’s loan portfolio may be different than the Company’s. Any increase in the Company’s allowance for loan losses or loan charge-offs as required by these regulatory agencies could have a negative effect on the Company’s results of operations or financial condition. Moreover, additions to the allowance may be necessary based on changes in economic and real estate market conditions, new information regarding existing loans or borrowers, identification of additional problem loans and other factors, both within and outside of the Company’s management’s control. These additions may require increased provision expense which would negatively impact the Company’s results of operations.

Implementation of CECL has changed the way the Company calculates its allowance for loan losses and could have a material adverse effect on its financial condition and results of operations.

The Financial Accounting Standards Board adopted a new accounting standard that became effective for the Company on January 1, 2020. This standard, referred to as current expected credit loss, or CECL, requires financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and recognize the expected credit losses through provision for loan losses. CECL replaced the previous method of provisioning for loan losses that are probable, which will require the Company to increase its allowance for loan losses in the first quarter of 2020, and is also increasing the types of data the Company needs to collect and review to determine the appropriate level of its allowance for loan losses. In addition, the adoption of CECL may result in more volatility in the level of the Company’s allowance for loan losses. An increase, to the extent material, in the Company’s allowance for loan losses or expenses incurred to determine the appropriate level of the allowance for loan losses could have a material adverse effect on the Company’s capital levels, financial condition and results of operations. A reduction in the Company’s or the Bank’s capital levels could subject it to a variety of enforcement remedies available to the federal regulatory authorities and would negatively impact the Company’s ability to pursue expansion opportunities if it is unable to satisfactorily raise additional capital.

               The Company has sought to expand its franchise by developing new markets or expanding its operations in existing markets and may continue to do so in future years.

Since 2014, the Company has opened branch locations in Putnam County, Rutherford County, Davidson County and Williamson County as it sought to expand its footprint beyond its historical markets. Expansion, whether by opening new branches or acquiring existing branches or whole banks, involves various risks, including:

Management of Growth. The Company may be unable to successfully:

• maintain loan quality in the context of significant loan growth;

• identify and expand into suitable markets;

• obtain regulatory and other approvals;

• identify and acquire suitable sites for new banking offices;

• attract sufficient deposits and capital to fund anticipated loan growth;

• avoid diversion or disruption of its existing operations or management as well as those of an acquired institution;

• maintain adequate management personnel and systems to oversee and support such growth;

• maintain adequate internal audit, loan review and compliance functions; and

• implement additional policies, procedures and operating systems required to support such growth.

Results of Operations. There is no assurance that existing offices or future offices will maintain or achieve deposit levels, loan balances or other operating results necessary to avoid losses or produce profits. Execution on a growth strategy could lead to increases in overhead expenses if the Company were to add new offices and staff. The Company’s historical results may not be indicative of future results or results that may be achieved if it were to increase the number and concentration of its branch offices in its existing or new markets.

Development of Offices. There are considerable costs involved in opening branches, and new branches generally do not generate sufficient revenues to offset their costs until they have been in operation for at least a year or more. Accordingly, any new branches the Company establishes can be expected to negatively impact the Company’s earnings for some period of time until they reach certain economies of scale. The same is true for the Company’s efforts to expand in these markets with the hiring of additional seasoned professionals with significant experience in that market. The Company’s expenses could be further increased if it encounters delays in opening any of its new branches. The Company may be unable to accomplish future branch expansion plans due to a lack of available satisfactory sites, difficulties in acquiring such sites, failure to receive any required regulatory approvals, on a timely basis or at all, increased expenses or loss of potential sites due to complexities associated with zoning and permitting processes, higher than anticipated merger and acquisition costs or other factors. Finally, any branch may not meet the Company’s long-term profitability expectations or otherwise be successful even after it has been established or acquired, as the case may be.

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Regulatory and Economic Factors. Growth of banks like the Bank may be adversely affected by a number of regulatory and economic developments or other events. Failure to obtain required regulatory approvals, changes in laws and regulations or other regulatory developments and changes in prevailing economic conditions or other unanticipated events may prevent or adversely affect the Company’s growth and expansion. Such factors may cause the Company to alter its growth and expansion plans or slow or halt the growth and expansion process, which may prevent the Company from entering into or expanding in its targeted markets or allow competitors to gain or retain market share in the Company’s existing markets.

Failure to successfully address these and other issues related to the Company’s expansion could have a material adverse effect on its financial condition and results of operations, and could adversely affect its ability to successfully implement its business strategy.

The Company is dependent on its information technology and telecommunications systems and third-party servicers, and systems failures, interruptions or breaches of security could have an adverse effect on its financial condition and results of operations, as well as cause legal or reputational harm. 

The Company is dependent upon information technologies, computer systems and networks, including those maintained by it and those maintained and provided to the Company by third parties, to conduct operations and is reliant on technology to help increase efficiency in its business. These systems could become unavailable or impaired due to a variety of causes, including storms and other natural disasters, terrorist attacks, fires, utility outages, internal or external theft or fraud, design defects, human error, misconduct or complications or failures encountered as existing systems are maintained, replaced or upgraded. For example, the Company’s financial, accounting, data processing, or other operating or security systems or infrastructure or those of third parties upon which it relies may fail to operate properly or become disabled or damaged, which could adversely affect the Company’s ability to process transactions or provide services. In the event that backup systems are utilized, they may not process data as quickly as the Company’s primary systems and the Company may experience data losses in the course of such recovery. The Company continuously updates the systems on which it relies to support its operations and growth and to remain compliant with all applicable laws, rules and regulations globally. This updating entails significant costs and creates risks associated with implementing new systems and integrating them with existing ones, including business interruptions that may occur in the course of such implementation challenges. The Company maintains a system of internal controls and security to mitigate the risks of many of these occurrences and maintains insurance coverage for certain risks; however, should an event occur that is not prevented or detected by the Company’s internal controls, causes an interruption, degradation or outage in service, or is uninsured against or in excess of applicable insurance limits, such occurrence could have an adverse effect on the Company’s business and its reputation, which, in turn, could have a material adverse effect on its financial condition, results of operations and liquidity.

The Company’s operations rely on the secure processing, storage and transmission of confidential, proprietary, personal and other information in its computer systems and networks. Although the Company takes protective measures and endeavors to modify these systems as circumstances warrant, the security of its computer systems, software and networks may be vulnerable to breaches, unauthorized access, misuse, computer viruses, ransomware or other malicious code and other events that could have a security impact. The Company provides its customers the ability to bank remotely, including over the Internet or through their mobile device. The secure transmission of confidential information is a critical element of remote and mobile banking. The Company’s network, and the systems of parties with whom it contracts or on which it relies, as well as those of its customers and regulators, could be vulnerable to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches. Sources of attacks vary and may include hackers, disgruntled employees or vendors, organized crime, terrorists, foreign governments, corporate espionage and activists. In recent periods, there continues to be a rise in electronic fraudulent activity, security breaches and cyber-attacks within the financial services industry, especially in the commercial banking sector due to cyber criminals targeting commercial bank accounts.

Cybersecurity risks for banking organizations have significantly increased in recent years in part because of the proliferation of new technologies, and the use of the Internet and telecommunications technologies to conduct financial transactions. For example, cybersecurity risks may increase in the future as the Company continues to increase its mobile-payment and other Internet-based product offerings and expand its internal use of web-based products and applications. Even the most advanced internal control environment may be vulnerable to compromise. Targeted social engineering attacks are becoming more prevalent and sophisticated, and are extremely difficult to prevent. The techniques used by bad actors change frequently, may not be recognized until launched and may not be recognized until well after a breach has occurred. Additionally, the existence of cyber-attacks or security breaches at third parties with access to the Company’s data, such as vendors, may not be disclosed to the Company in a timely manner. Consistent with industry trends, the Company remains at risk for attempted electronic fraudulent activity, as well as attempts at security breaches and cybersecurity-related incidents. The Company may be required to spend significant capital and other resources to protect against the threat of security breaches and computer viruses, or to alleviate problems caused by security breaches or viruses. To the extent that the Company’s activities or the activities of its vendors, regulators or customers involve the storage and transmission of confidential information, security breaches (including breaches of security of customer, vendor or regulatory systems and networks) and viruses could expose the Company to claims, litigation and other possible liabilities, which may be significant. Any inability to prevent security breaches or computer viruses could also cause existing customers to lose confidence in the Company’s systems and could adversely affect its reputation, results of operations and ability to attract and retain customers and businesses. Further, a security breach could also subject the Company to additional regulatory scrutiny, expose it to civil litigation and possible financial liability and cause reputational damage.

The Company contracts with third-party vendors to provide software or services for many of its major systems, such as data processing, loan servicing and deposit processing system. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt the Company’s operations. Because the Company’s information technology and telecommunications systems interface with and depend on third-party systems, the Company could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions. If sustained or repeated, a system failure or service denial could result in a deterioration of the Company’s ability to process new and renewal loans, gather deposits and provide customer service, compromise its ability to operate effectively, damage its reputation, result in a loss of customer business and/or subject it to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on the Company’s financial condition and results of operations.

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The Company also faces the risk of operational disruption, failure, termination, or capacity constraints of any of the third parties that facilitate its business activities, including vendors, exchanges, and other financial intermediaries. Such parties could also be the source or cause of an attack on, or breach of, the Company’s operational systems, data or infrastructure, and could disclose such attack or breach to the Company in a delayed manner or not at all. In addition, the Company may be at risk of an operational failure with respect to its customers’ systems. The Company’s risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats and the continued uncertain global economic environment.

As cyber threats continue to evolve, the Company may be required to expend significant, additional resources to continue to modify or enhance its protective measures, investigate and remediate any information security vulnerabilities, or respond to any changes to state or federal regulations, policy statements or laws concerning information systems or security. Any failure to maintain adequate security over its information systems, its technology-driven products and services or its customers’ personal and transactional information could negatively affect its business and its reputation and result in fines, penalties, or other costs, including litigation expense and/or additional compliance costs, all of which could have material adverse effect on its financial condition, results of operations and liquidity. Furthermore, the public perception that a cyber-attack on the Company’s systems has been successful, whether or not this perception is correct, may damage the Company’s reputation with customers and third parties with whom it does business. A successful penetration or circumvention of system security could cause the Company negative consequences, including loss of customers and business opportunities, disruption to the Company’s operations and business, misappropriation or destruction of the Company’s confidential information and/or that of its customers, or damage to its customers’ and/or third parties’ computers or systems, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in the Company’s security measures, reputational damage, reimbursement or other compensatory costs, additional compliance costs, and could adversely impact the Company’s results of operations, liquidity and financial condition.

Changes to capital requirements for bank holding companies and depository institutions that became effective on January 1, 2015 may negatively impact the Company’s and the Bank’s results of operations.

In July 2013, the FRB and the FDIC approved final rules that substantially amended the regulatory risk-based capital rules applicable to the Company and the Bank. The final rules, which became effective on January 1, 2015, implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act.

Various provisions of the Dodd-Frank Act increase the capital requirements of bank holding companies. The leverage and risk-based capital ratios of these entities may not be lower than the leverage and risk-based capital ratios for insured depository institutions. The final rules implementing the Basel III regulatory capital reforms include new minimum risk-based capital and leverage ratios. These rules also refine the definition of what constitutes “capital” for purposes of calculating those ratios. The minimum capital level requirements applicable to bank holding companies and banks subject to the rules are: (i) a CET1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4% for all institutions. The rules also establish a “capital conservation buffer” of 2.5% (that was fully phased in as of January 1, 2019) above the new regulatory minimum capital ratios, and result in the following minimum ratios: (i) a CET1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital levels fall below the buffer amounts. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.

The application of more stringent capital requirements for the Company and the Bank, like those implementing the Basel III reforms (particularly CET1 capital ratio), could, among other things, result in lower returns on invested capital, require the raising of additional capital, and result in regulatory actions if the Company or the Bank were to be unable to comply with such requirements. Furthermore, the imposition of liquidity requirements in connection with the implementation of the final rules regarding Basel III could result in the Company or the Bank having to lengthen the term of their funding, restructure their business models and/or increase their holdings of liquid assets, which could negatively impact the Company’s financial condition or results of operations. Implementation of changes to asset risk weightings for risk-based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy and could limit the Company’s and the Bank’s ability to make distributions, including paying dividends or buying back shares.

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Liquidity risk could impair the Company’s ability to fund its operations and jeopardize its financial condition.

Liquidity represents an institution’s ability to provide funds to satisfy demands from depositors, borrowers and other creditors by either converting assets into cash or accessing new or existing sources of incremental funds. Liquidity risk arises from the possibility that the Company may be unable to satisfy current or future funding requirements and needs.

The objective of managing liquidity risk is to ensure that the Company’s cash flow requirements resulting from depositor, borrower and other creditor demands are met, as well as the Company’s operating cash needs, and that the Company’s cost of funding such requirements and needs is reasonable. The Company maintains an asset/liability and interest rate risk policy and a liquidity and funds management policy, including a contingency funding plan that, among other things, include procedures for managing and monitoring liquidity risk. Generally the Company relies on deposits, repayments of loans and cash flows from its investment securities as its primary sources of funds. The Company’s principal deposit sources include consumer, commercial and public funds customers in the Company’s markets. The Company has used these funds, together with wholesale deposit sources such as federal funds purchased and other sources of short-term and long-term borrowings, including advances from the FHLB Cincinnati, to make loans, acquire investment securities and other assets and to fund continuing operations.

An inability to maintain or raise funds in amounts necessary to meet the Company’s liquidity needs could have a substantial negative effect, individually or collectively, on the Company’s and the Bank's liquidity. The Company’s access to funding sources in amounts adequate to finance its activities, or on terms attractive to it, could be impaired by factors that affect the Company specifically or the financial services industry in general. For example, factors that could detrimentally impact the Company’s access to liquidity sources include a decrease in the level of its business activity due to a market downturn or adverse regulatory action against it or the Bank, a reduction in its credit rating, any damage to its reputation or any other decrease in depositor or investor confidence in the Company’s creditworthiness and business. The Company’s access to liquidity could also be impaired by factors that are not specific to it, such as severe volatility or disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole. Any such event or failure to manage the Company’s liquidity effectively could affect its competitive position, increase its borrowing costs and the interest rates it pays on deposits, limit its access to the capital markets, cause its regulators to criticize its operations and have a material adverse effect on its financial condition or results of operations.

Deposit levels may be affected by a number of factors, including demands by customers, rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, general economic and market conditions and other factors. Loan repayments are a relatively stable source of funds but are subject to the borrowers’ ability to repay loans, which can be adversely affected by a number of factors including changes in general economic conditions, adverse trends or events affecting business industry groups or specific businesses, declines in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters, prolonged government shutdowns and other factors. Furthermore, loans generally are not readily convertible to cash. Accordingly, the Company may be required from time to time to rely on secondary sources of liquidity to meet growth in loans, deposit withdrawal demands or otherwise fund operations. Such secondary sources include Federal Home Loan Bank advances, brokered deposits, secured and unsecured federal funds lines of credit from correspondent banks, FRB borrowings and/or accessing the equity or debt capital markets.

The Company anticipates it will continue to rely primarily on deposits, loan repayments, and cash flows from its investment securities to provide liquidity. Additionally, where necessary, the secondary sources of borrowed funds described above, like the advances from the FHLB Cincinnati the Bank borrowed in 2019, will be used to augment the Company’s primary funding sources. If the Company is unable to access any of these secondary funding sources when needed, it might be unable to meet its customers’ or creditors’ needs, which would adversely affect its financial condition, results of operations, and liquidity.

The performance of the Company’s investment securities portfolio is subject to fluctuation due to changes in interest rates and market conditions, including credit deterioration of the issuers of individual securities.

Changes in interest rates can negatively affect the performance of most of the Company’s investment securities. Interest rate volatility can reduce unrealized gains or increase unrealized losses in the Company’s portfolio. Interest rates are highly sensitive to many factors including monetary policies, domestic and international economic, social and political issues, including trade disputes and global health pandemics, and other factors beyond the Company’s control. Fluctuations in interest rates can materially affect both the returns on and market value of the Company’s investment securities. Additionally, actual investment income and cash flows from investment securities that carry prepayment risk, such as mortgage-backed securities and callable securities, may materially differ from those anticipated at the time of investment or subsequently as a result of changes in interest rates and market conditions.

The Company’s investment securities portfolio consists of several securities whose trading markets are “not active.” As a result, the Company utilizes alternative methodologies for pricing these securities that include various estimates and assumptions. There can be no assurance that the Company can sell these investment securities at the price derived by these methodologies, or that it can sell these investment securities at all, which could have an adverse effect on the Company’s financial condition, results of operations and liquidity.

The Company monitors the financial position of the various issuers of investment securities in its portfolio, including each of the state and local governments and other political subdivisions where it has exposure. To the extent the Company has securities in its portfolio from issuers who have experienced a deterioration of financial condition, or who may experience future deterioration of financial condition, the value of such securities may decline and could result in an other-than-temporary impairment charge, which could have an adverse effect on the Company’s financial condition, results of operations and liquidity.

In addition, from time to time the Company may restructure portions of its investment securities portfolio as part of its asset liability management strategies, and may incur loses, which may be material, in connection with any such restructuring.

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Environmental liability associated with commercial lending could result in losses.

In the course of business, the Bank may acquire, through foreclosure, properties securing loans it has originated or purchased which are in default. Particularly in commercial real estate lending, there is a risk that hazardous substances could be discovered on these properties. In this event, the Company, or the Bank, might be required to remove these substances from the affected properties at the Company’s sole cost and expense. The cost of this removal could substantially exceed the value of affected properties. The Company and the Bank may not have adequate remedies against the prior owner or other responsible parties and could find it difficult or impossible to sell the affected properties. These events could have a material adverse effect on the Company’s business, results of operations and financial condition.

The Company has acquired a number of retail banking facilities and other real properties, any of which may contain hazardous or toxic substances. If hazardous or toxic substances are found, the Company may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require the Company to incur substantial expenses and may materially reduce the affected property’s value or limit the Company’s ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase the Company’s exposure to environmental liability.

Competition from financial institutions and other financial service providers may adversely affect the Company’s profitability.

The banking business is highly competitive and the Company experiences competition in each of its markets from many other financial and non-financial institutions. The Company competes with commercial banks, credit unions, savings and loan associations, mortgage banking firms, consumer finance companies, securities brokerage firms, insurance companies, money market funds, and other mutual funds, mobile payment platforms, as well as other community banks and super-regional and national financial institutions that operate offices in the Company’s primary market areas and elsewhere. Many of the Company’s competitors are well-established, larger financial institutions that have greater resources and lending limits and a lower cost of funds than the Company has.

Additionally, the Company faces competition from similarly sized and smaller community banks, including those with senior management who were previously affiliated with other local or regional banks or those controlled by investor groups with strong local business and community ties. These community banks may offer higher deposit rates or lower cost loans in an effort to attract the Company’s customers, and may attempt to hire the Company’s management and employees.

Some of the Company’s competitors, including credit unions, are not subject to certain regulatory constraints, such as the Community Reinvestment Act, which requires the Company to, among other things, implement procedures to make and monitor loans throughout the communities it serves. Credit unions also have federal tax exemptions that may allow them to offer lower rates on loans and higher rates on deposits than taxpaying financial institutions such as commercial banks. In addition, non-depository institution competitors are generally not subject to the extensive regulation applicable to institutions, like the Bank, that offer federally insured deposits, which affords them the advantage of operating with greater flexibility and lower cost structures. Other institutions may have other competitive advantages in particular markets or may be willing to accept lower profit margins on certain products.

The Company competes with these other financial and non-financial institutions both in attracting deposits and in making loans. In addition, the Company has to attract its customer base from other existing financial institutions and from new residents. This competition at times has made it more difficult for the Company to make new loans and at times has forced the Company to offer higher deposit rates or utilize secondary sources of liquidity. Price competition for loans and deposits might result in the Company earning less interest on its loans and paying more interest on its deposits, which reduces the Company’s net interest income. The Company’s profitability depends upon its continued ability to successfully compete with an array of financial and non-financial institutions in its market areas.

The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. For example, the Growth Act and, if adopted, certain proposed implementing regulations, significantly reduce the regulatory burden of certain large bank holding companies and raise the asset thresholds at which more onerous requirements apply, which could cause certain large bank holding companies to become more competitive, to more aggressively pursue expansion or to more readily consolidate with similar sized financial institutions. Also, technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as mobile payment and other automatic transfer and payment systems, and for banks that do not have a physical presence in the Company’s markets to compete for deposits. The absence of regulatory requirements may give non-bank financial companies a competitive advantage over the Company.

The Company’s key management personnel may leave at any time.

The Company’s future success depends to a significant extent on the continued service of its key management personnel, especially John McDearman, III, its president and chief executive officer, and John Foster, the president of the Bank. While the Company does not have employment agreements with any of its personnel and can provide no assurance that it will be able to retain any of its key officers and employees or attract and retain qualified personnel in the future, it has entered into non-competition agreements with such persons which would prevent them in most circumstances, from competing with the Bank for one year following their termination. In addition, these persons are parties to certain deferred compensation, supplemental retirement and equity incentive plans, the benefits of which would cease to accrue upon the termination of the person’s employment with the Company or the Bank.

As previously announced, Randall Clemons, the Company's previous president and chief executive officer, retired on December 31, 2019, though he remains a member of the boards of directors of the Company and the Bank. Mr. Clemons has been a large part of the Company’s success and the Company’s ability to continue to grow its loan portfolio and deliver returns for its shareholders will depend on the ability of Mr. McDearman to manage the transition smoothly and operate the Bank in a profitable manner.

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The Company, as well as the Bank, operate in an increasingly highly regulated environment and are supervised and examined by various federal and state regulatory agencies who may adversely affect the Company’s ability to conduct business.

The TDFI and the FRB supervise and examine the Bank and the Company, respectively. Because the Bank’s deposits are federally insured, the FDIC also regulates its activities. These and other regulatory agencies impose certain regulations and restrictions on the Bank, including:

• explicit standards as to capital and financial condition;

• limitations on the permissible types, amounts and extensions of credit and investments;

• restrictions on permissible non-banking activities; and

• restrictions on dividend payments.

Federal and state regulatory agencies have extensive discretion and power to prevent or remedy unsafe or unsound practices or violations of law by banks and bank holding companies. As a result, the Company must expend significant time and expense to assure that it is in compliance with regulatory requirements and agency practices.

The Company, as well as the Bank, also undergoes periodic examinations by one or more regulatory agencies. Following such examinations, the Company or the Bank may be required, among other things, to make additional provisions to its allowance for loan loss, to restrict its operations or to increase its capital levels. These actions would result from the regulators’ judgments based on information available to them at the time of their examination. The Bank’s operations are also governed by a wide variety of state and federal consumer protection laws and regulations. These federal and state regulatory restrictions limit the manner in which the Company and the Bank may conduct business and obtain financing. These laws and regulations can and do change significantly from time to time, and any such changes could adversely affect the Company’s results of operations.

Federal or state legislation or regulation may increase the Company’s expenses and reduce earnings.

Federal bank regulators are increasing regulatory scrutiny, and additional restrictions (including those originating from the Dodd-Frank Act) on financial institutions have been proposed or adopted by regulators and by Congress. Changes in tax law, federal legislation, regulation or policies, such as bankruptcy laws, deposit insurance, consumer protection laws, and capital requirements, among others, can result in significant increases in the Company’s expenses and/or charge-offs, which may adversely affect its results of operations and financial condition. Changes in state or federal tax laws or regulations can have a similar impact. State and municipal governments, including the State of Tennessee, could seek to increase their tax revenues through increased tax levies which could have a meaningful impact on the Company’s results of operations. Furthermore, financial institution regulatory agencies may continue to be aggressive in responding to concerns and trends identified in examinations, including the continued issuance of additional formal or informal enforcement or supervisory actions. These actions, whether formal or informal, could result in the Company’s or the Bank’s agreeing to limitations or monetary penalties or to take actions that limit its operational flexibility, restrict its growth, increase its operating expenses or increase its capital or liquidity levels, any of which could materially and adversely affect the Company’s results of operations and financial condition. Failure to comply with any formal or informal regulatory restrictions, including informal supervisory actions, could lead to further regulatory enforcement actions. Negative developments in the financial services industry and the impact of recently enacted or new legislation in response to those developments could negatively impact the Company’s operations by restricting its business operations, including its ability to originate or sell loans, and adversely impact its financial performance. In addition, industry, legislative or regulatory developments may cause the Company to materially change its existing strategic direction, capital strategies, compensation or operating plans. 

Additionally, the Company is subject to laws regarding its handling, disclosure and processing of personal and confidential information of certain parties, such as its employees, customers, suppliers, counterparties and other third parties. The GLB Act requires the Company to periodically disclose its privacy policies and practices relating to sharing such information and enables retail customers to opt out of the Company’s ability to share information with unaffiliated third parties, under certain circumstances. Other laws and regulations impact the Company’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers. The Company is subject to laws that require it to implement a comprehensive information security program that includes administrative, technical and physical safeguards to provide the security and confidentiality of customer records and information. Additionally, other legislative and regulatory activity continue to lend uncertainty to privacy compliance requirements that impact the Company’s business. The Company also expects that there will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions. The potential effects of pending legislation are far-reaching and may require the Company to modify its data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

Implementation of the various provisions of the Dodd-Frank Act has resulted in increases in the Company’s operating costs and may continue to cause additional increases, or otherwise have a material adverse effect on the Company’s business, financial condition or results of operations.

Since the 2008 financial crisis, financial institutions generally have been subjected to increased regulation and scrutiny from federal regulatory authorities. The U.S. Congress responded to the financial crisis by enacting a variety of statutes, in particular the Dodd-Frank Act, which contained numerous far-reaching changes and reforms for the financial services industry and directs federal regulatory agencies to issue regulations to implement these reforms. The Dodd-Frank Act also restructured the regulation of depository institutions, including the creation of the CFPB to administer consumer protection and fair lending laws, a function that was formerly performed by the depository institution regulators. The provisions of the Dodd-Frank Act and the rules adopted to implement those provisions have made far-reaching changes to the regulatory framework under which the Company operates and have had, and may continue to have, a material impact on the Company’s operations, particularly through increased regulatory burdens and compliance costs. Community banks with less than $10 billion in assets (like the Bank) are exempt from certain provisions of the legislation.

Ongoing compliance with the Company’s regulatory obligations has resulted in (and may continue to cause the Company to incur) further increased regulatory compliance costs, fee reductions and restrictions on activities in which the Company may have otherwise engaged, any of which could have a material adverse effect on its business, financial condition or results of operations. Moreover, the Company’s failure to comply with these or other regulations could result in regulatory enforcement actions against the Company or make it more difficult to receive any required regulatory approvals necessary to execute on the Company’s growth strategy, each of which could have a material adverse effect on the Company’s results of operations, business or financial condition.

Future changes to the laws and regulations applicable to the financial industry, if enacted or adopted, may impact the Company’s profitability or financial condition, require more oversight or change certain of the Company’s business practices, and expose it to additional costs, including increased compliance costs. The Company cannot predict whether any such legislative or regulatory changes, including those that could benefit its business and results of operations, will be enacted or adopted or, if they are, whether they will have a material effect on the Company.

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An ineffective risk management framework could have a material adverse effect on the Company’s strategic planning and its ability to mitigate risks and/or losses and could have adverse regulatory consequences.

The Company has implemented a risk management framework to identify and manage its risk exposure. This framework is comprised of various processes, systems and strategies, and is designed to manage the types of risk to which it is subject, including, among others, credit, market, liquidity, operational, capital, compliance, strategic and reputational risks. The Company’s framework also includes financial, analytical, forecasting, or other modeling methodologies, which involves management assumptions and judgment. However, there is no assurance that the Company’s risk management framework will be effective under all circumstances or that it will adequately identify, manage or mitigate any risk or loss to it. If the Company’s risk management framework is not effective, it could suffer unexpected losses and become subject to regulatory consequences, as a result of which its business, financial condition, results of operations or prospects could be materially adversely affected.

The Company’s accounting estimates and risk management processes rely on analytical and forecasting models and tools.

The processes the Company uses to estimate expected credit losses, calculate its allowance for loan losses and to measure the fair value of financial instruments, as well as the processes used to estimate the effects of changing interest rates and other measures of the Company’s financial condition and results of operations, depend upon the use of analytical and forecasting models and tools. These models and tools reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen circumstances. Even if these assumptions are accurate, the models and tools may prove to be inadequate or inaccurate because of other flaws in their design or their implementation. Any such failure in the Company’s analytical or forecasting models and tools could have a material adverse effect on its business, financial condition and results of operations.

The Company’s selection of accounting policies and methods may affect its reported financial results.

The Company’s accounting policies and methods are fundamental to how the Company records and reports its financial condition and results of operations. The Company’s management must exercise judgment in selecting and applying many of these accounting policies and methods so they comply with GAAP and reflect management’s judgment of the most appropriate manner to report its financial condition and results of operations. In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which may be reasonable under the circumstances, yet which may result in the Company reporting materially different results than would have been reported under a different alternative.

Certain accounting policies are critical to presenting the Company’s financial condition and results of operations. They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. Because of the uncertainty of estimates involved in these matters, the Company may be required to do one or more of the following: significantly increase the allowance for loan losses or sustain loan losses that are significantly higher than the reserve provided; reduce the carrying value of an asset measured at fair value; recognize an other-than-temporary impairment of securities; or significantly increase the Company’s accrued tax liability. Any of these could have a material adverse effect on the Company’s business, financial condition or results of operations. For a discussion of the Company’s critical accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” contained in the 2019 Annual Report.

The Company currently invests in bank owned life insurance (“BOLI”) and may continue to do so in the future.

The Company had approximately $31.76 million in general, hybrid and separate account BOLI contracts at December 31, 2019. BOLI is an illiquid long-term asset that provides tax savings because cash value growth and life insurance proceeds are not taxable, subject to certain exceptions. However, if the Company needed additional liquidity and converted the BOLI to cash, such transaction would be subject to ordinary income tax and applicable penalties. The Company is also exposed to the credit risk of the underlying securities in the investment portfolio and to the insurance carrier’s credit risk (in a general account contract). If BOLI was exchanged to another carrier, additional fees would be incurred and a tax-free exchange could only be done for insureds that were still actively employed by the Company at that time. There is interest rate risk relating to the market value of the underlying investment securities associated with the BOLI in that there is no assurance that the market value of these securities will not decline. Investing in BOLI exposes the Company to liquidity, credit and interest rate risk, which could adversely affect the Company’s results of operations, financial condition and liquidity.

The Company’s business reputation and relationships are important and any damage to them could have a material adverse effect on its business.

The Company’s reputation is very important in sustaining its business and it relies on its relationships with its current, former and potential clients and shareholders and other actors in the industries that it serves. Any damage to the Company’s reputation, whether arising from regulatory, supervisory or enforcement actions, matters affecting the Company’s financial reporting or compliance with SEC requirements, negative publicity, the way in which the Company conducts its business or otherwise could strain its existing relationships and make it difficult for the Company to develop new relationships. Any such damage to the Company’s reputation and relationships could in turn lead to a material adverse effect on its business.

The Company is subject to certain litigation, and its expenses related to this litigation may adversely affect its results.

The Company is from time to time subject to certain litigation in the ordinary course of its business. The Company may also be subject to claims related to its loan servicing programs, particularly those involving servicing of commercial real estate loans. These and other claims and legal actions, as well as supervisory and enforcement actions by the Company’s regulators, including those with oversight of its loan servicing programs, could involve large monetary claims, capital directives, agreements with federal regulators, cease and desist orders and significant defense costs. The outcome of any such cases or actions is uncertain. Substantial legal liability or significant regulatory action against the Company could have material adverse financial effects or cause significant reputational harm to the Company, which in turn could seriously harm its business prospects.

In accordance with GAAP, for matters where a loss is not probable or the amount of the loss cannot be estimated, no accrual is established. For matters where it is probable the Company will incur a loss and the amount can be reasonably estimated, the Company establishes an accrual for the loss. Once established, the accrual is adjusted periodically to reflect any relevant developments. The actual cost of any outstanding legal proceedings or threatened claims, however, may turn out to be substantially higher than the amount accrued. Further, the Company’s insurance may not cover all litigation, other proceedings or claims, or the costs of defense. Future developments could result in an unfavorable outcome for any existing or new lawsuits or investigations in which the Company is, or may become, involved, which may have a material adverse effect on its business and its results of operations.

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The soundness of other financial institutions could adversely affect the Company.

The Company’s ability to engage in routine funding transactions could be adversely affected by the actions and financial stability of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. The Company has exposure to various counterparties, including brokers and dealers, commercial and correspondent banks, and others. As a result, defaults by, or rumors or questions about, one or more financial services institutions, or the financial services industry generally, may result in market-wide liquidity problems and could lead to losses or defaults by such other institutions. Such occurrences could expose the Company to credit risk in the event of default of one or more counterparties and could have a material adverse effect on the Company’s financial position, results of operations and liquidity.

The Company depends on the accuracy and completeness of information about customers.

In deciding whether to extend credit or enter into certain transactions, the Company relies on information furnished by or on behalf of customers, including financial statements, credit reports, tax returns and other financial information. The Company may also rely on representations of those customers or other third parties, such as independent auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading personal information, financial statements, credit reports, tax returns or other financial information, including information falsely provided as a result of identity theft, could have an adverse effect on the Company’s business, financial condition and results of operations.

The Company may be subject to claims and litigation asserting lender liability.

From time to time, and particularly during periods of economic stress, customers, including real estate developers and consumer borrowers, may make claims or otherwise take legal action pertaining to performance of the Company’s responsibilities. These claims are often referred to as “lender liability” claims and are sometimes brought in an effort to produce or increase leverage against the Company in workout negotiations or debt collection proceedings. Lender liability claims frequently assert one or more of the following allegations: breach of fiduciary duties, fraud, economic duress, breach of contract, breach of the implied covenant of good faith and fair dealing, and similar claims. Whether customer claims and legal action related to the performance of the Company’s responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a favorable manner, they may result in significant financial liability and/or adversely affect the Company’s market reputation, products and services, as well as potentially affecting customer demand for those products and services. Any financial liability or reputation damage could have a material adverse effect on the Company’s business, which, in turn, could have a material adverse effect on its financial condition, results of operations and liquidity.

Natural disasters may adversely affect the Company.

The Company’s operations and customer base are located in markets where natural disasters, including tornadoes, severe storms, fires and floods often occur. Such natural disasters could significantly impact the local population and economies and the Company’s business, and could pose physical risks to its properties. Although the Company maintains insurance coverages for such events, a significant natural disaster in or near one or more of the Company’s markets could have a material adverse effect on its financial condition, results of operations or liquidity.

The Company’s asset valuation may include methodologies, estimations and assumptions which are subject to differing interpretations and could result in changes to asset valuations that may materially adversely affect its results of operations or financial condition.

The Company uses estimates, assumptions, and judgments when financial assets and liabilities are measured and reported at fair value. Assets and liabilities carried at fair value inherently result in a higher degree of financial statement volatility. Fair values and the information used to record valuation adjustments for certain assets and liabilities are based on quoted market prices and/or other observable inputs provided by independent third-party sources, when available. When such third-party information is not available, fair value is estimated primarily by using cash flow and other financial modeling techniques utilizing assumptions such as credit quality, liquidity, interest rates and other relevant inputs. Changes in underlying factors, assumptions, or estimates in any of these areas could materially impact the Company’s future financial condition and results of operations.

During periods of market disruption, including periods of significantly rising or high interest rates, rapidly widening credit spreads or illiquidity, it may be difficult to value certain assets if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were in active markets with significant observable data that become illiquid due to the current financial environment. In such cases, certain asset valuations may require more subjectivity and management judgment. As such, valuations may include inputs and assumptions that are less observable or require greater estimation. Further, rapidly changing and unprecedented credit and equity market conditions could materially impact the valuation of assets as reported within the Company’s consolidated financial statements and the period-to-period changes in value could vary significantly. Decreases in value may have a material adverse effect on results of operations or financial condition.

Valuation methodologies which are particularly susceptible to the conditions mentioned above include those used to value certain securities in the Company’s available for sale investment portfolio such as auction rate securities and non-agency mortgage and asset-backed securities, in addition to non-marketable private equity securities, loans held for sale and intangible assets.

The Company’s ability to declare and pay dividends is limited.

While the Company has historically paid a biannual cash dividend on its common stock, there can be no assurance of whether or when it may pay dividends on its common stock in the future. Future dividends, if any, will be declared and paid at the discretion of the Company’s board of directors and will depend on a number of factors, including the Company’s and the Bank’s capital levels. The Company’s principal source of funds used to pay cash dividends on its common stock will be dividends that it receives from the Bank. Although the Bank’s asset quality, earnings performance, liquidity and capital requirements will be taken into account before the Company declares or pays any future dividends on its common stock, the Company’s board of directors will also consider its liquidity and capital requirements and its board of directors could determine to declare and pay dividends without relying on dividend payments from the Bank.

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Federal and state banking laws and regulations and state corporate laws restrict the amount of dividends the Company may declare and pay and that the Bank may declare and pay to the Company. For example, FRB regulations implementing the capital rules required under Basel III do not permit dividends unless capital levels exceed certain higher levels applying capital conservation buffers.

If the Company fails to maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results. As a result, current and potential holders of the Company’s common stock could lose confidence in the Company’s financial reporting, which would harm the Company’s business and the trading price of its securities.

Maintaining and adapting the Company’s internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, is expensive and requires significant management attention. Moreover, as the Company continues to grow, its internal controls may become more complex and require additional resources to ensure they remain effective amid dynamic regulatory and other guidance. Failure to maintain effective controls or implement required new or improved controls or difficulties encountered in the process may harm the Company’s results of operations and financial condition or cause it to fail to meet its reporting obligations. If the Company or its independent registered public accounting firm identify material weaknesses in the Company’s internal control over financial reporting or the Company is required to restate the its financial statements, the Company could be required to implement expensive and time-consuming remedial measures and could lose investor confidence in the accuracy and completeness of its financial reports. The Company may also face regulatory enforcement or other actions. This could have an adverse effect on the Company’s business, financial condition or results of operations, as well as the trading price of the Company’s securities, and could potentially subject the Company to litigation.

The Company is required to act as a source of financial and managerial strength for the Bank in times of stress.

Under federal law, the Company is required to act as a source of financial and managerial strength to the Bank, and to commit resources to support the Bank if necessary. The Company may be required to commit additional resources to the Bank, or guarantee the Bank’s compliance with a capital plan developed by the Bank to raise capital, at times when the Company may not be in a financial position to provide such resources or guarantee or when it may not be in the Company’s, or its shareholders’ or its creditors’ best interests to do so. Providing such support is more likely during times of financial stress for the Company and the Bank, which may make any capital the Company is required to raise to provide such support more expensive than it might otherwise be. In addition, any capital loans the Company makes to the Bank are subordinate in right of payment to depositors and to certain other indebtedness of the Bank. In the event of the Company’s bankruptcy, any commitment by it to a federal banking regulator to maintain the capital of the Bank will be assumed by the bankruptcy trustee and entitled to priority of payment.

Non-compliance with the Patriot Act, the BSA or other laws and regulations could result in fines or sanctions against the Company.

The BSA, as amended by the Patriot Act, requires financial institutions to design and implement programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the Treasury's Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions, including restrictions on conducting acquisitions or establishing new branches, as well as additional operating expenses to add staff and/or technological enhancements to the Company’s systems to better comply.

The Company’s common stock is thinly traded, and recent prices may not reflect the prices at which the stock would trade in an active trading market.

The Company’s common stock is not traded through an organized exchange, but rather is traded in individually-arranged transactions between buyers and sellers. Therefore, recent prices at which the stock has traded may not necessarily reflect the actual value of the Company’s common stock. A shareholder’s ability to sell the shares of Company common stock in a timely manner may be substantially limited by the lack of a trading market for the common stock.

An investment in the Company’s common stock is not an insured deposit.

The Company’s common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in the Company’s common stock is inherently risky for the reasons described in this “Risk Factors” section and elsewhere in this report and is subject to the equity market forces like other common stock. As a result, if you acquire the Company’s stock, you could lose some or all of your investment. 

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Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties

The Company’s main office is owned by the Company and consists of approximately four acres at 623 West Main Street, Lebanon, Tennessee. The building is a two story, brick building, with approximately 35,000 square feet. The lot has approximately 350 feet of road frontage on West Main Street. In spring 2018, the Bank completed construction on its new 67,000 square foot operations center located at 105 North Castle Heights Avenue, Lebanon, Tennessee, which is adjacent to the 623 West Main Street office. In addition thereto, the Bank has twenty-eight branch locations located at the following locations: 1436 West Main Street, Lebanon, Tennessee; 1444 Baddour Parkway, Lebanon, Tennessee; 200 Tennessee Boulevard, Lebanon, Tennessee; 8875 Stewart’s Ferry Pike, Gladeville, Tennessee; 402 Public Square, Watertown, Tennessee; 1476 North Mt. Juliet Road, Mt. Juliet, Tennessee; 11835 Highway 70, Mount Juliet, Tennessee; 1130 Castle Heights Avenue North, Lebanon, Tennessee; 127 McMurry Blvd., Hartsville, Tennessee; the Wal-Mart Supercenter, Lebanon, Tennessee; 440 Highway 109 North, Lebanon, Tennessee; 4736 Andrew Jackson Parkway in Hermitage, Tennessee; 3110 Memorial Blvd in Murfreesboro, Tennessee; 210 Commerce Drive in Smyrna, Tennessee; 2640 South Church Street, Murfreesboro, Tennessee; 217 Donelson Pike, Nashville, Tennessee; 2930 West End Avenue, Nashville, Tennessee; 710 NW Broad in Murfreesboro, Tennessee; 4195 Franklin Road, Murfreesboro, Tennessee; 576 West Broad Street in Smithville, Tennessee; 306 Brush Creek Road in Alexandria, Tennessee; 1300 Main Street North in Carthage, Tennessee; 7 New Middleton Highway in Gordonsville, Tennessee; 709 South Mt. Juliet Road, Mt. Juliet, Tennessee; 455 West Main Street, Gallatin, Tennessee; 175 East Main Street, Hendersonville, Tennessee; 320 South Jefferson Avenue, Cookeville, Tennessee; 9200 Carothers Parkway, Suite 108, Franklin, Tennessee; a Loan Production Office at 393 Maple Street Suite 100-A in Gallatin, Tennessee and a Loan Production Office at 161 Harold court in Franklin, Tennessee.

The Mt. Juliet office contains approximately 16,000 square feet of space; the Castle Heights Office contains 2,400 square feet of space; the Hartsville Office contains 8,000 square feet of space; the Leeville-109 branch contains approximately 4,000 square feet. The Hermitage branch opened in the fall of 1999 and contains 8,000 square feet of space. The Gladeville branch contains approximately 3,400 square feet of space. The Lebanon facility at Tennessee Boulevard was expanded in 1997 to 2,200 square feet of space. The Mt. Juliet facility on Highway 70 was completed in July 2004 and contains approximately 3,450 square feet of space and the Providence facility which was opened in 2011 contains approximately 4,450 square feet of space. The NorthWest Broad Street facility was relocated from a leased office to an office owned by the Bank in 2011 and contains approximately 6,300 square feet of space. The Smyrna office opened in September of 2006 and contains approximately 3,600 square feet of space. The Memorial Blvd office in Murfreesboro opened in October of 2006 and contains approximately 7,800 square feet of space. The Highway 96 office in Murfreesboro opened in January 2017 and contains approximately 4,700 square feet of space. The South Church Street office in Murfreesboro opened in January 2008 and contains approximately 7,800 square feet of space. The West End office in Nashville opened in August 2017 and contains approximately 3,200 square feet of space. The Cool Springs office in Franklin opened in December 2018 and contains approximately 4,180 square feet of space. Each of the branch facilities of the Bank not otherwise described above contains approximately 1,000 square feet of space.

The Bank also has a facility at 576 West Broad Street in Smithville, Tennessee which was expanded in 2001 and now contains approximately 10,300 square feet of space and a facility at 306 Brush Creek Road in Alexandria, Tennessee which occupies approximately 2,400 square feet of space. The Bank owns both facilities. The Bank also owns a building at 1300 Main Street North, Carthage, Tennessee, which was expanded in 2005 and now contains approximately 11,000 square feet and a second facility in Gordonsville, Tennessee at 7 New Middleton Highway, Gordonsville, Tennessee. The Bank owns a building at 455 West Main Street in Gallatin, Tennessee which occupies approximately 4,800 square feet of space and a building at 175 East Main Street in Hendersonville, Tennessee which occupies approximately 6,300 square feet of space. The Bank owns a building at 217 Donelson Pike, Donelson, Tennessee which occupies approximately 8,000 square feet of space and a building at 320 South Jefferson Avenue, Cookeville, Tennessee, which occupies approximately 6,300 square feet of space. The Bank owns all of its branch facilities except for the Lebanon facility at Tennessee Boulevard, its space in the Wal-Mart Supercenter, its Loan Production office in Gallatin, its West End office in Nashville and its Cool Springs office in Franklin. The Bank also leases space at seven locations within Wilson County, DeKalb County, Rutherford County, Davidson County, Smith County and Cannon County where it maintains and operates automatic teller machines.

Item 3. Legal Proceedings

As of the date hereof, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of its properties are subject; nor are there material proceedings known to the Company or its subsidiaries to be contemplated by any governmental authority; nor are there material proceedings known to the Company or its subsidiaries, pending or contemplated, in which any director, officer or affiliate or any principal security holder of the Company or any of its subsidiaries or any associate of any of the foregoing, is a party or has an interest adverse to the Company or any of its subsidiaries.

Item 4. Mine Safety Disclosures

Not Applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchasers of Equity Securities

Information required by this item is contained under the heading “Holding Company & Stock Information” on page 86 of the Company’s 2019Annual Report and is incorporated herein by reference.

The Company did not repurchase any shares of its common stock during the quarter ended December 31, 2019.

Item 6. Selected Financial Data

Information required by this item is contained under the heading “Wilson Bank Holding Company Financial Highlights (Unaudited)” on page 13 of the Company’s 2019Annual Report and is incorporated herein by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information required by this item is contained under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as set forth on pages 14 through 31 of the Company’s 2019Annual Report and is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is contained under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Quantitative and Qualitative Disclosures About Market Risk” as set forth on pages 26 and 27 of the Company’s 2019Annual Report and is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements and the independent auditor’s report of Maggart & Associates, P.C. required by this item are contained in pages 35 through 85 of the Company’s 2019 Annual Report and are incorporated herein by reference.

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by it in the reports that if files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

Management Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

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Based on that assessment, management concluded that, as of December 31, 2019, the Company’s internal control over financial reporting was effective based on those criteria.

The Company’s independent registered public accounting firm has issued an attestation report on the Company’s internal control over financial reporting, which report is contained on pages 33 and 34 of the Company’s 2019 Annual Report and is incorporated herein by reference.

Changes in Internal Controls

No changes were made to the Company’s internal control over financial reporting during the quarter ended December 31, 2019 that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

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PART III

Item 10.        Directors, Executive Officers and Corporate Governance

The information required by this item with respect to directors is incorporated herein by reference to the sections entitled “Item-1 Election of Directors-Information Concerning Nominees” and “Item-1 Election of Directors-Director Qualifications” in the Company’s definitive proxy materials filed in connection with the Company’s 2020 Annual Meeting of Shareholders (the “2020 Annual Meeting of Shareholders”). The information required by this item with respect to executive officers is set forth below:

John McDearman (50) – Mr. McDearman is President and Chief Executive Officer of the Company and Chief Executive Officer of the Bank. Mr. McDearman joined the Bank in November of 1998.  He has held positions in branch administration and commercial lending.  From November 2002 to January 2009, he held the position of Senior Vice President-Central Division of the Bank. From January 2009 to January 2018, he served as Executive Vice President of the Bank and from January 2018 to January 1, 2020, he served as President of the Bank.  Prior to joining the Bank in 1998, he was Assistant Vice President, Banking Center Manager for NationsBank, Chattanooga, TN, a position he held from 1994 to 1998.  Mr. McDearman also serves on the Boards of Directors of the Company and the Bank.

John Foster (47) – Mr. Foster joined the Bank in January 1998. He has held positions in branch administration and consumer lending. From August 2017 to July 2018, Mr. Foster served as Senior Vice President/Head of Consumer Lending for the Bank, after having served as a Senior Vice President of the Bank from January 2013 to August 2017. From July 2018 to April 2019, he served as Executive Vice President/Small Business & Consumer Lending for the Bank. From April 2019 to January 1, 2020, he served as the Bank’s Executive Vice President/Chief Consumer/Commercial Banking Officer. Currently, he serves as President of the Bank, a position he has held since January 1, 2020.

Gary Whitaker (62) - Mr. Whitaker joined the Bank in May 1996. Prior to that time Mr. Whitaker was employed with NationsBank of Tennessee, N.A. in Nashville (and its predecessors) from 1979. He has held positions in collections, as branch manager, in construction lending, retail marketing, automobile lending, loan administration, operations analyst, as Vice President, Senior Vice President and most recently as Executive Vice President since 2002. His principal duties include overseeing the Bank’s lending function and loan operations.

Lisa Pominski (55) - Ms. Pominski is Executive Vice President and the Chief Financial Officer of the Bank and the Company and is the Company’s principal financial and accounting officer. Ms. Pominski has held several positions with the Bank including Asst. Cashier, Asst. Vice President and Senior Vice President since the Bank’s formation in May of 1987. Prior to 1987 Ms. Pominski was employed by People’s Bank, Lebanon, TN.

Clark Oakley (50) - Mr. Oakley joined the Bank in October of 1995. He has held positions in mortgage origination and branch administration. From 2008 to 2016 he held the position of Senior Vice President- Eastern Division of the Bank, and from January 1, 2017 until December 31, 2017, he served as Executive Vice President and Chief Operating Officer of the Bank. Currently he serves as Executive Vice President and Chief Operating Officer of the Company and the Bank. Prior to 1995 Mr. Oakley was employed at Union Planters Bank in Alexandria, TN. His primary duties include overseeing the operations of the Company and the Bank, including information technology and electronic banking.

All officers serve at the pleasure of the Board of Directors. No officers are involved in any legal proceedings which are material to an evaluation of their ability and integrity.

The Company has adopted a code of conduct for its senior executive and financial officers (the “Code of Conduct”), a copy of which will be provided to any person, without charge, upon request to the Company at 623 West Main Street, Lebanon, Tennessee 37087, Attention: Corporate Secretary. The Company will make any legally required disclosures regarding amendments to, or waivers of, provisions of its Code of Conduct either in a Current Report on Form 8-K or on its website, in each case in accordance with the rules and regulations of the SEC.

The information required by this item with respect to the Company’s audit committee and any “audit committee financial expert” is incorporated herein by reference to the section entitled “Item-1 Election of Directors - Description of the Board and Committees of the Board” in the Company’s definitive proxy materials filed in connection with the 2020 Annual Meeting of Shareholders.

The information required by this item with respect to Delinquent Section 16(a) of the Exchange Act is incorporated herein by reference to the Section entitled “Item-1 Election of Directors - Delinquent Section 16(a) of the Securities Exchange Act of 1934” in the Company’s definitive proxy materials filed in connection with the 2020 Annual Meeting of Shareholders.

45

Item 11. Executive Compensation

Information required by this item is incorporated herein by reference to the sections entitled “Executive Compensation” and “Personnel Committee Interlocks and Insider Participation” in the Company’s definitive proxy materials to be filed in connection with the 2020 Annual Meeting of Shareholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information required by this item is incorporated herein by reference to the section entitled “Stock Ownership” in the Company’s definitive proxy materials to be filed in connection with the 2020 Annual Meeting of Shareholders.

The following table summarizes information concerning the Company’s equity compensation plans at December 31, 2019 and has been adjusted to reflect the Company’s two-for-one stock split in the form of a 100% stock dividend paid on October 30, 2003, a four-for-three stock split in the form of a stock dividend paid on May 31, 2007 and a four-for-three stock split in the form of a stock dividend paid on March 31, 2016:

	Number of securities to be issued	Weighted average exercise price of	Number of securities remaining available for future
	upon exercise of outstanding options,	outstanding options, warrants and	issuance under equity compensation plans (excluding
Plan Category	warrants and rights	rights	securities reflected in first column)
Equity compensation plans approved by shareholders	273,309	41.19	467,271
Equity compensation plans not approved by shareholders	—	—	—
Total	273,309	41.19	467,271

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required by this item with respect to certain relationships and related transactions is incorporated herein by reference to the section entitled “Certain Relationships and Related Transactions” in the Company’s definitive proxy materials to be filed in connection with the 2020 Annual Meeting of Shareholders.

Information required by this item with respect to director independence is incorporated herein by reference to the section entitled “Item-1 Election of Directors - Director Independence” in the Company’s definitive proxy materials to be filed in connection with the 2020 Annual Meeting of Shareholders.

Item 14. Principal Accountant Fees and Services

Information required by this item is incorporated herein by reference to the section entitled “Item-2 Ratification of the Appointment of the Independent Registered Public Accounting Firm” in the Company’s definitive proxy materials to be filed in connection with the 2020 Annual Meeting of Shareholders.

Item 15. Exhibits, Financial Statement Schedules

(a)(1)    Financial Statements. See Item 8.

(a)(2)    Financial Statement Schedules. Not Applicable.

(a)(3)    Exhibits. See Index to Exhibits.

Item 16. Form 10K Summary

None.

46

INDEX TO EXHIBITS

3.1	Charter of Wilson Bank Holding Company, as amended (restated for SEC electronic filling purposes only) (incorporated herein by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 9, 2016).
3.2	Bylaws of Wilson Bank Holding Company, as amended (restated for SEC electronic filling purposes only) (incorporated herein by reference to Exhibit 3.2 of the Company’s Quarterly Report on form 10-Q for the quarter ended March 31, 2016 filed with the SEC on May 10, 2016).
4.1	Specimen Common Stock Certificate. (incorporated herein by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-4 (Registration No. 333-121943)).
4.2	Description of the Company's Securities
10.1	Wilson Bank Holding Company 2009 Stock Option Plan (incorporated herein by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 (Registration No. 333-158621)).*
10.2	Form of Wilson Bank Holding Company Incentive Stock Option Agreement (incorporated herein by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-20402)).*
10.3	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.4	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.5	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.6	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*

47

10.7	Amendment, dated December 30, 2008, to Executive Salary Continuation Agreement dated as of January 1, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.8	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.9	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.10	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.11	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.11 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.12	Executive Salary Continuation Agreement dated as of July 28, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*

10.13	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.14	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.15	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.16	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.17	Amendment, dated November 23, 2012, to Executive Salary Continuation Agreement dated as of January 1, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.18	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*

48

10.19	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.20	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.21	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.22	Amendment, dated November 23, 2012 to Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated as of July 28, 2006 by and between Wilson Bank and John C. McDearman III (incorporated by reference to Exhibit 10.10 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.23	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.11 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.24	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.25	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.13 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.26	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.14 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.27	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.15 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.28	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.16 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.29	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.17 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.30	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.18 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*

49

10.31	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.19 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.32	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.20 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.33	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.21 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.34	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.22 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.35	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.23 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.36	Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated July 28, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.24 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.37	Executive Survivor Income Agreement, dated April 14, 2014, by and between the Bank and Lisa Pominski (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.38	Executive Survivor Income Agreement, dated April 14, 2014, by and between the Bank and Gary Whitaker (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.39	Executive Survivor Income Agreement, dated April 14, 2014, by and between the Bank and John C. McDearman, III (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.40	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and J. Randall Clemons (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.41	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and H. Elmer Richerson (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.42	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and Jack Bell (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.43	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and James Comer (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).

50

10.44	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and James Patton (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.45	Director Survivor Income Agreement, dated April 6, 2015, by and between the Bank and William Jordan (incorporated by reference to Exhibit 10.46 of the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 14, 2016).
10.46	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.47	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.48	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.49	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.50	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.51	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.52	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.53	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.54	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.55	Second Amendment to the Executive Salary Continuation Agreement dated as of January 1, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.56	Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*

51

10.57	Form of Stock Appreciation Rights Agreement for employees under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.58	Form of Non-qualified Stock Option Agreement for employees under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.59	Form of Stock Appreciation Rights Agreement for employee directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.60	Form of Non-qualified Stock Option Agreement for employee directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.10 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.61	Form of Stock Appreciation Rights Agreement for directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.11 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.62	Form of Non-qualified Stock Option Agreement for directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.63	Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated November 23, 2012, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.64 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 8, 2019).*
10.64	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.65 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 8, 2019).*
10.65	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement as of September 26, 2016, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.66 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 8, 2019).*
10.66	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.67 of the Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on March 8, 2019).*
10.67	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement Implemented May 22, 2015 by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.68 of the Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on March 8, 2019).*
10.68	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and John Foster.*
10.69	Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated May 22, 2015, by and between Wilson Bank and Trust and John Foster.*
13.1	Selected Portions of the Wilson Bank Holding Company Annual Report to Shareholders for the year ended December 31, 2019 incorporated by reference into items 1, 5, 6, 7, 7A and 8.
21.1	Subsidiaries of the Company.
23.1	Consent of Independent Registered Public Accounting Firm.
31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*    Management compensatory plan or contract

52

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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
By:	/s/ John C. McDearman, III
	John C McDearman, III
Title:	President and Chief Executive Officer
Date:	March 12, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John C. McDearman, III John C. McDearman, III	President, Chief Executive Officer and Director (Principal Executive Officer)	March 12, 2020
/s/ Lisa Pominski Lisa Pominski	Chief Financial Officer (Principal Financial and Accounting Officer)	March 12, 2020
/s/ Jack W. Bell Jack W. Bell	Director	March 12, 2020
/s/ James F. Comer James F. Comer	Director	March 12, 2020
/s/ William P. Jordan William P. Jordan	Director	March 12, 2020
/s/ James Anthony Patton James Anthony Patton	Director	March 12, 2020
/s/ J. Randall Clemons J Randall Clemons	Director	March 12, 2020
/s/ Michael G. Maynard Michael G. Maynard	Director	March 12, 2020
/s/ Clinton M. Swain Clinton M. Swain	Director	March 12, 2020
/s/ H. Elmer Richerson H. Elmer Richerson	Director	March 12, 2020

53

EX-4.2

Exhibit 4.2

DESCRIPTION OF REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

The following description sets forth certain material terms and provisions of Wilson Bank Holding Company’s securities that are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of the date of the Annual Report on Form 10-K of which this exhibit is a part, the registrant has one class of securities registered under Section 12 of the Exchange Act: Wilson Bank Holding Company’s common stock, par value $2.00 per share.

DESCRIPTION OF COMMON STOCK

     Wilson Bank Holding Company has the authority to issue 50,000,000 shares of common stock. As of March 12, 2020, 10,888,997 shares of Wilson Bank Holding Company common stock were outstanding.

     The following summary of the common stock of Wilson Bank Holding Company and certain provisions of Wilson Bank Holding Company’s charter, as amended, and bylaws, as amended, and certain provisions of applicable law, does not purport to be complete and is qualified by applicable law and by the provisions of Wilson Bank Holding Company’s charter, as amended, and bylaws, as amended, which are incorporated by reference as exhibits to the Annual Report on Form 10-K, of which this exhibit is a part.

Common Stock

     The holders of Wilson Bank Holding Company’s common stock are entitled to one vote per share on all matters to be voted on by shareholders, including the election of directors. Holders of common stock have no preemptive rights, and there are no conversion rights or redemption or sinking fund provisions with respect to shares of Wilson Bank Holding Company’s common stock.

Anti-Takeover Effect of Wilson Bank Holding Company’s Charter and Bylaw Provisions

     Wilson Bank Holding Company’s charter and bylaws contain provisions that could make it more difficult to consummate an acquisition of Wilson Bank Holding Company by means of a tender offer, a proxy contest or otherwise.

     Board of Directors. Wilson Bank Holding Company’s bylaws provide that the number of directors shall be no fewer than five nor more than 15. The Wilson Bank Holding Company charter and bylaws provide that the directors will be classified into three classes, as nearly equal in number as possible with each class to serve for staggered three year terms. Under the Wilson Bank Holding Company bylaws, the shareholders may remove one or more directors with or without cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him without cause. The Wilson Bank Holding Company bylaws provides that if so provided in the Wilson Bank Holding Company charter, any of the directors may be removed for cause by the affirmative vote of a majority of the entire board of directors; however, such a method of removal is not provided for in the Wilson Bank Holding Company charter. A director may be removed by the shareholders or directors only at a meeting called for the purpose of removing him, and the meeting notice must state the purpose, or one of the purposes, of the meeting is the removal of directors. Directors may be removed without cause only by vote of a majority of the shareholders entitled to vote at a regular or special meeting. The Wilson Bank Holding Company charter provides that any vacancy on the board of directors, including a vacancy that results from an increase in the number of directors or a vacancy that results from the removal of a director with cause, may be filled only by the board of directors. Any director elected to fill a vacancy shall hold office until the next annual meeting following his or her election to the board of directors at which time such person will be subject to election and classification. Under the Wilson Bank Holding Company bylaws, if the directors remaining in office constitute fewer than a quorum of the board of directors, they may fill such vacancies by the affirmative vote of a majority of all the directors remaining in office.

     Charter Provisions. The Wilson Bank Holding Company charter provides that the affirmative vote of holders of two-thirds of the voting power of the shares entitled to vote at an election of directors shall be required to amend, alter, change or repeal, or to adopt any provision as part of the charter or as part of Wilson Bank Holding Company’s bylaws inconsistent with the purpose and intent of Article 8 of the charter, which creates staggered terms for the board of directors.

Tennessee’s Anti-takeover Provisions

     Provisions in Tennessee law could make it harder for someone to acquire Wilson Bank Holding Company through a tender offer, proxy contest or otherwise.

     Tennessee Business Combination Act. The Tennessee Business Combination Act provides that a party owning shares equal to 10% or more of the voting power of any class or series of the then outstanding voting stock of a “resident domestic corporation” is an “interested shareholder.” An interested shareholder also includes a party that is an affiliate or associate, as defined in the Tennessee Business Combination Act, of a “resident domestic corporation.” Wilson Bank Holding Company is currently a resident domestic corporation within the meaning of this act. An interested shareholder cannot engage in a business combination with the resident domestic corporation unless the combination:

•   takes place at least five years after the interested shareholder first acquired 10% or more of the voting power of any class or series of the then outstanding voting stock of the resident domestic corporation; and

•   either is approved by at least two-thirds of the non-interested voting shares of the resident domestic corporation or satisfies fairness conditions specified in the Tennessee Business Combination Act.

     These provisions apply unless one of the following exemptions is available:

•   a business combination with an entity can proceed without delay when approved by the target corporation’s board of directors before that entity becomes an interested shareholder;

•   a business combination is exempt, if in its original charter or original bylaws, the resident domestic corporation elects not to be governed by the Tennessee Business Combination Act;

•   unless the charter of the resident domestic corporation provides otherwise, the Tennessee Business Combination Act does not apply to a business combination of a resident domestic corporation with, or proposed by or on behalf of, an interested shareholder if the resident domestic corporation did not have, on such interested shareholder’s share acquisition date, a class of voting stock registered or traded on a national securities exchange or registered with the securities and exchange commission pursuant to Section 12(g) of the Exchange Act; or

•   the resident corporation may enact a charter or bylaw amendment to remove itself entirely from the Tennessee Business Combination Act that must be approved by a majority of the shareholders who have held shares for more than one year before the vote and which cannot become operative until two years after the vote.

Wilson Bank Holding Company has not adopted a charter amendment or bylaw to remove it from the Tennessee Business Combination Act.

     Tennessee Greenmail Act. The Tennessee Greenmail Act prohibits Wilson Bank Holding Company from purchasing or agreeing to purchase any of its securities, at a price higher than fair market value, from a holder of 3% or more of any class of its securities who has beneficially owned the securities for less than two years. Wilson Bank Holding Company can, however, make this purchase if the majority of the outstanding shares of each class of voting stock issued by it approves the purchase or if it makes an offer of at least equal value per share to all holders of shares of the same class of securities as those held by the prospective seller.

     Tennessee Control Share Acquisition Act. The Tennessee Control Share Acquisition Act strips a purchaser’s shares of voting rights any time an acquisition of shares in a Tennessee corporation which has elected to be covered by the Tennessee Control Share Acquisition Act (which Wilson Bank Holding Company at this time has not) brings the purchaser’s voting power to one-fifth, one-third or a majority of all voting power. The purchaser’s voting rights can be restored only by a majority vote of the other shareholders. The purchaser may demand a meeting of shareholders to conduct such a vote. The purchaser can demand a meeting for this purpose before acquiring shares in excess of the thresholds described above, which we refer to as a control share acquisition, only if it holds at least 10% of the outstanding shares and announces a good faith intention to make the acquisition of shares having voting power in excess of the thresholds stated above. If a target corporation so elects prior to the date on which a purchaser makes a control share acquisition, a target corporation may redeem the purchaser’s shares if the shares are not granted voting rights.

     The effect of these provisions may make a change of control of Wilson Bank Holding Company harder by delaying, deferring or preventing a tender offer or takeover attempt that you might consider to be in your best interest, including those attempts that might result in the payment of a premium over the market price for Wilson Bank Holding Company’s shares. They may also promote the continuity of Wilson Bank Holding Company’s management by making it harder for you to remove or change the incumbent members of the board of directors.

     Limitations on Liability and Indemnification of Directors and Officers. The Tennessee Business Corporation Act provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if:

•   the director or officer acted in good faith;

•   in the case of conduct in his or her official capacity with the corporation, the director or officer reasonably believed such conduct was in the corporation’s best interest;

•   in all other cases, the director or officer reasonably believed that his or her conduct was not opposed to the best interest of the corporation; and

•   in connection with any criminal proceeding, the director or officer had no reasonable cause to believe that his or her conduct was unlawful.

     In actions brought by or in the right of the corporation, however, the Tennessee Business Corporation Act provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. In cases where the director or officer is wholly successful, on the merits or otherwise, in the defense of any proceeding instituted because of his or her status as an officer or director of a corporation, the Tennessee Business Corporation Act mandates that the corporation indemnify the director or officer against reasonable expenses incurred in the proceeding. The Tennessee Business Corporation Act also provides that in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if the officer or director is adjudged liable on the basis that personal benefit was improperly received. Notwithstanding the foregoing, the Tennessee Business Corporation Act provides that a court of competent jurisdiction, upon application, may order that an officer or director be indemnified for reasonable expenses if, in consideration of all relevant circumstances, the court determines that the individual is fairly and reasonably entitled to indemnification, notwithstanding the fact that:

•   the officer or director was adjudged liable to the corporation in a proceeding by or in the right of the corporation;

•   the officer or director was adjudged liable on the basis that personal benefit was improperly received by him or her; or

•   the officer or director breached his or her duty of care to the corporation.

     Wilson Bank Holding Company’s charter provides that to the extent permitted by the Tennessee Business Corporation Act, the company may indemnify every officer, director or employee, his heirs, executors and administrators, against judgments resulting from the expenses reasonably incurred by him in connection with any action to which he may be made a party by reason of his being an officer, director or employee of the company, including any action based upon any alleged act or omission on his part as an officer, director or employee of the company, except in relation to matters as to which he shall be finally adjudged in such action to be liable for negligence or misconduct. Under the Tennessee Business Corporation Act, this provision relieves Wilson Bank Holding Company’s directors from personal liability to it or its shareholders for monetary damages for breach of fiduciary duty as a director, except for liability arising from a judgment or other final adjudication establishing:

•   any breach of the director’s duty of loyalty;

•   acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or

•   any unlawful distributions.

EX-10.68

Exhibit 10.68

© 2015 Meyer Chatfield Compensation Advisors

This document is provided to assist your legal counsel in documenting your specific arrangement. It is not a form to be signed, nor is it to be construed as legal advice. Failure to accurately document your arrangement could result in significant losses, whether from claims of those participating in the arrangement, from the heirs and beneficiaries of participants, or from regulatory agencies such as the Internal Revenue Service and the Department of Labor. License is hereby granted to your legal counsel to use these materials in documenting solely your arrangement.

WILSON BANK & TRUST

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

This Supplemental Executive Retirement Plan (“Plan”) is adopted as of this 22nd day May, 2015 (the “Effective Date”) by Wilson Bank & Trust, a Tennessee corporation (the “Employer” or the “Bank”) for the benefit of John Foster (the “Executive”). The purpose of the Plan is to provide certain supplemental nonqualified pension benefits to certain executives who have contributed substantially to the success of the Employer and the Employer desires to incentivize the executives to continue in its employ.

This Plan is intended to be and shall be administered as an income tax nonqualified, unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), Sections 201(2), 301(a)(3), and 401(a)(1). This Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, the intent of the parties hereto is that the Plan shall be operated and interpreted consistent with the requirements thereof.

ARTICLE 1     
DEFINITIONS

Whenever used in this Plan, the following terms have the meanings specified:

1.1.     “Account Balance” means, as of any date, the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) on behalf of the Executive.

1.2.      “Annuity Contract” means the following annuity contract(s) purchased and solely owned by the Bank: [a Flexible Premium Indexed Deferred Annuity Contract issued by Midland Insurance Company, contract #8500543841or such other annuity contracts as the Bank may purchase from time to time].

1.3.     “Beneficiary” means the person or entity designated, or otherwise determined in accordance with Article 4, in writing by the Executive to receive death benefits pursuant to this Plan in the event of his or her death.

1.4.     “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.

1.5.     “Board” means the Board of Directors of the Employer.

1.6.     “Change in Control” shall be deemed to have taken place if there occurs a “change in ownership,” a “change in the effective control,” or a “change in the ownership of a substantial portion of the assets” of the Employer as such terms are defined in Treasury Regulation §1.409A-3(i)(5) or any subsequent, applicable Treasury Regulation.

1.7.     “Disability” shall mean the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of net less than twelve (12) months or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer, as determined under Section 1.409A-3(i)(4).

Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Employer, provided that the definition of disability applied under such disability insurance program complies with the requirements of Section 409A. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of Social Security Administration’s or the provider’s determination.

1.8.     “ERISA” means the Employee Retirement Income Security Act of 1974.

1.9.     “Rider” means the income rider attached to the Annuity Contract as an endorsement or other product feature that operates as an income rider, with such feature providing for a withdrawal or payment feature for the life of the annuitant.

1.10.     “Normal Retirement Age” means age sixty-five (65).

1.11.     “Normal Retirement Date” means the date the Executive Separates from Service after reaching Normal Retirement Age.

1.12.     “Separation from Service” means separation from service as that term is defined and interpreted in Section 409A of the Code and Treasury Regulation §1.409A-1(h) or in subsequent regulations or other guidance issued by the Internal Revenue Service.

ARTICLE 2     
DEFERRED COMPENSATION AND VALUATION OF ACCOUNT

2.1.     Annuity Contract and Other Investments. For purposes of satisfying its obligations to provide benefits under this Plan, the Bank has initially invested in the Annuity Contract and may invest in other investments. However, nothing in this Section shall require the Bank to invest in any particular form of investment.

2.2.     Ownership of the Annuity Contract. The Bank is the sole owner of the Annuity Contract, and other such investments, and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the death proceeds of the Annuity Contract. The Bank shall at all times be entitled to the Annuity Contract’s cash surrender value, as that term is defined in the Annuity Contract.

2.3.     Right to Annuity Contract. Notwithstanding any provision hereof to the contrary, the Bank shall have the right to sell or surrender any Annuity Contract without terminating this Plan, provided the Bank replaces the Annuity Contract with a comparable annuity policy or asset of comparable value.  Without limitation, the Annuity Contract at all times shall be the exclusive property of the Bank and shall be subject to the claims of the Bank’s creditors

2.4.     Rabbi Trust. Employer may establish a “rabbi trust” to which contributions may be made to provide the Employer with a source of funds for purposes of satisfying the obligations of the Employer under the Plan. The trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan. The Executive and his or her Beneficiary shall have no beneficial ownership interest in any assets held in the trust.

ARTICLE 3     
RETIREMENT AND OTHER BENEFITS

3.1.     Normal Retirement Benefit. Upon the Executive’s Separation from Service on or after reaching Normal Retirement Age for any reason other than death or Disability, the Executive will be entitled to the monthly benefit payment described in this paragraph 3.1. The amount of the monthly benefit will equal the amount that is paid from the Annuity Contract designated under this Plan to benefit the Executive through the Rider (the “Normal Retirement Benefit”). The Normal Retirement Benefit will be payable in equal monthly installments for the life of the Executive commencing on the first (1st) day of the second month following the Executive’s Normal Retirement Date. This shall be the Executive’s benefit in lieu of any other benefit under this Plan.

3.2.     Other Separation from Service. In the event the Executive should Separate from Service prior to Normal Retirement Age for any reason other than death, Disability, or on or following a Change in Control, this agreement will terminate and the Executive will not be entitled to any of the benefits enumerated in this agreement.

3.3.     Disability Benefit. Upon the Executive’s Disability while actively employed by the Employer, but prior to his or her Normal Retirement or Early Retirement, the Executive will be entitled to the benefit described in this Section 3.3 in lieu of any other benefit under this Agreement. The Disability Benefit will equal sixty (60%) percent of the Executive’s base salary and bonus at the time of the Disability. The Disability Benefit is payable in equal monthly installments commencing on the first (1^st) day of the third month following the date of the Executive’s Disability and payable until the Executive reaches Normal Retirement Age. At Normal Retirement Age, the Disability Benefit will be reduced to an amount equal to the Normal Retirement Benefit as provided for in Section 3.1 as if the Executive separated from service at the Executive’s Normal Retirement Age and such reduced amount shall continue for the life of the Executive as provided in Section 3.1.

3.4.     Preretirement Death Benefit. Upon death of the Executive while in service to the Employer, the Employer shall pay to the Executive’s Beneficiary the Account Balance, payable in a lump sum no later than thirty (30) days from the date of death (with the Beneficiary having no right to designate the taxable year of the payment).

3.5.     Postretirement Death Benefit. Upon death of the Executive after benefit payments have commenced under the Plan, but before receiving a total of one hundred eighty (180) payments, the Employer shall continue payments to the Executive’s Beneficiary until a total of one hundred eighty (180) payments have been paid to the Executive and/or his Beneficiary. If the Executive dies after receiving one hundred eighty (180) or more payments of benefit payments, this Agreement will terminate and no additional payments will be made to the Executive's Beneficiary under the Plan.

3.6.     Change in Control Benefit. Upon a Change in Control, the Executive will be one hundred percent (100%) vested in the Retirement Benefit as provided for in Section 3.1 as if the Executive separated from service at the Normal Retirement Age. Such benefits shall be payable in equal monthly installments for the life of the Executive commencing thirty (30) days following said Change in Control.

3.7.     Restriction on Timing of Distributions. Notwithstanding the applicable provisions of this Plan regarding timing of payments, the following special rules shall apply if the stock of the Employer is publicly traded at the time of the Executive’s Separation from Service in order for this Plan to comply with Section 409A of the Code: (i) to the extent the Executive is a “specified employee” (as defined under Section 1.409A-1(i) of the Treasury Regulations) at the time of a distribution and to the extent such applicable provisions of Section 409A of the Code and the regulations thereunder require a delay of such distributions by a six-month period after the date of such Executive’s Separation from Service with the Employer, no such distribution shall be made prior to the date that is six months after the date of the Executive’s Separation from Service with the Employer, and (ii) any such delayed payments shall be paid to the Executive in a single lump sum within five (5) business days after the end of the six (6) month delay.

ARTICLE 4     
BENEFICIARIES

4.1.     Beneficiary Designations. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Plan upon the death of the Executive. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other benefit plan of the Employer in which the Executive participates.

4.2.     Beneficiary Designation; Changes. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.

4.3.     Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received in writing by the Plan Administrator or its designated agent.

4.4.    No Beneficiary Designation. If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be distributed to the personal representative of the Executive’s estate.

4.5.     Facility of Payment. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Employer may pay such benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Employer may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Employer from all liability for the benefit.

ARTICLE 5     
GENERAL LIMITATIONS

5.1.     Limits on Payments. It is the intention of the parties that none of the payments to which the Executive is entitled under this Plan will constitute a “golden parachute payment” within the meaning of 12 USC Section 1828(k) or implementing regulations of the FDIC, the payment of which is prohibited (collectively, “Section 1828(k)”). Notwithstanding any other provision of this Plan to the contrary, any payments due to be made by Employer for the benefit of the Executive pursuant to this Plan, or otherwise, are subject to and conditioned on compliance with Section 1828(k) and any regulations promulgated thereunder including the receipt of all required approvals thereof by Employer’s primary federal banking regulator and/or the FDIC.

In addition, Employer and its successors retain the legal right to demand the return of any payment made hereunder which constitutes a “golden parachute payment” within the meaning of Section 1828(k) or implementing regulations of the FDIC should Employer or its successors later obtain information indicating that the Executive committed, is substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses outlined under 12 C.F.R. 359.4(a)(4).

ARTICLE 6     
CLAIMS AND REVIEW PROCEDURES

6.1.     Claims Procedure. A person or Beneficiary (a “claimant”) who has not received benefits under the Plan that he or she believes should be paid shall make a claim for such benefits as follows, and strictly in accordance with section 409A of the Code:

(a)     Initiation - Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If the claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after the notice was received by the claimant. All other claims must be made within one hundred eighty (180) days after the date of the event that caused the claim to arise. The claim must state with particularity the determination desired by the claimant.

(b)     Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (90)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

(c)     Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i) The specific reasons for the denial,

(ii) A reference to the specific provisions of the Plan on which the denial is based,

(iii) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

(iv) An explanation of the Plan’s review procedures and the time limits applicable to such procedures, and

(v) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

6.2.     Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial, as follows

(a)     Initiation - Written Request. To initiate the review, the claimant, within 60 days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.

(b)     Additional Submissions - Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

(c)     Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d)     Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60)-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

(e)     Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i) The specific reasons for the denial,

(ii) A reference to the specific provisions of the Plan on which the denial is based,

(iii) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits, and

(iv) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

All claim determinations under this Section 6 shall be made in accordance with section 409A of the Code and the Regulations thereunder.

ARTICLE 7     
MISCELLANEOUS

7.1.     Amendments and Termination. Strictly in compliance with Section 409A of the Code, (a) this Agreement may be amended solely by a written agreement signed by the Employer and by the Executive, and (b) except as otherwise provided herein, this Agreement may be terminated solely by the Employer in its sole discretion. Any acceleration of payments or change in the form of payments under this Agreement, including upon the amendment, modification or termination of the Agreement, shall be made strictly as permitted and in accordance with section 409A of the Code, including 1.409A-3(j)(4) of the Treasury Regulations.

7.2.     No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give any Executive the right to remain an employee of the Employer, nor does it interfere with the Employer’s right to discharge the Executive. It also does not require any Executive to remain an employee nor interfere with any Executive’s right to terminate employment at any time.

7.3.     Non-Transferability. Benefits under this Plan cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.

7.4.     Tax Withholding. The Employer shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.

7.5.     Applicable Law. Except to the extent preempted by the laws of the United States of America, the validity, interpretation, construction and performance of this Plan shall be governed by and construed in accordance with the laws of the State of Tennessee, without giving effect to the principles of conflict of laws of such state.

7.6.     Unfunded Arrangement. The Executive and his/her Beneficiary are general unsecured creditors of the Employer for the payment of benefits under this Plan. The benefits represent the mere promise by the Employer to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance, annuity contract or other asset purchased by Employer to fund its obligations under this Plan shall be a general asset of the Employer to which the Executive and Beneficiary have no preferred or secured claim.

7.7.     Benefit Provision. Notwithstanding the provisions of this Plan in the payment of the benefits under Article 3, any benefits payable under this Plan are contingent solely upon the amount that is provided by the Annuity Contract(s) as identified in this Plan or other provision as provided for in Article 2.

7.8.     Severability. If any provision of this Plan is held invalid, such invalidity shall not affect any other provision of this Plan, and each such other provision shall continue in full force and effect to the full extent consistent with law. If any provision of this Plan is held invalid in part, such invalidity shall not affect the remainder of the provision, and the remainder of such provision together with all other provisions of this Plan shall continue in full force and effect to the full extent consistent with law.

7.9.     Headings. The headings of articles herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Plan.

7.10.   Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Employer at the time of the delivery of such notice, and properly addressed to the Employer if addressed to the Board, at PO 768, Lebanon, Tennessee 37088.

7.11.   Payment of Legal Fees. In the event litigation ensues between the parties concerning the enforcement of the obligations of the parties under this Plan, the Employer shall pay all costs and expenses in connection with such litigation until such time as a final determination (excluding any appeals) is made with respect to the litigation. If the Employer prevails on the substantive merits of each material claim in dispute in such litigation, the Employer shall be entitled to receive from the Executive all reasonable costs and expenses, including without limitation attorneys’ fees, incurred by the Employer on behalf of the Executive in connection with such litigation, and the Executive shall pay such costs and expenses to the Employer promptly upon demand by the Employer.

7.12.   Termination or Modification of Plan Because of Changes in Law, Rules or Regulations. The Employer is entering into this Plan on the assumption that certain existing tax laws, rules, and regulations will continue in effect in their current form. If that assumption materially changes and the change has a material detrimental effect on this Plan, then the Employer reserves the right to terminate or modify this Plan accordingly.

ARTICLE 8     
ADMINISTRATION OF AGREEMENT

8.1.     Plan Administrator Duties. This Plan shall be administered by a Plan Administrator consisting of the Board or such committee or person(s) as the Board shall appoint. The Plan Administrator shall have the sole and absolute discretion and authority to interpret and enforce all appropriate rules and regulations for the administration of this Plan and the rights of the Executive under this Plan, to decide or resolve any and all questions or disputes arising under this Plan, including benefits payable under this Plan and all other interpretations of this Plan, as may arise in connection with the Plan.

8.2.     Agents. In the administration of this Plan, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Employer.

8.3.    Binding Effect of Decisions. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan. Without limiting the foregoing, it is acknowledged that the value of the benefits payable hereunder may be difficult to determine in the event the Employer does not actually purchase and maintain the Annuity Contract as contemplated hereunder; therefore, in such event, the Employer shall have the right to make any reasonable assumptions in determining the benefits payable hereunder and any such determination made in good faith shall be binding on the Executive.

8.4.     Indemnity of Plan Administrator. The Plan Administrator shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan, unless such action or omission is attributable to the willful misconduct of the Plan Administrator or any of its members. The Employer shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Plan Administrator or any of its members.

 8.5.    Employer Information. To enable the Plan Administrator to perform its functions, the Employer shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation of

Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.

This Supplemental Executive Retirement Plan Agreement is hereby adopted as of the date written above.

THE EXECUTIVE:	WILSON BANK & TRUST
/s/ John Foster JOHN FOSTER	By: /s/ Elmer Richerson
	Title: President

BENEFICIARY DESIGNATION

WILSON BANK & TRUST

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

I, John Foster, designate the following as Beneficiary of any death benefits under the Wilson Bank & Trust Supplemental Executive Retirement Plan:

Primary:                                                                                                                         

Contingent:                                                                                                                         

Note: To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.

I understand that I may change these Beneficiary designations by filing a new written designation with the Employer. I further understand that the designations will be automatically revoked if the Beneficiary predeceases me, or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

Signature:      /s/ John Foster                    

John Foster

Date:             May 22, 2015                      

Accepted by the Employer this __22_____ day of _May, 2015__.

By:                   /s/ Elmer Richerson               

Print Name:     Elmer Richerson           

Title:                President                    

EX-10.69

Exhibit 10.69

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

THIS AGREEMENT (the “Agreement”) is made and entered into this 22nd day of May, 15, by and between Wilson Bank & Trust, a banking corporation, located in Wilson County, Tennessee (the “Bank”), and John Foster, a current employee of the Bank (hereinafter referred to as the “Employee”).

INTRODUCTION

WHEREAS, Employee is an officer or other highly paid employee of the Bank;

WHEREAS, the Bank is purchasing insurance policies (hereinafter referred to as the “Insurance Policy(ies)”), with Tennessee Farm Bureau (hereinafter collectively referred to as the “Insurer”), on the life of the Employee;

WHEREAS, the Bank desires to induce Employee to continue to utilize Employee’s best efforts on behalf of the Bank by its payment of premiums due on the Insurance Policy(ies); and

WHEREAS, the Bank is the sole owner of the Insurance Policy(ies) and elects to endorse a portion of the death benefit of the Insurance Policy(ies) to Employee, or Employee’s designated beneficiary.

NOW, THEREFORE, in consideration of the mutual undertakings set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Bank and the Employee agree as follows:

1. Ownership

1.1. Ownership of Insurance Policy. The Bank is the sole owner of the Insurance Policy(ies) and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the remaining death proceeds of the Insurance Policy(ies) after payment of the Employee Death Benefit as defined and provided for in this Agreement. The Bank shall at all times be entitled to the Policy(ies) cash surrender value, as that term is defined in the Insurance Policy(ies), less any Insurance Policy loans and unpaid interest or cash withdrawals previously incurred by the Bank and any applicable Insurance Policy surrender charges. The cash surrender value shall be determined as of the date of the surrender of the Insurance Policy or death of the Employee, as the case may be.

1.2. Right to Insurance Policy. Notwithstanding any provision hereof to the contrary, the Bank shall have the right to sell or surrender the Insurance Policy(ies) without terminating this Agreement, provided (i) the Bank replaces the Insurance Policy(ies) with a comparable life insurance policy or arrangement that provides the benefit provided under this Agreement and (ii) the Bank and the Employee (who will not unreasonably withhold his signature) execute a new Split Dollar Policy Endorsement for said comparable coverage arrangement, at which time all references to “Insurance Policy” hereunder shall refer to such replacement coverage arrangement. Without limitation, the Insurance Policy(ies) at all times shall be the exclusive property of the Bank, and shall be subject to the claims of the Bank’s creditors.

2. Premiums.

2.1. Payment of Premium. The Bank may pay each premium on the Insurance Policy(ies) to the Insurer on or before the due date of such premium or within the grace period allowed by the Insurance Policy(ies) for the payment of such premium.

2.2. Economic Benefit. The Bank shall determine the economic benefit attributable to the Employee based on the life insurance premium factor for the Employee’s age multiplied by the amount of current life insurance protection payable to the Employee’s beneficiary. The “life insurance premium factor” is the minimum amount required to be imputed under Treasury Regulation § 1.61-22(d)(3)(ii), or any subsequent applicable authority. The Bank shall impute the economic benefit to the Employee on an annual basis by adding the economic benefit to the Executive’s Form W-2, or, if applicable, Form 1099.

3. Bank’s Interests. Upon the death of the Executive and whereby death proceeds are payable by the Insurance Carrier, the Bank shall be entitled to receive an amount equal to all death benefits due under the Insurance Policy less those explicitly provided to the Employee’s designated beneficiary under Section 4 hereof (the “Bank’s Policy Interest”). The Bank’s Policy Interest shall be payable as provided in Section 6 of this Agreement. The Bank’s Policy Interest shall be reduced by any amount borrowed against the Insurance Policy(ies) by Bank.

4. Employee’s Interests. The Employee Death Benefit under this Agreement shall be an amount equal to the Net Amount at Risk (NAR), defined as the difference between the death benefit payable upon death of the insured pursuant to a life insurance policy and the accrued cash value of the life insurance policy at the time of death of the insured. The Employee shall have the limited right during the term of Employee’s employment with the Bank to designate and change the direct and contingent beneficiaries (collectively, the “Beneficiary”) of the Employee portion of the death benefits of the Insurance Policy (the “Employee Death Benefit”)

5. Beneficiary

5.1. Beneficiary Designation. The Employee’s Beneficiary designation shall be made in writing and delivered to the Bank in a form acceptable to the Insurer and Bank. Employee’s designated Beneficiary may be amended by the Employee from time to time during the term of this Agreement. Upon the acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Bank shall be entitled to rely on the last Beneficiary Designation Form filed by the Employee and accepted by the Bank prior to the Employee’s death.

5.2. Beneficiary Acknowledgement. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Bank or its designated agent.

5.3. Facility of Payment. If the Bank determines in its discretion that a benefit is to be paid to a minor, to a person incapable of handling the disposition of that person’s property, the Bank may direct payment of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Bank may require proof of incompetence, minority or guardianship as it may deep appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Employee and the Employee’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount.

5.4. No Beneficiary Designation. If the Employee dies without a valid designation of Beneficiary, or if all designated Beneficiaries predecease the Employee, then the Employee’s surviving spouse shall be the designated Beneficiary. If the Employee has no surviving spouse, the benefits shall be made payable to the personal representative of the Employee’s estate.

6. Death Claims.

6.1. Bank’s Benefit. Upon the death of Employee, the Bank shall be entitled to receive a portion of the death benefits payable under the Insurance Policy equal to the Bank’s Policy Interest and the receipt of this amount by the Bank shall constitute satisfaction of the Bank’s rights under Section 3 of this Agreement.

6.2. Employee’s Benefit. Upon the death of Employee, the Beneficiary shall be entitled to receive the amount of the death benefits equal to the Employee Death Benefit and the receipt of this amount by the Beneficiary shall constitute satisfaction of the Employee’s rights under this Agreement.

6.3. Benefit Paid by Insurance Carrier. The benefit payable to Employee’s Beneficiaries shall be paid solely by the Insurer from the proceeds of the Insurance Policy(ies) on the life of the Insured. In no event shall the Bank be obligated to pay a death benefit under this Agreement from its general funds. Should an Insurer refuse or be unable to pay death proceeds endorsed to Insured under the express terms of this Agreement, or should the Bank cancel the Insurance Policy(ies) for any reason, neither Employee nor any Beneficiary shall be entitled to a death benefit.

6.4. Suicide or Misstatement. The amount of the benefit payable to Employee’s Beneficiaries may be reduced or eliminated if Employee fails or refuses to take a physical examination, to truthfully and completely supply such information or complete any forms as may be required by the Bank or the Insurer, or otherwise fails to cooperate with the requests of the Bank or the Insurer, or if Employee dies under circumstances such that the Insurance Policy(ies) does not pay a full death benefit, e.g., in the case of suicide within two years after a respective Insurance Policy date.

7. Termination of Agreement.

7.1. Termination Events. This Agreement shall automatically terminate on the occurrence of any of the following events prior to the death of the Employee:

(a) Written notice given by either party to the other;

(b) Termination of the employment of Employee (whether voluntary or involuntary); or

(c) Bankruptcy, receivership or dissolution of the Bank.

7.2. Rights Upon Termination. If this Agreement is terminated pursuant to this Section 7, the Employee shall forfeit all rights hereunder, including the right to designate a Beneficiary, and Bank at its sole discretion may retain or terminate the Insurance Policy(ies).

7.3. Amendments. Prior to the Employee’s death, this Agreement may be amended or terminated, in whole or in part, by the Bank at its sole discretion; provided, however, that if the Employee’s interests are adversely affected, such amendment or termination by action of the Bank may not become effective earlier than thirty days (30) after delivering a written notice of such action to the Employee. This Agreement may not be amended after the date of the Employee’s death.

8. Insurance Company Not a Party. The Insurer shall not be deemed a party to this Agreement for any purpose nor in any way responsible for its validity; shall not be obligated to inquire as to the distribution of any monies payable or paid by it under the Insurance Policy(ies); and shall be fully discharged from any and all liability under the terms of the Insurance Policy(ies) upon payment or other performance of its obligations in accordance with the terms of the Insurance Policy(ies). The Insurer shall not be bound by or be deemed to have notice of the provisions of this Agreement.

9. Administration

9.1. Plan Administrator. This Split Dollar Agreement shall be administered by a Plan Administrator, which shall consist of the Bank’s board of directors or such committee as the board shall appoint. The Employee may be a member of the Administrator.

9.2. Plan Administrator Duties. The Plan Administrator shall have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in connection with this Agreement.

9.3. Binding Effect of Decisions. Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

9.4. Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the members of the Plan Administrator, and those to whom management and operation responsibilities of the plan have been delegated, against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Split Dollar Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.

9.5. Information. To enable the Administrator to perform its functions, the Bank shall supply full and timely information to the Administrator on all matters relating to the date and circumstances of the retirement, death, or Termination of Employment of the Executive and such other pertinent information as the Administrator may reasonably require.

10. Claims and Review Procedure

10.1. Written Claim. A person who believes that he or she being denied a benefit to which he or she is entitled under this Agreement (hereinafter referred to as a "Claimant") may file a written request for such benefit with the Plan Administrator, setting forth his or her claim. The request must be addressed to the Bank at its then principal place of business.

10.2. Timing of Response. Upon receipt of a claim, the Plan Administrator shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period. The Plan Administrator may, however, extend the reply period for an additional ninety (90) days for reasonable cause. If the claim is denied in whole or in part, the Plan Administrator shall adopt a written opinion, using language calculated to be understood by the Claimant, setting forth:

(a) The specific reason or reasons for such denial;

(b) The specific reference to pertinent provisions of this Agreement on which such denial is based;

(c) A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary;

(d) Appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and

(e) The time limits for requesting a review under Section 10.3 and for review under Section 10.4 hereof.

10.3. Request for Review. With sixty (60) days after the receipt by the Claimant of the written opinion described in Section 10.2, the Claimant may request in writing that the determination of the Plan Administrator be reviewed. Such request must be addressed to the Bank at its then principal place of business. The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Plan Administrator. If the Claimant does not request a review of the Plan Administrator's determination within such sixty (60) day period, he or she shall be barred and estopped from challenging the Plan Administrator's determination.

10.4. Review of Decision. The Plan Administrator will review its determination within sixty (60) days after receipt of a request for review. After considering all materials presented by the Claimant, the Plan Administrator will render a written opinion, written in a manner calculated to be understood by the Claimant, setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of this Agreement on which the decision is based. If special circumstances require that the sixty (60) day time period be extended, the Plan Administrator will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review.

11. Binding Effect. This Agreement shall bind the Employee and the Bank and their respective heirs, beneficiaries, survivors, executors, administrators, representatives, successors, transferees and assigns, and any Insurance Policy Beneficiary.

12. No Guarantee of Employment. This Agreement is not an employment policy or contract. It does not give the Employee the right to remain an employee of the Bank, nor does it interfere with the Bank’s right to discharge the Employee. It also does not require the Executive to remain an employee nor interfere with the Employee’s right to terminate employment at any time.

13. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BANK AND EMPLOYEE HEREBY IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTIONS OF THE BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

14. Entire Agreement; Oral Agreements Ineffective. This Agreement constitutes the entire and final agreement between the Bank and Employee as to the subject matter hereof and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

15. No Third Party Beneficiaries. The benefits of this Agreement shall not inure to any third party. This Agreement shall not be construed as creating any rights, claims, or causes of action against Bank or any of its officers, directors, agents, or employees in favor of any person or entity other than Employee.

16. Severability. If any one or more of the provisions hereof is declared invalid, illegal, or unenforceable in any jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired, and that invalidity, illegality, or unenforceability in one jurisdiction shall not affect the validity, legality, or enforceability of the remaining provisions hereof.

17. Governing Law; Venue; Service of Process. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE. THIS AGREEMENT HAS BEEN ENTERED INTO IN BEDFORD COUNTY, TENNESSEE, AND IS PERFORMABLE FOR ALL PURPOSES IN BEDFORD COUNTY, TENNESSEE. THE PARTIES HEREBY AGREE THAT ANY LAWSUIT, ACTION, OR PROCEEDING THAT IS BROUGHT (WHETHER IN CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED THEREBY, OR THE ACTIONS OF THE BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THIS AGREEMENT SHALL BE BROUGHT IN A STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN BEDFORD COUNTY, TENNESSEE. EMPLOYEE HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS, (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH LAWSUIT, ACTION, OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND (C) FURTHER WAIVES ANY CLAIM THAT IT MAY NOW OR HEREAFTER HAVE THAT ANY SUCH COURT IS AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO AGREE THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED AT THE ADDRESS FOR NOTICES CONTAINED IN THE SIGNATURE PAGE OF THIS AGREEMENT.

18. Notices. Any notice, consent or demand required or permitted to be given under the provisions of this Agreement by one party to another shall be in writing, shall be signed by the party giving or making the same, and may be given either by delivering the same to such other party personally, or by mailing the same, by United States certified mail, postage prepaid, to such party, addressed to his or her last known address as shown on the records of the Bank. The date of such mailing shall be deemed the date of such mailed notice, consent or demand.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

WILSON BANK & TRUST, BANK:     John Foster, EMPLOYEE:

By: /s/ Elmer Richerson                   By: /s/ John Foster              

Print Name: Elmer Richerson          Print Name: John Foster     

Title: President                                 Address:                              

WILSON BANK & TRUST

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

BENEFICIARY DESIGNATION FORM

Executive: John Foster

Social Security Number: ______ ____ ______

Definitions:

Primary Beneficiary means the person(s) who will receive the Benefits in the event of the Executive’s death. Proceeds will be divided in equal shares if multiple primary beneficiaries are named, unless otherwise indicated. If percentages are listed, the total must equal 100%.

Contingent Beneficiary means the person(s) who will receive the Benefits if the primary beneficiary is not living at the time of the Executive’s death.

Trust as Beneficiary Designation can be done by using the following written statement: “To [name of trustee], trustee of the [name of trust], under a trust agreement dated [date of trust].”

Primary Beneficiary      DOB     Social Security #            Address                   % of Proceeds

____________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

Contingent Beneficiary DOB     Social Security #            Address                   % of Proceeds

____________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

The undersigned Executive acknowledges that SAMPLE BANK (“Bank”) is providing this Death Benefit subject to the terms and conditions of the Agreement entered into with Executive; only to the extent that the Death Benefit is actually paid by the Insurer, and that Bank is also entitled to separate benefits in the Policy.

/s/ John Foster__________________________          5-22-15_____________________

John Foster                              Date

Acknowledged Receipt by the Bank:

/s/ Elmer Richerson______________________

Officer          

WILSON BANK & TRUST

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

SCHEDULE OF POLICIES

JOHN FOSTER

     Insurer:          Tennessee Farmers__________________________                           _

     Policy Number:     BK0313235______________________________________________

     Insurer:          ________________________________________________________

     Policy Number:     ________________________________________________________

     Insurer:          ________________________________________________________

     Policy Number:     ________________________________________________________

EX-13.1

Exhibit 13.1

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, the anticipated financial and operating results of the Company. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release any modifications or revisions to these forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.

The Company cautions investors that future financial and operating results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. The words “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. Such forward-looking statements involve known and unknown risks and uncertainties, including, but not limited to those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and also include, without limitation, (i) deterioration in the financial condition of borrowers of Wilson Bank resulting in significant increases in loan losses and provisions for those losses, (ii) renewed deterioration in the real estate market conditions in the Company’s market areas, (iii) the impact of increased competition with other financial institutions, including pricing pressures, and the resulting impact on the Company's results, including as a result of compression to net yield on earning assets, (iv) the deterioration of the economy in the Company’s market areas, (v) fluctuations or differences in interest rates on loans or deposits from those that the Company is modeling or anticipating, including as a result of Wilson Bank's inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve, (vi) the ability to grow and retain low-cost core deposits, (vii) significant downturns in the business of one or more large customers, (viii) the inability of Wilson Bank to maintain the historical growth rate of its loan portfolio, (ix) risks of expansion into new geographic or product markets, (x) the possibility of increased compliance and operational costs as a result of increased regulatory oversight,

(xi) the inability of the Company to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies and required capital maintenance levels, (xii) 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, including implementation of the Dodd Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), (xiii) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments, (xiv) inadequate allowance for loan losses, (xv) the effectiveness of the Company’s activities in improving, resolving or liquidating lower quality assets, (xvi) results of regulatory examinations, (xvii) the vulnerability of our network and online banking portals, and the systems of parties with whom the Company contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches, (xviii) the possibility of additional increases to compliance costs as a result of increased regulatory oversight, (xix) loss of key personnel, and (xx) adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future obligatory litigation, examinations or other legal and/or regulatory actions. These risks and uncertainties may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. The Company’s future operating results depend on a number of factors which were derived utilizing numerous assumptions that could cause actual results to differ materially from those projected in forward-looking statements.

General

The Company is a registered bank holding company that owns 100% of the common stock of Wilson Bank and Trust (“Wilson Bank”), a Tennessee state-chartered 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, Davidson County, Putnam County, Sumner County, and Williamson County, Tennessee as its primary market areas. Generally, this market is the Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical area. At December 31, 2019, Wilson Bank had twenty-eight locations in Wilson, Davidson, DeKalb, Smith, Sumner, Rutherford, Putnam, Trousdale and Williamson 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 and the notes thereto.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

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 have been critical to the determination of our financial position and results of operations. Additional information regarding significant accounting policies is described in Note 1 to the Company's consolidated financial statements for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K.

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 portfolio, 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 indicators 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.

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 recognizes 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 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 bank 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 loan losses in each of the twelve loan segments. The estimates for these loans are based on our historical loss data for that category over the last twenty quarters.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The estimated loan loss allocation for all twelve loan portfolio segments is then adjusted 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 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, changes in interest rate, 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.

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.

Impairment of Goodwill - Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired. Goodwill is assigned to reporting units and tested for impairment at least annually on December 31, or on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. See Note 6 (Acquired Intangible Assets and Goodwill) to the Company's consolidated financial statements for the year ended December 31, 2019 included in the Company's Annual Report on Form 10-K.  Should the Company determine in a future period that the goodwill has become impaired, then a charge to earnings will be recorded in the period such determination is made.

Other-than-temporary Impairment-Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). A decline in the fair value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in a reduction in the carrying amount of the security. To determine whether OTTI has occurred, management considers factors such as (1) length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, and (3) the Company’s ability and intent to hold the security for a period sufficient to allow for an anticipated recovery in fair value. If management deems a security to be OTTI, management reviews the present value of the future cash flows associated with the security. A shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is referred to as a credit loss. If a credit loss is identified, the credit loss is recognized in that period as a charge to earnings and a new cost basis for the security is established. If management concludes that no credit loss exists and it is not more-likely-than-not that the Company will be required to sell the security before the recovery of the security’s cost basis, then the security is not deemed OTTI and the shortfall is recorded as a component of equity.

Fair Value of Financial Instruments-Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 21 to the Company's consolidated financial statements for the year ended December 31, 2019 included in the Company's Annual Report on Form 10-K. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations

Net earnings for the year ended December 31, 2019 were $36,044,000, an increase of $3,450,000, or 10.58%, compared to net earnings of $32,594,000 for the year ended December 31, 2018. Our 2018 net earnings were 38.54%, or $9,068,000, above our net earnings of $23,526,000 for 2017. Basic earnings per share were $3.36 in 2019, compared with $3.09 in 2018 and $2.26 in 2017. Diluted earnings per share were $3.35 in 2019, compared to $3.08 in 2018 and $2.26 in 2017. The increase in net earnings and diluted and basic earnings per share during the year ended December 31, 2019 as compared to the year ended December 31, 2018 was primarily due to an increase in net interest income, reflecting an increase in average interest earning asset balances and yields between the relevant periods, as well as an increase in non-interest income, partially offset by an increase in interest expense and non-interest expense. The increase in interest expense resulted from an increase in deposit rates along with an increase in balances, and the increase in non-interest expense resulted from the Company's continued growth. Income tax expense was also higher in 2019 when compared to 2018. Net income and diluted and basic earnings per share in 2017 were significantly and negatively impacted by the revaluation of the Company’s deferred tax assets triggered by the passage of the Tax Cuts and Jobs Act in late December 2017. Net yield on earning assets for the year ended December 31, 2019 was 3.81%, compared to 4.01% and 3.84% for the years ended December 31, 2018 and December 31, 2017, respectively. Net interest spread for the year ended December 31, 2019 was 3.60%, compared to 3.87% and 3.75% for the years ended December 31, 2018 and December 31, 2017, respectively. See below for further discussion regarding variances related to net interest income, provision for loan losses, non-interest income, non-interest expense and income taxes.

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 2019 was $118,077,000, up 14.06% when compared with $103,525,000 in 2018 and the year ended December 31, 2018 was up 13.74% when compared to $91,020,000 in 2017, in each case excluding tax exempt adjustments relating to tax exempt securities and loans. The increase in total interest income in 2019 when compared to 2018 was primarily attributable to an overall increase in average loan balances and the resulting increase in the aggregate amount of interest and fees earned on loans as well as an increase in average loan yields from 5.11% to 5.32% and an increase in yield on securities from 2.31% to 2.47%. The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate, which is the rate offered on loans to borrowers with strong credit, decreased 75 basis points during 2019. During 2018, the prime rate increased 100 basis points. During 2017, the prime rate increased 75 basis points. Although prime rates decreased during 2019 and we faced competitive pressures in our markets, we were able to increase our yield on loans due to the delayed affects of the rising rate environment in 2017 and 2018, strategic loan pricing on certain loan segments, and an increase in loans qualified to received state income tax credit.  Fees earned on loans totaled $7,751,000, $7,400,000 and $6,773,000 for the years ended 2019, 2018 and 2017, respectively.  Late in 2019, the Company added several loans qualifying for state income tax credit, which is included in our loan yield calculation.  The total amount of credits included in our loan yields were $2,154,000, $1,997,000 and $503,000 for the years ended 2019, 2018 and 2017, respectively. The increase in yield on securities was due to management's ability to invest in higher yielding securities as the overall rates in the market increased in 2018.

The ratio of average earning assets to total average assets was 95.8%, 95.0% and 95.4% for each of the years ended December 31, 2019, 2018 and 2017, respectively. Average earning assets increased $277,823,000 from December 31, 2018 to December 31, 2019. The average rate earned on earning assets for 2019 was 4.69%, compared with 4.62% in 2018 and 4.25% in 2017.

Total interest expense for 2019 was $22,647,000, an increase of $8,629,000, or 61.56%, compared to total interest expense of $14,018,000 in 2018. Average interest-bearing deposits increased to $2,054,817,000 for 2019 compared to $1,867,037,000 for 2018. The average rate paid on interest-bearing deposits was 1.07% for 2019 compared to 0.75% for 2018. Total interest expense increased from $8,889,000 in 2017 to $14,018,000 in 2018, an increase of $5,129,000 or 57.70%. The increases in total interest expense in 2019 and 2018 resulted primarily from the higher rates on deposits from the rising rate environment of 2018 and the first half of 2019, and competitive pressures in our markets, as well as an overall increase in the volume of average interest-bearing deposits. We also incurred additional funding costs related to the utilization of Federal Home Loan Bank borrowings and brokered deposits beginning late in the first quarter of 2019 to increase our balance sheet liquidity. These borrowings are at a higher rate than our core deposits. Interest expense was also impacted by our inability to quickly reprice deposits with the start of the downward rate environment when it began in 2019.

Net interest income for 2019 totaled $95,430,000 as compared to $89,507,000 and $82,131,000 in 2018 and 2017, 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), decreased to 3.60% in 2019 from 3.87% in 2018. The net interest spread was 3.75% in 2017. Net yield on earning assets decreased to 3.81% in 2019 from 4.01% in 2018. The net yield on earning assets was 3.84% in 2017. The change in net yield on earning assets resulted from an increase in the interest paid on our interest-bearing liabilities that was only partially offset by the increase in yields on loans and securities. Our net yield on earning assets and our net interest spread declined during 2019 as the impact of the declining rate environment more quickly impacted our earning assets than our interest-bearing liabilities, and competitive pressures in our markets limited our ability to reduce the rates we pay on our interest bearing liabilities. Declining loan balances also negatively impacted our net interest spread. Management is anticipating a steady growth in the loan portfolio in 2020 that should have a positive effect on our yield on earning assets and our net interest spread. 

The Company’s liabilities are positioned to re-price faster than its assets such that a short-term declining rate environment could have a positive impact on the Company’s earnings as its interest expense decreases faster than interest income. Conversely, a rising rate environment could have a short-term negative impact on margins, as deposits would likely re-price faster than assets. Management regularly monitors the deposit rates of the Company’s competitors and these rates continue to put pressure on the Company’s deposit pricing, just as loan pricing pressure from competition within our markets continues to negatively impact loan yields. This pressure could continue to negatively impact the Company’s net interest margin and earnings if short-term rates continue to rise or these competitive pressures limit the Company's ability to lower deposit rates in a declining rate environment. 

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

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, is adequate to provide coverage for estimated losses on outstanding loans and to provide for uncertainties in the economy. The 2019 provision for loan losses was $2,040,000, a decrease of $2,258,000 from the provision of $4,298,000 in 2018, which was $2,617,000 higher than the provision in 2017. The decrease in the provision for the year ended December 31, 2019 is primarily attributable to a decrease in the volume of loans originated during the period and a decrease in the amount of net loans charged off. Loan growth totaled $43,568,000, $293,655,000 and $61,826,000 for the years ended 2019, 2018, and 2017, respectively. Management continues to fund the allowance for loan losses through provisions based on management’s calculation of the allowance 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 loan losses. Such factors include growth and composition of the loan portfolio, review of specific problem loans, past due and nonperforming loans, change in lending staff, the recommendations of the Company’s regulators, and current economic conditions that may affect the borrowers’ ability to repay.

Wilson Bank’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 a determination is made that the loan is uncollectible. Net charge-offs decreased to $488,000 in 2019 from $1,033,000 in 2018. Net charge-offs in 2017 totaled $503,000. The ratio of net charge-offs to average total outstanding loans was 0.02% in 2019, 0.05% in 2018 and 0.03% in 2017. The decrease in net charge-offs in 2019 is due to two large recoveries received during the year. 

The decrease in charge-offs in 2019 resulted in an increase of the allowance for loan losses (net of charge-offs and recoveries) to $28,726,000 at December 31, 2019 from $27,174,000 at December 31, 2018 and $23,909,000 at December 31, 2017. The allowance for loan losses increased 5.71% between December 31, 2018 and December 31, 2019 as compared to the 2.09% increase in total loans over the same period. The allowance for loan losses was 1.38% of total loans outstanding at December 31, 2019 compared to 1.33% at December 31, 2018 and 1.37% at December 31, 2017. As a percentage of nonperforming loans at December 31, 2019, 2018 and 2017, the allowance for loan losses represented 359%, 473% and 337%, respectively. The internally classified loans as a percentage of the allowance for loan losses were 37.1% and 44.3%, respectively, at December 31, 2019 and 2018.

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 quarterly by the Chief Financial Officer and Chief Credit Officer and is provided to the Board of Directors 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 Company's independent Loan Review Department, 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 quarterly assessment. See the discussion above under “Critical Accounting Estimates” for more information. Management believes the allowance for loan losses at December 31, 2019 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 expense 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, fees and gains on sales of loans, gains(losses) on sales of securities, income on bank-owned life insurance(BOLI) and annuity contracts, gain on the sale of other real estate and other income. Total non-interest income for 2019 was $28,349,000, compared with $25,248,000 in 2018 and $22,821,000 in 2017. The 12.28% increase from 2018 to 2019 was primarily due to an increase in other fees and commissions, an increase in service charges on deposits, a decrease in the loss on the sale of securities, and an increase on the gain on sale of loans offset in part by an increase in the loss on the sale of fixed assets and a decrease in income on BOLI and annuity contracts. Other fees and commissions increased $529,000, or 3.86%, to $14,233,000 in 2019 when compared to 2018. Other fees and commissions include income on brokerage accounts, debit and credit card interchange fee income, and various other fees. The increase in other fees and commissions is primarily due to an increase in brokerage income, debit card interchange fee income, and credit card interchange fee income of 2019 when compared to the comparable periods in 2018. Debit card and credit card interchange fee income increased due to an increase in the number and volume of debit card  and credit card holders and transactions. The service charges on deposit accounts increased $153,000, or 2.25%, to $6,952,000 for the year ended December 31, 2019 compared to the year ended December 31, 2018 due to an increase in the number of consumer checking accounts and the number of transactions, and an increase in the per item service charge fee on insufficient funds. The fees and gains on sales of mortgage loans increased $2,163,000, or 46.63%, to $6,802,000 for the year ended December 31, 2019 compared to the year ended December 31, 2018. Overall, volume from the sale of loans increased $25,707,000 from December 31, 2018 to December 31, 2019 primarily resulting from a new capital markets execution process which consisted of transitioning to the mandatory delivery process from the best efforts delivery process and an increase in the volume of loan originations. The mandatory delivery process was implemented by the mortgage department in November 2018. The gain on sale of mortgage loans also benefited from expanding our loan sale investor count and a new pricing strategy we implemented in 2019. Loss on sale of securities decreased $382,000, or 58.77%, to $268,000 in 2019 when compared to  $650,000 in 2018 due to management actively monitoring the liquidity needs of the Company and trading securities to manage liquidity needs and to optimize yield on earning assets

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 home mortgage market and stock market conditions and fluctuate more widely from period to period.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Non-Interest Expenses

Non-interest expenses consist primarily of employee costs, FDIC premiums, occupancy expenses, furniture and equipment expenses, data processing expenses, directors’ fees, and other operating expenses. Total non-interest expenses for 2019 increased 8.03% to $74,628,000 from $69,080,000 in 2018. Non-interest expenses for 2018 were up 14.39% over non-interest expenses in 2017 which totaled $60,391,000. The increase in non-interest expenses in 2019 is primarily attributable to a year-over-year increase in salaries and employee benefits of $2,951,000, other operating expenses of $452,000, occupancy expenses of $386,000, furniture and equipment expenses of $343,000, accounting, legal and consulting fees of $405,000, data processing expenses of $1,595,000 and ATM and interchange fees of $348,000, partially offset by a decrease in equity-based compensation expense of $451,000 and a decrease in FDIC insurance of $470,000. Salaries and employee benefits were up in 2019 when compared to 2018 because the number of employees continued to increase in order to support the Company's growth in operations and new branch expansions. The decrease in equity-based compensation expense is due to the increased expense associated with stock appreciation rights in 2018 as three members of the Board of Directors retired and became fully vested and the Company recognized the expense accordingly.

The increase in other operating expenses is due to increased account servicing costs associated with an increase in consumer checking accounts, brokerage accounts and loans made to customers. The increase in salaries and employee benefits is primarily attributable to an increase in the number of employees necessary to support the Company’s growth in operations and branch expansion. The increase in furniture and equipment expenses is primarily attributable to an increase in depreciation related to the opening of the operations building in Lebanon, Tennessee, Cool Springs office in Williamson County and West End office in Davidson County and an increase in the cost of maintenance and repairs. The increase in occupancy expense is similarly attributable to the opening of the operations center in the second quarter of 2018, and the lease expense associated with the opening of the new branch in Davidson County in the third quarter of 2018 and the new branch in Williamson County in the fourth quarter of 2018. The increase in data processing expenses is primarily attributable to an increase in computer maintenance and computer licenses due to the upgrade of our current systems as well as additional investments in computer software due to branch expansion, an increase in I.T. consulting expense, and an increase in computer home banking expense that resulted from the evolution of our new mobile application. This expense is now incurred on a per user basis as opposed to an overall fee. The increase in ATM and interchange fees is primarily attributable to the addition of ATMs as branch expansion has occurred and increasing interchange fees associated with a higher volume of debit card transactions. The Company's efficiency ratios, which measure a bank's overhead as a percentage of its revenue, were 60.29%, 60.20% and 57.54% for the years ended 2019,2018, and 2017, respectively. The Company anticipates that salaries and employee benefits expense and occupancy expense will continue to increase as the Company's operations grow.

Income Taxes

The Company’s income tax expense was $11,067,000 for 2019, an increase of $2,284,000 from $8,783,000 for 2018, which was down by $10,571,000 from the 2017 total of $19,354,000. The percentage of income tax expense to earnings before taxes was 23.5% in 2019, 21.2% in 2018 and 45.1% in 2017. The increase in income tax expense in 2019 from 2018 was due to the increase in earnings before income taxes and the decrease in 2018 from 2017 was due to the reduction in statutory corporate tax rates as a result of the Tax Cuts and Jobs Act (the "Act"), a tax reform bill passed in December 2017 which, among other items, reduced the then current corporate federal tax rate to 21% from 35%. Our effective tax rate represents our blended federal and state rate of 26.135% affected by the impact of anticipated favorable permanent differences between our book and taxable income such as bank-owned life insurance, income earned on tax-exempt securities and certain federal and state tax credits. The rate reduction under the Act was effective January 1, 2018. The Company concluded that the Act caused the Company's deferred tax assets to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. During the fourth quarter of 2017, we reduced the value of our deferred tax assets by $3.6 million and recorded an additional income tax expense, thus causing the decrease in income tax expense from 2017 to 2018.

Our income tax expense, deferred tax assets and liabilities reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes at both the federal and state level. Significant judgments and estimates are required in determining the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, we begin with historical results adjusted for changes in accounting policies and incorporate assumptions including the amount of future state and federal pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income. Changes in current tax laws and rates could also affect recorded deferred tax assets and liabilities in the future as was the case with the passage of the Act.

Financial Accounting Standards Board (“FASB”) ASC Topic 740, Income Taxes (“ASC 740”) provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. ASC Topic 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

We recognize tax liabilities in accordance with ASC Topic 740 and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

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, 2019, 2018 and 2017: 

	Years Ended December 31,
	2019		2018		2017
	(Dollars in Thousands except per share amounts)
Basic EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Basic earnings per common share	$	3.36		3.09		2.26
Diluted EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Dilutive effect of stock options		18,198		8,049		5,325
		10,761,467		10,572,221		10,412,536
Diluted earnings per common share	$	3.35		3.08		2.26

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Financial Condition

Balance Sheet Summary

The Company’s total assets increased in 2019 by $250,527,000 or 9.85%, to $2,794,209,000 at December 31, 2019, after increasing 9.78% in 2018 to $2,543,682,000 at December 31, 2018. Loans, net of allowance for loan losses, totaled $2,057,175,000 at December 31, 2019, a 2.04% increase compared to December 31, 2018. In the first half of 2019 management made a strategic decision to begin focusing loan growth in the commercial and industrial and residential 1-4 family segments of our loan portfolio, which have historically grown at slower rates than the other segments of the portfolio. As a result, loan growth slowed in 2019. Loan growth was also affected by the payoff of several large loan relationships in 2019. We operate in a market area that is experiencing economic growth, which caused our commercial real estate, residential 1-4 family, and commercial and industrial portfolio to increase as of December 31, 2019, when compared to December 31, 2018. At year end 2019, securities totaled $421,145,000, an increase of 47.64% from $285,252,000 at December 31, 2018, primarily as a result of slowing loan growth and management's decision to invest liquid funds in higher yielding assets through the purchase of securities.

Total liabilities increased by $209,210,000, or 9.31%, to $2,457,225,000 at December 31, 2019 compared to $2,248,015,000 at December 31, 2018. This increase was composed primarily of the $181,950,000 increase in total deposits to $2,417,605,000, an 8.14% increase from December 31, 2018. Federal home loan bank advances increased to $23,613,000 during 2019 due to management's decision in the first quarter of 2019 to borrow funds from the FHLB to purchase pledgeable securities as part of our strategy to improve our balance sheet liquidity and as a result of slowing loan growth.

Stockholders’ equity increased $41,317,000, or 13.97%, in 2019, due to net earnings, the issuance of stock pursuant to the Company’s Dividend Reinvestment Plan, an increase in the fair value of available-for-sale securities, and the exercise of stock options, partially offset by the repurchase of common stock and dividends paid on the Company’s common stock. The change in stockholders’ equity includes a $8,398,000 increase in net unrealized gains on available-for-sale securities, net of taxes during the period. 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, 2019					December 31, 2018
	(Dollar Amounts in Thousands)					(Dollar Amounts in Thousands)
	AMOUNT		PERCENTAGE			AMOUNT		PERCENTAGE
Commercial, financial and agricultural	$	108,883		5.2	%	$	89,554		4.3	%
Installment and other		54,834		2.6			48,759		2.4
Real estate – mortgage		1,504,140		71.9			1,393,641		68.0
Real estate – construction		425,185		20.3			518,245		25.3
Total	$	2,093,042		100.0	%	$	2,050,199		100.0	%

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 loan losses, increased 2.04% at year end 2019 when compared to year end 2018. The loan portfolio is composed of four primary loan categories: commercial, financial and agricultural; installment and other; real estate-mortgage; and real estate-construction. The table above sets forth the loan categories and the percentage of such loans in the portfolio as of December 31, 2019 and 2018.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

As represented in the table, Wilson Bank experienced loan growth for the year ended December 31, 2019 in three loan categories. Real estate mortgage loans increased 7.93% in 2019 and comprised 71.9% of the total loan portfolio at December 31, 2019, compared to 68.0% at December 31, 2018. Management believes the increase in real estate mortgage loans was primarily due to the continued 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. Installment loans increased 12.46% in 2019 and comprised 2.6% of the total loan portfolio at December 31, 2019, compared to 2.4% at December 31, 2018. Commercial, financial, and agricultural loans increased 21.58% in 2019 and comprised 5.2% of the total loan portfolio at December 31, 2019, compared to 4.3% at December 31, 2018. The increase in commercial and industrial loans is a result of an increase in demand for such loans in the overall economy and the Company's markets. Real estate construction loans decreased 17.96% in 2019 and comprised 20.3% of the portfolio at December 31, 2019, compared to 25.3% at December 31, 2018. The decrease in real estate construction loans and the increase in installment loans, commercial and industrial and 1-4 family residential mortgage loans during 2019 reflected a strategic decision made by management to begin focusing on these specific types of loans to increase diversification of the overall loan portfolio.  Because the construction portfolio remains a meaningful portion of our portfolio, Wilson Bank has implemented an additional layer of monitoring as it seeks to avoid advancing funds that exceed the present value of the collateral securing the loan. The responsibility for monitoring percentage of completion and distribution of funds tied to these completion percentages are now monitored and administered by a credit administration department independent of the lending function. Wilson Bank continues to seek to diversify its real estate portfolio as it seeks to lessen concentrations in any one type of loan.

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, 2019, the Company had no highly leveraged transactions, and there were no foreign loans outstanding during any of the reporting periods. As of December 31, 2019, the Company had not underwritten any loans in connection with capital leases.

The following tables present the Company’s nonaccrual loans and past due loans as of December 31, 2019 and December 31, 2018.

Loans on Nonaccrual Status	In Thousands
	2019		2018
Residential 1-4 family	$	949	$	948
Multifamily		—		—
Commercial real estate		1,661		1,102
Construction		—		—
Farmland		—		—
Second mortgages		—		—
Equity lines of credit		—		—
Commercial		—		—
Agricultural, installment and other		—		—
Total	$	2,610	$	2,050

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

	30-59 Days Past Due		60-89 Days Past Due		Non-accrual and Greater Than 90 Days Past Due		Past Due		Current		Loans		Loans Greater Than 90 Days Past Due and Accruing Interest
December 31, 2019
Residential 1-4 family	$	4,760		799		2,336		7,895		503,355		511,250	$	1,387
Multifamily		—		—		—		—		97,104		97,104		—
Commercial real estate		500		—		1,661		2,161		791,218		793,379		—
Construction		1,535		147		594		2,276		422,909		425,185		594
Farmland		57		—		8		65		19,203		19,268		8
Second mortgages		—		—		100		100		10,660		10,760		100
Equity lines of credit		143		—		372		515		71,864		72,379		372
Commercial		71		30		—		101		98,164		98,265		—
Agricultural, installment and other		517		116		46		679		64,773		65,452		46
Total	$	7,583		1,092		5,117		13,792		2,079,250		2,093,042	$	2,507
December 31, 2018
Residential 1-4 family	$	3,258		1,092		1,868		6,218		454,474		460,692	$	920
Multifamily		—		—		—		—		134,613		134,613		—
Commercial real estate		312		109		1,174		1,595		699,460		701,055		72
Construction		1,567		26		32		1,625		516,620		518,245		32
Farmland		43		9		21		73		23,998		24,071		21
Second mortgages		333		—		—		333		10,864		11,197		—
Equity lines of credit		297		—		45		342		61,671		62,013		45
Commercial		93		—		24		117		78,128		78,245		24
Agricultural, installment and other		407		85		95		587		59,481		60,068		95
Total	$	6,310		1,321		3,259		10,890		2,039,309		2,050,199	$	1,209

Non-performing loans, which include nonaccrual loans and loans 90 days past due, totaled $5,117,000 at December 31, 2019, an increase from $3,259,000 at December 31, 2018, resulting from a $560,000, or 27.32%, increase in nonaccrual loans and a $1,298,000, or 107.36%, increase in 90 day past due and accruing loans. The increase in non-performing loans during the year ended December 31, 2019 of $1,858,000 was due primarily to an increase in non-performing residential 1-4 family real estate loans of $468,000, an increase in non-performing construction loans of $562,00, an increase in non-performing equity lines of credit of $327,000 and an increase in  non-performing commercial real estate loans of  $487,000. The increase in non-performing loans resulted primarily from the addition of two large commercial real estate secured loans on nonaccrual status and three large real estate secured loans that were greater than 90 days past due. Nonaccrual 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. Management believes that it is probable that it will incur losses on nonperforming loans but believes that these losses should not exceed the amount in the allowance for loan losses already allocated to these loans, unless there is a deterioration of local real estate values.

At December 31, 2019, the Company had three impaired loans totaling $2,610,000 which were on non-accruing interest status. At December 31, 2018, the Company had two impaired loans totaling $2,050,000 which were on non-accruing interest status. In each case, at the date such loans were placed on nonaccrual status, the Company reversed all previously accrued interest income against current year earnings.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following table presents the Company’s impaired loans (including loans on nonaccrual status and loans past due 90 days or more) at December 31, 2019 and December 31, 2018.

	In Thousands
	Recorded		Unpaid Principal		Related		Average Recorded		Interest Income
	Investment		Balance		Allowance		Investment		Recognized
December 31, 2019
With no related allowance recorded:
Residential 1-4 family	$	1,090		1,464		—		1,090		99
Multifamily		—		—		—		—		—
Commercial real estate		951		1,124		—		910		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,041		2,588		—		2,000		116
With allowance recorded:
Residential 1-4 family	$	1,489		1,480		795		1,590		83
Multifamily		—		—		—		—		—
Commercial real estate		1,522		1,520		341		2,015		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,011		3,000		1,136		3,605		100
Total
Residential 1-4 family	$	2,579		2,944		795		2,680		182
Multifamily		—		—		—		—		—
Commercial real estate		2,473		2,644		341		2,925		34
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,052		5,588		1,136		5,605		216

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

	In Thousands
	Recorded		Unpaid Principal		Related		Average Recorded		Interest Income
	Investment		Balance		Allowance		Investment		Recognized
December 31, 2018
With no related allowance recorded:
Residential 1-4 family	$	1,196		1,795		—		1,862		42
Multifamily		—		—		—		—		—
Commercial real estate		317		316		—		320		16
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,203		2,797		—		3,237		100
With allowance recorded:
Residential 1-4 family	$	1,641		1,635		852		1,782		77
Multifamily		—		—		—		—		—
Commercial real estate		1,515		1,515		312		2,001		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,156		3,150		1,164		3,783		94
Total
Residential 1-4 family	$	2,837		3,430		852		3,644		119
Multifamily		—		—		—		—		—
Commercial real estate		1,832		1,831		312		2,321		33
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,359		5,947		1,164		7,020		194

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

A loan is considered impaired, in accordance with the impairment accounting guidance of FASB ASC 310, 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 fair value 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 decrease in impaired loans during the year ended December 31, 2019 as compared to the year ended December 31, 2018 was the result of the pay-off or pay-down of three loan relationships, partially offset by three additional loan relationships becoming impaired in 2019. Overall, the Company’s market areas have seen continued strengthening in the residential real estate market in recent years while the commercial real estate market has remained steady. The allowance for loan losses related to collateral dependent impaired loans was measured based upon the estimated fair value of related collateral.

The Company considers all loans subject to the provisions of FASB ASC 310 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 $10,651,000, inclusive of the Company’s non-performing loans, at December 31, 2019, as compared to $12,039,000 at December 31, 2018. Of the internally classified loans at December 31, 2019, $10,432,000 are real estate secured loans (including loans to home builders and developers of land, commercial real estate loans, as well as multifamily mortgage loans) and $219,000 are various other types of loans. These loans have been graded accordingly considering bankruptcies, inadequate cash flows and delinquencies. Overall, in 2019 Wilson Bank experienced a stabilization in internally graded loans as the cash flows from home builders, land developers and commercial real estate borrowers continue to improve. Management does not anticipate losses on these loans to exceed the amount already allocated to loan losses for these loans, unless there is a deterioration of local real estate values.

The internally classified loans as a percentage of the allowance for loan losses were 37.1% and 44.3%, respectively, at December 31, 2019 and 2018.

The Company’s loan portfolio includes certain loans that have been modified in a troubled debt restructuring (TDR), where economic, or other, concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. The concessions typically result from the Company’s loss mitigation activities and could include reduction in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. Nonperforming TDRs as of December 31, 2019 increased $651,000 to $1,467,000 at December 31, 2019 when compared to December 31, 2018 due to the addition of one large TDR loan relationships that was non-performing at December 31, 2019. Total TDRs increased $2,055,000 to $4,547,000 from December 31, 2018 to December 31, 2019 due the addition of three large loan relationships that were classified as TDRs in 2019.

The allowance for loan losses is discussed under “Critical Accounting Estimates” and “Provision for Loan Losses.” The Company maintains its allowance for loan losses at an amount believed by management to be adequate to absorb probable loan losses inherent in the loan portfolio as of December 31, 2019.

Substantially all of the Company’s loans are from Wilson, DeKalb, Smith, Putnam, Trousdale, Davidson, Rutherford, Williamson and adjacent counties. Although the majority of the Company's loans are in the real estate market, the Company seeks to exercise prudent risk management in lending through the diversification by loan category within the real estate segment, including 1-4 family residential real estate, commercial real estate, multifamily, construction, second mortgages, farmland, and equity lines of credit. At December 31, 2019, no single industry segment accounted for more than 10% of the Company’s portfolio other than construction, commercial real estate, and residential 1-4 family real estate loans.

The Company’s management believes there is an opportunity to increase the loan portfolio in 2020 as economic conditions in the Company's primary market areas continue to outperform other markets. The Company will target owner-occupied commercial real estate, residential real estate lending and consumer lending as areas of emphasis in 2020. At December 31, 2019, the Company’s total loans equaled 86.3% of its total deposits. As a practice, the Company generates its own loans and does not buy participations from other institutions. The Company may sell portions of the loans it generates to other financial institutions for cash in order to improve the liquidity of the Company’s loan portfolio or extend its lending capacity.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Securities

Securities increased 47.64% to $421,145,000 at December 31, 2019 from $285,252,000 at December 31, 2018, and comprised the second largest and other primary component of the Company’s earning assets. Securities increased as the result of slowing loan growth and management’s decision to invest liquid funds into higher yielding assets through the purchase of securities. During the year ended December 31, 2018, the Company sold securities classified as held-to-maturity with a book value of $4,843,000 for a loss of $79,000. Due to the sale, management determined the Company no longer had the intent to hold the remaining securities classified as held-to-maturity to their respective maturity dates and transferred the remaining book value of $22,800,000 to the available-for-sale classification. The average yield, excluding tax equivalent adjustment, of the securities portfolio at December 31, 2019 was 2.42% with a weighted average life of 7.08 years, as compared to an average yield of 2.45% and a weighted average life of 6.50 years at December 31, 2018. The weighted average lives on mortgage-backed securities reflect the repayment rate used for book value calculations.

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.

No securities have been classified as trading securities or held-to-maturity at December 31, 2019.

The Company’s classification of securities as of December 31, 2019 and December 31, 2018 is as follows: 

	December 31, 2019
(In Thousands)	Available-For-Sale
	Amortized Cost		Estimated Market Value
U.S. Government-sponsored enterprises (GSEs)	$	59,735	$	59,579
Mortgage-backed securities		265,648		267,313
Asset-backed securities		27,531		27,229
Obligations of state and political subdivisions		67,293		67,024
	$	420,207	$	421,145

	December 31, 2018
(In Thousands)	Available-For-Sale
			Estimated
	Amortized Cost		Market Value
U.S. Government-sponsored enterprises (GSEs)	$	71,446	$	68,467
Mortgage-backed securities		152,375		147,510
Asset-backed securities		22,534		21,700
Obligations of state and political subdivisions		49,328		47,575
	$	295,683	$	285,252

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

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.

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, 2019:

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
	Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
Available-for-Sale Securities:
GSEs	$	16,507	$	114		5	$	24,658	$	90		9	$	41,165	$	204
Mortgage-backed securities		45,862		182		21		56,917		453		52		102,779		635
Asset-backed securities		17,807		161		10		7,317		142		4		25,124		303
Obligations of states and political subdivisions		30,423		783		26		3,858		45		10		34,281		828
	$	110,599	$	1,240		62	$	92,750	$	730		75	$	203,349	$	1,970

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. Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). A decline in the fair value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in a reduction in the carrying amount of the security. To determine whether OTTI has occurred, management considers factors such as (1) length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, and (3) the Company’s ability and intent to hold the security for a period sufficient to allow for an anticipated recovery in fair value. If management deems a security to be OTTI, management reviews the present value of the future cash flows associated with the security. A shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is referred to as a credit loss. If a credit loss is identified, the credit loss is recognized in that period as a charge to earnings and a new cost basis for the security is established. If management concludes that no credit loss exists and it is not more-likely-than-not that it will be required to sell the security before the recovery of the security’s cost basis, then the security is not deemed OTTI and the shortfall is recorded as a component of equity. Accordingly, as of December 31, 2019, management believes the impairments detailed in the table above are temporary and no impairment loss has been realized in our consolidated income statement.

Deposits

The increases in assets in 2019 and 2018 were funded primarily by increases in deposits and the Company’s earnings. Total deposits, which are the principal source of funds for the Company, totaled $2,417,605,000 at December 31, 2019 compared to $2,235,655,000 at December 31, 2018, an increase of 8.1%. 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, Putnam County, Smith County, Sumner County, Rutherford County, Trousdale County and Williamson County areas are attractive economic markets offering growth opportunities for the Company; however, the Company competes with several larger banks and community banks that have bank offices in these counties which may negatively impact market growth or maintenance of current market share. Even though the Company is in a very competitive market, management currently believes that its market share can be maintained or expanded.

The $181,950,000, or 8.14%, growth in deposits in 2019 was due to a $19,925,000, or 3.71%, increase in certificates of deposits, a $74,332,000, or 10.22%, increase in money market accounts, a $30,454,000, or 11.98%, increase in demand deposit accounts, a $55,310,000, or 10.99%, increase in NOW accounts, and a $3,625,000, or 2.65%, increase in savings accounts, offset by a decrease in individual retirement accounts of $1,696,000, or 2.22%. The average rate paid on average total interest-bearing deposits was 1.07% for 2019 compared to 0.75% for 2018. The average rate paid in 2017 was 0.50%. 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 lower deposit rates as short-term interest rates fall. It’s these same competitive pressures that may cause our deposit rates to rise more quickly than we are able to increase the rates we earn on loans in a rising rate environment. If this were to happen our net yield on earning assets would experience compression and our results of operations would be negatively impacted, as was the case in 2019, during which the impact of the declining rate environment more quickly impacted our earning assets than our interest-bearing liabilities, which consequently compressed our net yield on earning assets. The ratio of average loans to average deposits was 87.4% in 2019, 89.7% in 2018, and 86.5% in 2017. To increase our levels of on-balance sheet liquidity in 2019, we borrowed money from the Federal Home Loan Bank. These borrowings typically have interest rates that are higher than the rates we pay on deposits and, accordingly, result in increases to our funding costs.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Contractual Obligations

The Company’s contractual obligations at December 31, 2019 are as follows:

(In Thousands)	Less than 1Year		1 –3 Years		3-5 Years		More than 5 Years		Total
Long-Term Debt	$	8,250	$	10,486	$	4,877	$	-	$	23,613
Operating Leases		444		602		116		9		1,171
Deposits with Stated Maturity Dates		326,212		232,946		72,585		250		631,993
Purchases		—		—		—		—		—
Other Long-Term Liabilities		—		—		—		—		—
Total	$	334,906	$	244,034	$	77,578	$	259	$	656,777

Long-term debt contractual obligations include advances from the Federal Home Loan Bank, and at December 31, 2019, the Company had $ 23,613,000 in advances. 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, 2019, the Company had unfunded lines of credit of $633 million and outstanding standby letters of credit of $73 million. Since many of the 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, its investment security maturities, and short-term borrowings.

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 quarterly 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

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, interest bearing deposits held at other banks, fed funds sold, and unpledged investments. At December 31, 2019, the Company’s liquid assets totaled approximately $324.5 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.

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, 2019, the Company had a liability sensitive position (a negative gap). 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 quarterly to analyze its rate sensitivity position. 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 rates, prepayment risk, the need or desire to increase capital and similar economic factors. At December 31, 2019, securities totaling approximately $35.2 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, 2019, loans totaling approximately $719.7 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 and individual retirement accounts of $250,000 or greater totaling approximately $73.6 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 accounts and regular savings accounts. Management anticipates that there will be no significant withdrawals from these accounts in 2020.

At December 31, 2019, the scheduled maturities of these advances and interest rates were as follows (scheduled maturities will differ from scheduled repayments):

Scheduled Maturities	Amount		Weighted Average Rates
2020	$	1,000		2.65	%
2021		2,500		2.67
2022		2,250		2.68
2023		2,438		2.68
2024		15,425		2.67
Thereafter		—		—
	$	23,613		2.67	%

Management believes that with present maturities, the anticipated growth in deposit base, and the efforts of management in its asset/liability management program, liquidity will not pose a problem in the near term future. At the present time there are no known trends or any known commitments, demands, events or uncertainties that will result in or that are reasonably likely to result in the Company’s liquidity changing in a materially adverse way.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following table shows the rate sensitivity gaps for different time periods as of December 31, 2019: 

Interest Rate Sensitivity Gaps 

(In Thousands)	1-90 Days			91-180 Days			181-365 Days			One Year And Longer			Total
Interest-earning assets	$	570,203			109,045			227,119			1,770,365			2,676,732
Interest-bearing liabilities		(1,630,556	)		(63,386	)		(134,271	)		(328,394	)		(2,156,607	)
Interest-rate sensitivity gap	$	(1,060,353	)		45,659			92,848			1,441,971			520,125
Cumulative gap	$	(1,060,353	)		(1,014,694	)		(921,846	)		520,125

The Company also uses simulation modeling to evaluate both the level of interest rate sensitivity as well as potential balance sheet strategies. The Asset Liability Committee 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. The Company also uses Economic Value of Equity (“EVE”) sensitivity analysis to understand the impact of changes in interest rates on long-term cash flows, income and capital. EVE is calculated by discounting the cash flows for all balance sheet instruments under different interest rate scenarios. The EVE is a longer term view of interest rate risk because it measures the present value of the future cash flows. Presented below is the estimated impact on Wilson Bank’s net interest income and EVE as of December 31, 2019, assuming an immediate shift in interest rates:

	% Change from Base Case for Immediate Parallel Changes in Rates
	-200 BP(1)			-100 BP(1)			+100 BP			+200 BP			+300 BP
Net interest income		(8.02	)%		(2.31	)%		(0.25	)%		(0.83	)%		(1.74	)%
EVE		(17.93	)		(5.96	)		0.46			(0.26	)		(1.73	)

(1) Currently, some short term interest rates are below the standard down 200 and 300 rate scenarios. The asset liability model does not calculate negative interest rates and will floor any indexes at a nominal rate. 

Each of the above analyses may not, on its own, be an accurate indicator of how our net interest income will be affected by changes in interest rates. Income associated with interest-earning assets and costs associated with interest-bearing liabilities may not be affected uniformly by changes in interest rates. In addition, the magnitude and duration of changes in interest rates may have a significant impact on net interest income. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market rates, while interest rates on other types may lag behind changes in general market rates. In addition, certain assets, such as adjustable rate mortgage loans, have features (generally referred to as interest rate caps and floors) which limit changes in interest rates. Prepayment and early withdrawal levels also could deviate significantly from those assumed in calculating the maturity of certain instruments. The ability of many borrowers to service their debts also may decrease during periods of rising interest rates. We review each of the above interest rate sensitivity analyses along with several different interest rate scenarios as part of our responsibility to provide a satisfactory, consistent level of profitability within the framework of established liquidity, loan, investment, borrowing, and capital policies.

Management believes that with present maturities, the anticipated growth in deposit base, and the efforts of management in its asset/liability management program, liquidity will not pose a problem in the near term future. At the present time there are no other known trends or any known commitments, demands, events or uncertainties that will result in, or that are reasonably likely to result in, the Company’s liquidity changing in a materially adverse way.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Impact of Inflation

Although interest rates are significantly affected by inflation, for the fiscal years ended December 31, 2019, 2018, and 2017, the inflation rate is believed to have had an immaterial impact on the Company’s results of operations.

Capital Resources, Capital Position and Dividends

At December 31, 2019, total stockholders’ equity was $336,984,000, or 12.06% of total assets, which compares with $295,667,000, or 11.62% of total assets, at December 31, 2018, and $267,730,000, or 11.55% of total assets, at December 31, 2017. The dollar increase in the Company’s stockholders’ equity during 2019 reflects (i) net income of $36,044,000 less cash dividends of $1.10 per share totaling $11,725,000, (ii) the issuance of 179,199 shares of common stock for $9,134,000, as reinvestment of cash dividends, (iii) the issuance of 21,764 shares of common stock pursuant to exercise of stock options for $775,000, (iv) the net change in unrealized gain on available-for-sale securities of $8,398,000, (v) the repurchase of 31,774 shares of stock for $1,629,000, (vi) the cumulative effect of accounting change of $27,000 and (vii) a stock-based compensation expense of $347,000.

The Company and Wilson Bank are subject to regulatory capital requirements administered by the FDIC, the Federal Reserve and the Tennessee Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on the Company’s and Wilson Bank’s financial statements. Under capital adequacy guidelines and, in the case of Wilson Bank, the regulatory framework for prompt corrective action, the Company and Wilson Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Wilson Bank to maintain minimum amounts and ratios (set forth in the following table) of total, Tier 1, and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). As of December 31, 2019 and December 31, 2018, the Company and the Wilson Bank are considered to be “well-capitalized” under applicable regulatory definitions.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

As of December 31, 2019, the most recent notification from the FDIC categorized Wilson Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized for prompt corrective action regulations as of December 31, 2019 and December 31, 2018, an institution was required to maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables and not be subject to a written agreement, order or directive to maintain a specific capital level. There are no conditions or events since the notification that management believes have changed Wilson Bank’s category. The Company’s and Wilson Bank’s actual capital amounts and ratios as of December 31, 2019 and 2018, are presented in the following table (dollar amounts in thousands):

	Actual					Minimum Capital Adequacy Requirements With Basel III Capital Conservation Buffer					Minimum To Be Well Capitalized Under Applicable Prompt Corrective Action Regulatory Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2019
Total capital to risk weighted assets:
Consolidated	$	360,645		15.0	%	$	253,215		10.5	%	$	241,157		10.0	%
Wilson Bank		359,576		14.9			252,675		10.5			240,643		10.0
Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			204,984		8.5			144,694		6.0
Wilson Bank		330,416		13.7			204,547		8.5			192,515		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			168,810		7.0			N/A		N/A
Wilson Bank		330,416		13.7			168,451		7.0			156,418		6.5
Tier 1 capital to average assets:
Consolidated		331,485		12.4			106,565		4.0			N/A		N/A
Wilson Bank		330,416		11.9			110,764		4.0			138,454		5.0

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

	Actual					Minimum Capital Adequacy Requirements With Basel III Capital Conservation Buffer					Minimum To Be Well Capitalized Under Applicable Prompt Corrective Action Regulatory Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2018
Total capital to risk weighted assets:
Consolidated	$	326,099		14.1	%	$	227,974		9.875	%	$	230,860		10.0	%
Wilson Bank		323,852		14.0			227,915		9.875			230,800		10.0
Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			181,802		7.875			138,516		6.0
Wilson Bank		296,319		12.8			181,756		7.875			184,641		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			147,173		6.375			N/A		N/A
Wilson Bank		296,319		12.8			147,136		6.375			150,021		6.5
Tier 1 capital to average assets:
Consolidated		298,566		12.3			97,022		4.0			N/A		N/A
Wilson Bank		296,319		11.9			99,373		4.0			124,217		5.0

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

In July 2013, the Federal banking regulators, in response to the Statutory Requirements of The Dodd-Frank Act, adopted new regulations implementing the Basel Capital Adequacy Accord (“Basel III”) and the related higher minimum capital ratios. The new capital requirements were effective beginning January 1, 2015 and include a new “Common Equity Tier 1 Ratio”, which has stricter rules as to what qualifies as Common Equity Tier 1 Capital.

The guidelines under Basel III establish a 2.5% capital conservation buffer requirement that was phased in over four years beginning January 1, 2016. The buffer is related to Risk Weighted Assets. In order to avoid limitations on capital distributions such as dividends and certain discretionary bonus payments to executive officers, a banking organization must maintain capital ratios above the minimum ratios including the buffer. The Basel III minimum requirements after giving effect to the buffer as of January 1, of each year presented are as follows:

	2016			2017			2018			2019
Common Equity Tier 1 Ratio		5.125	%		5.75	%		6.375	%		7.0	%
Tier 1 Capital to Risk Weighted Assets Ratio		6.625	%		7.25	%		7.875	%		8.5	%
Total Capital to Risk Weighted Assets Ratio		8.625	%		9.25	%		9.875	%		10.5	%

The requirements of Basel III also place more restrictions on the inclusion of deferred tax assets and capitalized mortgage servicing rights as a percentage of Tier 1 Capital. In addition, the risk weights assigned to certain assets such as past due loans and certain real estate loans have been increased.

The requirements of Basel III allowed banks and bank holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and Wilson Bank have opted out of this requirement.

The application of these more stringent capital requirements to the Company and Wilson Bank could, among other things, result in lower returns on invested capital, require the raising of additional capital, and result in regulatory actions if the Company and Wilson Bank were to be unable to comply with such requirements. Furthermore, the imposition of liquidity requirements in connection with the implementation of the final rules regarding Basel III could result in the Company or Wilson Bank having to lengthen the term of their funding, restructure their business models and/or increase their holdings of liquid assets. Implementation of changes to asset risk weightings for risk-based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy and could limit the Company’s and Wilson Bank’s ability to make distributions, including paying dividends or buying back shares.

In 2018, the U.S. Congress passed, and the President signed into law, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (the “Growth Act”). The Growth Act, among other things, requires the federal banking agencies to issue regulations allowing community bank organizations with total assets of less than $10.0 billion in assets and limited amounts of certain assets and off-balance sheet exposures to access a simpler capital regime focused on a bank’s Tier 1 leverage capital levels rather than risk-based capital levels that are the focus of the capital rules issued under the Dodd-Frank Act implementing Basel III.

In October 2019, the federal banking agencies approved final rules under the Growth Act that exempt a qualifying community bank and its holding company that have community bank leverage ratios, calculated as Tier 1 capital over average total consolidated assets, of greater than 9 percent from the risk-based capital requirements of the capital rules issued under the Dodd-Frank Act. A qualifying community banking organization and its holding company that have chosen the proposed framework are not required to calculate the existing risk-based and leverage capital requirements. Such a bank would also be considered to have met the capital ratio requirements to be well capitalized for the agencies' prompt corrective action rules provided it has a community bank leverage ratio greater than 9 percent.

The Growth Act also raised the eligibility for the small bank holding company policy statement to $3 billion of assets from $1 billion.

The Company is currently evaluating whether or not it will take advantage of these new capital rules under the Growth Act. 

Holding Company & Stock Information

Wilson Bank Holding Company Directors

James F. Comer, Chairman; J. Randall Clemons; Jack W. Bell; William P. Jordan; James Anthony Patton; John C. McDearman III; H. Elmer Richerson; Clinton M. Swain; and Michael G. Maynard.

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 25, 2020 was 4,370. 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 common stock during the years 2018 and 2019.

On January 2, 2018, a $.35 per share cash dividend was declared and on July 1, 2018 a $.55 per share cash dividend was declared and paid to shareholders of record on those dates. On January 2, 2019, a $.55 per share cash dividend was declared and on July 1, 2019, a $.55 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 and economic and regulatory considerations.

Stock Prices 

2018	High			Low
First Quarter	$	46.00		$	44.75
Second Quarter	$	125.00	*	$	46.00
Third Quarter	$	48.50		$	47.25
Fourth Quarter	$	50.00	*	$	48.50
2019		High			Low
First Quarter	$	51.00		$	49.75
Second Quarter	$	52.25	*	$	51.00
Third Quarter	$	53.50		$	52.25
Fourth Quarter	$	54.75	*	$	53.50

*Represents one transaction of 21 shares during the second quarter of 2018 and one transaction of 20 shares during the fourth quarter of 2018 of which the Company is aware where the sale prices was at least $0.25 higher than any other trade during the quarter.  The volume weighted average stock price during the second quarter of  2018 was $46.46 and the volume weighted average stock price during the fourth quarter of  2018 was $48.65.

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 28, 2020 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 FINANCIAL HIGHLIGHTS (UNAUDITED)

	In Thousands, Except Per Share Information
	As Of December 31,
	2019		2018		2017		2016		2015
CONSOLIDATED BALANCE SHEETS:
Total assets end of year	$	2,794,209		2,543,682		2,317,033		2,198,051		2,021,604
Loans, net	$	2,057,175		2,016,005		1,727,253		1,667,088		1,443,179
Securities	$	421,145		285,252		365,196		349,209		359,323
Deposits	$	2,417,605		2,235,655		2,037,745		1,942,135		1,789,850
Stockholders’ equity	$	336,984		295,667		267,730		244,620		223,438

	Years Ended December 31,
	2019			2018		2017		2016		2015
CONSOLIDATED STATEMENTS OF EARNINGS:
Interest income	$	118,077			103,525		91,020		84,746		78,839
Interest expense		22,647			14,018		8,889		8,284		8,608
Net interest income		95,430			89,507		82,131		76,462		70,231
Provision for loan losses		2,040			4,298		1,681		379		388
Net interest income after provision for loan losses		93,390			85,209		80,450		76,083		69,843
Non-interest income		28,349			25,248		22,821		21,654		19,941
Non-interest expense		74,628			69,080		60,391		57,263		52,159
Earnings before income taxes		47,111			41,377		42,880		40,474		37,625
Income taxes		11,067			8,783		19,354		14,841		13,762
Net earnings	$	36,044			32,594		23,526		25,633		23,863
Cash dividends declared	$	11,725			9,447		6,729		5,756		4,935
PER SHARE DATA: (1)
Basic earnings per common share	$	3.36			3.09		2.26		2.49		2.35
Diluted earnings per common share	$	3.35			3.08		2.26		2.49		2.35
Cash dividends	$	1.10			0.90		0.65		0.56		0.49
Book value	$	31.22			27.83		25.62		23.71		21.90
RATIOS:
Return on average stockholders’ equity		11.31	%		11.70		9.06		10.8		11.17
Return on average assets		1.34	%		1.35		1.04		1.21		1.23
Total capital to assets		12.06	%		11.62		11.55		11.13		11.05
Dividends declared per share as a percentage of basic earnings per share		32.74	%		29.13		28.76		22.49		20.85

(1) Per share data for the year ended December 31, 2015 was retroactively adjusted to reflect a 4 for 3 stock split which occurred effective March 30, 2016.

WILSON BANK HOLDING COMPANY

Consolidated Financial Statements

December 31, 2019 and 2018

(With Independent Auditor’s Report Thereon)

Stephen M. Maggart, CPA, ABV, CFF J. Mark Allen, CPA Joshua K. Cundiff, CPA Michael T. Holland, CPA, ABV, CFF M. Todd Maggart, CPA, ABV, CFF Michael F. Murphy, CPA P. Jason Ricciardi, CPA, CGMA David B. von Dohlen, CPA T. Keith Wilson, CPA, CITP  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Shareholders of

Wilson Bank Holding Company:

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Wilson Bank Holding Company and Subsidiary (the Company) as of December 31, 2019 and 2018, 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, 2019, and the related notes (collectively referred to as the financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

Basis for Opinion

The 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 financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. 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.

1201 DEMONBREUN STREET ▪ SUITE 1220 ▪ NASHVILLE, TENNESSEE 37203-3140 ▪ (615) 252-6100 ▪ Fax ▪ (615) 252-6105

www.maggartpc.com

To The Board of Directors and Shareholders of

Wilson Bank Holding Company:

Page Two

Definition and Limitations of Internal Control over Financial Reporting

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.

/s/ MAGGART & ASSOCIATES, P.C.

We have served as the Company’s auditor since 1987.

Nashville, Tennessee

February 18, 2020

WILSON BANK HOLDING COMPANY

Consolidated Balance Sheets

December 31, 2019 and 2018 

	Dollars in thousands
	2019		2018
ASSETS
Loans, net of allowance for loan losses of $28,726 and $27,174, respectively	$	2,057,175		2,016,005
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)		421,145		285,252
Loans held for sale		18,179		7,484
Interest bearing deposits		126,827		80,215
Federal funds sold		20,000		9,000
Restricted equity securities, at cost		4,680		3,012
Total earning assets		2,648,006		2,400,968
Cash and due from banks		12,943		9,976
Premises and equipment, net		60,295		58,363
Accrued interest receivable		5,945		6,724
Deferred income taxes		6,136		8,901
Other real estate		697		1,357
Bank owned life insurance		31,762		30,952
Goodwill		4,805		4,805
Other assets		23,620		21,636
Total assets	$	2,794,209		2,543,682
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	2,417,605		2,235,655
Federal home loan bank advances		23,613		—
Accrued interest and other liabilities		16,007		12,360
Total liabilities		2,457,225		2,248,015
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 10,792,999 and 10,623,810 shares issued and outstanding, respectively		21,586		21,248
Additional paid-in capital		82,249		73,960
Retained earnings		232,456		208,164
Net unrealized gains (losses) on available-for-sale securities, net of taxes of $245 and $2,726, respectively		693		(7,705	)
Total stockholders’ equity		336,984		295,667
COMMITMENTS AND CONTINGENCIES
Total liabilities and stockholders’ equity	$	2,794,209		2,543,682

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Earnings

Three Years Ended December 31, 2019

	Dollars In Thousands (except per share data)
	2019			2018			2017
Interest income:
Interest and fees on loans	$	105,783			94,917			83,120
Interest and dividends on securities:
Taxable securities		8,559			6,158			5,397
Exempt from Federal income taxes		773			1,020			1,208
Interest on loans held for sale		325			184			324
Interest on Federal funds sold		275			83			97
Interest on interest bearing deposits		2,164			979			723
Interest and dividends on restricted equity securities		198			184			151
Total interest income		118,077			103,525			91,020
Interest expense:
Interest on negotiable order of withdrawal accounts		2,311			1,823			1,308
Interest on money market accounts and other savings accounts		6,855			4,231			2,211
Interest on certificates of deposit and individual retirement accounts		12,896			7,944			5,353
Interest on securities sold under repurchase agreements		—			16			9
Interest on Federal funds purchased		4			4			8
Interest on Federal Home Loan Bank advances		581			—			—
Total interest expense		22,647			14,018			8,889
Net interest income before provision for loan losses		95,430			89,507			82,131
Provision for loan losses		2,040			4,298			1,681
Net interest income after provision for loan losses		93,390			85,209			80,450
Non-interest income		28,349			25,248			22,821
Non-interest expense		(74,628	)		(69,080	)		(60,391	)
Earnings before income taxes		47,111			41,377			42,880
Income taxes		11,067			8,783			19,354
Net earnings	$	36,044			32,594			23,526
Basic earnings per common share	$	3.36			3.09			2.26
Diluted earnings per common share	$	3.35			3.08			2.26
Weighted average common shares outstanding:
Basic		10,743,269			10,564,172			10,407,211
Diluted		10,761,467			10,572,221			10,412,536

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Comprehensive Earnings

Three Years Ended December 31, 2019

	Dollars In Thousands
	2019		2018			2017
Net earnings	$	36,044		32,594			23,526
Other comprehensive earnings (losses), net of tax:
Net unrealized gains (losses) on available-for-sale securities arising during period, net of taxes of $2,901, $1,398, and $271, respectively		8,200		(3,950	)		437
Reclassification adjustment for net losses included in net earnings, net of taxes of $70, $170, and $67, respectively		198		480			108
Other comprehensive earnings (losses)		8,398		(3,470	)		545
Comprehensive earnings	$	44,442		29,124			24,071

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Changes in Stockholders’ Equity

Three Years Ended December 31, 2019

	Dollars In Thousands
										Net Unrealized
										Gain (Loss) On
				Additional Paid In						Available For Sale
	Common Stock			Capital			Retained Earnings			Securities			Total
Balance December 31, 2016	$	20,639			60,541			167,523			(4,083	)		244,620
Cash dividends declared, $.65 per share		—			—			(6,729	)		—			(6,729	)
Issuance of 125,960 shares of common stock pursuant to dividend reinvestment plan		252			5,014			—			—			5,266
Issuance of 5,078 shares of common stock pursuant to exercise of stock options		10			142			—			—			152
Reclassification of deferred tax asset revaluation		—			—			697			(697	)		0
Share based compensation expense		—			350			—			—			350
Net change in fair value of available-for-sale securities during the year, net of taxes of $338		—			—			—			545			545
Net earnings for the year		—			—			23,526			—			23,526
Balance December 31, 2017		20,901			66,047			185,017			(4,235	)		267,730
Cash dividends declared, $.90 per share		—			—			(9,447	)		—			(9,447	)
Issuance of 161,514 shares of common stock pursuant to dividend reinvestment plan		324			7,146			—			—			7,470
Issuance of 11,585 shares of common stock pursuant to exercise of stock options		23			371			—			—			394
Share based compensation expense		—			396			—			—			396
Net change in fair value of available-for-sale securities during the year, net of taxes of $1,228		—			—			—			(3,470	)		(3,470	)
Net earnings for the year		—			—			32,594			—			32,594
Balance December 31, 2018		21,248			73,960			208,164			(7,705	)		295,667
Cash dividends declared, $1.10 per share		—			—			(11,725	)		—			(11,725	)
Issuance of 179,199 shares of common stock pursuant to dividend reinvestment plan		358			8,776			—			—			9,134
Issuance of 21,764 shares of common stock pursuant to exercise of stock options		44			731			—			—			775
Share based compensation expense		—			347			—			—			347
Net change in fair value of available-for-sale securities during the year, net of taxes of $2,971		—			—			—			8,398			8,398
Cumulative effect of accounting change		—			—			(27	)		—			(27	)
Repurchase of 31,774 common shares		(64	)		(1,565	)		—			—			(1,629	)
Net earnings for the year		—			—			36,044			—			36,044
Balance December 31, 2019	$	21,586			82,249			232,456			693			336,984

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows

Three Years Ended December 31, 2019

Increase (Decrease) in Cash and Cash Equivalents

	Dollars In Thousands
	2019			2018			2017
Cash flows from operating activities:
Interest received	$	121,366			105,318			93,506
Fees and other income received		27,987			20,503			17,876
Proceeds from sales of loans		157,028			131,321			149,775
Origination of loans held for sale		(167,723	)		(129,060	)		(135,835	)
Interest paid		(21,966	)		(12,565	)		(8,612	)
Cash paid to suppliers and employees		(69,681	)		(64,186	)		(57,643	)
Income taxes paid		(10,934	)		(10,558	)		(16,400	)
Net cash provided by operating activities		36,077			40,773			42,667
Cash flows from investing activities:
Purchase of available-for-sale securities		(255,432	)		(9,118	)		(96,180	)
Proceeds from calls, maturities and paydowns of available-for-sale securities		90,805			36,955			38,839
Proceeds from sale of available-for-sale securities		37,325			35,093			35,555
Purchase of restricted equity securities		(1,668	)		—			—
Proceeds from maturities and paydowns of held-to-maturity securities		—			4,651			3,859
Proceeds from sale of held-to-maturity securities		—			4,764			—
Loans made to customers, net of repayments		(43,568	)		(293,655	)		(61,826	)
Purchase of bank owned life insurance and annuity contracts		—			(4,301	)		—
Purchase of premises and equipment		(6,044	)		(7,752	)		(12,660	)
Proceeds from sale of other assets		14			4			43
Proceeds from sale of other real estate		952			796			2,876
Net cash used in investing activities		(177,616	)		(232,563	)		(89,494	)
Cash flows from financing activities:
Net increase in non-interest bearing, savings, NOW and money market deposit accounts		163,720			101,248			87,116
Net increase in time deposits		18,230			96,662			8,494
Net increase (decrease) in securities sold under agreements to repurchase		—			(864	)		128
Net increase in Federal Home Loan Bank advances		23,613			—			—
Dividends paid		(11,725	)		(9,447	)		(6,729	)
Proceeds from sale of common stock pursuant to dividend reinvestment		9,134			7,470			5,266
Repurchase of common stock		(1,629	)		—			—
Proceeds from sale of common stock pursuant to exercise of stock options		775			394			152
Net cash provided by financing activities		202,118			195,463			94,427
Net increase in cash and cash equivalents		60,579			3,673			47,600
Cash and cash equivalents at beginning of year		99,191			95,518			47,918
Cash and cash equivalents at end of year	$	159,770			99,191			95,518

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows, Continued

Three Years Ended December 31, 2019

Increase (Decrease) in Cash and Cash Equivalents

	Dollars In Thousands
	2019			2018			2017
Reconciliation of net earnings to net cash provided by operating activities:
Net earnings	$	36,044			32,594			23,526
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, amortization and accretion		6,494			5,853			5,507
Provision for loan losses		2,040			4,298			1,681
Share-based compensation expense		347			1,237			692
Provision for deferred tax benefit		(206	)		(248	)		(607	)
Revaluation of deferred tax assets due to change in tax rates		—			—			3,603
Loss (gain) on sales of other real estate, net		48			80			(6	)
Loss on sales of other assets		4			3			15
Loss on disposal of premises and equipment		128			2			—
Security loss (gain)		268			650			175
Decrease (increase) in loans held for sale		(10,695	)		(2,378	)		9,682
Increase (decrease) in taxes payable		339			(1,526	)		(42	)
Increase in other assets, bank owned life insurance and annuity contract earnings		(194	)		(1,684	)		(1,231	)
Decrease (increase) in accrued interest receivable		779			(458	)		(162	)
Increase in interest payable		682			1,453			277
Increase (decrease) in other liabilities		(1	)		897			(443	)
Total adjustments		33			8,179			19,141
Net cash provided by operating activities	$	36,077			40,773			42,667
Supplemental Schedule of Non-Cash Activities:
Change in fair value of securities available-for-sale, net of taxes of $2,971 in 2019, $1,228 in 2018, and $338 in 2017	$	8,398			(3,470	)		545
Non-cash transfers from held-to-maturity to available-for-sale securities	$	-			22,800			—
Non-cash transfers from loans to other real estate	$	884			693			173
Non-cash transfers from other real estate to loans	$	544			95			195
Non-cash transfers from loans to other assets	$	18			7			2

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(1) Summary of Significant Accounting Policies 

The accounting and reporting policies of Wilson Bank Holding Company (“the Company”) and Wilson Bank & Trust (“Wilson Bank”) are in accordance with accounting principles generally accepted in the United States of America (“U.S.”) and conform to general practices within the banking industry. The following is a brief summary of the significant policies.

(a) Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Wilson Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

(b) Nature of Operations

Wilson Bank operates under a state bank charter and provides full banking services. As a state-chartered bank that is not a member of the Federal Reserve, Wilson Bank is subject to regulations of the Tennessee Department of Financial Institutions and the Federal Deposit Insurance Corporation (“FDIC”). The areas served by Wilson Bank include Wilson County, DeKalb County, Rutherford County, Smith County, Trousdale County, Putnam County, Sumner County, Davidson County and Williamson County, Tennessee and surrounding counties in Middle Tennessee. Services are provided at the main office and twenty-eight branch locations.

(c) Estimates

In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and other real estate, other-than-temporary impairments of securities, and the fair value of financial instruments.

(d) Significant Group Concentrations of Credit Risk

Most of the Company’s activities are with customers located within Middle Tennessee. The types of securities in which the Company invests are described in note 3. The types of lending in which the Company engages are described in note 2. The Company does not have any significant concentrations to any one industry or customer other than as disclosed in note 2.

Residential 1-4 family, commercial real estate and construction mortgage loans, represented 24%, 38% and 20% and 22%, 34% and 25% of the loan portfolio at December 31, 2019 and 2018, respectively. 

(e) Loans

The Company grants mortgage, commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans throughout Middle Tennessee. The ability of the Company’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in this area.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for unearned income, the allowance for loan losses, and any unamortized deferred fees or costs on originated loans, and premiums or discounts on purchased loans.

Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized on a straight line basis over the respective term of the loan.

As part of its routine credit monitoring process, the Company performs regular credit reviews of the loan portfolio and loans receive risk ratings by the assigned credit officer, which are subject to validation by our independent loan review department. Risk ratings are categorized as pass, special mention, substandard or doubtful. The Company believes that its categories follow those outlined by the FDIC, Wilson Bank's primary federal regulator.

Generally the accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Credit card loans and other personal loans are typically charged off no later than when they become 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements

December 31, 2019, 2018 and 2017

(f) Allowance for Loan Losses

Management provides for loan losses by establishing an allowance. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a quarterly basis by management and is based upon management’s quarterly review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

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, independent loan reviewers, and reviews that may have been conducted by third-party reviewers. We incorporate relevant loan review results in the loan impairment determination. In addition, regulatory agencies, as an integral part of their examination process, will periodically review the Company’s allowance for loan losses and may require the Company to record adjustments to the allowance based on their judgment about information available to them at the time of their examinations.

In addition to the independent loan review process, the aforementioned risk ratings are subject to continual review by loan officers to determine that the appropriate risk ratings are being utilized in our allowance for loan loss process. Each risk rating is also subject to review by our independent loan review department. Currently, our independent loan review department targets reviews of 100% of existing loan relationships with aggregate debt of $1.0 million and greater and new loans with aggregate debt of $500,000 and greater. In addition, our independent loan review department targets particular portfolio segments, loans assigned to a particular lending officer, past due loans, and loans with four or more renewals.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are individually classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience, historical loan loss factors, loss experience of various loan segments, and other adjustments based on management’s assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial, mortgage and agricultural loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment disclosures, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(g) Debt and Equity Securities

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 based on available market prices, with unrealized gains and losses excluded from earnings and reported in other comprehensive income on an after-tax basis. Securities classified as “available-for-sale” are held for indefinite periods of time and may be sold in response to movements in market interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. 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.

Other-than-temporary Impairment—Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). A decline in the fair value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in a reduction in the carrying amount of the security. To determine whether OTTI has occurred, management considers factors such as (1) length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospectus of the issuer, and (3) Wilson Bank’s ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value. If management deems a security to be OTTI, management reviews the present value of the future cash flows associated with the security. A shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is referred to as a credit loss. If a credit loss is identified, the credit loss is recognized as a charge to earnings and a new cost basis for the security is established. If management concludes that no credit loss exists and it is not “more-likely-than-not” that it will be required to sell the security before the recovery of the security’s cost basis, then the security is not deemed OTTI and the shortfall is recorded as a component of equity.

No securities have been classified as trading securities or held-to-maturity securities at December 31, 2019.

(h) Federal Home Loan Bank Stock

The Company, as a member of the Federal Home Loan Bank (“FHLB”) Cincinnati system, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at par value, which approximates its fair value. Management reviews the investment for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. As of December 31, 2019, this minimum required investment was valued at approximately $4.0 million. Stock redemptions are at the discretion of the FHLB. 

(i) Loans Held for Sale

Mortgage loans held for sale are carried at fair value. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan.

(j) Premises and Equipment

Premises and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the related assets. Gains or losses realized on items retired and otherwise disposed of are credited or charged to operations and cost and related accumulated depreciation are removed from the asset and accumulated depreciation accounts.

Expenditures for major renovations and improvements of premises and equipment are capitalized and those for maintenance and repairs are charged to earnings as incurred.

(k) Other Real Estate

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less the estimated cost to sell at the date the Company acquires the property, establishing a new cost basis. Subsequent to their acquisition by the Company, valuations of these assets are periodically performed by management, and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance [i.e. any direct write-downs] are included within non-interest expense.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(l) Intangible Assets

The Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” 350, Goodwill and Other Intangible Assets requires that management determine the allocation of intangible assets into identifiable groups at the date of acquisition and that appropriate amortization periods be established. Under the provisions of FASB ASC 350, goodwill is not to be amortized; rather, it is to be monitored for impairment and written down to the impairment value at the time impairment occurs. The Company has determined that no impairment loss needs to be recognized related to its goodwill. 

(m) Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, interest-bearing deposits, amounts due from banks and Federal funds sold. Generally, Federal funds sold are purchased and sold for one day periods. Management makes deposits only with financial institutions it considers to be financially sound. 

(n) Long-Term Assets

Premises and equipment, intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

(o) Securities Sold Under Agreements to Repurchase

Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by Federal deposit insurance.

(p) Income Taxes

The Company accounts for Income Taxes in accordance with income tax accounting guidance (FASB ASC 740, Income Taxes). The Company follows accounting guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.

The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term "more-likely-than-not" means a likelihood of more than 50 percent. The terms "examined" and "upon examination" also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized.

The Company recognizes interest and penalties on income taxes as a component of income tax expense. 

(q) Mortgage Banking Derivatives

Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest rate on the loan is locked. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in net gains on sale of mortgage loans.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(r) Equity-Based Incentives

Stock compensation accounting guidance (FASB ASC 718, “Compensation—Stock Compensation”) requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, cash-settled stock appreciation rights (SARs), and employee share purchase plans. Because cash-settled SARs do not give the grantee the choice of receiving stock, all cash-settled SARs are accounted for as liabilities, not equity, as compensation is accrued over the requisite service period.

The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options and cash-settled SARs.

(s) Advertising Costs

Advertising costs are expensed as incurred by the Company and totaled $2,498,000, $2,552,000 and $2,326,000 for 2019, 2018 and 2017, respectively. 

(t) Earnings Per Share

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

(u) Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 21 - Disclosures About Fair Value of Financial Instruments of the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.

(v) Reclassification

Certain reclassifications have been made to the 2018 and 2017 figures to conform to the presentation for 2019. 

(w) 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 credit. Such financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received. 

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(x) Accounting Standard Updates

Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Our revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. Because of this, our adoption of this Standard in the first quarter of 2018 did not have a significant impact on our financial statements.

ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. ASU 2016-01 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2016-02, “Leases (Topic 842).” ASU 2016-02, among other things, requires lessees to recognize a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-02 was effective for us on January 1, 2019 and initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) - Targeted Improvements,” which, among other things, provides an additional transition method that allows entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors,” which provides for certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon adoption of ASU 2016-02, ASU 2018-11 and ASU 2018-20 on January 1, 2019, we recorded a right-of-use asset in the amount of $2,600,000 and an offsetting lease liability in the amount of $2,627,000. Upon adoption, using a modified retrospective transition adoption approach, we recognized a cumulative effect reduction to retained earnings totaling $27,000. We elected to apply certain practical expedients provided under ASU 2016-02 whereby we will not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. We utilized the modified-retrospective transition approach prescribed by ASU 2018-11.

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In April 2019, ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” was issued to address certain codification improvements and to provide certain accounting policy electives related to accrued interest as well as disclosure related to credit losses, among other things. In May 2019, ASU 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief,” was issued to provide transition relief in connection with the adoption of ASU 2016-03 whereby entities would have the option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2016-13, as updated, became effective on January 1, 2020.

We are currently working through our implementation plan for ASU 2016-13 under the direction of our Chief Financial Officer and our Chief Credit Officer. Our implementation plan includes assessment and documentation of processes, internal controls and data sources; model development, documentation and validation; and system configuration, among other things. We are also in the process of implementing a third-party vendor solution to assist us in the application of ASU 2016-13. Based upon our preliminary parallel run as of December 31, 2019, we currently expect the adoption of ASU 2016-13 will not result in a significant change to our current allowance for loan losses and our reserves for unfunded commitments. The adoption of ASU 2016-13 is also not currently expected to have a significant impact on our regulatory capital ratios. The ultimate impact of adoption in future periods could be significantly different than our current expectation as our modeling processes will be significantly influenced by the composition, characteristics and quality of our loan and securities portfolios as well as the prevailing economic conditions and forecasts as of that date, notwithstanding any further refinements to our expected credit loss models.

ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. ASU 2016-15 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 became effective for us on January 1, 2020, and is not expected to have a significant impact on our financial statements.

ASU 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) - Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 clarifies the scope of Subtopic 610-20 and adds guidance for partial sales of nonfinancial assets, including partial sales of real estate. Historically, U.S. GAAP contained several different accounting models to evaluate whether the transfer of certain assets qualified for sale treatment. ASU 2017-05 reduces the number of potential accounting models that might apply and clarifies which model does apply in various circumstances. ASU 2017-05 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-08, “Receivables -  Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 provides guidance on the amortization period for certain purchased callable debt securities held at a premium. This update shortens the amortization period for the premium to the earliest call date. Under current generally accepted accounting principles, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument related to certain cash flow issues. ASU 2017-08 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting.” ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. ASU 2017-09 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-12, “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 amends the hedge accounting recognition and presentation requirements in ASC 815 to improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities to better align the entity’s financial reporting for hedging relationships with those risk management activities and to reduce the complexity of and simplify the application of hedge accounting. ASU 2017-12 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." Under ASU 2018-02, entities may elect to reclassify certain income tax effects related to the change in the U.S. statutory federal income tax rate under the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, from accumulated other comprehensive income to retained earnings. ASU 2018-02 also requires certain accounting policy disclosures. We elected to adopt the provisions of ASU 2018-02 for the year ended December 31, 2018 in advance of the required application date of January 1, 2019. See Note 10 - Income Taxes.

ASU 2018-05, "Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118.” ASU 2018-05 amends the Accounting Standards Codification to incorporate various SEC paragraphs pursuant to the issuance of SAB 118. SAB 118 addresses the application of generally accepted accounting principles in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act. See Note 10 - Income Taxes.

ASU 2018-13, "Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 became effective for us on January 1, 2020 and is not expected to have a significant impact on our financial statements.

ASU 2018-16, “Derivatives and Hedging (Topic 815) - Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.” The amendments in this update permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct U.S. Treasury obligations, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. ASU 2018-16 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

Other than those previously discussed, there were no other recently issued accounting pronouncements that may materially impact the Company.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(2) Loans and Allowance for Loan Losses

The classification of loans at December 31, 2019 and 2018 is as follows: 

	In Thousands
	2019			2018
Mortgage loans on real estate:
Residential 1-4 family	$	511,250			460,692
Multifamily		97,104			134,613
Commercial		793,379			701,055
Construction		425,185			518,245
Farmland		19,268			24,071
Second mortgages		10,760			11,197
Equity lines of credit		72,379			62,013
Total mortgage loans on real estate		1,929,325			1,911,886
Commercial loans		98,265			78,245
Agricultural loans		1,569			1,985
Consumer installment loans:
Personal		50,532			45,072
Credit cards		4,302			3,687
Total consumer installment loans		54,834			48,759
Other loans		9,049			9,324
		2,093,042			2,050,199
Net deferred loan fees		(7,141	)		(7,020	)
Total loans		2,085,901			2,043,179
Less: Allowance for loan losses		(28,726	)		(27,174	)
Loans, net	$	2,057,175			2,016,005

At December 31, 2019, variable rate and fixed rate loans totaled $1,640,991,000 and $452,051,000, respectively. At December 31, 2018, variable rate and fixed rate loans totaled $1,495,918,000 and $554,281,000, respectively.

In the normal course of business, Wilson Bank has made loans at prevailing interest rates and terms to directors and executive officers of the Company and to their affiliates. The aggregate amount of these loans was $12,878,000 and $13,019,000 at December 31, 2019 and 2018, respectively. None of these loans were restructured, charged-off or involved more than the normal risk of collectibility or presented other unfavorable features during the three years ended December 31, 2019.

An analysis of the activity with respect to such loans to related parties is as follows:

	In Thousands
	December 31,
	2019			2018
Balance, January 1	$	13,019			7,759
New loans and renewals during the year		31,548			17,278
Repayments (including loans paid by renewal) during the year		(31,689	)		(12,018	)
Balance, December 31	$	12,878			13,019

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

Risk characteristics relevant to each portfolio segment are as follows:

Construction and land development: Loans for non-owner-occupied real estate construction or land development are generally repaid through cash flow related to the operation, sale or refinance of the property. The Company also finances construction loans for owner-occupied properties. A portion of the Company’s construction and land portfolio segment is comprised of loans secured by residential product types (residential land and single-family construction). With respect to construction loans to developers and builders that are secured by non-owner occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, market sales activity, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

1-4 family residential real estate: Residential real estate loans represent loans to consumers or investors to finance a residence. These loans are typically financed on 15 to 30 year amortization terms, but generally with shorter maturities of 5 to 15 years. Many of these loans are extended to borrowers to finance their primary or secondary residence. Loans to an investor secured by a 1-4 family residence will be repaid from either the rental income from the property or from the sale of the property. This loan segment also includes closed-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home. Loans in this portfolio segment are underwritten and approved based on a number of credit quality criteria including limits on maximum Loan-to-Value (LTV), minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these residential property values impact the depth of potential losses in this portfolio segment.

1-4 family HELOC: This loan segment includes open-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home utilizing a revolving line of credit. These loans are underwritten and approved based on a number of credit quality criteria including limits on maximum LTV, minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these residential property values impact the depth of potential losses in this portfolio segment. Because of the revolving nature of these loans, as well as the fact that many represent second mortgages, this portfolio segment can contain more risk than the amortizing 1-4 family residential real estate loans.

Multi-family and commercial real estate: Multi-family and commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial loans (which are discussed below), in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.

Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting the market areas it serves. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. Non-owner occupied commercial real estate loans are loans secured by multifamily and commercial properties where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. These loans are made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail properties. Owner-occupied commercial real estate loans are loans where the primary source of repayment is the cash flow from the ongoing operations and business activities conducted by the party, or affiliate of the party, who owns the property.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

Commercial and industrial: The commercial and industrial loan portfolio segment includes commercial and industrial loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other expansion projects. Collection risk in this portfolio is driven by the creditworthiness of underlying borrowers, particularly cash flow from customers’ business operations. Commercial and industrial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial and industrial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and usually incorporates a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Consumer: The consumer loan portfolio segment includes non-real estate secured direct loans to consumers for household, family, and other personal expenditures. Consumer loans may be secured or unsecured and are usually structured with short or medium term maturities. These loans are underwritten and approved based on a number of consumer credit quality criteria including limits on maximum LTV on secured consumer loans, minimum credit scores, and maximum debt to income. Many traditional forms of consumer installment credit have standard monthly payments and fixed repayment schedules of one to five years. These loans are made with either fixed or variable interest rates that are based on specific indices. Installment loans fill a variety of needs, such as financing the purchase of an automobile, a boat, a recreational vehicle or other large personal items, or for consolidating debt. These loans may be unsecured or secured by an assignment of title, as in an automobile loan, or by money in a bank account. In addition to consumer installment loans, this portfolio segment also includes secured and unsecured personal lines of credit as well as overdraft protection lines. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310), when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Substantially all of the Company’s impaired loans are collateral dependent.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

The following tables, present the Company’s impaired loans at December 31, 2019 and 2018:

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
With no related allowance recorded:
Residential 1-4 family	$	1,090		1,464		—		1,090		99
Multifamily		—		—		—		—		—
Commercial real estate		951		1,124		—		910		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,041		2,588		—		2,000		116

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
With allowance recorded:
Residential 1-4 family	$	1,489		1,480		795		1,590		83
Multifamily		—		—		—		—		—
Commercial real estate		1,522		1,520		341		2,015		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,011		3,000		1,136		3,605		100

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
Total:
Residential 1-4 family	$	2,579		2,944		795		2,680		182
Multifamily		—		—		—		—		—
Commercial real estate		2,473		2,644		341		2,925		34
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,052		5,588		1,136		5,605		216

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
With no related allowance recorded:
Residential 1-4 family	$	1,196		1,795		—		1,862		42
Multifamily		—		—		—		—		—
Commercial real estate		317		316		—		320		16
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,203		2,797		—		3,237		100

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
With allowance recorded:
Residential 1-4 family	$	1,641		1,635		852		1,782		77
Multifamily		—		—		—		—		—
Commercial real estate		1,515		1,515		312		2,001		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,156		3,150		1,164		3,783		94

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
Total:
Residential 1-4 family	$	2,837		3,430		852		3,644		119
Multifamily		—		—		—		—		—
Commercial real estate		1,832		1,831		312		2,321		33
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,359		5,947		1,164		7,020		194

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

The following tables present the Company’s nonaccrual loans, credit quality indicators and past due loans as of December 31, 2019 and 2018.

Loans on Nonaccrual Status

	In Thousands
	2019		2018
Residential 1-4 family	$	949		948
Multifamily		—		—
Commercial real estate		1,661		1,102
Construction		—		—
Farmland		—		—
Second mortgages		—		—
Equity lines of credit		—		—
Commercial		—		—
Agricultural, installment and other		—		—
Total	$	2,610		2,050

The impact on net interest income for these loans was not material to the Company’s results of operations for the years ended December 31, 2019, 2018 and 2017.

Potential problem loans, which include nonperforming loans, amounted to approximately $10.7 million at December 31, 2019 compared to $12.0 million at December 31, 2018. Potential problem loans represent those loans with a well defined weakness and where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by the FDIC, the Company’s primary federal regulator, for loans classified as special mention, substandard, or doubtful, excluding the impact of nonperforming loans.

The following table presents our loan balances by primary loan classification and the amount classified within each risk rating category. Pass rated loans include all credits other than those included in special mention, substandard and doubtful which are defined as follows:

• Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

• Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

• Doubtful loans have all the characteristics of substandard loans with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The Company considers all doubtful loans to be impaired and places the loans on nonaccrual status.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

Credit Quality Indicators

	In Thousands
																	Agricultural,
	Residential 1-4				Commercial						Second		Equity Lines				Installment and
	Family		Multifamily		Real Estate		Construction		Farmland		Mortgages		of Credit		Commercial		Other		Total
Credit Risk Profile by Internally Assigned Grade
December 31, 2019
Pass	$	503,861		97,104		791,610		424,517		19,106		10,458		72,237		98,243		65,255		2,082,391
Special mention		2,923		—		—		635		103		174		—		—		101		3,936
Substandard		4,466		—		1,769		33		59		128		142		22		96		6,715
Doubtful		—		—		—		—		—		—		—		—		—		—
Total	$	511,250		97,104		793,379		425,185		19,268		10,760		72,379		98,265		65,452		2,093,042
December 31, 2018
Pass	$	452,411		134,613		698,083		518,123		23,895		10,979		61,927		78,206		59,923		2,038,160
Special mention		3,949		—		1,690		64		112		179		—		39		78		6,111
Substandard		4,332		—		1,282		58		64		39		86		—		67		5,928
Doubtful		—		—		—		—		—		—		—		—		—		—
Total	$	460,692		134,613		701,055		518,245		24,071		11,197		62,013		78,245		60,068		2,050,199

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

Age Analysis of Past Due Loans

	In Thousands
													Recorded
													Investment
					Nonaccrual		Total						Greater Than
	30-59 Days		60-89 Days		and Greater		Nonaccrual						90 Days and
	Past Due		Past Due		Than 90 Days		Past Due		Current		Total Loans		Accruing
December 31, 2019
Residential 1-4 family	$	4,760		799		2,336		7,895		503,355		511,250		1,387
Multifamily		—		—		—		—		97,104		97,104		—
Commercial real estate		500		—		1,661		2,161		791,218		793,379		—
Construction		1,535		147		594		2,276		422,909		425,185		594
Farmland		57		—		8		65		19,203		19,268		8
Second mortgages		—		—		100		100		10,660		10,760		100
Equity lines of credit		143		—		372		515		71,864		72,379		372
Commercial		71		30		—		101		98,164		98,265		—
Agricultural, installment and other		517		116		46		679		64,773		65,452		46
Total	$	7,583		1,092		5,117		13,792		2,079,250		2,093,042		2,507
December 31, 2018
Residential 1-4 family	$	3,258		1,092		1,868		6,218		454,474		460,692		920
Multifamily		—		—		—		—		134,613		134,613		—
Commercial real estate		312		109		1,174		1,595		699,460		701,055		72
Construction		1,567		26		32		1,625		516,620		518,245		32
Farmland		43		9		21		73		23,998		24,071		21
Second mortgages		333		—		—		333		10,864		11,197		—
Equity lines of credit		297		—		45		342		61,671		62,013		45
Commercial		93		—		24		117		78,128		78,245		24
Agricultural, installment and other		407		85		95		587		59,481		60,068		95
Total	$	6,310		1,321		3,259		10,890		2,039,309		2,050,199		1,209

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

Transactions in the allowance for loan losses for the years ended December 31, 2019 and 2018 are summarized as follows:

	In Thousands
																							Agricultural,
	Residential 1-4						Commercial									Second		Equity Lines					Installment and
	Family			Multifamily			Real Estate			Construction			Farmland			Mortgages		of Credit		Commercial			Other			Total
December 31, 2019
Allowance for loan losses:
Beginning balance	$	6,297			1,481			9,753			7,084			221			118		731		622			867			27,174
Provision		838			(364	)		1,484			(1,510	)		(34	)		5		158		422			1,041			2,040
Charge-offs		(15	)		—			(173	)		—			—			—		—		(15	)		(1,160	)		(1,363	)
Recoveries		24			—			50			423			—			—		—		15			363			875
Ending balance	$	7,144			1,117			11,114			5,997			187			123		889		1,044			1,111			28,726
Ending balance individually evaluated for impairment	$	795			—			341			—			—			—		—		—			—			1,136
Ending balance collectively evaluated for impairment	$	6,349			1,117			10,773			5,997			187			123		889		1,044			1,111			27,590
Loans:
Ending balance	$	511,250			97,104			793,379			425,185			19,268			10,760		72,379		98,265			65,452			2,093,042
Ending balance individually evaluated for impairment	$	2,569			—			2,471			—			—			—		—		—			—			5,040
Ending balance collectively evaluated for impairment	$	508,681			97,104			790,908			425,185			19,268			10,760		72,379		98,265			65,452			2,088,002

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

	In Thousands
																				Agricultural,
	Residential 1-4					Commercial								Second		Equity Lines				Installment and
	Family			Multifamily		Real Estate		Construction			Farmland			Mortgages		of Credit		Commercial		Other			Total
December 31, 2018
Allowance for loan losses:
Beginning balance	$	5,156			1,011		9,267		6,094			487			94		723		401		676			23,909
Provision		1,568			470		436		921			(266	)		24		7		218		920			4,298
Charge-offs		(492	)		—		—		(19	)		—			—		—		—		(1,152	)		(1,663	)
Recoveries		65			—		50		88			—			—		1		3		423			630
Ending balance	$	6,297			1,481		9,753		7,084			221			118		731		622		867			27,174
Ending balance individually evaluated for impairment	$	852			—		312		—			—			—		—		—		—			1,164
Ending balance collectively evaluated for impairment	$	5,445			1,481		9,441		7,084			221			118		731		622		867			26,010
Loans:
Ending balance	$	460,692			134,613		701,055		518,245			24,071			11,197		62,013		78,245		60,068			2,050,199
Ending balance individually evaluated for impairment	$	2,829			—		1,831		686			—			—		—		—		—			5,346
Ending balance collectively evaluated for impairment	$	457,863			134,613		699,224		517,559			24,071			11,197		62,013		78,245		60,068			2,044,853

The Company’s loan portfolio includes certain loans that have been modified in a troubled debt restructuring (TDR), where economic or other concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. The concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

The following table summarizes the carrying balances of TDRs at December 31, 2019 and December 31, 2018 (dollars in thousands):

	2019		2018
Performing TDRs	$	3,080		1,676
Nonperforming TDRs		1,467		816
Total TDRs	$	4,547		2,492

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

The following table outlines the amount of each TDR categorized by loan classification for the years ended December 31, 2019 and 2018 (dollars in thousands):

	December 31, 2019						December 31, 2018
					Post Modification						Post Modification
			Pre Modification		Outstanding				Pre Modification		Outstanding
			Outstanding		Recorded				Outstanding		Recorded
	Number of		Recorded		Investment, Net of		Number of		Recorded		Investment, Net of
	Contracts		Investment		Related Allowance		Contracts		Investment		Related Allowance
Residential 1-4 family		1	$	1,338	$	619		4	$	448	$	448
Multifamily		—		—		—		—		—		—
Commercial real estate		4		2,677		2,399		—		—		—
Construction		—		—		—		—		—		—
Farmland		—		—		—		—		—		—
Second mortgages		—		—		—		—		—		—
Equity lines of credit		—		—		—		—		—		—
Commercial		—		—		—		—		—		—
Agricultural, installment and other		—		—		—		2		5		5
Total		5	$	4,015	$	3,018		6	$	453	$	453

As of December 31, 2019 and 2018 the Company did not have any loan previously classified as a TDR default within twelve months of the restructuring. A default is defined as an occurrence which violates the terms of the receivable’s contract.

As of December 31, 2019 , the Bank did not have any consumer mortgage loans in the process of foreclosure.

As of December 31, 2018, the Company's recorded investment in consumer mortgage loans in the process of foreclosure amounted to $200,000.

The Company’s principal customers are primarily in the Middle Tennessee area with a concentration in Wilson County, Tennessee. Credit is extended to businesses and individuals and is evidenced by promissory notes. The terms and conditions of the loans including collateral vary depending upon the purpose of the credit and the borrower’s financial condition.

In 2019, 2018 and 2017, Wilson Bank originated mortgage loans for sale into the secondary market of $167,723,000, $129,060,000 and $135,835,000, respectively. The fees and gain on sale of these loans totaled $6,802,000, $4,639,000 and $4,258,000 in 2019, 2018 and 2017, respectively. All of these loan sales transfer servicing rights to the buyer.

In some instances, Wilson Bank sells loans that contain provisions which permit the buyer to seek recourse against Wilson Bank in certain circumstances. At December 31, 2019 and 2018, total mortgage loans sold with recourse in the secondary market aggregated $115,789,000 and $94,801,000, respectively. At December 31, 2019, Wilson Bank has not been required to repurchase a significant amount of the mortgage loans originated by Wilson Bank and sold in the secondary market. Management expects no material losses to result from these recourse provisions.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(3) Debt and Equity Securities 

Debt and equity securities have been classified in the consolidated balance sheet according to management’s intent. Debt and equity securities at December 31, 2019 consist of the following:

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Estimated Market
	Amortized Cost		Gains		Losses		Value
Government-sponsored enterprises (GSEs)	$	59,735		48		204		59,579
Mortgage-backed securities		265,648		2,300		635		267,313
Asset-backed securities		27,531		1		303		27,229
Obligations of states and political subdivisions		67,293		559		828		67,024
	$	420,207		2,908		1,970		421,145

The Company’s classification of securities at December 31, 2018 was as follows:

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Estimated Market
	Amortized Cost		Gains		Losses		Value
Government-sponsored enterprises (GSEs)	$	71,446		—		2,979		68,467
Mortgage-backed securities		152,375		9		4,874		147,510
Asset-backed securities		22,534		10		844		21,700
Obligations of states and political subdivisions		49,328		22		1,775		47,575
	$	295,683		41		10,472		285,252

There were no debt and equity securities classified as held-to-maturity at December 31, 2019 or  December 31, 2018. During the year ended December 31, 2018, the Company sold securities classified as held-to-maturity with a book value of $4,843,000 for a loss of $79,000. Due to the sale, management determined the Company no longer had the intent to hold the remaining securities classified as held-to-maturity to their respective maturity dates and transferred the remaining book value of $22,800,000 to the available-for-sale classification.

Included in mortgage-backed securities are collateralized mortgage obligations totaling $46,994,000 (fair value of $47,442,000) and $11,564,000 (fair value of $11,295,000) at December 31, 2019 and 2018, respectively.

The amortized cost and estimated market value of debt securities at December 31, 2019, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities of mortgage and asset-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

	In Thousands
Securities Available-For-Sale	Amortized Cost		Estimated Market Value
Due in one year or less	$	472		471
Due after one year through five years		18,332		18,319
Due after five years through ten years		56,626		56,622
Due after ten years		51,598		51,191
		127,028		126,603
Mortgage and asset-backed securities		293,179		294,542
	$	420,207		421,145

Results from sales of debt and equity securities are as follows:

	In Thousands
	2019			2018			2017
Gross proceeds	$	37,325			39,857			35,555
Gross realized gains	$	75			102			76
Gross realized losses		(343	)		(752	)		(251	)
Net realized gains (losses)	$	(268	)		(650	)		(175	)

Securities carried on the balance sheet of approximately $256,300,000 (approximate market value of $256,598,000) and $260,562,000 (approximate market value of $251,549,000) were pledged to secure public deposits and for other purposes as required or permitted by law at December 31, 2019 and 2018, respectively.

Included in the securities above are $50,193,000 (approximate market value of $49,903,000) at December 31,2019 in obligations of political subdivisions located within the sates of Tennessee, Idaho, Missouri, and Texas.

Securities that have rates that adjust prior to maturity totaled $48,018,000 (approximate market value of $47,784,000) and $32,864,000 (approximate market value of $32,217,000) at December 31, 2019 and 2018, respectively.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

Temporarily Impaired Securities

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2019 and 2018.

Available-for-sale securities that have been in a continuous unrealized loss position at December 31, 2019 and 2018 are as follows:

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2019	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
GSEs	$	16,507	$	114		5	$	24,658	$	90		9	$	41,165	$	204
Mortgage-backed securities		45,862		182		21		56,917		453		52		102,779		635
Asset-backed securities		17,807		161		10		7,317		142		4		25,124		303
Obligations of states and political subdivisions		30,423		783		26		3,858		45		10		34,281		828
	$	110,599	$	1,240		62	$	92,750	$	730		75	$	203,349	$	1,970

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2018	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
GSEs	$	—	$	—		—	$	68,467	$	2,979		28	$	68,467	$	2,979
Mortgage-backed securities		8,651		64		10		137,457		4,810		94		146,108		4,874
Asset-backed securities		—		—		—		20,597		844		14		20,597		844
Obligations of states and political subdivisions		4,064		26		6		39,841		1,749		94		43,905		1,775
	$	12,715	$	90		16	$	266,362	$	10,382		230	$	279,077	$	10,472

Declines in the fair value of available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income. In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and our ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in cost.

As of  December 31, 2019, management does not have the intent to sell any of the securities classified as available-for-sale in the table above and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of  December 31, 2019, management believes the impairments detailed in the table above are temporary and no impairment loss has been realized in our consolidated statements of earnings.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(4) Restricted Equity Securities

Restricted equity securities consists of stock of the FHLB of Cincinnati amounting to $4,680,000 and $3,012,000 at December 31, 2019 and 2018, respectively. The stock can be sold back only at par or a value as determined by the issuing institution and only to the respective financial institution or to another member institution. These securities are recorded at cost.

(5) Premises and Equipment

The detail of premises and equipment at December 31, 2019 and 2018 is as follows:

	In Thousands
	2019			2018
Land	$	17,093			17,022
Buildings		46,389			44,921
Leasehold improvements		533			492
Furniture and equipment		13,000			12,600
Automobiles		243			343
Construction-in-progress		1,339			100
		78,597			75,478
Less accumulated depreciation		(18,302	)		(17,115	)
	$	60,295			58,363

During 2019, 2018 and 2017, payments of $2,207,000, $2,633,000 and $5,934,000, respectively, were made to an entity owned by a director for the construction of buildings and repair work on existing buildings.

Depreciation expense was $3,984,000, $3,602,000 and $2,859,000 for the years ended December 31, 2019, 2018 and 2017, respectively.

(6) Acquired Intangible Assets and Goodwill

The Company's intangible assets result from the excess of purchase price over the applicable book value of the net assets acquired related to outside ownership of two previously 50% owned subsidiaries that the Company acquired 100% of in 2005.

	In Thousands
	2019		2018
Goodwill:
Balance at January 1,	$	4,805		4,805
Goodwill acquired during year		—		—
Impairment loss		—		—
Balance at December 31,	$	4,805		4,805

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(7) Deposits

Deposits at December 31, 2019 and 2018 are summarized as follows:

	In Thousands
	2019		2018
Demand deposits	$	284,611		254,157
Savings accounts		140,270		136,645
Negotiable order of withdrawal accounts		558,745		503,435
Money market demand accounts		801,986		727,654
Certificates of deposit $250,000 or greater		131,899		134,506
Other certificates of deposit		425,222		402,690
Individual retirement accounts $250,000 or greater		10,646		8,525
Other individual retirement accounts		64,226		68,043
	$	2,417,605		2,235,655

Principal maturities of certificates of deposit and individual retirement accounts at December 31, 2019 are as follows:

	(In Thousands)
Maturity	Total
2020	$	326,212
2021		160,368
2022		72,578
2023		51,327
2024		21,258
Thereafter		250
	$	631,993

The aggregate amount of overdrafts reclassified as loans receivable was $529,000 and $496,000 at December 31, 2019 and 2018, respectively.

As of December 31, 2019 and 2018, Wilson Bank was not required to maintain a cash balance with the Federal Reserve.

(8) Federal Home Loan Bank Advances

At December 31, 2019 the Company had $23,613,000 in outstanding advances from the FHLB of Cincinnati.  Each advance is amortized and payable monthly with a prepayment penalty for fixed rate advances. The weighted average rate of the total borrowings at December 31, 2019 was 2.67%.  The advances are collateralized by a blanket security agreement which includes the Banks 1-4 family loans.  The Company’s additional borrowing capacity was $266,712,000 at December 31, 2019.

Required future principal payments on Federal Home Loan Bank borrowings are as follows

	(In Thousands)
Maturity	Total
2020	$	8,250
2021		5,828
2022		4,658
2023		3,929
2024		948
Thereafter		—
Total		23,613

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(9) Non-Interest Income and Non-Interest Expense

The significant components of non-interest income and non-interest expense for the years ended December 31, 2019, 2018 and 2017 are presented below:

	In Thousands
	2019			2018			2017
Non-interest income:
Service charges on deposits	$	6,952			6,799			6,124
Other fees and commissions		14,233			13,704			11,752
BOLI and annuity earnings		810			841			871
Security losses, net		(268	)		(650	)		(175	)
Fees and gains on sales of mortgage loans		6,802			4,639			4,258
Gain (loss) on sale of other real estate, net		(48	)		(80	)		6
Loss on sale of fixed assets, net		(128	)		(2	)		—
Loss on sale of other assets, net		(4	)		(3	)		(15	)
	$	28,349			25,248			22,821

	In Thousands
	2019		2018		2017
Non-interest expense:
Employee salaries and benefits	$	42,541		39,590		35,830
Equity-based compensation		786		1,237		692
Occupancy expenses		4,789		4,403		3,718
Furniture and equipment expenses		3,110		2,767		2,085
Data processing expenses		4,495		2,900		2,834
Advertising expenses		2,498		2,552		2,326
ATM & interchange fees		3,439		3,091		2,569
Accounting, legal & consulting expenses		1,382		977		500
FDIC insurance		373		843		683
Directors’ fees		586		543		677
Other operating expenses		10,629		10,177		8,477
	$	74,628		69,080		60,391

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(10) Income Taxes

In December 2017, the Tax Cuts and Jobs Act was signed into law. As a result, the statutory corporate federal tax rate was lowered from 35% to 21%, effective January 1, 2018. In accordance with accounting principles generally accepted in the United States of America, the effect of rate changes are to be recorded as an adjustment to income in the year of enactment. As a result of the Tax Cuts and Jobs Act being signed into law, the Company revalued all deferred taxes to reflect the new statutory corporate tax rate resulting in a $3,603,000 charge to deferred tax expense in the fourth quarter of 2017. This charge included $697,000 related to unrealized losses on available-for-sale securities. Unrealized losses on available-for-sale securities are recognized as a component of equity as other comprehensive income. Management has elected to reclassify the $697,000 expense related to the available-for-sale rate change from retained earnings to other comprehensive income.

The components of the net deferred tax asset are as follows:

	In Thousands
	2019			2018
Deferred tax asset:
Federal	$	7,444			9,046
State		2,240			2,739
		9,684			11,785
Deferred tax liability:
Federal		(2,666	)		(2,167	)
State		(882	)		(717	)
		(3,548	)		(2,884	)
Net deferred tax asset	$	6,136			8,901

The tax effects of each type of significant item that gave rise to deferred tax assets (liabilities) are: 

	In Thousands
	2019			2018
Financial statement allowance for loan losses in excess of tax allowance	$	7,283			6,846
Excess of depreciation deducted for tax purposes over the amounts deducted in the financial statements		(2,976	)		(2,557	)
Financial statement deduction for deferred compensation in excess of deduction for tax purposes		1,193			1,128
Writedown of other real estate not deductible for income tax purposes until sold		157			176
Financial statement income on FHLB stock dividends not recognized for tax purposes		(327	)		(327	)
Unrealized loss (gain) on securities available-for-sale		(245	)		2,726
Equity based compensation		625			469
Other items, net		426			440
Net deferred tax asset	$	6,136			8,901

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

The components of income tax expense (benefit) are summarized as follows:

	In Thousands
	Federal			State			Total
2019
Current	$	10,134			1,411			11,545
Deferred		(335	)		(143	)		(478	)
Total	$	9,799		$	1,268			11,067
2018
Current	$	8,310			721			9,031
Deferred		(136	)		(112	)		(248	)
Total	$	8,174			609			8,783
2017
Current	$	14,004			2,354			16,358
Deferred		3,205			(209	)		2,996
Total	$	17,209			2,145			19,354

A reconciliation of actual income tax expense of $11,067,000, $8,783,000 and $19,354,000 for the years ended December 31, 2019, 2018 and 2017, respectively, to the “expected” tax expense (computed by applying the statutory rate of 21% for 2019 and 2018 and 34% for 2017 to earnings before income taxes) is as follows:

	In Thousands
	2019			2018			2017
Computed “expected” tax expense	$	9,893			8,689			14,579
State income taxes, net of Federal income tax benefit		1,056			432			1,346
Tax exempt interest, net of interest expense exclusion		(186	)		(226	)		(415	)
Federal income tax rate in excess of statutory rate related to taxable income over $10 million		—			—			399
Earnings on cash surrender value of life insurance		(170	)		(177	)		(292	)
Expenses not deductible for tax purposes		37			16			43
Equity based compensation expense		15			(39	)		16
Revaluation of federal deferred tax assets due to change in tax rates		—			—			3,603
Other		422			88			75
	$	11,067			8,783			19,354

Total income tax expense for 2019, 2018 and 2017, includes $70,000, $170,000 and $67,000 of benefit related to the realized gain and loss, respectively, on sale of securities.

As of December 31, 2019, 2018 and 2017 the Company has not accrued or recognized interest or penalties related to uncertain tax positions. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense.

There were no unrecognized tax benefits at December 31, 2019.

Wilson Bank does not expect that unrecognized tax benefits will significantly increase or decrease within the next 12 months. Included in the balance at December 31, 2019, were approximately $9.7 million of tax positions (deferred tax assets) for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

The Company and Wilson Bank file income tax returns in the United States (“U.S.”), as well as in the State of Tennessee. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2015. The Company’s Federal tax returns have been audited through December 31, 2005 with no changes.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(11) Commitments and Contingent Liabilities 

The Company is party to litigation and claims arising in the normal course of business. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from such litigation and claims will not be material to the Company's consolidated financial position.

Wilson Bank leases branch facilities and land for certain branch facilities and automatic teller machine locations. Future minimum rental payments required under the terms of the noncancellable leases are as follows:

Years Ending December 31,	In Thousands
2020	$	444
2021		387
2022		215
2023		112
2024		4
Thereafter		9

Total rent expense amounted to $484,000, $362,000 and $215,000, respectively, during the years ended December 31, 2019, 2018 and 2017.

At December 31,2019 and 2018 respectively, the Company has lines of credit with other financial institutions totaling $53,000,000. At December 31, 2019 and 2018, respectively, there was no balance outstanding under these lines of credit.

The Company also has a Cash Management Advance ("CMA") Line of Credit agreement. The CMA is a component of the Company's Blanket Agreement for advances with the FHLB. The purpose of the CMA is to assist with short-term liquidity management. Under the terms of the CMA, the Company may borrow a maximum of $25,000,000, selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. There were no borrowings outstanding under the CMA at December 31, 2019 or December 31, 2018.

(12) Financial Instruments with Off-Balance-Sheet Risk

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

	In Thousands
	Contract or Notional Amount
	2019		2018
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit	$	632,686		582,897
Standby letters of credit		72,901		80,165
Total	$	705,587		663,062

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally represent future cash requirements. The Company evaluates each customer's credit-worthiness on a case-by-case basis. The amount of collateral, if deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral normally consists of real property.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Most guarantees extend from one to two years. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The fair value of standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the likelihood of the counterparties drawing on such financial instruments and the present creditworthiness of such counterparties. Such commitments have been made on terms which are competitive in the markets in which the Company operates; thus, the fair value of standby letters of credit equals the carrying value for the purposes of this disclosure. The maximum potential amount of future payments that the Company could be required to make under the guarantees totaled $73,000,000 at December 31, 2019.

(13) Concentration of Credit Risk

Practically all of the Company’s loans, commitments, and commercial and standby letters of credit have been granted to customers in the Company’s market area. Practically all such customers are depositors of Wilson Bank. The concentrations of credit by type of loan are set forth in Note 2 - Loans and Allowance for Loan Losses.

Interest bearing deposits totaling $89,177,000 were deposited with four commercial banks.

Federal funds sold in the amount of $20,000,000 were deposited with one commercial bank.

(14) Employee Benefit Plan

Wilson Bank has in effect a 401(k) plan (the “401(k) Plan”) which covers eligible employees. To be eligible an employee must have obtained the age of 20.5. The provisions of the 401(k) Plan provide for both employee and employer contributions. For the years ended December 31, 2019, 2018 and 2017, Wilson Bank contributed $2,540,000, $2,383,000 and $2,145,000, respectively, to the 401(k) Plan.

(15) Dividend Reinvestment Plan

Under the terms of the Company’s dividend reinvestment plan (the “DRIP”) holders of common stock may elect to automatically reinvest cash dividends in additional shares of common stock. The Company may elect to sell original issue shares or to purchase shares in the open market for the account of participants. Original issue shares of 179,199 in 2019, 161,514 in 2018 and 125,960 in 2017 were sold to participants under the terms of the DRIP.

(16) Regulatory Matters and Restrictions on Dividends

The Company and Wilson Bank are subject to regulatory capital requirements administered by the FDIC, the Federal Reserve and the Tennessee Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Wilson Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Wilson Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Wilson Bank to maintain minimum amounts and ratios (set forth in the following table) of total, Tier 1 and common equity Tier 1 capital (each as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2019 and 2018, that the Company and Wilson Bank meet all capital adequacy requirements to which they are subject.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

As of December 31, 2019, the most recent notification from the FDIC categorized Wilson Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed Wilson Bank’s category. To be categorized as well capitalized for purposes of prompt corrective action regulations as of December 31, 2019 and 2018, an institution must have maintained minimum capital ratios as set forth in the following tables and not have been subject to a written agreement, order or directive to maintain a higher capital level. The Company’s and Wilson Bank’s actual capital amounts and ratios as of December 31, 2019 and 2018, are presented in the following tables:

						Regulatory Minimum Capital Requirement					Regulatory Minimum To Be Well
	Actual					with Basel III Capital Conservation Buffer					Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2019
Total capital to risk weighted assets:
Consolidated	$	360,645		15.0	%	$	253,215		10.5	%	$	241,157		10.0	%
Wilson Bank		359,576		14.9			252,675		10.5			240,643		10.0
Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			204,984		8.5			144,694		6.0
Wilson Bank		330,416		13.7			204,547		8.5			192,515		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			168,810		7.0			N/A		N/A
Wilson Bank		330,416		13.7			168,451		7.0			156,418		6.5
Tier 1 capital to average assets:
Consolidated		331,485		12.4			106,565		4.0			N/A		N/A
Wilson Bank		330,416		11.9			110,764		4.0			138,454		5.0

						Regulatory Minimum Capital Requirement					Regulatory Minimum To Be Well
	Actual					with Basel III Capital Conservation Buffer					Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2018
Total capital to risk weighted assets:
Consolidated	$	326,099		14.1	%	$	227,974		9.875	%	$	230,860		10.0	%
Wilson Bank		323,852		14.0			227,915		9.875			230,800		10.0
Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			181,802		7.875			138,516		6.0
Wilson Bank		296,319		12.8			181,756		7.875			184,641		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			147,173		6.375			N/A		N/A
Wilson Bank		296,319		12.8			147,136		6.375			150,021		6.5
Tier 1 capital to average assets:
Consolidated		298,566		12.3			97,022		4.0			N/A		N/A
Wilson Bank		296,319		11.9			99,373		4.0			124,217		5.0

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

In July 2013, the Federal banking regulators, in response to the Statutory Requirements of The Dodd-Frank Wall Street Reform and Consumer Protection Act, adopted new regulations implementing the Basel Capital Adequacy Accord (“Basel III”) and the related minimum capital ratios. The new capital requirements were effective beginning January 1, 2015. The guidelines under Basel III established a 2.5% capital conservation buffer requirement that was phased in over four years beginning January 1, 2016. The buffer is related to Risk Weighted Assets. In order to avoid limitations on capital distributions such as dividends and certain discretionary bonus payments to executive officers, a banking organization must maintain capital ratios above the minimum ratios including the buffer. The Basel III minimum requirements after giving effect to the buffer as of January 1, of each year presented are as follows:

	2016			2017			2018			2019
Common Equity Tier 1 Ratio		5.125	%		5.75	%		6.375	%		7.0	%
Tier 1 Capital to Risk Weighted Assets Ratio		6.625	%		7.25	%		7.875	%		8.5	%
Total Capital to Risk Weighted Assets Ratio		8.625	%		9.25	%		9.875	%		10.5	%

The requirements of Basel III also place additional restrictions on the inclusion of deferred tax assets and capitalized mortgage servicing rights as a percentage of Tier 1 Capital. In addition, the risk weights assigned to certain assets such as past due loans and certain real estate loans have been increased.

The requirements of Basel III allow banks and bank holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and Wilson Bank have opted out of this requirement.

In 2018, the U.S. Congress passed, and the President signed into law, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (the “Growth Act”). The Growth Act, among other things, requires the federal banking agencies to issue regulations allowing community bank organizations with total assets of less than $10.0 billion in assets and limited amounts of certain assets and off-balance sheet exposures to access a simpler capital regime focused on a bank’s Tier 1 leverage capital levels rather than risk-based capital levels that are the focus of the capital rules issued under the Dodd-Frank Act implementing Basel III.

In October 2019, the federal banking agencies approved final rules under the Growth Act that exempt a qualifying community bank and its holding company that have community bank leverage ratios, calculated as Tier 1 capital over average total consolidated assets, of greater than 9 percent from the risk-based capital requirements of the capital rules issued under the Dodd-Frank Act. A qualifying community banking organization and its holding company that have chosen the proposed framework are not required to calculate the existing risk-based and leverage capital requirements. Such a bank would also be considered to have met the capital ratio requirements to be well capitalized for the agencies' prompt corrective action rules provided it has a community bank leverage ratio greater than 9 percent.

The Growth Act also raised the eligibility for the small bank holding company policy statement to $3 billion of assets from $1 billion.

(17) Salary Deferral Plans

The Company provides its executive officers certain non-qualified pension benefits through an Executive Salary Continuation Plan ("the Plan") and Supplemental Executive Retirement Plan (SERP) Agreements ("SERP Agreements"). The Plan and SERP agreements were established by the Board of Directors to reward executive management for past performance and to provide additional incentive to retain the service of executive management. The Plan and SERP Agreements generally provide executives with benefits of a portion of their salary beginning at retirement through life. As a result, the Company has accrued a liability for future obligations under the Plan and SERP Agreements. At December 31, 2019 and 2018, the liability related to the Plan totaled $1,786,000 and $1,825,000, respectively. At December 31, 2019 and 2018 the liability related to the SERP Agreements totaled $2,778,000 and $2,491,000, respectively.

The Company has purchased life insurance policies to provide the benefits related to the Plan, which at December 31, 2019 and 2018 had an aggregate cash surrender value of $4,657,000 and $4,540,000, respectively, and an aggregate face value of insurance policies in force of $13,526,000 and $13,523,000, respectively. The life insurance policies remain the sole property of the Company and are payable to the Company.

The Company has also purchased bank owned life insurance policies on its executive officers. The insurance policies remain the sole property of the Company and are payable to the Company. The cash surrender value of the life insurance contracts totaled $27,105,000 and $26,412,000 and the face amount of the insurance policies in force approximated $61,067,000 and $61,202,000 at December 31, 2019 and 2018, respectively.

The Company has also purchased Flexible Premium Indexed Deferred Annuity Contracts (“Annuity Contracts”) to provide benefits related to the SERP Agreements. The Annuity Contracts remain the sole property of the Company and are payable to the Company. Included in other assets at December 31, 2019 and 2018 are the Annuity Contracts with an aggregate value of $14,471,000 and $14,558,000, respectively.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(18) Equity Incentive Plan

In April 1999, the stockholders of the Company approved the Wilson Bank Holding Company 1999 Stock Option Plan (the “1999 Stock Option Plan”). The Stock Option Plan provided for the granting of stock options, and authorized the issuance of common stock upon the exercise of such options, for up to 200,000 shares of common stock, to officers and other key employees of the Company and its subsidiary. Furthermore, the Company and its subsidiary could reserve additional shares for issuance under the 1999 Stock Option Plan as needed in order that the aggregate number of shares that could be issued during the term of the 1999 Stock Option Plan was equal to five percent (5%) of the shares of common stock then issued and outstanding. The 1999 Stock Option Plan terminated on April 13, 2009, and no additional rewards may be issued under the 1999 Stock Option Plan. The awards granted under the 1999 Stock Option Plan prior to the plan's termination remained outstanding until exercised or otherwise terminated. As of December 31, 2019, the Company had outstanding no outstanding options under the 1999 Stock Option Plan.

In April 2009, the Company’s shareholders approved the Wilson Bank Holding Company 2009 Stock Option Plan (the “2009 Stock Option Plan”). The 2009 Stock Option Plan was effective as of April 14, 2009. Under the 2009 Stock Option Plan, awards could be in the form of options to acquire common stock of the Company. Subject to adjustment as provided by the terms of the 2009 Stock Option Plan, the maximum number of shares of common stock with respect to which awards could be granted under the 2009 Stock Option Plan was 100,000 shares. The 2009 Stock Option Plan terminated on April 13, 2019, and no additional awards may be issued under the 2009 Stock Option Plan. The awards granted under the 2009 Stock Option Plan prior to the Plan's expiration will remain outstanding until exercised or otherwise terminated. As of December 31, 2019, the Company had outstanding 20,065 options under the 2009 Stock Option Plan with a weighted average exercise price of $32.66.

As of December 31, 2019, the company had outstanding 140,908 stock options with a weighted average exercise price of $40.46 and $32.31. Cash settled stock appreciation rights with weighted average exercise price of $41.75.

In October 2019, the federal banking agencies approved final rules under the Growth Act that exempt a qualifying community bank and its holding company that have community bank leverage ratios, calculated as Tier 1 capital over average total consolidated assets, of greater than 9 percent from the risk-based capital requirements of the capital rules issued under the Dodd-Frank Act. A qualifying community banking organization and its holding company that have chosen the proposed framework are not required to calculate the existing risk-based and leverage capital requirements. Such a bank would also be considered to have met the capital ratio requirements to be well capitalized for the agencies' prompt corrective action rules provided it has a community bank leverage ratio greater than 9 percent.

During the second quarter of 2016, the Company’s shareholders approved the Wilson Bank Holding Company 2016 Equity Incentive Plan, which authorizes awards of up to 750,000 shares of common stock. The 2016 Equity Incentive Plan was approved by the Board of Directors and effective as of January 25, 2016 and approved by the Company’s shareholders on April 12, 2016. On September 26, 2016, the Board of Directors approved an amendment and restatement of the 2016 Equity Incentive Plan (as amended and restated the “2016 Equity Incentive Plan”) to make clear that directors who are not also employees of the Company may be awarded stock appreciation rights. The primary purpose of the 2016 Equity Incentive Plan is to promote the interest of the Company and its shareholders by, among other things, (i) attracting and retaining key officers, employees and directors of, and consultants to, the Company and its subsidiaries and affiliates, (ii) motivating those individuals by means of performance-related incentives to achieve long-range performance goals, (iii) enabling such individuals to participate in the long-term growth and financial success of the Company, (iv) encouraging ownership of stock in the Company by such individuals, and (v) linking their compensation to the long-term interests of the Company and its shareholders. Except for certain limitations, awards can be in the form of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted shares and restricted share units, performance awards and other stock-based awards. As of December 31, 2019, the Company had 467,271 shares remaining available for issuance under the 2016 Equity Incentive Plan. As of  December 31, 2019, the Company had outstanding 120,843 stock options with a weighted average exercise price of $41.75 and 132,131 cash-settled stock appreciation rights each with a weighted average exercise price of $41.97.

As of December 31, 2019 the company had outstanding 140,908 stock options with a weighted average exercise price of $40.46 and 132,131 cash settled stock appreciation rights with a weighted average exercise price of $41.97.

The fair value of each stock option and cash-settled SAR grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 2019, 2018 and 2017:

	2019			2018			2017
Expected dividends		1.60	%		1.22	%		1.27	%
Expected term (in years)		7.14			9.35			7.79
Expected stock price volatility		25	%		24	%		26	%
Risk-free rate		1.90	%		2.83	%		2.23	%

The expected stock price volatility is based on historical volatility adjusted for consideration of other relevant factors. The risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield and forfeiture rate assumptions are based on the Company’s history and expectation of dividend payouts and forfeitures.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

A summary of the stock option and cash-settled SAR activity for 2019, 2018 and 2017 is as follows:

	2019					2018					2017
				Weighted Average					Weighted Average					Weighted Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Outstanding at beginning of year		277,820		$	40.11		285,780		$	39.31		183,747		$	38.09
Granted		17,833			51.16		21,666			46.59		112,333			40.87
Exercised		(22,614	)		35.78		(22,460	)		37.07		(5,078	)		29.65
Forfeited or expired		0			0		(7,166	)		37.53		(5,222	)		39.22
Outstanding at end of year		273,039		$	41.19		277,820		$	40.11		285,780		$	39.31
Options and cash-settled SARs exercisable at year end		122,932		$	40.19		94,951		$	39.14		42,256		$	36.66

The weighted average fair value at the grant date of options and cash-settled SARs granted during the years 2019, 2018 and 2017 was $13.43, $14.41 and $12.59, respectively. The total intrinsic value of options and cash-settled SARs exercised during the years 2019, 2018 and 2017 was $369,000, $200,000 and $62,000, respectively.

The following table summarizes information about outstanding and exercisable stock options and cash-settled SARs at   December 31, 2019:

	Options and Cash-Settled SARs Outstanding						Options and Cash-Settled SARs Exercisable
					Weighted Average						Weighted Average
Range of	Number				Remaining		Number				Remaining
Exercise	Outstanding at		Weighted Average		Contractual Term (In		Exercisable at		Weighted Average		Contractual Term (In
Prices	12/31/19		Exercise Price		Years)		12/31/19		Exercise Price		Years)
$28.00 - $38.00		20,065	$	32.66		2.98		8,487	$	32.35		2.78
$38.01 - $51.25		252,974	$	41.86		6.68		114,445	$	40.77		5.74
		273,039						122,932
Aggregate intrinsic value (in thousands)	$	3,703					$	1,790

As of December 31, 2019, there was $1,622,000 of total unrecognized cost related to non-vested share-based compensation arrangements granted under the Company’s equity incentive plans. The cost is expected to be recognized over a weighted-average period of 2.51 years.

(19) Earnings Per Share

The following is a summary of the components comprising basic and diluted earnings per share (“EPS”):

	Years Ended December 31,
	2019		2018		2017
Basic EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Basic earnings per common share	$	3.36		3.09		2.26
Diluted EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Dilutive effect of stock options		18,198		8,049		5,325
		10,761,467		10,572,221		10,412,536
Diluted earnings per common share	$	3.35		3.08		2.26

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(20) Mortgage Banking Derivatives

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Company's practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. At December 31, 2019 and  December 31, 2018, the Company had approximately $10,307,000 and $9,655,000, respectively, of interest rate lock commitments and approximately $14,000,000 and $11,750,000, respectively, of forward commitments for the future delivery of residential mortgage loans. The fair value of these mortgage banking derivatives was reflected by derivative assets of $328,000 and $335,000 and derivative liabilities of $23,000 and $88,000, respectively, at December 31, 2019 and  December 31, 2018. Changes in the fair values of these mortgage-banking derivatives are included in net gains on sale of loans.

The net gains (losses) relating to free-standing derivative instruments used for risk management is summarized below (in thousands):

	In Thousands
	2019			2018
Forward contracts related to mortgage loans held for sale and interest rate contracts	$	65			(88	)
Interest rate contracts for customers		(7	)		335

The following table reflects the amount and fair value of mortgage banking derivatives included in the consolidated balance sheet as of December 31, 2019 and  December 31, 2018 (in thousands):

	In Thousands
	2019					2018
	Notional Amount		Fair Value			Notional Amount		Fair Value
Included in other assets (liabilities):
Interest rate contracts for customers	$	10,307		328			9,655		335
Forward contracts related to mortgage loans held-for-sale		14,000		(23	)		11,750		(88	)

(21) Disclosures About Fair Value of Financial Instruments

Fair Value of Financial Instruments

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. The definition of fair value focuses on the exit price, i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not the entry price, i.e., the price that would be paid to acquire the asset or received to assume the liability at the measurement date. The statement emphasizes that fair value is a market-based measurement; not an entity-specific measurement. Therefore, the fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.

Valuation Hierarchy

FASB ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

• Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

• Level 2 - inputs to the valuation methodology include all prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs to the valuation methodology that are unobservable and significant to the fair value measurement.  

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Asset

Securities available-for-sale - Where quoted prices are available for identical securities in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and certain other financial products. If quoted market prices are not available, then fair values are estimated by using pricing models that use observable inputs or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. In certain cases where there is limited activity or less transparency around inputs to the valuation and more complex pricing models or discounted cash flows are used, securities are classified within Level 3 of the valuation hierarchy. From time to time, we will validate prices supplied by our third party vendor by comparison to prices obtained from third parties.

Impaired loans - A loan is considered to be impaired when it is probable the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected payments using the loan’s original effective rate as the discount rate, the loan’s observable market price, or the fair value of the collateral less selling costs if the loan is collateral dependent. If the recorded investment in the impaired loan exceeds the measure of fair value, a valuation allowance may be established as a component of the allowance for loan losses or the expense is recognized as a charge-off. Impaired loans are classified within Level 3 of the hierarchy due to the unobservable inputs used in determining their fair value such as collateral values and the borrower’s underlying financial condition.

Other real estate owned - Other real estate owned (“OREO”) represents real estate foreclosed upon by the Company through loan defaults by customers or acquired in lieu of foreclosure. Upon foreclosure, the property is recorded at the lower of cost or fair value, based on appraised value, less selling costs estimated as of the date acquired with any loss recognized as a charge-off through the allowance for loan losses. Additional OREO losses for subsequent valuation downward adjustments are determined on a specific property basis and are included as a component of noninterest expense along with holding costs. Any gains or losses realized at the time of disposal are also reflected in noninterest income. OREO is included in Level 3 of the valuation hierarchy due to the lack of observable market inputs into the determination of fair value. Appraisal values are property-specific and sensitive to the changes in the overall economic environment.

Bank Owned Life Insurance - The cash surrender value of bank owned life insurance policies is carried at fair value. The Company uses financial information received from insurance carriers indicating the performance of the insurance policies and cash surrender values in determining the carrying value of life insurance. The Company reflects these assets within Level 3 of the valuation hierarchy due to the unobservable inputs included in the valuation of these items. The Company does not consider the fair values of these policies to be materially sensitive to changes in these unobservable inputs.

Mortgage loans held for sale - Mortgage loans held for sale are carried at fair value. The fair value of mortgage loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan and mortgage loans held for sale are included in Level 2 of the valuation hierarchy.

Derivatives - The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2).

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

The following tables present the financial instruments carried at fair value as of December 31, 2019 and December 31, 2018, by caption on the consolidated balance sheet and by FASB ASC 820 valuation hierarchy (as described above) (in thousands):

	Measured on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	59,579		—		59,579		—
Mortgage-backed securities		267,313		—		267,313		—
Asset-backed securities		27,229		—		27,229		—
State and municipal securities		67,024		—		67,024		—
Total investment securities available-for-sale		421,145		—		421,145		—
Mortgage loans held for sale		18,179		—		18,179		—
Mortgage banking derivatives		328		—		328		—
Bank owned life insurance		31,762		—		—		31,762
Total assets	$	471,414		—		439,652		31,762
Mortgage banking derivatives	$	23		—		23		—
Total liabilities	$	23		—		23		—

	Measured on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2018
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	68,467		—		68,467		—
Mortgage-backed securities		147,510		—		147,510		—
Asset-backed securities		21,700		—		21,700		—
State and municipal securities		47,575		—		47,575		—
Total investment securities available-for-sale		285,252		—		285,252		—
Mortgage loans held for sale		7,484		—		7,484		—
Mortgage banking derivatives		335		—		335		—
Bank owned life insurance		30,952		—		—		30,952
Total assets	$	324,023		—		293,071		30,952
Mortgage banking derivatives	$	88		—		88		—
Total liabilities	$	88		—		88		—

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

	Measured on a Non-Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Other real estate owned	$	697		—		—		697
Impaired loans, net (¹)		3,916		—		—		3,916
Total	$	4,613		—		—		4,613
December 31, 2018
Other real estate owned	$	1,357		—		—		1,357
Impaired loans, net (¹)		4,195		—		—		4,195
Total	$	5,552		—		—		5,552

(¹) Amount is net of a valuation allowance of $1,136,000 at December 31, 2019 and $1,164,000 at December 31, 2018 as required by ASC 310, “Receivables.”

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at December 31, 2019 and 2018:

	Valuation Techniques (2)	Significant Unobservable Inputs	Range (Weighted Average)
Impaired loans	Appraisal	Estimated costs to sell		10	%
Other real estate owned	Appraisal	Estimated costs to sell		10	%

(2) The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

In the case of its investment securities portfolio, the Company monitors the valuation technique utilized by various pricing agencies to ascertain when transfers between levels have been affected. The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare. For the twelve months ended December 31, 2019, there were no transfers between Levels 1, 2 or 3.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

The table below includes a rollforward of the balance sheet amounts for the year ended December 31, 2019 and 2018 (including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis. When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, since Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources), the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology (in thousands):

	For the Year Ended December 31,
	2019		2018
	Other Assets		Other Assets
Fair value, January 1	$	30,952	$	29,475
Total realized gains included in income		810		841
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at December 31		—		—
Purchases, issuances and settlements, net		—		636
Transfers out of Level 3		—		—
Fair value, December 31	$	31,762		30,952
Total realized gains included in income related to financial assets and liabilities still on the consolidated balance sheet at December 31	$	810		841

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments that are not measured at fair value. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flow models. Those models are significantly affected by the assumptions used, including the discount rates, estimates of future cash flows and borrower creditworthiness. The fair value estimates presented herein are based on pertinent information available to management as of December 31, 2019 and December 31, 2018. Such amounts have not been revalued for purposes of these consolidated financial statements since those dates and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Cash and cash equivalents - The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Loans - The fair value of our loan portfolio includes a credit risk factor in the determination of the fair value of our loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction.

Fair values are estimated using discounted cash flow models, using current market interest rates offered for loans with similar terms to borrowers of similar credit quality. We believe current market rates capture a market participant's cost of funds, liquidity premium, capital charges, servicing charges and expectations of future rate movements. The values derived from the discounted cash flow approach for each of the above portfolios are then further discounted to incorporate credit risk to determine the exit price.

Deposits, and Federal Home Loan Bank advances - Fair values for deposits are estimated using discounted cash flow models, using current market interest rates offered on deposits with similar remaining maturities.

Restricted equity securities - It is not practical to determine the fair value of Federal Home Loan Bank or Federal Reserve Bank stock due to restrictions placed on its transferability.

Accrued interest receivable/payable - The carrying amounts of accrued interest approximate fair value resulting in a Level 1, Level 2 or Level 3 classification based on the asset/liability with which they are associated.

Off-balance sheet instruments - Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The fair value of commitments is not material.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

The following table presents the carrying amounts, estimated fair value and placement in the fair value hierarchy of the Company’s financial instruments at December 31, 2019 and December 31, 2018. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. 

(in Thousands)	Carrying/Notional Amount		Estimated Fair Value (¹)		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Financial assets:
Cash and cash equivalents	$	159,770		159,770		159,770		—		—
Loans, net		2,057,175		2,053,212		—		—		2,053,212
Restricted equity securities		4,680	NA		NA		NA		NA
Accrued interest receivable		5,945		5,945		5		1,647		4,293
Financial liabilities:
Deposits		2,417,605		2,210,038		—		—		2,210,038
Federal Home Loan Bank advances		23,613		23,860		—		—		23,860
Accrued interest payable		3,814		3,814		—		—		3,814
December 31, 2018
Financial assets:
Cash and cash equivalents	$	99,191		99,191		99,191		—		—
Loans, net		2,016,005		2,017,272		—		—		2,017,272
Restricted equity securities		3,012	NA		NA		NA		NA
Accrued interest receivable		6,724		6,724		3		1,362		5,359
Financial liabilities:
Deposits		2,235,655		1,974,554		—		—		1,974,554
Accrued interest payable		3,132		3,132		—		—		3,132

(¹) Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market-participant would realize in a hypothetical orderly transaction.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(22) Wilson Bank Holding Company -

Parent Company Financial Information

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Balance Sheets

December 31, 2019 and 2018

	Dollars In Thousands
	2019			2018
ASSETS
Cash	$	1,899	*		2,759		*
Investment in wholly-owned commercial bank subsidiary		335,915			293,420
Deferred income taxes		625			469
Refundable income taxes		132			177
Total assets	$	338,571			296,825
LIABILITIES AND STOCKHOLDERS’ EQUITY
Stock appreciation rights payable	$	1,587			1,158
Total liabilities		1,587			1,158
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 10,792,999 and 10,623,810 shares issued and outstanding, respectively		21,586			21,248
Additional paid-in capital		82,249			73,960
Retained earnings		232,456			208,164
Net unrealized gains (losses) on available-for-sale securities, net of income taxes of $245 and $2,726, respectively		693			(7,705	)
Total stockholders’ equity		336,984			295,667
Total liabilities and stockholders’ equity	$	338,571			296,825

* Eliminated in consolidation.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Earnings

Three Years Ended December 31, 2019

	Dollars In Thousands
	2019			2018			2017
Income:
Dividends from commercial bank subsidiary	$	2,800			3,000			1,500
Expenses:
Directors’ fees		283			254			334
Other		885			1,351			805
		1,168			1,605			1,139
Income before Federal income tax benefits and equity in undistributed earnings of commercial bank subsidiary		1,632			1,395			361
Federal income tax benefits		287			468			359
		1,919			1,863			720
Equity in undistributed earnings of commercial bank subsidiary		34,125	*		30,731	*		22,806	*
Net earnings	$	36,044			32,594			23,526

* Eliminated in consolidation.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Cash Flows

Three Years Ended December 31, 2019

Increase (Decrease) in Cash and Cash Equivalents

	Dollars In Thousands
	2019			2018			2017
Cash flows from operating activities:
Cash paid to suppliers and other	$	(383	)		(367	)		(447	)
Tax benefits received		177			181			169
Net cash used in operating activities		(206	)		(186	)		(278	)
Cash flows from investing activities:
Dividends received from commercial bank subsidiary		2,800			3,000			1,500
Net cash provided by investing activities		2,800			3,000			1,500
Cash flows from financing activities:
Payments made to stock appreciation rights holders		(9	)		(61	)		—
Dividends paid		(11,725	)		(9,447	)		(6,729	)
Proceeds from sale of stock pursuant to dividend reinvestment plan		9,134			7,470			5,266
Proceeds from exercise of stock options		775			394			152
Repurchase of common stock		(1,629	)		—			—
Net cash used in financing activities		(3,454	)		(1,644	)		(1,311	)
Net increase (decrease) in cash and cash equivalents		(860	)		1,170			(89	)
Cash and cash equivalents at beginning of year		2,759			1,589			1,678
Cash and cash equivalents at end of year	$	1,899			2,759			1,589

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Cash Flows, Continued

Three Years Ended December 31, 2019

Increase (Decrease) in Cash and Cash Equivalents

	Dollars in Thousands
	2019			2018			2017
Reconciliation of net earnings to net cash used in operating activities:
Net earnings	$	36,044			32,594			23,526
Adjustments to reconcile net earnings to net cash used in operating activities:
Equity in earnings of commercial bank subsidiary		(36,925	)		(33,731	)		(24,306	)
Decrease (increase) in refundable income taxes		45			5			(12	)
Increase in deferred taxes		(156	)		(291	)		(178	)
Share based compensation expense		786			1,237			692
Total adjustments		(36,250	)		(32,780	)		(23,804	)
Net cash used in operating activities	$	(206	)		(186	)		(278	)

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(23) Quarterly Financial Data (Unaudited)

Selected quarterly results of operations for the four quarters ended December 31 are as follows:

	(In Thousands, except per share data)
	2019								2018								2017
	Fourth		Third		Second		First		Fourth		Third		Second		First		Fourth		Third		Second		First
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Interest income	$	29,897		30,329		29,567		28,284	$	27,585		26,298		25,548		24,094	$	23,487		22,904		22,871		21,758
Interest expense		5,522		5,991		5,923		5,211		4,606		3,656		3,097		2,659		2,439		2,332		2,094		2,024
Net interest income		24,375		24,338		23,644		23,073		22,979		22,642		22,451		21,435		21,048		20,572		20,777		19,734
Provision for loan losses		686		167		154		1,033		1,097		1,088		1,090		1,023		436		436		420		389
Earnings before income taxes		10,222		13,556		12,451		10,882		10,708		10,718		9,798		10,153		10,694		10,438		11,386		10,362
Net earnings		7,972		10,266		9,516		8,290		9,833		7,972		7,309		7,480		3,574		6,469		6,988		6,495
Basic earnings per common share		0.74		0.95		0.89		0.77		0.93		0.75		0.69		0.71		0.34		0.62		0.67		0.63
Diluted earnings per common share		0.74		0.95		0.89		0.77		0.92		0.75		0.69		0.71		0.34		0.62		0.67		0.63

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2019, 2018 and 2017

(24) Subsequent Events

ASC Topic 855, Subsequent Events, as amended by ASU No. 2010-90, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. The Company evaluated all events or transactions that occurred after December 31, 2019, through the date of the issued financial statements. During this period there were no material recognizable subsequent events that required recognition in the disclosures to the Company's December 31, 2019 financial statements.

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF THE ISSUER

The Company has a wholly-owned subsidiary, Wilson Bank and Trust, a state chartered bank incorporated under the laws of the State of Tennessee and doing business under the same name.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

         We consent to the incorporation by reference in the Registration Statement (Form S-8, No. 333-32442) pertaining to the Wilson Bank Holding Company 1999 Stock Option Plan, the Registration Statement (Form S-3, No. 333-81984) pertaining to the Wilson Bank Holding Company Dividend Reinvestment Plan, the Registration Statement (Form S-8, No. 333-158621) pertaining to the Wilson Bank Holding Company 2009 Stock Option Plan, the Registration Statement (Form S-8, No. 333-210927) pertaining to the Wilson Bank Holding Company 2016 Equity Incentive Plan, the Registration Statement (Form S-3 No. 333-218868) pertaining to the Amended and Restated Wilson Bank Holding Company Dividend Reinvestment Plan and the Registration Statement (Form S-3 No. 333-235739) pertaining to the Amended and Restated Wilson Bank Holding Company Dividend Reinvestment Plan of our reports dated December 27, 2019, with respect to the consolidated financial statements of Wilson Bank Holding Company and with respect to the effectiveness of internal control over financial reporting of Wilson Bank Holding Company, included in this Annual Report on Form 10-K for the year ended December 31, 2019.

/s/ Maggart & Associates, P.C.            

MAGGART & ASSOCIATES, P.C.

Nashville, Tennessee

March 12, 2020

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, John C. McDearman III, certify that:
1.	I have reviewed this annual report on Form 10-K of Wilson Bank Holding Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
	(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 12, 2020
		By:/s/ John C. McDearman III
		Name: John C. McDearman
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Lisa Pominski , certify that:
1.	I have reviewed this annual report on Form 10-K of Wilson Bank Holding Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
	(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 12, 2020
		By:/s/ Lisa Pominski
		Name: Lisa Pominski
		Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Wilson Bank Holding Company (the “Company”) on Form 10-K for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John C. McDearman, III, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John C. McDearman III

John C McDearman III

President and Chief Executive Officer

Date: March 12, 2020

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Wilson Bank Holding Company (the “Company”) on Form 10-K for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lisa Pominski, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lisa Pominski

Lisa Pominski, Executive Vice President and Chief

Financial Officer

Date: March 12, 2020

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Note 18 - Equity Incentive Plan - Schedule of Weighted-average Black-Scholes Fair Value Assumptions (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Expected dividends	1.60%	1.22%	1.27%
Expected term (in years) (Year)	7 years 1 month 20 days	9 years 4 months 6 days	7 years 9 months 14 days
Expected stock price volatility	25.00%	24.00%	26.00%
Risk-free rate	1.90%	2.83%	2.23%

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Note 3 - Debt and Equity Securities (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Securities, Held-to-maturity, Total	$ 0	$ 0
Debt Securities, Held-to-maturity, Sold, Amount		4,843,000
Debt Securities, Held-to-maturity, Sold, Realized Gain (Loss)		(79,000)
Other Comprehensive Income (Loss), Transfers from Held-to-maturity to Available-for-Sale Securities, before Tax	0	22,800,000	$ 0
Debt Securities, Available-for-sale, Amortized Cost, Total	420,207,000	295,683,000
Debt Securities, Available-for-sale, Total	421,145,000	285,252,000
Security Owned and Pledged as Collateral, Fair Value, Total	256,598,000	251,549,000
Security Owned and Pledged as Collateral	256,300,000	260,562,000
Securities Adjust Prior to Maturity	48,018,000	32,864,000
Securities Adjust Prior to Maturity, Market Value	47,784,000	32,217,000
Tennessee, Idaho, Missouri, and Texas [Member]
Security Owned and Pledged as Collateral, Fair Value, Total	49,903,000
Security Owned and Pledged as Collateral	50,193,000
Collateralized Mortgage Obligations [Member]
Debt Securities, Available-for-sale, Amortized Cost, Total	46,994,000	11,564,000
Debt Securities, Available-for-sale, Total	$ 47,442,000	$ 11,295,000

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Note 3 - Debt and Equity Securities - Gross Unrealized Losses and Fair Value of Company's Investments (Details) $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Available-for-Sale Securities, Less than 12 Months, Fair Value	$ 110,599
Available-for-Sale Securities, Less than 12 Months, Unrealized Losses	$ 1,240
Available-for-Sale Securities, Less than 12 Months, Number of Securities Included	62
Available-for-Sale Securities, 12 Months or More, Fair Value	$ 92,750
Available-for-Sale Securities, 12 Months or More, Unrealized Losses	$ 730
Available-for-Sale Securities, 12 Months or More, Number of Securities Included	75
Available-for-Sale Securities, Total, Fair Value	$ 203,349
Available-for-Sale Securities, Total, Unrealized Losses	1,970
Held-to-Maturity, Less than 12 Months, Fair Value		$ 12,715
Held-to-Maturity, Less than 12 Months, Unrealized Losses		$ 90
Held-to-Maturity, Less than 12 Months, Number of Securities Included		16
Held-to-Maturity, 12 Months or More, Fair Value		$ 266,362
Held-to-Maturity, 12 Months or More, Unrealized Losses		$ 10,382
Held-to-Maturity, 12 Months or More, Number of Securities Included		230
Held-to-Maturity, Total, Fair Value		$ 279,077
Held-to-Maturity, Total, Unrealized Losses		10,472
US Government-sponsored Enterprises Debt Securities [Member]
Available-for-Sale Securities, Less than 12 Months, Fair Value	16,507	0
Available-for-Sale Securities, Less than 12 Months, Unrealized Losses	$ 114	$ 0
Available-for-Sale Securities, Less than 12 Months, Number of Securities Included	5	0
Available-for-Sale Securities, 12 Months or More, Fair Value	$ 24,658	$ 68,467
Available-for-Sale Securities, 12 Months or More, Unrealized Losses	$ 90	$ 2,979
Available-for-Sale Securities, 12 Months or More, Number of Securities Included	9	28
Available-for-Sale Securities, Total, Fair Value	$ 41,165	$ 68,467
Available-for-Sale Securities, Total, Unrealized Losses	204	2,979
Collateralized Mortgage Backed Securities [Member]
Available-for-Sale Securities, Less than 12 Months, Fair Value	45,862
Available-for-Sale Securities, Less than 12 Months, Unrealized Losses	$ 182
Available-for-Sale Securities, Less than 12 Months, Number of Securities Included	21
Available-for-Sale Securities, 12 Months or More, Fair Value	$ 56,917
Available-for-Sale Securities, 12 Months or More, Unrealized Losses	$ 453
Available-for-Sale Securities, 12 Months or More, Number of Securities Included	52
Available-for-Sale Securities, Total, Fair Value	$ 102,779
Available-for-Sale Securities, Total, Unrealized Losses	635
Held-to-Maturity, Less than 12 Months, Fair Value		8,651
Held-to-Maturity, Less than 12 Months, Unrealized Losses		$ 64
Held-to-Maturity, Less than 12 Months, Number of Securities Included		10
Held-to-Maturity, 12 Months or More, Fair Value		$ 137,457
Held-to-Maturity, 12 Months or More, Unrealized Losses		$ 4,810
Held-to-Maturity, 12 Months or More, Number of Securities Included		94
Held-to-Maturity, Total, Fair Value		$ 146,108
Held-to-Maturity, Total, Unrealized Losses		4,874
Asset-backed Securities [Member]
Available-for-Sale Securities, Less than 12 Months, Fair Value	17,807	0
Available-for-Sale Securities, Less than 12 Months, Unrealized Losses	$ 161	$ 0
Available-for-Sale Securities, Less than 12 Months, Number of Securities Included	10	0
Available-for-Sale Securities, 12 Months or More, Fair Value	$ 7,317	$ 20,597
Available-for-Sale Securities, 12 Months or More, Unrealized Losses	$ 142	$ 844
Available-for-Sale Securities, 12 Months or More, Number of Securities Included	4	14
Available-for-Sale Securities, Total, Fair Value	$ 25,124	$ 20,597
Available-for-Sale Securities, Total, Unrealized Losses	303	844
US States and Political Subdivisions Debt Securities [Member]
Available-for-Sale Securities, Less than 12 Months, Fair Value	30,423
Available-for-Sale Securities, Less than 12 Months, Unrealized Losses	$ 783
Available-for-Sale Securities, Less than 12 Months, Number of Securities Included	26
Available-for-Sale Securities, 12 Months or More, Fair Value	$ 3,858
Available-for-Sale Securities, 12 Months or More, Unrealized Losses	$ 45
Available-for-Sale Securities, 12 Months or More, Number of Securities Included	10
Available-for-Sale Securities, Total, Fair Value	$ 34,281
Available-for-Sale Securities, Total, Unrealized Losses	$ 828
Held-to-Maturity, Less than 12 Months, Fair Value		4,064
Held-to-Maturity, Less than 12 Months, Unrealized Losses		$ 26
Held-to-Maturity, Less than 12 Months, Number of Securities Included		6
Held-to-Maturity, 12 Months or More, Fair Value		$ 39,841
Held-to-Maturity, 12 Months or More, Unrealized Losses		$ 1,749
Held-to-Maturity, 12 Months or More, Number of Securities Included		94
Held-to-Maturity, Total, Fair Value		$ 43,905
Held-to-Maturity, Total, Unrealized Losses		$ 1,775

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Note 20 - Mortgage Banking Derivatives (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Interest Rate Lock Commitments [Member]
Derivative, Notional Amount	$ 10,307,000	$ 9,655,000
Derivative Asset, Fair Value, Gross Asset, Total	328,000	335,000
Forward Contracts [Member]
Derivative, Notional Amount	14,000,000	11,750,000
Derivative Liability, Fair Value, Gross Liability, Total	$ 23,000	$ 88,000

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Note 11 - Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Years Ending December 31,	In Thousands
2020	$	444
2021		387
2022		215
2023		112
2024		4
Thereafter		9

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Note 7 - Deposits (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Deposit Liabilities, Type [Table Text Block]

	In Thousands
	2019		2018
Demand deposits	$	284,611		254,157
Savings accounts		140,270		136,645
Negotiable order of withdrawal accounts		558,745		503,435
Money market demand accounts		801,986		727,654
Certificates of deposit $250,000 or greater		131,899		134,506
Other certificates of deposit		425,222		402,690
Individual retirement accounts $250,000 or greater		10,646		8,525
Other individual retirement accounts		64,226		68,043
	$	2,417,605		2,235,655

Time Deposit Maturities [Table Text Block]

	(In Thousands)
Maturity	Total
2020	$	326,212
2021		160,368
2022		72,578
2023		51,327
2024		21,258
Thereafter		250
	$	631,993

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Note 22 - Wilson Bank Holding Company - Parent Company Financial Information - Statements of Earnings (Details) - USD ($)		3 Months Ended												12 Months Ended
		Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Directors’ fees														$ 586,000	$ 543,000	$ 677,000
														74,628,000	69,080,000	60,391,000
Income taxes														11,067,000	8,783,000	19,354,000
Net earnings		$ 7,972,000	$ 10,266,000	$ 9,516,000	$ 8,290,000	$ 9,833,000	$ 7,972,000	$ 7,309,000	$ 7,480,000	$ 3,574,000	$ 6,469,000	$ 6,988,000	$ 6,495,000	36,044,000	32,594,000	23,526,000
Parent Company [Member]
Dividends from commercial bank subsidiary														2,800,000	3,000,000	1,500,000
Directors’ fees														283,000	254,000	334,000
Other														885,000	1,351,000	805,000
														1,168,000	1,605,000	1,139,000
Income before Federal income tax benefits and equity in undistributed earnings of commercial bank subsidiary														1,632,000	1,395,000	361,000
Income taxes														287,000	468,000	359,000
														1,919,000	1,863,000	720,000
Equity in undistributed earnings of commercial bank subsidiary	[1]													34,125,000	30,731,000	22,806,000
Net earnings														$ 36,044,000	$ 32,594,000	$ 23,526,000

[1] Eliminated in consolidation.

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Note 19 - Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Years Ended December 31,
	2019		2018		2017
Basic EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Basic earnings per common share	$	3.36		3.09		2.26
Diluted EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Dilutive effect of stock options		18,198		8,049		5,325
		10,761,467		10,572,221		10,412,536
Diluted earnings per common share	$	3.35		3.08		2.26

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Note 21 - Disclosures About Fair Value of Financial Instruments (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Impaired Financing Receivable, Related Allowance	$ 1,136,000	$ 1,164,000

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Note 21 - Disclosures About Fair Value of Financial Instruments - Changes in Fair Value Due to Observable Factors (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Fair value, other assets	$ 30,952
Fair value, other liabilities	29,475
Total realized gains included in income, other assets	810
Total realized gains included in income, other liabilities	841
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at September 30, other assets	0
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at September 30, other liabilities	0
Purchases, issuances and settlements, net, other assets	0
Purchases, issuances and settlements, net, other liabilities	636
Transfers out of Level 3, other assets	0
Transfers out of Level 3, other liabilities	0
Fair value, other assets	31,762
Fair value, other liabilities	30,952
Total realized gains included in income related to financial assets and liabilities still on the consolidated balance sheet, other assets	810
Total realized gains included in income related to financial assets and liabilities still on the consolidated balance sheet, other liabilities	$ 841

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Note 19 - Earnings Per Share

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

(19) Earnings Per Share

The following is a summary of the components comprising basic and diluted earnings per share (“EPS”):

	Years Ended December 31,
	2019		2018		2017
Basic EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Basic earnings per common share	$	3.36		3.09		2.26
Diluted EPS Computation:
Numerator – Earnings available to common stockholders	$	36,044		32,594		23,526
Denominator – Weighted average number of common shares outstanding		10,743,269		10,564,172		10,407,211
Dilutive effect of stock options		18,198		8,049		5,325
		10,761,467		10,572,221		10,412,536
Diluted earnings per common share	$	3.35		3.08		2.26

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Note 11 - Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(11) Commitments and Contingent Liabilities 

The Company is party to litigation and claims arising in the normal course of business. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from such litigation and claims will not be material to the Company's consolidated financial position.

Wilson Bank leases branch facilities and land for certain branch facilities and automatic teller machine locations. Future minimum rental payments required under the terms of the noncancellable leases are as follows:

Years Ending December 31,	In Thousands
2020	$	444
2021		387
2022		215
2023		112
2024		4
Thereafter		9

Total rent expense amounted to $484,000, $362,000 and $215,000, respectively, during the years ended December 31, 2019, 2018 and 2017.

At December 31,2019 and 2018 respectively, the Company has lines of credit with other financial institutions totaling $53,000,000. At December 31, 2019 and 2018, respectively, there was no balance outstanding under these lines of credit.

The Company also has a Cash Management Advance ("CMA") Line of Credit agreement. The CMA is a component of the Company's Blanket Agreement for advances with the FHLB. The purpose of the CMA is to assist with short-term liquidity management. Under the terms of the CMA, the Company may borrow a maximum of $25,000,000, selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. There were no borrowings outstanding under the CMA at December 31, 2019 or December 31, 2018.

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Note 15 - Dividend Reinvestment Plan

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Dividend Reinvestment Plan [Text Block]

(15) Dividend Reinvestment Plan

Under the terms of the Company’s dividend reinvestment plan (the “DRIP”) holders of common stock may elect to automatically reinvest cash dividends in additional shares of common stock. The Company may elect to sell original issue shares or to purchase shares in the open market for the account of participants. Original issue shares of 179,199 in 2019, 161,514 in 2018 and 125,960 in 2017 were sold to participants under the terms of the DRIP.

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for loan losses	$ 28,726	$ 27,174	$ 23,909
Available-for-sale, amortized cost	$ 420,207	$ 295,683
Common stock, par value (in dollars per share)	$ 2.00	$ 2.00
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	10,792,999	10,623,810
Common stock, shares outstanding (in shares)	10,792,999	10,623,810
Net unrealized losses on available-for-sale securities, income taxes	$ 245	$ 2,726

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Note 24 - Subsequent Events

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

(24) Subsequent Events

ASC Topic 855, Subsequent Events, as amended by ASU No. 2010-90, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. The Company evaluated all events or transactions that occurred after December 31, 2019, through the date of the issued financial statements. During this period there were no material recognizable subsequent events that required recognition in the disclosures to the Company's December 31, 2019 financial statements.

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock Outstanding [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]	Total
Balance at Dec. 31, 2016	$ 20,639	$ 60,541	$ 167,523	$ (4,083)	$ 244,620
Cash dividends declared	0	0	(6,729)	0	(6,729)
Issuance of shares of common stock pursuant to dividend reinvestment plan	252	5,014	0	0	5,266
Issuance of shares of common stock pursuant to exercise of stock options	10	142	0	0	152
Reclassification of deferred tax asset revaluation	0	0	697	(697)	0
Share based compensation expense	0	350	0	0	350
Net change in fair value of available-for-sale securities during the year, net of taxes	0	0	0	545	545
Net earnings for the year	0	0	23,526	0	23,526
Balance at Dec. 31, 2017	20,901	66,047	185,017	(4,235)	267,730
Cash dividends declared	0	0	(9,447)	0	(9,447)
Issuance of shares of common stock pursuant to dividend reinvestment plan	324	7,146	0	0	7,470
Issuance of shares of common stock pursuant to exercise of stock options	23	371	0	0	394
Share based compensation expense	0	396	0	0	396
Net change in fair value of available-for-sale securities during the year, net of taxes	0	0	0	(3,470)	(3,470)
Net earnings for the year	0	0	32,594	0	32,594
Balance at Dec. 31, 2018	21,248	73,960	208,164	(7,705)	295,667
Cash dividends declared	0	0	(11,725)	0	(11,725)
Issuance of shares of common stock pursuant to dividend reinvestment plan	358	8,776	0	0	9,134
Issuance of shares of common stock pursuant to exercise of stock options	44	731	0	0	775
Share based compensation expense	0	347	0	0	347
Net change in fair value of available-for-sale securities during the year, net of taxes	0	0	0	8,398	8,398
Net earnings for the year	0	0	36,044	0	36,044
Cumulative effect of accounting change	0	0	(27)	0	(27)
Repurchase of 31,774 common shares	(64)	(1,565)	0	0	(1,629)
Balance at Dec. 31, 2019	$ 21,586	$ 82,249	$ 232,456	$ 693	$ 336,984

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Note 20 - Mortgage Banking Derivatives

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

(20) Mortgage Banking Derivatives

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Company's practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. At December 31, 2019 and  December 31, 2018, the Company had approximately $10,307,000 and $9,655,000, respectively, of interest rate lock commitments and approximately $14,000,000 and $11,750,000, respectively, of forward commitments for the future delivery of residential mortgage loans. The fair value of these mortgage banking derivatives was reflected by derivative assets of $328,000 and $335,000 and derivative liabilities of $23,000 and $88,000, respectively, at December 31, 2019 and  December 31, 2018. Changes in the fair values of these mortgage-banking derivatives are included in net gains on sale of loans.

The net gains (losses) relating to free-standing derivative instruments used for risk management is summarized below (in thousands):

	In Thousands
	2019			2018
Forward contracts related to mortgage loans held for sale and interest rate contracts	$	65			(88	)
Interest rate contracts for customers		(7	)		335

The following table reflects the amount and fair value of mortgage banking derivatives included in the consolidated balance sheet as of December 31, 2019 and  December 31, 2018 (in thousands):

	In Thousands
	2019					2018
	Notional Amount		Fair Value			Notional Amount		Fair Value
Included in other assets (liabilities):
Interest rate contracts for customers	$	10,307		328			9,655		335
Forward contracts related to mortgage loans held-for-sale		14,000		(23	)		11,750		(88	)

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Note 5 - Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

	In Thousands
	2019			2018
Land	$	17,093			17,022
Buildings		46,389			44,921
Leasehold improvements		533			492
Furniture and equipment		13,000			12,600
Automobiles		243			343
Construction-in-progress		1,339			100
		78,597			75,478
Less accumulated depreciation		(18,302	)		(17,115	)
	$	60,295			58,363

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Note 3 - Debt and Equity Securities

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

(3) Debt and Equity Securities 

Debt and equity securities have been classified in the consolidated balance sheet according to management’s intent. Debt and equity securities at December 31, 2019 consist of the following:

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Estimated Market
	Amortized Cost		Gains		Losses		Value
Government-sponsored enterprises (GSEs)	$	59,735		48		204		59,579
Mortgage-backed securities		265,648		2,300		635		267,313
Asset-backed securities		27,531		1		303		27,229
Obligations of states and political subdivisions		67,293		559		828		67,024
	$	420,207		2,908		1,970		421,145

The Company’s classification of securities at December 31, 2018 was as follows:

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Estimated Market
	Amortized Cost		Gains		Losses		Value
Government-sponsored enterprises (GSEs)	$	71,446		—		2,979		68,467
Mortgage-backed securities		152,375		9		4,874		147,510
Asset-backed securities		22,534		10		844		21,700
Obligations of states and political subdivisions		49,328		22		1,775		47,575
	$	295,683		41		10,472		285,252

There were no debt and equity securities classified as held-to-maturity at December 31, 2019 or  December 31, 2018. During the year ended December 31, 2018, the Company sold securities classified as held-to-maturity with a book value of $4,843,000 for a loss of $79,000. Due to the sale, management determined the Company no longer had the intent to hold the remaining securities classified as held-to-maturity to their respective maturity dates and transferred the remaining book value of $22,800,000 to the available-for-sale classification.

Included in mortgage-backed securities are collateralized mortgage obligations totaling $46,994,000 (fair value of $47,442,000) and $11,564,000 (fair value of $11,295,000) at December 31, 2019 and 2018, respectively.

The amortized cost and estimated market value of debt securities at December 31, 2019, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities of mortgage and asset-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	In Thousands
Securities Available-For-Sale	Amortized Cost		Estimated Market Value
Due in one year or less	$	472		471
Due after one year through five years		18,332		18,319
Due after five years through ten years		56,626		56,622
Due after ten years		51,598		51,191
		127,028		126,603
Mortgage and asset-backed securities		293,179		294,542
	$	420,207		421,145

Results from sales of debt and equity securities are as follows:

	In Thousands
	2019			2018			2017
Gross proceeds	$	37,325			39,857			35,555
Gross realized gains	$	75			102			76
Gross realized losses		(343	)		(752	)		(251	)
Net realized gains (losses)	$	(268	)		(650	)		(175	)

Securities carried on the balance sheet of approximately $256,300,000 (approximate market value of $256,598,000) and $260,562,000 (approximate market value of $251,549,000) were pledged to secure public deposits and for other purposes as required or permitted by law at December 31, 2019 and 2018, respectively.

Included in the securities above are $50,193,000 (approximate market value of $49,903,000) at December 31,2019 in obligations of political subdivisions located within the sates of Tennessee, Idaho, Missouri, and Texas.

Securities that have rates that adjust prior to maturity totaled $48,018,000 (approximate market value of $47,784,000) and $32,864,000 (approximate market value of $32,217,000) at December 31, 2019 and 2018, respectively.

Temporarily Impaired Securities

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2019 and 2018.

Available-for-sale securities that have been in a continuous unrealized loss position at December 31, 2019 and 2018 are as follows:

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2019	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
GSEs	$	16,507	$	114		5	$	24,658	$	90		9	$	41,165	$	204
Mortgage-backed securities		45,862		182		21		56,917		453		52		102,779		635
Asset-backed securities		17,807		161		10		7,317		142		4		25,124		303
Obligations of states and political subdivisions		30,423		783		26		3,858		45		10		34,281		828
	$	110,599	$	1,240		62	$	92,750	$	730		75	$	203,349	$	1,970

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2018	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
GSEs	$	—	$	—		—	$	68,467	$	2,979		28	$	68,467	$	2,979
Mortgage-backed securities		8,651		64		10		137,457		4,810		94		146,108		4,874
Asset-backed securities		—		—		—		20,597		844		14		20,597		844
Obligations of states and political subdivisions		4,064		26		6		39,841		1,749		94		43,905		1,775
	$	12,715	$	90		16	$	266,362	$	10,382		230	$	279,077	$	10,472

Declines in the fair value of available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income. In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and our ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in cost.

As of  December 31, 2019, management does not have the intent to sell any of the securities classified as available-for-sale in the table above and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of  December 31, 2019, management believes the impairments detailed in the table above are temporary and no impairment loss has been realized in our consolidated statements of earnings.

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Note 7 - Deposits

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

(7) Deposits

Deposits at December 31, 2019 and 2018 are summarized as follows:

	In Thousands
	2019		2018
Demand deposits	$	284,611		254,157
Savings accounts		140,270		136,645
Negotiable order of withdrawal accounts		558,745		503,435
Money market demand accounts		801,986		727,654
Certificates of deposit $250,000 or greater		131,899		134,506
Other certificates of deposit		425,222		402,690
Individual retirement accounts $250,000 or greater		10,646		8,525
Other individual retirement accounts		64,226		68,043
	$	2,417,605		2,235,655

Principal maturities of certificates of deposit and individual retirement accounts at December 31, 2019 are as follows:

	(In Thousands)
Maturity	Total
2020	$	326,212
2021		160,368
2022		72,578
2023		51,327
2024		21,258
Thereafter		250
	$	631,993

The aggregate amount of overdrafts reclassified as loans receivable was $529,000 and $496,000 at December 31, 2019 and 2018, respectively.

As of December 31, 2019 and 2018, Wilson Bank was not required to maintain a cash balance with the Federal Reserve.

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Note 12 - Financial Instruments with Off-balance-sheet Risk - Financial Instruments Whose Contract Amounts Represents Credit Risk (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Contract or notional amount	$ 705,587	$ 663,062
Unused Commitments to Extend Credit [Member]
Contract or notional amount	632,686	582,897
Standby Letters of Credit 1 [Member]
Contract or notional amount	$ 72,901	$ 80,165

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Note 8 - Federal Home Loan Bank Advances (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Advances from Federal Home Loan Banks, Total	$ 23,613,000	$ 0
Federal Home Loan Bank, Advances, Activity for Year, Average Interest Rate at Period End	2.67%
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	$ 266,712,000

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Note 6 - Acquired Intangible Assets and Goodwill - Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance	$ 4,805	$ 4,805
Goodwill acquired during year	0	0
Impairment loss	0	0
Balance	$ 4,805	$ 4,805

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Note 10 - Income Taxes - Reconciliation of Actual Income Tax Expense to the Expected Tax Expense (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Computed “expected” tax expense	$ 9,893,000	$ 8,689,000	$ 14,579,000
State income taxes, net of Federal income tax benefit	1,056,000	432,000	1,346,000
Tax exempt interest, net of interest expense exclusion	(186,000)	(226,000)	(415,000)
Federal income tax rate in excess of statutory rate related to taxable income over $10 million	0	0	399,000
Earnings on cash surrender value of life insurance	(170,000)	(177,000)	(292,000)
Expenses not deductible for tax purposes	37,000	16,000	43,000
Equity based compensation expense	15,000	(39,000)	16,000
Revaluation of federal deferred tax assets due to change in tax rates	0	0	3,603,000
Other	422,000	88,000	75,000
	$ 11,067,000	$ 8,783,000	$ 19,354,000

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Note 2 - Loans and Allowance for Loan Losses - Loan Portfolio by Risk Rating (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Loans, gross	$ 2,093,042	$ 2,050,199
Real Estate Portfolio Segment [Member]
Loans, gross	1,929,325	1,911,886
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Loans, gross	511,250	460,692
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Loans, gross	97,104	134,613
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Loans, gross	793,379	701,055
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans, gross	425,185	518,245
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans, gross	19,268	24,071
Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Loans, gross	10,760	11,197
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans, gross	72,379	62,013
Commercial Portfolio Segment [Member]
Loans, gross	98,265	78,245
Agricultural Installment and Other Portfolio Segment [Member]
Loans, gross	65,452	60,068
Pass [Member]
Loans, gross	2,082,391	2,038,160
Pass [Member] | Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Loans, gross	503,861	452,411
Pass [Member] | Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Loans, gross	97,104	134,613
Pass [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Loans, gross	791,610	698,083
Pass [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans, gross	424,517	518,123
Pass [Member] | Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans, gross	19,106	23,895
Pass [Member] | Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Loans, gross	10,458	10,979
Pass [Member] | Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans, gross	72,237	61,927
Pass [Member] | Commercial Portfolio Segment [Member]
Loans, gross	98,243	78,206
Pass [Member] | Agricultural Installment and Other Portfolio Segment [Member]
Loans, gross	65,255	59,923
Special Mention [Member]
Loans, gross	3,936	6,111
Special Mention [Member] | Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Loans, gross	2,923	3,949
Special Mention [Member] | Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Loans, gross	0	0
Special Mention [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Loans, gross	0	1,690
Special Mention [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans, gross	635	64
Special Mention [Member] | Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans, gross	103	112
Special Mention [Member] | Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Loans, gross	174	179
Special Mention [Member] | Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans, gross	0	0
Special Mention [Member] | Commercial Portfolio Segment [Member]
Loans, gross	0	39
Special Mention [Member] | Agricultural Installment and Other Portfolio Segment [Member]
Loans, gross	101	78
Substandard [Member]
Loans, gross	6,715	5,928
Substandard [Member] | Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Loans, gross	4,466	4,332
Substandard [Member] | Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Loans, gross	0	0
Substandard [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Loans, gross	1,769	1,282
Substandard [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans, gross	33	58
Substandard [Member] | Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans, gross	59	64
Substandard [Member] | Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Loans, gross	128	39
Substandard [Member] | Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans, gross	142	86
Substandard [Member] | Commercial Portfolio Segment [Member]
Loans, gross	22	0
Substandard [Member] | Agricultural Installment and Other Portfolio Segment [Member]
Loans, gross	96	67
Doubtful [Member]
Loans, gross	0	0
Doubtful [Member] | Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Loans, gross	0	0
Doubtful [Member] | Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Loans, gross	0	0
Doubtful [Member] | Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Loans, gross	0	0
Doubtful [Member] | Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans, gross	0	0
Doubtful [Member] | Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans, gross	0	0
Doubtful [Member] | Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Loans, gross	0	0
Doubtful [Member] | Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans, gross	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member]
Loans, gross	0	0
Doubtful [Member] | Agricultural Installment and Other Portfolio Segment [Member]
Loans, gross	$ 0	$ 0

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Note 22 - Wilson Bank Holding Company - Parent Company Financial Information (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Condensed Balance Sheet [Table Text Block]

	Dollars In Thousands
	2019			2018
ASSETS
Cash	$	1,899	*		2,759		*
Investment in wholly-owned commercial bank subsidiary		335,915			293,420
Deferred income taxes		625			469
Refundable income taxes		132			177
Total assets	$	338,571			296,825
LIABILITIES AND STOCKHOLDERS’ EQUITY
Stock appreciation rights payable	$	1,587			1,158
Total liabilities		1,587			1,158
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 10,792,999 and 10,623,810 shares issued and outstanding, respectively		21,586			21,248
Additional paid-in capital		82,249			73,960
Retained earnings		232,456			208,164
Net unrealized gains (losses) on available-for-sale securities, net of income taxes of $245 and $2,726, respectively		693			(7,705	)
Total stockholders’ equity		336,984			295,667
Total liabilities and stockholders’ equity	$	338,571			296,825

Condensed Income Statement [Table Text Block]

	Dollars In Thousands
	2019			2018			2017
Income:
Dividends from commercial bank subsidiary	$	2,800			3,000			1,500
Expenses:
Directors’ fees		283			254			334
Other		885			1,351			805
		1,168			1,605			1,139
Income before Federal income tax benefits and equity in undistributed earnings of commercial bank subsidiary		1,632			1,395			361
Federal income tax benefits		287			468			359
		1,919			1,863			720
Equity in undistributed earnings of commercial bank subsidiary		34,125	*		30,731	*		22,806	*
Net earnings	$	36,044			32,594			23,526

Condensed Cash Flow Statement [Table Text Block]

	Dollars In Thousands
	2019			2018			2017
Cash flows from operating activities:
Cash paid to suppliers and other	$	(383	)		(367	)		(447	)
Tax benefits received		177			181			169
Net cash used in operating activities		(206	)		(186	)		(278	)
Cash flows from investing activities:
Dividends received from commercial bank subsidiary		2,800			3,000			1,500
Net cash provided by investing activities		2,800			3,000			1,500
Cash flows from financing activities:
Payments made to stock appreciation rights holders		(9	)		(61	)		—
Dividends paid		(11,725	)		(9,447	)		(6,729	)
Proceeds from sale of stock pursuant to dividend reinvestment plan		9,134			7,470			5,266
Proceeds from exercise of stock options		775			394			152
Repurchase of common stock		(1,629	)		—			—
Net cash used in financing activities		(3,454	)		(1,644	)		(1,311	)
Net increase (decrease) in cash and cash equivalents		(860	)		1,170			(89	)
Cash and cash equivalents at beginning of year		2,759			1,589			1,678
Cash and cash equivalents at end of year	$	1,899			2,759			1,589

	Dollars in Thousands
	2019			2018			2017
Reconciliation of net earnings to net cash used in operating activities:
Net earnings	$	36,044			32,594			23,526
Adjustments to reconcile net earnings to net cash used in operating activities:
Equity in earnings of commercial bank subsidiary		(36,925	)		(33,731	)		(24,306	)
Decrease (increase) in refundable income taxes		45			5			(12	)
Increase in deferred taxes		(156	)		(291	)		(178	)
Share based compensation expense		786			1,237			692
Total adjustments		(36,250	)		(32,780	)		(23,804	)
Net cash used in operating activities	$	(206	)		(186	)		(278	)

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Note 2 - Loans and Allowance for Loan Losses - Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Loans, gross	$ 2,093,042	$ 2,050,199
Net deferred loan fees	(7,141)	(7,020)
Total loans	2,085,901	2,043,179
Less: Allowance for loan losses	(28,726)	(27,174)	$ (23,909)
Loans, net	2,057,175	2,016,005
Real Estate Portfolio Segment [Member]
Loans, gross	1,929,325	1,911,886
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Loans, gross	511,250	460,692
Less: Allowance for loan losses	(7,144)	(6,297)	(5,156)
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Loans, gross	97,104	134,613
Less: Allowance for loan losses	(1,117)	(1,481)	(1,011)
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Loans, gross	793,379	701,055
Less: Allowance for loan losses	(11,114)	(9,753)	(9,267)
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans, gross	425,185	518,245
Less: Allowance for loan losses	(5,997)	(7,084)	(6,094)
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans, gross	19,268	24,071
Less: Allowance for loan losses	(187)	(221)	(487)
Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Loans, gross	10,760	11,197
Less: Allowance for loan losses	(123)	(118)	(94)
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans, gross	72,379	62,013
Less: Allowance for loan losses	(889)	(731)	(723)
Commercial Portfolio Segment [Member]
Loans, gross	98,265	78,245
Less: Allowance for loan losses	(1,044)	(622)	$ (401)
Agricultural Portfolio Segment [Member]
Loans, gross	1,569	1,985
Consumer Portfolio Segment [Member]
Loans, gross	54,834	48,759
Consumer Portfolio Segment [Member] | Personal Loan [Member]
Loans, gross	50,532	45,072
Consumer Portfolio Segment [Member] | Credit Card Receivable [Member]
Loans, gross	4,302	3,687
Unallocated Financing Receivables [Member]
Loans, gross	$ 9,049	$ 9,324

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Note 6 - Acquired Intangible Assets and Goodwill (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Goodwill [Table Text Block]

	In Thousands
	2019		2018
Goodwill:
Balance at January 1,	$	4,805		4,805
Goodwill acquired during year		—		—
Impairment loss		—		—
Balance at December 31,	$	4,805		4,805

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Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Dec. 31, 2018
ASSETS
Loans, net of allowance for loan losses of $28,726 and $27,174, respectively	$ 2,057,175,000	$ 2,016,005,000
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	421,145,000	285,252,000
Loans held for sale	18,179,000	7,484,000
Interest bearing deposits	126,827,000	80,215,000
Federal funds sold	20,000,000	9,000,000
Restricted equity securities, at cost	4,680,000	3,012,000
Total earning assets	2,648,006,000	2,400,968,000
Cash and due from banks	12,943,000	9,976,000
Premises and equipment, net	60,295,000	58,363,000
Accrued interest receivable	5,945,000	6,724,000
Deferred income taxes	6,136,000	8,901,000
Other real estate	697,000	1,357,000
Bank owned life insurance	31,762,000	30,952,000
Goodwill	4,805,000	4,805,000
Other assets	23,620,000	21,636,000
Total assets	2,794,209,000	2,543,682,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	2,417,605,000	2,235,655,000
Federal home loan bank advances	23,613,000	0
Accrued interest and other liabilities	16,007,000	12,360,000
Total liabilities	2,457,225,000	2,248,015,000
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 10,792,999 and 10,623,810 shares issued and outstanding, respectively	21,586,000	21,248,000
Additional paid-in capital	82,249,000	73,960,000
Retained earnings	232,456,000	208,164,000
Net unrealized gains (losses) on available-for-sale securities, net of taxes of $245 and $2,726, respectively	693,000	(7,705,000)
Total stockholders’ equity	336,984,000	295,667,000
COMMITMENTS AND CONTINGENCIES
Total liabilities and stockholders’ equity	$ 2,794,209,000	$ 2,543,682,000

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

(a) Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Wilson Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

Nature of Business [Policy Text Block]

(b) Nature of Operations

Wilson Bank operates under a state bank charter and provides full banking services. As a state-chartered bank that is not a member of the Federal Reserve, Wilson Bank is subject to regulations of the Tennessee Department of Financial Institutions and the Federal Deposit Insurance Corporation (“FDIC”). The areas served by Wilson Bank include Wilson County, DeKalb County, Rutherford County, Smith County, Trousdale County, Putnam County, Sumner County, Davidson County and Williamson County, Tennessee and surrounding counties in Middle Tennessee. Services are provided at the main office and twenty-eight branch locations.

Use of Estimates, Policy [Policy Text Block]

(c) Estimates

In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and other real estate, other-than-temporary impairments of securities, and the fair value of financial instruments.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

(d) Significant Group Concentrations of Credit Risk

Most of the Company’s activities are with customers located within Middle Tennessee. The types of securities in which the Company invests are described in note 3. The types of lending in which the Company engages are described in note 2. The Company does not have any significant concentrations to any one industry or customer other than as disclosed in note 2.

Residential 1-4 family, commercial real estate and construction mortgage loans, represented 24%, 38% and 20% and 22%, 34% and 25% of the loan portfolio at December 31, 2019 and 2018, respectively. 

Financing Receivable [Policy Text Block]

(e) Loans

The Company grants mortgage, commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans throughout Middle Tennessee. The ability of the Company’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in this area.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for unearned income, the allowance for loan losses, and any unamortized deferred fees or costs on originated loans, and premiums or discounts on purchased loans.

Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized on a straight line basis over the respective term of the loan.

As part of its routine credit monitoring process, the Company performs regular credit reviews of the loan portfolio and loans receive risk ratings by the assigned credit officer, which are subject to validation by our independent loan review department. Risk ratings are categorized as pass, special mention, substandard or doubtful. The Company believes that its categories follow those outlined by the FDIC, Wilson Bank's primary federal regulator.

Generally the accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Credit card loans and other personal loans are typically charged off no later than when they become 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

(f) Allowance for Loan Losses

Management provides for loan losses by establishing an allowance. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a quarterly basis by management and is based upon management’s quarterly review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

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, independent loan reviewers, and reviews that may have been conducted by third-party reviewers. We incorporate relevant loan review results in the loan impairment determination. In addition, regulatory agencies, as an integral part of their examination process, will periodically review the Company’s allowance for loan losses and may require the Company to record adjustments to the allowance based on their judgment about information available to them at the time of their examinations.

In addition to the independent loan review process, the aforementioned risk ratings are subject to continual review by loan officers to determine that the appropriate risk ratings are being utilized in our allowance for loan loss process. Each risk rating is also subject to review by our independent loan review department. Currently, our independent loan review department targets reviews of 100% of existing loan relationships with aggregate debt of $1.0 million and greater and new loans with aggregate debt of $500,000 and greater. In addition, our independent loan review department targets particular portfolio segments, loans assigned to a particular lending officer, past due loans, and loans with four or more renewals.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are individually classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience, historical loan loss factors, loss experience of various loan segments, and other adjustments based on management’s assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial, mortgage and agricultural loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment disclosures, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

Investment, Policy [Policy Text Block]

(g) Debt and Equity Securities

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 based on available market prices, with unrealized gains and losses excluded from earnings and reported in other comprehensive income on an after-tax basis. Securities classified as “available-for-sale” are held for indefinite periods of time and may be sold in response to movements in market interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. 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.

Other-than-temporary Impairment—Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). A decline in the fair value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in a reduction in the carrying amount of the security. To determine whether OTTI has occurred, management considers factors such as (1) length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospectus of the issuer, and (3) Wilson Bank’s ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value. If management deems a security to be OTTI, management reviews the present value of the future cash flows associated with the security. A shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is referred to as a credit loss. If a credit loss is identified, the credit loss is recognized as a charge to earnings and a new cost basis for the security is established. If management concludes that no credit loss exists and it is not “more-likely-than-not” that it will be required to sell the security before the recovery of the security’s cost basis, then the security is not deemed OTTI and the shortfall is recorded as a component of equity.

No securities have been classified as trading securities or held-to-maturity securities at December 31, 2019.

Federal Home Loan Bank Stock [Policy Text Block]

(h) Federal Home Loan Bank Stock

The Company, as a member of the Federal Home Loan Bank (“FHLB”) Cincinnati system, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at par value, which approximates its fair value. Management reviews the investment for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. As of December 31, 2019, this minimum required investment was valued at approximately $4.0 million. Stock redemptions are at the discretion of the FHLB. 

Financing Receivable, Held-for-sale [Policy Text Block]

(i) Loans Held for Sale

Mortgage loans held for sale are carried at fair value. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan.

Property, Plant and Equipment, Policy [Policy Text Block]

(j) Premises and Equipment

Premises and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the related assets. Gains or losses realized on items retired and otherwise disposed of are credited or charged to operations and cost and related accumulated depreciation are removed from the asset and accumulated depreciation accounts.

Expenditures for major renovations and improvements of premises and equipment are capitalized and those for maintenance and repairs are charged to earnings as incurred.

Real Estate, Policy [Policy Text Block]

(k) Other Real Estate

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less the estimated cost to sell at the date the Company acquires the property, establishing a new cost basis. Subsequent to their acquisition by the Company, valuations of these assets are periodically performed by management, and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance [i.e. any direct write-downs] are included within non-interest expense.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

(l) Intangible Assets

The Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” 350, Goodwill and Other Intangible Assets requires that management determine the allocation of intangible assets into identifiable groups at the date of acquisition and that appropriate amortization periods be established. Under the provisions of FASB ASC 350, goodwill is not to be amortized; rather, it is to be monitored for impairment and written down to the impairment value at the time impairment occurs. The Company has determined that no impairment loss needs to be recognized related to its goodwill. 

Cash and Cash Equivalents, Policy [Policy Text Block]

(m) Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, interest-bearing deposits, amounts due from banks and Federal funds sold. Generally, Federal funds sold are purchased and sold for one day periods. Management makes deposits only with financial institutions it considers to be financially sound. 

Property, Plant and Equipment, Impairment [Policy Text Block]

(n) Long-Term Assets

Premises and equipment, intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Repurchase and Resale Agreements Policy [Policy Text Block]

(o) Securities Sold Under Agreements to Repurchase

Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by Federal deposit insurance.

Income Tax, Policy [Policy Text Block]

(p) Income Taxes

The Company accounts for Income Taxes in accordance with income tax accounting guidance (FASB ASC 740, Income Taxes). The Company follows accounting guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.

The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term "more-likely-than-not" means a likelihood of more than 50 percent. The terms "examined" and "upon examination" also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized.

The Company recognizes interest and penalties on income taxes as a component of income tax expense. 

Derivatives, Policy [Policy Text Block]

(q) Mortgage Banking Derivatives

Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest rate on the loan is locked. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in net gains on sale of mortgage loans.

Share-based Payment Arrangement [Policy Text Block]

(r) Equity-Based Incentives

Stock compensation accounting guidance (FASB ASC 718, “Compensation—Stock Compensation”) requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, cash-settled stock appreciation rights (SARs), and employee share purchase plans. Because cash-settled SARs do not give the grantee the choice of receiving stock, all cash-settled SARs are accounted for as liabilities, not equity, as compensation is accrued over the requisite service period.

The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options and cash-settled SARs.

Advertising Cost [Policy Text Block]

(s) Advertising Costs

Advertising costs are expensed as incurred by the Company and totaled $2,498,000, $2,552,000 and $2,326,000 for 2019, 2018 and 2017, respectively. 

Earnings Per Share, Policy [Policy Text Block]

(t) Earnings Per Share

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

Fair Value of Financial Instruments, Policy [Policy Text Block]

(u) Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 21 - Disclosures About Fair Value of Financial Instruments of the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassification, Policy [Policy Text Block]

(v) Reclassification

Certain reclassifications have been made to the 2018 and 2017 figures to conform to the presentation for 2019. 

Off-Balance-Sheet Credit Exposure, Policy [Policy Text Block]

(w) 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 credit. Such financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received. 

New Accounting Pronouncements, Policy [Policy Text Block]

(x) Accounting Standard Updates

Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Our revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. Because of this, our adoption of this Standard in the first quarter of 2018 did not have a significant impact on our financial statements.

ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. ASU 2016-01 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2016-02, “Leases (Topic 842).” ASU 2016-02, among other things, requires lessees to recognize a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-02 was effective for us on January 1, 2019 and initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) - Targeted Improvements,” which, among other things, provides an additional transition method that allows entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors,” which provides for certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon adoption of ASU 2016-02, ASU 2018-11 and ASU 2018-20 on January 1, 2019, we recorded a right-of-use asset in the amount of $2,600,000 and an offsetting lease liability in the amount of $2,627,000. Upon adoption, using a modified retrospective transition adoption approach, we recognized a cumulative effect reduction to retained earnings totaling $27,000. We elected to apply certain practical expedients provided under ASU 2016-02 whereby we will not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. We utilized the modified-retrospective transition approach prescribed by ASU 2018-11.

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In April 2019, ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” was issued to address certain codification improvements and to provide certain accounting policy electives related to accrued interest as well as disclosure related to credit losses, among other things. In May 2019, ASU 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief,” was issued to provide transition relief in connection with the adoption of ASU 2016-03 whereby entities would have the option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2016-13, as updated, became effective on January 1, 2020.

We are currently working through our implementation plan for ASU 2016-13 under the direction of our Chief Financial Officer and our Chief Credit Officer. Our implementation plan includes assessment and documentation of processes, internal controls and data sources; model development, documentation and validation; and system configuration, among other things. We are also in the process of implementing a third-party vendor solution to assist us in the application of ASU 2016-13. Based upon our preliminary parallel run as of December 31, 2019, we currently expect the adoption of ASU 2016-13 will not result in a significant change to our current allowance for loan losses and our reserves for unfunded commitments. The adoption of ASU 2016-13 is also not currently expected to have a significant impact on our regulatory capital ratios. The ultimate impact of adoption in future periods could be significantly different than our current expectation as our modeling processes will be significantly influenced by the composition, characteristics and quality of our loan and securities portfolios as well as the prevailing economic conditions and forecasts as of that date, notwithstanding any further refinements to our expected credit loss models.

ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. ASU 2016-15 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 became effective for us on January 1, 2020, and is not expected to have a significant impact on our financial statements.

ASU 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) - Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 clarifies the scope of Subtopic 610-20 and adds guidance for partial sales of nonfinancial assets, including partial sales of real estate. Historically, U.S. GAAP contained several different accounting models to evaluate whether the transfer of certain assets qualified for sale treatment. ASU 2017-05 reduces the number of potential accounting models that might apply and clarifies which model does apply in various circumstances. ASU 2017-05 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-08, “Receivables -  Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 provides guidance on the amortization period for certain purchased callable debt securities held at a premium. This update shortens the amortization period for the premium to the earliest call date. Under current generally accepted accounting principles, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument related to certain cash flow issues. ASU 2017-08 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting.” ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. ASU 2017-09 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-12, “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 amends the hedge accounting recognition and presentation requirements in ASC 815 to improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities to better align the entity’s financial reporting for hedging relationships with those risk management activities and to reduce the complexity of and simplify the application of hedge accounting. ASU 2017-12 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." Under ASU 2018-02, entities may elect to reclassify certain income tax effects related to the change in the U.S. statutory federal income tax rate under the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, from accumulated other comprehensive income to retained earnings. ASU 2018-02 also requires certain accounting policy disclosures. We elected to adopt the provisions of ASU 2018-02 for the year ended December 31, 2018 in advance of the required application date of January 1, 2019. See Note 10 - Income Taxes.

ASU 2018-05, "Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118.” ASU 2018-05 amends the Accounting Standards Codification to incorporate various SEC paragraphs pursuant to the issuance of SAB 118. SAB 118 addresses the application of generally accepted accounting principles in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act. See Note 10 - Income Taxes.

ASU 2018-13, "Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 became effective for us on January 1, 2020 and is not expected to have a significant impact on our financial statements.

ASU 2018-16, “Derivatives and Hedging (Topic 815) - Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.” The amendments in this update permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct U.S. Treasury obligations, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. ASU 2018-16 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

Other than those previously discussed, there were no other recently issued accounting pronouncements that may materially impact the Company.

XML

Consolidated Statements of Comprehensive Earnings (Parentheticals) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net unrealized gains (losses) on available-for-sale securities arising during period, taxes	$ 2,901,000	$ 1,398,000	$ 271,000
Reclassification adjustment for net losses on the sale of securities included in net earnings, taxes	$ 70,000	$ 170,000	$ 67,000

XML

Note 21 - Disclosures About Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(21) Disclosures About Fair Value of Financial Instruments

Fair Value of Financial Instruments

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. The definition of fair value focuses on the exit price, i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not the entry price, i.e., the price that would be paid to acquire the asset or received to assume the liability at the measurement date. The statement emphasizes that fair value is a market-based measurement; not an entity-specific measurement. Therefore, the fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.

Valuation Hierarchy

FASB ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

• Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

• Level 2 - inputs to the valuation methodology include all prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs to the valuation methodology that are unobservable and significant to the fair value measurement.  

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Asset

Securities available-for-sale - Where quoted prices are available for identical securities in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and certain other financial products. If quoted market prices are not available, then fair values are estimated by using pricing models that use observable inputs or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. In certain cases where there is limited activity or less transparency around inputs to the valuation and more complex pricing models or discounted cash flows are used, securities are classified within Level 3 of the valuation hierarchy. From time to time, we will validate prices supplied by our third party vendor by comparison to prices obtained from third parties.

Impaired loans - A loan is considered to be impaired when it is probable the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected payments using the loan’s original effective rate as the discount rate, the loan’s observable market price, or the fair value of the collateral less selling costs if the loan is collateral dependent. If the recorded investment in the impaired loan exceeds the measure of fair value, a valuation allowance may be established as a component of the allowance for loan losses or the expense is recognized as a charge-off. Impaired loans are classified within Level 3 of the hierarchy due to the unobservable inputs used in determining their fair value such as collateral values and the borrower’s underlying financial condition.

Other real estate owned - Other real estate owned (“OREO”) represents real estate foreclosed upon by the Company through loan defaults by customers or acquired in lieu of foreclosure. Upon foreclosure, the property is recorded at the lower of cost or fair value, based on appraised value, less selling costs estimated as of the date acquired with any loss recognized as a charge-off through the allowance for loan losses. Additional OREO losses for subsequent valuation downward adjustments are determined on a specific property basis and are included as a component of noninterest expense along with holding costs. Any gains or losses realized at the time of disposal are also reflected in noninterest income. OREO is included in Level 3 of the valuation hierarchy due to the lack of observable market inputs into the determination of fair value. Appraisal values are property-specific and sensitive to the changes in the overall economic environment.

Bank Owned Life Insurance - The cash surrender value of bank owned life insurance policies is carried at fair value. The Company uses financial information received from insurance carriers indicating the performance of the insurance policies and cash surrender values in determining the carrying value of life insurance. The Company reflects these assets within Level 3 of the valuation hierarchy due to the unobservable inputs included in the valuation of these items. The Company does not consider the fair values of these policies to be materially sensitive to changes in these unobservable inputs.

Mortgage loans held for sale - Mortgage loans held for sale are carried at fair value. The fair value of mortgage loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan and mortgage loans held for sale are included in Level 2 of the valuation hierarchy.

Derivatives - The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2).

The following tables present the financial instruments carried at fair value as of December 31, 2019 and December 31, 2018, by caption on the consolidated balance sheet and by FASB ASC 820 valuation hierarchy (as described above) (in thousands):

	Measured on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	59,579		—		59,579		—
Mortgage-backed securities		267,313		—		267,313		—
Asset-backed securities		27,229		—		27,229		—
State and municipal securities		67,024		—		67,024		—
Total investment securities available-for-sale		421,145		—		421,145		—
Mortgage loans held for sale		18,179		—		18,179		—
Mortgage banking derivatives		328		—		328		—
Bank owned life insurance		31,762		—		—		31,762
Total assets	$	471,414		—		439,652		31,762
Mortgage banking derivatives	$	23		—		23		—
Total liabilities	$	23		—		23		—

	Measured on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2018
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	68,467		—		68,467		—
Mortgage-backed securities		147,510		—		147,510		—
Asset-backed securities		21,700		—		21,700		—
State and municipal securities		47,575		—		47,575		—
Total investment securities available-for-sale		285,252		—		285,252		—
Mortgage loans held for sale		7,484		—		7,484		—
Mortgage banking derivatives		335		—		335		—
Bank owned life insurance		30,952		—		—		30,952
Total assets	$	324,023		—		293,071		30,952
Mortgage banking derivatives	$	88		—		88		—
Total liabilities	$	88		—		88		—

	Measured on a Non-Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Other real estate owned	$	697		—		—		697
Impaired loans, net (¹)		3,916		—		—		3,916
Total	$	4,613		—		—		4,613
December 31, 2018
Other real estate owned	$	1,357		—		—		1,357
Impaired loans, net (¹)		4,195		—		—		4,195
Total	$	5,552		—		—		5,552

(¹) Amount is net of a valuation allowance of $1,136,000 at December 31, 2019 and $1,164,000 at December 31, 2018 as required by ASC 310, “Receivables.”

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at December 31, 2019 and 2018:

	Valuation Techniques (2)	Significant Unobservable Inputs	Range (Weighted Average)
Impaired loans	Appraisal	Estimated costs to sell		10	%
Other real estate owned	Appraisal	Estimated costs to sell		10	%

(2) The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

In the case of its investment securities portfolio, the Company monitors the valuation technique utilized by various pricing agencies to ascertain when transfers between levels have been affected. The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare. For the twelve months ended December 31, 2019, there were no transfers between Levels 1, 2 or 3.

The table below includes a rollforward of the balance sheet amounts for the year ended December 31, 2019 and 2018 (including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis. When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, since Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources), the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology (in thousands):

	For the Year Ended December 31,
	2019		2018
	Other Assets		Other Assets
Fair value, January 1	$	30,952	$	29,475
Total realized gains included in income		810		841
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at December 31		—		—
Purchases, issuances and settlements, net		—		636
Transfers out of Level 3		—		—
Fair value, December 31	$	31,762		30,952
Total realized gains included in income related to financial assets and liabilities still on the consolidated balance sheet at December 31	$	810		841

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments that are not measured at fair value. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flow models. Those models are significantly affected by the assumptions used, including the discount rates, estimates of future cash flows and borrower creditworthiness. The fair value estimates presented herein are based on pertinent information available to management as of December 31, 2019 and December 31, 2018. Such amounts have not been revalued for purposes of these consolidated financial statements since those dates and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Cash and cash equivalents - The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Loans - The fair value of our loan portfolio includes a credit risk factor in the determination of the fair value of our loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction.

Fair values are estimated using discounted cash flow models, using current market interest rates offered for loans with similar terms to borrowers of similar credit quality. We believe current market rates capture a market participant's cost of funds, liquidity premium, capital charges, servicing charges and expectations of future rate movements. The values derived from the discounted cash flow approach for each of the above portfolios are then further discounted to incorporate credit risk to determine the exit price.

Deposits, and Federal Home Loan Bank advances - Fair values for deposits are estimated using discounted cash flow models, using current market interest rates offered on deposits with similar remaining maturities.

Restricted equity securities - It is not practical to determine the fair value of Federal Home Loan Bank or Federal Reserve Bank stock due to restrictions placed on its transferability.

Accrued interest receivable/payable - The carrying amounts of accrued interest approximate fair value resulting in a Level 1, Level 2 or Level 3 classification based on the asset/liability with which they are associated.

Off-balance sheet instruments - Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The fair value of commitments is not material.

The following table presents the carrying amounts, estimated fair value and placement in the fair value hierarchy of the Company’s financial instruments at December 31, 2019 and December 31, 2018. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. 

(in Thousands)	Carrying/Notional Amount		Estimated Fair Value (¹)		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Financial assets:
Cash and cash equivalents	$	159,770		159,770		159,770		—		—
Loans, net		2,057,175		2,053,212		—		—		2,053,212
Restricted equity securities		4,680	NA		NA		NA		NA
Accrued interest receivable		5,945		5,945		5		1,647		4,293
Financial liabilities:
Deposits		2,417,605		2,210,038		—		—		2,210,038
Federal Home Loan Bank advances		23,613		23,860		—		—		23,860
Accrued interest payable		3,814		3,814		—		—		3,814
December 31, 2018
Financial assets:
Cash and cash equivalents	$	99,191		99,191		99,191		—		—
Loans, net		2,016,005		2,017,272		—		—		2,017,272
Restricted equity securities		3,012	NA		NA		NA		NA
Accrued interest receivable		6,724		6,724		3		1,362		5,359
Financial liabilities:
Deposits		2,235,655		1,974,554		—		—		1,974,554
Accrued interest payable		3,132		3,132		—		—		3,132

(¹) Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market-participant would realize in a hypothetical orderly transaction.

XML

Note 2 - Loans and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(2) Loans and Allowance for Loan Losses

The classification of loans at December 31, 2019 and 2018 is as follows: 

	In Thousands
	2019			2018
Mortgage loans on real estate:
Residential 1-4 family	$	511,250			460,692
Multifamily		97,104			134,613
Commercial		793,379			701,055
Construction		425,185			518,245
Farmland		19,268			24,071
Second mortgages		10,760			11,197
Equity lines of credit		72,379			62,013
Total mortgage loans on real estate		1,929,325			1,911,886
Commercial loans		98,265			78,245
Agricultural loans		1,569			1,985
Consumer installment loans:
Personal		50,532			45,072
Credit cards		4,302			3,687
Total consumer installment loans		54,834			48,759
Other loans		9,049			9,324
		2,093,042			2,050,199
Net deferred loan fees		(7,141	)		(7,020	)
Total loans		2,085,901			2,043,179
Less: Allowance for loan losses		(28,726	)		(27,174	)
Loans, net	$	2,057,175			2,016,005

At December 31, 2019, variable rate and fixed rate loans totaled $1,640,991,000 and $452,051,000, respectively. At December 31, 2018, variable rate and fixed rate loans totaled $1,495,918,000 and $554,281,000, respectively.

In the normal course of business, Wilson Bank has made loans at prevailing interest rates and terms to directors and executive officers of the Company and to their affiliates. The aggregate amount of these loans was $12,878,000 and $13,019,000 at December 31, 2019 and 2018, respectively. None of these loans were restructured, charged-off or involved more than the normal risk of collectibility or presented other unfavorable features during the three years ended December 31, 2019.

An analysis of the activity with respect to such loans to related parties is as follows:

	In Thousands
	December 31,
	2019			2018
Balance, January 1	$	13,019			7,759
New loans and renewals during the year		31,548			17,278
Repayments (including loans paid by renewal) during the year		(31,689	)		(12,018	)
Balance, December 31	$	12,878			13,019

Risk characteristics relevant to each portfolio segment are as follows:

Construction and land development: Loans for non-owner-occupied real estate construction or land development are generally repaid through cash flow related to the operation, sale or refinance of the property. The Company also finances construction loans for owner-occupied properties. A portion of the Company’s construction and land portfolio segment is comprised of loans secured by residential product types (residential land and single-family construction). With respect to construction loans to developers and builders that are secured by non-owner occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, market sales activity, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

1-4 family residential real estate: Residential real estate loans represent loans to consumers or investors to finance a residence. These loans are typically financed on 15 to 30 year amortization terms, but generally with shorter maturities of 5 to 15 years. Many of these loans are extended to borrowers to finance their primary or secondary residence. Loans to an investor secured by a 1-4 family residence will be repaid from either the rental income from the property or from the sale of the property. This loan segment also includes closed-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home. Loans in this portfolio segment are underwritten and approved based on a number of credit quality criteria including limits on maximum Loan-to-Value (LTV), minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these residential property values impact the depth of potential losses in this portfolio segment.

1-4 family HELOC: This loan segment includes open-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home utilizing a revolving line of credit. These loans are underwritten and approved based on a number of credit quality criteria including limits on maximum LTV, minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these residential property values impact the depth of potential losses in this portfolio segment. Because of the revolving nature of these loans, as well as the fact that many represent second mortgages, this portfolio segment can contain more risk than the amortizing 1-4 family residential real estate loans.

Multi-family and commercial real estate: Multi-family and commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial loans (which are discussed below), in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.

Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting the market areas it serves. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. Non-owner occupied commercial real estate loans are loans secured by multifamily and commercial properties where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. These loans are made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail properties. Owner-occupied commercial real estate loans are loans where the primary source of repayment is the cash flow from the ongoing operations and business activities conducted by the party, or affiliate of the party, who owns the property.

Commercial and industrial: The commercial and industrial loan portfolio segment includes commercial and industrial loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other expansion projects. Collection risk in this portfolio is driven by the creditworthiness of underlying borrowers, particularly cash flow from customers’ business operations. Commercial and industrial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial and industrial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and usually incorporates a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Consumer: The consumer loan portfolio segment includes non-real estate secured direct loans to consumers for household, family, and other personal expenditures. Consumer loans may be secured or unsecured and are usually structured with short or medium term maturities. These loans are underwritten and approved based on a number of consumer credit quality criteria including limits on maximum LTV on secured consumer loans, minimum credit scores, and maximum debt to income. Many traditional forms of consumer installment credit have standard monthly payments and fixed repayment schedules of one to five years. These loans are made with either fixed or variable interest rates that are based on specific indices. Installment loans fill a variety of needs, such as financing the purchase of an automobile, a boat, a recreational vehicle or other large personal items, or for consolidating debt. These loans may be unsecured or secured by an assignment of title, as in an automobile loan, or by money in a bank account. In addition to consumer installment loans, this portfolio segment also includes secured and unsecured personal lines of credit as well as overdraft protection lines. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310), when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Substantially all of the Company’s impaired loans are collateral dependent.

The following tables, present the Company’s impaired loans at December 31, 2019 and 2018:

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
With no related allowance recorded:
Residential 1-4 family	$	1,090		1,464		—		1,090		99
Multifamily		—		—		—		—		—
Commercial real estate		951		1,124		—		910		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,041		2,588		—		2,000		116

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
With allowance recorded:
Residential 1-4 family	$	1,489		1,480		795		1,590		83
Multifamily		—		—		—		—		—
Commercial real estate		1,522		1,520		341		2,015		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,011		3,000		1,136		3,605		100

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
Total:
Residential 1-4 family	$	2,579		2,944		795		2,680		182
Multifamily		—		—		—		—		—
Commercial real estate		2,473		2,644		341		2,925		34
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,052		5,588		1,136		5,605		216

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
With no related allowance recorded:
Residential 1-4 family	$	1,196		1,795		—		1,862		42
Multifamily		—		—		—		—		—
Commercial real estate		317		316		—		320		16
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,203		2,797		—		3,237		100

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
With allowance recorded:
Residential 1-4 family	$	1,641		1,635		852		1,782		77
Multifamily		—		—		—		—		—
Commercial real estate		1,515		1,515		312		2,001		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,156		3,150		1,164		3,783		94

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
Total:
Residential 1-4 family	$	2,837		3,430		852		3,644		119
Multifamily		—		—		—		—		—
Commercial real estate		1,832		1,831		312		2,321		33
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,359		5,947		1,164		7,020		194

The following tables present the Company’s nonaccrual loans, credit quality indicators and past due loans as of December 31, 2019 and 2018.

Loans on Nonaccrual Status

	In Thousands
	2019		2018
Residential 1-4 family	$	949		948
Multifamily		—		—
Commercial real estate		1,661		1,102
Construction		—		—
Farmland		—		—
Second mortgages		—		—
Equity lines of credit		—		—
Commercial		—		—
Agricultural, installment and other		—		—
Total	$	2,610		2,050

The impact on net interest income for these loans was not material to the Company’s results of operations for the years ended December 31, 2019, 2018 and 2017.

Potential problem loans, which include nonperforming loans, amounted to approximately $10.7 million at December 31, 2019 compared to $12.0 million at December 31, 2018. Potential problem loans represent those loans with a well defined weakness and where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by the FDIC, the Company’s primary federal regulator, for loans classified as special mention, substandard, or doubtful, excluding the impact of nonperforming loans.

The following table presents our loan balances by primary loan classification and the amount classified within each risk rating category. Pass rated loans include all credits other than those included in special mention, substandard and doubtful which are defined as follows:

• Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

• Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

• Doubtful loans have all the characteristics of substandard loans with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The Company considers all doubtful loans to be impaired and places the loans on nonaccrual status.

Credit Quality Indicators

	In Thousands
																	Agricultural,
	Residential 1-4				Commercial						Second		Equity Lines				Installment and
	Family		Multifamily		Real Estate		Construction		Farmland		Mortgages		of Credit		Commercial		Other		Total
Credit Risk Profile by Internally Assigned Grade
December 31, 2019
Pass	$	503,861		97,104		791,610		424,517		19,106		10,458		72,237		98,243		65,255		2,082,391
Special mention		2,923		—		—		635		103		174		—		—		101		3,936
Substandard		4,466		—		1,769		33		59		128		142		22		96		6,715
Doubtful		—		—		—		—		—		—		—		—		—		—
Total	$	511,250		97,104		793,379		425,185		19,268		10,760		72,379		98,265		65,452		2,093,042
December 31, 2018
Pass	$	452,411		134,613		698,083		518,123		23,895		10,979		61,927		78,206		59,923		2,038,160
Special mention		3,949		—		1,690		64		112		179		—		39		78		6,111
Substandard		4,332		—		1,282		58		64		39		86		—		67		5,928
Doubtful		—		—		—		—		—		—		—		—		—		—
Total	$	460,692		134,613		701,055		518,245		24,071		11,197		62,013		78,245		60,068		2,050,199

Age Analysis of Past Due Loans

	In Thousands
													Recorded
													Investment
					Nonaccrual		Total						Greater Than
	30-59 Days		60-89 Days		and Greater		Nonaccrual						90 Days and
	Past Due		Past Due		Than 90 Days		Past Due		Current		Total Loans		Accruing
December 31, 2019
Residential 1-4 family	$	4,760		799		2,336		7,895		503,355		511,250		1,387
Multifamily		—		—		—		—		97,104		97,104		—
Commercial real estate		500		—		1,661		2,161		791,218		793,379		—
Construction		1,535		147		594		2,276		422,909		425,185		594
Farmland		57		—		8		65		19,203		19,268		8
Second mortgages		—		—		100		100		10,660		10,760		100
Equity lines of credit		143		—		372		515		71,864		72,379		372
Commercial		71		30		—		101		98,164		98,265		—
Agricultural, installment and other		517		116		46		679		64,773		65,452		46
Total	$	7,583		1,092		5,117		13,792		2,079,250		2,093,042		2,507
December 31, 2018
Residential 1-4 family	$	3,258		1,092		1,868		6,218		454,474		460,692		920
Multifamily		—		—		—		—		134,613		134,613		—
Commercial real estate		312		109		1,174		1,595		699,460		701,055		72
Construction		1,567		26		32		1,625		516,620		518,245		32
Farmland		43		9		21		73		23,998		24,071		21
Second mortgages		333		—		—		333		10,864		11,197		—
Equity lines of credit		297		—		45		342		61,671		62,013		45
Commercial		93		—		24		117		78,128		78,245		24
Agricultural, installment and other		407		85		95		587		59,481		60,068		95
Total	$	6,310		1,321		3,259		10,890		2,039,309		2,050,199		1,209

Transactions in the allowance for loan losses for the years ended December 31, 2019 and 2018 are summarized as follows:

	In Thousands
																							Agricultural,
	Residential 1-4						Commercial									Second		Equity Lines					Installment and
	Family			Multifamily			Real Estate			Construction			Farmland			Mortgages		of Credit		Commercial			Other			Total
December 31, 2019
Allowance for loan losses:
Beginning balance	$	6,297			1,481			9,753			7,084			221			118		731		622			867			27,174
Provision		838			(364	)		1,484			(1,510	)		(34	)		5		158		422			1,041			2,040
Charge-offs		(15	)		—			(173	)		—			—			—		—		(15	)		(1,160	)		(1,363	)
Recoveries		24			—			50			423			—			—		—		15			363			875
Ending balance	$	7,144			1,117			11,114			5,997			187			123		889		1,044			1,111			28,726
Ending balance individually evaluated for impairment	$	795			—			341			—			—			—		—		—			—			1,136
Ending balance collectively evaluated for impairment	$	6,349			1,117			10,773			5,997			187			123		889		1,044			1,111			27,590
Loans:
Ending balance	$	511,250			97,104			793,379			425,185			19,268			10,760		72,379		98,265			65,452			2,093,042
Ending balance individually evaluated for impairment	$	2,569			—			2,471			—			—			—		—		—			—			5,040
Ending balance collectively evaluated for impairment	$	508,681			97,104			790,908			425,185			19,268			10,760		72,379		98,265			65,452			2,088,002

	In Thousands
																				Agricultural,
	Residential 1-4					Commercial								Second		Equity Lines				Installment and
	Family			Multifamily		Real Estate		Construction			Farmland			Mortgages		of Credit		Commercial		Other			Total
December 31, 2018
Allowance for loan losses:
Beginning balance	$	5,156			1,011		9,267		6,094			487			94		723		401		676			23,909
Provision		1,568			470		436		921			(266	)		24		7		218		920			4,298
Charge-offs		(492	)		—		—		(19	)		—			—		—		—		(1,152	)		(1,663	)
Recoveries		65			—		50		88			—			—		1		3		423			630
Ending balance	$	6,297			1,481		9,753		7,084			221			118		731		622		867			27,174
Ending balance individually evaluated for impairment	$	852			—		312		—			—			—		—		—		—			1,164
Ending balance collectively evaluated for impairment	$	5,445			1,481		9,441		7,084			221			118		731		622		867			26,010
Loans:
Ending balance	$	460,692			134,613		701,055		518,245			24,071			11,197		62,013		78,245		60,068			2,050,199
Ending balance individually evaluated for impairment	$	2,829			—		1,831		686			—			—		—		—		—			5,346
Ending balance collectively evaluated for impairment	$	457,863			134,613		699,224		517,559			24,071			11,197		62,013		78,245		60,068			2,044,853

The Company’s loan portfolio includes certain loans that have been modified in a troubled debt restructuring (TDR), where economic or other concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. The concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

The following table summarizes the carrying balances of TDRs at December 31, 2019 and December 31, 2018 (dollars in thousands):

	2019		2018
Performing TDRs	$	3,080		1,676
Nonperforming TDRs		1,467		816
Total TDRs	$	4,547		2,492

The following table outlines the amount of each TDR categorized by loan classification for the years ended December 31, 2019 and 2018 (dollars in thousands):

	December 31, 2019						December 31, 2018
					Post Modification						Post Modification
			Pre Modification		Outstanding				Pre Modification		Outstanding
			Outstanding		Recorded				Outstanding		Recorded
	Number of		Recorded		Investment, Net of		Number of		Recorded		Investment, Net of
	Contracts		Investment		Related Allowance		Contracts		Investment		Related Allowance
Residential 1-4 family		1	$	1,338	$	619		4	$	448	$	448
Multifamily		—		—		—		—		—		—
Commercial real estate		4		2,677		2,399		—		—		—
Construction		—		—		—		—		—		—
Farmland		—		—		—		—		—		—
Second mortgages		—		—		—		—		—		—
Equity lines of credit		—		—		—		—		—		—
Commercial		—		—		—		—		—		—
Agricultural, installment and other		—		—		—		2		5		5
Total		5	$	4,015	$	3,018		6	$	453	$	453

As of December 31, 2019 and 2018 the Company did not have any loan previously classified as a TDR default within twelve months of the restructuring. A default is defined as an occurrence which violates the terms of the receivable’s contract.

As of December 31, 2019 , the Bank did not have any consumer mortgage loans in the process of foreclosure.

As of December 31, 2018, the Company's recorded investment in consumer mortgage loans in the process of foreclosure amounted to $200,000.

The Company’s principal customers are primarily in the Middle Tennessee area with a concentration in Wilson County, Tennessee. Credit is extended to businesses and individuals and is evidenced by promissory notes. The terms and conditions of the loans including collateral vary depending upon the purpose of the credit and the borrower’s financial condition.

In 2019, 2018 and 2017, Wilson Bank originated mortgage loans for sale into the secondary market of $167,723,000, $129,060,000 and $135,835,000, respectively. The fees and gain on sale of these loans totaled $6,802,000, $4,639,000 and $4,258,000 in 2019, 2018 and 2017, respectively. All of these loan sales transfer servicing rights to the buyer.

In some instances, Wilson Bank sells loans that contain provisions which permit the buyer to seek recourse against Wilson Bank in certain circumstances. At December 31, 2019 and 2018, total mortgage loans sold with recourse in the secondary market aggregated $115,789,000 and $94,801,000, respectively. At December 31, 2019, Wilson Bank has not been required to repurchase a significant amount of the mortgage loans originated by Wilson Bank and sold in the secondary market. Management expects no material losses to result from these recourse provisions.

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Note 6 - Acquired Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

(6) Acquired Intangible Assets and Goodwill

The Company's intangible assets result from the excess of purchase price over the applicable book value of the net assets acquired related to outside ownership of two previously 50% owned subsidiaries that the Company acquired 100% of in 2005.

	In Thousands
	2019		2018
Goodwill:
Balance at January 1,	$	4,805		4,805
Goodwill acquired during year		—		—
Impairment loss		—		—
Balance at December 31,	$	4,805		4,805

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Note 13 - Concentration of Credit Risk (Details Textual)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Interest-bearing Deposits in Banks and Other Financial Institutions	$ 89,177,000
Interest Bearing Deposits, Number of Banks	4
Federal Funds Sold	$ 20,000,000	$ 9,000,000
Federal Funds Sold, Number of Banks	1

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Note 8 - Federal Home Loan Bank Advances - Required Future Principal Payments (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
2020	$ 8,250,000
2021	5,828,000
2022	4,658,000
2023	3,929,000
2024	948,000
Thereafter	0
Total	$ 23,613,000	$ 0

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Note 7 - Deposits (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Deposit Liabilities Reclassified as Loans Receivable	$ 529,000	$ 496,000
Minimum Average Yearly Cash Balance With Federal Reserve	$ 0	$ 0

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Note 11 - Commitments and Contingent Liabilities (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating Lease, Expense	$ 484,000	$ 362,000	$ 215,000
Line of Credit Facility, Maximum Borrowing Capacity	53,000,000	53,000,000
Long-term Line of Credit, Total	0	0
Cash Management Advance Line of Credit [Member] | Line of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	25,000,000
Long-term Line of Credit, Total	$ 0	$ 0
Line of Credit Facility, Period for Variable Rate	90 days
Line of Credit Facility, Period of Fixed Rate	30 days

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Note 21 - Disclosures About Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Measured on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	59,579		—		59,579		—
Mortgage-backed securities		267,313		—		267,313		—
Asset-backed securities		27,229		—		27,229		—
State and municipal securities		67,024		—		67,024		—
Total investment securities available-for-sale		421,145		—		421,145		—
Mortgage loans held for sale		18,179		—		18,179		—
Mortgage banking derivatives		328		—		328		—
Bank owned life insurance		31,762		—		—		31,762
Total assets	$	471,414		—		439,652		31,762
Mortgage banking derivatives	$	23		—		23		—
Total liabilities	$	23		—		23		—

	Measured on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2018
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	68,467		—		68,467		—
Mortgage-backed securities		147,510		—		147,510		—
Asset-backed securities		21,700		—		21,700		—
State and municipal securities		47,575		—		47,575		—
Total investment securities available-for-sale		285,252		—		285,252		—
Mortgage loans held for sale		7,484		—		7,484		—
Mortgage banking derivatives		335		—		335		—
Bank owned life insurance		30,952		—		—		30,952
Total assets	$	324,023		—		293,071		30,952
Mortgage banking derivatives	$	88		—		88		—
Total liabilities	$	88		—		88		—

Fair Value Measurements, Nonrecurring [Table Text Block]

	Measured on a Non-Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Other real estate owned	$	697		—		—		697
Impaired loans, net (¹)		3,916		—		—		3,916
Total	$	4,613		—		—		4,613
December 31, 2018
Other real estate owned	$	1,357		—		—		1,357
Impaired loans, net (¹)		4,195		—		—		4,195
Total	$	5,552		—		—		5,552

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

	Valuation Techniques (2)	Significant Unobservable Inputs	Range (Weighted Average)
Impaired loans	Appraisal	Estimated costs to sell		10	%
Other real estate owned	Appraisal	Estimated costs to sell		10	%

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	For the Year Ended December 31,
	2019		2018
	Other Assets		Other Assets
Fair value, January 1	$	30,952	$	29,475
Total realized gains included in income		810		841
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at December 31		—		—
Purchases, issuances and settlements, net		—		636
Transfers out of Level 3		—		—
Fair value, December 31	$	31,762		30,952
Total realized gains included in income related to financial assets and liabilities still on the consolidated balance sheet at December 31	$	810		841

Fair Value, by Balance Sheet Grouping [Table Text Block]

(in Thousands)	Carrying/Notional Amount		Estimated Fair Value (¹)		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2019
Financial assets:
Cash and cash equivalents	$	159,770		159,770		159,770		—		—
Loans, net		2,057,175		2,053,212		—		—		2,053,212
Restricted equity securities		4,680	NA		NA		NA		NA
Accrued interest receivable		5,945		5,945		5		1,647		4,293
Financial liabilities:
Deposits		2,417,605		2,210,038		—		—		2,210,038
Federal Home Loan Bank advances		23,613		23,860		—		—		23,860
Accrued interest payable		3,814		3,814		—		—		3,814
December 31, 2018
Financial assets:
Cash and cash equivalents	$	99,191		99,191		99,191		—		—
Loans, net		2,016,005		2,017,272		—		—		2,017,272
Restricted equity securities		3,012	NA		NA		NA		NA
Accrued interest receivable		6,724		6,724		3		1,362		5,359
Financial liabilities:
Deposits		2,235,655		1,974,554		—		—		1,974,554
Accrued interest payable		3,132		3,132		—		—		3,132

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Note 2 - Loans and Allowance for Loan Losses (Details Textual) Pure in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Loans Receivable with Variable Rates of Interest	$ 1,640,991,000	$ 1,495,918,000
Loans Receivable with Fixed Rates of Interest	452,051,000	554,281,000
Loans and Leases Receivable, Related Parties, Ending Balance	$ 12,878,000	$ 13,019,000	$ 7,759,000
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts	0	0
Mortgage Loans in Process of Foreclosure, Amount	$ 0	$ 200,000
Loans Originated Into Secondary Market	167,723,000	129,060,000	135,835,000
Gain (Loss) on Sale of Mortgage Loans	6,802,000	4,639,000	$ 4,258,000
Loans Sold With Recourse In Secondary Market	115,789,000	94,801,000
Nonperforming Financial Instruments [Member]
Potential Problem Loans	$ 10,700,000	$ 12,000,000.0
Minimum [Member] | Real Estate Portfolio Segment [Member]
Financing Receivable, Amortization Period	15 years
Financing Receivable, Maturity Period	5 years
Minimum [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Maturity Period	1 year
Maximum [Member] | Real Estate Portfolio Segment [Member]
Financing Receivable, Amortization Period	30 years
Financing Receivable, Maturity Period	15 years
Maximum [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Maturity Period	5 years

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Note 23 - Quarterly Financial Data (Unaudited) - Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest income	$ 29,897	$ 30,329	$ 29,567	$ 28,284	$ 27,585	$ 26,298	$ 25,548	$ 24,094	$ 23,487	$ 22,904	$ 22,871	$ 21,758	$ 118,077	$ 103,525	$ 91,020
Interest expense	5,522	5,991	5,923	5,211	4,606	3,656	3,097	2,659	2,439	2,332	2,094	2,024	22,647	14,018	8,889
Net interest income	24,375	24,338	23,644	23,073	22,979	22,642	22,451	21,435	21,048	20,572	20,777	19,734	95,430	89,507	82,131
Provision for loan losses	686	167	154	1,033	1,097	1,088	1,090	1,023	436	436	420	389	2,040	4,298
Earnings before income taxes	10,222	13,556	12,451	10,882	10,708	10,718	9,798	10,153	10,694	10,438	11,386	10,362
Net earnings	$ 7,972	$ 10,266	$ 9,516	$ 8,290	$ 9,833	$ 7,972	$ 7,309	$ 7,480	$ 3,574	$ 6,469	$ 6,988	$ 6,495	$ 36,044	$ 32,594	$ 23,526
Basic earnings per common share (in dollars per share)	$ 0.74	$ 0.95	$ 0.89	$ 0.77	$ 0.93	$ 0.75	$ 0.69	$ 0.71	$ 0.34	$ 0.62	$ 0.67	$ 0.63	$ 3.36	$ 3.09	$ 2.26
Diluted earnings per common share (in dollars per share)	$ 0.74	$ 0.95	$ 0.89	$ 0.77	$ 0.92	$ 0.75	$ 0.69	$ 0.71	$ 0.34	$ 0.62	$ 0.67	$ 0.63	$ 3.35	$ 3.08	$ 2.26

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Note 2 - Loans and Allowance for Loan Losses - Loans on Nonaccrual Status (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Loans on Nonaccrual Status	$ 2,610	$ 2,050
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Loans on Nonaccrual Status	949	948
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Loans on Nonaccrual Status	0	0
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Loans on Nonaccrual Status	1,661	1,102
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans on Nonaccrual Status	0	0
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans on Nonaccrual Status	0	0
Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Loans on Nonaccrual Status	0	0
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Loans on Nonaccrual Status	0	0
Commercial Portfolio Segment [Member]
Loans on Nonaccrual Status	0	0
Agricultural Installment and Other Portfolio Segment [Member]
Loans on Nonaccrual Status	$ 0	$ 0

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Note 18 - Equity Incentive Plan (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2016	Apr. 30, 2009	Apr. 30, 1999	Apr. 13, 1999
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	369,000	200,000	62,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	140,908
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 40.46
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 13.43	$ 14.41	$ 12.59
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount	$ 1,622,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years 6 months 3 days
Cash Settled Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Instruments Other Than Options, Exercisable, Weighted Average Exercise Price	$ 41.75
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Instruments Other Than Options, Exercisable, Weighted Average Exercise Price	$ 41.97
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance	132,131
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 40.46
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 32.31
The 1999 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized						200,000
Share Based Compensation Arrangement by Share Based Payment Award, Number of Shares Authorized, Percentage						5.00%
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant							0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	0
The 2009 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	20,065
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 32.66
The 2016 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				750,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	467,271
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	120,843
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 41.75
The 2016 Equity Incentive Plan [Member] | Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Instruments Other Than Options, Exercisable, Weighted Average Exercise Price	$ 41.97
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance	132,131

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Note 2 - Loans and Allowance for Loan Losses - Troubled Debt Restructuring (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Total TDRS	$ 4,547	$ 2,492
Number of Contracts	5	6
Pre Modification Outstanding Recorded Investment	$ 4,015	$ 453
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 3,018	$ 453
Commercial Portfolio Segment [Member]
Number of Contracts	0	0
Pre Modification Outstanding Recorded Investment	$ 0	$ 0
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 0	$ 0
Agricultural Installment and Other Portfolio Segment [Member]
Number of Contracts	0	2
Pre Modification Outstanding Recorded Investment	$ 0	$ 5
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 0	$ 5
Residential 1 to 4 Family [Member] | Real Estate Portfolio Segment [Member]
Number of Contracts	1	4
Pre Modification Outstanding Recorded Investment	$ 1,338	$ 448
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 619	$ 448
Multifamily Real Estate [Member] | Real Estate Portfolio Segment [Member]
Number of Contracts	0	0
Pre Modification Outstanding Recorded Investment	$ 0	$ 0
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 0	$ 0
Commercial Real Estate [Member] | Real Estate Portfolio Segment [Member]
Number of Contracts	4	0
Pre Modification Outstanding Recorded Investment	$ 2,677	$ 0
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 2,399	$ 0
Construction Loans [Member] | Real Estate Portfolio Segment [Member]
Number of Contracts	0	0
Pre Modification Outstanding Recorded Investment	$ 0	$ 0
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 0	$ 0
Farmland [Member] | Real Estate Portfolio Segment [Member]
Number of Contracts	0	0
Pre Modification Outstanding Recorded Investment	$ 0	$ 0
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 0	$ 0
Second Mortgages [Member] | Real Estate Portfolio Segment [Member]
Number of Contracts	0	0
Pre Modification Outstanding Recorded Investment	$ 0	$ 0
Post Modification Outstanding Recorded Investment, Net of Related Allowance	$ 0	$ 0
Home Equity Line of Credit [Member] | Real Estate Portfolio Segment [Member]
Number of Contracts	0	0
Pre Modification Outstanding Recorded Investment	$ 0	$ 0
Post Modification Outstanding Recorded Investment, Net of Related Allowance	0	0
Performing Financial Instruments [Member]
Total TDRS	3,080	1,676
Nonperforming Financial Instruments [Member]
Total TDRS	$ 1,467	$ 816

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Note 3 - Debt and Equity Securities - Sales of Debt and Equity Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Gross proceeds	$ 37,325	$ 39,857	$ 35,555
Gross realized gains	75	102	76
Gross realized losses	(343)	(752)	(251)
Net realized gains (losses)	$ (268)	$ (650)	$ (175)

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Note 19 - Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Numerator – Earnings available to common stockholders	$ 7,972	$ 10,266	$ 9,516	$ 8,290	$ 9,833	$ 7,972	$ 7,309	$ 7,480	$ 3,574	$ 6,469	$ 6,988	$ 6,495	$ 36,044	$ 32,594	$ 23,526
Denominator – Weighted average number of common shares outstanding (in shares)													10,743,269	10,564,172	10,407,211
Basic earnings per common share (in dollars per share)	$ 0.74	$ 0.95	$ 0.89	$ 0.77	$ 0.93	$ 0.75	$ 0.69	$ 0.71	$ 0.34	$ 0.62	$ 0.67	$ 0.63	$ 3.36	$ 3.09	$ 2.26
Numerator – Earnings available to common stockholders													$ 36,044	$ 32,594	$ 23,526
Dilutive effect of stock options (in shares)													18,198	8,049	5,325
(in shares)													10,761,467	10,572,221	10,412,536
Diluted earnings per common share (in dollars per share)	$ 0.74	$ 0.95	$ 0.89	$ 0.77	$ 0.92	$ 0.75	$ 0.69	$ 0.71	$ 0.34	$ 0.62	$ 0.67	$ 0.63	$ 3.35	$ 3.08	$ 2.26

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Note 20 - Mortgage Banking Derivatives (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Derivative Instruments, Gain (Loss) [Table Text Block]

	In Thousands
	2019			2018
Forward contracts related to mortgage loans held for sale and interest rate contracts	$	65			(88	)
Interest rate contracts for customers		(7	)		335

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

	In Thousands
	2019					2018
	Notional Amount		Fair Value			Notional Amount		Fair Value
Included in other assets (liabilities):
Interest rate contracts for customers	$	10,307		328			9,655		335
Forward contracts related to mortgage loans held-for-sale		14,000		(23	)		11,750		(88	)

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Note 21 - Disclosures About Fair Value of Financial Instruments - Fair Value of Financial Instruments Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	$ 421,145	$ 285,252
Fair Value, Recurring [Member] | Reported Value Measurement [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	421,145	285,252
Mortgage loans held for sale	18,179	7,484
Derivative, fair value	328	335
Bank owned life insurance	31,762	30,952
Total assets	471,414	324,023
Mortgage banking derivatives	23	88
Total liabilities	23	88
Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
Mortgage loans held for sale	0	0
Derivative, fair value	0	0
Bank owned life insurance	0	0
Total assets	0	0
Mortgage banking derivatives	0	0
Total liabilities	0	0
Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	421,145	285,252
Mortgage loans held for sale	18,179	7,484
Derivative, fair value	328	335
Bank owned life insurance	0	0
Total assets	439,652	293,071
Mortgage banking derivatives	23	88
Total liabilities	23	88
Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
Mortgage loans held for sale	0	0
Derivative, fair value	0	0
Bank owned life insurance	31,762	30,952
Total assets	31,762	30,952
Mortgage banking derivatives	0	0
Total liabilities	0	0
US Government-sponsored Enterprises Debt Securities [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	59,579	68,467
US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Recurring [Member] | Reported Value Measurement [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	59,579	68,467
US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	59,579	68,467
US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
Collateralized Mortgage Backed Securities [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	267,313	147,510
Collateralized Mortgage Backed Securities [Member] | Fair Value, Recurring [Member] | Reported Value Measurement [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	267,313	147,510
Collateralized Mortgage Backed Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
Collateralized Mortgage Backed Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	267,313	147,510
Collateralized Mortgage Backed Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
Asset-backed Securities [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	27,229	21,700
Asset-backed Securities [Member] | Fair Value, Recurring [Member] | Reported Value Measurement [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	27,229	21,700
Asset-backed Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
Asset-backed Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	27,229	21,700
Asset-backed Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	67,024	47,575
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member] | Reported Value Measurement [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	67,024	47,575
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	0	0
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	67,024	47,575
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities, at market (amortized cost $420,207 and $295,683, respectively)	$ 0	$ 0

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Note 21 - Disclosures About Fair Value of Financial Instruments - Carrying Value and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Restricted equity securities		$ 4,680	$ 3,012
Reported Value Measurement [Member]
Cash and cash equivalents		159,770	99,191
Loans, net		2,057,175	2,016,005
Restricted equity securities		4,680	3,012
Accrued interest receivable		5,945	6,724
Deposits		2,417,605	2,235,655
Federal Home Loan Bank advances		23,613
Accrued interest payable		3,814	3,132
Estimate of Fair Value Measurement [Member]
Cash and cash equivalents	[1]	159,770	99,191
Loans, net	[1]	2,053,212	2,017,272
Accrued interest receivable	[1]	5,945	6,724
Deposits	[1]	2,210,038	1,974,554
Federal Home Loan Bank advances	[1]	23,860
Accrued interest payable	[1]	3,814	3,132
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents		159,770	99,191
Loans, net		0	0
Accrued interest receivable		5	3
Deposits		0	0
Federal Home Loan Bank advances		0
Accrued interest payable		0	0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents		0	0
Loans, net		0	0
Accrued interest receivable		1,647	1,362
Deposits		0	0
Federal Home Loan Bank advances		0
Accrued interest payable		0	0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents		0	0
Loans, net		2,053,212	2,017,272
Accrued interest receivable		4,293	5,359
Deposits		2,210,038	1,974,554
Federal Home Loan Bank advances		23,860
Accrued interest payable		$ 3,814	$ 3,132

[1] Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market-participant would realize in a hypothetical orderly transaction.

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Note 12 - Financial Instruments with Off-balance-sheet Risk (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block]

	In Thousands
	Contract or Notional Amount
	2019		2018
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit	$	632,686		582,897
Standby letters of credit		72,901		80,165
Total	$	705,587		663,062

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Note 8 - Federal Home Loan Bank Advances (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

	(In Thousands)
Maturity	Total
2020	$	8,250
2021		5,828
2022		4,658
2023		3,929
2024		948
Thereafter		—
Total		23,613

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Note 22 - Wilson Bank Holding Company - Parent Company Financial Information - Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended															12 Months Ended
	Dec. 31, 2019		Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019		Dec. 31, 2018		Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2017
Cash paid to suppliers and other																$ 69,681		$ 64,186		$ 57,643
Net cash provided by operating activities																36,077		40,773		42,667
Net cash provided by investing activities																(177,616)		(232,563)		(89,494)
Dividends paid																11,725		9,447		6,729
Proceeds from exercise of stock options																775		394		152
Repurchase of common stock																(1,629)		0		0
Net cash used in financing activities																202,118		195,463		94,427
Net earnings	$ 7,972		$ 10,266	$ 9,516	$ 8,290		$ 9,833		$ 7,972	$ 7,309	$ 7,480	$ 3,574	$ 6,469	$ 6,988	$ 6,495	36,044		32,594		23,526
Increase (decrease) in taxes payable																339		(1,526)		(42)
Increase in deferred taxes																206		248		607
Share-based compensation expense																347		1,237		692
Total adjustments																33		8,179		19,141
Parent Company [Member]
Cash paid to suppliers and other																(383)		(367)		(447)
Tax benefits received																177		181		169
Net cash provided by operating activities																(206)		(186)		(278)
Dividends received from commercial bank subsidiary																2,800		3,000		1,500
Net cash provided by investing activities																2,800		3,000		1,500
Payments made to stock appreciation rights holders																(9)		(61)		0
Dividends paid																(11,725)		(9,447)		(6,729)
Proceeds from sale of stock pursuant to dividend reinvestment plan																9,134		7,470		5,266
Proceeds from exercise of stock options																775		394		152
Repurchase of common stock																(1,629)		0		0
Net cash used in financing activities																(3,454)		(1,644)		(1,311)
Net increase (decrease) in cash and cash equivalents																(860)		1,170		(89)
Cash and cash equivalents at beginning of year					$ 2,759	[1]					$ 1,589				$ 1,678	2,759	[1]	1,589		1,678
Cash and cash equivalents at end of year	$ 1,899	[1]					$ 2,759	[1]				$ 1,589				1,899	[1]	2,759	[1]	1,589
Net earnings																36,044		32,594		23,526
Equity in earnings of commercial bank subsidiary																(36,925)		(33,731)		(24,306)
Increase (decrease) in taxes payable																45		5		(12)
Increase in deferred taxes																(156)		(291)		(178)
Share-based compensation expense																786		1,237		692
Total adjustments																$ (36,250)		$ (32,780)		$ (23,804)

[1] Eliminated in consolidation.

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Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(10) Income Taxes

In December 2017, the Tax Cuts and Jobs Act was signed into law. As a result, the statutory corporate federal tax rate was lowered from 35% to 21%, effective January 1, 2018. In accordance with accounting principles generally accepted in the United States of America, the effect of rate changes are to be recorded as an adjustment to income in the year of enactment. As a result of the Tax Cuts and Jobs Act being signed into law, the Company revalued all deferred taxes to reflect the new statutory corporate tax rate resulting in a $3,603,000 charge to deferred tax expense in the fourth quarter of 2017. This charge included $697,000 related to unrealized losses on available-for-sale securities. Unrealized losses on available-for-sale securities are recognized as a component of equity as other comprehensive income. Management has elected to reclassify the $697,000 expense related to the available-for-sale rate change from retained earnings to other comprehensive income.

The components of the net deferred tax asset are as follows:

	In Thousands
	2019			2018
Deferred tax asset:
Federal	$	7,444			9,046
State		2,240			2,739
		9,684			11,785
Deferred tax liability:
Federal		(2,666	)		(2,167	)
State		(882	)		(717	)
		(3,548	)		(2,884	)
Net deferred tax asset	$	6,136			8,901

The tax effects of each type of significant item that gave rise to deferred tax assets (liabilities) are: 

	In Thousands
	2019			2018
Financial statement allowance for loan losses in excess of tax allowance	$	7,283			6,846
Excess of depreciation deducted for tax purposes over the amounts deducted in the financial statements		(2,976	)		(2,557	)
Financial statement deduction for deferred compensation in excess of deduction for tax purposes		1,193			1,128
Writedown of other real estate not deductible for income tax purposes until sold		157			176
Financial statement income on FHLB stock dividends not recognized for tax purposes		(327	)		(327	)
Unrealized loss (gain) on securities available-for-sale		(245	)		2,726
Equity based compensation		625			469
Other items, net		426			440
Net deferred tax asset	$	6,136			8,901

The components of income tax expense (benefit) are summarized as follows:

	In Thousands
	Federal			State			Total
2019
Current	$	10,134			1,411			11,545
Deferred		(335	)		(143	)		(478	)
Total	$	9,799		$	1,268			11,067
2018
Current	$	8,310			721			9,031
Deferred		(136	)		(112	)		(248	)
Total	$	8,174			609			8,783
2017
Current	$	14,004			2,354			16,358
Deferred		3,205			(209	)		2,996
Total	$	17,209			2,145			19,354

A reconciliation of actual income tax expense of $11,067,000, $8,783,000 and $19,354,000 for the years ended December 31, 2019, 2018 and 2017, respectively, to the “expected” tax expense (computed by applying the statutory rate of 21% for 2019 and 2018 and 34% for 2017 to earnings before income taxes) is as follows:

	In Thousands
	2019			2018			2017
Computed “expected” tax expense	$	9,893			8,689			14,579
State income taxes, net of Federal income tax benefit		1,056			432			1,346
Tax exempt interest, net of interest expense exclusion		(186	)		(226	)		(415	)
Federal income tax rate in excess of statutory rate related to taxable income over $10 million		—			—			399
Earnings on cash surrender value of life insurance		(170	)		(177	)		(292	)
Expenses not deductible for tax purposes		37			16			43
Equity based compensation expense		15			(39	)		16
Revaluation of federal deferred tax assets due to change in tax rates		—			—			3,603
Other		422			88			75
	$	11,067			8,783			19,354

Total income tax expense for 2019, 2018 and 2017, includes $70,000, $170,000 and $67,000 of benefit related to the realized gain and loss, respectively, on sale of securities.

As of December 31, 2019, 2018 and 2017 the Company has not accrued or recognized interest or penalties related to uncertain tax positions. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense.

There were no unrecognized tax benefits at December 31, 2019.

Wilson Bank does not expect that unrecognized tax benefits will significantly increase or decrease within the next 12 months. Included in the balance at December 31, 2019, were approximately $9.7 million of tax positions (deferred tax assets) for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

The Company and Wilson Bank file income tax returns in the United States (“U.S.”), as well as in the State of Tennessee. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2015. The Company’s Federal tax returns have been audited through December 31, 2005 with no changes.

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Note 14 - Employee Benefit Plan

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

(14) Employee Benefit Plan

Wilson Bank has in effect a 401(k) plan (the “401(k) Plan”) which covers eligible employees. To be eligible an employee must have obtained the age of 20.5. The provisions of the 401(k) Plan provide for both employee and employer contributions. For the years ended December 31, 2019, 2018 and 2017, Wilson Bank contributed $2,540,000, $2,383,000 and $2,145,000, respectively, to the 401(k) Plan.

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Note 18 - Equity Incentive Plan

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

(18) Equity Incentive Plan

In April 1999, the stockholders of the Company approved the Wilson Bank Holding Company 1999 Stock Option Plan (the “1999 Stock Option Plan”). The Stock Option Plan provided for the granting of stock options, and authorized the issuance of common stock upon the exercise of such options, for up to 200,000 shares of common stock, to officers and other key employees of the Company and its subsidiary. Furthermore, the Company and its subsidiary could reserve additional shares for issuance under the 1999 Stock Option Plan as needed in order that the aggregate number of shares that could be issued during the term of the 1999 Stock Option Plan was equal to five percent (5%) of the shares of common stock then issued and outstanding. The 1999 Stock Option Plan terminated on April 13, 2009, and no additional rewards may be issued under the 1999 Stock Option Plan. The awards granted under the 1999 Stock Option Plan prior to the plan's termination remained outstanding until exercised or otherwise terminated. As of December 31, 2019, the Company had outstanding no outstanding options under the 1999 Stock Option Plan.

In April 2009, the Company’s shareholders approved the Wilson Bank Holding Company 2009 Stock Option Plan (the “2009 Stock Option Plan”). The 2009 Stock Option Plan was effective as of April 14, 2009. Under the 2009 Stock Option Plan, awards could be in the form of options to acquire common stock of the Company. Subject to adjustment as provided by the terms of the 2009 Stock Option Plan, the maximum number of shares of common stock with respect to which awards could be granted under the 2009 Stock Option Plan was 100,000 shares. The 2009 Stock Option Plan terminated on April 13, 2019, and no additional awards may be issued under the 2009 Stock Option Plan. The awards granted under the 2009 Stock Option Plan prior to the Plan's expiration will remain outstanding until exercised or otherwise terminated. As of December 31, 2019, the Company had outstanding 20,065 options under the 2009 Stock Option Plan with a weighted average exercise price of $32.66.

As of December 31, 2019, the company had outstanding 140,908 stock options with a weighted average exercise price of $40.46 and $32.31. Cash settled stock appreciation rights with weighted average exercise price of $41.75.

In October 2019, the federal banking agencies approved final rules under the Growth Act that exempt a qualifying community bank and its holding company that have community bank leverage ratios, calculated as Tier 1 capital over average total consolidated assets, of greater than 9 percent from the risk-based capital requirements of the capital rules issued under the Dodd-Frank Act. A qualifying community banking organization and its holding company that have chosen the proposed framework are not required to calculate the existing risk-based and leverage capital requirements. Such a bank would also be considered to have met the capital ratio requirements to be well capitalized for the agencies' prompt corrective action rules provided it has a community bank leverage ratio greater than 9 percent.

During the second quarter of 2016, the Company’s shareholders approved the Wilson Bank Holding Company 2016 Equity Incentive Plan, which authorizes awards of up to 750,000 shares of common stock. The 2016 Equity Incentive Plan was approved by the Board of Directors and effective as of January 25, 2016 and approved by the Company’s shareholders on April 12, 2016. On September 26, 2016, the Board of Directors approved an amendment and restatement of the 2016 Equity Incentive Plan (as amended and restated the “2016 Equity Incentive Plan”) to make clear that directors who are not also employees of the Company may be awarded stock appreciation rights. The primary purpose of the 2016 Equity Incentive Plan is to promote the interest of the Company and its shareholders by, among other things, (i) attracting and retaining key officers, employees and directors of, and consultants to, the Company and its subsidiaries and affiliates, (ii) motivating those individuals by means of performance-related incentives to achieve long-range performance goals, (iii) enabling such individuals to participate in the long-term growth and financial success of the Company, (iv) encouraging ownership of stock in the Company by such individuals, and (v) linking their compensation to the long-term interests of the Company and its shareholders. Except for certain limitations, awards can be in the form of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted shares and restricted share units, performance awards and other stock-based awards. As of December 31, 2019, the Company had 467,271 shares remaining available for issuance under the 2016 Equity Incentive Plan. As of  December 31, 2019, the Company had outstanding 120,843 stock options with a weighted average exercise price of $41.75 and 132,131 cash-settled stock appreciation rights each with a weighted average exercise price of $41.97.

As of December 31, 2019 the company had outstanding 140,908 stock options with a weighted average exercise price of $40.46 and 132,131 cash settled stock appreciation rights with a weighted average exercise price of $41.97.

The fair value of each stock option and cash-settled SAR grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 2019, 2018 and 2017:

	2019			2018			2017
Expected dividends		1.60	%		1.22	%		1.27	%
Expected term (in years)		7.14			9.35			7.79
Expected stock price volatility		25	%		24	%		26	%
Risk-free rate		1.90	%		2.83	%		2.23	%

The expected stock price volatility is based on historical volatility adjusted for consideration of other relevant factors. The risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield and forfeiture rate assumptions are based on the Company’s history and expectation of dividend payouts and forfeitures.

A summary of the stock option and cash-settled SAR activity for 2019, 2018 and 2017 is as follows:

	2019					2018					2017
				Weighted Average					Weighted Average					Weighted Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Outstanding at beginning of year		277,820		$	40.11		285,780		$	39.31		183,747		$	38.09
Granted		17,833			51.16		21,666			46.59		112,333			40.87
Exercised		(22,614	)		35.78		(22,460	)		37.07		(5,078	)		29.65
Forfeited or expired		0			0		(7,166	)		37.53		(5,222	)		39.22
Outstanding at end of year		273,039		$	41.19		277,820		$	40.11		285,780		$	39.31
Options and cash-settled SARs exercisable at year end		122,932		$	40.19		94,951		$	39.14		42,256		$	36.66

The weighted average fair value at the grant date of options and cash-settled SARs granted during the years 2019, 2018 and 2017 was $13.43, $14.41 and $12.59, respectively. The total intrinsic value of options and cash-settled SARs exercised during the years 2019, 2018 and 2017 was $369,000, $200,000 and $62,000, respectively.

The following table summarizes information about outstanding and exercisable stock options and cash-settled SARs at   December 31, 2019:

	Options and Cash-Settled SARs Outstanding						Options and Cash-Settled SARs Exercisable
					Weighted Average						Weighted Average
Range of	Number				Remaining		Number				Remaining
Exercise	Outstanding at		Weighted Average		Contractual Term (In		Exercisable at		Weighted Average		Contractual Term (In
Prices	12/31/19		Exercise Price		Years)		12/31/19		Exercise Price		Years)
$28.00 - $38.00		20,065	$	32.66		2.98		8,487	$	32.35		2.78
$38.01 - $51.25		252,974	$	41.86		6.68		114,445	$	40.77		5.74
		273,039						122,932
Aggregate intrinsic value (in thousands)	$	3,703					$	1,790

As of December 31, 2019, there was $1,622,000 of total unrecognized cost related to non-vested share-based compensation arrangements granted under the Company’s equity incentive plans. The cost is expected to be recognized over a weighted-average period of 2.51 years.

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Note 8 - Federal Home Loan Bank Advances

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Federal Home Loan Bank Advances, Disclosure [Text Block]

(8) Federal Home Loan Bank Advances

At December 31, 2019 the Company had $23,613,000 in outstanding advances from the FHLB of Cincinnati.  Each advance is amortized and payable monthly with a prepayment penalty for fixed rate advances. The weighted average rate of the total borrowings at December 31, 2019 was 2.67%.  The advances are collateralized by a blanket security agreement which includes the Banks 1-4 family loans.  The Company’s additional borrowing capacity was $266,712,000 at December 31, 2019.

Required future principal payments on Federal Home Loan Bank borrowings are as follows

	(In Thousands)
Maturity	Total
2020	$	8,250
2021		5,828
2022		4,658
2023		3,929
2024		948
Thereafter		—
Total		23,613

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Consolidated Statements of Cash Flows (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Change in fair value of securities available-for-sale, taxes	$ 2,971	$ 1,228	$ 338

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Note 4 - Restricted Equity Securities

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Restricted Equity Securities [Text Block]

(4) Restricted Equity Securities

Restricted equity securities consists of stock of the FHLB of Cincinnati amounting to $4,680,000 and $3,012,000 at December 31, 2019 and 2018, respectively. The stock can be sold back only at par or a value as determined by the issuing institution and only to the respective financial institution or to another member institution. These securities are recorded at cost.

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Consolidated Statements of Changes in Stockholders' Equity (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash dividends declared, per share (in dollars per share)	$ 1.10	$ 0.90	$ 0.65
Issuance of shares of common stock pursuant to dividend reinvestment plan, shares (in shares)	179,199	161,514	125,960
Issuance of shares of common stock, shares (in shares)	21,764	11,585	5,078
Net change in fair value of available-for-sale securities during the period, taxes	$ 2,971	$ 1,228	$ 338
Repurchase of common shares (in shares)	31,774

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Note 3 - Debt and Equity Securities (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Marketable Securities [Table Text Block]

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Estimated Market
	Amortized Cost		Gains		Losses		Value
Government-sponsored enterprises (GSEs)	$	59,735		48		204		59,579
Mortgage-backed securities		265,648		2,300		635		267,313
Asset-backed securities		27,531		1		303		27,229
Obligations of states and political subdivisions		67,293		559		828		67,024
	$	420,207		2,908		1,970		421,145

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Estimated Market
	Amortized Cost		Gains		Losses		Value
Government-sponsored enterprises (GSEs)	$	71,446		—		2,979		68,467
Mortgage-backed securities		152,375		9		4,874		147,510
Asset-backed securities		22,534		10		844		21,700
Obligations of states and political subdivisions		49,328		22		1,775		47,575
	$	295,683		41		10,472		285,252

Investments Classified by Contractual Maturity Date [Table Text Block]

	In Thousands
Securities Available-For-Sale	Amortized Cost		Estimated Market Value
Due in one year or less	$	472		471
Due after one year through five years		18,332		18,319
Due after five years through ten years		56,626		56,622
Due after ten years		51,598		51,191
		127,028		126,603
Mortgage and asset-backed securities		293,179		294,542
	$	420,207		421,145

Schedule of Realized Gain (Loss) [Table Text Block]

	In Thousands
	2019			2018			2017
Gross proceeds	$	37,325			39,857			35,555
Gross realized gains	$	75			102			76
Gross realized losses		(343	)		(752	)		(251	)
Net realized gains (losses)	$	(268	)		(650	)		(175	)

Schedule of Unrealized Loss on Investments [Table Text Block]

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2019	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
GSEs	$	16,507	$	114		5	$	24,658	$	90		9	$	41,165	$	204
Mortgage-backed securities		45,862		182		21		56,917		453		52		102,779		635
Asset-backed securities		17,807		161		10		7,317		142		4		25,124		303
Obligations of states and political subdivisions		30,423		783		26		3,858		45		10		34,281		828
	$	110,599	$	1,240		62	$	92,750	$	730		75	$	203,349	$	1,970

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2018	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
GSEs	$	—	$	—		—	$	68,467	$	2,979		28	$	68,467	$	2,979
Mortgage-backed securities		8,651		64		10		137,457		4,810		94		146,108		4,874
Asset-backed securities		—		—		—		20,597		844		14		20,597		844
Obligations of states and political subdivisions		4,064		26		6		39,841		1,749		94		43,905		1,775
	$	12,715	$	90		16	$	266,362	$	10,382		230	$	279,077	$	10,472

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Note 23 - Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Quarterly Financial Information [Text Block]

(23) Quarterly Financial Data (Unaudited)

Selected quarterly results of operations for the four quarters ended December 31 are as follows:

	(In Thousands, except per share data)
	2019								2018								2017
	Fourth		Third		Second		First		Fourth		Third		Second		First		Fourth		Third		Second		First
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Interest income	$	29,897		30,329		29,567		28,284	$	27,585		26,298		25,548		24,094	$	23,487		22,904		22,871		21,758
Interest expense		5,522		5,991		5,923		5,211		4,606		3,656		3,097		2,659		2,439		2,332		2,094		2,024
Net interest income		24,375		24,338		23,644		23,073		22,979		22,642		22,451		21,435		21,048		20,572		20,777		19,734
Provision for loan losses		686		167		154		1,033		1,097		1,088		1,090		1,023		436		436		420		389
Earnings before income taxes		10,222		13,556		12,451		10,882		10,708		10,718		9,798		10,153		10,694		10,438		11,386		10,362
Net earnings		7,972		10,266		9,516		8,290		9,833		7,972		7,309		7,480		3,574		6,469		6,988		6,495
Basic earnings per common share		0.74		0.95		0.89		0.77		0.93		0.75		0.69		0.71		0.34		0.62		0.67		0.63
Diluted earnings per common share		0.74		0.95		0.89		0.77		0.92		0.75		0.69		0.71		0.34		0.62		0.67		0.63

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Consolidated Statements of Earnings - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest income:
Interest and fees on loans	$ 105,783,000	$ 94,917,000	$ 83,120,000
Interest and dividends on securities:
Taxable securities	8,559,000	6,158,000	5,397,000
Exempt from Federal income taxes	773,000	1,020,000	1,208,000
Interest on loans held for sale	325,000	184,000	324,000
Interest on Federal funds sold	275,000	83,000	97,000
Interest on interest bearing deposits	2,164,000	979,000	723,000
Interest and dividends on restricted equity securities	198,000	184,000	151,000
Total interest income	118,077,000	103,525,000	91,020,000
Interest expense:
Interest on negotiable order of withdrawal accounts	2,311,000	1,823,000	1,308,000
Interest on money market accounts and other savings accounts	6,855,000	4,231,000	2,211,000
Interest on certificates of deposit and individual retirement accounts	12,896,000	7,944,000	5,353,000
Interest on securities sold under repurchase agreements	0	16,000	9,000
Interest on Federal funds purchased	4,000	4,000	8,000
Interest on Federal Home Loan Bank advances	581,000	0	0
Total interest expense	22,647,000	14,018,000	8,889,000
Net interest income before provision for loan losses	95,430,000	89,507,000	82,131,000
Provision for loan losses	2,040,000	4,298,000	1,681,000
Net interest income after provision for loan losses	93,390,000	85,209,000	80,450,000
Non-interest income	28,349,000	25,248,000	22,821,000
Non-interest expense	(74,628,000)	(69,080,000)	(60,391,000)
Earnings before income taxes	47,111,000	41,377,000	42,880,000
Income taxes	11,067,000	8,783,000	19,354,000
Net earnings	$ 36,044,000	$ 32,594,000	$ 23,526,000
Basic earnings per common share (in dollars per share)	$ 3.36	$ 3.09	$ 2.26
Diluted earnings per common share (in dollars per share)	$ 3.35	$ 3.08	$ 2.26
Weighted average common shares outstanding:
Basic (in shares)	10,743,269	10,564,172	10,407,211
Diluted (in shares)	10,761,467	10,572,221	10,412,536

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Note 23 - Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Quarterly Financial Information [Table Text Block]

	(In Thousands, except per share data)
	2019								2018								2017
	Fourth		Third		Second		First		Fourth		Third		Second		First		Fourth		Third		Second		First
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Interest income	$	29,897		30,329		29,567		28,284	$	27,585		26,298		25,548		24,094	$	23,487		22,904		22,871		21,758
Interest expense		5,522		5,991		5,923		5,211		4,606		3,656		3,097		2,659		2,439		2,332		2,094		2,024
Net interest income		24,375		24,338		23,644		23,073		22,979		22,642		22,451		21,435		21,048		20,572		20,777		19,734
Provision for loan losses		686		167		154		1,033		1,097		1,088		1,090		1,023		436		436		420		389
Earnings before income taxes		10,222		13,556		12,451		10,882		10,708		10,718		9,798		10,153		10,694		10,438		11,386		10,362
Net earnings		7,972		10,266		9,516		8,290		9,833		7,972		7,309		7,480		3,574		6,469		6,988		6,495
Basic earnings per common share		0.74		0.95		0.89		0.77		0.93		0.75		0.69		0.71		0.34		0.62		0.67		0.63
Diluted earnings per common share		0.74		0.95		0.89		0.77		0.92		0.75		0.69		0.71		0.34		0.62		0.67		0.63

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Note 2 - Loans and Allowance for Loan Losses - Loans to Related Parties (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance	$ 13,019,000	$ 7,759,000
New loans and renewals during the year	31,548,000	17,278,000
Repayments (including loans paid by renewal) during the year	(31,689,000)	(12,018,000)
Balance	$ 12,878,000	$ 13,019,000

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Note 12 - Financial Instruments with Off-balance-sheet Risk (Details Textual) - Standby Letters of Credit [Member]	12 Months Ended
	Dec. 31, 2019 USD ($)
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 73,000,000
Minimum [Member]
Guarantee Obligations, Term 1	1 year
Maximum [Member]
Guarantee Obligations, Term 1	2 years

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Note 7 - Deposits - Principal Maturities if Certificates of Deposit and Individual Retirement Accounts (Details) $ in Thousands	Dec. 31, 2019 USD ($)
2020	$ 326,212
2021	160,368
2022	72,578
2023	51,327
2024	21,258
Thereafter	250
	$ 631,993

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Note 6 - Acquired Intangible Assets and Goodwill (Details Textual)	Dec. 31, 2005
Business Acquisition, Percentage of Voting Interests Acquired	100.00%

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Note 10 - Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current Federal	$ 10,134,000	$ 8,310,000	$ 14,004,000
Current State	1,411,000	721,000	2,354,000
Current	11,545,000	9,031,000	16,358,000
Deferred Federal	(335,000)	(136,000)	3,205,000
Deferred State	(143,000)	(112,000)	(209,000)
Deferred	(478,000)	(248,000)	2,996,000
Total Federal	9,799,000	8,174,000	17,209,000
Total State	1,268,000	609,000	2,145,000
	11,067,000	8,783,000	19,354,000
Current	11,545,000	9,031,000	16,358,000
Deferred	$ (478,000)	$ (248,000)	$ 2,996,000

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Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Tax Cuts and Jobs Act, Change in Tax Rate, Deferred Tax Asset, Income Tax Expense	$ 3,603,000	$ 0	$ 0	$ 3,603,000
Tax Cuts and Jobs Act, Reclassification from Retained Earnings to AOCI, Tax Effect	697,000
Income Tax Expense (Benefit), Total		$ 11,067,000	$ 8,783,000	$ 19,354,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%	34.00%	34.00%
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax, Total		$ (70,000)	$ (170,000)	$ (67,000)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 0	0	$ 0	$ 0
Unrecognized Tax Benefits, Ending Balance		0
Deferred Tax Assets, Gross, Total		$ 9,700,000
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Open Tax Year		2015 2016 2017 2018 2019
State and Local Jurisdiction [Member]
Open Tax Year		2015 2016 2017 2018 2019

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Note 15 - Dividend Reinvestment Plan (Details Textual) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Issued During Period, Shares, Dividend Reinvestment Plan	179,199	161,514	125,960

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Note 21 - Disclosures About Fair Value of Financial Instruments - Additional Information on Assets Measured on a Nonrecurring Basis (Details) - Fair Value, Nonrecurring [Member] - Fair Value, Inputs, Level 3 [Member] - Measurement Input, Discount Rate [Member] - Weighted Average [Member]	Dec. 31, 2019	[1]
Impaired loans	0.10
Other real estate owned	0.10

[1] The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

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Note 22 - Wilson Bank Holding Company - Parent Company Financial Information - Balance Sheets (Details) (Parentheticals) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Common stock, par value (in dollars per share)	$ 2.00	$ 2.00
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	10,792,999	10,623,810
Common stock, shares outstanding (in shares)	10,792,999	10,623,810
Net unrealized losses on available-for-sale securities, income taxes	$ 245	$ 2,726
Parent Company [Member]
Common stock, par value (in dollars per share)	$ 2.00	$ 2.00
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	10,792,999	10,623,810
Common stock, shares outstanding (in shares)	10,792,999	10,623,810
Net unrealized losses on available-for-sale securities, income taxes	$ 245	$ 2,726

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Note 18 - Equity Incentive Plan (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]

	2019			2018			2017
Expected dividends		1.60	%		1.22	%		1.27	%
Expected term (in years)		7.14			9.35			7.79
Expected stock price volatility		25	%		24	%		26	%
Risk-free rate		1.90	%		2.83	%		2.23	%

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	2019					2018					2017
				Weighted Average					Weighted Average					Weighted Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Outstanding at beginning of year		277,820		$	40.11		285,780		$	39.31		183,747		$	38.09
Granted		17,833			51.16		21,666			46.59		112,333			40.87
Exercised		(22,614	)		35.78		(22,460	)		37.07		(5,078	)		29.65
Forfeited or expired		0			0		(7,166	)		37.53		(5,222	)		39.22
Outstanding at end of year		273,039		$	41.19		277,820		$	40.11		285,780		$	39.31
Options and cash-settled SARs exercisable at year end		122,932		$	40.19		94,951		$	39.14		42,256		$	36.66

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

	Options and Cash-Settled SARs Outstanding						Options and Cash-Settled SARs Exercisable
					Weighted Average						Weighted Average
Range of	Number				Remaining		Number				Remaining
Exercise	Outstanding at		Weighted Average		Contractual Term (In		Exercisable at		Weighted Average		Contractual Term (In
Prices	12/31/19		Exercise Price		Years)		12/31/19		Exercise Price		Years)
$28.00 - $38.00		20,065	$	32.66		2.98		8,487	$	32.35		2.78
$38.01 - $51.25		252,974	$	41.86		6.68		114,445	$	40.77		5.74
		273,039						122,932
Aggregate intrinsic value (in thousands)	$	3,703					$	1,790

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Note 10 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	In Thousands
	2019			2018
Deferred tax asset:
Federal	$	7,444			9,046
State		2,240			2,739
		9,684			11,785
Deferred tax liability:
Federal		(2,666	)		(2,167	)
State		(882	)		(717	)
		(3,548	)		(2,884	)
Net deferred tax asset	$	6,136			8,901

	In Thousands
	2019			2018
Financial statement allowance for loan losses in excess of tax allowance	$	7,283			6,846
Excess of depreciation deducted for tax purposes over the amounts deducted in the financial statements		(2,976	)		(2,557	)
Financial statement deduction for deferred compensation in excess of deduction for tax purposes		1,193			1,128
Writedown of other real estate not deductible for income tax purposes until sold		157			176
Financial statement income on FHLB stock dividends not recognized for tax purposes		(327	)		(327	)
Unrealized loss (gain) on securities available-for-sale		(245	)		2,726
Equity based compensation		625			469
Other items, net		426			440
Net deferred tax asset	$	6,136			8,901

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	In Thousands
	Federal			State			Total
2019
Current	$	10,134			1,411			11,545
Deferred		(335	)		(143	)		(478	)
Total	$	9,799		$	1,268			11,067
2018
Current	$	8,310			721			9,031
Deferred		(136	)		(112	)		(248	)
Total	$	8,174			609			8,783
2017
Current	$	14,004			2,354			16,358
Deferred		3,205			(209	)		2,996
Total	$	17,209			2,145			19,354

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	In Thousands
	2019			2018			2017
Computed “expected” tax expense	$	9,893			8,689			14,579
State income taxes, net of Federal income tax benefit		1,056			432			1,346
Tax exempt interest, net of interest expense exclusion		(186	)		(226	)		(415	)
Federal income tax rate in excess of statutory rate related to taxable income over $10 million		—			—			399
Earnings on cash surrender value of life insurance		(170	)		(177	)		(292	)
Expenses not deductible for tax purposes		37			16			43
Equity based compensation expense		15			(39	)		16
Revaluation of federal deferred tax assets due to change in tax rates		—			—			3,603
Other		422			88			75
	$	11,067			8,783			19,354

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Note 20 - Mortgage Banking Derivatives - Net Gains (Losses) Relating to Free-standing Derivative Instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Forward Contracts [Member]
Net gains (losses)	$ 65	$ (88)
Interest Rate Contract [Member]
Net gains (losses)	$ (7)	$ 335

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Note 4 - Restricted Equity Securities (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Federal Home Loan Bank Certificates and Obligations (FHLB) [Member]
Restricted Investments	$ 4,680,000	$ 3,012,000

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Note 16 - Regulatory Matters and Restrictions on Dividends - Summary of Company's and Wilson Banks Actual Capital Amounts and Ratios (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Total capital to risk weighted assets actual amount	$ 360,645	$ 326,099
Total capital to risk weighted assets actual ratio	15.00%	14.10%
Total capital to risk weighted assets regulatory minimum capital requirement amount	$ 253,215	$ 227,974
Total capital to risk weighted assets regulatory minimum capital requirement ratio (	10.50%	9.875%	9.25%	8.625%
Total capital to risk weighted assets regulatory minimum to be well capitalized amount	$ 241,157	$ 230,860
Total capital to risk weighted assets regulatory minimum to be well capitalized ratio	10.00%	10.00%
Tier 1 capital to risk weighted assets actual amount	$ 331,485	$ 298,566
Tier 1 capital to risk weighted assets actual ratio	13.70%	12.90%
Tier 1 capital to risk weighted assets regulatory minimum capital requirement amount	$ 204,984	$ 181,802
Tier 1 capital to risk weighted assets regulatory minimum capital requirement ratio	8.50%	7.875%	7.25%	6.625%
Tier 1 capital to risk weighted assets regulatory minimum to be well capitalized amount	$ 144,694	$ 138,516
Tier 1 capital to risk weighted assets regulatory minimum to be well capitalized ratio	6.00%	6.00%
Common equity Tier 1 capital to risk weighted assets actual amount	$ 331,485	$ 298,566
Common equity Tier 1 capital to risk weighted assets actual ratio	13.70%	12.90%
Common equity Tier 1 capital to risk weighted assets regulatory minimum capital requirement amount	$ 168,810	$ 147,173
Common equity Tier 1 capital to risk weighted assets regulatory minimum capital requirement ratio	7.00%	6.375%	5.75%	5.125%
Tier 1 capital to average assets actual amount	$ 331,485	$ 298,566
Tier 1 capital to average assets actual ratio	12.40%	12.30%
Tier 1 capital to average assets regulatory minimum capital requirement amount	$ 106,565	$ 97,022
Tier 1 capital to average assets regulatory minimum capital requirement ratio (as a percent)	4.00%	4.00%
Common equity Tier 1 capital to risk weighted assets regulatory minimum capital requirement amount	$ 168,810	$ 147,173
Common Equity Tier 1 Ratio	7.00%	6.375%	5.75%	5.125%
Tier 1 Capital to Risk Weighted Assets Ratio	8.50%	7.875%	7.25%	6.625%
Total Capital to Risk Weighted Assets Ratio	10.50%	9.875%	9.25%	8.625%
Parent Company [Member]
Total capital to risk weighted assets actual amount	$ 359,576	$ 323,852
Total capital to risk weighted assets actual ratio	14.90%	14.00%
Total capital to risk weighted assets regulatory minimum capital requirement amount	$ 252,675	$ 227,915
Total capital to risk weighted assets regulatory minimum capital requirement ratio (	10.50%	9.875%
Total capital to risk weighted assets regulatory minimum to be well capitalized amount	$ 240,643	$ 230,800
Total capital to risk weighted assets regulatory minimum to be well capitalized ratio	10.00%	10.00%
Tier 1 capital to risk weighted assets actual amount	$ 330,416	$ 296,319
Tier 1 capital to risk weighted assets actual ratio	13.70%	12.80%
Tier 1 capital to risk weighted assets regulatory minimum capital requirement amount	$ 204,547	$ 181,756
Tier 1 capital to risk weighted assets regulatory minimum capital requirement ratio	8.50%	7.875%
Tier 1 capital to risk weighted assets regulatory minimum to be well capitalized amount	$ 192,515	$ 184,641
Tier 1 capital to risk weighted assets regulatory minimum to be well capitalized ratio	8.00%	8.00%
Common equity Tier 1 capital to risk weighted assets actual amount	$ 330,416	$ 296,319
Common equity Tier 1 capital to risk weighted assets actual ratio	13.70%	12.80%
Common equity Tier 1 capital to risk weighted assets regulatory minimum capital requirement amount	$ 168,451	$ 147,136
Common equity Tier 1 capital to risk weighted assets regulatory minimum capital requirement ratio	7.00%	6.375%
Common equity Tier 1 capital to risk weighted assets regulatory minimum to be well capitalized amount	$ 156,418	$ 150,021
Common equity Tier 1 capital to risk weighted assets regulatory minimum to be well capitalized ratio	6.50%	6.50%
Tier 1 capital to average assets actual amount	$ 330,416	$ 296,319
Tier 1 capital to average assets actual ratio	11.90%	11.90%
Tier 1 capital to average assets regulatory minimum capital requirement amount	$ 110,764	$ 99,373
Tier 1 capital to average assets regulatory minimum capital requirement ratio (as a percent)	4.00%	4.00%
Tier 1 capital to average assets regulatory minimum to be well capitalized amount	$ 138,454	$ 124,217
Tier 1 capital to average assets regulatory minimum to be well capitalized ratio (as a percent)	5.00%	5.00%
Common equity Tier 1 capital to risk weighted assets regulatory minimum capital requirement amount	$ 168,451	$ 147,136
Common Equity Tier 1 Ratio	7.00%	6.375%
Tier 1 Capital to Risk Weighted Assets Ratio	8.50%	7.875%
Total Capital to Risk Weighted Assets Ratio	10.50%	9.875%

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Note 2 - Loans and Allowance for Loan Losses - Age Analysis of Past Due Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Past Due	$ 13,792	$ 10,890
Current	2,079,250	2,039,309
Ending balance	2,093,042	2,050,199
Recorded Investment Greater Than 90 Days and Accruing	2,507	1,209
Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	7,583	6,310
Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	1,092	1,321
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	5,117	3,259
Real Estate Portfolio Segment [Member]
Ending balance	1,929,325	1,911,886
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Past Due	7,895	6,218
Current	503,355	454,474
Ending balance	511,250	460,692
Recorded Investment Greater Than 90 Days and Accruing	1,387	920
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	4,760	3,258
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	799	1,092
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	2,336	1,868
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Past Due	0	0
Current	97,104	134,613
Ending balance	97,104	134,613
Recorded Investment Greater Than 90 Days and Accruing	0	0
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	0	0
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	0	0
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	0	0
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Past Due	2,161	1,595
Current	791,218	699,460
Ending balance	793,379	701,055
Recorded Investment Greater Than 90 Days and Accruing	0	72
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	500	312
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	0	109
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	1,661	1,174
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Past Due	2,276	1,625
Current	422,909	516,620
Ending balance	425,185	518,245
Recorded Investment Greater Than 90 Days and Accruing	594	32
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	1,535	1,567
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	147	26
Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	594	32
Real Estate Portfolio Segment [Member] | Farmland [Member]
Past Due	65	73
Current	19,203	23,998
Ending balance	19,268	24,071
Recorded Investment Greater Than 90 Days and Accruing	8	21
Real Estate Portfolio Segment [Member] | Farmland [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	57	43
Real Estate Portfolio Segment [Member] | Farmland [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	0	9
Real Estate Portfolio Segment [Member] | Farmland [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	8	21
Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Past Due	100	333
Current	10,660	10,864
Ending balance	10,760	11,197
Recorded Investment Greater Than 90 Days and Accruing	100	0
Real Estate Portfolio Segment [Member] | Second Mortgages [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	0	333
Real Estate Portfolio Segment [Member] | Second Mortgages [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	0	0
Real Estate Portfolio Segment [Member] | Second Mortgages [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	100	0
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Past Due	515	342
Current	71,864	61,671
Ending balance	72,379	62,013
Recorded Investment Greater Than 90 Days and Accruing	372	45
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	143	297
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	0	0
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	372	45
Commercial Portfolio Segment [Member]
Past Due	101	117
Current	98,164	78,128
Ending balance	98,265	78,245
Recorded Investment Greater Than 90 Days and Accruing	0	24
Commercial Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	71	93
Commercial Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	30	0
Commercial Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	0	24
Agricultural Installment and Other Portfolio Segment [Member]
Past Due	679	587
Current	64,773	59,481
Ending balance	65,452	60,068
Recorded Investment Greater Than 90 Days and Accruing	46	95
Agricultural Installment and Other Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past Due	517	407
Agricultural Installment and Other Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past Due	116	85
Agricultural Installment and Other Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past Due	$ 46	$ 95

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Note 3 - Debt and Equity Securities - Debt and Equity Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Available-for-sale, amortized cost	$ 420,207	$ 295,683
Securities, Available-for-sale, Gross Unrealized Gains	2,908	41
Securities, Available-for-sale, Gross Unrealized Losses	1,970	10,472
Debt Securities, Available-for-sale, Total	421,145	285,252
US Government-sponsored Enterprises Debt Securities [Member]
Available-for-sale, amortized cost	59,735	71,446
Securities, Available-for-sale, Gross Unrealized Gains	48	0
Securities, Available-for-sale, Gross Unrealized Losses	204	2,979
Debt Securities, Available-for-sale, Total	59,579	68,467
Collateralized Mortgage Backed Securities [Member]
Available-for-sale, amortized cost	265,648	152,375
Securities, Available-for-sale, Gross Unrealized Gains	2,300	9
Securities, Available-for-sale, Gross Unrealized Losses	635	4,874
Debt Securities, Available-for-sale, Total	267,313	147,510
Asset-backed Securities [Member]
Available-for-sale, amortized cost	27,531	22,534
Securities, Available-for-sale, Gross Unrealized Gains	1	10
Securities, Available-for-sale, Gross Unrealized Losses	303	844
Debt Securities, Available-for-sale, Total	27,229	21,700
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale, amortized cost	67,293	49,328
Securities, Available-for-sale, Gross Unrealized Gains	559	22
Securities, Available-for-sale, Gross Unrealized Losses	828	1,775
Debt Securities, Available-for-sale, Total	$ 67,024	$ 47,575

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Note 18 - Equity Incentive Plan - Summary of Stock Option Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Shares Exercised (in shares)	(21,764)	(11,585)	(5,078)
Shares Outstanding (in shares)	140,908
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 40.46
Stock Options and Stock Appreciation Rights [Member]
Shares Outstanding (in shares)	277,820	285,780	183,747
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 40.11	$ 39.31	$ 38.09
Shares Granted (in shares)	17,833	21,666	112,333
Granted, Weighted Average Exercise Price (in dollars per share)	$ 51.16	$ 46.59	$ 40.87
Shares Exercised (in shares)	(22,614)	(22,460)	(5,078)
Exercised, Weighted Average Exercise Price (in dollars per share)	$ 35.78	$ 37.07	$ 29.65
Shares Forfeited or expired (in shares)	0	(7,166)	(5,222)
Forfeited or expired, Weighted Average Exercise Price (in dollars per share)	$ 0	$ 37.53	$ 39.22
Shares Outstanding (in shares)	273,039	277,820	285,780
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 41.19	$ 40.11	$ 39.31
Options and cash-settled SARs Shares exercisable at year end (in shares)	122,932	94,951	42,256
Options and cash-settled SARs exercisable at year end, Weighted Average Exercise Price (in dollars per share)	$ 40.19	$ 39.14	$ 36.66

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Note 12 - Financial Instruments with Off-balance-sheet Risk

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Financial Instruments Disclosure [Text Block]

(12) Financial Instruments with Off-Balance-Sheet Risk

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

	In Thousands
	Contract or Notional Amount
	2019		2018
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit	$	632,686		582,897
Standby letters of credit		72,901		80,165
Total	$	705,587		663,062

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally represent future cash requirements. The Company evaluates each customer's credit-worthiness on a case-by-case basis. The amount of collateral, if deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral normally consists of real property.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Most guarantees extend from one to two years. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The fair value of standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the likelihood of the counterparties drawing on such financial instruments and the present creditworthiness of such counterparties. Such commitments have been made on terms which are competitive in the markets in which the Company operates; thus, the fair value of standby letters of credit equals the carrying value for the purposes of this disclosure. The maximum potential amount of future payments that the Company could be required to make under the guarantees totaled $73,000,000 at December 31, 2019.

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Note 16 - Regulatory Matters and Restrictions on Dividends

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Restrictions on Dividends, Loans and Advances [Text Block]

(16) Regulatory Matters and Restrictions on Dividends

The Company and Wilson Bank are subject to regulatory capital requirements administered by the FDIC, the Federal Reserve and the Tennessee Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Wilson Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Wilson Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Wilson Bank to maintain minimum amounts and ratios (set forth in the following table) of total, Tier 1 and common equity Tier 1 capital (each as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2019 and 2018, that the Company and Wilson Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2019, the most recent notification from the FDIC categorized Wilson Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed Wilson Bank’s category. To be categorized as well capitalized for purposes of prompt corrective action regulations as of December 31, 2019 and 2018, an institution must have maintained minimum capital ratios as set forth in the following tables and not have been subject to a written agreement, order or directive to maintain a higher capital level. The Company’s and Wilson Bank’s actual capital amounts and ratios as of December 31, 2019 and 2018, are presented in the following tables:

						Regulatory Minimum Capital Requirement					Regulatory Minimum To Be Well
	Actual					with Basel III Capital Conservation Buffer					Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2019
Total capital to risk weighted assets:
Consolidated	$	360,645		15.0	%	$	253,215		10.5	%	$	241,157		10.0	%
Wilson Bank		359,576		14.9			252,675		10.5			240,643		10.0
Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			204,984		8.5			144,694		6.0
Wilson Bank		330,416		13.7			204,547		8.5			192,515		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			168,810		7.0			N/A		N/A
Wilson Bank		330,416		13.7			168,451		7.0			156,418		6.5
Tier 1 capital to average assets:
Consolidated		331,485		12.4			106,565		4.0			N/A		N/A
Wilson Bank		330,416		11.9			110,764		4.0			138,454		5.0

						Regulatory Minimum Capital Requirement					Regulatory Minimum To Be Well
	Actual					with Basel III Capital Conservation Buffer					Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2018
Total capital to risk weighted assets:
Consolidated	$	326,099		14.1	%	$	227,974		9.875	%	$	230,860		10.0	%
Wilson Bank		323,852		14.0			227,915		9.875			230,800		10.0
Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			181,802		7.875			138,516		6.0
Wilson Bank		296,319		12.8			181,756		7.875			184,641		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			147,173		6.375			N/A		N/A
Wilson Bank		296,319		12.8			147,136		6.375			150,021		6.5
Tier 1 capital to average assets:
Consolidated		298,566		12.3			97,022		4.0			N/A		N/A
Wilson Bank		296,319		11.9			99,373		4.0			124,217		5.0

In July 2013, the Federal banking regulators, in response to the Statutory Requirements of The Dodd-Frank Wall Street Reform and Consumer Protection Act, adopted new regulations implementing the Basel Capital Adequacy Accord (“Basel III”) and the related minimum capital ratios. The new capital requirements were effective beginning January 1, 2015. The guidelines under Basel III established a 2.5% capital conservation buffer requirement that was phased in over four years beginning January 1, 2016. The buffer is related to Risk Weighted Assets. In order to avoid limitations on capital distributions such as dividends and certain discretionary bonus payments to executive officers, a banking organization must maintain capital ratios above the minimum ratios including the buffer. The Basel III minimum requirements after giving effect to the buffer as of January 1, of each year presented are as follows:

	2016			2017			2018			2019
Common Equity Tier 1 Ratio		5.125	%		5.75	%		6.375	%		7.0	%
Tier 1 Capital to Risk Weighted Assets Ratio		6.625	%		7.25	%		7.875	%		8.5	%
Total Capital to Risk Weighted Assets Ratio		8.625	%		9.25	%		9.875	%		10.5	%

The requirements of Basel III also place additional restrictions on the inclusion of deferred tax assets and capitalized mortgage servicing rights as a percentage of Tier 1 Capital. In addition, the risk weights assigned to certain assets such as past due loans and certain real estate loans have been increased.

The requirements of Basel III allow banks and bank holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and Wilson Bank have opted out of this requirement.

In 2018, the U.S. Congress passed, and the President signed into law, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (the “Growth Act”). The Growth Act, among other things, requires the federal banking agencies to issue regulations allowing community bank organizations with total assets of less than $10.0 billion in assets and limited amounts of certain assets and off-balance sheet exposures to access a simpler capital regime focused on a bank’s Tier 1 leverage capital levels rather than risk-based capital levels that are the focus of the capital rules issued under the Dodd-Frank Act implementing Basel III.

In October 2019, the federal banking agencies approved final rules under the Growth Act that exempt a qualifying community bank and its holding company that have community bank leverage ratios, calculated as Tier 1 capital over average total consolidated assets, of greater than 9 percent from the risk-based capital requirements of the capital rules issued under the Dodd-Frank Act. A qualifying community banking organization and its holding company that have chosen the proposed framework are not required to calculate the existing risk-based and leverage capital requirements. Such a bank would also be considered to have met the capital ratio requirements to be well capitalized for the agencies' prompt corrective action rules provided it has a community bank leverage ratio greater than 9 percent.

The Growth Act also raised the eligibility for the small bank holding company policy statement to $3 billion of assets from $1 billion.

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Note 16 - Regulatory Matters and Restrictions on Dividends (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

						Regulatory Minimum Capital Requirement					Regulatory Minimum To Be Well
	Actual					with Basel III Capital Conservation Buffer					Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2019
Total capital to risk weighted assets:
Consolidated	$	360,645		15.0	%	$	253,215		10.5	%	$	241,157		10.0	%
Wilson Bank		359,576		14.9			252,675		10.5			240,643		10.0
Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			204,984		8.5			144,694		6.0
Wilson Bank		330,416		13.7			204,547		8.5			192,515		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		331,485		13.7			168,810		7.0			N/A		N/A
Wilson Bank		330,416		13.7			168,451		7.0			156,418		6.5
Tier 1 capital to average assets:
Consolidated		331,485		12.4			106,565		4.0			N/A		N/A
Wilson Bank		330,416		11.9			110,764		4.0			138,454		5.0

						Regulatory Minimum Capital Requirement					Regulatory Minimum To Be Well
	Actual					with Basel III Capital Conservation Buffer					Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2018
Total capital to risk weighted assets:
Consolidated	$	326,099		14.1	%	$	227,974		9.875	%	$	230,860		10.0	%
Wilson Bank		323,852		14.0			227,915		9.875			230,800		10.0
Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			181,802		7.875			138,516		6.0
Wilson Bank		296,319		12.8			181,756		7.875			184,641		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		298,566		12.9			147,173		6.375			N/A		N/A
Wilson Bank		296,319		12.8			147,136		6.375			150,021		6.5
Tier 1 capital to average assets:
Consolidated		298,566		12.3			97,022		4.0			N/A		N/A
Wilson Bank		296,319		11.9			99,373		4.0			124,217		5.0

	2016			2017			2018			2019
Common Equity Tier 1 Ratio		5.125	%		5.75	%		6.375	%		7.0	%
Tier 1 Capital to Risk Weighted Assets Ratio		6.625	%		7.25	%		7.875	%		8.5	%
Total Capital to Risk Weighted Assets Ratio		8.625	%		9.25	%		9.875	%		10.5	%

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Note 9 - Non-interest Income and Non-interest Expense (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Noninterest Income and Noninterest Expense [Table Text Block]

	In Thousands
	2019			2018			2017
Non-interest income:
Service charges on deposits	$	6,952			6,799			6,124
Other fees and commissions		14,233			13,704			11,752
BOLI and annuity earnings		810			841			871
Security losses, net		(268	)		(650	)		(175	)
Fees and gains on sales of mortgage loans		6,802			4,639			4,258
Gain (loss) on sale of other real estate, net		(48	)		(80	)		6
Loss on sale of fixed assets, net		(128	)		(2	)		—
Loss on sale of other assets, net		(4	)		(3	)		(15	)
	$	28,349			25,248			22,821

	In Thousands
	2019		2018		2017
Non-interest expense:
Employee salaries and benefits	$	42,541		39,590		35,830
Equity-based compensation		786		1,237		692
Occupancy expenses		4,789		4,403		3,718
Furniture and equipment expenses		3,110		2,767		2,085
Data processing expenses		4,495		2,900		2,834
Advertising expenses		2,498		2,552		2,326
ATM & interchange fees		3,439		3,091		2,569
Accounting, legal & consulting expenses		1,382		977		500
FDIC insurance		373		843		683
Directors’ fees		586		543		677
Other operating expenses		10,629		10,177		8,477
	$	74,628		69,080		60,391

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Note 21 - Disclosures About Fair Value of Financial Instruments - Fair Value of Financial Instruments Measured on a Non-recurring Basis (Details) - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Reported Value Measurement [Member]
Other real estate owned		$ 697	$ 1,357
Impaired loans, net	[1]	3,916	4,195
Total assets		4,613	5,552
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Other real estate owned		0	0
Impaired loans, net	[1]	0	0
Total assets		0	0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Other real estate owned		0	0
Impaired loans, net	[1]	0	0
Total assets		0	0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Other real estate owned		697	1,357
Impaired loans, net	[1]	3,916	4,195
Total assets		$ 4,613	$ 5,552

[1] Amount is net of a valuation allowance of $1,136,000 at December 31, 2019 and $1,164,000 at December 31, 2018 as required by ASC 310, "Receivables."

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Note 22 - Wilson Bank Holding Company - Parent Company Financial Information - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2019		Dec. 31, 2018		Dec. 31, 2017	Dec. 31, 2016
Deferred income taxes	$ 6,136		$ 8,901
Total assets	2,794,209		2,543,682
Total liabilities	2,457,225		2,248,015
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 10,792,999 and 10,623,810 shares issued and outstanding, respectively	21,586		21,248
Additional paid-in capital	82,249		73,960
Retained earnings	232,456		208,164
Net unrealized gains (losses) on available-for-sale securities, net of taxes of $245 and $2,726, respectively	693		(7,705)
Total stockholders’ equity	336,984		295,667		$ 267,730	$ 244,620
Total liabilities and stockholders’ equity	2,794,209		2,543,682
Parent Company [Member]
Cash	1,899	[1]	2,759	[1]	$ 1,589	$ 1,678
Investment in wholly-owned commercial bank subsidiary	335,915		293,420
Deferred income taxes	625		469
Refundable income taxes	132		177
Total assets	338,571		296,825
Stock appreciation rights payable	1,587		1,158
Total liabilities	1,587		1,158
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 10,792,999 and 10,623,810 shares issued and outstanding, respectively	21,586		21,248
Additional paid-in capital	82,249		73,960
Retained earnings	232,456		208,164
Net unrealized gains (losses) on available-for-sale securities, net of taxes of $245 and $2,726, respectively	693		(7,705)
Total stockholders’ equity	336,984		295,667
Total liabilities and stockholders’ equity	$ 338,571		$ 296,825

[1] Eliminated in consolidation.

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Note 17 - Salary Deferral Plans (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Deferred Compensation Liability, Current and Noncurrent, Total	$ 1,786,000	$ 1,825,000
Cash Surrender Value of Life Insurance	4,657,000	4,540,000
Life Settlement Contracts, Investment Method, Face Value, Total	13,526,000	13,523,000
Supplemental Employee Retirement Plan Agreement [Member]
Deferred Compensation Liability, Current and Noncurrent, Total	2,778,000	2,491,000
Cash Surrender Value of Life Insurance	27,105,000	26,412,000
Life Settlement Contracts, Investment Method, Face Value, Total	61,067,000	61,202,000
Flexible Indexed Annuity Contracts Value	$ 14,471,000	$ 14,558,000

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Note 2 - Loans and Allowance for Loan Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018
Beginning balance				$ 27,174				$ 23,909					$ 27,174	$ 23,909
Provision for loan losses	$ 686	$ 167	$ 154	1,033	$ 1,097	$ 1,088	$ 1,090	1,023	$ 436	$ 436	$ 420	$ 389	2,040	4,298
Charge-offs													(1,363)	(1,663)
Recoveries													875	630
Ending balance	28,726				27,174				23,909				28,726	27,174
Ending balance individually evaluated for impairment	1,136				1,164								1,136	1,164
Ending balance collectively evaluated for impairment	27,590				26,010								27,590	26,010
Ending balance	2,093,042				2,050,199								2,093,042	2,050,199
Ending balance individually evaluated for impairment	5,040				5,346								5,040	5,346
Ending balance collectively evaluated for impairment	2,088,002				2,044,853								2,088,002	2,044,853
Real Estate Portfolio Segment [Member]
Ending balance	1,929,325				1,911,886								1,929,325	1,911,886
Commercial Portfolio Segment [Member]
Beginning balance				622				401					622	401
Provision for loan losses													422	218
Charge-offs													(15)	0
Recoveries													15	3
Ending balance	1,044				622				401				1,044	622
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	1,044				622								1,044	622
Ending balance	98,265				78,245								98,265	78,245
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	98,265				78,245								98,265	78,245
Agricultural Installment and Other Portfolio Segment [Member]
Beginning balance				867				676					867	676
Provision for loan losses													1,041	920
Charge-offs													(1,160)	(1,152)
Recoveries													363	423
Ending balance	1,111				867				676				1,111	867
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	1,111				867								1,111	867
Ending balance	65,452				60,068								65,452	60,068
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	65,452				60,068								65,452	60,068
Residential 1 to 4 Family [Member] | Real Estate Portfolio Segment [Member]
Beginning balance				6,297				5,156					6,297	5,156
Provision for loan losses													838	1,568
Charge-offs													(15)	(492)
Recoveries													24	65
Ending balance	7,144				6,297				5,156				7,144	6,297
Ending balance individually evaluated for impairment	795				852								795	852
Ending balance collectively evaluated for impairment	6,349				5,445								6,349	5,445
Ending balance	511,250				460,692								511,250	460,692
Ending balance individually evaluated for impairment	2,569				2,829								2,569	2,829
Ending balance collectively evaluated for impairment	508,681				457,863								508,681	457,863
Multifamily Real Estate [Member] | Real Estate Portfolio Segment [Member]
Beginning balance				1,481				1,011					1,481	1,011
Provision for loan losses													(364)	470
Charge-offs													0	0
Recoveries													0	0
Ending balance	1,117				1,481				1,011				1,117	1,481
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	1,117				1,481								1,117	1,481
Ending balance	97,104				134,613								97,104	134,613
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	97,104				134,613								97,104	134,613
Commercial Real Estate [Member] | Real Estate Portfolio Segment [Member]
Beginning balance				9,753				9,267					9,753	9,267
Provision for loan losses													1,484	436
Charge-offs													(173)	0
Recoveries													50	50
Ending balance	11,114				9,753				9,267				11,114	9,753
Ending balance individually evaluated for impairment	341				312								341	312
Ending balance collectively evaluated for impairment	10,773				9,441								10,773	9,441
Ending balance	793,379				701,055								793,379	701,055
Ending balance individually evaluated for impairment	2,471				1,831								2,471	1,831
Ending balance collectively evaluated for impairment	790,908				699,224								790,908	699,224
Construction Loans [Member] | Real Estate Portfolio Segment [Member]
Beginning balance				7,084				6,094					7,084	6,094
Provision for loan losses													(1,510)	921
Charge-offs													0	(19)
Recoveries													423	88
Ending balance	5,997				7,084				6,094				5,997	7,084
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	5,997				7,084								5,997	7,084
Ending balance	425,185				518,245								425,185	518,245
Ending balance individually evaluated for impairment	0				686								0	686
Ending balance collectively evaluated for impairment	425,185				517,559								425,185	517,559
Farmland [Member] | Real Estate Portfolio Segment [Member]
Beginning balance				221				487					221	487
Provision for loan losses													(34)	(266)
Charge-offs													0	0
Recoveries													0	0
Ending balance	187				221				487				187	221
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	187				221								187	221
Ending balance	19,268				24,071								19,268	24,071
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	19,268				24,071								19,268	24,071
Second Mortgages [Member] | Real Estate Portfolio Segment [Member]
Beginning balance				118				94					118	94
Provision for loan losses													5	24
Charge-offs													0	0
Recoveries													0	0
Ending balance	123				118				94				123	118
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	123				118								123	118
Ending balance	10,760				11,197								10,760	11,197
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	10,760				11,197								10,760	11,197
Home Equity Line of Credit [Member] | Real Estate Portfolio Segment [Member]
Beginning balance				$ 731				$ 723					731	723
Provision for loan losses													158	7
Charge-offs													0	0
Recoveries													0	1
Ending balance	889				731				$ 723				889	731
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	889				731								889	731
Ending balance	72,379				62,013								72,379	62,013
Ending balance individually evaluated for impairment	0				0								0	0
Ending balance collectively evaluated for impairment	$ 72,379				$ 62,013								$ 72,379	$ 62,013

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Note 3 - Debt and Equity Securities - Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Due in one year or less, securities available-for-sale, amortized cost	$ 472
Due in one year or less, securities available-for-sale, estimated market value	471
Due after one year through five years, securities available-for-sale, amortized cost	18,332
Due after one year through five years, securities available-for-sale, estimated market value	18,319
Due after five years through ten years, securities available-for-sale, amortized cost	56,626
Due after five years through ten years, securities available-for-sale, estimated market value	56,622
Due after ten years, securities available-for-sale, amortized cost	51,598
Due after ten years, securities available-for-sale, estimated market value	51,191
Securities available-for-sale, amortized cost	127,028
Securities available-for-sale, estimated market value	126,603
Mortgage and asset-backed securities, amortized cost	293,179
Mortgage and asset-backed securities, estimated market value	294,542
Amortized Cost	420,207	$ 295,683
Estimated market value	$ 421,145

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Note 18 - Equity Incentive Plan - Summary of Information about Stock Options (Details) - Stock Options and Stock Appreciation Rights [Member] $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) $ / shares shares
Options Outstanding, Number of outstanding (in shares) | shares	273,039
Options Exercisable, Number exercisable (in shares) | shares	122,932
Aggregate intrinsic value | $	$ 3,703
Aggregate intrinsic value | $	$ 1,790
Price Range 1 [Member]
Lower limit (in dollars per share)	$ 28.00
Options Outstanding, Number of outstanding (in shares) | shares	20,065
Upper limit (in dollars per share)	$ 38.00
Options Outstanding, Weighted average exercise price (in dollars per share)	$ 32.66
Options Outstanding, Weighted average remaining contractual term (Year)	2 years 11 months 23 days
Options Exercisable, Number exercisable (in shares) | shares	8,487
Options Exercisable, Weighted average exercise price (in dollars per share)	$ 32.35
Options Exercisable, Weighted average remaining contractual term (Year)	2 years 9 months 10 days
Price Range 2 [Member]
Lower limit (in dollars per share)	$ 38.01
Options Outstanding, Number of outstanding (in shares) | shares	252,974
Upper limit (in dollars per share)	$ 51.25
Options Outstanding, Weighted average exercise price (in dollars per share)	$ 41.86
Options Outstanding, Weighted average remaining contractual term (Year)	6 years 8 months 4 days
Options Exercisable, Number exercisable (in shares) | shares	114,445
Options Exercisable, Weighted average exercise price (in dollars per share)	$ 40.77
Options Exercisable, Weighted average remaining contractual term (Year)	5 years 8 months 26 days

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Note 20 - Mortgage Banking Derivatives - Amount and Fair Value of Mortgage Banking Derivatives (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Interest Rate Contract [Member]
Derivative, amount	$ 10,307,000	$ 9,655,000
Derivative, fair value	328,000	335,000
Forward Contracts [Member]
Derivative, amount	14,000,000	11,750,000
Derivative, fair value	$ (23,000)	$ (88,000)

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Note 5 - Premises and Equipment (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Depreciation, Total	$ 3,984,000	$ 3,602,000	$ 2,859,000
Construction and Repairs of Buildings [Member] | Director [Member]
Related Party Transaction, Amounts of Transaction	$ 2,207,000	$ 2,633,000	$ 5,934,000

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Note 13 - Concentration of Credit Risk

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

(13) Concentration of Credit Risk

Practically all of the Company’s loans, commitments, and commercial and standby letters of credit have been granted to customers in the Company’s market area. Practically all such customers are depositors of Wilson Bank. The concentrations of credit by type of loan are set forth in Note 2 - Loans and Allowance for Loan Losses.

Interest bearing deposits totaling $89,177,000 were deposited with four commercial banks.

Federal funds sold in the amount of $20,000,000 were deposited with one commercial bank.

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Note 17 - Salary Deferral Plans

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Compensation Related Costs, General [Text Block]

(17) Salary Deferral Plans

The Company provides its executive officers certain non-qualified pension benefits through an Executive Salary Continuation Plan ("the Plan") and Supplemental Executive Retirement Plan (SERP) Agreements ("SERP Agreements"). The Plan and SERP agreements were established by the Board of Directors to reward executive management for past performance and to provide additional incentive to retain the service of executive management. The Plan and SERP Agreements generally provide executives with benefits of a portion of their salary beginning at retirement through life. As a result, the Company has accrued a liability for future obligations under the Plan and SERP Agreements. At December 31, 2019 and 2018, the liability related to the Plan totaled $1,786,000 and $1,825,000, respectively. At December 31, 2019 and 2018 the liability related to the SERP Agreements totaled $2,778,000 and $2,491,000, respectively.

The Company has purchased life insurance policies to provide the benefits related to the Plan, which at December 31, 2019 and 2018 had an aggregate cash surrender value of $4,657,000 and $4,540,000, respectively, and an aggregate face value of insurance policies in force of $13,526,000 and $13,523,000, respectively. The life insurance policies remain the sole property of the Company and are payable to the Company.

The Company has also purchased bank owned life insurance policies on its executive officers. The insurance policies remain the sole property of the Company and are payable to the Company. The cash surrender value of the life insurance contracts totaled $27,105,000 and $26,412,000 and the face amount of the insurance policies in force approximated $61,067,000 and $61,202,000 at December 31, 2019 and 2018, respectively.

The Company has also purchased Flexible Premium Indexed Deferred Annuity Contracts (“Annuity Contracts”) to provide benefits related to the SERP Agreements. The Annuity Contracts remain the sole property of the Company and are payable to the Company. Included in other assets at December 31, 2019 and 2018 are the Annuity Contracts with an aggregate value of $14,471,000 and $14,558,000, respectively.

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Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(1) Summary of Significant Accounting Policies 

The accounting and reporting policies of Wilson Bank Holding Company (“the Company”) and Wilson Bank & Trust (“Wilson Bank”) are in accordance with accounting principles generally accepted in the United States of America (“U.S.”) and conform to general practices within the banking industry. The following is a brief summary of the significant policies.

(a) Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Wilson Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

(b) Nature of Operations

Wilson Bank operates under a state bank charter and provides full banking services. As a state-chartered bank that is not a member of the Federal Reserve, Wilson Bank is subject to regulations of the Tennessee Department of Financial Institutions and the Federal Deposit Insurance Corporation (“FDIC”). The areas served by Wilson Bank include Wilson County, DeKalb County, Rutherford County, Smith County, Trousdale County, Putnam County, Sumner County, Davidson County and Williamson County, Tennessee and surrounding counties in Middle Tennessee. Services are provided at the main office and twenty-eight branch locations.

(c) Estimates

In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and other real estate, other-than-temporary impairments of securities, and the fair value of financial instruments.

(d) Significant Group Concentrations of Credit Risk

Most of the Company’s activities are with customers located within Middle Tennessee. The types of securities in which the Company invests are described in note 3. The types of lending in which the Company engages are described in note 2. The Company does not have any significant concentrations to any one industry or customer other than as disclosed in note 2.

Residential 1-4 family, commercial real estate and construction mortgage loans, represented 24%, 38% and 20% and 22%, 34% and 25% of the loan portfolio at December 31, 2019 and 2018, respectively. 

(e) Loans

The Company grants mortgage, commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans throughout Middle Tennessee. The ability of the Company’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in this area.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for unearned income, the allowance for loan losses, and any unamortized deferred fees or costs on originated loans, and premiums or discounts on purchased loans.

Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized on a straight line basis over the respective term of the loan.

As part of its routine credit monitoring process, the Company performs regular credit reviews of the loan portfolio and loans receive risk ratings by the assigned credit officer, which are subject to validation by our independent loan review department. Risk ratings are categorized as pass, special mention, substandard or doubtful. The Company believes that its categories follow those outlined by the FDIC, Wilson Bank's primary federal regulator.

Generally the accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Credit card loans and other personal loans are typically charged off no later than when they become 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

(f) Allowance for Loan Losses

Management provides for loan losses by establishing an allowance. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a quarterly basis by management and is based upon management’s quarterly review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

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, independent loan reviewers, and reviews that may have been conducted by third-party reviewers. We incorporate relevant loan review results in the loan impairment determination. In addition, regulatory agencies, as an integral part of their examination process, will periodically review the Company’s allowance for loan losses and may require the Company to record adjustments to the allowance based on their judgment about information available to them at the time of their examinations.

In addition to the independent loan review process, the aforementioned risk ratings are subject to continual review by loan officers to determine that the appropriate risk ratings are being utilized in our allowance for loan loss process. Each risk rating is also subject to review by our independent loan review department. Currently, our independent loan review department targets reviews of 100% of existing loan relationships with aggregate debt of $1.0 million and greater and new loans with aggregate debt of $500,000 and greater. In addition, our independent loan review department targets particular portfolio segments, loans assigned to a particular lending officer, past due loans, and loans with four or more renewals.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are individually classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience, historical loan loss factors, loss experience of various loan segments, and other adjustments based on management’s assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial, mortgage and agricultural loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment disclosures, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

(g) Debt and Equity Securities

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 based on available market prices, with unrealized gains and losses excluded from earnings and reported in other comprehensive income on an after-tax basis. Securities classified as “available-for-sale” are held for indefinite periods of time and may be sold in response to movements in market interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. 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.

Other-than-temporary Impairment—Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). A decline in the fair value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in a reduction in the carrying amount of the security. To determine whether OTTI has occurred, management considers factors such as (1) length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospectus of the issuer, and (3) Wilson Bank’s ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value. If management deems a security to be OTTI, management reviews the present value of the future cash flows associated with the security. A shortfall of the present value of the cash flows expected to be collected in relation to the amortized cost basis is referred to as a credit loss. If a credit loss is identified, the credit loss is recognized as a charge to earnings and a new cost basis for the security is established. If management concludes that no credit loss exists and it is not “more-likely-than-not” that it will be required to sell the security before the recovery of the security’s cost basis, then the security is not deemed OTTI and the shortfall is recorded as a component of equity.

No securities have been classified as trading securities or held-to-maturity securities at December 31, 2019.

(h) Federal Home Loan Bank Stock

The Company, as a member of the Federal Home Loan Bank (“FHLB”) Cincinnati system, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at par value, which approximates its fair value. Management reviews the investment for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. As of December 31, 2019, this minimum required investment was valued at approximately $4.0 million. Stock redemptions are at the discretion of the FHLB. 

(i) Loans Held for Sale

Mortgage loans held for sale are carried at fair value. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan.

(j) Premises and Equipment

Premises and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the related assets. Gains or losses realized on items retired and otherwise disposed of are credited or charged to operations and cost and related accumulated depreciation are removed from the asset and accumulated depreciation accounts.

Expenditures for major renovations and improvements of premises and equipment are capitalized and those for maintenance and repairs are charged to earnings as incurred.

(k) Other Real Estate

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less the estimated cost to sell at the date the Company acquires the property, establishing a new cost basis. Subsequent to their acquisition by the Company, valuations of these assets are periodically performed by management, and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance [i.e. any direct write-downs] are included within non-interest expense.

(l) Intangible Assets

The Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” 350, Goodwill and Other Intangible Assets requires that management determine the allocation of intangible assets into identifiable groups at the date of acquisition and that appropriate amortization periods be established. Under the provisions of FASB ASC 350, goodwill is not to be amortized; rather, it is to be monitored for impairment and written down to the impairment value at the time impairment occurs. The Company has determined that no impairment loss needs to be recognized related to its goodwill. 

(m) Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, interest-bearing deposits, amounts due from banks and Federal funds sold. Generally, Federal funds sold are purchased and sold for one day periods. Management makes deposits only with financial institutions it considers to be financially sound. 

(n) Long-Term Assets

Premises and equipment, intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

(o) Securities Sold Under Agreements to Repurchase

Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by Federal deposit insurance.

(p) Income Taxes

The Company accounts for Income Taxes in accordance with income tax accounting guidance (FASB ASC 740, Income Taxes). The Company follows accounting guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.

The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term "more-likely-than-not" means a likelihood of more than 50 percent. The terms "examined" and "upon examination" also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized.

The Company recognizes interest and penalties on income taxes as a component of income tax expense. 

(q) Mortgage Banking Derivatives

Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest rate on the loan is locked. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in net gains on sale of mortgage loans.

(r) Equity-Based Incentives

Stock compensation accounting guidance (FASB ASC 718, “Compensation—Stock Compensation”) requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, cash-settled stock appreciation rights (SARs), and employee share purchase plans. Because cash-settled SARs do not give the grantee the choice of receiving stock, all cash-settled SARs are accounted for as liabilities, not equity, as compensation is accrued over the requisite service period.

The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options and cash-settled SARs.

(s) Advertising Costs

Advertising costs are expensed as incurred by the Company and totaled $2,498,000, $2,552,000 and $2,326,000 for 2019, 2018 and 2017, respectively. 

(t) Earnings Per Share

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

(u) Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 21 - Disclosures About Fair Value of Financial Instruments of the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.

(v) Reclassification

Certain reclassifications have been made to the 2018 and 2017 figures to conform to the presentation for 2019. 

(w) 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 credit. Such financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received. 

(x) Accounting Standard Updates

Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Our revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. Because of this, our adoption of this Standard in the first quarter of 2018 did not have a significant impact on our financial statements.

ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. ASU 2016-01 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2016-02, “Leases (Topic 842).” ASU 2016-02, among other things, requires lessees to recognize a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-02 was effective for us on January 1, 2019 and initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) - Targeted Improvements,” which, among other things, provides an additional transition method that allows entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors,” which provides for certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon adoption of ASU 2016-02, ASU 2018-11 and ASU 2018-20 on January 1, 2019, we recorded a right-of-use asset in the amount of $2,600,000 and an offsetting lease liability in the amount of $2,627,000. Upon adoption, using a modified retrospective transition adoption approach, we recognized a cumulative effect reduction to retained earnings totaling $27,000. We elected to apply certain practical expedients provided under ASU 2016-02 whereby we will not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. We utilized the modified-retrospective transition approach prescribed by ASU 2018-11.

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In April 2019, ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” was issued to address certain codification improvements and to provide certain accounting policy electives related to accrued interest as well as disclosure related to credit losses, among other things. In May 2019, ASU 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief,” was issued to provide transition relief in connection with the adoption of ASU 2016-03 whereby entities would have the option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2016-13, as updated, became effective on January 1, 2020.

We are currently working through our implementation plan for ASU 2016-13 under the direction of our Chief Financial Officer and our Chief Credit Officer. Our implementation plan includes assessment and documentation of processes, internal controls and data sources; model development, documentation and validation; and system configuration, among other things. We are also in the process of implementing a third-party vendor solution to assist us in the application of ASU 2016-13. Based upon our preliminary parallel run as of December 31, 2019, we currently expect the adoption of ASU 2016-13 will not result in a significant change to our current allowance for loan losses and our reserves for unfunded commitments. The adoption of ASU 2016-13 is also not currently expected to have a significant impact on our regulatory capital ratios. The ultimate impact of adoption in future periods could be significantly different than our current expectation as our modeling processes will be significantly influenced by the composition, characteristics and quality of our loan and securities portfolios as well as the prevailing economic conditions and forecasts as of that date, notwithstanding any further refinements to our expected credit loss models.

ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. ASU 2016-15 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 became effective for us on January 1, 2020, and is not expected to have a significant impact on our financial statements.

ASU 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) - Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 clarifies the scope of Subtopic 610-20 and adds guidance for partial sales of nonfinancial assets, including partial sales of real estate. Historically, U.S. GAAP contained several different accounting models to evaluate whether the transfer of certain assets qualified for sale treatment. ASU 2017-05 reduces the number of potential accounting models that might apply and clarifies which model does apply in various circumstances. ASU 2017-05 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-08, “Receivables -  Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 provides guidance on the amortization period for certain purchased callable debt securities held at a premium. This update shortens the amortization period for the premium to the earliest call date. Under current generally accepted accounting principles, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument related to certain cash flow issues. ASU 2017-08 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting.” ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. ASU 2017-09 became effective for us on January 1, 2018 and did not have a significant impact on our financial statements.

ASU 2017-12, “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 amends the hedge accounting recognition and presentation requirements in ASC 815 to improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities to better align the entity’s financial reporting for hedging relationships with those risk management activities and to reduce the complexity of and simplify the application of hedge accounting. ASU 2017-12 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." Under ASU 2018-02, entities may elect to reclassify certain income tax effects related to the change in the U.S. statutory federal income tax rate under the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, from accumulated other comprehensive income to retained earnings. ASU 2018-02 also requires certain accounting policy disclosures. We elected to adopt the provisions of ASU 2018-02 for the year ended December 31, 2018 in advance of the required application date of January 1, 2019. See Note 10 - Income Taxes.

ASU 2018-05, "Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118.” ASU 2018-05 amends the Accounting Standards Codification to incorporate various SEC paragraphs pursuant to the issuance of SAB 118. SAB 118 addresses the application of generally accepted accounting principles in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act. See Note 10 - Income Taxes.

ASU 2018-13, "Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 became effective for us on January 1, 2020 and is not expected to have a significant impact on our financial statements.

ASU 2018-16, “Derivatives and Hedging (Topic 815) - Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes.” The amendments in this update permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct U.S. Treasury obligations, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. ASU 2018-16 was effective for us on January 1, 2019 and did not have a significant impact on our financial statements.

Other than those previously discussed, there were no other recently issued accounting pronouncements that may materially impact the Company.

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Note 5 - Premises and Equipment

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

(5) Premises and Equipment

The detail of premises and equipment at December 31, 2019 and 2018 is as follows:

	In Thousands
	2019			2018
Land	$	17,093			17,022
Buildings		46,389			44,921
Leasehold improvements		533			492
Furniture and equipment		13,000			12,600
Automobiles		243			343
Construction-in-progress		1,339			100
		78,597			75,478
Less accumulated depreciation		(18,302	)		(17,115	)
	$	60,295			58,363

During 2019, 2018 and 2017, payments of $2,207,000, $2,633,000 and $5,934,000, respectively, were made to an entity owned by a director for the construction of buildings and repair work on existing buildings.

Depreciation expense was $3,984,000, $3,602,000 and $2,859,000 for the years ended December 31, 2019, 2018 and 2017, respectively.

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Note 9 - Non-interest Income and Non-interest Expense

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Other Income and Other Expense Disclosure [Text Block]

(9) Non-Interest Income and Non-Interest Expense

The significant components of non-interest income and non-interest expense for the years ended December 31, 2019, 2018 and 2017 are presented below:

	In Thousands
	2019			2018			2017
Non-interest income:
Service charges on deposits	$	6,952			6,799			6,124
Other fees and commissions		14,233			13,704			11,752
BOLI and annuity earnings		810			841			871
Security losses, net		(268	)		(650	)		(175	)
Fees and gains on sales of mortgage loans		6,802			4,639			4,258
Gain (loss) on sale of other real estate, net		(48	)		(80	)		6
Loss on sale of fixed assets, net		(128	)		(2	)		—
Loss on sale of other assets, net		(4	)		(3	)		(15	)
	$	28,349			25,248			22,821

	In Thousands
	2019		2018		2017
Non-interest expense:
Employee salaries and benefits	$	42,541		39,590		35,830
Equity-based compensation		786		1,237		692
Occupancy expenses		4,789		4,403		3,718
Furniture and equipment expenses		3,110		2,767		2,085
Data processing expenses		4,495		2,900		2,834
Advertising expenses		2,498		2,552		2,326
ATM & interchange fees		3,439		3,091		2,569
Accounting, legal & consulting expenses		1,382		977		500
FDIC insurance		373		843		683
Directors’ fees		586		543		677
Other operating expenses		10,629		10,177		8,477
	$	74,628		69,080		60,391

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Note 2 - Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	In Thousands
	2019			2018
Mortgage loans on real estate:
Residential 1-4 family	$	511,250			460,692
Multifamily		97,104			134,613
Commercial		793,379			701,055
Construction		425,185			518,245
Farmland		19,268			24,071
Second mortgages		10,760			11,197
Equity lines of credit		72,379			62,013
Total mortgage loans on real estate		1,929,325			1,911,886
Commercial loans		98,265			78,245
Agricultural loans		1,569			1,985
Consumer installment loans:
Personal		50,532			45,072
Credit cards		4,302			3,687
Total consumer installment loans		54,834			48,759
Other loans		9,049			9,324
		2,093,042			2,050,199
Net deferred loan fees		(7,141	)		(7,020	)
Total loans		2,085,901			2,043,179
Less: Allowance for loan losses		(28,726	)		(27,174	)
Loans, net	$	2,057,175			2,016,005

Schedule of Loans Receivable to Related Parties [Table Text Block]

	In Thousands
	December 31,
	2019			2018
Balance, January 1	$	13,019			7,759
New loans and renewals during the year		31,548			17,278
Repayments (including loans paid by renewal) during the year		(31,689	)		(12,018	)
Balance, December 31	$	12,878			13,019

Impaired Financing Receivables [Table Text Block]

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
With no related allowance recorded:
Residential 1-4 family	$	1,090		1,464		—		1,090		99
Multifamily		—		—		—		—		—
Commercial real estate		951		1,124		—		910		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,041		2,588		—		2,000		116

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
With allowance recorded:
Residential 1-4 family	$	1,489		1,480		795		1,590		83
Multifamily		—		—		—		—		—
Commercial real estate		1,522		1,520		341		2,015		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,011		3,000		1,136		3,605		100

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2019
Total:
Residential 1-4 family	$	2,579		2,944		795		2,680		182
Multifamily		—		—		—		—		—
Commercial real estate		2,473		2,644		341		2,925		34
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,052		5,588		1,136		5,605		216

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
With no related allowance recorded:
Residential 1-4 family	$	1,196		1,795		—		1,862		42
Multifamily		—		—		—		—		—
Commercial real estate		317		316		—		320		16
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	2,203		2,797		—		3,237		100

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
With allowance recorded:
Residential 1-4 family	$	1,641		1,635		852		1,782		77
Multifamily		—		—		—		—		—
Commercial real estate		1,515		1,515		312		2,001		17
Construction		—		—		—		—		—
Farmland		—		—		—		—		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	3,156		3,150		1,164		3,783		94

	In Thousands
	Recorded		Unpaid Principal				Average Recorded		Interest Income
	Investment		Balance		Related Allowance		Investment		Recognized
December 31, 2018
Total:
Residential 1-4 family	$	2,837		3,430		852		3,644		119
Multifamily		—		—		—		—		—
Commercial real estate		1,832		1,831		312		2,321		33
Construction		690		686		—		822		42
Farmland		—		—		—		233		—
Second mortgages		—		—		—		—		—
Equity lines of credit		—		—		—		—		—
Commercial		—		—		—		—		—
Agricultural, installment and other		—		—		—		—		—
	$	5,359		5,947		1,164		7,020		194

Financing Receivable, Nonaccrual [Table Text Block]

	In Thousands
	2019		2018
Residential 1-4 family	$	949		948
Multifamily		—		—
Commercial real estate		1,661		1,102
Construction		—		—
Farmland		—		—
Second mortgages		—		—
Equity lines of credit		—		—
Commercial		—		—
Agricultural, installment and other		—		—
Total	$	2,610		2,050

Financing Receivable Credit Quality Indicators [Table Text Block]

	In Thousands
																	Agricultural,
	Residential 1-4				Commercial						Second		Equity Lines				Installment and
	Family		Multifamily		Real Estate		Construction		Farmland		Mortgages		of Credit		Commercial		Other		Total
Credit Risk Profile by Internally Assigned Grade
December 31, 2019
Pass	$	503,861		97,104		791,610		424,517		19,106		10,458		72,237		98,243		65,255		2,082,391
Special mention		2,923		—		—		635		103		174		—		—		101		3,936
Substandard		4,466		—		1,769		33		59		128		142		22		96		6,715
Doubtful		—		—		—		—		—		—		—		—		—		—
Total	$	511,250		97,104		793,379		425,185		19,268		10,760		72,379		98,265		65,452		2,093,042
December 31, 2018
Pass	$	452,411		134,613		698,083		518,123		23,895		10,979		61,927		78,206		59,923		2,038,160
Special mention		3,949		—		1,690		64		112		179		—		39		78		6,111
Substandard		4,332		—		1,282		58		64		39		86		—		67		5,928
Doubtful		—		—		—		—		—		—		—		—		—		—
Total	$	460,692		134,613		701,055		518,245		24,071		11,197		62,013		78,245		60,068		2,050,199

Financing Receivable, Past Due [Table Text Block]

	In Thousands
													Recorded
													Investment
					Nonaccrual		Total						Greater Than
	30-59 Days		60-89 Days		and Greater		Nonaccrual						90 Days and
	Past Due		Past Due		Than 90 Days		Past Due		Current		Total Loans		Accruing
December 31, 2019
Residential 1-4 family	$	4,760		799		2,336		7,895		503,355		511,250		1,387
Multifamily		—		—		—		—		97,104		97,104		—
Commercial real estate		500		—		1,661		2,161		791,218		793,379		—
Construction		1,535		147		594		2,276		422,909		425,185		594
Farmland		57		—		8		65		19,203		19,268		8
Second mortgages		—		—		100		100		10,660		10,760		100
Equity lines of credit		143		—		372		515		71,864		72,379		372
Commercial		71		30		—		101		98,164		98,265		—
Agricultural, installment and other		517		116		46		679		64,773		65,452		46
Total	$	7,583		1,092		5,117		13,792		2,079,250		2,093,042		2,507
December 31, 2018
Residential 1-4 family	$	3,258		1,092		1,868		6,218		454,474		460,692		920
Multifamily		—		—		—		—		134,613		134,613		—
Commercial real estate		312		109		1,174		1,595		699,460		701,055		72
Construction		1,567		26		32		1,625		516,620		518,245		32
Farmland		43		9		21		73		23,998		24,071		21
Second mortgages		333		—		—		333		10,864		11,197		—
Equity lines of credit		297		—		45		342		61,671		62,013		45
Commercial		93		—		24		117		78,128		78,245		24
Agricultural, installment and other		407		85		95		587		59,481		60,068		95
Total	$	6,310		1,321		3,259		10,890		2,039,309		2,050,199		1,209

Financing Receivable, Allowance for Credit Loss [Table Text Block]

	In Thousands
																							Agricultural,
	Residential 1-4						Commercial									Second		Equity Lines					Installment and
	Family			Multifamily			Real Estate			Construction			Farmland			Mortgages		of Credit		Commercial			Other			Total
December 31, 2019
Allowance for loan losses:
Beginning balance	$	6,297			1,481			9,753			7,084			221			118		731		622			867			27,174
Provision		838			(364	)		1,484			(1,510	)		(34	)		5		158		422			1,041			2,040
Charge-offs		(15	)		—			(173	)		—			—			—		—		(15	)		(1,160	)		(1,363	)
Recoveries		24			—			50			423			—			—		—		15			363			875
Ending balance	$	7,144			1,117			11,114			5,997			187			123		889		1,044			1,111			28,726
Ending balance individually evaluated for impairment	$	795			—			341			—			—			—		—		—			—			1,136
Ending balance collectively evaluated for impairment	$	6,349			1,117			10,773			5,997			187			123		889		1,044			1,111			27,590
Loans:
Ending balance	$	511,250			97,104			793,379			425,185			19,268			10,760		72,379		98,265			65,452			2,093,042
Ending balance individually evaluated for impairment	$	2,569			—			2,471			—			—			—		—		—			—			5,040
Ending balance collectively evaluated for impairment	$	508,681			97,104			790,908			425,185			19,268			10,760		72,379		98,265			65,452			2,088,002

	In Thousands
																				Agricultural,
	Residential 1-4					Commercial								Second		Equity Lines				Installment and
	Family			Multifamily		Real Estate		Construction			Farmland			Mortgages		of Credit		Commercial		Other			Total
December 31, 2018
Allowance for loan losses:
Beginning balance	$	5,156			1,011		9,267		6,094			487			94		723		401		676			23,909
Provision		1,568			470		436		921			(266	)		24		7		218		920			4,298
Charge-offs		(492	)		—		—		(19	)		—			—		—		—		(1,152	)		(1,663	)
Recoveries		65			—		50		88			—			—		1		3		423			630
Ending balance	$	6,297			1,481		9,753		7,084			221			118		731		622		867			27,174
Ending balance individually evaluated for impairment	$	852			—		312		—			—			—		—		—		—			1,164
Ending balance collectively evaluated for impairment	$	5,445			1,481		9,441		7,084			221			118		731		622		867			26,010
Loans:
Ending balance	$	460,692			134,613		701,055		518,245			24,071			11,197		62,013		78,245		60,068			2,050,199
Ending balance individually evaluated for impairment	$	2,829			—		1,831		686			—			—		—		—		—			5,346
Ending balance collectively evaluated for impairment	$	457,863			134,613		699,224		517,559			24,071			11,197		62,013		78,245		60,068			2,044,853

Financing Receivable, Troubled Debt Restructuring [Table Text Block]

	2019		2018
Performing TDRs	$	3,080		1,676
Nonperforming TDRs		1,467		816
Total TDRs	$	4,547		2,492

	December 31, 2019						December 31, 2018
					Post Modification						Post Modification
			Pre Modification		Outstanding				Pre Modification		Outstanding
			Outstanding		Recorded				Outstanding		Recorded
	Number of		Recorded		Investment, Net of		Number of		Recorded		Investment, Net of
	Contracts		Investment		Related Allowance		Contracts		Investment		Related Allowance
Residential 1-4 family		1	$	1,338	$	619		4	$	448	$	448
Multifamily		—		—		—		—		—		—
Commercial real estate		4		2,677		2,399		—		—		—
Construction		—		—		—		—		—		—
Farmland		—		—		—		—		—		—
Second mortgages		—		—		—		—		—		—
Equity lines of credit		—		—		—		—		—		—
Commercial		—		—		—		—		—		—
Agricultural, installment and other		—		—		—		2		5		5
Total		5	$	4,015	$	3,018		6	$	453	$	453

XML

Document And Entity Information - USD ($)	Dec. 31, 2019	Mar. 12, 2020	Jun. 30, 2019
Document Information [Line Items]
Entity Registrant Name	WILSON BANK HOLDING COMPANY
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019
Document, Type	10-K
Document, Annual Report	true
Document, Period End Date	Dec. 31, 2019
Document, Transition Report	false
Entity, File Number	0-20402
Entity, Incorporation, State or Country Code	TN
Entity, Tax Identification Number	62-1497076
Entity, Address, Address Line One	623 West Main Street
Entity, Address, City or Town	Lebanon
Entity, Address, State or Province	TN
Entity, Address, Postal Zip Code	37087
City Area Code	615
Local Phone Number	444-2265
Title of 12(g) Security	Common Stock, $2.00 par value per share
No Trading Symbol Flag	true
Entity, Well-known Seasoned Issuer	No
Entity, Voluntary Filers	No
Entity, Current Reporting Status	Yes
Entity, Interactive Data, Current	Yes
Entity, Filer Category	Accelerated Filer
Entity, Small Business	false
Entity, Emerging Growth Company	false
Entity, Public Float			$ 532,621,138
Entity, Shell Company	false
Entity, Common Stock Shares, Outstanding		10,888,745
Amendment Flag	false
Entity Central Index Key	0000885275

XML

Note 22 - Wilson Bank Holding Company - Parent Company Financial Information

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

(22) Wilson Bank Holding Company -

Parent Company Financial Information

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Balance Sheets

December 31, 2019 and 2018

	Dollars In Thousands
	2019			2018
ASSETS
Cash	$	1,899	*		2,759		*
Investment in wholly-owned commercial bank subsidiary		335,915			293,420
Deferred income taxes		625			469
Refundable income taxes		132			177
Total assets	$	338,571			296,825
LIABILITIES AND STOCKHOLDERS’ EQUITY
Stock appreciation rights payable	$	1,587			1,158
Total liabilities		1,587			1,158
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 50,000,000 shares, 10,792,999 and 10,623,810 shares issued and outstanding, respectively		21,586			21,248
Additional paid-in capital		82,249			73,960
Retained earnings		232,456			208,164
Net unrealized gains (losses) on available-for-sale securities, net of income taxes of $245 and $2,726, respectively		693			(7,705	)
Total stockholders’ equity		336,984			295,667
Total liabilities and stockholders’ equity	$	338,571			296,825

* Eliminated in consolidation.

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Earnings

Three Years Ended December 31, 2019

	Dollars In Thousands
	2019			2018			2017
Income:
Dividends from commercial bank subsidiary	$	2,800			3,000			1,500
Expenses:
Directors’ fees		283			254			334
Other		885			1,351			805
		1,168			1,605			1,139
Income before Federal income tax benefits and equity in undistributed earnings of commercial bank subsidiary		1,632			1,395			361
Federal income tax benefits		287			468			359
		1,919			1,863			720
Equity in undistributed earnings of commercial bank subsidiary		34,125	*		30,731	*		22,806	*
Net earnings	$	36,044			32,594			23,526

* Eliminated in consolidation.

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Cash Flows

Three Years Ended December 31, 2019

Increase (Decrease) in Cash and Cash Equivalents

	Dollars In Thousands
	2019			2018			2017
Cash flows from operating activities:
Cash paid to suppliers and other	$	(383	)		(367	)		(447	)
Tax benefits received		177			181			169
Net cash used in operating activities		(206	)		(186	)		(278	)
Cash flows from investing activities:
Dividends received from commercial bank subsidiary		2,800			3,000			1,500
Net cash provided by investing activities		2,800			3,000			1,500
Cash flows from financing activities:
Payments made to stock appreciation rights holders		(9	)		(61	)		—
Dividends paid		(11,725	)		(9,447	)		(6,729	)
Proceeds from sale of stock pursuant to dividend reinvestment plan		9,134			7,470			5,266
Proceeds from exercise of stock options		775			394			152
Repurchase of common stock		(1,629	)		—			—
Net cash used in financing activities		(3,454	)		(1,644	)		(1,311	)
Net increase (decrease) in cash and cash equivalents		(860	)		1,170			(89	)
Cash and cash equivalents at beginning of year		2,759			1,589			1,678
Cash and cash equivalents at end of year	$	1,899			2,759			1,589

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Cash Flows, Continued

Three Years Ended December 31, 2019

Increase (Decrease) in Cash and Cash Equivalents

	Dollars in Thousands
	2019			2018			2017
Reconciliation of net earnings to net cash used in operating activities:
Net earnings	$	36,044			32,594			23,526
Adjustments to reconcile net earnings to net cash used in operating activities:
Equity in earnings of commercial bank subsidiary		(36,925	)		(33,731	)		(24,306	)
Decrease (increase) in refundable income taxes		45			5			(12	)
Increase in deferred taxes		(156	)		(291	)		(178	)
Share based compensation expense		786			1,237			692
Total adjustments		(36,250	)		(32,780	)		(23,804	)
Net cash used in operating activities	$	(206	)		(186	)		(278	)

XML

Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net earnings	$ 36,044	$ 32,594	$ 23,526
Other comprehensive earnings (losses), net of tax:
Net unrealized gains (losses) on available-for-sale securities arising during period, net of taxes of $2,901, $1,398, and $271, respectively	8,200	(3,950)	437
Reclassification adjustment for net losses included in net earnings, net of taxes of $70, $170, and $67, respectively	198	480	108
Other comprehensive earnings (losses)	8,398	(3,470)	545
Comprehensive earnings	$ 44,442	$ 29,124	$ 24,071

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Interest received	$ 121,366,000	$ 105,318,000	$ 93,506,000
Fees and other income received	27,987,000	20,503,000	17,876,000
Proceeds from sales of loans	157,028,000	131,321,000	149,775,000
Origination of loans held for sale	(167,723,000)	(129,060,000)	(135,835,000)
Interest paid	(21,966,000)	(12,565,000)	(8,612,000)
Cash paid to suppliers and employees	(69,681,000)	(64,186,000)	(57,643,000)
Income taxes paid	(10,934,000)	(10,558,000)	(16,400,000)
Net cash provided by operating activities	36,077,000	40,773,000	42,667,000
Cash flows from investing activities:
Purchase of available-for-sale securities	(255,432,000)	(9,118,000)	(96,180,000)
Proceeds from calls, maturities and paydowns of available-for-sale securities	90,805,000	36,955,000	38,839,000
Proceeds from sale of available-for-sale securities	37,325,000	35,093,000	35,555,000
Purchase of restricted equity securities	(1,668,000)	0	0
Proceeds from maturities and paydowns of held-to-maturity securities	0	4,651,000	3,859,000
Proceeds from sale of held-to-maturity securities	0	4,764,000	0
Loans made to customers, net of repayments	(43,568,000)	(293,655,000)	(61,826,000)
Purchase of bank owned life insurance and annuity contracts	0	(4,301,000)	0
Purchase of premises and equipment	(6,044,000)	(7,752,000)	(12,660,000)
Proceeds from sale of other assets	14,000	4,000	43,000
Proceeds from sale of other real estate	952,000	796,000	2,876,000
Net cash used in investing activities	(177,616,000)	(232,563,000)	(89,494,000)
Cash flows from financing activities:
Net increase in non-interest bearing, savings, NOW and money market deposit accounts	163,720,000	101,248,000	87,116,000
Net increase in time deposits	18,230,000	96,662,000	8,494,000
Net increase (decrease) in securities sold under agreements to repurchase	0	(864,000)	128,000
Net increase in Federal Home Loan Bank advances	23,613,000	0	0
Dividends paid	(11,725,000)	(9,447,000)	(6,729,000)
Proceeds from sale of common stock pursuant to dividend reinvestment	9,134,000	7,470,000	5,266,000
Repurchase of common stock	(1,629,000)	0	0
Proceeds from sale of common stock pursuant to exercise of stock options	775,000	394,000	152,000
Net cash provided by financing activities	202,118,000	195,463,000	94,427,000
Net increase in cash and cash equivalents	60,579,000	3,673,000	47,600,000
Cash and cash equivalents at beginning of year	99,191,000	95,518,000	47,918,000
Cash and cash equivalents at end of year	159,770,000	99,191,000	95,518,000
Reconciliation of net earnings to net cash provided by operating activities:
Net earnings	36,044,000	32,594,000	23,526,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, amortization and accretion	6,494,000	5,853,000	5,507,000
Provision for loan losses	2,040,000	4,298,000	1,681,000
Share-based compensation expense	347,000	1,237,000	692,000
Provision for deferred tax benefit	(206,000)	(248,000)	(607,000)
Revaluation of deferred tax assets due to change in tax rates	0	0	3,603,000
Loss (gain) on sales of other real estate, net	48,000	80,000	(6,000)
Loss on sales of other assets	4,000	3,000	15,000
Loss on disposal of premises and equipment	128,000	2,000	0
Security loss (gain)	268,000	650,000	175,000
Decrease (increase) in loans held for sale	(10,695,000)	(2,378,000)	9,682,000
Increase (decrease) in taxes payable	339,000	(1,526,000)	(42,000)
Increase in other assets, bank owned life insurance and annuity contract earnings	(194,000)	(1,684,000)	(1,231,000)
Decrease (increase) in accrued interest receivable	779,000	(458,000)	(162,000)
Increase in interest payable	682,000	1,453,000	277,000
Increase (decrease) in other liabilities	(1,000)	897,000	(443,000)
Total adjustments	33,000	8,179,000	19,141,000
Net cash provided by operating activities	36,077,000	40,773,000	42,667,000
Supplemental Schedule of Non-Cash Activities:
Change in fair value of securities available-for-sale, net of taxes of $2,971 in 2019, $1,228 in 2018, and $338 in 2017	8,398,000	(3,470,000)	545,000
Non-cash transfers from held-to-maturity to available-for-sale securities	0	22,800,000	0
Non-cash transfers from loans to other real estate	884,000	693,000	173,000
Non-cash transfers from other real estate to loans	544,000	95,000	195,000
Non-cash transfers from loans to other assets	$ 18,000	$ 7,000	$ 2,000

XML

Note 1 - Summary of Significant Accounting Policies (Details Textual)		12 Months Ended
	Jan. 01, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Number of Full Service Branches		28
Target Percentage of Loans Requiring Review		100.00%
Minimum Existing Loan Requiring Review		$ 1,000,000.0
Minimum New Loan Requiring Review		500,000
Debt Securities, Trading		0
Federal Home Loan Bank Stock, Minimum Investment		4,000,000.0
Goodwill, Impairment Loss		0	$ 0
Advertising Expense		2,498,000	2,552,000	$ 2,326,000
Operating Lease, Right-of-Use Asset	$ 2,600,000
Cumulative Effect on Retained Earnings, Net of Tax, Total		(27,000)
Debt Securities, Held-to-maturity, Total		$ 0	$ 0
Accounting Standards Update 2016-02 [Member]
Cumulative Effect on Retained Earnings, Net of Tax, Total	27,000
Accrued Interest and Other Liabilities [Member]
Operating Lease, Liability, Total	$ 2,627,000
Residential 1 to 4 Family [Member] | Real Estate Portfolio Segment [Member]
Loan Portfolio Percentage		24.00%	22.00%
Commercial Real Estate [Member] | Real Estate Portfolio Segment [Member]
Loan Portfolio Percentage		38.00%	34.00%
Construction Loans [Member] | Real Estate Portfolio Segment [Member]
Loan Portfolio Percentage		20.00%	25.00%

XML

Note 2 - Loans and Allowance for Loan Losses - Impaired Loans (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Recorded Investment, with no related allowance	$ 2,041,000	$ 2,203,000
Unpaid Principal Balance, with no related allowance	2,588,000	2,797,000
Average Recorded Investment, with no related allowance	2,000,000	3,237,000
Interest Income Recognized, with no related allowance	116,000	100,000
Recorded Investment, with related allowance	3,011,000	3,156,000
Unpaid Principal Balance, with related allowance	3,000,000	3,150,000
Related Allowance	1,136,000	1,164,000
Average Recorded Investment, with related allowance	3,605,000	3,783,000
Interest Income Recognized, with related allowance	100,000	94,000
Recorded Investment	5,052,000	5,359,000
Unpaid Principal Balance	5,588,000	5,947,000
Average Recorded Investment	5,605,000	7,020,000
Interest Income Recognized	216,000	194,000
Real Estate Portfolio Segment [Member] | Residential 1 to 4 Family [Member]
Recorded Investment, with no related allowance	1,090,000	1,196,000
Unpaid Principal Balance, with no related allowance	1,464,000	1,795,000
Average Recorded Investment, with no related allowance	1,090,000	1,862,000
Interest Income Recognized, with no related allowance	99,000	42,000
Recorded Investment, with related allowance	1,489,000	1,641,000
Unpaid Principal Balance, with related allowance	1,480,000	1,635,000
Related Allowance	795,000	852,000
Average Recorded Investment, with related allowance	1,590,000	1,782,000
Interest Income Recognized, with related allowance	83,000	77,000
Recorded Investment	2,579,000	2,837,000
Unpaid Principal Balance	2,944,000	3,430,000
Average Recorded Investment	2,680,000	3,644,000
Interest Income Recognized	182,000	119,000
Real Estate Portfolio Segment [Member] | Multifamily Real Estate [Member]
Recorded Investment, with no related allowance	0	0
Unpaid Principal Balance, with no related allowance	0	0
Average Recorded Investment, with no related allowance	0	0
Interest Income Recognized, with no related allowance	0	0
Recorded Investment, with related allowance	0	0
Unpaid Principal Balance, with related allowance	0	0
Related Allowance	0	0
Average Recorded Investment, with related allowance	0	0
Interest Income Recognized, with related allowance	0	0
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
Real Estate Portfolio Segment [Member] | Commercial Real Estate [Member]
Recorded Investment, with no related allowance	951,000	317,000
Unpaid Principal Balance, with no related allowance	1,124,000	316,000
Average Recorded Investment, with no related allowance	910,000	320,000
Interest Income Recognized, with no related allowance	17,000	16,000
Recorded Investment, with related allowance	1,522,000	1,515,000
Unpaid Principal Balance, with related allowance	1,520,000	1,515,000
Related Allowance	341,000	312,000
Average Recorded Investment, with related allowance	2,015,000	2,001,000
Interest Income Recognized, with related allowance	17,000	17,000
Recorded Investment	2,473,000	1,832,000
Unpaid Principal Balance	2,644,000	1,831,000
Average Recorded Investment	2,925,000	2,321,000
Interest Income Recognized	34,000	33,000
Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Recorded Investment, with no related allowance	0	690,000
Unpaid Principal Balance, with no related allowance	0	686,000
Average Recorded Investment, with no related allowance	0	822,000
Interest Income Recognized, with no related allowance	0	42,000
Recorded Investment, with related allowance	0	0
Unpaid Principal Balance, with related allowance	0	0
Related Allowance	0	0
Average Recorded Investment, with related allowance	0	0
Interest Income Recognized, with related allowance	0	0
Recorded Investment	0	690,000
Unpaid Principal Balance	0	686,000
Average Recorded Investment	0	822,000
Interest Income Recognized	0	42,000
Real Estate Portfolio Segment [Member] | Farmland [Member]
Recorded Investment, with no related allowance	0	0
Unpaid Principal Balance, with no related allowance	0	0
Average Recorded Investment, with no related allowance	0	233,000
Interest Income Recognized, with no related allowance	0	0
Recorded Investment, with related allowance	0	0
Unpaid Principal Balance, with related allowance	0	0
Related Allowance	0	0
Average Recorded Investment, with related allowance	0	0
Interest Income Recognized, with related allowance	0	0
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Average Recorded Investment	0	233,000
Interest Income Recognized	0	0
Real Estate Portfolio Segment [Member] | Second Mortgages [Member]
Recorded Investment, with no related allowance	0	0
Unpaid Principal Balance, with no related allowance	0	0
Average Recorded Investment, with no related allowance	0	0
Interest Income Recognized, with no related allowance	0	0
Recorded Investment, with related allowance	0	0
Unpaid Principal Balance, with related allowance	0	0
Related Allowance	0	0
Average Recorded Investment, with related allowance	0	0
Interest Income Recognized, with related allowance	0	0
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
Real Estate Portfolio Segment [Member] | Home Equity Line of Credit [Member]
Recorded Investment, with no related allowance	0	0
Unpaid Principal Balance, with no related allowance	0	0
Average Recorded Investment, with no related allowance	0	0
Interest Income Recognized, with no related allowance	0	0
Recorded Investment, with related allowance	0	0
Unpaid Principal Balance, with related allowance	0	0
Related Allowance	0	0
Average Recorded Investment, with related allowance	0	0
Interest Income Recognized, with related allowance	0	0
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
Commercial Portfolio Segment [Member]
Recorded Investment, with no related allowance	0	0
Unpaid Principal Balance, with no related allowance	0	0
Average Recorded Investment, with no related allowance	0	0
Interest Income Recognized, with no related allowance	0	0
Recorded Investment, with related allowance	0	0
Unpaid Principal Balance, with related allowance	0	0
Related Allowance	0	0
Average Recorded Investment, with related allowance	0	0
Interest Income Recognized, with related allowance	0	0
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
Agricultural Installment and Other Portfolio Segment [Member]
Recorded Investment, with no related allowance	0	0
Unpaid Principal Balance, with no related allowance	0	0
Average Recorded Investment, with no related allowance	0	0
Interest Income Recognized, with no related allowance	0	0
Recorded Investment, with related allowance	0	0
Unpaid Principal Balance, with related allowance	0	0
Related Allowance	0	0
Average Recorded Investment, with related allowance	0	0
Interest Income Recognized, with related allowance	0	0
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	$ 0	$ 0

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Note 9 - Non-interest Income and Non-interest Expense - Non-interest Income and Non-interest Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Service charges on deposits	$ 6,952	$ 6,799	$ 6,124
Other fees and commissions	14,233	13,704	11,752
BOLI and annuity earnings	810	841	871
Security losses, net	(268)	(650)	(175)
Fees and gains on sales of mortgage loans	6,802	4,639	4,258
Gain (loss) on sale of other real estate, net	(48)	(80)	6
Loss on sale of fixed assets, net	(128)	(2)	(0)
Loss on sale of other assets, net	(4)	(3)	(15)
	28,349	25,248	22,821
Employee salaries and benefits	42,541	39,590	35,830
Equity-based compensation	786	1,237	692
Occupancy expenses	4,789	4,403	3,718
Furniture and equipment expenses	3,110	2,767	2,085
Data processing expenses	4,495	2,900	2,834
Advertising expenses	2,498	2,552	2,326
ATM & interchange fees	3,439	3,091	2,569
Accounting, legal & consulting expenses	1,382	977	500
FDIC insurance	373	843	683
Directors’ fees	586	543	677
Other operating expenses	10,629	10,177	8,477
	$ 74,628	$ 69,080	$ 60,391

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Note 14 - Employee Benefit Plan (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Contribution Plan, Minimum Age for Eligibility	20 years 6 months
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 2,540,000	$ 2,383,000	$ 2,145,000

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Note 11 - Commitments and Contingent Liabilities - Future Minimum Rental Payments (Details) $ in Thousands	Dec. 31, 2019 USD ($)
2020	$ 444
2021	387
2022	215
2023	112
2024	4
Thereafter	$ 9

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Note 7 - Deposits - Deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Demand deposits	$ 284,611	$ 254,157
Savings accounts	140,270	136,645
Negotiable order of withdrawal accounts	558,745	503,435
Money market demand accounts	801,986	727,654
Certificates of deposit $250,000 or greater	131,899	134,506
Other certificates of deposit	425,222	402,690
Individual retirement accounts $250,000 or greater	10,646	8,525
Other individual retirement accounts	64,226	68,043
	$ 2,417,605	$ 2,235,655

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Note 5 - Premises and Equipment - Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Premises and equipment, gross	$ 78,597	$ 75,478
Less accumulated depreciation	(18,302)	(17,115)
	60,295	58,363
Land [Member]
Premises and equipment, gross	17,093	17,022
Building [Member]
Premises and equipment, gross	46,389	44,921
Leasehold Improvements [Member]
Premises and equipment, gross	533	492
Furniture and Fixtures [Member]
Premises and equipment, gross	13,000	12,600
Vehicles [Member]
Premises and equipment, gross	243	343
Construction in Progress [Member]
Premises and equipment, gross	$ 1,339	$ 100

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Note 10 - Income Taxes - Components of Net Deferred Tax Asset (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deferred tax asset	$ 9,684	$ 11,785
Deferred tax liability	(3,548)	(2,884)
Net deferred tax asset	6,136	8,901
Financial statement allowance for loan losses in excess of tax allowance	7,283	6,846
Excess of depreciation deducted for tax purposes over the amounts deducted in the financial statements	(2,976)	(2,557)
Financial statement deduction for deferred compensation in excess of deduction for tax purposes	1,193	1,128
Writedown of other real estate not deductible for income tax purposes until sold	157	176
Financial statement income on FHLB stock dividends not recognized for tax purposes	(327)	(327)
Unrealized loss (gain) on securities available-for-sale	(245)
Unrealized loss (gain) on securities available-for-sale		2,726
Equity based compensation	625	469
Other items, net	426	440
Net deferred tax asset	6,136	8,901
Domestic Tax Authority [Member]
Deferred tax asset	7,444	9,046
Deferred tax liability	(2,666)	(2,167)
State and Local Jurisdiction [Member]
Deferred tax asset	2,240	2,739
Deferred tax liability	$ (882)	$ (717)