-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DX2VBSuIO71P/3hVh1zEjnIyVy31r5ULb3ZQL4WFJ9OSyjZ+Y4n0SIdzJzRKh/Vg YuMH4ZJbszORio6js8gCpQ== 0000950144-96-005144.txt : 19960813 0000950144-96-005144.hdr.sgml : 19960813 ACCESSION NUMBER: 0000950144-96-005144 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WILSON BANK HOLDING CO CENTRAL INDEX KEY: 0000885275 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 621497076 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20402 FILM NUMBER: 96608188 BUSINESS ADDRESS: STREET 1: 623 W MAIN STREET STREET 2: P.O. BOX 768 CITY: LEBANON STATE: TN ZIP: 37087 BUSINESS PHONE: 6154442265 MAIL ADDRESS: STREET 1: 623 W MAIN STREET STREET 2: P.O. BOX 768 CITY: LEBANON STATE: TN ZIP: 37087 10-Q 1 WILSON BANK HOLDING CO. FORM 10-Q 6-30-96 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q MARK ONE [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number 0-20402 WILSON BANK HOLDING COMPANY --------------------------- (Exact Name of Registrant As Specified in Its Charter) Tennessee 62-1497076 --------- ---------- (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 623 West Main Street, Lebanon, Tennessee 37087 ----------------------------------------------- (Address of principal executive offices and Zip Code) (615) 444-2265 -------------- (Registrant's telephone Number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Common stock outstanding: 1,378,073 shares at August 10, 1996. 1 2 PART I: FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements of the registrant and its wholly-owned subsidiary Wilson Bank & Trust (the "Bank") and its subsidiary DeKalb Community Bank ("DeKalb") of which there is also a minority interest ownership are as follows: Consolidated Balance Sheets - June 30, 1996 and December 31, 1995. Consolidated Statements of Income - For the six months ended June 30, 1996 and 1995. Consolidated Statements of Income - For the quarters ended June 30, 1996 and 1995. Consolidated Statements of Cash Flows - For the six months ended June 30, 1996 and 1995. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II: OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. Item 6. Exhibits and Reports on Form 8-K. SIGNATURES 2 3 WILSON BANK HOLDING COMPANY Consolidated Balance Sheets June 30, 1996 and December 31, 1995 (Unaudited)
June 30, December 31, 1996 1995 (In Thousands) ASSETS ------ Loans (less allowance for possible loan losses of $2,172,000 and $1,944,000 respectively) $ 165,212 $ 146,738 Securities: Held-to-maturity, at cost (market value of $27,652,000 and $22,558,000 respectively) 27,779 25,391 Available-for-sale, at market (amortized cost $25,450,000 and $26,350,000, respectively) 25,288 26,632 --------- --------- Total securities 53,067 52,023 --------- --------- Loans held for sale 2,276 1,715 Interest-bearing deposits in financial institutions 100 100 Federal funds sold 9,498 8,042 ---------------------- --------- --------- Total earning assets 230,153 208,618 ---------------------- --------- --------- Cash and due from banks 7,590 9,147 Bank premises and equipment, net 7,450 6,121 Accrued interest receivable 1,989 1,896 Deferred income tax asset 514 349 Other assets 371 558 --------- --------- TOTAL ASSETS $ 248,067 $ 226,689 ========= =========
See accompanying notes to unaudited consolidated financial statements. 3 4 WILSON BANK HOLDING COMPANY Consolidated Balance Sheets June 30, 1996 and December 31, 1995 (Unaudited) (Continued)
June 30, December 31, 1996 1995 (In Thousands) LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ LIABILITIES ----------- Deposits $ 216,772 $ 200,037 Securities sold under agreement to repurchase 8,222 6,693 Accrued interest 1,455 1,374 Other liabilities 199 187 --------- --------- Total liabilities 226,648 208,291 --------- --------- Minority interest in assets of subsidiary 1,733 - --------- --------- STOCKHOLDERS' EQUITY -------------------- Common stock, $2.00 par value per share; authorized 5,000,000 shares; 1,363,838 and 1,349,616 issued and outstanding at June 30, 1996 and December 31, 1995, respectively 2,727 2,699 Additional paid-in capital 6,307 5,944 Retained earnings 10,753 9,580 Net unrealized appreciation (losses) on available-for-sale securities, net of tax benefit of $62,000 and taxes of $107,000, respectively (101) 175 --------- --------- Total stockholders' equity 19,686 18,398 --------- --------- Commitments and contingencies TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 248,067 $ 226,689 ========= =========
See accompanying notes to unaudited consolidated financial statements. 4 5 WILSON BANK HOLDING COMPANY Consolidated Statements of Earnings For the Six Months Ended June 30, 1996 and 1995 (Unaudited)
Six Months Ended June 30, 1996 1995 (Dollars In Thousands Except Per Share Amounts) Interest income: Interest and fees on loans $7,786 $6,214 Interest and dividends on securities: Taxable securities 951 808 Exempt from Federal income taxes 561 506 Interest on loans held for sale 43 46 Interest on federal funds sold 333 281 Interest on interest-bearing deposits in financial institutions 5 4 ------ ------ Total interest income 9,679 7,859 ------ ------ Interest expense: Interest on negotiable order of withdrawal accounts 263 239 Interest on money market and savings accounts 914 681 Interest on certificates of deposit 3,384 2,799 Interest on securities sold under agreement to repurchase 162 120 ------ ------ Total interest expense 4,723 3,839 ------ ------ Net interest income before provisions for possible loan losses 4,956 4,020 Provision for possible loan losses 277 252 ------ ------ Net interest income after provision for possible loan losses 4,679 3,768 ------ ------ Non-interest income: Service charges on deposit accounts 601 465 Other fees and commissions 140 128 Gain on sale of loans 322 178 Minority interest in net loss of subsidiary 17 - ------ ------ Total non-interest income 1,080 771 ------ ------
5 6 WILSON BANK HOLDING COMPANY Consolidated Statements of Earnings For the Six Months Ended June 30, 1996 and 1995 (Unaudited) (Continued) Non-interest expenses: Salaries and employee benefits 1,902 1,536 Occupancy expenses, net 183 186 Furniture and equipment expense 409 333 Data processing expense 154 138 Other operating expenses 668 704 Security losses, available-for-sale - 4 Loss on sale of other real estate - 10 ------ ------ Total non-interest expenses 3,316 2,911 ------ ------ Net earnings before income taxes 2,443 1,628 Income taxes 798 476 ------ ------ Net earnings $1,645 $1,152 ====== ====== Weighted average number of shares of common stock outstanding 1,361,494 1,332,033 Net earnings per share $ 1.21 .86 Dividends per share $ .35 .35
See accompanying notes to unaudited consolidated financial statements. 6 7 WILSON BANK HOLDING COMPANY Consolidated Statements of Earnings For the Quarters Ended June 30, 1996 and 1995 (Unaudited)
Quarters Ended June 30, 1996 1995 (Dollars In Thousands Except Per Share Amounts) Interest income: Interest and fees on loans $4,017 $3,225 Interest and dividends on securities: Taxable securities 487 416 Exempt from Federal income taxes 278 254 Interest on loans held for sale 20 26 Interest on federal funds sold 148 129 Interest on interest-bearing deposits in financial institutions 3 2 ------ ------ Total interest income 4,953 4,052 ------ ------ Interest expense: Interest on negotiable order of withdrawal accounts 114 107 Interest on money market and savings accounts 450 356 Interest on certificates of deposit 1,695 1,492 Interest on securities sold under agreement to repurchase 92 64 ------ ------ Total interest expense 2,351 2,019 ------ ------ Net interest income before provisions for possible loan losses 2,602 2,033 Provision for possible loan losses 146 115 ------ ------ Net interest income after provision for possible loan losses 2,456 1,918 ------ ------ Non-interest income: Service charges on deposit accounts 311 243 Other fees and commissions 24 67 Gain on sale of loans 164 108 Minority interest in net loss of subsidiary 17 - ------ ------ Total non-interest income 516 418 ------ ------
7 8 WILSON BANK HOLDING COMPANY Consolidated Statements of Earnings For the Quarters Ended June 30, 1996 and 1995 (Unaudited) (Continued) Non-interest expenses: Salaries and employee benefits 1,025 793 Occupancy expenses, net 96 108 Furniture and equipment expense 213 149 Data processing expense 81 70 Other operating expenses 338 358 Security losses, available-for-sale - 4 Loss on sale of other real estate - 10 ------ ------ Total non-interest expenses 1,753 1,492 ------ ------ Net earnings before income taxes 1,219 844 Income taxes 402 247 ------ ------ Net earnings $ 817 $ 597 ====== ====== Weighted average number of shares of common stock outstanding 1,363,838 1,334,717 Net earnings per share $ .60 $ .44 Dividends per share $ - -
See accompanying notes to unaudited consolidated financial statements. 8 9 WILSON BANK HOLDING COMPANY Consolidated Statements of Cash Flows For the Six Months Ended June 30, 1996 and 1995 Increase (Decrease) in Cash and Cash Equivalents (Unaudited)
Six Months Ended June 30, 1996 1995 (In Thousands) Cash flows from operating activities: Interest received $ 9,579 $ 7,428 Fees and commissions received 848 593 Proceeds from sale of loans 13,848 9,787 Origination of loans held for sale (14,087) (9,595) Interest paid (4,642) (3,628) Cash paid to suppliers and employees (3,093) (2,798) Income taxes paid (647) (417) ------- ------- Net cash provided by operating activities 1,806 1,370 ------- ------- Cash flows from investing activities: Proceeds from maturities of held-to-maturity securities 1,984 647 Proceeds from maturities of available-for-sale securities 6,013 541 Proceeds from sales of available-for-sale securities - 2,461 Purchase of held-to-maturity securities (4,368) (379) Purchase of available-for-sale securities (5,110) (5,955) Loans made to customers, net of repayments (18,751) (8,485) Purchase of premises and equipment (1,608) (454) ------- ------- Net cash used in investing activities (21,840) (11,624) ------- ------- Cash flows from financing activities: Net increase in non-interest bearing, savings and NOW deposit accounts 8,651 4,288 Net increase in time deposits 8,084 12,122 Increase in securities sold under agreement to repurchase 1,529 1,301 Increase in Federal funds purchased - 250 Sale of minority owned commercial bank subsidiary common stock 1,750 - Dividends paid (472) (462)
9 10 WILSON BANK HOLDING COMPANY Consolidated Statements of Cash Flows For the Six Months Ended June 30, 1996 and 1995 Increase (Decrease) in Cash and Cash Equivalents (Unaudited) (Continued) Proceeds from reinvestment of dividends - sale of common stock 391 382 ------- ------- Net cash provided by financing activities 19,933 17,881 ------- ------- Net increase (decrease) in cash and cash equivalents (101) 7,627 Cash and cash equivalents at beginning of period 17,189 17,175 ------- ------- Cash and cash equivalents at end of period $17,088 $24,802 ======= ======= Reconciliation of net earnings to net cash provided by operating activities: Net earnings $ 1,645 $ 1,152 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 305 263 Provision for loan losses 277 252 Loss on sale of investment securities - available-for-sale - 4 Net loss of minority interest of commercial bank subsidiary (17) - Federal Home Loan Bank stock dividends (33) (17) Decrease in refundable income taxes 80 86 Increase (decrease) in taxes payable 68 (26) Loss on sale of other real estate - 10 Decrease (increase) in other assets, net 110 (194) Decrease (increase)in loans held for sale (561) 14 Increase in interest receivable (93) (405) Increase (decrease) in other liabilities (56) 20 Increase in interest payable 81 211 ------- ------- Total adjustments 161 218 ------- ------- Net cash provided by operating activities $ 1,806 $ 1,370 ======= =======
10 11 WILSON BANK HOLDING COMPANY Consolidated Statements of Cash Flows For the Six Months Ended June 30, 1996 and 1995 Increase (Decrease) in Cash and Cash Equivalents (Unaudited) (Continued) Supplemental schedule of noncash activities: Unrealized gain in values of securities available for sale, net of taxes of $169,000 and $264,000 for the six months ended June 30, 1996 and 1995, respectively. $ (276) $ 432 ======== ========
See accompanying notes to unaudited consolidated financial statements. 11 12 WILSON BANK HOLDING COMPANY Notes to Consolidated Financial Statements (Unaudited) BASIS OF PRESENTATION The unaudited consolidated financial statements include the accounts of Wilson Bank Holding Company (the "Company") and its wholly-owned subsidiary, Wilson Bank and Trust (the "Bank") along with DeKalb Community Bank ("DeKalb) of which the Company owns 50% of the outstanding common stock. DeKalb opened for business on April 18, 1996. The Bank also has a wholly-owned consolidated subsidiary, Hometown Finance Company, which is a consumer finance company. The accompanying consolidated financial statements have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. All financial information except per share data has been rounded to the nearest thousand of dollars for both the financial statements and management's discussion and analysis of financial condition and results of operations. In the opinion of management, the consolidated financial statements contain all adjustments and disclosures necessary to summarize fairly the financial position of the Company as of June 30, 1996 and December 31, 1995, and the results of operations for the six months ended June 30, 1996 and 1995 and the three months ended June 30, 1996 and 1995 and changes in cash flows for the six months ended June 30, 1996 and 1995. All significant intercompany transactions have been eliminated. The interim consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements presented in the Company's 1995 Annual Report to Stockholders. The results for interim periods are not necessarily indicative of results to be expected for the complete fiscal year. 12 13 ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The purpose of this discussion is to provide insight into the financial condition and results of operations of the Company and its subsidiaries. This discussion should be read in conjunction with the consolidated financial statements. RESULTS OF OPERATIONS Net earnings increased 42.8% to $1,645,000 for the six months ended June 30, 1996 from $1,152,000 in the first six months of 1995. Net earnings were $817,000 for the quarter ended June 30, 1996, an increase of $220,000 or 36.9% from $597,000 for the three months ended June 30, 1995 and a decrease of $11,000 or 1.3% from the quarter ended March 31, 1996. The increase in net earnings during the six months ended June 30, 1996 was primarily due to a 23.3% increase in net interest income along with a 40.1% increase in non-interest income as compared to a 13.9% increase in non-interest expenses. NET INTEREST INCOME Net interest income represents the amount by which interest earned on various earning assets exceeds interest paid on deposits and other interest-bearing liabilities and is the most significant component of the Company's earnings. The Company's total interest income, excluding tax equivalent adjustments, increased $1,820,000 or 23.2% during the six months ended June 30, 1996 as compared to the same period in 1995. The increase in total interest income was $901,000 or 22.2% for the quarter ended June 30, 1996 as compared to the quarter ended June 30, 1995 and $227,000 or 4.8% over the first three months of 1996. The increase in 1996 was primarily attributable to an increase in average earning assets, combined with an increase in weighted average interest rates. The ratio of average earning assets to total average assets was 94.3% and 94.9% for the quarters ended June 30, 1996 and March 31, 1996, respectively, and 94.6% and 93.5% for the six months ended June 30, 1996 and 1995, respectively. Interest expense increased $884,000 or 23.0% for the six months ended June 30, 1996 as compared to the same period in 1995. The increase was $332,000 or 16.4% for the three months ended June 30, 1996 as compared to the same period in 1995. Interest expense decreased $21,000 or 0.89% for the quarter ended June 30, 1996 over the first three months of 1996. The overall increase in total interest expense for the first six months of 1996 was primarily attributable to an increase in weighted average interest-bearing liabilities. The foregoing resulted in an increase in net interest income of $936,000 or 23.3% for the first six months of 1996 as compared to the same period in 1995. The increase in net interest income was $569,000 or 28.0% for the quarter ended June 30, 1996 13 14 compared to the quarter ended June 30, 1995 and an increase of $248,000 or 10.5% when compared to the first quarter of 1996. PROVISION FOR POSSIBLE LOAN LOSSES The provision for possible loan losses was $277,000 and $252,000, for the first six months of 1996 and 1995, respectively. The provision for loan losses during the three month periods ended June 30, 1996 and 1995 was $146,000 and $115,000, respectively. The provision for possible loan losses is based on past loan experience and other factors which, in management's judgment, deserve current recognition in estimating possible loan losses. Such factors include past loan loss experience, growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for loan losses to outstanding loans, and current economic conditions that may affect the borrower's ability to repay. Management has in place a system designed for monitoring its loan portfolio in an effort to identify potential problem loans. The provision for possible loan losses raised the allowance for possible loan losses to $2,172,000, an increase of 11.7% from $1,944,000 at December 31, 1995. The allowance for possible loan losses as a percentage of total outstanding loans (excluding loans held for sale) was 1.30% at June 30, 1996 compared to 1.31% at December 31, 1995. The level of the allowance and the amount of the provision involve evaluation of uncertainties and matters of judgment. Management believes the allowance for possible loan losses at June 30, 1996 to be adequate. Transactions related to the allowance for possible loan losses were as follows:
Six Months Ended June 30, 1996 1995 (In Thousands) Balance, January 1, 1996 and 1995, respectively $1,944 $1,556 Add (deduct): Losses charged to allowance (55) (45) Recoveries credited to allowance 6 23 Provision for loan losses 277 252 ------ ------ Balance, June 30, 1996 and 1995, respectively $2,172 $1,786 ====== ======
NON-INTEREST INCOME The components of the Company's non-interest income include service charges on deposit accounts, other fees and commissions, gain on sale of loans, gain on sale of investment securities and the offsetting effect of third party interests in the results of operations of DeKalb. Total non-interest income for the six months ended June 30, 1996 increased by 40.1% to $1,080,000 from $771,000 for the same period in 1995. The increase was $98,000 or 23.4% during the quarter ended June 30, 1996 compared to the second quarter in 1995 and there was a decrease of $48,000 or 8.5% 14 15 compared to the first three months of 1996. The increase during the first six months of 1996 was due primarily to increases in service charges on deposit accounts as well as an increase in gains on sale of loans. Service charges on deposit accounts increased $136,000 or 29.2% to $601,000 during the six months ended June 30, 1996. Service charges on deposit accounts increased $68,000 or 28.0% during the quarter ended June 30, 1996 compared to the same quarter in 1995. Gains on sales of loans totaled $322,000 and $178,000 during the six months ended June 30, 1996 and 1995, respectively, which represented an increase of 80.9%, and $164,000 and $108,000 during the quarters ended June 30, 1996 and 1995, respectively, which reflected a 51.9% increase in 1996 over the corresponding period in 1995. NON-INTEREST EXPENSES Non-interest expense consists primarily of employee salaries and benefits, occupancy, furniture and equipment expense and other operating expenses. Total non-interest expense increased $405,000 or 13.9% during the first six months of 1996 compared to the same period in 1995. The increase for the quarter ended June 30, 1996 was $261,000 or 17.5% as compared to the comparable quarter in 1995 and $190,000 or 12.2% as compared to the first three months of 1996. The increases in non-interest expense are attributable primarily to increases in employee salaries and benefits associated with an increase in the number of employees necessary to support the Company's expanded operations, which included the opening of a new branch in 1995. The number of full-time equivalent employees increased to 133 at June 30, 1996, an increase from 107 at June 30, 1995. This included 127 at the Bank and 6 at DeKalb. Increases in occupancy and furniture and equipment expenses were also due to the Company's expanded operations. Other operating expenses for the six months ended June 30, 1996 decreased 5.1% to $668,000 from $704,000 for the comparable period in 1995. Other operating expenses decreased $20,000 or 5.6% during the quarter ended June 30, 1996 as compared to the same period in 1995 and increased $8,000 or 2.4% as compared to the first three months of 1996. These other operating expenses include Federal Deposit Insurance Corporation premiums assessed on deposits, supplies and general operating costs which increased as a result of continued growth of the Company. During 1995 the Bank's FDIC assessment rate was 0.23% of eligible deposits. The FDIC has changed the risk-based range of assessments (which had ranged from 0.23% to 0.31% of eligible deposits) to range from 0.04% to 0.31%. The Bank is currently assessed a maximum of 0.04% and the annual expense for 1996 should be approximately $2,000. The Bank received a rebate on the premiums paid in early 1995 late last year. INCOME TAXES The Company's income tax expense was $798,000 for the six months 15 16 ended June 30, 1996, an increase of $322,000 over the comparable period in 1995. Income tax expense was $402,000 for the quarter ended June 30, 1996, an increase of $155,000 over the same period in 1995. The percentage of income tax expense to net income before taxes was 32.7% and 29.2% for the six months ended June 30, 1996 and 1995, respectively and 33.0% and 29.3% for the quarters ended June 30, 1996 and 1995, respectively. The percentage of income tax expense to net income before taxes was 32.4% for the first three months of 1996. The increase in the percentage is due to a decrease in the amount of tax exempt interest income as a percentage of total interest income. This percentage was 5.8% for the six months ended June 30, 1996 compared to 6.4% for the six months ended June 30, 1995. FINANCIAL CONDITION BALANCE SHEET SUMMARY The Company's total assets increased 9.4% to $248,067,000 during the six months ended June 30, 1996 from $226,689,000 at December 31, 1995. Total assets increased $6,616,000 or 2.7% and $14,762,000 or 6.5% during the three-month periods ended June 30, 1996 and March 31, 1996, respectively. Loans, net of allowance for possible loan losses ("Net Loans"), totaled $165,212,000 at June 30, 1996 or a 12.6% increase compared to $146,738,000 at December 31, 1995. Net Loans increased $15,629,000 or 10.4% and $2,845,000 or 1.9% during the quarters ended June 30, 1996 and March 31, 1996, respectively. These increases were primarily due to the continued favorable interest rate environment which motivated the refinancing of mortgages and the Company's ability to increase its market share of such loans while maintaining its underwriting standards. Investment securities increased $1,044,000 or 2.0% to $53,067,000 at June 30, 1996 from $52,023,000 at December 31, 1995. Investment securities increased $1,759,000 or 3.4% during the three months ended June 30, 1996 and decreased $715,000 or 1.4% during the quarter ended March 31, 1996. The increase in securities was reduced by a net unrealized loss of $162,000 during the six month period ending June 30, 1996. Federal funds sold increased $1,456,000 to $9,498,000 at June 30, 1996 from $8,042,000 at December 31, 1995. Total liabilities increased by 8.8% to $226,648,000 at June 30, 1996 compared to $208,291,000 at December 31, 1995. The increase by quarter totaled $5,951,000 or 2.7% and $12,406,000 or 6.0% during the quarters ended June 30, 1996 and March 31, 1996, respectively. These increases were composed primarily of a $16,735,000 or 8.4% increase in total deposits and an increase of $1,529,000 or 22.8% in securities sold under repurchase agreements during the six months ended June 30, 1996. 16 17 The following schedule details selected information as to non-performing loans of the Company at June 30, 1996 and December 31, 1995:
June 30, 1996 --------------------- Past due 90 days or more Non-accrual ------- ----------- (In Thousands) Real estate loans $ 11 $ 5 Installment loans 235 88 Credit cards 11 - Commercial, financial and agricultural loans 28 16 ------ ------ Total 90 days or more past due and non-accrual loans $ 285 $ 109 ====== ====== Total 90 days or more past due and non-accrual loans $ 394 Renegotiated loans - -------- Total 90 days or more past due, non- accrual and renegotiated loans $ 394 ========
December 31, 1995 --------------------- Past due 90 days or more Non-accrual ------- ----------- (In Thousands) Real estate loans $ - - Installment loans 154 113 Credit cards 9 - Commercial, financial and agricultural loans 8 4 ------ ------ Total 90 days or more past due and non-accrual loans $ 171 $ 117 ====== ====== Total 90 days or more past due and non-accrual loans $ 288 Renegotiated loans - -------- Total 90 days or more past due, non- accrual and renegotiated loans $ 288 ========
Non-performing loans at June 30, 1996 totaled $394,000, an increase of 36.8% from $288,000 at December 31, 1995. During the three months ended June 30, 1996, non-performing loans decreased $3,000 or 0.8% from $397,000 at March 31, 1996. The increase in non-performing loans in the first six months of 1996 is due primarily to an increase in the installment loans 90 or more days past due. At June 30, 1996, loans totaling $514,000 (including the above past due and non-accrual loans) were included in the Company's internal classified loan list. Of these loans $260,000 are secured by real 17 18 estate, $91,000 are commercial and $163,000 are installment loans. The collateral values securing these loans total approximately $340,000 ($216,000 secured by real property, $49,000 relating to commercial loans and $75,000 related to installment loans). The internally classified loans have declined from $1,631,000 at December 31, 1995, to $514,000 at June 30, 1996. This decrease is represented by a decrease of $953,000 in loans secured by real estate and a decrease of $164,000 of other various types of loans. Loans are listed as classified when information obtained about possible credit problems of the borrower has prompted management to question the ability of the borrower to comply with the repayment terms of the loan agreement. The loan classifications do not represent or result from trends or uncertainties which management expects will materially impact future operating results, liquidity or capital resources. Fixed assets net of depreciation increased $1,329,000 during the first six months of 1996 to $7,450,000. Of this increase. $394,000 can be attributed to the addition of DeKalb and $891,000 was the result of a new addition to the main office of the Bank. Construction is scheduled to be completed in October 1996. LIQUIDITY AND ASSET MANAGEMENT The Company's management seeks to maximize net interest income by managing the Company's assets and liabilities within appropriate constraints on capital, liquidity and interest rate risk. Liquidity is the ability to maintain sufficient cash levels necessary to fund operations, meet the requirements of depositors and borrowers and fund attractive investment opportunities. Higher levels of liquidity bear corresponding costs, measured in terms of lower yields on short-term, more liquid earning assets and higher interest expense involved in extending liability maturities. Liquid assets include cash and cash equivalents and securities and money market instruments that will mature within one year. At June 30, 1996, the Company's liquid assets totaled $31,266,000. The Company's primary source of liquidity is a stable core deposit base. In addition short-term investments, loan payments and investment security maturities provide a secondary source. Interest rate risk (sensitivity) focuses on the earnings risk associated with changing interest rates. Management seeks to maintain profitability in both immediate and long term earnings through funds management/interest rate risk management. The Company's rate sensitivity position has an important impact on earnings. Senior management of the Company meets monthly to analyze the rate sensitivity position of the Bank. These meetings focus on the spread between the Company's cost of funds and interest yields generated primarily through loans and investments. 18 19 The Company's securities portfolio consists of earning assets that provide interest income. For those securities classified as held-to-maturity the Company has the ability and intent to hold these securities to maturity or on a long-term basis. Securities classified as available-for-sale include securities intended to be used as part of the Company's asset/liability strategy and/or securities that may be sold in response to changes in interest rate, prepayment risk, the need or desire to increase capital and similar economic factors. Securities totaling $15.1 million mature or will be subject to rate adjustments within the next twelve months. A secondary source of liquidity is the Bank's loan portfolio. At June 30, 1996 loans of approximately $107 million either will become due or will be subject to rate adjustments within twelve months from the respective date. Continued emphasis will be placed on structuring adjustable rate loans. As for liabilities, certificates of deposit of $100,000 or greater of approximately $30.8 million will become due during the next twelve months. Historically, there has been no significant reduction in immediately withdrawable accounts such as negotiable order of withdrawal accounts, money market demand accounts, demand deposit and regular savings. Management does not anticipate that there will be significant withdrawals from these accounts in the next twelve months. Management believes that with present maturities, the anticipated growth in deposit base, and the efforts of management in its asset/liability program, management is positioned to effectively manage its liquidity in the near term. CAPITAL POSITION AND DIVIDENDS At June 30, 1996, total stockholders' equity was $19,686,000 or 7.9% of total assets, which compares with $18,398,000 or 8.1% of total assets at December 31, 1995. The dollar increase in stockholders' equity during the six months ended June 30, 1996 results from the Company's net income of $1,645,000 less the net effect of a $276,000 increase in the net unrealized loss on investment securities net of applicable income taxes and cash dividends declared of $472,000 (of which $391,000 was reinvested under the Company's dividend reinvestment plan.) The Company's principal regulators have established minimum risk-based capital requirements and leverage capital requirements for the Company, the Bank and DeKalb. These guidelines classify capital into two categories of Tier I and Tier II capital. Total capital consists of Tier I (or core) capital (essentially common equity less intangible assets) and Tier II capital (essentially qualifying long-term debt, of which the Company Bank and DeKalb have none, and a part of the allowance for possible loans losses). 19 20 In determining risk-based capital requirements, assets are assigned risk-weights of 0% to 100%, depending on regulatory assigned levels of credit risk associated with such assets. The risk-based capital guidelines require the Company, Bank and DeKalb to have a total risk-based capital ratio of 8.0% and a Tier I risk-based capital ratio of 4.0%. At June 30, 1996 the Company's total risk-based capital ratio was 13.6% and their Tier I risk-based capital ratio was approximately 12.3% compared to ratios of 13.8% and 12.6%, respectively at December 31, 1995. At June 30, 1996 the Bank's total risk-based capital ratio was 12.6% and its Tier I risk-based capital ratio was approximately 11.4% compared to ratios of 13.8% and 12.5%, respectively at December 31, 1995. At June 30, 1996 DeKalb's total risk-based capital ratio was 93.7% and its Tier I risk-based capital ratio was approximately 93.7%. The required leverage capital ratio (Tier I capital to average assets for the most recent quarter) for the Company, Bank and DeKalb is 4.0%. At June 30, 1996 the Company had a leverage ratio of 8.4%, compared to 8.2% at December 31, 1995. At June 30, 1996 the Bank had a leverage ratio of 7.7%, compared to 8.1% at December 31, 1995. At June 30, 1996 DeKalb had a leverage ratio of 120.4%. Dividends of $472,000 and $462,000 were declared by the Company during the first six months ended June 30, 1996 and 1995, respectively. IMPACT OF INFLATION Although interest rates are significantly affected by inflation, the inflation rate is immaterial when reviewing the Company's results of operations. 20 21 WILSON BANK HOLDING COMPANY FORM 10-Q, CONTINUED PART II. OTHER INFORMATION ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Annual Meeting of Stockholders was held April 16, 1996. (b) Each of the persons named in the Proxy Statement as a nominee for director was elected and the selection of Maggart & Associates, P.C. as independent auditors for the Company for 1996 was ratified. The following are the voting results on each of the matters: (1) Election of the entire board of directors who are as follows: Total Number of Shares Voting: Shares Broker Voting For Against Withheld Non-Votes ---------------------------------------------- Charles Bell 741,290 740,565 0 725 0 Jack Bell 741,290 740,565 0 725 0 Mackey Bentley 741,290 740,565 0 725 0 Randall Clemons 741,290 740,565 0 725 0 Jimmy Comer 741,290 739,066 1,499 725 0 Jerry Franklin 741,290 740,565 0 725 0 John Freeman 741,290 740,565 0 725 0 Marshall Griffith 741,290 740,565 0 725 0 Harold Patton 741,290 740,565 0 725 0 James Patton 741,290 740,565 0 725 0 John Trice 741,290 740,279 286 725 0 Bob VanHooser 741,290 739,869 696 725 0 (2) The election of Maggart & Associates, P.C. as independent auditors for the Company was as follows: Total Number of Shares Voting: Shares Broker Voting For Against Abstain Non-Votes -------------------------------------------------------- 741,290 736,892 1,191 3,207 0 21 22 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (27) Financial Data Schedule (for SEC use only) (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. 22 23 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WILSON BANK HOLDING COMPANY --------------------------- (Registrant) DATE: August 9, 1996 /s/ Randall Clemons ----------------- ------------------------------------- Randall Clemons, President and Chief Executive Officer DATE: August 9, 1996 /s/ Becky Taylor ----------------- ------------------------------------- Becky Taylor, Vice President, Cashier and Principal Accounting Officer 23 EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 6-MOS DEC-31-1996 JUN-30-1996 7,590 100 9,498 0 25,288 27,779 25,450 167,384 2,172 248,067 216,772 8,222 1,654 0 0 0 2,727 16,959 248,067 7,786 1,512 381 9,679 4,561 4,723 4,956 277 0 3,316 2,443 2,443 0 0 1,645 1.21 1.21 4.72 109 285 0 514 1,944 55 6 2,172 2,172 0 1,658
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