10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

For the fiscal year ended December 31, 2004

o 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 incorporation or organization)	(I.R.S. Employer Identification Number)
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 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 þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes þ Noo

The aggregate market value of the voting stock held by non-affiliates of the registrant on June 30, 2004, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $107,311,078. For purposes of this calculation, “affiliates” are considered to be the directors of the registrant. The market value calculation was determined using $28.50 per share.

Shares of common stock, $2.00 par value per share, outstanding on March 7, 2005 were 4,490,081.

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, 2004 are incorporated by reference into Items 5, 6, 7, 7A and 8.
Part III	Portions of the Registrant’s Proxy Statement relating to the Registrant’s Annual Meeting of Shareholders to be held on April 12, 2005 are incorporated by reference into Items 10, 11, 12, 13 and 14.

TABLE OF CONTENTS

PART I
	Item 1. Business
	Item 2. Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
PART II
	Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issues Purchasers of Equity Securities
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk
	Item 8. Financial Statements and Supplementary Data
	Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
	Item 9A. Controls and Procedures
	Item 9B. Other Information
PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	Item 13. Certain Relationships and Related Transactions
	Item 14. Principal Accountant Fees and Services
	Item 15. Exhibits and Financial Statement Schedules
SIGNATURES
EX-10.7 FORM OF WILSON BANK HOLDING COMPANY
Ex-13.1 Selected Portions of the Wilson Bank Holding Company Annual Report to Shareholders
Ex-21.1 Subsidiaries of the Company
Ex-23.1 Consent of Maggart & Associates, P.C.
Ex-31.1 Section 302 Certification of the CEO
Ex-31.2 Section 302 Certification of the CFO
Ex-32.1 Section 906 Certification of the CEO
Ex-32.2 Section 906 Certification of the CFO

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 a plan of share exchange and agreement.

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, and two fifty-percent owned subsidiaries, DeKalb Community Bank (“DCB”) and Community Bank of Smith County (“CBSC”). The Bank, on December 31, 2004, had nine full service banking offices located in Wilson County, Tennessee, one full service banking facility in Trousdale County, Tennessee, two full service banking offices in eastern Davidson County and one banking facility located in Rutherford County. On January 4, 2004, the Bank opened its Leeville-109 branch. On February 2, 2004, the Bank opened a loan production office in Murfreesboro which was converted to a full service banking office on March 1, 2004. On March 15, 2004, the Company opened its Mt. Juliet branch. On February 18, 2005, the Bank opened its branch on Donelson Pike. DCB had two full service banking offices in DeKalb County, one office located in Smithville, Tennessee and one office located in Alexandria, Tennessee. CBSC had one office located in Carthage, Smith County, Tennessee and one office located in Gordonsville, Smith County, Tennessee. DCB began operations in April 1996 and CBSC began operations in December 1996. As of December 31, 2004, revenues and expenses of DCB and CBSC, have not had a material effect on the earnings of the Company.

In November 2004, DCB and CBSC entered into agreements with the Company and the Bank that provide for the merger of DCB and CBSC with and into the Bank subject to shareholder approval and regulatory approvals. At a special meeting of DCB’s shareholders held on March 14, 2005, DCB’s shareholders voted to approve the merger of DCB with and into the Bank. At a special meeting of CBSC’s shareholders to be held on March 24, 2005, CBSC’s shareholders will be asked to approve the merger of CBSC with and into the Bank.

The Company’s principal executive office is located at 623 West Main Street, Lebanon, Tennessee, which is also the principal location of the Bank. The Bank’s branch offices are located at 1444 Baddour Parkway, Lebanon, Tennessee; 200 Tennessee Boulevard, Lebanon, Tennessee; Public Square, Watertown, Tennessee; 8875 Stewart’s Ferry Pike, Gladeville, Tennessee; 1476 North Mt. Juliet Road, Mt. Juliet, Tennessee; 11835 Highway 70, Mount Juliet, Tennessee; 127 McMurry Boulevard, Hartsville, Tennessee; 1130 Castle Heights Avenue North, Lebanon, Tennessee; the Wal-Mart Super Center, Lebanon, Tennessee; 440 Highway 109 North, Lebanon, Tennessee; 4736 Andrew Jackson Parkway in Hermitage, Tennessee; 151 Heritage Park Drive, Suite 102, in Murfreesboro, Tennessee; and 217 Donelson Pike, Nashville, Tennessee. Management believes that Wilson County, Trousdale County, Davidson County and Rutherford County offer an environment for continued banking growth in the Company’s target market, which consists of local consumers, professionals and small 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. Furthermore, no concentration of loans exists within a single industry or group of related industries.

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, 2004, the Company reported net earnings of approximately $9.1 million and had total assets of approximately $937.2 million.

DCB was organized and began operations as a de novo state chartered bank in 1996. Pending consummation of the merger, DCB is 50% owned by the Company and 50% owned by residents of DeKalb County. On November 16, 2004, the Company entered into a merger agreement with DCB, pursuant to which DCB will merge with and into the Bank with the Bank continuing as the surviving entity of the merger. At a special meeting of DCB’s shareholders held on March 14, 2005, DCB’s shareholders voted to approve the merger of DCB with and into the Bank. DCB operates two full-service branches, one in Smithville and one in Alexandria, Tennessee, which following consummation of the merger will be operated as DeKalb Community Bank, a Wilson Bank and Trust bank. Until consummation of the merger, DCB is considered a subsidiary of the Company for purposes of the Bank Holding Company Act of 1956.

Management believes that DeKalb County offers an environment for continued growth since it is geographically close to Wilson County. DCB, the only locally-owned bank in DeKalb County, 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. DCB does

1

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 DCB. Furthermore, no concentration of loans exists within a single industry or group of related industries.

CBSC was organized as a de novo state chartered bank in 1996. Pending consummation of its merger with Wilson Bank and Trust, CBSC is 50% owned by the Company and 50% owned by residents of Smith County. On November 16, 2004, the Company entered into a merger agreement with CBSC, pursuant to which CBSC will merge with and into the Bank with the Bank continuing as the surviving entity of the merger. At a special meeting of CBSC’s shareholders to be held on March 24, 2005, CBSC’s shareholders will be asked to approve the merger of CBSC with and into the Bank. CBSC operates two full-service branches, one in Gordonsville and one in Carthage. Following consummation of the merger, CBSC’s two branches will be operated as Community Bank of Gordonsville, a Wilson Bank and Trust bank, and Community Bank of Smith County, a Wilson Bank and Trust bank. CBSC is considered a subsidiary of the Company for purposes of the Bank Holding Company Act of 1956. Management believes that Smith County offers an environment for continued growth since it is contiguous to Wilson County and has only three other financial institutions serving its residents. CBSC 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. CBSC 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 CBSC. Furthermore, no concentration of loans exists within a single industry or group of related industries.

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, 2004 filed as Exhibit 13 to this Form 10-K (the “2004 Annual Report”), are incorporated herein by reference.

Regulation and Supervision

In addition to the information set forth herein, Management’s Discussion and Analysis of Financial Condition and Results of Operations, incorporated by reference in Item 7 hereof, further discusses recent banking legislation and regulation and should be reviewed in conjunction herewith.

The Company, the Bank, DCB and CBSC are subject to extensive regulation under state and federal statutes and regulations. The discussion in this section, which briefly summarizes certain of such statutes, does not purport to be complete, and is qualified in its entirety by reference to such statutes. Other state and federal legislation and regulations directly and indirectly affecting banks are likely to be enacted or implemented in the future; however, such legislation and regulations and their effect on the business of the Company and its subsidiaries cannot be predicted.

The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the “Act”) and is registered with the Board of Governors of the Federal Reserve System (the “Board”). The Company is required to file annual reports with, and is subject to examination by, the Board. The Bank, DCB and CBSC are chartered under the laws of the State of Tennessee and are subject to the supervision of, and are regularly examined by, the Tennessee Department of Financial Institutions. The Bank, DCB and CBSC are also regularly examined by the Federal Deposit Insurance Corporation.

Under the 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 Board. In addition, bank holding companies are generally prohibited under the Act from engaging in non-banking activities, subject to certain exceptions and the recent modernization of the financial services industry in connection with the passing of the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”). Under the Act, the Board is authorized to approve the ownership by a bank holding company of shares of any company whose activities have been determined by the Board to be so closely related to banking or to managing or controlling banks as to be a proper incident thereto.

In November 1999, the GLB Act became law. Under the GLB Act, a “financial holding company” may engage in activities the Board 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, 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 Board to become a “financial holding company.”

Under the Tennessee Bank Structure Act, a bank holding company which controls 30% or more of the total deposits in all federally insured financial institutions in Tennessee is prohibited from acquiring any bank in Tennessee. Furthermore, no bank holding company may acquire any bank in Tennessee that has been in operation less than three years or organize a new bank in Tennessee,

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except in the case of certain interim bank mergers and acquisitions of banks in financial difficulty. State banks and national banks in Tennessee, however, may establish branches anywhere in the state.

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “IBBEA”) authorized interstate acquisitions of banks and bank holding companies without geographic limitation beginning on June 1, 1997. In addition, on that date, the IBBEA authorized a bank to merge with a bank in another state as long as neither of the states has opted out of interstate branching between the date of enactment of the IBBEA and May 1, 1997. Tennessee enacted interstate branching laws in response to the federal law which prohibit the establishment or acquisition in Tennessee by any bank of a branch office, branch bank or other branch facility in Tennessee except (i) a Tennessee-chartered bank, (ii) a national bank which has its main office in Tennessee or (iii) a bank which merges or consolidates with a Tennessee-chartered bank or national bank with its main office in Tennessee.

The Company, the Bank, DCB and CBSC 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 banks, on investments in the stock or other securities of the bank holding company or its subsidiary banks, and on taking such stock or other securities as collateral for loans of any borrower. The Bank, DCB and CBSC all take Company Common Stock as collateral for borrowings subject to the aforementioned restrictions.

The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) covers a wide expanse of banking regulatory issues. FDICIA deals with recapitalization of the Bank Insurance Fund, with deposit insurance reform, including requiring the FDIC to establish a risk-based premium assessment system, and with a number of other regulatory and supervisory matters.

The Financial Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) 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 Company’s bank subsidiaries 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 Federal Reserve Board 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 Company’s bank subsidiaries 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.

Competition

The banking industry is highly competitive. The Company, through its subsidiary banks, competes with national and state banks for deposits, loans, and trust and other services.

The Bank competes with much larger commercial banks in Wilson County, the Bank’s primary market area, including four banks in Wilson County owned by regional multi-bank holding companies headquartered outside of Tennessee and four banks owned by Tennessee multi-bank holding companies. These institutions enjoy existing depositor relationships and greater financial resources than the Company and can be expected to offer a wider range of banking services. In addition, the Bank competes with two credit unions located in Wilson County and two locally-owned banks which were organized in 2001.

DCB competes with much larger commercial banks in DeKalb County, including two banks owned by Tennessee multi-bank holding companies. While these institutions enjoy existing depositor relationships and greater financial resources than DCB and can be expected to offer a wider range of banking services, the Company believes that DCB can expect to attract customers since it is locally owned and most loan and management decisions will be made at the local level. In addition, DCB is the only predominantly locally-owned commercial bank headquartered in DeKalb County.

CBSC competes with three commercial banks in Smith County, all of which are small community banking organizations. These institutions enjoy existing depositor relationships; however, the Company believes that CBSC can be expected to offer a wider range of banking services at CBSC through its financial resources as well as programs offered by other subsidiaries of the Company.

Given the competitive market place, the Company makes no predictions as to how its relative position will change in the future.

Monetary Policies

The results of operations of the Bank, the Company and the Company’s other bank subsidiaries are affected by the policies of the regulatory authorities, particularly the Board. An important function of the Board is to regulate the national supply of bank credit in

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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, the Bank, DCB and CBSC cannot be predicted with accuracy.

Employment

As of March 7, 2005, the Company and its subsidiaries collectively employed 277 full-time equivalent employees and 42 part-time employees. Additional personnel will be hired as needed to meet future growth.

Available Information

The Company’s Internet website is http://www.wilsonbank.com. Please note that our 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 electronically files or furnishes such materials to the Securities and Exchange Commission (the “SEC”). The information provided on our 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 2004 Annual Report. Certain information not contained in the Company’s 2004 Annual Report, but required by Guide 3, is contained in the tables immediately following:

[REMINDER OF PAGE INTENTIONALLY LEFT BLANK]

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WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

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 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%.

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 $1,056,000, $814,000 and $506,000 for 2004, 2003 and 2002, respectively, are included in loan income and represent an adjustment of the yield on these loans.

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WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

	In Thousands, Except Interest Rates
	2004								2003								2004/2003 Change
	Average			Interest			Income/		Average			Interest			Income/		Due to			Due to
	Balance			Rate			Expense		Balance			Rate			Expense		Volume			Rate			Total
Loans, net of unearned interest	$	656,973			6.40	%		42,037		568,227			6.81	%		38,687		5,781			(2,431	)		3,350
Investment securities — taxable		127,043			3.13			3,971		108,430			3.37			3,654		592			(275	)		317
Investment securities - tax exempt		16,199			4.14			671		14,384			5.08			731		85			(145	)		(60	)
Taxable equivalent adjustment		—			2.13			346		—			2.62			377		44			(75	)		(31	)
Total tax-exempt investment securities		16,199			6.28			1,017		14,384			7.70			1,108		129			(220	)		(91	)
Total investment securities		143,242			3.48			4,988		122,814			3.88			4,762		746			(520	)		226
Loans held for sale		3,634			4.43			161		6,643			5.39			358		(141	)		(56	)		(197	)
Federal funds sold		29,505			1.08			319		56,226			1.04			584		(286	)		21			(265	)
Restricted equity securities		2,619			3.97			104		2,521			4.01			101		4			(1	)		3
Total earning assets		835,973			5.70			47,609		756,431			5.88			44,492		4,524			(1,407	)		3,117
Cash and due from banks		21,299								17,559
Allowance for possible loan losses		(8,596	)							(7,637	)
Bank premises and equipment		20,209								16,506
Other assets		10,950								9,201
Total assets	$	879,835								792,060

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WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

	In Thousands, Except Interest Rates
	2004							2003							2004/2003 Change
	Average		Interest			Income/		Average		Interest			Income/			Due to		Due to
	Balance		Rate			Expense		Balance		Rate			Expense			Volume		Rate		Total
Deposits:
Negotiable order of withdrawal accounts	$	62,723		.36	%		223		52,770		.44	%		234		37		(48	)	(11	)
Money market demand accounts		195,769		1.17			2,290		183,633		1.24			2,275		147		(132	)	15
Individual retirement accounts		40,847		3.03			1,238		35,466		3.50			1,243		174		(179	)	(5	)
Other savings deposits		43,249		1.36			590		36,582		1.76			645		105		(160	)	(55	)
Certificates of deposit $100,000 and over		137,872		3.11			4,284		129,955		3.15			4,098		240		(54	)	186
Certificates of deposit under $100,000		221,990		3.02			6,693		202,561		3.19			6,458		594		(359	)	235
Total interest-bearing deposits		702,450		2.18			15,318		640,967		2.33			14,953		1,369		(1,004	)	365
Securities sold under repurchase agreements		9,254		1.75			162		10,591		1.92			203		(24	)	(17	)	(41	)
Federal funds purchased		1,157		1.82			21		104		1.92			2		19		—		19
Advances from Federal Home Loan Bank		5,343		4.68			250		827		7.13			59		217		(26	)	191
Total interest-bearing liabilities		718,204		2.19			15,751		652,489		2.33			15,217		1,478		(944	)	534
Demand deposits		83,448							70,160
Other liabilities		11,217							10,425
Stockholders’ equity		66,966							58,986
Total liabilities and stockholders’ equity	$	879,835							792,060
Net interest income							31,858							29,275
Net yield on earning assets				3.81	%						3.87	%
Net interest spread				3.51	%						3.55	%

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WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

	In Thousands, Except Interest Rates
	2003								2002								2003/2002 Change
	Average			Interest			Income/		Average			Interest			Income/		Due to			Due to
	Balance			Rate			Expense		Balance			Rate			Expense		Volume			Rate			Total
Loans, net of unearned interest	$	568,227			6.81	%		38,687		521,799			7.50	%		39,120		3,327			(3,760	)		(433	)
Investment securities — taxable		108,430			3.37			3,654		91,528			4.69			4,292		705			(1,343	)		(638	)
Investment securities - tax exempt		14,384			5.08			731		15,175			5.26			798		(41	)		(26	)		(67	)
Taxable equivalent adjustment		—			2.62			377		—			2.70			411		(20	)		(14	)		(34	)
Total tax-exempt investment securities		14,384			7.70			1,108		15,175			7.97			1,209		(61	)		(40	)		(101	)
Total investment securities		122,814			3.88			4,762		106,703			5.16			5,501		754			(1,493	)		(739	)
Loans held for sale		6,643			5.39			358		3,860			5.10			197		149			12			161
Federal funds sold		56,226			1.04			584		36,557			1.60			585		248			(249	)		(1	)
Restricted securities		2,521			4.01			101		2,232			4.39			98		12			(9	)		3
Total earning assets		756,431			5.88			44,492		671,151			6.78			45,501		5,415			(6,424	)		(1,009	)
Cash and due from banks		17,559								15,472
Allowance for possible loan losses		(7,637	)							(6,225	)
Bank premises and equipment		16,506								15,265
Other assets		9,201								9,057
Total assets	$	792,060								704,720

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WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

	In Thousands, Except Interest Rates
	2003							2002							2003/2002 Change
	Average		Interest			Income/		Average		Interest			Income/		Due to			Due to
	Balance		Rate			Expense		Balance		Rate			Expense		Volume			Rate			Total
Deposits:
Negotiable order of withdrawal accounts	$	52,770		.44	%		234		44,828		.84	%		378		58			(202	)		(144	)
Money market demand accounts		183,633		1.24			2,275		144,484		2.03			2,928		669			(1,322	)		(653	)
Individual retirement accounts		35,466		3.50			1,243		30,342		4.63			1,406		214			(377	)		(163	)
Other savings deposits		36,582		1.76			645		36,905		2.58			951		(8	)		(298	)		(306	)
Certificates of deposit $100,000 and over		129,955		3.15			4,098		125,224		3.85			4,817		178			(897	)		(719	)
Certificates of deposit under $100,000		202,561		3.19			6,458		189,966		3.89			7,398		463			(1,403	)		(940	)
Total interest-bearing deposits		640,967		2.33			14,953		571,749		3.13			17,878		2,000			(4,925	)		(2,925	)
Securities sold under repurchase agreements		10,591		1.92			203		11,929		2.09			249		(27	)		(19	)		(46	)
Federal funds purchased		104		1.92			2		279		2.15			6		(3	)		(1	)		(4	)
Advances from Federal Home Loan Bank		827		7.13			59		1,143		7.17			82		(23	)		—			(23	)
Total interest-bearing liabilities		652,489		2.33			15,217		585,100		3.11			18,215		1,929			(4,927	)		(2,998	)
Demand deposits		70,160							59,471
Other liabilities		10,425							9,926
Stockholders’ equity		58,986							50,223
Total liabilities and stockholders’ equity	$	792,060							704,720
Net interest income							29,275							27,286
Net yield on earning assets				3.87	%						4.07	%
Net interest spread				3.55	%						3.67	%

9

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

II.   Investment Portfolio:

A.   Investment securities at December 31, 2004 consist of the following:

	Securities Held-To-Maturity
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of states and political subdivisions	$	14,202		512		9		14,705
Mortgage-backed securities		235		—		—		235
	$	14,437		512		9		14,940

	Securities Available-For-Sale
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
U.S. Treasury and other U.S. Government agencies and corporations	$	109,945		24		1,586		108,383
Obligations of states and political subdivisions		1,035		61		—		1,096
Mortgage-backed securities		9,208		5		57		9,156
	$	120,188		90		1,643		118,635

10

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

II.   Investment Portfolio, Continued:

A.	Continued:
	Securities at December 31, 2003 consist of the following:

	Securities Held-To-Maturity
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of states and political subdivisions	$	15,851		709		26		16,534
Mortgage-backed securities		792		1		1		792
	$	16,643		710		27		17,326

	Securities Available-For-Sale
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
U.S. Treasury and other U.S. Government agencies and corporations	$	122,046		621		886		121,781
Obligations of states and political subdivisions		1,380		81		—		1,461
Corporate bonds		500		—		1		499
Mortgage-backed securities		9,191		6		45		9,152
	$	133,117		708		932		132,893

11

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

II.   Investment Portfolio, Continued:

A.	Continued:
	Securities at December 31, 2002 consist of the following:

	Securities Held-To-Maturity
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of states and political subdivisions	$	12,877		626		—		13,503
Mortgage-backed securities		1,336		3		4		1,335
	$	14,213		629		4		14,838

	Securities Available-For-Sale
	(In Thousands)
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
U.S. Treasury and other U.S. Government agencies and corporations	$	96,375		1,359		26		97,708
Obligations of states and political subdivisions		1,804		80		—		1,884
Corporate bonds		1,705		16		—		1,721
Mortgage-backed securities		346		10		—		356
	$	100,230		1,465		26		101,669

12

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

II.   Investment Portfolio, Continued:

B.   The following schedule details the estimated maturities and weighted average yields of investment securities (including mortgage backed securities) of the Company at December 31, 2004:

			Estimated		Weighted
	Amortized		Market		Average
Held-To-Maturity Securities	Cost		Value		Yields
	(In Thousands, Except Yields)
U.S. Treasury and other U.S. Government agencies and corporations, including mortgage-backed securities:
Less than one year	$	—		—		—	%
One to five years		182		182		6.47
Five to ten years		—		—		—
More than ten years		53		53		4.50
Total securities of U.S. Treasury and other U.S. Government agencies and corporations		235		235		6.03
Obligations of states and political subdivisions*:
Less than one year		1,156		1,172		4.55
One to five years		3,794		3,938		4.15
Five to ten years		7,638		7,899		4.18
More than ten years		1,614		1,696		4.63
Total obligations of states and political subdivisions		14,202		14,705		4.25
Total held-to-maturity securities	$	14,437		14,940		4.28	%

* Weighted average yield is stated on a tax-equivalent basis, assuming a weighted average Federal income tax rate of 34%.

13

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

II.   Investment Portfolio, Continued:

B.   Continued:

			Estimated		Weighted
	Amortized		Market		Average
Available-For-Sale Securities	Cost		Value		Yields
	(In Thousands, Except Yields)
U.S. Treasury and other U. S. Government agencies and corporations, including mortgage-backed securities:
Less than one year	$	1,500		1,490		2.17	%
One to five years		100,000		98,548		3.07
Five to ten years		15,470		15,323		3.51
More than ten years		2,183		2,178		2.92
Total securities of U.S. Treasury and other U.S. Government agencies and corporations		119,153		117,539		3.11
Obligations of states and political subdivisions*:
Less than one year		100		100		5.25
One to five years		734		776		4.03
Five to ten years		201		220		4.65
More than ten years		—		—		—
Total obligations of states and political subdivisions		1,035		1,096		4.27
Total available-for-sale securities	$	120,188		118,635		3.12	%

* Weighted average yield is stated on a tax-equivalent basis, assuming a weighted average Federal income tax rate of 34%.

14

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

III.   Loan Portfolio:

A.   Loan Types

The following schedule details the loans of the Company at December 31, 2004, 2003, 2002, 2001 and 2000:

	In Thousands
	2004			2003			2002			2001			2000
Commercial, financial and agricultural	$	217,372			174,235			192,945			190,700			157,254
Real estate — construction		49,085			39,508			30,794			25,044			31,531
Real estate — mortgage		384,062			314,168			267,145			228,316			195,480
Installment		73,482			64,880			59,721			50,741			48,198
Total loans		724,001			592,791			550,605			494,801			432,463
Less unearned interest		—			—			(4	)		(35	)		(174	)
Total loans, net of unearned interest		724,001			592,791			550,601			494,766			432,289
Less allowance for possible loan losses		(9,370	)		(8,077	)		(6,943	)		(5,489	)		(4,525	)
Net loans	$	714,631			584,714			543,658			489,277			427,764

15

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

III.   Loan Portfolio, Continued:

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

The following schedule details maturities and sensitivity to interest rates changes for commercial loans of the Company at December 31, 2004:

	In Thousands
			1 Year to
	Less Than		Less Than		After 5
	1 Year*		5 Years		Years		Total
Maturity Distribution:
Commercial, financial and agricultural	$	121,860		64,808		30,704		217,372
Real estate — construction		45,505		3,580		—		49,085
	$	167,365		68,388		30,704		266,457
Interest-Rate Sensitivity:
Fixed interest rates	$	130,372		57,348		2,435		190,155
Floating or adjustable interest rates		36,993		11,040		28,269		76,302
Total commercial, financial and agricultural loans plus real estate - construction loans	$	167,365		68,388		30,704		266,457

*Includes demand loans, bankers acceptances, commercial paper and deposit notes.

16

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

III.   Loan Portfolio, Continued:

C.   Risk Elements

The following schedule details selected information as to non-performing loans of the Company at December 31, 2004, 2003, 2002, 2001 and 2000:

	In Thousands, Except Percentages
	2004			2003		2002		2001		2000
Non-accrual loans:
Commercial, financial and agricultural	$	7			17		—		—		—
Real estate — construction		—			—		—		—		—
Real estate — mortgage		526			270		327		71		—
Installment		91			175		156		98		100
Lease financing receivable		—			—		—		—		—
Total non-accrual	$	624			462		483		169		100
Loans 90 days past due:
Commercial, financial and agricultural	$	197			170		22		—		—
Real estate — construction		—			8		—		124		—
Real estate — mortgage		1,698			872		318		194		68
Installment		638			716		407		270		222
Lease financing receivable		—			—		—		—		—
Total loans 90 days past due	$	2,533			1,766		747		588		290
Renegotiated loans:
Commercial, financial and agricultural	$	—			—		—		—		—
Real estate — construction		—			—		—		—		—
Real estate – mortgage		—			—		—		—		—
Installment		—			—		—		—		—
Lease financing receivable		—			—		—		—		—
Total renegotiated loans past due	$	—			—		—		—		—
Loans current — considered uncollectible	$	—			—		—		—		—
Total non-performing loans	$	3,157			2,228		1,230		757		390
Total loans, net of unearned interest	$	724,001			592,791		550,601		494,766		432,289
Percent of total loans outstanding, net of unearned interest		0.44	%		0.38		0.22		0.15		0.09
Other real estate	$	580			417		818		415		425

17

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

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 collectibility. If collectibility is doubtful, the unpaid interest is charged off. Thereafter, interest on non-accrual loans is recognized only as received. Non-accrual loans totaled $624,000 at December 31, 2004, $462,000 at December 31, 2003, $483,000 at December 31, 2002, $169,000 at December 31, 2001 and $100,000 at December 31, 2000. Gross interest income on non-accrual loans, that would have been recorded for the year ended December 31, 2004 if the loans had been current totaled $13,000 compared to $8,000 in 2003, $12,000 in 2002, $12,000 in 2001 and $17,000 in 2000. The amount of interest and fee income recognized on total loans during 2004 totaled $42,037,000 as compared to $38,687,000 in 2003, $39,120,000 in 2002, $40,262,000 in 2001 and $35,743,000 in 2000.

At December 31, 2004, loans, which include the above, totaling $9,686,000 were included in the Company’s internal classified loan list. Of these loans $5,509,000 are real estate and $4,177,000 are various other types of loans. The values collateralizing these loans is estimated by management to be approximately $13,953,000 ($9,549,000 related to real property and $4,404,000 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, 2004 there were no loan concentrations that exceeded ten percent of total loans other than as included in the preceding table of types of loans. Loan concentrations are amounts loaned to a multiple number of borrowers engaged in similar activities which would cause them to be similarly impacted by economic or other conditions.

At December 31, 2004 and 2003 other real estate totaled $580,000 and $417,000, respectively.

18

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

III.   Loan Portfolio, Continued:

C.   Risk Elements, Continued:

There were no material amounts of other interest-bearing assets (interest-bearing deposits with other banks, municipal bonds, etc.) at December 31, 2004 which would be required to be disclosed as past due, non-accrual, restructured or potential problem loans, if such interest-bearing assets were loans.

19

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

IV.   Summary of Loan Loss Experience:

The following schedule details selected information related to the allowance for possible loan loss account of the Company at December 31, 2004, 2003, 2002, 2001 and 2000 and the years then ended.

				In Thousands, Except Percentages
	2004			2003			2002			2001			2000
Allowance for loan losses at beginning of period	$	8,077			6,943			5,489			4,525			3,847
Less: net of loan charge-offs:
Charge-offs:
Commercial, financial and agricultural		(229	)		(15	)		(160	)		(311	)		(6	)
Real estate construction		(7	)		—			(8	)		(83	)		—
Real estate – mortgage		(632	)		(145	)		(218	)		(131	)		(186	)
Installment		(1,430	)		(806	)		(713	)		(726	)		(681	)
Lease financing		—			—			—			—			—
		(2,298	)		(966	)		(1,099	)		(1,251	)		(873	)
Recoveries:
Commercial, financial and agricultural		53			13			2			4			—
Real estate construction		—			—			—			—			—
Real estate – mortgage		5			8			1			—			—
Installment		260			175			206			235			134
Lease financing		—			—			—			—			—
		318			196			209			239			134
Net loan charge-offs		(1,980	)		(770	)		(890	)		(1,012	)		(739	)
Provision for loan losses charged to expense		3,273			1,904			2,344			1,976			1,417
Allowance for loan losses at end of period	$	9,370			8,077			6,943			5,489			4,525
Total loans, net of unearned interest, at end of year	$	724,001			592,791			550,601			494,766			432,289
Average total loans out- standing, net of unearned interest, during year	$	656,973			568,227			521,799			460,556			395,441
Net charge-offs as a percentage of average total loans outstanding, net of unearned interest, during year		0.30	%		0.14			0.17			0.22			0.19
Ending allowance for loan losses as a percentage of total loans outstanding net of unearned interest, at end of year		1.29	%		1.36			1.26			1.11			1.05

20

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

IV.   Summary of Loan Loss Experience, Continued:

The allowance for possible 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 possible 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 loan problems, the relationship of the allowance for possible 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 loans which are determined to be potentially uncollectible. Loan classifications are reviewed periodically by a person independent of the lending function. The Board of Directors periodically reviews the adequacy of the allowance for possible loan losses.

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

	December 31, 2004					December 31, 2003
			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	$	4,754		30.0	%	$	2,099		29.4	%
Real estate construction		114		6.8			340		6.7
Real estate mortgage		2,800		53.0			4,660		53.0
Installment		1,702		10.2			978		10.9
	$	9,370		100.0	%	$	8,077		100.0	%

	December 31, 2002					December 31, 2001
			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	$	828		35.0	%	$	651		38.5	%
Real estate construction		302		5.6			236		5.1
Real estate mortgage		4,723		48.5			3,892		46.1
Installment		1,090		10.9			710		10.3
	$	6,943		100.0	%	$	5,489		100.0	%

	December 31, 2000
			Percent of
			Loans In
	In		Each Category
	Thousands		To Total Loans
Commercial, financial and agricultural	$	480		36.4	%
Real estate construction		535		7.3
Real estate mortgage		2,981		45.2
Installment		529		11.1
	$	4,525		100.0	%

21

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

V.   Deposits:

The average amounts and average interest rates for deposits for 2004, 2003 and 2002 are detailed in the following schedule:

	2004					2003					2002
	Average					Average					Average
	Balance					Balance					Balance
	In		Average			In		Average			In		Average
	Thousands		Rate			Thousands		Rate			Thousands		Rate
Non-interest bearing deposits	$	83,448		—	%		70,160		—	%		59,471		—	%
Negotiable order of withdrawal accounts		62,723		.36	%		52,770		.44	%		44,828		.84	%
Money market demand accounts		195,769		1.17	%		183,633		1.24	%		144,484		2.03	%
Individual retirement accounts		40,847		3.03	%		35,466		3.50	%		30,342		4.63	%
Other savings		43,249		1.36	%		36,582		1.76	%		36,905		2.58	%
Certificates of deposit $100,000 and over		137,872		3.11	%		129,955		3.15	%		125,224		3.85	%
Certificates of deposit under $100,000		221,990		3.02	%		202,561		3.19	%		189,966		3.89	%
	$	785,898		1.95	%		711,127		2.10	%		631,220		2.83	%

The following schedule details the maturities of certificates of deposit and individual retirement accounts of $100,000 and over at December 31, 2004:

	In Thousands
	Certificates		Individual
	of		Retirement
	Deposit		Accounts		Total
Less than three months	$	22,907		1,423		24,330
Three to six months		26,090		4,654		30,744
Six to twelve months		21,599		611		22,210
More than twelve months		87,778		6,228		94,006
	$	158,374		12,916		171,290

22

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

VI.   Return on Equity and Assets:

The following schedule details selected key ratios of the Company at December 31, 2004, 2003 and 2002:

	2004			2003			2002
Return on assets (1)		1.04	%		1.31	%		1.33	%
(Net income divided by average total assets)
Return on equity		13.61	%		16.00	%		16.98	%
(Net income divided by average equity)
Dividend payout ratio		36.23	%		26.36	%		28.19	%
(Dividends declared per share divided by net income per share)
Equity to asset ratio		7.61	%		7.45	%		7.13	%
(Average equity divided by average total assets)
Leverage capital ratio		8.71	%		8.83	%		7.57	%
(Equity divided by fourth quarter average total assets, excluding the net unrealized gain (loss) on available-for-sale securities and including minority interest)

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

Beginning January 1, 1991, new risk-based capital guidelines were adopted by regulatory agencies. Under these guidelines, a credit risk is assigned to various categories of assets and commitments ranging from 0% to 100% based on the risk associated with the asset.

(1)   Includes minority interest earnings of consolidated subsidiaries.

23

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

VI.   Return on Equity and Assets, Continued:

The following schedule details the Company’s risk-based capital at December 31, 2004 excluding the net unrealized loss on available-for-sale securities which is shown as a deduction in stockholders’ equity in the consolidated financial statements:

	In Thousands
Tier I capital:
Stockholders’ equity, excluding the net unrealized loss on available-for-sale securities	$	72,417
Add: Minority interest (limited to 25% of Tier I capital)		6,959
Total Tier I capital		79,376
Total capital:
Allowable allowance for possible loan losses (limited to 1.25% of risk-weighted assets)		8,926
Total capital	$	88,302
Risk-weighted assets	$	714,043
Risk-based capital ratios:
Tier I capital ratio		11.12	%
Total risk-based capital ratio		12.37	%

24

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2004

VI.   Return on Equity and Assets, Continued:

The Company is required to maintain a Total capital to risk-weighted asset ratio of 8% and a Tier I capital to risk-weighted asset ratio of 4%. At December 31, 2004, the Company and its subsidiary banks were in compliance with these requirements.

The following schedule details the Company’s interest rate sensitivity at December 31, 2004:

	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 unearned interest	$	724,001		104,892			37,229			62,072			101,781			418,027
Securities		133,072		30			76			400			2,240			130,326
Loans held for sale		3,515		3,515			—			—			—			—
Federal funds sold		25,516		25,516			—			—			—			—
Restricted equity securities		2,661		2,661			—			—			—			—
Total earning assets		888,765		136,614			37,305			62,472			104,021			548,353
Interest-bearing liabilities:
Negotiable order of withdrawal accounts		68,228		68,228			—			—			—			—
Money market demand accounts		188,435		188,435			—			—			—			—
Individual retirement accounts		41,937		7,452			4,434			6,406			4,860			18,785
Other savings		38,342		38,342			—			—			—			—
Certificates of deposit, $100,000 and over		158,374		1,028			21,129			26,607			21,832			87,778
Certificates of deposit, under $100,000		235,124		1,883			31,778			30,427			47,761			123,275
Securities sold under repurchase agreements		6,679		6,679			—			—			—			—
Advances from Federal Home Loan Bank		15,263		—			—			—			—			15,263
		752,382		312,047			57,341			63,440			74,453			245,101
Interest-sensitivity gap	$	136,383		(175,433	)		(20,036	)		(968	)		29,568			303,252
Cumulative gap				(175,433	)		(195,469	)		(196,437	)		(166,869	)		136,383
Interest-sensitivity gap as % of total assets				(18.72	)		(2.14	)		(.10	)		3.15			32.36
Cumulative gap as % of total assets				(18.72	)		(20.86	)		(20.96	)		(17.81	)		14.55

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.

25

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 addition thereto, the Bank has thirteen branch locations located at the following locations: 1444 Baddour Parkway, Lebanon, Tennessee; 200 Tennessee Boulevard, Lebanon, Tennessee; 8875 Stewart’s Ferry Pike, Gladeville, Tennessee; 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; 151 Heritage Park Drive, Suite 102 in Murfreesboro, Tennessee; and 217 Donelson Pike, Nashville, 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 and the Heritage Park Drive branch contains less than 1,000 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 Mount Juliet facility on Highway 70 was completed in July 2004 and contains approximately 3,450 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 owns all of its branch facilities except for the Lebanon facility at Tennessee Boulevard, its space in the Wal-Mart Supercenter and its Heritage Park Drive facility in Murfreesboro, which are leased. The Bank also leases space at fifteen locations within Wilson County where it maintains and operates automatic teller machines.

DCB has a Bank 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 Bank facility at 306 Brush Creek Road in Alexandria, Tennessee which occupies approximately 2,400 square feet of space. DCB owns both facilities. The West Broad Street facility serves as the main office for DCB. CBSC operates out of a building it owns at 1300 Main Street North, Carthage, Tennessee and a second facility that it owns in Gordonsville, Tennessee at 7 New Middleton Highway, Gordonsville, Tennessee. CBSC’s Carthage facility contains approximately 8,000 square feet of space and its Gordonsville facility contains approximately 7,000 square feet of space. DCB and CBSC lease space at four and five locations, respectively, where they maintain and operate 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. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders in the fourth quarter of 2004.

PART II

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

Information required by this item is contained under the heading “Wilson Bank Holding Company Common Stock Market Information” on page 78 of the Company’s 2004 Annual Report and is incorporated herein by reference.

The Company did not repurchase any shares of its common stock during the quarter ended December 31, 2004.

Item 6. Selected Financial Data

Information required by this item is contained under the heading “Wilson Bank Holding Company Financial Highlights (Unaudited)” on page 22 of the Company’s 2004 Annual 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 23 through 33 of the Company’s 2004 Annual Report and is incorporated herein by reference.

26

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 31 through 32 of the Company’s 2004 Annual 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 77 and on page 34, respectively, of the Company’s 2004 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

As of the date of filing this Form 10-K, the Company, and its registered public accounting firm, have not finalized the report of management, and the related attestation of the registered public accounting firm, regarding the effectiveness of the Company’s internal control over financial reporting. In reliance on the Securities and Exchange Commission’s 45-day extension for issuers of a certain size, the required management report and related registered public accounting firm attestation are not included with this Form 10-K, but, rather, will be included in an amendment to this Form 10-K to be filed by the Company prior to the expiration of the 45-day extension. Currently, management of the Company is not aware of any material weaknesses in the Company’s internal control over financial reporting; however, no assurances can be given that a material weakness will not be discovered between the date of this Form 10-K and the date of the filing of the amendment to this Form 10-K described above.

Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting during the Company’s fiscal quarter ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by this item with respect to directors is incorporated herein by reference to the section entitled “Election of Directors” in the Company’s definitive proxy materials filed in connection with the Company’s 2005 Annual Meeting of Shareholders. The information required by this item with respect to executive officers is set forth below:

27

James Randall Clemons (52) — Mr. Clemons is President and Chief Executive Officer of the Company and the Chief Executive Officer of the Bank. Mr. Clemons also serves on the Board of Directors of the Company and the Bank. He has held such positions with the Company since its formation in March 1992 and has held his Bank positions since the Bank commenced operations in May 1987. Prior to that time, Mr. Clemons served as Senior Vice President and Cashier for Peoples Bank, Lebanon, Tennessee.

Ken Dill (59) — Mr. Dill joined the Bank in 1997. Prior to that time he was employed by Farm Credit Services, Lebanon, TN for 20 years. Currently, Mr. Dill serves as Senior Vice President of lending of the Bank. His primary duties include overseeing the lending function of the bank including SBA and commercial lending.

Elmer Richerson (52) — Mr. Richerson joined the Bank in February 1989. Prior to such time, Mr. Richerson was the manager of the Lebanon branch of Heritage Federal Savings and Loan Association from March 1988 to February 1989. From September 1986 until March 1988, Mr. Richerson was a liquidation assistant for the Federal Deposit Insurance Corporation. Since May 2002, Mr. Richerson has served as President of the Bank. From 1997 to May 2002, Mr. Richerson served as an Executive Vice President and Senior Loan Officer of the Bank and oversaw the branch administration for the Bank. Mr. Richerson also serves on the Board of Directors of the Bank and in 1998 was elected to serve on the Board of Directors of the Company as well.

Larry Squires (53) — Mr. Squires joined the Bank in 1989 and is currently Senior Vice President and Investment Officer. Prior to that time Mr. Squires was Vice President of Liberty State Bank in Lebanon. His principal duty is overseeing the Bank’s investment and brokerage center.

Gary Whitaker (47) — 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 (40) — Ms. Pominski is Senior 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 including Asst. Cashier, Asst. Vice President and Vice President since the Bank’s formation in May of 1987. Prior to 1987 Ms. Pominski was employed by People’s Bank, Lebanon, TN 37087.

John Goodman (38) — Mr. Goodman joined the Bank in November of 2002 as Senior Vice President. From 1998 to 2002 he was First Vice President of Commercial Lending for NBC Bank, Nashville, TN. His primary duties include the development of commercial lending and the supervision of the branch offices in the western portion of Wilson County and the eastern portion of Davidson County.

John McDearman (35) – Mr. McDearman joined the Bank in November of 1998. He has held positions in branch administration and commercial lending. Currently he serves as Senior Vice President of the Bank, a position he has held since November of 2002. 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. His primary duties include the continuing development of the commercial loan portfolio.

Christy Norton (38) — Mrs. Norton joined the Bank in February of 1989. Prior to that time she was employed by First Tennessee Bank, Lebanon, TN. She has held several positions for the Bank in Retail and Branch Administration and is currently a Senior Vice President, a position she has held since November of 2002. Her primary duties include bank operations and supervision of the Bank’s training department.

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 in accordance with the rules and regulations of the Securities and Exchange Commission.

28

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 2005 Annual Meeting of Shareholders.

The information required by this item with respect to compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to the Section entitled “Item-1 Election of Directors – Compliance with Section 16(a) of the Securities Exchange Act of 1934” in the Company’s definitive proxy materials filed in connection with the 2005 Annual Meeting of Shareholders.

Item 11. Executive Compensation

Information required by this item is incorporated herein by reference to the section entitled “Executive Compensation” in the Company’s definitive proxy materials filed in connection with the 2005 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 filed in connection with the 2005 Annual Meeting of Shareholders.

The following table summarizes information concerning the Company’s equity compensation plans at December 31, 2004 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:

	Number of Shares to		Weighted Average
	be Issued upon		Exercise Price of		Number of Shares Remaining Available for
	Exercise of		Outstanding		Future Issuance Under Equity Compensation
	Outstanding Options		Options		Plans (Excluding Shares Reflected in First
Plan Category	or Warrants		or Warrants		Column)
Equity compensation plans approved by shareholders		87,790	$	17.26		93,399
Equity compensation plans not approved by shareholders		N/A		N/A		N/A
Total		87,790	$	17.26		93,399

Item 13. Certain Relationships and Related Transactions

Information required by this item is incorporated herein by reference to the section entitled “Certain Relationships and Related Transactions” in the Company’s definitive proxy materials filed in connection with the 2005 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 “Independent Public Accountant Information” in the Company’s definitive proxy materials filed in connection with the 2005 Annual Meeting of Shareholders.

Item 15. Exhibits and Financial Statement Schedules

(a)(1)	Financial Statements. See Item 8.
(a)(2)	Financial Statement Schedules. Inapplicable.
(a)(3)	Exhibits. See Index to Exhibits.

29

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/ J. Randall Clemons
	J. Randall Clemons
	President and Chief Executive Officer
Date:	March 16, 2005

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/ J. Randall Clemons	President, Chief Executive Officer and Director
	(Principal Executive Officer)	March 16, 2005
J. Randall Clemons
/s/ Lisa Pominski	Chief Financial Officer (Principal
	Financial and Accounting Officer)	March 16, 2005
Lisa Pominski
/s/ Elmer Richerson
	Executive Vice President & Director	March 16, 2005
Elmer Richerson
/s/ Charles Bell
	Director	March 16, 2005
Charles Bell
/s/ Jack W. Bell
	Director	March 16, 2005
Jack W. Bell
/s/ Mackey Bentley
	Director	March 16, 2005
Mackey Bentley
/s/ James F. Comer
	Director	March 16, 2005
James F. Comer
/s/ Jerry L. Franklin
	Director	March 16, 2005
Jerry L. Franklin
/s/ John B. Freeman
	Director	March 16, 2005
John B. Freeman

30

Signature	Title	Date
/s/ Marshall Griffith	Director	March 16, 2005
Marshall Griffith
/s/ Harold R. Patton	Director	March 16, 2005
Harold R. Patton
/s/ James Anthony Patton	Director	March 16, 2005
James Anthony Patton
/s/ John R. Trice	Director	March 16, 2005
John R. Trice
/s/ Robert T. VanHooser, Jr.	Director	March 16, 2005
Robert T. VanHooser, Jr.

31

INDEX TO EXHIBITS

2.1	Agreement and Plan of Merger dated November 16, 2004, among Wilson Bank Holding Company, Wilson Bank and Trust and DeKalb Community Bank. (Pursuant to Item 601(b)(2) of Regulation S-K, the Schedules to this agreement are omitted, but will be provided supplementally to the Securities and Exchange Commission upon request.) (incorporated herein by reference to Exhibit 2.1 of the Company’s Registration Statement on Form S-4 (Registration No. 333-121943)).
2.2	Agreement and Plan of Merger dated November 16, 2004, among Wilson Bank Holding Company, Wilson Bank and Trust and Community Bank of Smith County. (Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to this agreement are omitted, but will be provided supplementally to the Securities and Exchange Commission upon request.) (incorporated herein by reference to Exhibit 2.1 of the Company’s Registration Statement on Form S-4 (Registration No. 333-122534)).
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 Registration Statement on Form S-4 (Registration No. 333-121943)).
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 Registration Statement on Form S-4 (Registration No. 333-121943)).
4.1	Specimen Common Stock Certificate. (incorporated herein by reference to Exhibit 2.1 of the Company’s Registration Statement on Form S-4 (Registration No. 333-121943)).
10.1	Wilson Bank Holding Company 1999 Stock Option Plan (incorporated herein by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-32442)).*
10.2	Executive Salary Continuation Agreement by and between the Company and J. Randall Clemons dated as of March 30, 1995 (incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).*
10.3	Executive Salary Continuation Agreement by and between the Company and Elmer Richerson dated as of March 30, 1995 (incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).*
10.4	Executive Salary Continuation Agreement by and between the Company and Gary D. Whitaker dated as of March 1, 1998 (incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).*
10.5	Executive Salary Continuation Agreement by and between the Company and Larry Squires dated September 16, 1996 (incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).*
10.6	Amendment to the Wilson Bank and Trust Executive Salary Continuation Agreement dated as of January 1, 2001 by and between Wilson Bank and Trust and Larry Squires (incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).*
10.7	Form of Wilson Bank Holding Company Qualified Stock Option Agreement.*
13.1	Selected Portions of the Wilson Bank Holding Company Annual Report to Shareholders for the year ended December 31, 2004 incorporated by reference into items 5, 6, 7, 7A and 8.
21.1	Subsidiaries of the Company.
23.1	Consent of 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.

* Management compensatory plan or contract

EX-10.7

                                                                 EXHIBIT 10.7



                           WILSON BANK HOLDING COMPANY
                        QUALIFIED STOCK OPTION AGREEMENT

TO:

         We are pleased to notify you that, as a key employee of Wilson Bank &
Trust, a subsidiary of Wilson Bank Holding Company (the "Company"), you have
been granted an option ("Option") to purchase _________ of the common stock,
$2.00 value ("Common Stock") of the Company at a price of $______ per share this
_____ DAY of __________, 200___, under the Company's 1998 Stock Option Plan (the
"Plan"). This Option may be exercised only upon the terms and conditions set
forth below.

1. PURPOSE OF PLAN.

     The purpose of the Plan under which this Option has been granted is to
     enable the Company to attract, retain and reward key employees of the
     Company and its subsidiaries (each a "Subsidiary, and, collectively,
     "Subsidiaries") and to strengthen the mutuality of interests between such
     key employees by awarding such key employees (collectively, "Participants")
     performance-based stock incentives and/or other equity interests or
     equity-based incentives in the Company, as well as performance-based
     incentives payable in cash.

2. PLAN CONTROLS.

     This Option is granted pursuant to the terms of the Plan and is subject to
     all of the terms and conditions of the Plan, which is incorporated herein
     by reference. Subject to the provisions of the Plan, the Board shall have
     the authority to interpret the provisions and supervise the administration
     of the Plan. If any of the provisions of this Option conflict with or are
     inconsistent with the provisions of the Plan, the provisions of the Plan
     shall be controlling.

3. ACCEPTANCE OF OPTION AGREEMENT.

     Your execution of this option agreement will indicate your acceptance of
     and your willingness to be bound by its terms; it imposes no obligation
     upon you to purchase any of the shares subject to the Option. Your
     obligation to purchase shares can arise only upon your exercise of the
     Option in the manner set forth in Section 5 hereof.

4. WHEN OPTION MAY BE EXERCISED.

     This Option shall vest one-tenth (1/10) annually for ten years beginning on
     the anniversary date of this date of grant and may be exercised to the
     fullest extent it has vested, or any part thereof, beginning on the date
     that is 12 months after this date of grant. This Option expires 10 years
     and 90 days from the date of grant whether or not it has been duly
     exercised (the "Option Period"), unless sooner terminated as provided in
     Sections 6, 7 and 8 hereof.




TO:

PAGE 2

5. HOW OPTION MAY BE EXERCISED.

     This Option is exercisable by giving written notice to the Company at its
     executive offices, signifying your election to exercise the Option. The
     notice must state the number of shares of Common Stock as to which the
     Option is being exercised, must contain a statement by you (in a form
     acceptable to the Company) that such shares are being acquired by you for
     investment and not with a view to their distribution or resale (unless a
     registration statement covering the shares purchasable has been declared
     effective by the Securities and Exchange Commission) and must be
     accompanied by check payable to the order of the Company for the full
     purchase price of the shares being purchased and such amount, if any, as is
     required for income tax withholding. Such payment may also be made in whole
     or in part by delivering previously owned shares of Common Stock (valued at
     the Fair Market Value of the Common Stock on the date the Option is
     exercised) or instructing the Company to withhold that number of shares
     issuable upon exercise of the Option having a Fair Market Value equal to
     the purchase price and the amount required for income tax withholding. Any
     Common Stock delivered in satisfaction of all or any portion of the
     purchase price shall be appropriately endorsed for transfer and assignment
     to the Company. No shares shall be issued until full payment therefore has
     been made and your income tax withholding obligations satisfied.

     If notice of the exercise of this Option is given by a person or persons
     other than you, the Company will require the submission to the Company of
     appropriate proof of the right of such person or persons to exercise this
     Option.

     Certificates for shares of the Common Stock so purchased will be issued as
     soon as practicable. The Company, however, shall not be required to issue
     or deliver a Certificate for any shares until it has complied with all
     requirements of the Securities Act of 1933, as amended, the Securities
     Exchange Act of 1934, as amended, any stock Exchange of which the Common
     Stock may then be listed and all applicable state laws in connection with
     the issuance of sale of such shares or the listing of such shares on said
     exchange. Until the issuance of the certificate for such shares, you or
     such other person as may be entitled to exercise this Option, shall have
     none of the rights of a stockholder with respect to shares subject to this
     Option.





TO:

PAGE 3


6. TERMINATION OF EMPLOYMENT WITH THE COMPANY.

     If you employment with the Company (or a Subsidiary) is terminated for any
     reason other than as a result of your death, disability, early or normal
     retirement, or registration as provided in Sections 7 and 8 hereof, you may
     exercise that portion of this Option which was exercisable by you at the
     date of termination at any time within 90 days of the date of such
     termination provided, however, such exercise occurs within the Option
     Period and further provided that in the event such termination was due to
     "Cause" (as defined in the Plan), this Option shall immediately lapse and
     expire.

7. RETIREMENT OR DISABILITY.

     If you retire from the Company on or after age 65, this Option shall become
     fully exercisable and vested and may be exercised by you at any time within
     three years of the date of such retirement, provided, however, that such
     exercise occurs within the Option Period. If you retire before age 65 or
     choose to resign from the Company (or a Subsidiary) or if you become
     disabled while still a key employee such that you are no longer able to
     maintain employment with the Company, you may exercise that portion of this
     Option which was exercisable by you at the date of such termination at any
     time within three years of the date of such termination provided, however,
     that such exercise occurs within the Option Period.

8. DEATH.

   (A)    If you die while still an employee of the Company (or a Subsidiary),
          this Option shall become fully exercisable and vested and may be
          exercised by the legal
          representative of your estate or the legatee or legatees under your
          will within 12 months from the date of your death, but in no event
          after the Option Period.

   (B)    If you die within three years following termination of your employment
          due to disability, early or normal retirement or voluntary
          resignation, that portion of this
          Option which was exercisable by you at the date of your death,
          disability, retirement or voluntary resignation, this Option shall
          become fully exercisable and vested and may be exercised by the legal
          representative of your estate of the legatee or legatees under your
          will within 12 months from the date of your death, but in no event
          after the Option Period.




TO:

PAGE 4

9. NON-TRANSFERABILITY OF OPTION.

     This Option shall not be assignable or transferable without the prior
     written consent of the Committee except (a) to a member of your immediate
     family or a trust for the benefit of you or a member of your immediate
     family, or (b) by will or the laws of descent and distribution or pursuant
     to a qualified domestic relations order, and may be exercised during your
     lifetime only by you or your guardian, legal representative or qualified
     domestic relations order transferee.

10. QUALIFIED STOCK OPTION.

      This Option is not intended to be an "incentive stock option" as defined
      in Section 42 422 of the Internal Revenue Code of 1986, as amended.

11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

      If at any time after the date of grant of this Option, the Company shall,
      by stock dividend, split-up, combination, reclassification or exchange, or
      through merger or consolidation, or otherwise, change its shares of Common
      Stock into a different number or kind or class of shares or other
      securities or property, then the number of shares covered by this Option
      and the price of each such share shall be proportion- ately adjusted for
      any such change by the Board of Directors whose determination shall be
      conclusive. Any fraction of a share resulting from any adjustment shall be
      eliminated and the price per share of the remaining shares subject to this
      Option shall be adjusted accordingly.

12. EFFECTS OF CHANGE IN CONTROL.

      Immediately following a "Change in Control" of the Company (as defined in
      the Plan), this Option shall become immediately vested and fully
      exercisable, but in no event may this Option be exercised after 10 years
      from the date this Option was granted to you.

13. MODIFICATION.

      This Option may be amended by the Board (subject to certain limitations as
      set forth in the Plan), prospectively or retroactively and in whole or in
      part, except that no such action may impair your rights with respect to
      this Option without your consent, and the Board may, in its sole
      discretion, waive any restrictions or conditions applicable to, or
      accelerate the vesting of, this Option, in whole or in part.




TO:

PAGE 5


14. MEANING OF CAPITALIZED TERMS.

      Capitalized terms used herein and not otherwise defined shall have the
      meanings ascribed to them in the Plan.

15. WHEN OPTION BECOMES EFFECTIVE.

      This Option shall not become effective unless a copy of this letter has
      been signed by you and returned to the Company at the above address.


                                              Sincerely yours,

                                              WILSON BANK HOLDING COMPANY



                                               By:
                                                   -----------------------------
                                                   J. Randall Clemons
                                                   Chief Executive Officer







AGREED TO AND ACCEPTED THIS _______ DAY OF _________________, ______.



- ----------------------------------------------
SIGNATURE OF OPTIONEE

EX-13.1

                                                                 EXHIBIT 13.1


                         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 on February 1, 2005 was 1,649. Based solely on information made
available to the Company from limited numbers of buyers and sellers, the Company
believes that the following table sets forth the quarterly range of sale prices
for the Company's stock during the years 2003 and 2004. The information set
forth below has been adjusted to reflect a 2-for-1 stock split paid by the
Company on October 30, 2003.

                               STOCK PRICES





            2003                         HIGH                    LOW
                                                         
       First Quarter                    $22.50                 $21.75
       Second Quarter                    23.25                  22.50
       Third Quarter                     24.12                  23.25
       Fourth Quarter                    27.50                  24.12






            2004
                                                         
       First Quarter                    $28.50                 $27.50
       Second Quarter                    29.50                  28.50
       Third Quarter                     30.50                  29.50
       Fourth Quarter                    30.50                  29.50



- ------------------

         On January 1, 2003, a $.30 per share cash dividend was declared and on
July 1, 2003, a $.33 per share cash dividend was declared and subsequently paid
to shareholders of record of the Company as of those dates. On January 1, 2004,
a $.35 per share cash dividend was declared and on July 1, 2004, a $.40 per
share cash dividend was declared and subsequently paid to shareholders of record
of the Company as of those dates. Future dividends will be dependent on the
Company's profitability, its capital needs, overall financial condition,
economic and regulatory consideration.




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


FORWARD-LOOKING STATEMENTS

         This report includes certain forward-looking statements (any statement
other than those made solely with respect to historical fact) based upon
management's beliefs, as well as assumptions made by and data currently
available to management. This information has been, or in the future may be,
included in reliance on the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. The words "expect," "anticipate," "intend,"
"should," "may," "could," "plan," "believe," "seek," "estimate" and similar
expressions are intended to identify such forward-looking statements, but other
statements not based on historical information may also be considered
forward-looking. All forward-looking statements are subject to risks,
uncertainties and other facts that may cause the actual results, performance or
achievements of Wilson Bank Holding Company (the "Company") to differ materially
from any results expressed or implied by such forward-looking statements. Such
factors include, without limitation, (i) increased competition with other
financial institutions, (ii) lack of sustained growth in the economy in the
Company's market area, (iii) rapid fluctuations in interest rates, (iv)
significant downturns in the businesses of one or more large customers, (v)
changes in the legislative and regulatory environment, (vi) inadequate allowance
for loan losses, (vii) consummation of the merger of Dekalb Community Bank and
Community Bank of Smith County with Wilson Bank & Trust and (viii) loss of key
personnel. Many of such factors are beyond the Company's ability to control or
predict, and readers are cautioned not to put undue reliance on such
forward-looking statements. The Company disclaims any obligation to update or
revise any forward-looking statements contained in this discussion, whether as a
result of new information, future events or otherwise.

GENERAL

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

         During 1996, the Company and other organizers consisting primarily of
residents of DeKalb and Smith Counties, Tennessee formed DeKalb Community Bank
and Community Bank of Smith County. The Company acquired 50% of the common stock
of each bank. Each of the banks were capitalized with $3,500,000; and
accordingly, the Company's initial investment in each bank was $1,750,000. Each
of the banks have a dividend reinvestment plan whereby the stockholders are
given the opportunity to reinvest all or a portion of their dividends in the
bank's stock. The Company reinvests its dividends in the amount necessary to
maintain a 50% ownership interest. DeKalb Community Bank and Community Bank of
Smith County are accounted for as consolidated subsidiaries of the Company and
their accounts are included in the consolidated financial statements. The equity
and earnings applicable to the minority stockholders are shown as minority
interest in the consolidated financial statements.

         The Company's three subsidiary banks are community banks headquartered
in Lebanon, Smithville and Carthage, Tennessee, respectively, serving Wilson
County, DeKalb County, Smith County, Trousdale County, and the eastern part of
Davidson County, Tennessee as their primary market areas. The subsidiary banks
have seventeen locations including their three main offices. Davidson, DeKalb,
Smith, Rutherford and Trousdale Counties adjoin Wilson County. Management
believes that these counties offer an environment for continued growth, and the
Company's target market is local consumers, professionals and small businesses.
The banks offer 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 custodial
and trust services and an investment center which offers a full line of
investment services to its customers.

         Since July 2002, the Company and its three bank subsidiaries have
incurred significantly higher internal control, auditing and accounting costs
related to their compliance with the requirements of the Sarbanes-Oxley Act of
2002 and the related rules and regulations imposed by the Securities and
Exchange Commission as a result of that act. These costs, which have increased
substantially during 2004 as a result of the requirement that the Company
document, and have its registered public accounting firm attest to, the
effectiveness of its internal control over financial reporting, are increased
over bank holding companies of similar size, by the fact that the company
maintains three separate bank subsidiaries. Prompted by these elevating costs,
management of the Company began consideration of combining Wilson Bank & Trust,
Dekalb Community Bank and Community Bank of







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


Smith County. The boards of directors of the Company, Wilson Bank & Trust,
Dekalb Community Bank and Community Bank of Smith County thereafter agreed that
it was in the best interests of each of the company's respective shareholders to
merge Dekalb Community Bank and Community Bank of Smith County with and into
Wilson Bank & Trust. The Company believes that combining these entities will
result in cost savings to the combined companies related to both Sarbanes-Oxley
compliance and the centralization of certain back office functions.

         As a result, in November 2004, DeKalb Community Bank and Community Bank
of Smith County entered into agreements with Wilson Bank Holding Company and
Wilson Bank and Trust that provide for the merger of the two banks into Wilson
Bank and Trust subject to shareholder and regulatory approvals. The minority
shareholders of DeKalb Community Bank and Community Bank of Smith County will
receive stock of Wilson Bank Holding Company for their shares in the community
banks except for those that dissent and choose to be paid in cash. The expected
impact of the transactions on the books of the Company, based on December 31,
2004 data, would be an increase to stockholders' equity of $13,692,000, a
decrease to minority interest of $6,959,000 and an increase to total assets of
$6,733,000. In addition the Company is expected to issue approximately 438,000
shares of its common stock in connection with the mergers.

         The following discussion and analysis is designed to assist readers in
their analysis of the Company's consolidated financial statements and must be
read in conjunction with such consolidated financial statements. The Company's
Board of Directors approved a 2 for 1 stock split for stockholders of record as
of October 1, 2003 payable October 30, 2003. Each stockholder received one (1)
additional share for each one (1) share owned with allowance for fractional
shares. Per share data included in these consolidated financial statements has
been restated to give effect to the stock split.

CRITICAL ACCOUNTING POLICIES

         The accounting principles we follow and our methods of applying these
principles conform with accounting principles generally accepted in the United
States and with general practices within the banking industry. In connection
with the application of those principles to the determination of our allowance
for loan losses (ALL), we have made judgments and estimates which have
significantly impacted our financial position and results of operations.

         Our management assesses the adequacy of the ALL on a regular basis.
This assessment includes procedures to estimate the ALL and test the adequacy
and appropriateness of the resulting balance. The ALL consists of two portions
(1) an allocated amount representative of specifically identified credit
exposure and exposures readily predictable by historical or comparative
experience, and (2) an unallocated amount representative of inherent loss which
is not readily identifiable. Even though the ALL is composed of two components,
the entire allowance is available to absorb any credit losses.

         We establish the allocated amount separately for two different risk
groups (1) unique loans (commercial loans, including those loans considered
impaired); and (2) homogenous loans (generally consumer loans). We base the
allocation for unique loans primarily on risk rating grades assigned to each of
these loans as a result of our loan management and review processes. Each
risk-rating grade is assigned an estimated loss ratio, which is determined based
on the experience of management, discussions with banking regulators, historical
and current economic conditions and our independent loan review process. We
estimate losses on impaired loans based on estimated cash flows discounted at
the loan's original effective interest rate or the underlying collateral value.
We also assign estimated loss ratios to our consumer portfolio. However, we base
the estimated loss ratios for these homogenous loans on the category of consumer
credit (e.g., automobile, residential mortgage, home equity) and not on the
results of individual loan reviews.

         The unallocated amount is particularly subjective and does not lend
itself to the exact mathematical calculation. We use the unallocated amount to
absorb inherent losses which may exist as of the balance sheet date for such
matters as changes in the local or national economy, the depth or experience of
the lending staff, any concentrations of credit in any particular industry
group, and new banking laws or regulations. After we assess applicable factors,
we evaluate the aggregate unallocated amount based on our management's
experience.






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


         We then test the resulting ALL balance by comparing the balance in the
allowance account to historical trends 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 ALL in its
entirety. The loan review and the finance committee of our board of directors
review the assessment prior to the filing of financial information.

RESULTS OF OPERATIONS

         Net earnings for the year ended December 31, 2004 were $9,112,000, a
decrease of $323,000, or 3.4%, compared to 2003. The decrease in net earnings
for the year ended December 31, 2004 was primarily the result of a decrease in
mortgage refinancing due to a higher rate environment. Net earnings for the year
ended December 31, 2003 were $9,435,000, an increase of $906,000, or 10.6%, over
2002. On a per share basis, net income equaled $2.07 in 2004, compared with
$2.20 in 2003 and $2.04 in 2002.

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 2004 was $47,263,000, compared with
$44,115,000 in 2003 and $45,090,000 in 2002. The increase in total interest
income in 2004 was primarily due to an increase in the average earning assets of
$80 million. Average earning assets increased $85 million from December 31, 2002
to December 31, 2003. As interest rates for 2004 remained at historically low
levels for 2004, the average interest rate earned on earning assets was 5.70% in
2004 compared with 5.88% in 2003 and 6.78% in 2002.

         Interest earned on earning assets does not include any interest income
which would have been recognized on non-accrual loans if such loans were
performing. The amount of interest not recognized on nonaccrual loans totaled
$13,000 in 2004, compared with $8,000 in 2003 and $12,000 in 2002.

         Total interest expense for 2004 was $15,751,000, an increase of
$534,000, or 3.5%, compared to total interest expense of $15,217,000 in 2003.
The increase in total interest expense was due to an increase in average
interest bearing liabilities of approximately $65,715,000, offset by a decrease
in the weighted average cost of funds from 2.33% to 2.19%. Interest expense
decreased from $18,215,000 in 2002 to $15,217,000 in 2003 or a decrease of
$2,998,000, or 16.5%. The decrease in 2003 was due to a decrease in the weighted
average cost of funds from 3.11% to 2.33% net of the effect of a $67,389,000
increase in average interest bearing liabilities.

         Net interest income for 2004 totaled $31,512,000 as compared to
$28,898,000 and $26,875,000 in 2003 and 2002, 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 3.51% from 3.55% in 2003. The net interest spread was 3.67% in
2002. The decrease in the interest spread for 2004 and 2003 as compared to the
prior period is a result of a lower interest rate environment. The net interest
yield, which is net interest income expressed as a percentage of average earning
assets, decreased to 3.81% for 2004 compared to 3.87% in 2003 and 4.07% in 2002.
Interest rates decreased during the first six months of 2004 and during 2003 as
a result of the Federal Reserve Bank's decision to lower the discount rate to
stimulate the economy. Since June 30, 2004, the Federal Reserve has raised short
term interest rates 1.25 basis points and the Company believes that interest
rates will continue to rise or remain stable in 2005. The Company is in a
position to reprice its liabilities faster than the assets are repricing such
that in the short term a rising rate environment may have a negative impact on
the Company's earnings as its interest expense increases faster than interest
income. Management also believes that growth in 2005 will generally approximate
the growth experienced in 2004. A significant increase in interest rates could
have an adverse impact on net interest yields and earnings.

PROVISION FOR POSSIBLE LOAN LOSSES

         The provision for loan losses represents a charge to earnings necessary
to establish an allowance for possible loan losses that, in management's
evaluation, should be adequate to provide coverage for estimated losses on
outstanding loans and to provide for uncertainties in the economy. The 2004
provision for loan losses was $3,273,000, an increase of $1,369,000 from the
provision of $1,904,000 in 2003. The increase in the provision was primarily a
result of additional provision determined necessary by management during 2004
after performing a detailed





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


evaluation of one of the Company's 50% owned subsidiary's loan officer's
portfolios. The provision for loan losses was $2,344,000 in 2002. Net
charge-offs increased to $1,980,000 in 2004 from $770,000 in 2003. The increase
in net charge-offs is also due to the loan officer portfolio analysis conducted
on one of the Company's 50% owned subsidiaries. Net charge-offs in 2002 totaled
$890,000. The ratio of net charge-offs to average total outstanding loans in
2004 was .30% in 2003 was .14% and .17% in 2002. The provision for loan losses
in 2004 exceeded net charge-offs by $1,293,000 compared to $1,134,000 in 2003
and $1,454,000 in 2002.

         The provision for loan losses raised the allowance for possible loan
losses (net of charge-offs and recoveries) to $9,370,000 at December 31, 2004
from $8,077,000 and $6,943,000 at December 31, 2003 and 2002, respectively. This
represents a 16.0% increase in the allowance at December 31, 2004 over December
31, 2003 as compared to a 22.1% increase in total loans. The allowance for
possible loan losses was 1.29% of total loans outstanding at December 31, 2004
compared to 1.36% at December 31, 2003 and 1.26% at December 31, 2002.
Additionally, as a percentage of nonperforming loans at year end 2004, 2003 and
2002, the allowance for possible loan losses represented 297%, 363% and 564%,
respectively.

         The level of the allowance and the amount of the provision involve
evaluation of uncertainties and matters of judgment. The Company maintains an
allowance for loan losses which management believes is adequate to absorb losses
inherent in the loan portfolio. A formal review is prepared bi-monthly by the
Loan Review Officer to assess the risk in the portfolio and to determine the
adequacy of the allowance for loan losses. The review includes analysis of
historical performance, the level of non-performing and adversely rated loans,
specific analysis of certain problem loans, loan activity since the previous
assessment, reports prepared by the Loan Review Officer, consideration of
current economic conditions, and other pertinent information. The level of the
allowance to net loans outstanding will vary depending on the overall results of
this bi-monthly assessment. The review is presented to the Finance Committee and
subsequently approved by the Board of Directors. See the discussion under
"Critical Accounting Policies" for more information. Management believes the
allowance for possible loan losses at December 31, 2004 to be adequate.

NON-INTEREST INCOME

         The components of the Company's non-interest income include service
charges on deposit accounts, other fees, gains on sales of loans, gains on sales
of fixed assets and other income. Total non-interest income for 2004 was
$8,898,000 compared with $9,060,000 in 2003 and $8,076,000 in 2002. The 1.8%
decrease over 2003 was primarily due to gains on sales of loans (which decreased
$1,109,000), offset by increases in the volume of service charges on deposit
accounts (which increased $527,000) and other fees (which increased $377,000).
The reduction in gains on loans was the result of a reduction in mortgage
refinancing as interest rates stabilized and subsequently rose during the second
half of 2004. The Company has entered into a commission participation
arrangement with a local insurance agency to sell insurance products. Management
does not anticipate that this arrangement will materially impact 2005
non-interest income.

NON-INTEREST EXPENSES

         Non-interest expenses consist primarily of employee costs, occupancy
expenses, furniture and equipment expenses and other operating expenses. Total
non-interest expenses for 2004 increased 9.6% to $22,336,000 from $20,377,000 in
2003. The 2003 non-interest expense was up 9.1% over non-interest expense in
2002 which totaled $18,685,000. The increases in non-interest expenses in 2004
resulted primarily from increases in employee salaries and related benefits.
This increase was principally due to an increase in the number of employees
necessary to support the Company's expanded operations. Other operating expenses
increased to $5,376,000 in 2004 from $4,868,000 in 2003. These expenses included
data processing, supplies and general operating expenses, which increased as a
result of continued growth of the Company.

INCOME TAXES

         The Company's income tax expense was $5,689,000 for 2004, a decrease of
$553,000 from $6,242,000 for 2003. The percentage of income tax expense to
earnings before taxes decreased to 38.4% in 2004 from 39.8% in 2003. The
percentage was 38.7% in 2002.




                          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 $84,629,000 or 9.9%
to $937,248,000 at December 31, 2004, after increasing 13.3% in 2003 to
$852,619,000 at December 31, 2003. Loans, net of allowance for possible loan
losses, totaled $714,631,000 at December 31, 2004, a 22.2% increase compared to
December 31, 2003. At year end 2004 securities totaled $133,072,000, a decrease
of 11.0% from $149,536,000 at December 31, 2003. The decrease in securities in
2004 includes a $1,329,000 increase in net unrealized losses on securities
available-for-sale. Securities also decreased in 2004, as the company liquidated
available for sale securities to fund loan growth in the second half of 2004.

         Total liabilities increased $75,981,000 at December 31, 2004 to
$858,728,000 compared to $782,747,000 at December 31, 2003. This increase was
composed primarily of the $62,503,000 increase in total deposits to $832,922,000
(a 8.1% increase) and an increase in advances from the Federal Home Loan Bank
from $712,000 at December 31, 2003 to $15,263,000 at December 31, 2004.
Securities sold under repurchase agreements decreased to $6,679,000 from
$8,606,000 at the respective year ends 2004 and 2003.

         Stockholders' equity increased $8,238,000 or 13.0% due to net earnings
and sales of stock pursuant to the Company's Dividend Reinvestment Plan, net of
dividends paid on the Company's common stock. The increase includes a $771,000
decrease in net unrealized losses on available-for-sale securities, net of
taxes. A more detailed discussion of assets, liabilities and capital follows.




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


- --------------------------------------------------------------------------------

LOANS:

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



                                                2004                            2003
                                     ---------------------------    -----------------------------
     (In Thousands)                     AMOUNT        PERCENTAGE       AMOUNT          PERCENTAGE
                                        ------        ----------       ------          ----------
                                                                          
    Commercial, financial
       and agricultural              $   217,372           30.0%    $    174,235            29.4%
     Installment                          73,482            6.8           64,880            10.9
     Real estate - mortgage              384,062           53.0          314,168            53.0
     Real estate - construction           49,085           10.2           39,508             6.7
                                     -----------     ----------     ------------     -----------
     TOTAL                           $   724,001          100.0%    $    592,791           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
possible loan losses, increased 22.2% as of year end 2004 as the Company
deployed available capital in higher earning loans rather than securities. The
loan portfolio is composed of four primary loan categories: commercial,
financial and agricultural; installment; real estate-mortgage; and real
estate-construction. The table above sets forth the loan categories and the
percentage of such loans in the portfolio at December 31, 2004 and 2003.

         As represented in the table, primary loan growth was in real estate
mortgage loans and commercial, financial and agricultural loans. Real estate
mortgage loans increased 22.2% in 2004 and at December 31, 2004 and 2003
comprised 53.0% of total loans outstanding. Management believes this increase
was primarily due to the favorable interest rate environment during the first
half of 2004 and the Company's ability to increase its market share of such
loans while maintaining its loan underwriting standards. Commercial, financial
and agricultural loans increased 24.8% in 2004 and comprised 30.0% of the total
loan portfolio at December 31, 2004, compared to 29.4% at December 31, 2003.

         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, 2004, the Company had
no highly leveraged transactions, and there were no foreign loans outstanding
during any of the reporting periods.

         Non-performing loans, which include non-accrual loans, loans 90 days
past due, and renegotiated loans totaled $3,157,000 at December 31, 2004, an
increase from $2,228,000 at December 31, 2003. Non-accrual loans are loans on
which interest is no longer accrued because management believes collection of
such interest is doubtful due to management's evaluation of the borrower's
financial condition, collateral liquidation value, economic and business
conditions and other factors affecting the borrower's ability to pay.
Non-accrual loans totaled $624,000 at December 31, 2004 compared to $462,000 at
December 31, 2003. Loans 90 days past due, as a component of non-performing
loans, increased to $2,533,000 at December 31, 2004 from $1,766,000 at December
31, 2003. This increase is primarily a result of increases in real estate
mortgage loans that are 90 days past due. The Company had no renegotiated loans,
which would have been included in non-performing loans.

         The Company also internally classifies loans about which management
questions the borrower's ability to comply with the present repayment terms of
the loan agreement. These internally classified loans totaled $9,686,000 at
December 31, 2004 as compared to $6,656,000 at December 31, 2003. Of the
internally classified loans at December 31, 2004, $5,509,000 are real estate
related loans and $4,177,000 are various other types of loans. The internally
classified loans as a percentage of the allowance for possible loan losses were
103.4% and 82.4%, respectively, at December 31, 2004 and 2003.

         The allowance for possible loan losses is discussed under "Critical
Accounting Policies" and "Provision for Possible Loan Losses." The Company





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


maintains its allowance for possible loan losses at an amount believed by
management to be adequate to provide for the possibility of loan losses in the
loan portfolio.

         Essentially all of the Company's loans were from Wilson, DeKalb, Smith,
Trousdale and adjacent counties. The Company seeks to exercise prudent risk
management in lending, including diversification by loan category and industry
segment as well as by identification of credit risks. At December 31, 2004 no
single industry segment accounted for more than 10% of the Company's portfolio
other than real estate loans.

         The Company's management believes there is a significant opportunity to
continue to increase the loan portfolio in the Company's primary market area
which was expanded in 1999 to include eastern Davidson County, Tennessee. The
Company has targeted commercial business lending, commercial and residential
real estate lending and consumer lending. Although it is the Company's objective
to achieve a loan portfolio equal to approximately 85% of deposit balances,
various factors, including demand for loans which meet its underwriting
standards, will likely determine the size of the loan portfolio in a given
economic climate. This loan demand is reflected in the past two years when the
Company's average loan to average deposit ratio was 83.6% and 79.9%,
respectively, despite significant deposit growth. As a practice, the Company
generates its own loans and does not buy participations from other institutions.
The Company may sell some of the loans it generates to other financial
institutions if the transaction profits the Company and improves the liquidity
of the loan portfolio. The subsidiary banks also sell loan participations to
other banks within the consolidated group.


SECURITIES

         Securities decreased 11.0% to $133,072,000 at year end 2004 from
$149,536,000 at December 31, 2003, and comprised the second largest and other
primary component of the Company's earning assets. This decrease followed a
29.0% securities portfolio increase from year end 2002 to 2003.

         The primary decrease in the Company's securities portfolio was in U.S.
Treasury and other U.S. Government agencies which decreased $13,398,000 or 11.0%
in 2004. The average yield of the securities portfolio at December 31, 2004 was
3.25% with an average maturity of 3.5 years, as compared to an average yield of
3.51% and an average maturity of 3.92 years at December 31, 2003. Due to falling
interest rates in 2003, payoffs in the securities portfolio increased.
Management reinvested in lower yielding securities, with shorter maturities,
which resulted in the decrease in both average yields and average maturities
from 2003 to 2004.

         The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 115 (SFAS No. 115), "Accounting for Certain Investments
in Debt and Equity Securities". Under the provisions of the Statement,
securities are to be classified in three categories and accounted for as
follows:

- -    Debt securities that the enterprise has the positive intent and ability to
     hold to maturity are classified as held-to-maturity securities and reported
     at amortized cost.

- -    Debt and equity securities that are bought and held principally for the
     purpose of selling them in the near term are classified as trading
     securities and reported at fair value with unrealized gains and losses
     included in earnings.

- -    Debt and equity securities not classified as either held-to-maturity
     securities or trading securities are classified as available-for-sale
     securities and reported at fair value with unrealized gains and losses
     excluded from earnings and reported in a separate component of
     shareholders' equity.





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


The Company's classification of securities as of December 31, 2004 is as
follows:

- --------------------------------------------------------------------------------



(In Thousands)                                  HELD-TO-MATURITY            AVAILABLE-FOR-SALE
                                                ----------------            ------------------
                                          Amortized      Estimated       Amortized      Estimated
                                             Cost       Market Value        Cost       Market Value
                                             ----       ------------        ----       ------------
                                                                           
U.S. Treasury and other
   U.S. Government agencies
   and Corporations                      $        --             --         109,945         108,383
Obligations of states and political
   Subdivisions                               14,202         14,705           1,035           1,096
Mortgage-backed securities                       235            235           9,208           9,156
                                         -----------      ---------      ----------   -------------
                                         $    14,437         14,940         120,188         118,635
                                         ===========      =========      ==========   =============



No securities have been classified as trading securities.
- --------------------------------------------------------------------------------

         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.

         As of December 31, 2004, the Company had forty-three temporarily
impaired securities with a market value of $30,904,000 and unrealized losses
totaling $342,000. The impaired securities are considered high quality
investments in line with normal industry investing practices. The unrealized
losses are primarily the result of changes in the interest rate and sector
environments. Consistent with the original classification as available for sale,
the Company intends and has the ability to hold the above securities until the
value is realized. The Company may sell the above or other securities in the
ordinary course of business in response to unexpected and significant changes in
liquidity needs, unexpected and significant increases in interest rates and /or
sector spreads that significantly extend the security's holding period, or
conducting a small volume of security transactions.

DEPOSITS

         The increases in assets in 2004 and 2003 were funded primarily by
increases in deposits. Total deposits, which are the principal source of funds
for the Company, totaled $832,922,000 at December 31, 2004 compared to
$770,419,000 and $679,408,000 at December 31, 2003 and 2002, respectively. The
Company has targeted local consumers, professionals, and small businesses as its
central clientele; therefore, deposit instruments in the form of demand
deposits, savings accounts, money market demand accounts, certificates of
deposits and individual retirement accounts are offered to customers. Management
believes the Wilson County, Davidson County, DeKalb County, Smith County,
Rutherford County and Trousdale County areas are growing economic markets
offering growth opportunities for the Company; however, the Company competes
with several of the larger bank holding companies that have bank offices in
these counties; and therefore, no assurances of market growth or maintenance of
current market share can be given. Even though the Company is in a very
competitive market, management currently believes that its market share can be
maintained or expanded.

         The $62,503,000, or 8.1%, growth in deposits in 2004 consisted of
changes in several deposit categories: savings accounts decreased
$5,658,000 (12.9%) to $38,342,000, total certificates of deposit (including
individual retirement accounts) increased $60,495,000 (16.1%) to $435,435,000,
NOW accounts increased $2,032,000 (3.1%) to $68,228,000, money market accounts
decreased $10,118,000 (5.1%) to $188,435,000 and demand deposits increased
$15,752,000 (18.2%) to $102,482,000.

         The average rate paid on average total interest-bearing deposits was
2.2% for 2004, compared to 2.3% for 2003. The average rate paid in 2002 was
3.1%.

         The ratio of average loans to average deposits was 83.6% in 2004
compared with 79.9% and 82.7% in 2003 and 2002, respectively.





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


CONTRACTUAL OBLIGATIONS

The Company has the following contractual obligations as of December 31, 2004:




                                Less
                                than                           More
   (In                           1          1-3      3-5       than 5
Thousands)                      Year       Years    Years      Years      Total
                                ----       -----    -----      -----      -----
                                                          
Long-Term Debt                $   --         --        --     15,263     15,263

Capital Leases                    --         --        --         --         --

Operating Leases                  34         24        15         --         73

Purchases                         --         --        --         --         --

Other Long-Term Liabilities       --         --        --         --         --
                              ------     ------    ------     ------     ------

Total                         $   34         24        15     15,263     15,263
                              ======     ======    ======     ======     ======



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

OFF BALANCE SHEET ARRANGEMENTS

         At December 31, 2004, the Company had unfunded loan commitments
outstanding of $101.7 million, unfunded lines of credit of $31.3 million and
outstanding standby letters of credit of $9.5 million. Because these commitments
generally have fixed expiration dates and many will expire without being drawn
upon, the total commitment level does not necessarily 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, the Company's bank subsidiary 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.

LIQUIDITY AND ASSET MANAGEMENT

         The Company's management seeks to maximize net interest income by
managing the Company's assets and liabilities within appropriate




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


constraints on capital, liquidity and interest rate risk. Liquidity is the
ability to maintain sufficient cash levels necessary to fund operations, meet
the requirements of depositors and borrowers and fund attractive investment
opportunities. Higher levels of liquidity bear corresponding costs, measured in
terms of lower yields on short-term, more liquid earning assets and higher
interest expense associated with extending liability maturities. Liquid assets
include cash and cash equivalents and investment securities and money market
instruments that will mature within one year. At December 31, 2004, the
Company's liquid assets approximated $90.1 million.

         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.

         At December 31, 2004, the Company had a liability sensitive position (a
negative gap) for 2005. Liability sensitivity means that more of the Company's
liabilities are capable of repricing over certain time frames than its assets.
The interest rates associated with these liabilities may not actually change
over this period but are capable of changing.

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


- --------------------------------------------------------------------------------

The following table shows the rate sensitivity gaps for different time periods
as of December 31, 2004:



     INTEREST RATE SENSITIVITY GAPS                                                  One Year
     December 31, 2004                    1-90         91-180         181-365          and
     (In Thousands)                       Days          Days            Days          Longer        Total
                                       ---------      ---------      ---------       --------     ---------
                                                                                   
     Interest-earning assets           $ 173,919         62,472        104,021        548,353       888,765
     Interest-bearing liabilities        369,388         63,440         74,453        245,101       752,382
                                       ---------      ---------      ---------      ---------     ---------
     Interest-rate sensitivity gap     $(195,469)          (968)        29,568        303,252       136,383
                                       =========      =========      =========      =========     =========

       Cumulative gap                  $(195,469)      (196,437)      (166,869)       136,383
                                       =========      =========      =========      =========


- --------------------------------------------------------------------------------






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



         At the present time there are no known trends or any known commitments,
demands, events or uncertainties that will result in, or that are reasonably
likely to result in, the Company's liquidity changing in any material way.

         Simulation modeling is used to evaluate both the level of interest rate
sensitivity as well as potential balance sheet strategies. Important elements in
this modeling process include a mix of floating rate versus fixed rate assets
and liabilities; the repricing/maturing volumes and rates of the existing
balance sheet; and assumptions regarding future volumes, maturity patterns and
pricing under varying interest rate scenarios. As of December 31, 2004, a +200
basis point shock was estimated to decrease net income by approximately
$1,110,000 or 8.7%, over the next twelve months, and would decrease the current
present value of the Company's equity to 8.2% as compared to rates remaining
stable. Also, a -200 basis point shock would decrease net income by
approximately $1,884,000 or 14.7%, and would increase the current present value
of the Company's equity to 8.5% over the next twelve months as compared to rates
remaining stable. This simulation analysis takes into account the call features
of certain investments securities based upon the rate shock, as well as
estimated prepayments on loans. The simulation also takes into account the
budgeted growth of the asses/liability composition.

CAPITAL RESOURCES, CAPITAL POSITION AND DIVIDENDS

         CAPITAL. At December 31, 2004, total shareholders' equity was
$71,561,000, or 7.6% of total assets, which compares with $63,323,000, or 7.4%
of total assets at December 31, 2003, and $55,031,000, or 7.3% of total assets,
at December 31, 2002. The dollar increase in shareholders' equity during 2004
reflects (i) the Company's net income of $9,112,000 less cash dividends of $.75
per share totaling $3,262,000, (ii) the issuance of 104,388 shares of common
stock for $2,978,000 in lieu of payment of cash dividends, (iii) the issuance of
11,613 shares of common stock pursuant to exercise of stock options for $181,000
and (iv) the increase in the net unrealized loss on available-for-sale
securities of $771,000.

         The Company's principal regulators have established minimum risk-based
capital requirements and leverage capital requirements for the Company and its
subsidiary banks. These guidelines classify capital into two categories of Tier
I and Total risk-based capital. Total risk-based capital consists of Tier I (or
core) capital (essentially common equity less intangible assets) and Tier II
capital (essentially qualifying long-term debt, of which the Company and
subsidiary banks have none, and a part of the allowance for possible loan
losses). In determining risk-based capital requirements, assets are assigned
risk-weights of 0% to 100%, depending on regulatory assigned levels of credit
risk associated with such assets. The risk-based capital guidelines require the
subsidiary banks and the Company to have a total risk-based capital ratio of
8.0% and a Tier I risk-based capital ratio of 4.0%. At December 31, 2004 the
Company's total risk-based capital ratio was 12.4% and its Tier I risk-based
capital ratio was 11.1%, respectively, compared to ratios of 12.6%




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


and 12.4%, respectively at December 31, 2003. The required Tier I leverage
capital ratio (Tier I capital to average assets for the most recent quarter) for
the Company is 4.0%. At December 31, 2004, the Company had a leverage ratio of
8.7% compared to 8.8% at December 31, 2003. Management believes it can
adequately capitalize its growth for the next few years with earnings.

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 immediate and long term earnings through funds
management/interest rate risk management. The Company's rate sensitivity
position has an important impact on earnings. Senior management of the Company
meets monthly to analyze the rate sensitivity position. These meetings focus on
the spread between the cost of funds and interest yields generated primarily
through loans and investments. The following table provides information about
the Company's financial instruments that are sensitive to changes in interest
rates as of December 31, 2004.

- --------------------------------------------------------------------------------



                                                  (DOLLARS IN THOUSANDS)
                                      EXPECTED MATURITY DATE - YEAR ENDING DECEMBER 31,
                                      ------------------------------------------------------                                 FAIR
                                      2005         2006       2007          2008       2009     THEREAFTER     TOTAL        VALUE
                                      ----         ----       ----          ----       ----     ----------     -----        -----
                                                                                                    
EARNING ASSETS:

Loans, net of unearned interest:
  Variable rate                    $  38,792        5,877       5,482       7,531      18,051      315,827      391,560     391,560
    Average interest rate               5.74%        6.67%       6.11%       6.44%       6.30%        6.86%        6.35%

  Fixed rate                         135,704       38,911      27,560      39,899      51,346       38,721      332,141     330,522
    Average interest rate               8.34%        9.38%       8.90%       8.24%       7.44%        7.42%        8.28%

Securities                             1,652       21,974      33,830      21,128      26,368       28,120      133,072     133,575
  Average interest rate                 3.68%        2.79%       3.34%       3.64%       2.63%        4.68%        3.46%

Loans held for sale                    3,515           --          --          --          --           --        3,515       3,515
  Average interest rate                 4.43%          --          --          --          --           --         4.43%

Federal funds sold                    25,516           --          --          --          --           --       25,516      25,516
  Average interest rate                 1.08%          --          --          --          --           --         1.08%

Interest-bearing deposits            500,050      117,476      58,307      16,615      37,766          226      730,440     730,786
  Average interest rate                 2.52%        3.22%       3.73%       3.90%       4.72%        4.30%        3.73%

Short-term borrowings                  6,679           --          --          --          --           --        6,679       6,679
  Average interest rate                 1.75%          --          --          --          --           --         1.75%








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


- --------------------------------------------------------------------------------

                                                                                             
Advances from Federal
  Home Loan Bank                        --          --         --          --         --       15,263      15,263    15,588
  Average interest rate                 --          --         --          --         --         4.68%       4.68%




- --------------------------------------------------------------------------------

SUPERVISION AND REGULATION

         Bank Holding Company Act of 1956. As a bank holding company, the
Company is subject to regulation under the Bank Holding Company Act of 1956 (the
"Act"), and the regulations adopted by the Board of Governors of the Federal
Reserve System (the "Board") under the Act. The Company is required to file
reports with, and is subject to examination by, the Board. The subsidiary banks
are Tennessee state chartered nonmember banks, and are therefore subject to the
supervision of and are regularly examined by the Tennessee Department of
Financial Institutions (the "TDFI") and the Federal Deposit Insurance
Corporation ("FDIC").

         Under the Act, a bank holding company may not directly or indirectly
acquire the 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 Board. In addition, bank holding companies are generally
prohibited under the Act from engaging in non-banking activities, subject to
certain exceptions. Under the Act, the Board is authorized to approve the
ownership by a bank holding company of shares of any company whose activities
have been determined by the Board to be so closely related to banking or to
managing or controlling banks as to be a proper incident thereto.

         Under the Gramm-Leach-Bliley Act of 1999 (the "GLB Act"), a "financial
holding company" may engage in activities the Board 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
depository institutions or the financial system. Generally, such companies may
engage in a wide range of securities activities and insurance underwriting and
agency activities.

         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. State banks and national banks in Tennessee may
establish branches anywhere in the state and generally may branch across state
lines either through interstate merger or branch acquisition, provided the other
state's law affords reciprocity.

         The Company and the subsidiary banks 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 Company or the
subsidiary banks, on investments in the stock or other securities of the Company
or the subsidiary banks, and on taking such stock or other securities as
collateral for loans of any borrower.

         FDICIA. Under the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA"), the federal banking regulators have assigned each insured
institution to one of five categories ("well capitalized," "adequately
capitalized" or one of three under capitalized categories) based upon the three
measures of capital adequacy discussed above, (see "Capital Position and
Dividends"). Institutions which have a Tier I leverage capital ratio of 5%, a
Tier I risk-based capital ratio of 5% and a total risk-based capital ratio of
10% are defined as "well capitalized". All institutions, regardless of their
capital levels, are restricted from making any capital distribution or paying
any management fees that would cause the institution to fail to satisfy the
minimum levels for any of its capital requirements for "adequately capitalized"
status. Wilson Bank & Trust and Community Bank of Smith County currently meet
the requirements for "well capitalized" status, while Dekalb Community Bank has
an "adequate" status.

         An institution that fails to meet the minimum level for any relevant
capital measure (an "undercapitalized institution") may be: (i) subject to
increased monitoring by the appropriate federal banking regulator; (ii) required
to submit an acceptable capital restoration plan within 45 days (which must be
guaranteed by the institution's holding company); (iii) subject to asset growth
limits; and (iv) required to obtain prior regulatory approval for acquisitions,






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


branching and new lines of businesses. The bank regulatory agencies have
discretionary authority to reclassify a "well capitalized" institution as
"adequately capitalized" or to impose on an "adequately capitalized" institution
requirements or actions specified for undercapitalized institutions if the
agency determines that the institution is in an unsafe or unsound condition or
is engaging in an unsafe or unsound practice.

         A "significantly undercapitalized" institution may be subject to a
number of additional requirements and restrictions, including (1) orders to sell
sufficient voting stock to become "adequately capitalized," (2) requirements to
reduce total assets and (3) cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions are subject to the appointment
of a receiver or conservator.

         Under FDICIA, bank regulatory agencies have prescribed safety and
soundness guidelines for all insured depository institutions relating to
internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth, asset
quality, earnings and compensation.

         The subsidiary banks are assessed quarterly at the rate of .00367% of
insured deposits for deposit insurance.

         Management is not aware of any current recommendations by the
regulatory authorities which, if implemented, would have a material effect on
the Company's liquidity, capital resources or operations.

         Monetary Policy. The subsidiary banks are affected by commercial bank
credit policies of regulatory authorities, including the Board. An important
function of the Board is to regulate the national supply of bank credit in order
to attempt to combat recessionary and curb inflationary pressures. Among the
instruments of monetary policy used by the Board to implement these objectives
are: open market operations in U.S. Government securities, changes in discount
rates on member borrowings, changes in reserve requirements against bank
deposits and limitations on interest rates which member banks may pay on time
and savings deposits. The monetary policies of the Board have had a significant
effect on the operating results of commercial banks, including nonmembers (such
as the Company's bank subsidiaries) as well as members, in the past and are
expected to continue to do so in the future.

IMPACT OF INFLATION

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





          WILSON BANK HOLDING COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED)



                                                IN THOUSANDS, EXCEPT PER SHARE INFORMATION
                                                            AS OF DECEMBER 31,
                                           ---------------------------------------------------
                                             2004      2003       2002       2001        2000
                                           --------   -------    -------    -------    -------
                                                                        
CONSOLIDATED
BALANCE SHEETS:
Total assets end of year                   $937,248   852,619    752,786    667,804    602,218
Loans, net                                 $714,631   584,714    543,658    489,277    427,764
Securities                                 $133,072   149,536    115,882     96,558     89,424
Deposits                                   $832,922   770,419    679,408    602,576    543,583
Stockholders' equity                       $ 71,561    63,323     55,031     45,971     38,735




                                                        YEARS ENDED DECEMBER 31,
                                           ---------------------------------------------------
                                            2004        2003       2002       2001       2000
                                           -------     ------     ------     ------     ------
                                                                         
CONSOLIDATED STATEMENTS
OF EARNINGS:

Interest income                            $47,263     44,115     45,090     47,883     42,426
Interest expense                            15,751     15,217     18,215     25,633     22,860
                                           -------     ------     ------     ------     ------
         Net interest income                31,512     28,898     26,875     22,250     19,566

Provision for possible loan losses           3,273      1,904      2,344      1,976      1,417
                                           -------     ------     ------     ------     ------
Net interest income after provision for
   possible loan losses                     28,239     26,994     24,531     20,274     18,149
Non-interest income                          8,898      9,060      8,076      7,732      5,752
Non-interest expense                        22,336     20,377     18,685     17,314     14,871
                                           -------     ------     ------     ------    -------

Earnings before income taxes                14,801     15,677     13,922     10,692      9,030

Income taxes                                 5,689      6,242      5,393      4,041      3,397
                                           -------     ------     ------     ------    -------

Net earnings                               $ 9,112      9,435      8,529      6,651      5,633
                                           =======     ======     ======     ======    =======

Minority interest in net earnings of
   subsidiaries                            $   475        916        866        587        460
                                           =======     ======     ======     ======    =======

Cash dividends declared                    $ 3,262      2,651      2,378      1,920      1,579
                                           =======     ======     ======     ======    =======
PER SHARE DATA: (1)
Basic earnings per common share            $  2.07       2.20       2.04       1.63       1.42
Diluted earnings per common share          $  2.07       2.20       2.04       1.63       1.42
Cash dividends                             $  0.75       0.63       0.58       0.48       0.40
Book value                                 $ 16.13      14.66      13.05      11.19       9.66

RATIOS:

Return on average stockholders'
   equity                                    13.61%     16.00%     16.98%     15.70%     16.39%
Return on average assets (2)                  1.04%      1.31%      1.33%      1.14%      1.14%
Capital to assets (3)                         8.38%      8.19%      8.08%      7.61%      7.13%
Dividends declared per share as
   percentage of basic earnings
   per share                                 36.23%     26.36%     28.19%     29.14%     28.27%


(1)   Per share data has been retroactively adjusted to reflect a 2 for 1 split
      which occurred effective October 31, 2003.

(2)   Includes minority interest earnings of consolidated subsidiaries in
      numerator.

(3)   Includes minority interest of consolidated subsidiaries in numerator.


                           WILSON BANK HOLDING COMPANY

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2004 AND 2003

                   (WITH INDEPENDENT AUDITOR'S REPORT THEREON)



                          INDEPENDENT AUDITOR'S REPORT

The Board of Directors
Wilson Bank Holding Company:

We have audited the accompanying consolidated balance sheets of Wilson Bank
Holding Company and Subsidiaries as of December 31, 2004 and 2003, and the
related consolidated statements of earnings, comprehensive earnings, changes in
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 2004. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board in the United States. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Wilson
Bank Holding Company and Subsidiaries as of December 31, 2004 and 2003, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2004, in conformity with accounting principles
generally accepted in the United States of America.


                                       /s/ Maggart & Associates, P.C.


Nashville, Tennessee
January 7, 2005



                           WILSON BANK HOLDING COMPANY

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2004 AND 2003



                                                                                              In Thousands
                                                                                  --------------------------------
                                                                                        2004                 2003
                                                                                  ---------------          -------
                                                                                                     
                        ASSETS

Loans, net of allowance for possible loan losses of $9,370,000
   and $8,077,000, respectively                                                   $       714,631          584,714
Securities:
   Held-to-maturity, at amortized cost (market value $14,940,000
     and $17,326,000, respectively)                                                        14,437           16,643
   Available-for-sale, at market (amortized cost $120,188,000 and
     $133,117,000, respectively)                                                          118,635          132,893
                                                                                  ---------------          -------
                  Total securities                                                        133,072          149,536

Loans held for sale                                                                         3,515            3,972
Federal funds sold                                                                         25,516           53,909
Restricted equity securities                                                                2,661            2,559
                                                                                  ---------------          -------
                  Total earning assets                                                    879,395          794,690
                                                                                  ---------------          -------

Cash and due from banks                                                                    23,799           28,414
Premises and equipment, net                                                                21,830           19,166
Accrued interest receivable                                                                 4,944            4,740
Deferred income taxes                                                                       3,194            2,483
Other real estate                                                                             580              417
Other assets                                                                                3,506            2,709
                                                                                  ---------------          -------
                  Total assets                                                    $       937,248          852,619
                                                                                  ===============          =======
                       LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits                                                                          $       832,922          770,419
Securities sold under repurchase agreements                                                 6,679            8,606
Advances from Federal Home Loan Bank                                                       15,263              712
Accrued interest and other liabilities                                                      3,864            3,010
                                                                                  ---------------          -------
                  Total liabilities                                                       858,728          782,747
                                                                                  ---------------          -------
Minority interest                                                                           6,959            6,549
                                                                                  ---------------          -------
Stockholders' equity:
   Common stock, par value $2.00 per share, authorized 10,000,000 shares,
     4,436,607 and 4,320,606 shares issued and outstanding, respectively                    8,873            8,642
   Additional paid-in capital                                                              14,856           11,928
   Retained earnings                                                                       48,688           42,838
   Net unrealized losses on available-for-sale securities, net of income
     taxes of $531,000 and $53,000, respectively                                             (856)             (85)
                                                                                  ---------------          -------
                  Total stockholders' equity                                               71,561           63,323
                                                                                  ---------------          -------
COMMITMENTS AND CONTINGENCIES
                  Total liabilities and stockholders' equity                      $       937,248          852,619
                                                                                  ===============          =======


See accompanying notes to consolidated financial statements.

                                        2


                           WILSON BANK HOLDING COMPANY

                       CONSOLIDATED STATEMENTS OF EARNINGS
                       THREE YEARS ENDED DECEMBER 31, 2004



                                                                             In Thousands (except per share data)
                                                                   ----------------------------------------------------
                                                                        2004                     2003             2002
                                                                   ----------------             -------          ------
                                                                                                        
Interest income:
   Interest and fees on loans                                      $         42,037              38,687          39,120
   Interest and dividends on securities:
     Taxable securities                                                       3,971               3,654           4,292
     Exempt from Federal income taxes                                           671                 731             798
   Interest on loans held for sale                                              161                 358             197
   Interest on Federal funds sold                                               319                 584             585
   Interest and dividends on restricted equity securities                       104                 101              98
                                                                   ----------------             -------          ------
                  Total interest income                                      47,263              44,115          45,090
                                                                   ----------------             -------          ------
Interest expense:
   Interest on negotiable order of withdrawal accounts                          223                 234             378
   Interest on money market accounts and other
     savings accounts                                                         2,880               2,920           3,879
   Interest on certificates of deposit                                       12,215              11,799          13,621
   Interest on securities sold under repurchase agreements                      162                 203             249
   Interest on advances from Federal Home Loan Bank                             250                  59              82
   Interest on Federal funds purchased                                           21                   2               6
                                                                   ----------------             -------          ------
                  Total interest expense                                     15,751              15,217          18,215
                                                                   ----------------             -------          ------

Net interest income before provision for possible loan losses                31,512              28,898          26,875
Provision for possible loan losses                                           (3,273)             (1,904)         (2,344)
                                                                   ----------------             -------          ------
Net  interest income after provision for possible loan losses                28,239              26,994          24,531
Non-interest income                                                           8,898               9,060           8,076
Non-interest expense                                                        (22,336)            (20,377)         18,685)
                                                                   ----------------             -------          ------

                  Earnings before income taxes                               14,801              15,677          13,922

Income taxes                                                                  5,689               6,242           5,393
                                                                   ----------------             -------          ------
                  Net earnings                                     $          9,112               9,435           8,529
                                                                   ================             =======          ======
Basic earnings per common share                                    $           2.07                2.20            2.04
                                                                   ================             =======          ======
Diluted earnings per common share                                  $           2.07                2.20            2.04
                                                                   ================             =======          ======


See accompanying notes to consolidated financial statements.

                                        3


                           WILSON BANK HOLDING COMPANY

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

                       THREE YEARS ENDED DECEMBER 31, 2004



                                                                                   In Thousands
                                                                   ----------------------------------------------
                                                                          2004           2003          2002
                                                                   ----------------     ------   ----------------
                                                                                        
Net earnings                                                       $          9,112      9,435              8,529
                                                                   ----------------     ------   ----------------
Other comprehensive earnings (losses), net of tax:
   Net unrealized gains (losses) on available-for-sale securities
     arising during period, net of taxes of $504,000
     $567,000 and $445,000, respectively                                       (813)      (915)               717
   Less:  reclassification adjustment for net (gains) losses
     included in net earnings, net of taxes of $26,000 in 2004                   42          -                 (1)
                                                                   ----------------     -------- ----------------

                  Other comprehensive earnings (losses)                        (771)      (915)               716
                                                                   ----------------     ------   ----------------
                  Comprehensive earnings                           $          8,341      8,520   $          9,245
                                                                   ================     ======   ================


See accompanying notes to consolidated financial statements.

                                        4


                          WILSON BANK HOLDING COMPANY

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                       THREE YEARS ENDED DECEMBER 31, 2004



                                                                             In Thousands
                                               ------------------------------------------------------------------------------
                                                                                                  Net Unrealized
                                                                  Additional                      Gain (Loss) On
                                                   Common          Paid-In          Retained      Available-For-
                                                   Stock           Capital          Earnings      Sale Securities       Total
                                               -------------      ----------       ---------      ---------------      ------
                                                                                                        
Balance December 31, 2001                      $       4,108         11,847          29,903                114         45,972

Cash dividends declared, $.58 per share                    -              -          (2,378)                 -         (2,378)

Issuance of 105,194 shares of stock pursuant
   to dividend reinvestment plan                         105          2,046               -                  -          2,151

Issuance of 2,666 shares of stock pursuant
   to exercise of stock options                            3             38               -                  -             41

Net change in unrealized gain on
   available-for-sale securities during the
   year, net of taxes of $445,000                          -              -               -                716            716

Net earnings for the year                                  -              -           8,529                  -          8,529
                                               -------------      ---------        --------          ---------         ------

Balance December 31, 2002                              4,216         13,931          36,054                830         55,031

Cash dividends declared, $.63 per share                    -              -          (2,651)                 -         (2,651)

Issuance of 102,568 shares of stock pursuant
   to dividend reinvestment plan                         103          2,289               -                  -          2,392

Issuance of 2,000 shares of stock pursuant
   to exercise of stock options                            3             28               -                  -             31

Issuance of 2,160,028 shares of stock
   pursuant to a 2 for 1 stock split                   4,320         (4,320)              -                  -              -

Net change in unrealized gain (loss) on
   available-for-sale securities during the
   year, net of taxes of $567,000                          -              -               -               (915)          (915)

Net earnings for the year                                  -              -           9,435                  -          9,435
                                               -------------      ---------        --------          ---------         ------
Balance December 31, 2003                              8,642         11,928          42,838                (85)        63,323

Cash dividends declared, $.75 per share                    -              -          (3,262)                 -         (3,262)

Issuance of 104,388 shares of stock pursuant
   to dividend reinvestment plan                         208          2,770               -                  -          2,978

Issuance of 11,613 shares of stock pursuant
   to exercise of stock options                           23            158               -                  -            181

Net change in unrealized loss on
   available-for-sale securities during the
   year, net of taxes of $478,000                          -              -               -               (771)          (771)

Net earnings for the year                                  -              -           9,112                  -          9,112
                                               -------------      ---------        --------          ---------         ------
Balance December 31, 2004                      $       8,873         14,856          48,688               (856)        71,561
                                               =============      =========        ========          =========         ======


See accompanying notes to consolidated financial statements.

                                        5


                          WILSON BANK HOLDING COMPANY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                       THREE YEARS ENDED DECEMBER 31, 2004

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



                                                                             In Thousands
                                                                -------------------------------------
                                                                  2004           2003          2002
                                                                ---------      --------      --------
                                                                                    
Cash flows from operating activities:
   Interest received                                            $  46,957        43,901        45,010
   Fees received                                                    7,828         6,924         6,697
   Other income received                                               35             -             -
   Proceeds from sales of loans                                    72,317       129,706        84,817
   Origination of loans held for sale                             (70,854)     (120,704)      (89,933)
   Interest paid                                                  (15,274)      (15,499)      (18,967)
   Cash paid to suppliers and employees                           (20,346)      (18,206)      (16,678)
   Income taxes paid                                               (6,217)       (7,108)       (5,815)
                                                                ---------      --------     ---------
                  Net cash provided by operating activities        14,446        19,014         5,131
                                                                ---------      --------     ---------
Cash flows from investing activities:
   Purchase of available-for-sale securities                      (75,268)     (166,265)     (100,513)
   Proceeds from maturities of available-for-sale securities       63,792       133,378        79,668
   Proceeds from sale of available-for-sale securities             24,337            --           501
   Purchase of held-to-maturity securities                           (250)       (5,211)       (1,076)
   Proceeds from maturities of held-to-maturity securities          2,456         2,781         2,993
   Loans made to customers, net of repayments                    (135,024)      (43,980)      (58,135)
   Purchase of bank premises and equipment                         (4,186)       (5,160)       (1,504)
   Proceeds from sales of fixed assets                                 40           137             3
   Proceeds from sales of other assets                                220           188           105
   Proceeds from sales of other real estate                         1,421         1,067           761
                                                                ---------      --------     ---------
                  Net cash used in investing activities          (122,462)      (83,065)      (77,197)
                                                                ---------      --------     ---------
Cash flows from financing activities:
   Net increase in non-interest bearing, savings, NOW
     and money market deposit accounts                              2,009        77,416        48,349
   Net increase in time deposits                                   60,494        13,595        28,483
   Proceeds from (purchase of) sale of securities under
     agreements to repurchase                                      (1,927)          738          (683)
   Proceeds from (repayments to) Federal Home Loan Bank, net       14,551          (285)         (373)
   Dividends paid                                                  (3,262)       (2,651)       (2,378)
   Dividends paid to minority shareholders                           (141)         (249)         (207)
   Proceeds from sale of stock to minority shareholders               125           224           186
   Proceeds from sale of common stock dividend reinvestment         2,978         2,392         2,151
   Proceeds from sale of common stock pursuant to exercise
     of stock options                                                 181            31            41
                                                                ---------      --------     ---------
                  Net cash provided by financing activities        75,008        91,211        75,569
                                                                ---------      --------     ---------
Net increase (decrease) in cash and cash equivalents              (33,008)       27,160         3,503
Cash and cash equivalents at beginning of year                     82,323        55,163        51,660
                                                                ---------      --------     ---------
Cash and cash equivalents at end of year                        $  49,315        82,323        55,163
                                                                =========      ========     =========


See accompanying notes to consolidated financial statements.

                                        6


                          WILSON BANK HOLDING COMPANY

                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

                       THREE YEARS ENDED DECEMBER 31, 2004

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



                                                                                    In Thousands
                                                                        ----------------------------------
                                                                          2004          2003         2002
                                                                        --------       ------       ------
                                                                                           
Reconciliation of net earnings to net cash
 provided by operating activities:
     Net earnings                                                       $  9,112        9,435        8,529
     Adjustments to reconcile net earnings to net cash
       provided by operating activities:
         Depreciation and amortization                                     1,511        1,287        1,234
         Provision for possible loan losses                                3,273        1,904        2,344
         Provision for deferred taxes                                       (201)        (266)        (482)
         Loss on sales of other real estate                                   18          112           68
         Loss on sales of other assets                                        64           35           21
         Security losses (gains)                                              68            -           (1)
         Gain on sales of fixed assets                                       (29)         (21)          (3)
         FHLB dividend reinvestment                                         (102)         (99)        (103)
         Decrease (increase) in loans held for sale                          457        6,887       (6,490)
         Increase (decrease) in taxes payable                               (325)        (602)          60
         Decrease (increase) in accrued interest receivable                 (204)        (115)          23
         Increase (decrease) in interest payable                             477         (282)        (752)
         Increase in other assets                                           (352)        (358)        (122)
         Increase (decrease) in accrued expenses                             204          181          (61)
         Net gains of minority interests of commercial
           bank subsidiaries                                                 475          916          866
                                                                        --------       ------       ------
                  Total adjustments                                        5,334        9,579       (3,398)
                                                                        --------       ------       ------


                  Net cash provided by operating activities             $ 14,446       19,014        5,131
                                                                        ========       ======       ======
Supplemental Schedule of Non-Cash Activities:
   Unrealized gain (loss) in value of securities available-for-sale,
     net of taxes of $478,000 in 2004, $567,000 in 2003,
     and $445,000 in 2002                                               $   (771)        (915)         716
                                                                        ========       ======       ======
   Non-cash transfers from loans to other real estate                   $  1,602          778        1,232
                                                                        ========       ======       ======
   Non-cash transfers from loans to other assets                        $    232          242          178
                                                                        ========       ======       ======


See accompanying notes to consolidated financial statements.

                                       7


                           WILSON BANK HOLDING COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accounting and reporting policies of Wilson Bank Holding Company and
      Subsidiaries ("the Company") are in accordance with accounting principles
      generally accepted in the United States of America 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, its wholly-owned subsidiary, Wilson Bank & Trust, DeKalb
            Community Bank, a 50% owned subsidiary, and Community Bank of Smith
            County, a 50% owned subsidiary. All significant intercompany
            accounts and transactions have been eliminated in consolidation. In
            November, 2004 DeKalb Community Bank and Community Bank of Smith
            County entered into agreements with Wilson Bank Holding Company and
            Wilson Bank and Trust that provide for the merger of the two banks
            into Wilson Bank and Trust subject to shareholder and regulatory
            approvals. The minority shareholders of DeKalb Community Bank and
            Community Bank of Smith County will receive stock of Wilson Bank
            Holding Company for their shares in the community banks except for
            those that dissent and choose to be paid in cash.

      (b)   NATURE OF OPERATIONS

            Wilson Bank & Trust, DeKalb Community Bank and Community Bank of
            Smith County operate under state bank charters and provide full
            banking services. As state banks, the subsidiary banks are subject
            to regulations of the Tennessee Department of Financial Institutions
            and the Federal Deposit Insurance Corporation. The areas served by
            the banks include Wilson County, DeKalb County, Smith County and
            Trousdale County, Tennessee and surrounding counties in Middle
            Tennessee. Services are provided at the three main offices, thirteen
            branch locations and one loan production office.

      (c)   ESTIMATES

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions that affect the reported amounts of assets and
            liabilities and disclosure of contingent assets and liabilities at
            the date of the financial statements and the 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 determination of the allowance for possible loan losses
            and the valuation of debt and equity securities and the related
            deferred taxes.

                                       8


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (d)   LOANS

            Loans are stated at the principal amount outstanding. Unearned
            discount, deferred loan fees net of loan acquisition costs, and the
            allowance for possible loan losses are shown as reductions of loans.
            Loan origination and commitment fees and certain loan-related costs
            are being deferred and the net amount amortized as an adjustment of
            the related loan's yield over the contractual life of the loan.
            Unearned discount represents the unamortized amount of finance
            charges, principally related to certain installment loans. Interest
            income on most loans is accrued based on the principal amount
            outstanding.

            The Company follows the provisions of Statement of Financial
            Accounting Standards (SFAS) No. 114, "Accounting by Creditors for
            Impairment of a Loan" and SFAS No. 118, "Accounting by Creditors for
            Impairment of a Loan - Income Recognition and Disclosures." These
            pronouncements apply to impaired loans except for large groups of
            smaller-balance homogeneous loans that are collectively evaluated
            for impairment including residential mortgage and installment loans.

            A loan is impaired when 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. Impaired
            loans are measured at the present value of expected future cash
            flows discounted at the loan's effective interest rate, at the
            loan's observable market price, or the fair value of the collateral
            if the loan is collateral dependent. If the measure of the impaired
            loan is less than the recorded investment in the loan, the Company
            shall recognize an impairment by creating a valuation allowance with
            a corresponding charge to the provision for possible loan losses or
            by adjusting an existing valuation allowance for the impaired loan
            with a corresponding charge or credit to the provision for possible
            loan losses.

            The Company's installment loans are divided into various groups of
            smaller-balance homogeneous loans that are collectively evaluated
            for impairment and, thus, are not subject to the provisions of SFAS
            Nos. 114 and 118. Substantially all other loans of the Company are
            evaluated for impairment under the provisions of SFAS Nos. 114 and
            118.

            The Company considers all loans on nonaccrual status that are
            subject to the provisions of SFAS Nos. 114 and 118 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. Past due status of
            loans is based on the contractual terms of the loan. Delays or
            shortfalls in loan payments are evaluated along with various other
            factors to determine if a loan is impaired. Generally, delinquencies
            under 90 days are considered

                                        9


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (d)   LOANS, CONTINUED

            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.

            Generally, at the time a loan is placed on nonaccrual status, all
            interest accrued and uncollected on the loan in the current fiscal
            year is reversed from income, and all interest accrued and
            uncollected from the prior year is charged off against the allowance
            for possible loan losses. Thereafter, interest on nonaccrual loans
            is recognized as interest income only to the extent that cash is
            received and future collection of principal is not in doubt. If the
            collectibility of outstanding principal is doubtful, such cash
            received is applied as a reduction of principal. A nonaccrual loan
            may be restored to an accruing status when principal and interest
            are no longer past due and unpaid and future collection of principal
            and interest on a timely basis is not in doubt.

            Loans not on nonaccrual status are classified as impaired in certain
            cases when there is inadequate protection by the current net worth
            and financial capacity of the borrower or of the collateral pledged,
            if any. 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.

            Generally, the Company also classifies as impaired any loans the
            terms of which have been modified in a troubled debt restructuring.
            Interest is generally accrued on such loans that continue to meet
            the modified terms of their loan agreements.

            The Company's charge-off policy for impaired loans is similar to its
            charge-off policy for all loans in that loans are charged off in the
            month when they are considered uncollectible.

      (e)   ALLOWANCE FOR POSSIBLE LOAN LOSSES

            The provision for possible loan losses represents a charge to
            earnings necessary, after loan charge-offs and recoveries, to
            maintain the allowance for possible loan losses at an appropriate
            level which is adequate to absorb estimated losses inherent in the
            loan portfolio. Such estimated losses arise primarily from the loan
            portfolio but may also be derived from other sources, including
            commitments to extend credit and standby letters of credit. The
            level of the allowance is determined on a monthly basis using
            procedures which include: (1) categorizing commercial and commercial
            real estate loans into risk categories to estimate loss
            probabilities based primarily on the historical loss experience

                                       10


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (e)   ALLOWANCE FOR POSSIBLE LOAN LOSSES, CONTINUED

            of those risk categories and current economic conditions; (2)
            analyzing significant commercial and commercial real estate credits
            and calculating specific reserves as necessary; (3) assessing
            various homogeneous consumer loan categories to estimate loss
            probabilities based primarily on historical loss experience; (4)
            reviewing unfunded commitments; and (5) considering various other
            factors, such as changes in credit concentrations, loan mix, and
            economic conditions which may not be specifically quantified in the
            loan analysis process.

            The allowance for possible loan losses consists of an allocated
            portion and an unallocated, or general portion. The allocated
            portion is maintained to cover estimated losses applicable to
            specific segments of the loan portfolio. The unallocated portion is
            maintained to absorb losses which probably exist as of the
            evaluation date but are not identified by the more objective
            processes used for the allocated portion of the allowance due to
            risk of errors or imprecision. While the total allowance consists of
            an allocated portion and an unallocated portion, these terms are
            primarily used to describe a process. Both portions of the allowance
            are available to provide for inherent loss in the entire portfolio.

            The allowance for possible loan losses is increased by provisions
            for possible loan losses charged to expense and is reduced by loans
            charged off net of recoveries on loans previously charged off. The
            provision is based on management's determination of the amount of
            the allowance necessary to provide for estimated loan losses based
            on its evaluation of the loan portfolio. Determining the appropriate
            level of the allowance and the amount of the provision involves
            uncertainties and matters of judgment and therefore cannot be
            determined with precision.

      (F)   DEBT AND EQUITY SECURITIES

            The Company applies the provisions of Statement of Financial
            Accounting Standards No. 115, "Accounting for Certain Investments in
            Debt and Equity Securities". Under the provisions of the Statement,
            securities are classified in three categories and accounted for as
            follows:

            -     Securities Held-to-Maturity

                  Debt securities that the enterprise has the positive intent
                  and ability to hold to maturity are classified as
                  held-to-maturity securities and reported at amortized cost.
                  Amortization of premiums and accretion of discounts are
                  recognized by the interest method.

                                       11


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (f)   DEBT AND EQUITY SECURITIES, CONTINUED

            -     Trading Securities

                  Debt and equity securities that are bought and held
                  principally for the purpose of selling them in the near term
                  are classified as trading securities and reported at fair
                  value, with unrealized gains and losses included in earnings.

            -     Securities Available-for-Sale

                  Debt and equity securities not classified as either
                  held-to-maturity securities or trading securities are
                  classified as available-for-sale securities and reported at
                  estimated fair value, with unrealized gains and losses
                  excluded from earnings and reported in a separate component of
                  stockholders' equity. Premiums and discounts are recognized by
                  the interest method.

            No securities have been classified as trading securities.

            Realized gains or losses from the sale of debt and equity securities
            are recognized based upon the specific identification method.

      (g)   LOANS HELD FOR SALE

            Mortgage loans held for sale are reported at the lower of cost or
            market value determined by outstanding commitments from investors at
            the balance sheet date. These loans are valued on an aggregate
            basis.

      (h)   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. Gain or loss on items retired and
            otherwise disposed of is credited or charged to operations and cost
            and related accumulated depreciation are removed from the asset and
            accumulated depreciation accounts.

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

                                       12


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (i)   CASH AND CASH EQUIVALENTS

            For purposes of reporting cash flows, cash and cash equivalents
            include cash on hand, 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.

      (j)   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.

      (k)   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.

      (l)   INCOME TAXES

            Provisions for income taxes are based on taxes payable or refundable
            for the current year (after exclusion of non-taxable income such as
            interest on state and municipal securities) and deferred taxes on
            temporary differences between the amount of taxable and pretax
            financial income and between the tax bases of assets and liabilities
            and their reported amounts in the financial statements. Deferred tax
            assets and liabilities are included in the financial statements at
            currently enacted income tax rates applicable to the period in which
            the deferred tax asset and liabilities are expected to be realized
            or settled as prescribed in Statement of Financial Accounting
            Standards No. 109, "Accounting for Income Taxes." As changes in tax
            laws or rates are enacted, deferred tax assets and liabilities are
            adjusted through the provision for income taxes.

            The Company and its wholly-owned subsidiaries file a consolidated
            Federal income tax return. The 50% owned subsidiaries file a
            separate Federal income tax return but are included in the Company's
            consolidated state income tax return. Each subsidiary provides for
            income taxes on a separate-return basis.

      (m)   STOCK OPTIONS

            The Company uses the fair value method to calculate the compensation
            reported in the proforma earnings in note 18 to the consolidated
            financial statements.

                                       13


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (n)   ADVERTISING COSTS

            Advertising costs are expensed when incurred by the Company.

      (o)   STOCK SPLIT

            The Company's Board of Directors voted a 2 for 1 stock split for
            stockholders of record as of October 1, 2003 payable October 31,
            2003. Each stockholder received one (1) additional share for each
            one (1) share owned with no allowance for fractional shares. Per
            share data included in these consolidated financial statements has
            been restated to give effect to the stock split.

      (p)   OTHER REAL ESTATE

            Real estate acquired in settlement of loans is initially recorded at
            the lower of cost (loan value of real estate acquired in settlement
            of loans plus incidental expense) or estimated fair value, less
            estimated cost to sell. Based on periodic evaluations by management,
            the carrying values are reduced by a direct charge to earnings when
            they exceed net realizable value. Costs relating to the development
            and improvement of the property are capitalized, while holding costs
            of the property are charged to expense in the period incurred.

      (q)   RECLASSIFICATIONS

            Certain reclassifications have been made to the 2003 and 2002
            figures to conform to the presentation for 2004.

      (r)   OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS

            In the ordinary course of business the subsidiary banks have 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.

                                       14


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (s)   IMPACT OF NEW ACCOUNTING STANDARDS

            In June, 2002, the FASB issued SFAS 146, "Accounting for Costs
            Associated with Exit or Disposal Activities". SFAS 146 addresses
            financial accounting and reporting for costs associated with exit or
            disposal activities and nullifies Emerging Issues Task Force (EITF)
            Issue No. 94-3, "Liability Recognition for Certain Employee
            Termination Benefits and Other Costs to Exit an Activity (including
            Certain Costs Incurred in a Restructuring)." The provisions of the
            Statement are effective for exit or disposal activities that are
            initiated after December 31, 2002. The adoption of SFAS 146 did not
            have a material impact on the Company's financial position or
            results of operations.

            In October, 2002, the Financial Accounting Standards Board issued
            Statement of Financial Accounting Standard No. 147, "Acquisitions of
            Certain Financial Institutions". SFAS No. 147 amends SFAS No. 72 and
            FASB Interpretation No. 9 to eliminate all acquisitions of financial
            institutions other than transactions between mutual enterprises from
            their scope. Accordingly, the excess of the purchase price paid to
            acquire a financial institution over the fair value of the
            identifiable tangible and intangible assets and liabilities acquired
            now must be recorded as goodwill following SFAS No. 141 and assessed
            for impairment following SFAS No. 142, "Goodwill and Other
            Intangible Assets". Furthermore, any previously recognized
            unidentifiable intangible assets resulting from prior business
            combinations that do not meet SFAS No. 141's criteria for separate
            recognition must be reclassified to goodwill. The Company has
            adopted SFAS 147, and it has not had any impact on the Company's
            financial position or results of operations. As discussed in note 1
            to the consolidated financial statements, Wilson Bank Holding
            Company, Wilson Bank and Trust, DeKalb Community Bank and Community
            Bank of Smith County have entered into agreements that provide that
            DeKalb Community Bank and Community Bank of Smith County will be
            merged into Wilson Bank and Trust. The acquisition of the minority
            interests related to DeKalb Community Bank and Community Bank of
            Smith County will be accounted for using the purchase method of
            accounting as setforth in SFAS No. 141. Amortization of any
            intangibles will be accounted for in accordance with SFAS No. 142.
            The mergers are subject to stockholder and regulatory approvals and
            are expected to occur in 2005. Wilson Bank Holding Company stock
            will be issued to the minority stockholders of DeKalb Community Bank
            and Community Bank of Smith County and the minority interest
            reflected in the consolidated balance sheet will be reflected in
            equity along with any excess of the fair market value of the newly
            issued Wilson Bank Holding Company stock over 50% of the book value
            of the net assets of DeKalb Community Bank and Community Bank of
            Smith County. Accordingly based on December 321, 2004 data, the
            consolidated stockholders' equity of Wilson Bank Holding Company is
            expected to increase by $13,692,000, minority interest would
            decrease by $6,959,000 and total assets would increase by
            $6,733,000. The impact on the Company's results of operations is not
            expected to be material.

                                       15


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (s)   IMPACT OF NEW ACCOUNTING STANDARDS, CONTINUED

            In November, 2002, the FASB issued Interpretation (FIN) 45,
            "Guarantor's Accounting and Disclosure Requirements for Guarantees,
            Including Indirect Guarantee of Indebtedness of Others", which
            elaborates on the disclosure to be made by a guarantor in its
            interim and annual financial statements about its obligations under
            certain guarantees that it has issued. The interpretation also
            clarifies that a guarantor is required to recognize, at the
            inception of the guarantee, a liability for the fair value of the
            obligation undertaken in issuing the guarantee. The adoption of FIN
            45 did not have a material impact on the consolidated financial
            statements.

            In May, 2003, the FASB issued SFAS 150, "Accounting for Certain
            Financial Instruments with Characteristics of both Liabilities and
            Equity". This Statement established standards for how an issuer
            classifies and measures certain financial instruments with
            characteristics of both liabilities and equity. It requires that an
            issuer classify a financial instrument that is within its scope as a
            liability (or an asset in some circumstances). Many of those
            instruments were previously classified as equity. This statement is
            effective for financial instruments entered into or modified after
            May 31, 2003, and otherwise is effective at the beginning of the
            first interim period beginning after June 15, 2003. The adoption of
            SFAS 150 did not have a material impact on the Company's financial
            position or results of operations.

            In June, 2003, the American Institute of Certified Public
            Accountants issued an exposure draft on a Proposed Statement of
            Position (SOP) on Allowance for Credit Losses. If approved, the
            Proposed SOP would significantly change the way the allowance for
            possible loan losses is calculated. Under the Proposed SOP, any
            loans determined to be impaired, as defined in FASB Statement No.
            114, would be assigned a specific reserve based on facts and
            circumstances surrounding the particular loan and no loss percentage
            would be assigned. If a loan is determined not to be impaired, it
            would be assigned to a pool of similar homogeneous loans. A loss
            percentage would then be assigned to the pool based on historical
            charge-offs adjusted for internal or external factors such as the
            economy, changes in underwriting standards, etc. Management has not
            yet determined the impact this Proposed SOP would have on their
            consolidated financial statements, but anticipates that it could
            result in a reduction in the allowance for possible loan losses.
            Under the Proposal, any changes resulting from the initial
            application of this Proposed SOP would be treated as a change in
            accounting estimate.

            In June, 2003, the Financial Accounting Standards Board issued
            Statement of Financial Accounting Standard No. 149, "Amendment of
            Statement 133 on Derivative Instruments and Hedging Activities".
            SFAS 149 amends and clarifies financial accounting and

                                       16


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      (s)   IMPACT OF NEW ACCOUNTING STANDARDS, CONTINUED

            reporting for derivative instruments, including certain derivative
            instruments embedded in other contracts (collectively referred to as
            derivatives) and for hedging activities under FASB Statement No.
            133, "Accounting for Derivative Instruments and Hedging Activities".
            Under SFAS 149 loan commitments that relate to the origination of
            mortgage loans that will be held for sale, commonly referred to as
            interest rate lock commitments, must be accounted for as derivatives
            by the issuer of the commitment. Commitments to originate mortgage
            loans that will be held for investment purposes and commitments to
            originate other types of loans are not considered derivatives. The
            Company has adopted SFAS 149, but it has not had any material impact
            on the Company's financial position or results of operations.

            In November, 2003, the Emerging Issues Task Force ("EITF") issued
            Position 03-1, "The Meaning of Other-Than-Temporary Impairment and
            Its Application to Certain Investments". The EITF provides guidance
            on the meaning of the phrase other-than-temporary impairment and its
            application to several types of investments, including debt
            securities classified as held-to-maturity and available-for-sale
            under FASB Statement No. 115, "Accounting for Certain Investments in
            Debt and Equities Securities". For purposes of EITF No. 03-1 an
            investment is impaired if the fair market value of the investment is
            less than its cost. Controversy has developed over the criteria to
            be used to determine whether an impairment is other than temporary.
            The EITF requires that an investor should make an evidenced-based
            judgment about a recovery of fair value up to (or beyond) the cost
            of the investment by considering the severity and duration of the
            impairment in relation to the forecasted recovery of fair value.
            Because of the controversy related to the determination of whether
            the impairment is other than temporary, certain positions of the
            EITF have been temporarily delayed. The Company cannot assess the
            effect on the financial position or results of operations until the
            controversy has been resolved. The EITF requires disclosures related
            to securities with fair values less than cost. The disclosures have
            been included in note 3 to the consolidated financial statements.

            In December, 2004, the Financial Accounting Standards Board ("FASB")
            reissued Statement of Financial Accounting Standards No. 123
            (revised 204) ("SFAS") related to share based payments. For Wilson
            Bank Holding Company the SFAS applies to the accounting for stock
            options. The substance of the revised statement is to require
            companies to record as an expense amortization of the fair market
            value of stock options determined as of the grand date. The
            offsetting credit is to additional paid-in capital unless there is
            an obligation to buy back the stock or exchange other assets for the
            stock. If such an obligation exists the offsetting credit would be
            to a liability account. The statement is effective for the first
            interim reporting period after June 15, 2005. Wilson Bank Holding
            Company is currently assessing the impact of this SFAS; however,
            management does not expect the impact to be material on the
            financial condition or result of operations.

                                       17


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(2)   LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES

      The classification of loans at December 31, 2004 and 2003 is as follows:



                                                      In Thousands
                                               ---------------------------
                                                   2004             2003
                                                   ----             ----
                                                             
 Commercial, financial and agricultural        $      217,372      174,235
 Installment                                           73,482       64,880
 Real estate - construction                            49,085       39,508
 Real estate - mortgage                               384,062      314,168
                                               --------------      -------
                                                      724,001      592,791
 Allowance for possible loan losses                    (9,370)      (8,077)
                                               --------------      -------
                                               $      714,631      584,714
                                               ==============      =======


      The principal maturities on loans at December 31, 2004 are as follows:



                                                       In Thousands
                   --------------------------------------------------------------------------------
                      Commercial,
                       Financial
                          and                               Real Estate -   Real Estate-
                      Agricultural      Installment         Construction      Mortgage      Total
                   ----------------     ------------    -----------------   ----------     --------
                                                                            
3 months or less   $        32,508             4,548               13,285         2,748      53,089
3 to 12 months              89,352             4,927               32,220         5,550     132,049
1 to 5 years                64,808            59,948                3,580        69,976     198,312
Over 5 Years                30,704             4,059                    -       305,788     340,551
                   ---------------      ------------    ------------------  -----------    --------

                   $       217,372            73,482               49,085       384,062     724,001
                   ===============      ============    =================   ===========    ========


      At December 31, 2004, variable rate and fixed rate loans total
      $391,560,000 and $332,441,000, respectively. At December 31, 2003,
      variable rate loans were $297,608,000 and fixed rate loans totaled
      $295,183,000.

      In the normal course of business, the Company's subsidiaries have 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 $15,416,000 and $14,092,000 at December 31, 2004 and 2003,
      respectively. As of December 31, 2004 none of these loans were
      restructured, nor were any related party loans charged-off during the past
      three years.

                                       18


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(2)   LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES, CONTINUED

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



                                             In Thousands
                                       -------------------------
                                              December 31,
                                       -------------------------
                                           2004           2003
                                           ----           ----
                                                   
Balance, January 1                     $    14,092       11,589
New loans during the year                   17,949       19,112
Repayments during the year                 (16,625)     (16,609)
                                       -----------       ------
Balance, December 31                   $    15,416       14,092
                                       ===========       ======


      A director of the Company performs appraisals related to certain loan
      customers. Fees paid to the director for these services were $487,000 in
      2004, $493,000 in 2003 and $314,000 in 2002.

      Loans which had been placed on non-accrual status totaled $624,000 and
      $462,000 at December 31, 2004 and 2003, respectively. Had interest on
      these loans been accrued, interest income would have been increased by
      approximately $13,000 in 2004 and $8,000 in 2003. In 2002, interest income
      that would have been earned had there been no non-accrual loans totaled
      approximately $12,000. Loans that are past due 90 days or more and are
      still accruing interest totaled $2,533,000 and $1,766,000 at December 31,
      2004 and 2003, respectively.

      Transactions in the allowance for possible loan losses for the years ended
      December 31, 2004, 2003 and 2002 are summarized as follows:



                                                       In Thousands
                                            ------------------------------------
                                               2004          2003         2002
                                            ----------     --------      -------
                                                                
Balance, beginning of year                  $    8,077        6,943       5,489
Provision charged to operating expense           3,273        1,904       2,344
Loans charged off                               (2,298)        (966)     (1,099)
Recoveries on losses                               318          196         209
                                            ----------        -----       -----

Balance, end of year                        $    9,370        8,077       6,943
                                            ==========        =====       =====


      The Company's principal customers are basically 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 varies depending
      upon the purpose of the credit and the borrower's financial condition.

                                       19


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(2)   LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES, CONTINUED

      Impaired loans and related loan loss reserve amounts at December 31, 2004
      and 2003 were as follows:



                                In Thousands
                            --------------------
                                December 31,
                            --------------------
                             2004          2003
                            ------        ------
                                    
Recorded investment         $   295       3,364
Loan loss reserve           $    41         121


      The average recorded investment in impaired loans for the years ended
      December 31, 2004, 2003 and 2002 was $121,000, $1,006,000 and $133,000,
      respectively. The related total amount of interest income recognized on
      the accrual basis for the period that such loans were impaired was $8,000
      and $69,000 during 2004 and 2003, respectively. There was no interest
      income recognized on these loans during 2002.

      In 2004, 2003 and 2002, the Company originated and sold loans in the
      secondary market of $70,854,000, $120,704,000 and $89,933,000,
      respectively. At December 31, 2004, the wholly-owned subsidiary Bank had
      not been required to repurchase any of the loans originated by the Bank
      and sold in the secondary market. The gain on sale of these loans totaled
      $1,006,000, $2,115,000 and $1,374,000 in 2004, 2003 and 2002,
      respectively.

      Of the loans sold in the secondary market, the recourse to the
      wholly-owned subsidiary Bank is limited. On loans sold to the Federal Home
      Loan Mortgage Corporation, the Bank has a recourse obligation for one year
      from the purchase date. At December 31, 2004, there were no loans sold to
      the Federal Home Loan Mortgage Corporation with existing recourse. All
      other loans sold in the secondary market provide the purchase recourse to
      the Bank for a period of 90 days from the date of purchase and only in the
      event of a default by the borrower pursuant to the terms of the individual
      loan agreement. At December 31, 2004, total loans sold with recourse to
      the Bank, including those sold to the Federal Home Loan Mortgage
      Corporation, aggregated $26,658,000. Management expects no loss to result
      from these recourse provisions.

(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, 2004 consist of the following:



                                                         Securities Held-To-Maturity
                                             ------------------------------------------------------
                                                                In Thousands
                                             ------------------------------------------------------
                                                             Gross           Gross        Estimated
                                              Amortized    Unrealized      Unrealized      Market
                                                Cost         Gains           Losses        Value
                                             ----------    ----------      ----------     ---------
                                                                              
Obligations of states and political
   subdivisions                              $ 14,202         512               9           14,705
Mortgage-backed securities                        235           -               -              235
                                             --------         ---               -           ------
                                             $ 14,437         512               9           14,940
                                             ========         ===               =           ======


                                       20



                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(3)   DEBT AND EQUITY SECURITIES, CONTINUED



                                                         Securities Available-For-Sale
                                             ------------------------------------------------------
                                                                  In Thousands
                                             ------------------------------------------------------
                                                              Gross          Gross        Estimated
                                              Amortized    Unrealized      Unrealized       Market
                                                Cost          Gains          Losses         Value
                                             ----------    ----------      ----------     ---------
                                                                              
U.S. Treasury and other U.S.
 Government agencies and
 corporations                                 $ 109,945         24           1,586         108,383
Obligations of states and political
 subdivisions                                     1,035         61               -           1,096
Mortgage-backed securities                        9,208          5              57           9,156
                                              ---------         --           -----         -------

                                              $ 120,188         90           1,643         118,635
                                              =========         ==           =====         =======


      The Company's classification of securities at December 31, 2003 is as
      follows:



                                                            Securities Held-To-Maturity
                                             ------------------------------------------------------
                                                                   In Thousands
                                             ------------------------------------------------------
                                                             Gross            Gross       Estimated
                                             Amortized     Unrealized      Unrealized       Market
                                               Cost          Gains           Losses         Value
                                             ---------     ----------      ----------     ---------
                                                                              
Obligations of states and political
   subdivisions                              $  15,851        709              26           16,534
Mortgage-backed securities                         792          1               1              792
                                             ---------        ---              --           ------
                                             $  16,643        710              27           17,326
                                             =========        ===              ==           ======




                                                            Securities Available-For-Sale
                                             ------------------------------------------------------
                                                                   In Thousands
                                             ------------------------------------------------------
                                                             Gross            Gross       Estimated
                                             Amortized     Unrealized      Unrealized       Market
                                               Cost          Gains           Losses         Value
                                             ----------    ----------      ----------     ---------
                                                                              
U.S. Treasury and other U.S.
  Government agencies and
  corporations                               $  122,046        621            886          121,781
Obligations of states and political
  subdivisions                                    1,380         81              -            1,461
Corporate bonds                                     500          -              1              499
Mortgage-backed securities                        9,191          6             45            9,152
                                             ----------        ---            ---          -------
                                             $  133,117        708            932          132,893
                                             ==========        ===            ===          =======


                                       21


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(3)   DEBT AND EQUITY SECURITIES, CONTINUED

      The amortized cost and estimated market value of debt securities at
      December 31, 2004, by contractual maturity, are shown below. Expected
      maturities will differ from contractual maturities because borrowers may
      have the right to call or prepay obligations with or without call or
      prepayment penalties.



                                                    In Thousands
                                             ---------------------------
                                                               Estimated
                                               Amortized         Market
Securities Held-To-Maturity                      Cost            Value
- ---------------------------                  -----------       ---------
                                                         
Due in one year or less                      $     1,156          1,172
Due after one year through five years              3,794          3,938
Due after five years through ten years             7,638          7,899
Due after ten years                                1,614          1,696
                                             -----------         ------
                                                  14,202         14,705
Mortgage-backed securities                           235            235
                                             -----------         ------
                                             $    14,437         14,940
                                             ===========         ======




                                                    In Thousands
                                             ---------------------------
                                                               Estimated
                                               Amortized         Market
Securities Held-To-Maturity                      Cost            Value
- ---------------------------                  -----------       ---------
                                                         
Due in one year or less                      $     1,600         1,590
Due after one year through five years             98,182        96,789
Due after five years through ten years            11,198        11,100
Due after ten years                                    -             -
                                             -----------       -------
                                                 110,980       109,479
Mortgage-backed securities                         9,208         9,156
                                             -----------       -------
                                             $   120,188       118,635
                                             ===========       =======


      The Company periodically applies the stress test to its securities
      portfolio. To satisfy the stress test a security's estimated market value
      should not decline more than certain percentages given certain assumed
      interest rate increases. The Company had no securities that failed to meet
      the stress test.

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



                                                          In Thousands
                                               ------------------------------
                                                 2004         2003       2002
                                                 ----         ----       ----
                                                                
Gross proceeds                                 $  24,337        -         501
                                               =========        =         ===
Gross realized gains                           $       -        -           1
Gross realized losses                                 68        -           -
                                               ---------        -           -
            Net realized gains (losses)        $     (68)       -           1
                                               =========        =         ===


                                       22


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(3)   DEBT AND EQUITY SECURITIES, CONTINUED

      Securities carried in the balance sheet of approximately $96,933,000
      (approximate market value of $96,138,000) and $98,302,000 (approximate
      market value of $98,802,000), were pledged to secure public deposits and
      for other purposes as required or permitted by law at December 31, 2004
      and 2003, respectively.

      Included in the securities above are $15,037,000 (approximate market value
      of $15,578,000) and $16,695,000 (approximate market value of $17,427,000)
      at December 31, 2004 and 2003, respectively, in obligations of political
      subdivisions located within the State of Tennessee. Management purchases
      only obligations of such political subdivisions it considers to be
      financially sound.

      Securities that have rates that adjust prior to maturity totaled $327,000
      (approximate market value of $327,000) and $912,000 (approximate market
      value of $912,000) at December 31, 2004 and 2003, respectively.

      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, 2004:



                                                            In Thousands, Except Number of Securities
                         ----------------------------------------------------------------------------------------------------------
                                      Less than 12 Months                           12 Months or More                 Total
                         ----------------------------------------    -------------------------------------     --------------------
                                                         Number                                Number
                                                           of                                    of
                            Fair       Unrealized      Securities     Fair     Unrealized     Securities       Fair      Unrealized
                            Value        Losses         Included      Value      Losses        Included        Value       Losses
                         -----------   ----------     -----------   --------   ----------     ----------      -------    ----------
                                                                                                 
U.S. Treasury
 and other U.S.
 Government
 agencies and
 corporations            $    70,558      824              80        33,797       762              37         104,355       1,586
Obligations of
 states and
 political sub-
 divisions                     1,449        9               8            -         -                -           1,449           9
Mortgage-backed
 securities                    7,351       42               7         1,879        15               3           9,230          57
                         -----------       --              --       -------       ---              --         -------       -----
    Total
     temporarily
     impaired
     securities          $    79,358      875              95        35,676       777              40         115,034       1,652
                         ===========      ===              ==        ======       ===              ==         =======       =====


                                       23


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(3)   DEBT AND EQUITY SECURITIES, CONTINUED

      The impaired securities are considered high quality investments in line
      with normal industry investing practices. The unrealized losses are
      primarily the result of changes in the interest rate and sector
      environments. Consistent with the original classification, as
      available-for-sale or held-to-maturity securities, the Company intends and
      has the ability to hold the above securities until the value is realized.

      The Company may sell the above or other securities in the ordinary course
      of business in response to unexpected and significant changes in liquidity
      needs, unexpected and significant increases in interest rates and/or
      sector spreads that significantly extend the security's holding period, or
      conducting a small volume of security transactions.

(4)   RESTRICTED EQUITY SECURITIES

      Restricted equity securities consists of stock of the Federal Home Loan
      Bank amounting to $2,573,000 and $2,471,000 at December 31, 2004 and 2003,
      respectively, and the stock of The Bankers Bank amounting to $88,000 at
      December 31, 2004 and 2003, 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, 2004 and 2003 is as
      follows:



                                         In Thousands
                                   ----------------------
                                     2004           2003
                                   ----------      ------
                                             
Land                               $    5,869       4,522
Buildings                              15,512      13,699
Construction in progress                  109         993
Leasehold improvements                    140         140
Furniture and equipment                 6,705       6,179
Automobiles                               175         134
                                   ----------      ------
                                       28,510      25,667
Less accumulated depreciation          (6,680)     (6,501)
                                   ----------      ------
                                   $   21,830      19,166
                                   ==========      ======


      Building additions during 2004 and 2003 include payments of $643,000 and
      $1,844,000, respectively, to a construction company owned by a director of
      the Company.

      Depreciation expense was $1,511,000, $1,287,000 and $1,234,000 for the
      years ended December 31, 2004, 2003 and 2002, respectively.

                                       24

                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(6)   DEPOSITS

      Deposits at December 31, 2004 and 2003 are summarized as follows:



                                                                    In Thousands
                                                           ------------------------------
                                                               2004                 2003
                                                           -----------            -------
                                                                            
Demand deposits                                            $   102,482             86,730
Savings accounts                                                38,342             44,000
Negotiable order of withdrawal accounts                         68,228             66,196
Money market demand accounts                                   188,435            198,553
Certificates of deposit $100,000 or greater                    158,374            127,083
Other certificates of deposit                                  235,124            208,846
Individual retirement accounts $100,000 or greater              12,916             12,006
Other individual retirement accounts                            29,021             27,005
                                                           -----------            -------
                                                           $   832,922            770,419
                                                           ===========            =======


      Principal maturities of certificates of deposit and individual retirement
      accounts at December 31, 2004 are as follows:



                             (In Thousands)
                             --------------
      Maturity                   Total
      --------                   -----
                           
2005                          $  202,359
2006                             119,521
2007                              58,880
2008                              16,677
2009                              37,925
Thereafter                            73
                              ----------
                              $  435,435
                              ==========


      At December 31, 2004, certificates of deposit and individual retirement
      accounts in denominations of $100,000 or more amounted to $171,290,000 as
      compared to $139,089,000 at December 31, 2003.

      The aggregate amount of overdrafts reclassified as loans receivable was
      $472,000 and $1,127,000 at December 31, 2004 and 2003, respectively.

      The subsidiary banks are required to maintain cash balances or balances
      with the Federal Reserve Bank or other correspondent banks based on
      certain percentages of deposit types. The average required amounts for the
      years ended December 31, 2004 and 2003 were approximately $12,061,000 and
      $10,900,000, respectively.

                                       25


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(7)   SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

      Securities sold under repurchase agreements were $6,679,000 and $8,606,000
      at December 31, 2004 and 2003, respectively. The maximum amounts of
      outstanding repurchase agreements at any month end during 2004 and 2003
      was $13,676,000 and $14,691,000, respectively. The average daily balance
      outstanding during 2004, 2003 and 2002 was $7,982,000, $14,460,000 and
      $13,700,000, respectively. The weighted-average interest rate on the
      outstanding balance at December 31, 2004 and 2003 was 1.68% and 1.86%,
      respectively. The underlying securities are typically held by other
      financial institutions and are designated as pledged.

(8)   ADVANCES FROM FEDERAL HOME LOAN BANK

      The advances from the Federal Home Loan Bank at December 31, 2004 and 2003
      consist of the following:



                                                                             In Thousands
                                   --------------------------------------------------------------------------------------------
                                                                             December 31,
                                   ---------------------------------------------------------------------------------------------
                                                    2004                                                    2003
                                   --------------------------------------                    -----------------------------------
                                                               Weighted                                             Weighted
                                     Amount                  Average Rate                     Amount               Average Rate
                                   ----------                ------------                     ------               ------------
                                                                                                       
Fixed-rate advance                 $   15,263                    4.58%                        $  712                   7.17%
                                   ==========                    ====                         ======                   ====


      Advances from the Federal Home Loan Bank are to mature as follows at
      December 31, 2004:



Year Ending                     In Thousands
December 31,                      Amount
- ------------                    ----------
                             
2009                            $  14,767
2010                                  496
                                ---------
                                $  15,263
                                =========


      These advances are collateralized by a required blanket pledge of
      qualifying mortgage loans.

                                       26


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(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 are presented below:



                                                                             In Thousands
                                                          -------------------------------------------------
                                                             2004                 2003               2002
                                                          ----------          ------------         --------
                                                                                          
Non-interest income:
   Service charges on deposits                             $   4,960                 4,433            4,234
   Other fees                                                  2,868                 2,491            2,463
   Gains on sales of loans                                     1,006                 2,115            1,374
   Security gains                                                  -                     -                1
   Gains on sales of fixed assets                                 29                    21                3
   Other income                                                   35                     -                1
                                                           ---------                 -----           ------
                                                           $   8,898                 9,060            8,076
                                                           =========                 =====           ======

Non-interest expense:
   Employee salaries and benefits                          $  12,566                11,082            9,837
   Occupancy expenses                                          1,290                 1,152            1,162
   Furniture and equipment expenses                            1,623                 1,421            1,106
   Loss on sales of other assets                                  64                    35               21
   Loss on sales of other real estate                             18                   112               68
   Security losses                                                68                     -                -
   FDIC insurance                                                113                   108              106
   Directors' fees                                               743                   683              665
   Other operating expenses                                    5,376                 4,868            4,854
   Minority interest in net earnings of subsidiaries             475                   916              866
                                                           ---------                ------           ------
                                                           $  22,336                20,377           18,685
                                                           =========                ======           ======


(10)  INCOME TAXES

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



                                        In Thousands
                              --------------------------------
                                 2004                    2003
                              ---------                 ------
                                                  
Deferred tax asset:
   Federal                    $   3,470                 2,641
   State                            710                   540
                              ---------                 -----
                                  4,180                 3,181
                              ---------                 -----
Deferred tax liability:
   Federal                         (819)                 (580)
   State                           (167)                 (118)
                              ---------                 -----
                                   (986)                 (698)
                              ---------                 -----
                              $   3,194                 2,483
                              =========                 =====


                                       27


                          WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(10)  INCOME TAXES, CONTINUED

      The tax effects of each type of significant item that gave rise to
      deferred taxes are:



                                                                         In Thousands
                                                                    ------------------------
                                                                      2004             2003
                                                                    ---------        -------
                                                                               
Financial statement allowance for loan losses in excess of
   tax allowance                                                    $  3,301          2,857

Excess of depreciation deducted for tax purposes over the
   amounts deducted in the financial statements                         (656)          (406)

Financial statement deduction for deferred compensation in
   excess of deduction for tax purposes                                  285            238

Financial statement income on FHLB stock dividends not
   recognized for tax purposes                                          (331)          (292)

Unrealized loss on securities available-for-sale                         595             86
                                                                    --------          -----

                                                                    $  3,194          2,483
                                                                    ========          =====


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



                               In Thousands
                      -------------------------------
                       Federal       State      Total
                      ---------      -----      -----
                                       
2004
   Current            $   4,843      1,047      5,890
   Deferred                (167)       (34)      (201)
                      ---------      -----      -----
         Total        $   4,676      1,013      5,689
                      =========      =====      =====
2003
   Current            $   5,369      1,139      6,508
   Deferred                (221)       (45)      (266)
                      ---------      -----      -----
         Total        $   5,148      1,094      6,242
                      =========      =====      =====
2002
   Current            $   4,850      1,025      5,875
   Deferred                (389)       (93)      (482)
                      ---------      -----      -----
         Total        $   4,461        932      5,393
                      =========      =====      =====


                                       28


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(10)  INCOME TAXES, CONTINUED

      A reconciliation of actual income tax expense of $5,689,000, $6,242,000
      and $5,393,000 for the years ended December 31, 2004, 2003 and 2002,
      respectively, to the "expected" tax expense (computed by applying the
      statutory rate of 34% to earnings before income taxes) is as follows:



                                                                     In Thousands
                                                          -----------------------------------
                                                            2004         2003         2002
                                                          ---------    ---------    ---------
                                                                               
Computed "expected" tax expense                           $   5,032        5,330        4,733
State income taxes, net of Federal income tax benefit           669          722          624
State deferred income taxes related to state income tax
   rate increase                                                  -            -          (14)
Tax exempt interest, net of interest expense exclusion         (232)        (213)        (237)
Tax expense related to minority interest income in
   subsidiaries                                                 162          311          294
Federal income tax expense above statutory
   rate related to taxable income over $10 million               27           32            -
Other                                                            31           60           (7)
                                                          ---------    ---------    ---------
                                                          $   5,689        6,242        5,393
                                                          =========    =========    =========


      Total income tax expense for 2004 includes tax benefit of $26,000 related
      to the loss on sale of securities. Total income tax expense for 2002
      includes tax expense of less than $1,000 related to the gain on sale of
      securities. There were no sales of securities in 2003.

(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 consolidated financial position.

      The subsidiary banks lease 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
- -------------------------       ------------
                             
         2005                     $    34
         2006                          12
         2007                          12
         2008                          13
         2009                           2
                                  -------
                                  $    73
                                  =======


                                       29


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(11)  COMMITMENTS AND CONTINGENT LIABILITIES, CONTINUED

      Total rent expense amounted to $72,000, $52,000 and $52,000, respectively,
      during the years ended December 31, 2004, 2003 and 2002.

      The Company has lines of credit with other financial institutions totaling
      $54,450,000. At December 31, 2004 and 2003, there was no balance
      outstanding under these lines of credit.

(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
                                                                --------------------
                                                                   2004       2003
                                                                ----------   -------
                                                                       
Financial instruments whose contract amounts represent credit
   risk:
     Unused commitments to extend credit                        $  133,008    98,656
     Standby letters of credit                                       9,531     4,772
                                                                ----------   -------
        Total                                                   $  142,539   103,428
                                                                ==========   =======


      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.

                                       30


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(12)  FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK, CONTINUED

      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 counter parties drawing on such
      financial instruments and the present creditworthiness of such counter
      parties. 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 $9.5
      million at December 31, 2004.

(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 the
      subsidiary banks. Investment in state and municipal securities also
      include governmental entities within the Company's market area. The
      concentrations of credit by type of loan are set forth in note 2 to the
      consolidated financial statements.

      At December 31, 2004, the Company's cash and due from banks included
      commercial bank deposits aggregating $638,000 in excess of the Federal
      Deposit Insurance Corporation limit of $100,000 per institution.

      Federal funds sold were deposited with six banks.

(14)  EMPLOYEE BENEFIT PLAN

      The Company has in effect a 401(k) plan which covers eligible employees.
      To be eligible an employee must have obtained the age of 20 1/2. The
      provisions of the plan provide for both employee and employer
      contributions. For the years ended December 31, 2004, 2003 and 2002, the
      subsidiary banks contributed $653,000, $614,000 and $529,000,
      respectively, to this plan.

(15)  DIVIDEND REINVESTMENT PLAN

      Under the terms of the Company's dividend reinvestment plan 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 104,388 in 2004, 102,568 in 2003
      and 105,194 in 2002 were sold to participants under the terms of the plan
      after giving effect to the 2 for 1 stock split in 2003.

                                       31


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(16)  REGULATORY MATTERS AND RESTRICTIONS ON DIVIDENDS

      The Company and its bank subsidiaries are subject to regulatory capital
      requirements administered by the Federal Deposit Insurance Corporation,
      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 financial statements. The Company's capital classification is
      also subject to qualitative judgments about components, risk weightings
      and other factors. Those qualitative judgments could also affect the
      subsidiary banks' capital statuses and the amount of dividends the
      subsidiaries may distribute.

      The Company and its subsidiary banks are required to maintain minimum
      amounts of capital to total "risk weighted" assets, as defined by the
      banking regulators. At December 31, 2004, the Company and its bank
      subsidiaries are required to have minimum Tier I and total risk-based
      capital ratios of 4% and 8%, respectively and a leverage ratio of 4%. The
      actual ratios of the Company and each of its bank subsidiaries were as
      follows:



                              Wilson Bank                Wilson                 DeKalb               Community Bank
                           Holding Company           Bank & Trust           Community Bank          of Smith County
                          ------------------       -----------------      -------------------      -----------------
                           2004        2003        2004        2003        2004        2003        2004        2003
                          ------      ------       ------     ------      ------       ------      ------     ------
                                                                                      
Tier I ratio              11.12%      12.36%       11.03%     12.48%      11.59%       11.74%      10.87%     11.77%

Total risk-based
   ratio                  12.37%      12.61%       12.22%     13.73%      12.85%       12.99%      12.13%     13.02%

Leverage ratio             8.71%       8.83%        9.07%      8.89%       6.98%        7.89%       7.52%      9.38%


      As of December 31, 2004, the most recent notification from the banking
      regulators categorized the Company and its subsidiaries 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 the Company's category.

(17)  DEFERRED COMPENSATION PLAN

      The Company's wholly-owned subsidiary bank provides its executive officers
      a deferred compensation plan, which also provides for death and disability
      benefits. The plan was 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. There were six
      employees participating in the plan at December 31, 2004.

      The plan provides retirement benefits for a period of 180 months after the
      employee reaches the age of 65. This benefit can be reduced if the
      wholly-owned subsidiary bank's average return on assets falls below 1%.
      The plan also provides benefits in the event the executive should die or
      become disabled prior to reaching retirement. The wholly-owned subsidiary
      bank has purchased insurance policies or other assets to provide the
      benefits listed above. The insurance policies remain the sole property of
      the wholly-owned subsidiary bank and are payable to the Bank. At December
      31, 2004 and 2003, the deferred compensation liability totaled $744,000
      and

                                       32


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(17)  DEFERRED COMPENSATION PLAN, CONTINUED

      $622,000, respectively, the cash surrender value of life insurance was
      $909,000 and $802,000, respectively, and the face amount of the insurance
      policies in force approximated $4,350,000 in 2004 and 2003, respectively.
      The deferred compensation plan is not qualified under Section 401 of the
      Internal Revenue Code.

(18)  STOCK OPTION PLAN

      In April, 1999, the stockholders of the Company approved the Wilson Bank
      Holding Company 1999 Stock Option Plan (the "Stock Option Plan"). The
      Stock Option Plan provides for the granting of stock options, and
      authorizes 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 subsidiaries. Furthermore, the Company
      may issue additional shares under the Stock Option Plan as needed in order
      that the aggregate number of shares that may be issued during the term of
      the Plan is equal to five percent (5%) of the shares of common stock then
      issued and outstanding.

      Under the Stock Option Plan, stock option awards may be granted in the
      form of incentive stock options or nonstatutory stock options, and are
      generally exercisable for up to ten years following the date such option
      awards are granted. Exercise prices of incentive stock options must be
      equal to or greater than 100% of the fair market value of the common stock
      on the grant date.

      Statement of Financial Accounting Standards (SFAS) No. 123 "Accounting for
      Stock Based Compensation", as amended by SFAS No. 148 "Accounting for
      Stock-Based Compensation - Transition and Disclosure", sets forth the
      method for recognition of cost of plans similar to those of the Company.
      As is permitted, management has elected to continue accounting for the
      plan under APB Opinion 25 and related Interpretations. However, under SFAS
      No. 123, the Company is required to make proforma disclosures as if cost
      had been recognized in accordance with the pronouncement. Had compensation
      cost for the Company's stock option plan been determined based on the fair
      value at the grant dates for awards under the plan consistent with the
      method of SFAS No. 123, the Company's net earnings, basic earnings per
      common share and diluted earnings per common share would have been reduced
      to the proforma amounts indicated below:



                                                   In Thousands
                                              Except Per Share Amounts
                                       ---------------------------------------
                                          2004             2003          2002
                                       -----------         -----         -----
                                                             
Net earnings             As Reported   $     9,112         9,435         8,529
                         Proforma      $     9,064         9,375         8,465

Basic earnings per       As Reported   $      2.07          2.20          2.04
    common share         Proforma      $      2.06          2.19          2.03

Diluted earnings per     As Reported   $      2.07          2.20          2.04
    common share         Proforma      $      2.06          2.18          2.02


                                       33


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(18)  STOCK OPTION PLAN, CONTINUED

      A summary of the stock option activity for 2004, 2003 and 2002 is as
      follows:



                                        2004                                2003                               2002
                                ----------------------             -----------------------              ----------------------
                                             Weighted                           Weighted                            Weighted
                                             Average                            Average                              Average
                                             Exercise                           Exercise                            Exercise
                                Shares        Price                Shares        Price                  Shares       Price
                                -------     ----------             -------    ------------              ------    ------------
                                                                                                
Outstanding at
   beginning of year            100,734     $    16.50              93,634    $      15.80              94,298    $      15.45
Granted                           5,500          26.27              10,500           22.50               8,000           19.75
Exercised                       (11,613)        (15.54)             (2,000)         (15.32)             (2,666)         (15.28)
Forfeited                        (6,831)        (16.32)             (1,400)         (15.28)             (5,998)         (15.88)
                                -------     ----------             -------    ------------              ------    ------------
Outstanding at end of
   year                          87,790     $    17.26             100,734    $      16.50              93,634    $      15.80
                                =======     ==========             =======    ============              ======    ============

Options exercisable at
   year end                      28,870                             31,852                              24,642
                                =======                            =======                              ======


      The following table summarizes information about fixed stock options
      outstanding at December 31, 2004:



                  Options Outstanding            Options Exercisable
            ----------------------------------  ---------------------
                                    Weighted
                         Weighted    Average                 Weighted
Range of       Number    Average    Remaining      Number     Average
Exercise    Outstanding  Exercise  Contractual  Exercisable  Exercise
 Prices     at 12/31/04   Price       Life      at 12/31/04   Price
- ---------   -----------  --------  -----------  -----------  --------
                                              
$ 15.28 -
 $ 19.75       73,440    $  15.96   5.5 years     27,920     $ 15.68
$ 22.50 -
  $27.50       14,350    $  23.92   9.3 years        950     $ 22.50


      Share and per share data above for 2002 have been restated to reflect a 2
      for 1 stock split effective October 31, 2003.

      The fair value of options granted in 2004, 2003 and 2002 was $3.89, $2.69
      and $.93, respectively, for each option. The fair value was estimated
      using the Black-Scholes option-pricing model. The weighted average
      assumptions used to calculate the minimum value were as follows for 2004,
      2003 and 2002, respectively: risk free interest rate of 4.25%, 3.97% and
      3.43%, expected life of ten years; and dividend yield of 2.29%, 2.56% and
      2.91%. The dividend yield was computed assuming a dividend payout of $.63,
      $.58 and $.58 per share, respectively.

                                       34


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(19)  EARNINGS PER SHARE

      Statement of Financial Accounting Standards (SFAS) No. 128 "Earnings Per
      Share" establishes uniform standards for computing and presenting earnings
      per share. The computation of basic earnings per share is based on the
      weighted average number of common shares outstanding during the period.
      For the Company the computation of diluted earnings per share begins with
      the basic earnings per share plus the effect of common shares contingently
      issuable from stock options. Share and per share data for 2002 have been
      restated to reflect a 2 for 1 stock split effective October 31, 2003.

      The following is a summary of the components comprising basic and diluted
      earnings per share (EPS):



                                                 In Thousands (except share data)
                                               ------------------------------------
                                                  2004         2003         2002
                                               ----------    ---------    ---------
                                                                 
Basic EPS Computation:
   Numerator - Earnings available to
     common stockholders                       $    9,112        9,435        8,529
                                               ----------    ---------    ---------
   Denominator - Weighted average number
     of common shares outstanding               4,393,791    4,285,000    4,178,976
                                               ----------    ---------    ---------
             Basic earnings per common share   $     2.07         2.20         2.04
                                               ==========    =========    =========

Diluted EPS Computation:
   Numerator - Earnings available to
     common stockholders                       $    9,112        9,435        8,529
                                               ----------    ---------    ---------
   Denominator:
     Weighted average number of common
        shares outstanding                      4,393,791    4,285,000    4,178,976
     Dilutive effect of stock options              13,035        9,844        6,146
                                               ----------    ---------    ---------
                                                4,406,826    4,294,844    4,185,122
                                               ----------    ---------    ---------
             Diluted earnings per common
               share                           $     2.07         2.20         2.04
                                               ==========    =========    =========


                                       35


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(20)  WILSON BANK HOLDING COMPANY -

        PARENT COMPANY FINANCIAL INFORMATION

                           WILSON BANK HOLDING COMPANY
                              (PARENT COMPANY ONLY)

                                 BALANCE SHEETS

                           DECEMBER 31, 2004 AND 2003



                                                                     In Thousands
                                                                ---------------------
                                                                   2004          2003
                                                                ------------    -------
                                                                          
                      ASSETS

Cash                                                            $       125*        61*
Investment in wholly-owned commercial bank subsidiary                64,359*    56,598*
Investment in 50% owned commercial bank subsidiaries                  6,959*     6,549*
Refundable income taxes                                                 118        115
                                                                -----------     ------

     Total assets                                               $    71,561     63,323
                                                                ===========     ======

         LIABILITIES AND STOCKHOLDERS' EQUITY

Stockholders' equity:
   Common stock, par value $2.00 per share, authorized
     10,000,000 shares, 4,436,607 and 4,320,606 shares
     issued and outstanding, respectively                       $     8,873      8,642
   Additional paid-in capital                                        14,856     11,928
   Retained earnings                                                 48,688     42,838
   Unrealized losses on available-for-sale securities, net of
     income taxes of $531,000 and $53,000, respectively                (856)       (85)
                                                                -----------     ------
           Total stockholders' equity                                71,561     63,323
                                                                -----------     ------

           Total liabilities and stockholders' equity           $    71,561     63,323
                                                                ===========     ======


*Eliminated in consolidation.

                                       36


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(20)  WILSON BANK HOLDING COMPANY -

      PARENT COMPANY FINANCIAL INFORMATION, CONTINUED

                           WILSON BANK HOLDING COMPANY
                              (PARENT COMPANY ONLY)

                STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

                       THREE YEARS ENDED DECEMBER 31, 2004



                                                               In Thousands
                                                        ---------------------------
                                                          2004       2003     2002
                                                        ---------    -----    -----
                                                                     
Expenses:
   Directors' fees                                      $     297      301      299
   Other                                                       12        -       21
                                                        ---------    -----    -----

     Loss before Federal income tax benefits
        and equity in undistributed earnings of
        commercial bank subsidiaries                         (309)    (301)    (320)

Federal income tax benefits                                   118      115      123
                                                        ---------    -----    -----
                                                             (191)    (186)    (197)

Equity in undistributed earnings of commercial
   bank subsidiaries                                        9,303*   9,621*   8,726*
                                                        ---------    -----    -----

     Net earnings                                           9,112    9,435    8,529
                                                        ---------    -----    -----

Other comprehensive earnings (losses), net of tax:
   Unrealized gains (losses) on available-for-sale-
     securities arising during period, net of taxes
     of $504,000, $567,000 and $445,000,
     respectively                                            (813)    (915)     717
   Less reclassification adjustments for net (gains)
     losses included in net earnings, net of taxes
     of $26,000 in 2004                                        42        -       (1)
                                                        ---------    -----    -----
                Other comprehensive earnings (losses)        (771)    (915)     716
                                                        ---------    -----    -----

                Comprehensive earnings                  $   8,341    8,520    9,245
                                                        =========    =====    =====


*Eliminated in consolidation.

                                       37


                           WILSON BANK HOLDING COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(20)  WILSON BANK HOLDING COMPANY -

        PARENT COMPANY FINANCIAL INFORMATION, CONTINUED

                           WILSON BANK HOLDING COMPANY
                              (PARENT COMPANY ONLY)

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                       THREE YEARS ENDED DECEMBER 31, 2004



                                                                          In Thousands
                                               -------------------------------------------------------------------
                                                                                          Net Unrealized
                                                              Additional                  Gain (Loss) On
                                                 Common         Paid-In       Retained    Available-For-
                                                 Stock          Capital       Earnings    Sale Securities   Total
                                               ----------     ----------      --------    ---------------  -------
                                                                                            
Balance December 31, 2001                      $    4,108        11,847        29,903           113        45,971
Cash dividends declared, $.58 per share                 -             -        (2,378)                     (2,378)
Issuance of 105,194 shares of stock pursuant
   to dividend reinvestment plan                      105         2,046             -             -         2,151
Issuance of 2,666 shares of stock pursuant
   to exercise of stock options                         3            38             -             -            41
Net change in unrealized gain on
   available-for-sale securities during the
   year, net of taxes of $445,000                       -             -             -           717           717
Net earnings for the year                               -             -         8,529             -         8,529
                                               ----------        ------        ------           ---        ------
Balance December 31, 2002                           4,216        13,931        36,054           830        55,031
Cash dividends declared, $.63 per share            (2,651)       (2,651)
Issuance of 102,568 shares of stock pursuant
   to dividend reinvestment plan                      103         2,289             -             -         2,392
Issuance of 2,000 shares of stock pursuant
   to exercise of stock options                         3            28             -             -            31
Issuance of 2,160,028 shares of stock
   pursuant to a 2 for 1 stock split                4,320        (4,320)            -             -             -
Net change in unrealized gain (loss) on
   available-for-sale securities during the
   year, net of taxes of $567,000                       -             -             -          (915)         (915)
Net earnings for the year                               -             -         9,435             -         9,435
                                               ----------        ------        ------           ---        ------
Balance December 31, 2003                           8,642        11,928        42,838           (85)       63,323
Cash dividends declared, $.75 per share                 -             -        (3,262)            -        (3,262)
Issuance of 104,388 shares of stock pursuant
   to dividend reinvestment plan                      208         2,770             -             -         2,978
Issuance of 11,613 shares of stock pursuant
   to exercise of stock options                        23           158             -             -           181
Net change in unrealized loss on
   available-for-sale securities during the
   year, net of taxes of $478,000                       -             -             -          (771)         (771)
Net earnings for the year                               -             -         9,112             -         9,112
                                               ----------        ------        ------           ---        ------
Balance December 31, 2004                      $    8,873        14,856        48,688          (856)       71,561
                                               ==========        ======        ======           ===        ======


                                       38


                           WILSON BANK HOLDING COMPANY

                  CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                       DECEMBER 31, 2004 AND 2003 AND 2002

(20)  WILSON BANK HOLDING COMPANY -

         PARENT COMPANY FINANCIAL INFORMATION, CONTINUED

                           WILSON BANK HOLDING COMPANY
                              (PARENT COMPANY ONLY)

                            STATEMENTS OF CASH FLOWS

                       THREE YEARS ENDED DECEMBER 31, 2004

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



                                                                     In Thousands
                                                         -----------------------------------
                                                           2004         2003           2002
                                                         ---------    ---------       ------
                                                                             
Cash flows from operating activities:
   Cash paid to suppliers and other                      $    (309)   $    (301)        (320)
   Tax benefits received                                       115          123          104
                                                         ---------    ---------       ------
             Net cash used in operating activities            (194)        (178)        (216)
                                                         ---------    ---------       ------

Cash flows from investing activities:
   Dividends received from commercial bank
     subsidiaries                                              486          639          616
   Dividends reinvested in commercial bank
     subsidiaries                                             (125)        (226)        (186)
                                                         ---------    ---------       ------
             Net cash provided by investing activities         361          413          430
                                                         ---------    ---------       ------

Cash flows from financing activities:
   Dividends paid                                           (3,262)      (2,651)      (2,378)
   Proceeds from sale of stock                               2,978        2,392        2,151
   Proceeds from exercise of stock options                     181           31           41
                                                         ---------    ---------       ------
           Net cash used in financing activities              (103)        (228)        (186)
                                                         ---------    ---------       ------

           Net increase in cash and cash equivalents            64            7           28

Cash and cash equivalents at beginning of year                  61           54           26
                                                         ---------    ---------       ------

Cash and cash equivalents at end of year                 $     125           61           54
                                                         =========    =========       ======


                                       39



                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(20)  WILSON BANK HOLDING COMPANY -

        PARENT COMPANY FINANCIAL INFORMATION, CONTINUED

                           WILSON BANK HOLDING COMPANY
                              (PARENT COMPANY ONLY)

                       STATEMENTS OF CASH FLOWS, CONTINUED

                       THREE YEARS ENDED DECEMBER 31, 2004

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



                                                                                          In Thousands
                                                                     ----------------------------------------------------
                                                                           2004               2003               2002
                                                                           ----               ----               ----
                                                                                                  
Reconciliation of net earnings to net cash used in operating
   activities:
     Net earnings                                                    $         9,112             9,435              8,529

Adjustments to reconcile net earnings to net cash used in operating
   activities:

     Equity in earnings of commercial bank
        subsidiaries                                                          (9,303)           (9,621)            (8,726)
     Decrease (increase) in refundable income taxes                               (3)                8                (19)
                                                                     ---------------    --------------     --------------
        Total adjustments                                                     (9,306)           (9,613)            (8,745)
                                                                     ---------------    --------------     --------------

        Net cash used in operating activities                        $          (194)             (178)              (216)
                                                                     ===============    ==============     ==============


                                       40




                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002


(21)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

      Statement of Financial Accounting Standards (SFAS) No. 107, "Disclosures
      about Fair Value of Financial Instruments", requires that the Company
      disclose estimated fair values for its financial instruments. Fair value
      estimates, methods, and assumptions are set forth below for the Company's
      financial instruments.

            Cash and short-term investments

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

            Securities

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

                  SFAS No. 107 specifies that fair values should be calculated
                  based on the value of one unit without regard to any premium
                  or discount that may result from concentrations of ownership
                  of a financial instrument, possible tax ramifications, or
                  estimated transaction costs. Accordingly, these considerations
                  have not been incorporated into the fair value estimates.

            Loans

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

                                       41



                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(21)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED

            Loans, Continued

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

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

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

            Deposit Liabilities

                  The fair value of demand deposits, savings accounts and
                  certain money market deposits is the amount payable on demand
                  at the reporting date. The fair value of fixed-maturity
                  certificates of deposit is estimated using the rates currently
                  offered for deposits of similar remaining maturities. Under
                  the provision of SFAS No. 107 the fair value estimates for
                  deposits does not include the benefit that results from the
                  low cost funding provided by the deposit liabilities compared
                  to the cost of borrowing funds in the market.

            Securities Sold Under Repurchase Agreements

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

            Advances from Federal Home Loan Bank

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

                                       42



                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002

(21)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED

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

                  Loan commitments are made to customers generally for a period
                  not to exceed one year and at the prevailing interest rates in
                  effect at the time the loan is closed. Commitments to extend
                  credit related to construction loans are generally made for a
                  period not to exceed six months with interest rates at the
                  current market rate at the date of closing. In addition,
                  standby letters of credit are issued for periods extending
                  from one to two years with rates to be determined at the date
                  the letter of credit is funded. Fees are only charged for the
                  construction loans and the standby letters of credit and the
                  amounts unearned at December 31, 2004 and 2003 are
                  insignificant. Accordingly, these commitments have no carrying
                  value and management estimates the commitments to have no
                  significant fair value.

                  The carrying value and estimated fair values of the Company's
                  financial instruments at December 31, 2004 and 2003 are as
                  follows:



                                                                           In Thousands
                                       --------------------------------------------------------------------------------
                                                         2004                                       2003
                                       --------------------------------------------------------------------------------
                                            Carrying                                    Carrying
                                             Amount              Fair Value              Amount             Fair Value
                                             ------              ----------              ------             ----------
                                                                                                
Financial assets:
   Cash and short-term
     investments                       $         49,315              49,315                 82,323               82,323
   Securities                                   133,072             133,575                149,536              150,219
   Loans, net of unearned
     interest                                   724,001                                    592,791
   Less:  allowance for possible
     loan losses                                  9,370                                      8,077
                                       ----------------                            ---------------
   Loans, net of allowance                      714,631             712,712                584,714              591,733
                                       ----------------                            ---------------

   Loans held for sale                            3,515               3,515                  3,972                3,972
   Restricted equity securities                   2,661               2,661                  2,559                2,559

Financial liabilities:
   Deposits                                     832,922             833,268                770,419              776,938
   Securities sold
     under repurchase
     agreements                                   6,679               6,679                  8,606                8,606
   Advances from Federal Home
     Loan Bank                                   15,263              15,588                    712                  819

Unrecognized financial
   instruments:
     Commitments to
        extend credit                                 -                   -                      -                    -
     Standby letters of credit                        -                   -                      -                    -



                                       43


                           WILSON BANK HOLDING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                        DECEMBER 31, 2004, 2003 AND 2002


(21)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED

            Limitations

                  Fair value estimates are made at a specific point in time,
                  based on relevant market information and information about the
                  financial instruments. These estimates do not reflect any
                  premium or discount that could result from offering for sale
                  at one time the Company's entire holdings of a particular
                  financial instrument. Because no market exists for a
                  significant portion of the Company's financial instruments,
                  fair value estimates are based on judgments regarding future
                  expected loss experience, current economic conditions, risk
                  characteristics of various financial instruments, and other
                  factors. These estimates are subjective in nature and involve
                  uncertainties and matters of significant judgment and
                  therefore cannot be determined with precision. Changes in
                  assumptions could significantly affect the estimates.

                  Fair value estimates are based on estimating
                  on-and-off-balance sheet financial instruments without
                  attempting to estimate the value of anticipated future
                  business and the value of assets and liabilities that are not
                  considered financial instruments. For example, a subsidiary
                  Bank has a mortgage department that contributes net fee income
                  annually. The mortgage department is not considered a
                  financial instrument, and its value has not been incorporated
                  into the fair value estimates. Other significant assets and
                  liabilities that are not considered financial assets or
                  liabilities include deferred tax assets and liabilities and
                  property, plant and equipment. In addition, the tax
                  ramifications related to the realization of the unrealized
                  gains and losses can have a significant effect on fair value
                  estimates and have not been considered in the estimates.

(22)  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)
                           ----------------------------------------------------------------------------------------------
                                                2004                                             2003
                           ---------------------------------------------      -------------------------------------------
                             Fourth       Third       Second      First       Fourth      Third       Second       First
                            Quarter      Quarter      Quarter    Quarter      Quarter    Quarter      Quarter     Quarter
                            -------      -------      -------    -------      -------    -------      -------     -------
                                                                                          
Interest income            $  10,750      12,588       12,155     11,770        9,501     11,760       11,308      11,546

Net interest
   income                      6,449       8,577        8,426      8,060        5,803      7,943        7,488       7,664

Provision for
   possible loan
   losses                      1,001         515          337      1,420          386        466          471         581

Earnings before
   income taxes                3,866       4,046        3,913      2,976        3,714      4,020        4,062       3,881

Net earnings                   2,432       2,459        2,415      1,806        2,255      2,420        2,400       2,360

Basic earnings per
   common share                  .55         .55          .56        .41          .52        .56          .56         .56

Diluted earnings
   per common share              .55         .55          .56        .41          .52        .56          .56         .56


                                       44

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. The Company also owns 50% of DeKalb Community
Bank, a state chartered bank incorporated under the laws of the State of
Tennessee and doing business under the same name and 50% of Community Bank of
Smith County, 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 AUDITORS


         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 and Registration Statements (Forms S-4, No. 333-121943 and 333-122534)
pertaining to the proposed mergers of Dekalb Community Bank and Community Bank
of Smith County with and into Wilson Bank and Trust of our report dated January
7, 2005, with respect to the consolidated financial statements of Wilson Bank
Holding Company included in the Annual Report (Form 10-K) for the year ended
December 31, 2004.



                                               /s/ Maggart & Associates, P.C.
                                              ----------------------------------
                                              MAGGART & ASSOCIATES, P.C.


Nashville, Tennessee
March 16, 2005

EX-31.1

                                                                    EXHIBIT 31.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, J. Randall Clemons, 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 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)) 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)   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

      (c)   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 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 16, 2005

                                       By: /s/ J. Randall Clemons
                                           ---------------------------------
                                       Name: J. Randall Clemons
                                       President and Chief Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

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 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)) 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)   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

      (c)   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 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 16, 2005

                         By: /s/ Lisa Pominski
                             ----------------------------
                         Name: Lisa Pominski
                         Senior 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 ending December 31, 2004 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Randall Clemons, 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/ J. Randall Clemons
                                  ----------------------------
                                  Randall Clemons
                                  President and Chief Executive Officer

                                  Date: March 16, 2005

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 ending December 31, 2004 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Lisa Pominski, Senior 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, Senior Vice President and Chief
                              Financial Officer

                              March 16, 2005