10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(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, 2007

or

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 No.)
623 West Main Street Lebanon, Tennessee	37087
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:
(615) 444-2265

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

None

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

Common Stock, $2.00 par value per share
(Title of class)

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

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

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 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 a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a smaller reporting company)

The aggregate market value of the voting stock held by non-affiliates of the registrant on June 30, 2007, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $185,518,818. For purposes of this calculation, “affiliates” are considered to be the directors of the registrant. The market value calculation was determined using $31.00 per share.

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

Shares of common stock, $2.00 par value per share, outstanding on March 12, 2008 were 6,975,650.

TABLE OF CONTENTS

PART I
	Item 1. Business.
	Item 1A. Risk Factors.
	Item 1B. Unresolved Staff Comments.
	Item 2. Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer 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, Executive Officers and Corporate Governance
	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, and Director Independence
	Item 14. Principal Accountant Fees and Services
	Item 15. Exhibits, Financial Statement Schedules
SIGNATURES
INDEX TO EXHIBITS
EX-10.8 DIRECTOR AND NAMED EXECUTIVE OFFICER COMPENSATION SUMMARY
EX-13.1 SELECTED PORTIONS OF THE ANNUAL REPORT
EX-21.1 SUBSIDIARIES OF THE REGISTRANT
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

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, 2007 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 8, 2008 are incorporated by reference into Items 10, 11, 12, 13 and 14.

PART I

Item 1. Business.

General

Wilson Bank Holding Company (the “Company”) was incorporated on March 17, 1992 under the laws of the State of Tennessee. The purpose of the Company was to acquire all of the issued and outstanding capital stock of Wilson Bank and Trust (the “Bank”) and act as a one-bank holding company. On November 17, 1992, the Company acquired 100% of the capital stock of the Bank pursuant to the terms of 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. The Bank, on December 31, 2007, had ten 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, Tennessee, three full service banking offices located in Rutherford County, Tennessee, two full service banking offices in DeKalb County, Tennessee and two full service banking facilities in Smith County, Tennessee.

Prior to March 31, 2005, the Company owned a 50% interest in DeKalb Community Bank and Community Bank of Smith County. On March 31, 2005, the Company acquired the minority interest in the subsidiaries when the two subsidiaries were merged into the Bank with the shareholders of these subsidiaries, other than the Company, receiving shares of the Company’s common stock in exchange for their shares of common stock in the subsidiaries. Prior to March 31, 2005, these two 50% owned subsidiaries were included in the consolidated financial statements.

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; 402 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; 217 Donelson Pike, Nashville, Tennessee, 802 NW Broad St, Murfreesboro, Tennessee, 3110 Memorial Blvd, Murfreesboro, Tennessee, 210 Commerce Drive, Smyrna, Tennessee, 2640 South Church Street, Murfreesboro, Tennessee, 576 West Broad Street, Smithville, Tennessee, 306 Brush Creek Road, Alexandria, Tennessee,1300 Main Street North, Carthage, Tennessee, and 7 New Middleton Highway, Gordonsville, Tennessee. Management believes that Wilson County, Trousdale County, Davidson County, Rutherford County, DeKalb County and Smith 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, 2007, the Company reported net earnings of approximately $11.0 million and had total assets of approximately $1.3 billion.

Financial and Statistical Information

The Company’s audited consolidated financial statements, selected financial data and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report to Shareholders for the year ended December 31, 2007 filed as Exhibit 13 to this Form 10-K (the “2007 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 and the Bank 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

1

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 is chartered under the laws of the State of Tennessee and is subject to the supervision of, and is regularly examined by, the Tennessee Department of Financial Institutions. The Bank is 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 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, 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 and the Bank are subject to certain restrictions imposed by the Federal Reserve Act and the Federal Deposit Insurance Act, respectively, on any extensions of credit to the bank holding company or its subsidiary bank, on investments in the stock or other securities of the bank holding company or its subsidiary bank, and on taking such stock or other securities as collateral for loans of any borrower. The Bank takes Company Common Stock as collateral for borrowings subject to the aforementioned restrictions.

The FDIC has adopted a risk-based assessment system for insured depository institutions that takes into account the risks attributable to different categories and concentrations of assets and liabilities. In early 2006, Congress passed the Federal Deposit Insurance Reform Act of 2005, which made certain changes to the Federal deposit insurance program. These changes included merging the Bank Insurance Fund and the Savings Association Insurance Fund, increasing retirement account coverage to $250,000 and providing for inflationary adjustments to general coverage beginning in 2010, providing the FDIC with authority to set the fund’s reserve ratio within a specified range, and requiring dividends to banks if the reserve ratio exceeds certain levels. The new statute grants banks an assessment credit based on their share of the assessment base on December 31, 1996, and the amount of the credit can be used to reduce assessments in any year subject to certain limitations. In 2007, the Bank utilized $331,147 of its credit. At December 31, 2007, the Bank had a credit of $3,270 remaining to be used.

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

2

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 subsidiary 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 bank, 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.

The Bank 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 the Bank and can be expected to offer a wider range of banking services, the Company believes that the Bank can expect to attract customers since most loan and management decisions will be made at the local level.

The Bank 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 the Bank can be expected to offer a wider range of banking services through its financial resources as well as broader range of product offerings.

The Bank competes with much larger commercial banks in Rutherford County. While these institutions enjoy existing depositor relationships and greater financial resources than the Bank and can be expected to offer a wider range of banking services, the Company believes that the Bank can expect to attract customers since most loan and management decisions will be made at the local level.

The Bank competes with two commercial banks in Trousdale County, both of which are small community banking organizations. These institutions enjoy existing depositor relationships; however, the Company believes that the Bank can be expected to offer a wider range of banking services through its financial resources as well as a broader range of product offerings.

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

Employment

As of March 12, 2008, the Company and its subsidiary collectively employed 365 full-time equivalent 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.

3

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 2007 Annual Report. Certain information not contained in the Company’s 2007 Annual Report, but required by Guide 3, is contained in the tables immediately following:

[REMINDER OF PAGE INTENTIONALLY LEFT BLANK]

4

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

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 $2,483,000, $2,359,000 and $2,197,000 for 2007, 2006 and 2005, respectively, are included in loan income and represent an adjustment of the yield on these loans.

5

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

	In Thousands, Except Interest Rates
	2007								2006								2007/2006 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	$	931,238			7.73	%		71,945		845,311			7.40	%		62,567		6,518			2,860			9,378
Investment securities — taxable		207,105			5.02			10,398		138,724			3.83			5,312		3,119			1,967			5,086
Investment securities — tax exempt		15,098			3.88			585		15,986			3.96			633		(34	)		(14	)		(48	)
Taxable equivalent adjustment		—			1.99			301		—			2.04			326		(18	)		(7	)		(25	)
Total tax-exempt investment securities		15,098			5.87			886		15,986			6.00			959		(52	)		(21	)		(73	)
Total investment securities		222,203			5.08			11,284		154,710			4.05			6,271		3,166			1,847			5,013
Loans held for sale		5,124			4.94			253		4,554			4.41			201		27			25			52
Federal funds sold		49,836			5.06			2,524		36,973			4.91			1,814		653			57			710
Restricted equity securities		2,960			5.98			177		2,838			5.74			163		7			7			14
Total earning assets		1,211,361			7.11			86,183		1,044,386			6.80			71,016								15,167
Cash and due from banks		33,526								29,693
Allowance for loan losses		(9,817	)							(9,597	)
Bank premises and equipment		29,416								26,931
Other assets		24,265								21,649
Total assets	$	1,288,751								1,113,062

6

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

	In Thousands, Except Interest Rates
	2007							2006							2007/2006 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	$	117,115		2.44	%		2,858		84,484		1.49	%		1,262		602			994		1,596
Money market demand accounts		218,387		2.66			5,815		209,011		2.38			4,980		230			605		835
Individual retirement accounts		57,872		5.00			2,895		48,764		4.32			2,104		426			365		791
Other savings deposits		40,190		3.00			1,204		37,561		2.59			975		71			158		229
Certificates of deposit $100,000 and over		285,328		5.29			15,092		207,155		4.38			9,071		3,883			2,138		6,021
Certificates of deposit under $100,000		323,376		5.18			16,759		290,021		4.48			12,980		1,602			2,177		3,779
Total interest-bearing deposits		1,042,268		4.28			44,623		876,996		3.58			31,372		6,814			6,437		13,251
Securities sold under repurchase agreements		7,804		4.38			342		8,460		4.18			354		(28	)		16		(12	)
Federal funds purchased		—		—			—		—		—			—		—			—		—
Advances from Federal Home Loan Bank		16,308		4.64			756		14,718		4.43			652		72			32		104
Total interest-bearing liabilities		1,066,380		4.29			45,721		900,174		3.60			32,378							13,343
Demand deposits		101,905							105,176
Other liabilities		9,607							7,048
Stockholders’ equity		110,859							100,664
Total liabilities and stockholders’ equity	$	1,288,751							1,113,062
Net interest income							40,462							38,638
Net yield on earning assets				3.34	%						3.70	%
Net interest spread				2.82	%						3.20	%

7

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

	In Thousands, Except Interest Rates
	2006								2005								2006/2005 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	$	845,311			7.40	%		62,567		747,922			6.72	%		50,283		6,912		5,372			12,284
Investment securities — taxable		138,724			3.83			5,312		134,539			3.31			4,447		143		722			865
Investment securities — tax exempt		15,986			3.96			633		15,596			3.99			623		15		(5	)		10
Taxable equivalent adjustment		—			2.04			326		—			2.06			321		8		(3	)		5
Total tax-exempt investment securities		15,986			6.00			959		15,596			6.05			944		23		(8	)		15
Total investment securities		154,710			4.05			6,271		150,135			3.59			5,391		169		711			880
Loans held for sale		4,554			4.41			201		4,122			4.25			175		19		7			26
Federal funds sold		36,973			4.91			1,814		24,363			2.76			673		455		686			1,141
Restricted equity securities		2,838			5.74			163		2,632			4.44			117		10		36			46
Total earning assets		1,044,386			6.80			71,016		929,174			6.10			56,639		7,467		6,910			14,377
Cash and due from banks		29,693								25,126
Allowance for loan losses		(9,597	)							(9,566	)
Bank premises and equipment		26,931								21,987
Other assets		21,649								16,598
Total assets	$	1,113,062								983,319

8

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

	In Thousands, Except Interest Rates
	2006							2005							2006/2005 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	$	84,484		1.49	%		1,262		72,453		.89	%		650		121			491			612
Money market demand accounts		209,011		2.38			4,980		190,867		1.65			3,142		325			1,513			1,838
Individual retirement accounts		48,764		4.32			2,104		44,725		3.48			1,555		150			399			549
Other savings deposits		37,561		2.59			975		40,524		1.94			787		(60	)		248			188
Certificates of deposit $100,000 and over		207,155		4.38			9,071		174,628		3.81			6,659		1,338			1,074			2,412
Certificates of deposit under $100,000		290,021		4.48			12,980		246,872		3.45			8,527		1,644			2,809			4,453
Total interest-bearing deposits		876,996		3.58			31,372		770,069		2.77			21,320		3,518			6,534			10,052
Securities sold under repurchase agreements		8,460		4.18			354		6,622		2.70			179		59			116			175
Federal funds purchased		—		—			—		1,023		2.05			21		(10	)		(11	)		(21	)
Advances from Federal Home Loan Bank		14,718		4.43			652		14,500		4.34			630		9			13			22
Total interest-bearing liabilities		900,174		3.60			32,378		792,214		2.80			22,150		3,576			6,652			10,228
Demand deposits		105,176							98,486
Other liabilities		7,048							5,284
Stockholders’ equity		100,664							87,335
Total liabilities and stockholders’ equity	$	1,113,062							983,319
Net interest income							38,638							34,489
Net yield on earning assets				3.70	%						3.71	%
Net interest spread				3.20	%						3.30	%

9

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

II. Investment Portfolio:

A. Securities at December 31, 2007 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	$	13,423		72		42		13,453
Mortgage-backed securities		27		—		—		27
	$	13,450		72		42		13,480

	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	$	206,528		329		952		205,905
Obligations of states and political subdivisions		1,928		—		17		1,911
Mortgage-backed securities		2,105		15		5		2,115
	$	210,561		344		974		209,931

10

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

II. Investment Portfolio, Continued:

A.	Continued:
	Securities at December 31, 2006 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	$	14,270		116		71		14,315
Mortgage-backed securities		61		—		—		61
	$	14,331		116		71		14,376

	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	$	168,236		12		2,345		165,903
Obligations of states and political subdivisions		1,929		3		8		1,924
Mortgage-backed securities		1,664		11		3		1,672
	$	171,829		26		2,356		169,499

11

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

II. Investment Portfolio, Continued:

A.	Continued:
	Investment securities at December 31, 2005 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	$	14,241		202		69		14,374
Mortgage-backed securities		133		—		—		133
	$	14,374		202		69		14,507

	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	$	138,056		—		3,349		134,707
Obligations of states and political subdivisions		1,340		23		4		1,359
Mortgage-backed securities		3,426		1		29		3,398
	$	142,822		24		3,382		139,464

12

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

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, 2007:

			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		—		—		—
Five to ten years		17		17		6.37
More than ten years		10		10		6.78
Total securities of U.S. Treasury and other U.S. Government agencies and corporations		27		27		6.55
Obligations of states and political subdivisions*:
Less than one year		2,729		2,743		4.33
One to five years		5,536		5,551		3.84
Five to ten years		3,745		3,758		3.78
More than ten years		1,413		1,401		3.94
Total obligations of states and political subdivisions		13,423		13,453		3.93
Total held-to-maturity securities	$	13,450		13,480		3.94	%

* 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, 2007

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	$	23,374		23,288		3.54	%
One to five years		51,343		51,229		4.44
Five to ten years		72,049		72,004		5.76
More than ten years		61,867		61,499		5.91
Total securities of U.S. Treasury and other U.S. Government agencies and corporations		208,633		208,020		5.33
Obligations of states and political subdivisions*:
Less than one year		—		—		—
One to five years		405		403		4.83
Five to ten years		—		—		—
More than ten years		1,523		1,508		3.94
Total obligations of states and political subdivisions		1,928		1,911		4.13
Total available-for-sale securities	$	210,561		209,931		5.32	%

* 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, 2006

III. Loan Portfolio:

A.	Loan Types
	The following schedule details the loans of the Company at December 31, 2007, 2006, 2005, 2004 and 2003:

	In Thousands
	2007			2006			2005			2004			2003
Commercial, financial and agricultural	$	337,368			301,589			251,494			217,372			174,235
Real estate — construction		100,036			67,162			58,672			49,085			39,508
Real estate — mortgage		486,504			439,164			414,543			384,062			314,168
Installment		73,618			82,964			86,079			73,482			64,880
Total loans		997,526			890,879			810,788			724,001			592,791
Less unearned interest		—			—			—			—			—
Total loans, net of unearned interest		997,526			890,879			810,788			724,001			592,791
Less allowance for possible loan losses		(9,473	)		(10,209	)		(9,083	)		(9,370	)		(8,077	)
Net loans	$	988,053			880,670			801,705			714,631			584,714

15

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

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, 2007:

	In Thousands
			1 Year to
	Less Than		Less Than		After 5
	1 Year*		5 Years		Years		Total
Maturity Distribution:
Commercial, financial and agricultural	$	219,012		85,628		32,728		337,368
Real estate — construction		87,352		12,684		—		100,036
	$	306,364		98,312		32,728		437,404
Interest-Rate Sensitivity:
Fixed interest rates	$	229,407		59,670		5,546		294,623
Floating or adjustable interest rates		76,957		38,642		27,182		142,781
Total commercial, financial and agricultural loans plus real estate — construction loans	$	306,364		98,312		32,728		437,404

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

16

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

III. Loan Portfolio, Continued:

C.	Risk Elements
	The following schedule details selected information as to non-performing loans of the Company at December 31, 2007, 2006, 2005, 2004 and 2003:

	In Thousands, Except Percentages
	2007			2006		2005		2004		2003
Non-accrual loans:
Commercial, financial and agricultural	$	534			817		—		7		17
Real estate — construction		—			—		—		—		—
Real estate — mortgage		1,620			387		190		526		270
Installment		13			156		35		91		175
Lease financing receivable		—			—		—		—		—
Total non-accrual	$	2,167			1,360		225		624		462
Loans 90 days past due:
Commercial, financial and agricultural	$	97			739		80		197		170
Real estate — construction		90			44		42		—		8
Real estate — mortgage		1,502			2,604		1,585		1,698		872
Installment		437			556		308		638		716
Lease financing receivable		—			—		—		—		—
Total loans 90 days past due	$	2,126			3,943		2,015		2,533		1,766
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	$	4,293			5,303		2,240		3,157		2,228
Total loans, net of unearned interest	$	997,526			890,879		810,788		724,001		592,791
Percent of total loans outstanding, net of unearned interest		.43	%		.59		0.28		0.44		0.38
Other real estate	$	1,268			555		277		580		417

17

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

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 $2,167,000 at December 31, 2007, $1,360,000 at December 31, 2006, $225,000 at December 31, 2005, $624,000 at December 31, 2004 and $462,000 at December 31, 2003. Gross interest income on non-accrual loans that would have been recorded for the year ended December 31, 2007 if the loans had been current totaled $128,000 compared to $11,000 in 2006, $13,000 in 2005, $13,000 in 2004 and $8,000 in 2003. The amount of interest and fee income recognized on total loans during 2007 totaled $71,945,000 as compared to $62,567,000 in 2006, $50,283,000 in 2005, $42,796,000 in 2004 and $39,368,000 in 2003.
	At December 31, 2007, loans, which include the above, totaling $7,980,000 were included in the Company’s internal classified loan list. Of these loans $5,135,000 are real estate and $2,845,000 are various other types of loans. The values collateralizing these loans is estimated by management to be approximately $11,210,000 ($8,328,000 related to real property securing real estate loans and $2,882,000 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, 2007, 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, 2007 and 2006, other real estate totaled $1,268,000 and $555,000, respectively.

18

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

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, 2007 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, 2007

IV.	Summary of Loan Loss Experience:
	The following schedule details selected information related to the allowance for loan loss account of the Company at December 31, 2007, 2006, 2005, 2004 and 2003 and the years then ended.

	In Thousands, Except Percentages
	2007			2006			2005			2004			2003
Allowance for loan losses at beginning of period	$	10,209			9,083			9,370			8,077			6,943
Less: net of loan charge-offs:
Charge-offs:
Commercial, financial and agricultural		(1,396	)		(861	)		(359	)		(229	)		(15	)
Real estate construction		(187	)		(7	)		—			(7	)		—
Real estate — mortgage		(1,318	)		(327	)		(133	)		(632	)		(145	)
Installment		(2,284	)		(1,822	)		(1,124	)		(1,430	)		(806	)
Lease financing		—			—			—			—			—
		(5,185	)		(3,017	)		(1,616	)		(2,298	)		(966	)
Recoveries:
Commercial, financial and agricultural		14			17			4			53			13
Real estate construction		3			21			—			—			—
Real estate — mortgage		5			13			3			5			8
Installment		282			286			186			260			175
Lease financing		—			—			—			—			—
		304			337			193			318			196
Net loan charge-offs		(4,881	)		(2,680	)		(1,423	)		(1,980	)		(770	)
Provision for loan losses charged to expense		4,145			3,806			1,136			3,273			1,904
Allowance for loan losses at end of period	$	9,473			10,209			9,083			9,370			8,077
Total loans, net of unearned interest, at end of year	$	997,526			890,879			810,788			724,001			592,791
Average total loans out- standing, net of unearned interest, during year	$	931,238			845,311			747,922			656,973			568,227
Net charge-offs as a percentage of average total loans outstanding, net of unearned interest, during year		.52	%		0.32			0.19			0.30			0.14
Ending allowance for loan losses as a percentage of total loans outstanding net of unearned interest, at end of year		.95	%		1.15			1.12			1.29			1.36

20

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

IV.	Summary of Loan Loss Experience, Continued:
	The allowance for loan losses is an amount that management believes will be adequate to absorb possible losses on existing loans that may become uncollectible. The provision for loan losses charged to operating expense is based on past loan loss experience and other factors which, in management’s judgment, deserve current recognition in estimating possible loan losses. Such other factors considered by management include growth and composition of the loan portfolio, review of specific loan problems, the relationship of the allowance for loan losses to outstanding loans, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and current economic conditions that may affect the borrower’s ability to pay.
	Management conducts a continuous review of all loans that are delinquent, previously charged down or which are determined to be potentially uncollectible. Loan classifications are reviewed periodically by a person independent of the lending function. The Board of Directors of the Company periodically reviews the adequacy of the allowance for loan losses.
	The following detail provides a breakdown of the allocation of the allowance for loan losses:

	December 31, 2007					December 31, 2006
			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	$	2,941		33.8	%	$	2,573		33.9	%
Real estate construction		724		10.0			392		7.5
Real estate mortgage		3,897		48.8			5,288		49.3
Installment		1,911		7.4			1,956		9.3
	$	9,473		100.0	%	$	10,209		100.0	%

	December 31, 2005					December 31, 2004
			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	$	2,802		31.0	%	$	4,754		30.0	%
Real estate construction		253		7.2			114		6.8
Real estate mortgage		4,162		51.2			2,800		53.0
Installment		1,866		10.6			1,702		10.2
	$	9,083		100.0	%	$	9,370		100.0	%

	December 31, 2003
			Percent of
			Loans In
	In		Each Category
	Thousands		To Total Loans
Commercial, financial and agricultural	$	2,099		29.4	%
Real estate construction		340		6.7
Real estate mortgage		4,660		53.0
Installment		978		10.9
	$	8,077		100.0	%

21

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

V.	Deposits:
	The average amounts and average interest rates for deposits for 2007, 2006 and 2005 are detailed in the following schedule:

	2007					2006					2005
	Average					Average					Average
	Balance					Balance					Balance
	In		Average			In		Average			In		Average
	Thousands		Rate			Thousands		Rate			Thousands		Rate
Non-interest bearing deposits	$	101,905		—	%		105,176		—	%		98,486		—	%
Negotiable order of withdrawal accounts		117,115		2.44	%		84,484		1.49	%		72,453		.89	%
Money market demand accounts		218,387		2.66	%		209,011		2.38	%		190,867		1.65	%
Individual retirement accounts		57,872		5.00	%		48,764		4.32	%		44,725		3.48	%
Other savings		40,190		3.00	%		37,561		2.59	%		40,524		1.94	%
Certificates of deposit $100,000 and over		285,328		5.29	%		207,155		4.38	%		174,628		3.81	%
Certificates of deposit under $100,000		323,376		5.18	%		290,021		4.48	%		246,872		3.45	%
	$	1,144,173		3.90	%		982,172		3.19	%		868,555		2.45	%

The following schedule details the maturities of certificates of deposit and individual retirement accounts of $100,000 and over at December 31, 2007:

	In Thousands
	Certificates		Individual
	of		Retirement
	Deposit		Accounts		Total
Less than three months	$	81,576		2,999		84,575
Three to six months		85,932		4,565		90,497
Six to twelve months		104,740		6,356		111,096
More than twelve months		29,553		4,733		34,286
	$	301,801		18,653		320,454

22

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

VI.	Return on Equity and Assets:
	The following schedule details selected key ratios of the Company at December 31, 2007, 2006 and 2005:

	2007			2006			2005
Return on assets (1)		.85	%		.95	%		1.12	%
(Net income divided by average total assets)
Return on equity		9.86	%		10.51	%		12.59	%
(Net income divided by average equity)
Dividend payout ratio		28.48	%		43.26	%		37.44	%
(Dividends declared per share divided by net income per share)
Equity to asset ratio		8.60	%		9.04	%		8.88	%
(Average equity divided by average total assets)
Leverage capital ratio		8.63	%		9.32	%		9.13	%
(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%.

(1) Includes minority interest earnings of consolidated subsidiaries in 2005.

23

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

VI.	Return on Equity and Assets, Continued:
	The following schedule details the Company’s risk-based capital at December 31, 2007 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 and goodwill	$	113,769
Total capital:
Allowable allowance for possible loan losses (limited to 1.25% of risk-weighted assets)		9,473
Total capital	$	123,242
Risk-weighted assets	$	1,056,202
Risk-based capital ratios:
Tier I capital ratio		10.77	%
Total risk-based capital ratio		11.67	%

24

WILSON BANK HOLDING COMPANY

Form 10-K

December 31, 2007

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, 2007, the Company and Wilson Bank & Trust were in compliance with these requirements.
	The following schedule details the Company’s interest rate sensitivity at December 31, 2007:

	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	$	997,526		40,792			50,748			94,728			142,973			668,285
Securities		223,381		3,495			6,156			6,574			10,488			196,668
Loans held for sale		6,034		6,034			—			—			—			—
Federal funds sold		14,722		14,722			—			—			—			—
Restricted equity securities		2,983		2,983			—			—			—			—
Total earning assets		1,244,646		68,026			56,904			101,302			153,461			864,953
Interest-bearing liabilities:
Negotiable order of withdrawal accounts		156,410		156,410			—			—			—			—
Money market demand accounts		194,008		194,008			—			—			—			—
Individual retirement accounts		62,357		7,840			7,909			15,115			20,591			10,902
Other savings		38,966		38,966			—			—			—
Certificates of deposit, $100,000 and over		301,801		35,951			45,625			85,932			104,740			29,553
Certificates of deposit, under $100,000		331,243		32,870			49,835			100,750			114,428			33,360
Securities sold under repurchase agreements		9,771		9,771			—			—			—			—
Advances from Federal Home Loan Bank		15,470		—			—			—			—			15,470
		1,110,026		475,816			103,369			201,797			239,759			89,285
Interest-sensitivity gap	$	134,620		(407,790	)		(46,465	)		(100,495	)		(86,298	)		775,668
Cumulative gap				(407,790	)		(454,255	)		(554,750	)		(641,048	)		134,620
Interest-sensitivity gap as % of total assets				(30.56	)		(3.48	)		(7.53	)		(6.47	)		58.14
Cumulative gap as % of total assets				(30.56	)		(34.04	)		(41.57	)		(48.04	)		10.10

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 1A. Risk Factors.

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

          The Company operates primarily in Wilson, DeKalb and Smith counties and the surrounding counties and substantially all of its loan customers and most of its deposit and other customers live or have operations in this same geographic area. Accordingly, the Company’s success significantly depends upon the growth in population, income levels, and deposits in these areas, along with the continued attraction of business ventures to the area and the area’s economic stability and strength of the housing market, and its profitability is impacted by the changes in general economic conditions in this market. In addition, unfavorable local or national economic conditions could reduce the Company’s growth rate, affect the ability of its customers to repay their loans and generally affect its financial condition and results of operations. The Company is less able than a larger institution to spread the risks of unfavorable local economic conditions across a large number of diversified economies.

          The Company could sustain losses if its asset quality declines.

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

          An inadequate allowance for loan losses would reduce the Company’s earnings.

          The risk of credit losses on loans varies with, among other things, general economic conditions, the type of loan being made, the creditworthiness of the borrower over the term of the loan and, in the case of a collateralized loan, the value and marketability of the collateral for the loan. Management maintains an allowance for loan losses based upon, among other things, historical experience, an evaluation of economic conditions and regular reviews of delinquencies and loan portfolio quality. Based upon such factors, management makes various assumptions and judgments about the ultimate collectibility of the loan portfolio and provides an allowance for loan losses based upon a percentage of the outstanding balances and takes a charge against earnings with respect to specific loans when their ultimate collectibility is considered questionable. If management’s assumptions and judgments prove to be incorrect and the allowance for loan losses is inadequate to absorb losses, or if the bank regulatory authorities require the Bank to increase the allowance for loan losses as a part of their examination process, the Bank’s earnings and capital could be significantly and adversely affected.

          Liquidity needs could adversely affect the Company’s results of operations and financial condition.

          The Company relies on dividends from the Bank as its primary source of funds. The primary source of funds of the Bank are customer deposits and loan repayments. While scheduled loan repayments are a relatively stable source of funds, they are subject to the ability of borrowers to repay the loans. The ability of borrowers to repay loans can be adversely affected by a number of factors, including changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters and international instability. Additionally, deposit levels may be affected by a number of factors, including rates paid by competitors, general interest rate levels, returns available to customers on alternative investments and general economic conditions. Accordingly, the Company may be required from time to time to rely on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations. Such sources include Federal Home Loan Bank advances and federal funds lines of credit from correspondent banks. While the Company believes that these sources are currently adequate, there can be no assurance they will be sufficient to meet future liquidity demands.

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

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

          Additionally, the Company faces competition from de novo community banks, including those with senior management who were previously affiliated with other local or regional banks or those controlled by investor groups with strong local business and

26

community ties. These de novo community banks may offer higher deposit rates or lower cost loans in an effort to attract the Company’s customers, and may attempt to hire the Company’s management and employees.

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

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

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

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

          The Tennessee Department of Financial Institutions and the Board of Governors of the Federal Reserve supervise and examine the Bank and the Company, respectively. Because the Bank’s deposits are federally insured, the FDIC also regulates its activities. These and other regulatory agencies impose certain regulations and restrictions on the Bank, including:

• explicit standards as to capital and financial condition;

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

• restrictions on permissible non-banking activities; and

• restrictions on dividend payments.

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

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

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

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

Item 1B. Unresolved Staff Comments.

None.

27

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 eighteen branch locations located at the following locations: 1444 Baddour Parkway, Lebanon, Tennessee; 200 Tennessee Boulevard, Lebanon, Tennessee; 8875 Stewart’s Ferry Pike, Gladeville, Tennessee; 402 Public Square, Watertown, Tennessee; 1476 North Mt. Juliet Road, Mt. Juliet, Tennessee; 11835 Highway 70, Mount Juliet, Tennessee; 1130 Castle Heights Avenue North, Lebanon, Tennessee; 127 McMurry Blvd., Hartsville, Tennessee; the Wal-Mart Supercenter, Lebanon, Tennessee; 440 Highway 109 North, Lebanon, Tennessee; 4736 Andrew Jackson Parkway in Hermitage, Tennessee; 151 Heritage Park Drive, Suite 102 in Murfreesboro, Tennessee; 3110 Memorial Blvd in Murfreesboro, Tennessee, 210 Commerce Drive in Smyrna, Tennessee, 2640 South Church Street, Murfreesboro, Tennessee, 217 Donelson Pike, Nashville, Tennessee, 802 NW Broad in Murfreesboro, Tennessee, 576 West Broad Street in Smithville, Tennessee, 306 Brush Creek Road in Alexandria, Tennessee, 1300 Main Street North in Carthage, Tennessee, and 7 New Middleton Highway in Gordonsville, TN.

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. The NorthWest Broad Street facility contains approximately 2800 square feet. The Smyrna office opened in September of 2006 and contains approximately 3,600 square feet of space. The Memorial Blvd office in Murfreesboro opened in October of 2006 and contains approximately 7,800 square feet of space. Also, the South Church Street office in Murfreesboro opened in January 2008 and contains approximately 7,800 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, its North West Broad facility in Murfreesboro, which are leased. The Bank also leases space at 10 locations within Wilson County, DeKalb County, Rutherford County, Davidson County, Smith County and Cannon County where it maintains and operates automatic teller machines.

The Bank also has a facility at 576 West Broad Street in Smithville, Tennessee which was expanded in 2001 and now contains approximately 10,300 square feet of space and a facility at 306 Brush Creek Road in Alexandria, Tennessee which occupies approximately 2,400 square feet of space. The Bank owns both facilities. The Bank also owns a building at 1300 Main Street North, Carthage, Tennessee, which was expanded in 2005 and now contains approximately 11,000 square feet and a second facility in Gordonsville, Tennessee at 7 New Middleton Highway, Gordonsville, Tennessee.

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 2007.

PART II

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

Information required by this item is contained under the heading “Wilson Bank Holding Company Common Stock Market Information” on page 86 of the Company’s 2007 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, 2007.

Item 6. Selected Financial Data

Information required by this item is contained under the heading “Wilson Bank Holding Company Financial Highlights (Unaudited)” on page 14 of the Company’s 2007 Annual Report and is incorporated herein by reference.

28

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 15 through 33 of the Company’s 2007 Annual Report and is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is contained under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosures About Market Risk” as set forth on page 29 of the Company’s 2007 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 36 through 85 of the Company’s 2007 Annual Report and are incorporated herein by reference.

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

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

Management Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes those written policies and procedures that:

• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of future periods are subject to the risk that controls may become inadequate because of the changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

29

Management evaluated the Company’s internal control over financial reporting as of December 31, 2007. This assessment was based on criteria for effective internal control over financial reporting described in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on that assessment, management concluded that, as of December 31, 2007, the Company’s internal control over financial reporting was effective based on those criteria.

The Company’s independent registered public accounting firm has issued an attestation report on the Company’s internal control over financial reporting, which report is contained on pages 34 through 35 of Wilson Bank Holding Company’s 2007 Annual Report and is incorporated herein by reference.

Changes in Internal Controls

No changes were made to the Company’s internal control over financial reporting during the quarter ended December 31, 2007 that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item with respect to directors is incorporated herein by reference to the section entitled “Election of Directors” in the Company’s definitive proxy materials filed in connection with the Company’s 2008 Annual Meeting of Shareholders. The information required by this item with respect to executive officers is set forth below:

James Randall Clemons (55) — 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 (62) — 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 and supervision of the Rutherford County offices.

Elmer Richerson (55) — 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 (56) — 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 (50) — 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 (43) — 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.

30

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 (41) — Mr. Goodman joined the Bank in November of 2002 as Senior Vice President-Western Division. 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 (39) — 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-Central Division 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 (41) — 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.

Paula Evans (39) — Mrs. Evans joined the Bank in October of 1999. Prior to that time she was compliance officer at Sun Trust, Nashville, TN. Her primary duties include the supervision of the Regulatory Department, including compliance, loan review and internal audit.

Barry Buckley (55) — Mr. Buckley joined the Bank in June of 2006 as Senior Vice President-Eastern Division. Prior to joining the Bank in 2006, he was a Regional Executive for Rutherford Bank & Trust, an office of Greene County Bank, Murfreesboro, Tennessee. His primary duties include the supervision of the branch offices in Trousdale, Dekalb, and Smith counties.

Ralph Mallicoat- (52) — Mr. Mallicoat joined the Bank in July of 2006 as Senior Vice President. Prior to joining the Bank in 2006, he was President and CEO of Liberty State Bank, Lebanon, Tennessee. Hs primary duties include development of the lending function and overseeing SBA loans.

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.

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 2008 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 2008 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 2008 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 2008 Annual Meeting of Shareholders.

31

The following table summarizes information concerning the Company’s equity compensation plans at December 31, 2007 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 and a four for three stock split in the form of a stock dividend paid on May 31, 2007:

					Number of Shares
					Remaining Available
					for Future Issuance
	Number of Shares to				Under Equity
	be Issued upon		Weighted Average		Compensation Plans
	Exercise of		Exercise Price of		(Excluding Shares
	Outstanding Options		Outstanding Options		Reflected in First
Plan Category	or Warrants		or Warrants		Column)
Equity compensation plans approved by shareholders		84,130	$	16.76		128,346
Equity compensation plans not approved by shareholders		—		—		—
Total		84,130	$	16.76		128,346

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

Information required by this item with respect to certain relationships and related transactions is incorporated herein by reference to the section entitled “Certain Relationships and Related Transactions” in the Company’s definitive proxy materials filed in connection with the 2008 Annual Meeting of Shareholders.

Information required by this item with respect to director independence is incorporated herein by reference to the section entitled “Item-1 Election of Directors — Director Independence” in the Company’s definitive proxy materials filed in connection with the 2008 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 Registered Public Accounting Firm Information” in the Company’s definitive proxy materials filed in connection with the 2008 Annual Meeting of Shareholders.

Item 15. Exhibits, Financial Statement Schedules

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

32

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 13, 2008

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 J. Randall Clemons	President, Chief Executive Officer and Director (Principal Executive Officer)	March 13, 2008
/s/ Lisa Pominski Lisa Pominski	Chief Financial Officer (Principal Financial and Accounting Officer)	March 13, 2008
/s/ Elmer Richerson	Executive Vice President & Director	March 13, 2008
Elmer Richerson
/s/ Charles Bell	Director	March 13, 2008
Charles Bell
	Director
Jack W. Bell
	Director
Mackey Bentley
/s/ James F. Comer	Director	March 13, 2008
James F. Comer
/s/ Jerry L. Franklin	Director	March 13, 2008
Jerry L. Franklin
/s/ John B. Freeman	Director	March 13, 2008
John B. Freeman

33

Signature	Title	Date
/s/ Marshall Griffith	Director	March 13, 2008
Marshall Griffith
/s/ Harold R. Patton	Director	March 13, 2008
Harold R. Patton
/s/ James Anthony Patton	Director	March 13, 2008
James Anthony Patton
	Director
John R. Trice
/s/ Robert T. VanHooser, Jr.	Director	March 13, 2008
Robert T. VanHooser, Jr.

34

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 Incentive Stock Option Agreement (incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005).*
10.8	Director and Named Executive Officer Compensation Summary.*
13.1	Selected Portions of the Wilson Bank Holding Company Annual Report to Shareholders for the year ended December 31, 2007 incorporated by reference into items 5, 6, 7, 7A and 8.

35

21.1	Subsidiaries of the Company.
23.1	Consent of Independent Registered Public Accounting Firm.
31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Management compensatory plan or contract

36

EX-10.8

EXHIBIT 10.8

Director^* Compensation Summary

Meeting Fees

          The Board of Directors of the Wilson Bank Holding Company (the “Company”) also serves as the Board of Directors of Wilson Bank and Trust (the “Bank”). In 2007, each director received $2,300 per month for his services as a director of the Company. In addition, each director of the Bank received $850 per month for his services as a director of the Bank and $450 for each committee meeting of the Bank he attended, not to exceed $1,700 per month, as a member of the various committees on which he serves. In addition, fees of $1,518 and $1,326 were paid to each of the directors of the Company and the directors of the Bank, respectively, for attendance at Company and Bank planning retreats held during 2007. Messrs. C. Bell and Comer received $400 per month for serving on the Advisory Board of the Smith County branches of the Bank. Messrs. Trice, J. Bell and VanHooser received $400 per month for serving on the Advisory Board of the Dekalb County branches of the Bank.

          Directors are reimbursed for their expenses incurred in connection with their activities as the Company’s directors.

Committee Meeting Fees

          Each director of the Bank receives $450 for each committee meeting of the Bank he attended, not to exceed $1,700 per month, as a member of the various committees on which he serves.

Equity Compensation

          Each director is eligible to participate in the Company’s Stock Option Plan.

          The foregoing information is summary in nature. Additional information regarding director compensation will be provided in the Company’s proxy statement to be filed in connection with the 2008 annual meeting of the Company’s shareholders.

Named Executive Officer Compensation Summary

          The following table sets forth the current base salaries paid to the Company’s President and Chief Executive Officer and its other named executive officers and the amount of the cash bonus paid to these persons for 2007.

Executive Officer	Current Salary		2007 Cash Bonus
J. Randall Clemons, President and Chief Executive Officer of the Company and Chief Executive Officer of the Bank	$	306,292	$	165,621
Lisa Pominski, Chief Financial Officer of the Company and the Bank	$	99,225	$	8,930
H. Elmer Richerson, President of the Bank Executive Vice President of the Company	$	237,102	$	126,976
Gary Whitaker, Executive Vice President of the Bank	$	151,836	$	13,665
John Goodman, Senior Vice President —Western Division of the Bank	$	126,788	$	11,410
John C. McDearman III Senior Vice President — Central Division of the Bank	$	126,788	$	11,410

^* Includes directors that are also employees of the Company.

          The Company has entered into Executive Salary Continuation Agreements with certain of its senior executive officers, including Messrs. Clemons, Richerson and Whitaker, pursuant to which each such executive officer (or his or her beneficiaries) is entitled, if certain performance targets for the Bank are met, to receive annual payments for 15 years, upon retirement at age 65 or, if sooner, the death or disability of such executive officer.

          In addition to their base salaries, these executive officers are also eligible to:

• Participate in the Company’s cash bonus plan;

• Participate in the Company’s equity incentive programs, which currently involves the award of stock options pursuant to the Company’s Stock Option Plan; and

• Participate in the Company’s broad-based benefit programs generally available to its employees, including health, disability and life insurance programs and the Company’s 401(k) Plan.

          The foregoing information is summary in nature. Additional information regarding the named executive officer compensation will be provided in the Company’s proxy statement to be filed in connection with the 2008 annual meeting of the Company’s shareholders.

EX-13.1

Exhibit 13.1

Holding Company & Stock Information

Wilson Bank Holding Company Directors and Executive Officers

Marshall Griffith, Chairman; Randall Clemons, President & CEO; Charles Bell; Jack Bell; Mackey Bentley; Jimmy Comer; John Freeman; Jerry Franklin; Harold Patton; James Anthony Patton; Elmer Richerson, Executive Vice President; John R. Trice; Bob VanHooser.

Common Stock Market Information

The common stock of Wilson Bank Holding Company is not traded on an exchange nor is there a known active trading market. The number of stockholders of record at February 1, 2008 was 2,631. 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 2006 and 2007. *The information set forth below has been adjusted to reflect a four for three split for shareholders of record as of May 8, 2007.

Stock Prices

2006
First Quarter	$	26.62	$	25.87
Second Quarter	$	27.37	$	26.62
Third Quarter	$	28.12	$	27.37
Fourth Quarter	$	28.87	$	28.12
2007
First Quarter	$	29.62	$	28.87
Second Quarter	$	31.00	$	29.62
Third Quarter	*$	40.00	$	31.00
Fourth Quarter	*$	40.00	$	32.00

* Represents one transaction of which the Company is aware during the quarter. The sale price was at least $3.00 higher than any other trade during the quarter of which the Company is aware.

On January 1, 2006, a $.34 per share cash dividend was declared and on July 1, 2006, a $.34 per share cash dividend was declared and paid to shareholders of record on those dates. On January 1, 2007 a $.34 per share cash dividend was declared and paid to shareholders of record as of that date. Future dividends will be dependent upon the Company’s profitability, it’s capital needs, overall financial condition, economic and regulatory consideration.

Annual Meeting and Information Contacts

The Annual Meeting of Shareholders will be held in the Main Office of
Wilson Bank Holding Company at 7:00 P.M., April 8, 2008 at 623
West Main Street, Lebanon, Tennessee.

For further information concerning Wilson Bank Holding Company or Wilson Bank & Trust, or to obtain a copy of the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission, which is available without charge to shareholders, please contact Lisa Pominski, CFO, Wilson Bank & Trust, P.O. Box 768, Lebanon, Tennessee 37088-0768, phone (615)444-2265.

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 those described in Item 1A.- Risk Factors of the Company’s Annual Report on Form 10-K and also 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, and (vii) 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 (“Wilson Bank”), a state bank headquartered in Lebanon, Tennessee. The Company was formed in 1992.

Wilson Bank is a community bank headquartered in Lebanon, Tennessee, serving Wilson County, DeKalb County, Smith County, Trousdale County, Rutherford County, and the eastern part of Davidson County, Tennessee as its primary market areas. Generally, this market is the eastern portion of the Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical area. The bank has twenty-one locations in Wilson, Davidson, DeKalb, Smith, Rutherford and Trousdale Counties. Management believes that these counties offer an environment for continued growth, and the Company’s target market is local consumers, professionals and small businesses. Wilson Bank offers a wide range of banking services, including checking, savings and money market deposit accounts, certificates of deposit and loans for consumer, commercial and real estate purposes. The Company also offers an investment center which offers a full line of investment services to its customers.

Prior to March 31, 2005, the Company owned a 50% interest in Dekalb Community Bank and Community Bank of Smith County. On March 31, 2005, the Company acquired the minority interest in the subsidiaries when the two subsidiaries were merged into Wilson Bank with the shareholders of these subsidiaries, other than the Company, receiving shares of the Company’s common stock in exchange for their shares of common stock in the subsidiaries. Prior to March 31, 2005, these two 50% owned subsidiaries were included in the consolidated financial statements.

The following discussion and analysis is designed to assist readers in their analysis of the Company’s consolidated financial statements and should be read in conjunction with such consolidated financial statements. The Company’s Board of Directors approved a 4 for 3 stock split for stockholders of record as of May 7, 2007 payable May 31, 2007. Each shareholder received one (1) additional share for each three (3) shares 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.

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

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”) and the recognition of our deferred income tax assets, 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 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.

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 finance committees 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, 2007 were $10,936,000, an increase of $361,000, or 3.4%, compared to net earnings of $10,575,000 for 2006. Net earnings continued to be negatively impacted by a continued increase in the provision for loan losses resulting from the Company’s continued review of a former officer’s loan portfolio as described more fully below under “Provision for Possible Loan Losses.” The Company also had a decrease in income taxes due to an increase in loans charged off during 2007 resulting from this review. Net earnings for the year ended December 31, 2006 were $10,575,000, a decrease of $421,000, or 3.8%, compared to net earnings of $10,996,000 for 2005. Basic earnings per share were $1.58 in 2007, compared with $1.56 in 2006 and $1.70 in 2005. Diluted earnings per share were $1.58 in 2007, compared to $1.55 and $1.69 in 2006 and 2005, respectively. Net interest margin for the year ended December 31, 2007 was 3.34% as compared to 3.70% and 3.71% for the years ended December 31, 2006 and December 31, 2005, respectively.

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 2007 was $85,882,000, compared with $70,690,000 in 2006 and $56,318,000 in 2005. The

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

increase in total interest income in 2007 was primarily due to higher yields on earning assets (particularly during the first three quarters of 2007) and an increase in average earning assets, particularly loans and investment securities. The ratio of average earning assets to total average assets was 94.0%, 93.8% and 94.5% for each of the years ended December 31, 2007, 2006 and 2005, respectively. Average earning assets increased $167 million from December 31, 2006 to December 31, 2007, an increase of 16.0%. The average rate earned on earning assets for 2007 was 7.11%, compared with 6.8% in 2006 and 6.10% in 2005, and in 2007 was negatively impacted by the rate cuts implemented by the Federal Reserve Board beginning in August 2007 and described in more detail below.

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 non-accrual loans totaled $128,000 in 2007, $11,000 in 2006 and $13,000 in 2005.

Total interest expense for 2007 was $45,721,000, an increase of $13,343,000, or 41.2%, compared to total interest expense of $32,378,000 in 2006. The increase in total interest expense was due to an increase in average interest bearing liabilities of approximately $166,206,000 as a result of branch expansion efforts during the second half of 2006 and an increase in the weighted average cost of funds from 3.60% to 4.29% as a result of increased competition on deposit pricing in the Company’s market area and a shift in deposits to higher costing deposits. Interest expense increased from $22,150,000 in 2005 to $32,378,000 in 2006, an increase of $10,228,000, or 46.2%. The increase in 2006 was due to an increase in the weighted average cost of funds from 2.80% to 3.60% net of the effect of a $107,960,000 increase in average interest bearing liabilities.

Net interest income for 2007 totaled $40,161,000 as compared to $38,312,000 and $34,168,000 in 2006 and 2005, 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 2.82% in 2007 from 3.2% in 2006. The net interest spread was 3.3% in 2005. The decrease in the net interest spread for 2007 and 2006 as compared to the prior period is a result of a declining interest rate environment beginning in August 2007. The net interest yield, which is net interest income expressed as a percentage of average earning assets, decreased to 3.34% for 2007 compared to 3.70% in 2006 and 3.71% in 2005. Short-term interest rates decreased during the last five months 2007 as a result of the Federal Reserve Board’s decision to lower the discount rate. From August 17, 2007 to December 31, 2007, the Federal Reserve lowered the discount rate by 150 basis points. In 2008, the Federal Reserve has lowered the discount rate an additional 125 basis points, and the Company believes that the Federal Reserve Board will continue to lower the discount rate in the first half of 2008. While the Company’s liabilities are positioned to reprice faster than its assets such that a short-term declining rate environment should have a positive impact on the Company’s earnings as its interest expense decreases faster than interest income, management regularly monitors the deposit rates of its competitors and these rates continue to put pressure on the Company’s deposit pricing. This pressure may continue to negatively impact the Company’s net spread even in a short-term falling rate environment. If interest rates were to continue to fall in 2008, the Company should experience expansion in its spread and growth in earnings unless competitive pricing pressures prohibit the Company from lowering rates paid on its deposits. A significant increase in interest rates could have an adverse impact on net interest yields and earnings. Management believes that growth in 2008 will generally approximate the growth experienced in 2007.

Provision for Loan Losses

The provision for loan losses represents a charge to earnings necessary to establish an allowance for loan losses that, in management’s evaluation, should be adequate to provide coverage for estimated losses on outstanding loans and to provide for uncertainties in the economy. The 2007 provision for loan losses was $4,145,000, an increase of $339,000 from the provision of $3,806,000 in 2006. The increase in the provision for the year ended December 31, 2007 was primarily related to increased charge-offs resulting from the Company’s discovery during the second half of 2006 and further investigation in 2007 of a former branch officer’s apparent inappropriate application of banking procedures when documenting loans and releasing the underlying collateral. The Company continues to review the former officer’s portfolio for any undetermined losses. This review has resulted in additional charge-offs in 2007 and a related increase in the loan loss provision during 2007 and management anticipates additional charge-offs during 2008. The Company expanded its loan review policy to include special reviews of loans with the current balance exceeding the original loan amount, loans with more than four renewals, and loans for which the payment

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

status has been changed concurrent with over-drafting accounts. The provision for loan losses was $1,136,000 in 2005. The provision for possible loan losses is based on past loan loss experience and other factors which, in management’s judgment, deserve current recognition in estimating possible loan losses. Such factors include past loan loss experience, growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for loan losses to outstanding loans, and current economic conditions that may affect the borrower’s ability to repay. Management has in place a system designed for monitoring its loan portfolio in an effort to identify potential problem loans.

The 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. Net charge-offs increased to $4,881,000 in 2007 from $2,680,000 in 2006. Charge-offs in 2007 and 2006 were relatively high as a result of the loan officer portfolio analysis. Net charge-offs in 2005 totaled $1,423,000. The ratio of net charge-offs to average total outstanding loans was 0.52% in 2007, 0.32% in 2006, and 0.19% in 2005.

The net charge-offs and provision for loan losses resulted in a decrease of the allowance for loan losses (net of charge-offs and recoveries) to $9,473,000 at December 31, 2007 from $10,209,000 at December 31, 2006 and $9,083,000 at December 31, 2005. The allowance decreased 7.2% at December 31, 2007 over December 31, 2006 as compared to a 12.0% increase in total loans over the same period. The allowance for loan losses was .95% of total loans outstanding at December 31, 2007 compared to 1.15% at December 31, 2006 and 1.12% at December 31, 2005. As a percentage of nonperforming loans at December 31, 2007, 2006 and 2005, the allowance for loan losses represented 221%, 192% and 405%, 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 monthly by the Loan Review Officer and provided to the Finance Committee 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 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, 2007 to be adequate.

Non-Interest Income

The components of the Company’s non-interest income include service charges on deposit accounts, other fees and commissions, gains on sales of loans, gains on sales of fixed assets and other income. Total non-interest income for 2007 was $10,636,000 compared with $9,486,000 in 2006 and $8,218,000 in 2005. The 12.1% increase over 2006 was primarily due to service charges on deposit accounts (which increased $568,000) and other fees and commissions (which increased $818,000). The increase in other fees and commissions was primarily due to an increase in brokerage fees paid to the Company’s investment department resulting from an increase in assets under management subject to recurring fee income. Service charges on deposit accounts totaled $6,506,000 and $5,938,000 at December 31, 2007 and 2006 respectively, an increase of $568,000 or 9.6% and an increase of $647,000 or 12.2% from December 31, 2005 to December 31, 2006.

The Company’s non interest income is composed of several components, some of which vary significantly between periods. Service charges on deposit accounts and other non interest income generally reflect the registrant’s growth, while fees for origination of mortgage loans and brokerage fees and commissions will often reflect stock and home mortgage market conditions and fluctuate more widely from period to period.

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

Non-Interest Expenses

Non-interest expenses consist primarily of employee costs, occupancy expenses, furniture and equipment expenses, advertising and marketing expenses, data processing expenses, director’s fees, loss on sale of other real estate, other operating expenses and minority interest in net earnings of subsidiaries. Total non-interest expenses for 2007 increased 10.2% to $29,477,000 from $26,746,000 in 2006. The 2006 non-interest expense was up 14.3% over non-interest expenses in 2005 which totaled $23,407,000. The increase in non-interest expenses in 2007 resulted primarily from increases in employee salaries and related benefits due to salary and benefit increases and an increase in the number of employees necessary to support the Company’s expanded operations. The number of full time equivalent employees increased to 362 at December 31, 2007 from 354 at December 31, 2006. Increases in salary, occupancy and furniture and equipment expenses were due to the Company’s growth during late 2006. Other operating expenses increased to $7,264,000 in 2007 from $6,298,000 in 2006. These expenses included advertising and marketing expenses and 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 $6,239,000 for 2007, a decrease of $432,000 from $6,671,000 for 2006 which was down by $176,000 from the 2005 total of $6,847,000. The percentage of income tax expense to earnings before taxes was 36.3% in 2007, 38.7% in 2006 and 38.4% in 2005. The effective tax rate exceeds the statutory tax rate as a result of permanent differences related to life insurance premiums.

Earnings Per Share

The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share for the Company begins with the basic earnings per share plus the effect of common shares contingently issuable from stock options.

The following is a summary of components comprising basic and diluted earnings per share (EPS) for the years ended December 31, 2007, 2006 and 2005:

	Years Ended December 31,
	2007		2006		2005
	(Dollars in Thousands Except per share amounts)
Basic EPS Computation
Numerator – Earnings available to common stockholders	$	10,936	$	10,575	$	10,996
Denominator – Weighted average number of common shares outstanding		6,901,447		6,771,455		6,459,315
Basic earnings per common share	$	1.58	$	1.56	$	1.70
Diluted EPS Computation:
Numerator – Earnings available to common stockholders	$	10,936	$	10,575	$	10,996
Denominator – Weighted average number of common shares outstanding		6,901,447		6,771,455		6,459,315
Diluted effect of stock options		35,994		39,602		46,532
Diluted earnings per common share	$	1.58	$	1.55	$	1.69

Financial Condition

Balance Sheet Summary

The Company’s total assets increased $103,960,000, or 8.4%, to $1,334,245,000 at December 31, 2007, after increasing 16.9% in 2006 to $1,230,285,000 at December 31, 2006. Loans, net of allowance for possible loan losses, totaled $998,053,000 at December 31, 2007, a 12.2% increase compared to December 31, 2006. At year end 2007, securities totaled $223,381,000, an increase of 21.5% from $183,830,000 at December 31, 2006. Securities

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

increased during 2007 as a result of an increase in deposits thus providing liquid funds to increase securities and to fund loans.

Total liabilities increased by $91,943,000 to $1,216,060,000 at December 31, 2007 compared to $1,124,117,000 at December 31, 2006. This increase was composed primarily of the $95,861,000 increase in total deposits to $1,182,590,000, an 8.8% increase. Federal Home Loan Bank advances decreased to $15,470,000 from $17,092,000 at the respective year ends 2007 and 2006 and securities sold under repurchase agreements decreased to $9,771,000 from $13,394,000 at the respective year ends 2007 and 2006.

Shareholders’ equity increased $12,017,000, or 11.3%, due to net earnings and the issuance of stock pursuant to the Company’s Dividend Reinvestment Plan, offset by dividends paid on the Company’s common stock, and the exercising of stock options. The increase includes a $1,049,000 decrease in net unrealized losses on available-for-sale securities, net of taxes. A more detailed discussion of assets, liabilities and capital follows.

Loans:

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

	December 31, 2007					December 31, 2006
(In Thousands)	AMOUNT		PERCENTAGE			AMOUNT		PERCENTAGE
Commercial, financial and agricultural	$	337,368		33.8	%	$	301,589		33.9	%
Installment		73,618		7.4			82,964		9.3
Real estate — mortgage		486,504		48.8			439,164		49.3
Real estate — construction		100,036		10.0			67,162		7.5
TOTAL	$	997,526		100.0	%	$	890,879		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 12.2% as of year end 2007 when compared to year end 2006. 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, 2007 and 2006.

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 10.8% in 2007 and comprised 48.8% of the total loan portfolio at December 31, 2007, compared to 49.3% at December 31, 2006. The reduction in real estate mortgage loans as a percentage of total loans was the product of an increase of $32.9 million in real estate construction loans which comprised 10.0% of the Company’s total loans at December 31, 2007, up from 7.5% at December 31, 2006. Management believes the increase in real estate mortgage loans was primarily due to the continued favorable interest rate environment, favorable population growth in the Company’s market areas, and the Company’s ability to increase its market share of such loans while maintaining its loan underwriting standards. Commercial, financial and agricultural loans increased 11.9% in 2007 and comprised 33.8% of the total loan portfolio at December 31, 2007, compared to 33.9% at December 31, 2006.

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, 2007, 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 $4,293,000 at December 31, 2007, a decrease from $5,303,000 at December 31, 2006, resulting from the charge off of loans as a result of the previously described the ongoing review of a former loan officer’s portfolio. 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,

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

economic and business conditions and other factors affecting the borrower’s ability to pay. Non-accrual loans totaled $2,167,000 at December 31, 2007 compared to $1,360,000 at December 31, 2006. The increase in non-accrual loans is primarily related to the ongoing loan review examination described above and one large loan that was placed on non-accrual. Loans 90 days past due, as a component of non-performing loans, decreased to $2,126,000 at December 31, 2007 from $3,943,000 at December 31, 2006. This decrease is primarily a result of decreases in real estate mortgage loans and commercial, financial and agriculture that are 90 days past due. The Company had no renegotiated loans, which would have been included in non-performing loans at December 31, 2007.

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 credit card, residential mortgage, and consumer installment loans.

A loan is impaired when the current net worth and financial capacity of the borrower or of the collateral pledged, if any, is viewed as inadequate and it is probable that the Company will be unable to collect the scheduled payments of principal and interest due under the contractual terms of the loan agreement. In those cases, such loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt, and if such deficiencies are not corrected, there is a probability that the Company will sustain some loss. In such cases, interest income continues to accrue as long as the loan does not meet the Company’s criteria for nonaccrual status. Impaired loans are measured at the present value of expected future cash flows discounted at the loan’s effective interest rate, at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. If the 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 loan losses or by adjusting an existing valuation allowance for the impaired loan with a corresponding charge or credit to the provision for loan losses.

The Company considers all loans subject to the provisions of SFAS Nos.114 and 118 that are on nonaccrual status to be impaired. Loans are placed on nonaccrual status when doubt as to timely collection of principal or interest exists, or when principal or interest is past due 90 days or more unless such loans are well-secured and in the process of collection. Delays or shortfalls in loan payments are evaluated with various other factors to determine if a loan is impaired. Generally, delinquencies under 90 days are considered insignificant unless certain other factors are present which indicate impairment is probable. The decision to place a loan on nonaccrual status is also based on an evaluation of the borrower’s financial condition, collateral, liquidation value, and other factors that affect the borrower’s ability to pay.

The Company also internally classifies loans about which management questions the borrower’s ability to comply with the present repayment terms of the loan agreement. These internally classified loans totaled $7,980,000, excluding non-performing loans, at December 31, 2007 as compared to $12,283,000 at December 31, 2006. Of the internally classified loans at December 31, 2007, $5,135,000 are real estate related loans and $2,845,000 are various other types of loans. The internally classified loans as a percentage of the allowance for possible loan losses were 84.2% and 120.3%, respectively, at December 31, 2007 and 2006.

The allowance for possible loan losses is discussed under “Critical Accounting Policies” and “Provision for Possible Loan Losses.” The Company 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, Davidson, Rutherford 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, 2007, 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 an opportunity to continue to increase the loan portfolio in the Company’s primary market area which was expanded to include eastern Davidson County, Tennessee in 1999 and

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

Rutherford County, Tennessee in 2004. 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 81.4% and 86.1% for the year ended 2007 and 2006, 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 or if the size of the loan exceeds the Company’s lending limits.

Securities

Securities increased 21.5% to $223,381,000 at year-end 2007 from $183,830,000 at December 31, 2006, and comprised the second largest and other primary component of the Company’s earning assets. This increase followed a 19.5% securities portfolio increase from year end 2005 to 2006. The primary increase in the Company’s securities portfolio was in U.S. Treasury and other U.S. Government agencies which increased $40,002,000, or 24.1%, in 2007. This increase was attributed to a strong growth in deposits, providing liquidity to fund loans and securities. The average yield of the securities portfolio at December 31, 2007 was 4.05% with an average maturity of 7.7 years, as compared to an average yield of 4.39% and an average maturity of 4.2 years at December 31, 2006.

The Company has adopted the provisions of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS No. 115”). Under the provisions of SFAS No. 115, 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.

The Company’s classification of securities as of December 31, 2007 and December 31, 2006 is as follows:

	December 31, 2007				December 31, 2007
	Held-To-Maturity				Available-For-Sale
	Amortized		Estimated		Amortized		Estimated
(In Thousands)	Cost		Market Value		Cost		Market Value
U.S. Treasury and other U.S. Government agencies and Corporations	$	—		—	$	206,528		205,905
Obligations of states and political Subdivisions		13,423		13,453		1,928		1,911
Mortgage-backed securities		27		27		2,105		2,115
	$	13,450		13,480	$	210,561		209,931

No securities have been classified as trading securities.

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

	December 31, 2006				December 31, 2006
	Held-To-Maturity				Available-For-Sale
	Amortized		Estimated		Amortized		Estimated
(In Thousands)	Cost		Market Value		Cost		Market Value
U.S. Treasury and other U.S. Government agencies and Corporations	$	—		—	$	168,236		165,903
Obligations of states and political Subdivisions		14,270		14,315		1,929		1,924
Mortgage-backed securities		61		61		1,664		1,672
	$	14,331		14,376	$	171,829		169,499

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.

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

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, 2007:

	In Thousands, Except Number of Securities
	Less than 12 Months								12 Months or More				Total
					Number						Number
	Fair		Unrealized		of		Fair		Unrealized		of		Fair		Unrealized
	Value		Losses		Securities		Value		Losses		Securities		Value		Losses
U.S. Treasury and other U.S. Government agencies and Corporations	$	79,602	$	628		40	$	58,685	$	324		58	$	138,287	$	952
Obligations of states and and political subdivisions		2,176		25		7		4,842		34		21		7,018		59
Mortgage-backed Securities		946		4		3		42		1		3		988		5
Total temporarily impaired securities	$	82,724	$	657		50	$	63,569	$	359		82	$	146,293	$	1,016

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 maturity or a market price recovery, and as such the impairment of these securities is not deemed to be other-than-temporarily impaired.

Deposits

The increases in assets in 2007 and 2006 were funded primarily by increases in deposits. Total deposits, which are the principal source of funds for the Company, totaled $1,182,590,000 at December 31, 2007 compared to $1,086,729,000 and $929,589,000 at December 31, 2006 and 2005, 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 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.

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

The $95,861,000, or 8.8%, growth in deposits in 2007 reflected increases in several deposit categories. Total certificates of deposit (including individual retirement accounts) increased $70,373,000, or 11.3%, to $695,401,000, while NOW accounts increased $64,259,000, or 69.7%, to $156,410,000. Offsetting some of this growth and reflecting higher rates paid on time deposits during the first nine months of 2007 was a decrease in money market accounts of $21,375,000, or 9.9%, to $156,410,000 and a decrease in demand deposit accounts of $21,015,000, or 17.7%, to $97,805,000. The average rate paid on average total interest-bearing deposits was 4.3% for 2007, compared to 3.6% for 2006. The average rate paid in 2005 was 2.8%. Competitive pressure from other banks in our market area relating to deposit pricing continues to adversely affect the rates paid on deposit accounts as does the shift to longer term deposit accounts, which earn interest at higher rates. The ratio of average loans to average deposits was 81.4% in 2007 and 86.1% in 2006 and 2005. The Company anticipates that during 2008 deposits will shift from longer term time deposits to interest bearing money markets and savings accounts due to the recent rate changes in the first month on 2008 and the anticipated additional rate decreases during the first half of 2008.

Contractual Obligations

The Company has the following contractual obligations as of December 31, 2007:

	Less than 1						More than 5
(In Thousands)	Year		1 –3 Years		3-5 Years		Years		Total
Long-Term Debt	$	—		15,470		—		—		15,470
Capital Leases		—		—		—		—		—
Operating Leases		133		211		122		—		466
Purchases		—		—		—		—		—
Other Long-Term Liabilities		—		—		—		—		—
Total	$	133	$	15,681	$	122	$	—	$	15,936

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 non cancellable leases are included in operating lease obligations.

Off Balance Sheet Arrangements

At December 31, 2007, the Company had unfunded loan commitments outstanding $12.0 million, unfunded lines of credit of $162.0 million and outstanding standby letters of credit of $20.1 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, 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 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

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

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, 2007, the Company’s liquid assets totaled approximately $160.9 million.

The Company maintains a formal asset and liability management process to quantify, monitor and control interest rate risk, and to assist management in maintaining stability in the net interest margin under varying interest rate environments. The Company accomplishes this process through the development and implementation of lending, funding and pricing strategies designed to maximize net interest income under varying interest rate environments subject to specific liquidity and interest rate risk guidelines.

Analysis of rate sensitivity and rate gap analysis are the primary tools used to assess the direction and magnitude of changes in net interest income resulting from changes in interest rates. Included in the analysis are cash flows and maturities of financial instruments held for purposes other than trading, changes in market conditions, loan volumes and pricing and deposit volume and mix. These assumptions are inherently uncertain, and, as a result, net interest income can not be precisely estimated nor can the impact of higher or lower interest rates on net interest income be precisely predicted. Actual results will differ due to timing, magnitude and frequency of interest rate changes and changes in market conditions and management’s strategies, among other factors.

The Company’s primary source of liquidity is a stable core deposit base. In addition, short-term borrowings, loan payments and investment security maturities provide a secondary source. At December 31, 2007, the Company had a liability sensitive position (a negative gap) for 2008. Liability sensitivity means that more of the Company’s liabilities are capable of re-pricing over certain time frames than its assets. The interest rates associated with these liabilities may not actually change over this period but are capable of changing.

Interest rate risk (sensitivity) management focuses on the earnings risk associated with changing interest rates. Management seeks to maintain profitability in both immediate and long term earnings through funds management/interest rate risk management. The Company’s rate sensitivity position has an important impact on earnings. Senior management of the Company meets 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 Company’s securities portfolio consists of earning assets that provide interest income. For those securities classified as held-to-maturity, the Company has the ability and intent to hold these securities to maturity or on a long-term basis. Securities classified as available-for-sale include securities intended to be used as part of the Company’s asset/liability strategy and/or securities that may be sold in response to changes in interest rate, prepayment risk, the need or desire to increase capital and similar economic factors. At December 31, 2007, securities totaling approximately $26 million mature or will be subject to rate adjustments within the next twelve months.

A secondary source of liquidity is the Company’s loan portfolio. At December 31, 2007, loans totaling approximately $329 million either will become due or will be subject to rate adjustments within twelve months from that date. Continued emphasis will be placed on structuring adjustable rate loans.

As for liabilities, certificates of deposit of $100,000 or greater totaling approximately $286 million will become due or reprice during the next twelve months. Historically, there has been no significant reduction in immediately withdrawable accounts such as negotiable order of withdrawal accounts, money market demand accounts, demand deposit and regular savings. Management anticipates that there will be no significant withdrawals from these accounts in the future.

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

The following table shows the rate sensitivity gaps for different time periods as of December 31, 2007:

Interest Rate Sensitivity Gaps										One Year
December 31, 2006	1-90			91-180			181-365			And
(In Thousands)	Days			Days			Days			Longer		Total
Interest-earning assets	$	124,930			101,302			153,461			864,953		1,244,646
Interest-bearing liabilities		579,185			201,797			239,759			89,285		1,110,026
Interest-rate sensitivity gap	$	(454,255	)		(100,495	)		(86.298	)		775,668		134,620
Cumulative gap	$	(454,255	)		(554,750	)		(641,048	)		134,620

The Company also uses a simulation modeling to evaluate both the level of interest rate sensitivity as well as potential balance sheet strategies. Senior management meets quarterly to analyze the interest rate shock simulation. The interest rate simulation model is based on a number of assumptions. The assumptions relate primarily to loan and deposit growth, asset and liability prepayments, the call features of investment securities, interest rates and balance sheet management strategies. As of December 31, 2007, a -200 basis point rate shock was forecast to increase net earnings an estimated $228,000, or 1.85%, over the next twelve months, as compared to rates remaining stable. In addition, the -200 basis point rate shock is estimated to decrease the volatility of equity capital by 2.5%. A +200 basis point rate shock is estimated to decrease net earnings approximately $596,000, or 4.7%, over the next twelve months and would decrease the volatility of equity capital by 9.8%.

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.

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

Capital Resources, Capital Position and Dividends

Capital

At December 31, 2007, total shareholders’ equity was $118,185,000, or 8.9% of total assets, which compares with $106,168,000, or 8.6% of total assets, at December 31, 2006, and $95,110,000, or 9.0% of total assets, at December 31, 2005. The dollar increase in shareholders’ equity during 2007 reflects (i) the Company’s net income of $10,936,000 less cash dividends of $.34 per share totaling $2,306,000, (ii) the issuance of 53,518 shares of common stock for $2,114,000, as reinvestment of cash dividends, (iii) the issuance of 16,107 shares of common stock pursuant to exercise of stock options for $203,000, (iv) the net unrealized gain on available-for-sale securities of $1,049,000, and (v) a stock based compensation expense of $21,000. In addition the Company’s Board of Directors approved a four for three stock split paid on May 31, 2007 to shareholders of record as of May 7, 2007. Pursuant to this split, 1,724,425 shares of stock were issued. All share and per share data have been restated to reflect this four for three stock split.

The Company’s principal regulators have established minimum risk-based capital requirements and leverage capital requirements for the Company and its subsidiary bank. 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 its subsidiary bank 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 bank 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%. Set forth below is the Company’s and the bank subsidiary’s capital ratios as of December 31, 2007 and 2006. 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”. Management believes it can adequately capitalize its growth for the next few years with retained earnings and dividends reinvested.

	Wilson Bank Holding
	Company					Wilson Bank & Trust
	Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)					(Dollars in Thousands)
December 31, 2007
Actual:
Total Risk Based Capital	$	123,242		11.67	%	$	123,572		12.08	%
Tier 1 Capital		113,769		10.77			113,350		11.08
Leverage		113,769		8.63			113,350		8.60
For Capital Adequacy Purposes:
Total Risk Based Capital				8.0					8.0
Tier 1 Capital				4.0					4.0
Leverage				4.0					4.0
December 31, 2006
Actual:
Total Risked Based Capital	$	113,010		11.87	%	$	112,705		11.84	%
Tier 1 Capital		102,801		10.80			102,496		10.77
Leverage		102,801		9.32			102,496		9.29
For Capital Adequacy Purposes:
Total Risked Based Capital				8.0					8.0
Tier 1 Capital				4.0					4.0
Leverage				4.0					4.0

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

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, 2007.

				(Dollars in Thousands)
	Expected Maturity Date - Year Ending December 31,																					Fair
	2008			2009			2010			2011			2012			Thereafter			Total			Value
Earning assets:
Loans, net of unearned interest:
Variable rate	$	83,776			17,433			10,998			14,533			29,854			392,975			549,569			549,569
Average interest rate		7.36	%		7.37	%		7.63	%		7.70	%		7.88	%		7.83	%		7.30	%
Fixed rate		245,484			65,372			47,057			38,942			23,169			27,933			447,957			449,087
Average interest rate		7.67	%		9.94	%		9.61	%		9.06	%		8.23	%		7.30	%		7.54	%
Securities		26,103			27,223			9,019			11,907			9,132			140,627			224,011			223,411
Average interest rate		3.62	%		3.85	%		4.55	%		4.94	%		5.01	%		5.73	%		5.14	%
Loans held for sale		6,034			—			—			—			—			—			6,034			6,034
Average interest rate		4.94	%		—			—			—			—			—			4.94	%
Federal funds sold		14,722			—			—			—			—			—			14,722			14,722
Average interest rate		5.06	%		—			—			—			—			—			5.06	%
Interest-bearing deposits		865,647			42,533			36,985			17,743			4,957			44			1,084,785			1,088,437
Average interest rate		4.49	%		4.57	%		4.63	%		4.85	%		4.95	%		4.65	%		3.60	%
Securities sold under repurchase agreements		9,771			—			—			—			—			—			9,771			9,771
Average interest rate		4.38	%		—			—			—			—			—			4.38	%		4.38	%
Advances from Federal
Home Loan Bank		—			—			15,346			124			—			—			15,470			15,745
Average interest rate		—			—			4.63	%		7.16	%		—			—			4.61	%

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

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. Wilson Bank is a Tennessee state chartered nonmember bank, and is therefore subject to the supervision of and is 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.

In November, 1999, the Gramm-Leach-Bliley Act of 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 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 sought “financial holding company” status.

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 Wilson Bank are subject to certain restrictions imposed by the Federal Reserve Act and the Federal Deposit Insurance Act, respectively, on any extensions of credit to the Company or Wilson Bank, on investments in the stock or other securities of the Company or Wilson Bank, and on taking such stock or other securities as collateral for loans of any borrower.

Under the Tennessee Banking Act, approval of the Commission of Financial Institutions is required for declaration of any dividends by Wilson Bank to the Company in excess of net income in the calendar year of declaration plus retained net income for the preceding two years.

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 Resources, 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 currently meets the requirement for “well capitalized”.

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, 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

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

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. Wilson Bank is assessed quarterly at the rate of .001395% 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. Wilson Bank is 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 subsidiary 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 immaterial when reviewing the Company’s results of operations.

Recently Issued Accounting Pronouncements

In November, 2005, the FASB issued FASB Staff Position Statement of Financial Accounting Standards 115-1 and 124-1 (“FSP 115-1”) which codified existing guidance addressing the determination as to when an investment is considered impaired, whether that impairment is other than temporary and the measurement of an impairment loss. FSP 115-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The guidance in FSP 115-1 amends SFAS No. 115, SFAS No. 124 and APB Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock”. FSP 115-1 is effective for 2006. The Company has considered FSP 115-1 in its testing for other-than-temporary impairment.

On June 1, 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS No. 154”), a replacement of Accounting Principles Board Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”. SFAS No. 154 applies to all voluntary changes in accounting principle, and changes the requirements for accounting for and reporting of a change in accounting principle. In the absence of specific transition requirements to the contrary in the adoption of an accounting principle, SFAS No. 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle unless it is impracticable for comparability and consistency of financial information between periods. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning in 2006.

On March 17, 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140”, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS No. 156 requires that all servicing assets and liabilities be initially measured at fair value and allows for two alternatives in the subsequent accounting for servicing assets and liabilities: the amortization method

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

and the fair value method. The amortization method requires that the servicing assets and liabilities be amortized over the remaining estimated lives of the serviced assets with impairment testing to be performed periodically. The fair value method requires the servicing assets and liabilities to be measured at fair value each period with an offset to income. SFAS No. 156 is to be adopted in the first fiscal year that begins after September 15, 2006. An entity can elect the fair value method at the beginning of any fiscal year provided the entity has not yet issued financial statements, including interim financial statements, for any period of that fiscal year. However, once the fair value election is made, an entity cannot revert back to the amortization method. The Company has determined that there is no impact to the Company relating to SFAS No. 156.

On September 15, 2006, the FASB issued SFAS No. 157 “Fair Value Measurement” (SFAS No. 157). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. Under SFAS No. 157, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. It clarifies the principal that fair value should be based on the assumptions market participation would use when pricing the asset or liability. In support of this principle, SFAS No. 157 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted process in active markets and the lowest priority to unobservable data, for example, the reporting entity’s own data, Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Early adoption is permitted. Management is currently reviewing the potential impact of this SFAS No. 157.

In September 2006, the FASB ratified the consensus the Emerging Issues Task Force (“EITF”) reached regarding EITF Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (“Issue 06-4”), which provides accounting guidance for postretirement benefits related to endorsement split-dollar life insurance arrangements, whereby the employer owns and controls the insurance policies. The consensus concludes that an employer should recognize a liability for the postretirement benefit in accordance with SFAS No. 106, “Employers Accounting for Postretirement Benefits Other Than Pensions” (“SFAS No. 106”) or Accounting Principles Board Opinion No. 12 (“APB 12”). In addition, the consensus states that an employer should also recognize an asset based on the substance of the arrangement with the employee. Issue 06-4 is effective for fiscal years beginning after December 15, 2007 with early application permitted.

In March 2007, the FASB ratified the consensus the EITF reached regarding EITF Issue No. 06-10, “Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements” (“Issue 06-10”), which provides accounting guidance for postretirement benefits related to collateral assignment split-dollar life insurance arrangements, whereby the employee owns and controls the insurance policies. The consensus concludes that an employer should recognize a liability for the postretirement benefit in accordance with SFAS No. 106 or APB 12, as well as recognize an asset based on the substance of the arrangement with the employee. Issue 06-10 is effective for fiscal years beginning after December 15, 2007 with early application permitted.

In February 2006, the FASB issued EITF Issue No. 06-5, “Accounting for Purchases of Life Insurance - - Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4, Accounting for Purchases of Life Insurance” (EITF 06-5). EITF 06-5 provides that in addition to cash surrender value, the assets recognized for a life insurance contract should consider certain other provisions included in a policy’s contractual terms with additional amounts being discounted if receivable beyond one year. Additionally, EITF 06-5 requires that the determination of the amount that could be realized under an insurance contract be performed at the individual policy level. The Company has determined there is no impact on the consolidated financial statements as a result of this standard.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 allows entities to voluntarily choose, at specified election dates, to measure financial assets and financial liabilities (as well as certain nonfinancial instruments that are similar to

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

financial instruments) at fair value (the “fair value option”). The election is made on an instrument-by-instrument basis and is irrevocable. If the fair value option is elected for an instrument, SFAS No. 159 specifies that all subsequent changes in fair value for that instrument be reported in earnings. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007 and earlier adoption is permitted. At the present time, management does not intend to make any fair value elections.

In September 2006, the SEC released Staff Accounting Bulletin No. 108 (“SAB No. 108”). SAB 108 requires that registrants assess the impact on both the statement of condition and the statement of income when quantifying and evaluating the materiality of a misstatement. Under SAB No. 108, adjustment of financial statements is required when either approach results in quantifying a misstatement that is material to a reporting period presented within the financial statements, after considering all relevant quantitative and qualitative factors.

WILSON BANK HOLDING COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED)

	In Thousands, Except Per Share Information
	As Of December 31,
	2007		2006		2005		2004		2003
CONSOLIDATED BALANCE SHEETS:
Total assets end of year	$	1,334,245		1,230,285		1,052,263		937,248		852,619
Loans, net	$	988,053		880,670		801,705		714,631		584,714
Securities	$	223,381		183,830		153,838		133,072		149,536
Deposits	$	1,182,590		1,086,729		929,589		832,922		770,419
Stockholders’ equity	$	118,185		106,168		95,110		71,561		63,323

	Years Ended December 31,
	2007			2006			2005			2004			2003
CONSOLIDATED STATEMENTS OF EARNINGS:
Interest income	$	85,882			70,690			56,318			48,022			44,796
Interest expense		45,721			32,378			22,150			15,751			15,217
Net interest income		40,161			38,312			34,168			32,271			29,579
Provision for loan losses		4,145			3,806			1,136			3,273			1,904
Net interest income after provision for loan losses		36,016			34,506			33,032			28,998			27,675
Non-interest income		10,636			9,486			8,218			7,431			8,379
Non-interest expense		29,477			26,746			23,407			21,628			20,377
Earnings before income taxes		17,175			17,246			17,843			14,801			15,677
Income taxes		6,239			6,671			6,847			5,689			6,242
Net earnings	$	10,936			10,575			10,996			9,112			9,435
Minority interest in net earnings of subsidiaries	$	—			—			236			475			916
Cash dividends declared	$	2,306			4,525			3,996			3,262			2,651
PER SHARE DATA: (3)
Basic earnings per common share	$	1.58			1.56			1.70			1.55			1.65
Diluted earnings per common share	$	1.58			1.55			1.69			1.55			1.65
Cash dividends	$	0.34			0.68			0.64			0.56			0.47
Book value	$	17.09			15.55			14.28			12.10			11.00
RATIOS:
Return on average stockholders’ equity		9.86	%		10.51	%		12.59	%		13.61	%		16.00	%
Return on average assets (1)		0.85	%		0.95	%		1.12	%		1.04	%		1.31	%
Capital to assets (2)		8.86	%		8.63	%		9.04	%		8.38	%		8.19	%
Dividends declared per share as percentage of basic earnings per share		28.48	%		43.27	%		37.44	%		36.23	%		26.36	%

(1)	Includes minority interest earnings of consolidated subsidiaries in numerator.
(2)	Includes minority interest of consolidated subsidiaries in numerator.
(3)	Per share data has been retroactively adjusted to reflect a 4 for 3 split which occurred effective May 7, 2007.

WILSON BANK HOLDING COMPANY

Consolidated Financial Statements

December 31, 2007 and 2006

(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 Subsidiary as of December 31, 2007 and 2006, 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, 2007. 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 Subsidiary as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Wilson Bank Holding Company’s internal control over financial reporting as of December 31, 2007 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 11, 2008 expressed an unqualified opinion thereon.

/s/ Maggart & Associates, P.C.  

Nashville, Tennessee
January 11, 2008

WILSON BANK HOLDING COMPANY

Consolidated Balance Sheets

December 31, 2007 and 2006

	In Thousands
	2007			2006
ASSETS
Loans, net of allowance for loan losses of $9,473,000 and $10,209,000, respectively	$	988,053		$	880,670
Securities:
Held-to-maturity, at amortized cost (market value $13,480,000 and $14,376,000, respectively)		13,450			14,331
Available-for-sale, at market (amortized cost $210,561,000 and $171,829,000, respectively)		209,931			169,499
Total securities		223,381			183,830
Loans held for sale		6,034			7,065
Federal funds sold		14,722			60,070
Restricted equity securities		2,983			2,940
Total earning assets		1,235,173			1,134,575
Cash and due from banks		44,853			43,334
Premises and equipment, net		30,411			28,705
Accrued interest receivable		8,864			8,019
Deferred income taxes		2,539			3,211
Other real estate		1,268			555
Goodwill		4,805			4,805
Other intangible assets, net		1,696			2,092
Other assets		4,636			4,989
Total assets	$	1,334,245			1,230,285
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	1,182,590			1,086,729
Securities sold under repurchase agreements		9,771			13,394
Advances from Federal Home Loan Bank		15,470			17,092
Accrued interest and other liabilities		8,229			6,902
Total liabilities		1,216,060			1,124,117
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 10,000,000 shares, 6,916,390 and 5,122,340 shares issued and outstanding, respectively		13,833			10,244
Additional paid-in capital		34,373			35,624
Retained earnings		70,368			61,738
Net unrealized losses on available-for-sale securities, net of income taxes of $241,000 and $892,000, respectively		(389	)		(1,438	)
Total stockholders’ equity		118,185			106,168
COMMITMENTS AND CONTINGENCIES
Total liabilities and stockholders’ equity	$	1,334,245			1,230,285

See accompanying notes to consolidated financial statements.

2

WILSON BANK HOLDING COMPANY

Consolidated Statements of Earnings

Three Years Ended December 31, 2007

	In Thousands (except per share data)
	2007			2006			2005
Interest income:
Interest and fees on loans	$	71,945			62,567			50,283
Interest and dividends on securities:
Taxable securities		10,398			5,312			4,447
Exempt from Federal income taxes		585			633			623
Interest on loans held for sale		253			201			175
Interest on Federal funds sold		2,524			1,814			673
Interest and dividends on restricted equity securities		177			163			117
Total interest income		85,882			70,690			56,318
Interest expense:
Interest on negotiable order of withdrawal accounts		2,858			1,262			650
Interest on money market accounts and other savings accounts		7,019			5,955			3,929
Interest on certificates of deposit		34,746			24,155			16,741
Interest on securities sold under repurchase agreements		342			354			179
Interest on advances from Federal Home Loan Bank		756			652			630
Interest on Federal funds purchased		—			—			21
Total interest expense		45,721			32,378			22,150
Net interest income before provision for loan losses		40,161			38,312			34,168
Provision for loan losses		(4,145	)		(3,806	)		(1,136	)
Net interest income after provision for loan losses		36,016			34,506			33,032
Non-interest income		10,636			9,486			8,218
Non-interest expense		(29,477	)		(26,746	)		(23,407	)
Earnings before income taxes		17,175			17,246			17,843
Income taxes		6,239			6,671			6,847
Net earnings	$	10,936			10,575			10,996
Basic earnings per common share	$	1.58			1.56			1.70
Diluted earnings per common share	$	1.58			1.55			1.69
Weighted average common shares outstanding:
Basic		6,901,447			6,771,455			6,459,315
Diluted		6,937,441			6,811,057			6,505,847

See accompanying notes to consolidated financial statements.

3

WILSON BANK HOLDING COMPANY

Consolidated Statements of Comprehensive Earnings

Three Years Ended December 31, 2007

	In Thousands
	2007		2006		2005
Net earnings	$	10,936		10,575		10,996
Other comprehensive earnings (losses), net of tax:
Net unrealized gains (losses) on available-for-sale securities arising during period, net of taxes of $651,000 $346,000 and $634,000, respectively		1,049		556		(1,021	)
Less: reclassification adjustment for net losses included in net earnings, net of taxes of $48,000 in 2006		—		78		—
Other comprehensive earnings (losses)		1,049		634		(1,021	)
Comprehensive earnings	$	11,985		11,209		9,975

See accompanying notes to consolidated financial statements.

4

WILSON BANK HOLDING COMPANY

Consolidated Statements of Changes in Stockholders’ Equity

Three Years Ended December 31, 2007

	In Thousands
									Net Unrealized
			Additional						Gain (Loss) On
	Common		Paid-In			Retained			Available-For-
	Stock		Capital			Earnings			Sale Securities			Total
Balance December 31, 2004	$	8,873		14,856			48,688			(856	)		71,561
Cash dividends declared, $.64 per share		—		—			(3,996	)		—			(3,996	)
Issuance of 111,914 shares of stock pursuant to dividend reinvestment plan		224		3,422			—			—			3,646
Issuance of 10,912 shares of stock pursuant to exercise of stock options		22		151			—			—			173
Issuance of 436,546 shares of stock pursuant to acquisition of minority interest in subsidiaries		873		13,073			—			(195	)		13,751
Net change in unrealized loss on available-for-sale securities during the year, net of taxes of $634,000		—		—			—			(1,021	)		(1,021	)
Net earnings for the year		—		—			10,996			—			10,996
Balance December 31, 2005		9,992		31,502			55,688			(2,072	)		95,110
Cash dividends declared, $.68 per share		—		—			(4,525	)		—			(4,525	)
Issuance of 113,774 shares of stock pursuant to dividend reinvestment plan		227		3,924			—			—			4,151
Issuance of 12,587 shares of stock pursuant to exercise of stock options		25		181			—			—			206
Stock based compensation expense		—		17			—			—			17
Net change in unrealized loss on available-for-sale securities during the year, net of taxes of $394,000		—		—			—			634			634
Net earnings for the year		—		—			10,575			—			10,575
Balance December 31, 2006		10,244		35,624			61,738			(1,438	)		106,168
Cash dividends declared, $.34 per share		—		—			(2,306	)		—			(2,306	)
Issuance of 53,518 shares of stock pursuant to dividend reinvestment plan		107		2,007			—			—			2,114
Issuance of 1,724,425 shares of stock pursuant to a 4 for 3 stock split		3,450		(3,450	)		—			—			—
Issuance of 16,107 shares of stock pursuant to exercise of stock options		32		171			—			—			203
Stock based compensation expense		—		21			—			—			21
Net change in unrealized loss on available-for-sale securities during the year, net of taxes of $651,000		—		—			—			1,049			1,049
Net earnings for the year		—		—			10,936			—			10,936
Balance December 31, 2007	$	13,833		34,373			70,368			(389	)		118,185

See accompanying notes to consolidated financial statements.

5

WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows

Three Years Ended December 31, 2007

Increase (Decrease) in Cash and Cash Equivalents

	In Thousands
	2007			2006			2005
Cash flows from operating activities:
Interest received	$	84,950			68,857			54,809
Fees received		10,267			8,881			7,683
Other income received		89			124			129
Proceeds from sales of loans		88,759			88,971			76,378
Origination of loans held for sale		(87,448	)		(92,650	)		(74,685	)
Interest paid		(44,639	)		(29,629	)		(21,612	)
Cash paid to suppliers and employees		(27,096	)		(25,407	)		(22,729	)
Income taxes paid		(5,844	)		(7,733	)		(6,483	)
Net cash provided by operating activities		19,038			11,414			13,490
Cash flows from investing activities:
Purchase of available-for-sale securities		(124,354	)		(66,771	)		(29,937	)
Proceeds from maturities of available-for-sale securities		85,679			27,335			7,303
Proceeds from sale of available-for-sale securities		—			10,303			—
Purchase of held-to-maturity securities		(979	)		(462	)		(1,327	)
Proceeds from maturities of held-to-maturity securities		1,847			505			1,390
Loans made to customers, net of repayments		(113,895	)		(85,426	)		(89,522	)
Purchase of bank premises and equipment		(3,423	)		(6,693	)		(3,062	)
Proceeds from sales of fixed assets		52			46			1
Proceeds from sales of other assets		261			324			201
Proceeds from sales of other real estate		1,318			1,764			1,229
Net cash used in investing activities		(153,494	)		(119,075	)		(113,724	)
Cash flows from financing activities:
Net increase in non-interest bearing, savings, NOW and money market deposit accounts		25,489			21,147			43,066
Net increase in time deposits		70,372			135,993			53,601
Proceeds from sale (purchase of) of securities under agreements to repurchase		(3,623	)		4,238			2,477
Proceeds from (repayments to) Federal Home Loan Bank, net		(1,622	)		3,404			(1,575	)
Dividends paid		(2,306	)		(4,525	)		(3,996	)
Dividends paid to minority shareholders		—			—			(77	)
Proceeds from sale of stock to minority shareholders		—			—			68
Proceeds from sale of common stock pursuant to dividend reinvestment		2,114			4,151			3,646
Proceeds from sale of common stock pursuant to exercise of stock options		203			206			173
Cash paid in merger		—			—			(13	)
Net cash provided by financing activities		90,627			164,614			97,370
Net increase (decrease) in cash and cash equivalents		(43,829	)		56,953			(2,864	)
Cash and cash equivalents at beginning of year		103,404			46,451			49,315
Cash and cash equivalents at end of year	$	59,575			103,404			46,451

See accompanying notes to consolidated financial statements.

6

WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows, Continued

Three Years Ended December 31, 2007

Increase (Decrease) in Cash and Cash Equivalents

	In Thousands
	2007			2006			2005
Reconciliation of net earnings to net cash provided by operating activities:
Net earnings	$	10,936			10,575			10,996
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		1,981			1,957			1,825
Provision for loan losses		4,145			3,806			1,136
Provision for deferred taxes		93			(475	)		(403	)
Loss on sales of other real estate		136			102			40
Loss on sales of other assets		119			101			65
Security losses		—			126			—
Loss (gain) on sales of fixed assets		36			(18	)		(1	)
FHLB dividend reinvestment		(43	)		(158	)		(121	)
Decrease (increase) in loans held for sale		1,031			(4,130	)		580
Increase (decrease) in taxes payable		302			(587	)		767
Increase in accrued interest receivable		(845	)		(1,687	)		(1,388	)
Increase in interest payable		1,082			2,749			538
Increase in other assets		(103	)		(651	)		(883	)
Increase (decrease) in accrued expenses		147			(313	)		103
Net gains of minority interests of commercial bank subsidiaries		—			—			236
Stock based compensation expense		21			17			—
Total adjustments		8,102			839			2,494
Net cash provided by operating activities	$	19,038			11,414			13,490
Supplemental Schedule of Non-Cash Activities:
Unrealized gain (loss) in value of securities available-for-sale, net of taxes of $651,000 in 2007, $394,000 in 2006, and $634,000 in 2005	$	1,049			634			(1,021	)
Non-cash transfers from loans to other real estate	$	2,167			2,144			966
Non-cash transfers from loans to other assets	$	200			511			346
Issuance of 436,546 shares of common stock for minority interest in subsidiaries	$	—			—			13,751
Issuance of 1,724,425 shares of common stock pursuant to a 4 for 3 stock split	$	3,450			—			—

See accompanying notes to consolidated financial statements.

7

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements

December 31, 2007, 2006 and 2005

(1)	Summary of Significant Accounting Policies
	The accounting and reporting policies of Wilson Bank Holding Company and Wilson Bank & Trust (“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 and its wholly-owned subsidiary Wilson Bank & Trust (“Wilson Bank”). All significant intercompany accounts and transactions have been eliminated in consolidation. Prior to March 31, 2005, the Company owned a 50% interest in DeKalb Community Bank and Community Bank of Smith County. On March 31, 2005, the Company acquired the minority interest in the subsidiaries by issuing Wilson Bank Holding Company stock to the minority shareholders. The two subsidiary banks were merged into Wilson Bank & Trust. Prior to March 31, 2005, these two 50% owned subsidiaries were included in the consolidated financial statements.
(b)	Nature of Operations
	Wilson Bank operates under a state bank charter and provides full banking services. As a state bank, the subsidiary bank is subject to regulations of the Tennessee Department of Financial Institutions and the Federal Deposit Insurance Corporation. The areas served by Wilson Bank include Wilson County, DeKalb County, Rutherford County, Smith County, Trousdale County, and eastern Davidson County, Tennessee and surrounding counties in Middle Tennessee. Services are provided at the main office and twenty branch locations.
(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 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, 2007, 2006 and 2005

(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 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” (“SFAS No. 114”) and SFAS No. 118, “Accounting by Creditors for Impairment of a Loan — Income Recognition and Disclosures” (“SFAS No. 118”). 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 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, 2007, 2006 and 2005

(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 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 Loan Losses
	The provision for loan losses represents a charge to earnings necessary, after loan charge-offs and recoveries, to maintain the allowance for 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 of those risk

10

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(e)	Allowance for Loan Losses, Continued
	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 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 loan losses is increased by provisions for 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 SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS No. 115”). Under the provisions of SFAS No. 115, 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, 2007, 2006 and 2005

(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, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(i)	Intangible Assets
	SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”) requires that management determine the allocation of intangible assets into identifiable groups at the date of acquisition and appropriate amortization periods be established. Under the provisions of SFAS No. 142, goodwill is not to be amortized; rather, it is to be monitored for impairment and written down to the impairment value at the time impairment occurs. The Company has determined that no impairment loss needs to be recognized related to the goodwill.
(j)	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.
(k)	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.
(l)	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.
(m)	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 SFAS No. 109, “Accounting for Income Taxes” (“SFAS No. 109”). As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

13

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(m)	Income Taxes, Continued
	The Company and its wholly-owned subsidiary file consolidated Federal and State income tax returns. The 50% owned subsidiaries filed separate Federal income tax returns for the three months prior to the merger. Each entity provides for income taxes on a separate-return basis.
(n)	Stock Options
	In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (Revised 2004) “Share-Based Payment” (“SFAS No. 123R”). The Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 107 (“SAB 107”) in March 2005 to assist preparers by simplifying some of the implementation challenges of SFAS No. 123R while enhancing the information investors receive. The FASB has also issued various Staff Positions clarifying certain provisions of the new accounting standard. SFAS No. 123R addresses all forms of share-based payment awards, including shares issued under employee stock purchase plans, stock options, restricted stock and stock appreciation rights. SFAS No. 123R requires the Company to expense share-based payment awards with compensation cost measured at the fair value of the award. In addition, SFAS No. 123R requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than an operating cash flow. Effective January 1, 2006, the Company adopted SFAS No. 123R under the modified prospective method.
	Under the modified prospective method, the accounting standards of SFAS No. 123R have been applied as of January 1, 2006 and the consolidated financial statements for prior periods have not been restated to reflect, and do not include, the impact of SFAS No. 123R. See note 19 to the consolidated financial statements for more information.
	Under the provisions of SFAS No. 123R, stock-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. Stock-based compensation expense recognized in the accompanying consolidated statements of earnings during 2007 and 2006 included compensation expense for stock-based payment awards granted prior to, but not yet vested, as of January 1, 2006 and for the stock-based awards granted after January 1, 2006, based on the grant date fair value estimated in accordance with SFAS No. 123R. As stock-based compensation expense recognized in the accompanying statements of earnings for 2007 and 2006 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. SFAS No. 123R requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For 2005 the impact of stock-based compensation expense is disclosed on a proforma basis. (See note 19 to the consolidated financial statements).

14

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(n)	Stock Options, Continued
	The fair value of each option award is estimated on the date of grant using a Black-Scholes Option Pricing Model (“BS”) that uses the following assumptions. Expected volatility is based on implied volatility from comparable publicly traded banks. The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the average of: (1) the weighted average vesting term and (2) original contractual term as permitted under SAB 107. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant and the weighted average expected life of the grant.
(o)	Stock Split
	The Company’s Board of Directors voted a 4 for 3 stock split for stockholders of record as of May 7, 2007 payable May 31, 2007. Each stockholder received four (4) shares of common stock for each three (3) shares 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)	Advertising Costs
	Advertising costs are expensed when incurred by the Company.
(q)	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.
(r)	Reclassifications
	Certain reclassifications have been made to the 2006 and 2005 figures to conform to the presentation for 2007.

15

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(s)	Off-Balance-Sheet Financial Instruments
	In the ordinary course of business Wilson Bank has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, commitments under credit card arrangements, commercial letters of credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received.
(t)	Impact of New Accounting Standards
	On June 30, 2005, the FASB issued an exposure draft “Business Combinations — a replacement of FASB Statement No. 141 (“Statement 141 Revised”). Statement 141 Revised would require the acquirer to measure the fair value of the acquiree, as a whole, as of the acquisition date as opposed to the definitive agreement date. The proposal also requires that contingent consideration be estimated and recorded at the acquisition which is in conflict with SFAS No. 5 “Accounting for Contingencies” (“SFAS No. 5”). SFAS No. 5 would be amended for this exception. Acquisition related costs incurred in connection with the business combination would generally be expensed.
	Statement 141 Revised would require the acquirer in a business combination in which the acquisition-date fair value of the acquirer’s interest in the acquiree exceeds the fair value of the consideration transferred for that interest (referred to as a bargain purchase) to account for that excess by first reducing the goodwill related to that business combination to zero, and then by recognizing any excess in income. SFAS No. 141 requires that excess to be allocated as a pro rata reduction of the amounts that would have been assigned to particular assets acquired. Statement 141 Revised is expected to be effective for acquisitions after January 1, 2007.
	On June 19, 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 SFAS 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.

16

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(t)	Impact of New Accounting Standards, Continued
	In November, 2005, the FASB issued FASB Staff Position Statement of Financial Accounting Standards 115-1 and 124-1 (“FSP 115-1”) which codified existing guidance addressing the determination as to when an investment is considered impaired, whether that impairment is other than temporary and the measurement of an impairment loss. FSP 115-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The guidance in FSP 115-1 amends SFAS No. 115, SFAS No. 124 and APB Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock”. FSP 115-1 is effective for 2006. The Company has considered FSP 115-1 in its testing for other-than-temporary impairment.
	In December 2004, the FASB issued SFAS No. 123R, which requires recognition of expense over the requisite service period for awards of share-based compensation to employees. SFAS No. 123R was adopted by the Company as of January 1, 2006. As permitted by the original SFAS No. 123 prior to January 1, 2006, the Company has accounted for its equity awards under the provisions of APB Opinion No. 25 “Accounting for Stock Issued to Employees” (“APB No. 25”). Under the provisions of SFAS No. 123R, the grant date fair value of an award has been used to measure the compensation expense recognized for the award. For any unvested awards granted prior to the adoption of SFAS No. 123R, the fair values used in preparation of the disclosures required under the original SFAS No. 123 have been utilized. Compensation expense recognized after adoption of SFAS No. 123R will incorporate an estimate of awards expected to ultimately vest, which requires estimation of forfeitures as well as projections related to the satisfaction of performance conditions that determine vesting. The substance of SFAS No. 123R is to require companies to record as an expense amortization of the fair market value of stock options determined as of the grant 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 adoption of SFAS No. 123R has had an impact on the Company’s results of operations for 2006 and 2007, although it has had no significant impact on the Company’s overall financial position. See note 19 to the consolidated financial statements for additional discussion.

17

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(t)	Impact of New Accounting Standards, Continued
	On June 1, 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS No. 154”), a replacement of Accounting Principles Board Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”. SFAS No. 154 applies to all voluntary changes in accounting principle, and changes the requirements for accounting for and reporting of a change in accounting principle. In the absence of specific transition requirements to the contrary in the adoption of an accounting principle, SFAS No. 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle unless it is impracticable for comparability and consistency of financial information between periods. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning in 2006.
	On March 17, 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140” (“SFAS No. 156”). SFAS No. 156 requires that all servicing assets and liabilities be initially measured at fair value and allows for two alternatives in the subsequent accounting for servicing assets and liabilities: the amortization method and the fair value method. The amortization method requires that the servicing assets and liabilities be amortized over the remaining estimated lives of the serviced assets with impairment testing to be performed periodically. The fair value method requires the servicing assets and liabilities to be measured at fair value each period with an offset to income. SFAS No. 156 is to be adopted in the first fiscal year that begins after September 15, 2006 and early adoption is permitted. An entity can elect the fair value method at the beginning of any fiscal year provided the entity has not yet issued financial statements, including interim financial statements, for any period of that fiscal year. However, once the fair value election is made, an entity cannot revert back to the amortization method. The Company has determined that there is no impact on the consolidated financial statements of SFAS No. 156.
	On July 13, 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), an interpretation of SFAS No. 109. FIN 48 requires that only benefits from tax positions that are more-likely-than-not of being sustained upon examination by the IRS should be recognized in the financial statements. These benefits would be recorded at amounts considered to be the maximum amounts more-likely-than-not of being sustained. At the time these positions become “more likely than not” to be disallowed under audit, their recognition would be reversed. The Company has reviewed the potential impact of FIN 48, and has determined that it should not have any material impact on the consolidated financial statements. See note 11 to the consolidated financial statements for additional discussion.

18

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(t)	Impact of New Accounting Standards, Continued
	On September 15, 2006, the FASB issued SFAS No. 157 “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. Under SFAS No. 157, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, SFAS No. 157 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, for example, the reporting entity’s own data. Under SFAS No. 157, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Early adoption is permitted. Management is currently reviewing the potential impact of SFAS No. 157.
	In September 2006, the FASB ratified the consensus the Emerging Issues Task Force (“EITF”) reached regarding EITF Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (“Issue 06-4”), which provides accounting guidance for postretirement benefits related to endorsement split-dollar life insurance arrangements, whereby the employer owns and controls the insurance policies. The consensus concludes that an employer should recognize a liability for the postretirement benefit in accordance with Statement of Financial Accounting Standards No. 106, “Employers Accounting for Postretirement Benefits Other Than Pensions” (“Statement No. 106”) or Accounting Principles Board Opinion No. 12 (“APB 12”). In addition, the consensus states that an employer should also recognize an asset based on the substance of the arrangement with the employee. Issue 06-4 is effective for fiscal years beginning after December 15, 2007 with early application permitted.

19

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(1) Summary of Significant Accounting Policies, Continued

(t)	Impact of New Accounting Standards, Continued
	In March 2007, the FASB ratified the consensus the EITF reached regarding EITF Issue No. 06-10, “Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements” (“Issue 06-10”), which provides accounting guidance for postretirement benefits related to collateral assignment split-dollar life insurance arrangements, whereby the employee owns and controls the insurance policies. The consensus concludes that an employer should recognize a liability for the postretirement benefit in accordance with Statement 106 or APB 12, as well as recognize an asset based on the substance of the arrangement with the employee. Issue 06-10 is effective for fiscal years beginning after December 15, 2007 with early application permitted.
	In February 2006, the FASB issued EITF Issue No. 06-5, “Accounting for Purchases of Life Insurance — Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4, Accounting for Purchases of Life Insurance” (EITF 06-5). EITF 06-5 provides that in addition to cash surrender value, the assets recognized for a life insurance contract should consider certain other provisions included in a policy’s contractual terms with additional amounts being discounted if receivable beyond one year. Additionally, EITF 06-5 requires that the determination of the amount that could be realized under an insurance contract be performed at the individual policy level. The Company has determined there is no impact on the consolidated financial statements as a result of this standard.
	In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities (“Statement 159”). Statement 159 allows entities to voluntarily choose, at specified election dates, to measure financial assets and financial liabilities (as well as certain nonfinancial instruments that are similar to financial instruments) at fair value (the “fair value option”). The election is made on an instrument-by-instrument basis and is irrevocable. If the fair value option is elected for an instrument, Statement 159 specifies that all subsequent changes in fair value for that instrument be reported in earnings. Statement 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007 and earlier adoption is permitted. At the present time, management does not intend to make any fair value elections.
	In September 2006, the SEC released Staff Accounting Bulletin No. 108 (SAB No. 108). SAB 108 requires that registrants assess the impact on both the statement of condition and the statement of income when quantifying and evaluating the materiality of a misstatement. Under SAB No. 108, adjustment of financial statements is required when either approach results in quantifying a misstatement that is material to a reporting period presented within the financial statements, after considering all relevant quantitative and qualitative factors.

20

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(2)	Loans and Allowance for Loan Losses
	The classification of loans at December 31, 2007 and 2006 is as follows:

	In Thousands
	2007			2006
Commercial, financial and agricultural	$	337,368			301,589
Installment		73,618			82,964
Real estate — construction		100,036			67,162
Real estate — mortgage		486,504			439,164
		997,526			890,879
Allowance for possible loan losses		(9,473	)		(10,209	)
	$	988,053			880,670

The principal maturities on loans at December 31, 2007 are as follows:

	In Thousands
	Commercial,
	Financial
	and				Real Estate -		Real Estate-
	Agricultural		Installment		Construction		Mortgage		Total
3 months or less	$	59,504		4,894		23,367		2,537		90,302
3 to 12 months		159,507		5,308		63,985		8,901		237,701
1 to 5 years		85,628		58,709		12,684		90,337		247,358
Over 5 Years		32,729		4,707		—		384,729		422,165
	$	337,368		73,618		100,036		486,504		997,526

At December 31, 2007, variable rate loans were $549,569,000 and fixed rate loans totaled $447,957,000. At December 31, 2006, variable rate and fixed rate loans totaled $480,598,000 and $410,281,000, respectively.

Unamortized deferred loan fees totaled $906,000 and $1,025,000 at December 31, 2007 and 2006, respectively.

In the normal course of business, Wilson Bank has made loans at prevailing interest rates and terms to directors and executive officers of the Company and to their affiliates. The aggregate amount of these loans was $15,889,000 and $13,392,000 at December 31, 2007 and 2006, respectively. As of December 31, 2007, none of these loans were restructured, nor were any related party loans charged-off during the past three years nor did they involve more than the normal risk of collectibility or present other unfavorable features.

21

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(2)	Loans and Allowance for Loan Losses, Continued
	An analysis of the activity with respect to such loans to related parties is as follows:

	In Thousands
	December 31,
	2007			2006
Balance, January 1	$	13,392			12,961
New loans during the year		32,407			22,524
Repayments during the year		(29,910	)		(22,093	)
Balance, December 31	$	15,889			13,392

A director of the Company performs appraisals related to certain loan customers. Fees paid to the director for these services were $210,000 in 2007, $392,000 in 2006, and $400,000 in 2005.

Loans which had been placed on non-accrual status totaled $2,167,000 and $1,360,000 at December 31, 2007 and 2006, respectively. Had interest on these loans been accrued, interest income would have been increased by approximately $128,000 in 2007, $11,000 in 2006 and $13,000 in 2005. Loans that are past due 90 days or more and are still accruing interest totaled $2,126,000 and $3,943,000 at December 31, 2007 and 2006, respectively.

Transactions in the allowance for loan losses for the years ended December 31, 2007, 2006 and 2005 are summarized as follows:

	In Thousands
	2007			2006			2005
Balance, beginning of year	$	10,209			9,083			9,370
Provision charged to operating expense		4,145			3,806			1,136
Loans charged off		(5,185	)		(3,017	)		(1,616	)
Recoveries on losses		304			337			193
Balance, end of year	$	9,473			10,209			9,083

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

22

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(2)	Loans and Allowance for Loan Losses, Continued
	Impaired loans and related loan loss reserve amounts at December 31, 2007 and 2006 were as follows:

	In Thousands
	December 31,
	2007		2006
Recorded investment	$	2,167		1,360
Loan loss reserve	$	313		277

Of the $2,167,000 impaired loans at December 31, 2007, the Company has one loan totaling $1,310,000 with no related loan loss reserve. As of December 31, 2006, there were no impaired loans without a related loan loss reserve.

The average recorded investment in impaired loans for the years ended December 31, 2007, 2006 and 2005 was $2,630,000, $650,000 and $369,000, respectively. The Company did not recognize any interest income on the accrued basis on these loans for the period that such loans were impaired during 2007, 2006 and 2005.

In 2007, 2006 and 2005, the Company originated and sold loans in the secondary market of $87,448,000, $92,650,000 and $74,685,000, respectively. The gain on sale of these loans totaled $280,000, $451,000 and $405,000 in 2007, 2006 and 2005, respectively.

Of the loans sold in the secondary market, the recourse to Wilson Bank is limited. On loans sold to the Federal Home Loan Mortgage Corporation, Wilson Bank has a recourse obligation for one year from the purchase date. At December 31, 2007, 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 purchaser recourse to Wilson 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, 2007, total loans sold with recourse to Wilson Bank, including those sold to the Federal Home Loan Mortgage Corporation, aggregated $65,693,000. At December 31, 2007, Wilson Bank had not been required to repurchase any of the loans originated by Wilson Bank and sold in the secondary market. Management expects no loss to result from these recourse provisions.

23

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(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, 2007 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	$	13,423		72		42		13,453
Mortgage-backed securities		27		—		—		27
	$	13,450		72		42		13,480

	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	$	206,528		329		952		205,905
Obligations of states and political subdivisions		1,928		—		17		1,911
Mortgage-backed securities		2,105		15		5		2,115
	$	210,561		344		974		209,931

The Company’s classification of securities at December 31, 2006 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	$	14,270		116		71		14,315
Mortgage-backed securities		61		—		—		61
	$	14,331		116		71		14,376

24

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(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	$	168,236		12		2,345		165,903
Obligations of states and political subdivisions		1,929		3		8		1,924
Mortgage-backed securities		1,664		11		3		1,672
	$	171,829		26		2,356		169,499

The amortized cost and estimated market value of debt securities at December 31, 2007, 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	$	2,729		2,743
Due after one year through five years		5,536		5,551
Due after five years through ten years		3,745		3,758
Due after ten years		1,413		1,401
		13,423		13,453
Mortgage-backed securities		27		27
	$	13,450		13,480

	In Thousands
			Estimated
	Amortized		Market
Securities Available-For-Sale	Cost		Value
Due in one year or less	$	23,374		23,288
Due after one year through five years		50,669		50,539
Due after five years through ten years		71,996		71,951
Due after ten years		62,417		62,038
		208,456		207,816
Mortgage-backed securities		2,105		2,115
	$	210,561		209,931

25

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(3)	Debt and Equity Securities, Continued
	Results from sales of debt and equity securities are as follows:

	In Thousands
	2007		2006			2005
Gross proceeds	$	—		10,303			—
Gross realized gains	$	—		20			—
Gross realized losses		—		(146	)		—
Net realized losses	$	—		(126	)		—

Securities carried in the balance sheet of approximately $114,710,000 (approximate market value of $114,447,000) and $123,414,000 (approximate market value of $121,473,000) were pledged to secure public deposits and for other purposes as required or permitted by law at December 31, 2007 and 2006, respectively.

Included in the securities above are $13,226,000 (approximate market value of $13,253,000) and $14,475,000 (approximate market value of $14,504,000) at December 31, 2007 and 2006, 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 $76,000 (approximate market value of $76,000) and $151,000 (approximate market value of $152,000) at December 31, 2007 and 2006, 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, 2007:

	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	$	79,602		628		40		58,685		324		58		138,287		952
Obligations of states and political sub-divisions		2,176		25		7		4,842		34		21		7,018		59
Mortgage-backed securities		946		4		3		42		1		3		988		5
Total temporarily impaired securities	$	82,724		657		50		63,569		359		82		146,293		1,016

26

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(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 maturity or a market price recovery, and as such the impairment of these securities is not deemed to be other-than-temporarily impaired.
	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 $2,895,000 and $2,852,000 at December 31, 2007 and 2006, respectively, and the stock of The Bankers Bank amounting to $88,000 and $88,000 at December 31, 2007 and 2006, 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, 2007 and 2006 is as follows:

	In Thousands
	2007			2006
Land	$	11,306			10,497
Buildings		18,845			18,509
Construction in progress		1,747			109
Leasehold improvements		140			140
Furniture and equipment		7,030			8,936
Automobiles		224			224
		39,292			38,415
Less accumulated depreciation		(8,881	)		(9,710	)
	$	30,411			28,705

Building additions during 2007 and 2006 include payments of $1,439,000 and $1,904,000, respectively, to a construction company owned by a director of the Company.

Depreciation expense was $1,629,000, $1,561,000 and $1,526,000 for the years ended December 31, 2007, 2006 and 2005, respectively.

27

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(6)	Acquired Intangible Assets and Goodwill
	The intangible assets result from the excess of purchase price over the applicable book value of the net assets acquired of 50% owned subsidiaries in 2005:

Amortizable intangible assets:

	In Thousands
	2007		2006
Premium on purchased deposits	$	2,787		2,787
Accumulated amortization		1,091		695
	$	1,696		2,092

	For the Year Ended December 31,
	2007		2006		2005
Amortization expense	$	396		396		299

Estimated amortization expense:

For the Year Ended
2008	$	396
2009		396
2010		396
2011		396
2012		112

The premium on purchased deposits is being amortized on a straight-line basis over 7 years.

Goodwill:

	In Thousands
	2007		2006
Balance at January 1,	$	4,805		4,805
Goodwill acquired during year		—		—
Impairment loss		—		—
Balance at December 31,	$	4,805		4,805

28

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(7)	Deposits
	Deposits at December 31, 2007 and 2006 are summarized as follows:

	In Thousands
	2007		2006
Demand deposits	$	97,805		118,820
Savings accounts		38,966		35,347
Negotiable order of withdrawal accounts		156,410		92,151
Money market demand accounts		194,008		215,383
Certificates of deposit $100,000 or greater		301,801		238,072
Other certificates of deposit		331,243		334,761
Individual retirement accounts $100,000 or greater		18,653		14,622
Other individual retirement accounts		43,704		37,573
	$	1,182,590		1,086,729

Principal maturities of certificates of deposit and individual retirement accounts at December 31, 2007 are as follows:

	(In Thousands)
Maturity	Total
2008	$	621,441
2009		47,231
2010		20,017
2011		5,328
2012		1,352
Thereafter		32
	$	695,401

At December 31, 2007, certificates of deposit and individual retirement accounts in denominations of $100,000 or more amounted to $320,454,000 as compared to $252,694,000 at December 31, 2006.

The aggregate amount of overdrafts reclassified as loans receivable was $429,000 and $2,121,000 at December 31, 2007 and 2006, respectively.

Wilson Bank is 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, 2007 and 2006 were approximately $15,778,000 and $16,636,000, respectively.

29

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(8)

Securities Sold Under Repurchase Agreements

Securities sold under repurchase agreements were $9,771,000 and $13,394,000 at December 31, 2007 and 2006, respectively. The maximum amounts of outstanding repurchase agreements at any month end during 2007 and 2006 was $10,674,000 and $13,575,000, respectively. The average daily balance outstanding during 2007, 2006 and 2005 was $7,804,000, $8,460,000 and $6,622,000, respectively. The weighted-average interest rate on the outstanding balance at December 31, 2007 and 2006 was 3.55% and 4.69%, respectively. The underlying securities are typically held by other financial institutions and are designated as pledged.

(9)	Advances from Federal Home Loan Bank
	The advances from the Federal Home Loan Bank at December 31, 2007 and 2006 consist of the following:

	In Thousands
	December 31,
	2007					2006
			Weighted					Weighted
	Amount		Average Rate			Amount		Average Rate
Fixed-rate advances	$	15,470		4.65	%	$	17,092		4.61	%

Advances from the Federal Home Loan Bank are to mature as follows at December 31, 2007:

Year Ending	In Thousands
December 31,	Amount
2009	$	15,346
2010		124
	$	15,470

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

(10)	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
	2007		2006		2005
Non-interest income:
Service charges on deposits	$	6,506		5,938		5,291
Other fees		3,761		2,943		2,392
Gains on sales of loans		280		451		405
Gains on sales of fixed assets		—		18		1
Other income		89		136		129
	$	10,636		9,486		8,218

30

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(10) Non-Interest Income and Non-Interest Expense, Continued

	In Thousands
	2007		2006		2005
Non-interest expense:
Employee salaries and benefits	$	16,466		14,825		12,818
Occupancy expenses		2,111		1,566		1,451
Furniture and equipment expenses		1,434		2,060		1,849
Loss on sale of fixed assets		36		—		—
Loss on sales of other assets		119		101		65
Loss on sales of other real estate		136		102		40
Data processing expenses		974		736		1,096
Security losses		—		126		—
FDIC insurance		129		117		128
Directors’ fees		808		815		713
Other operating expenses		7,264		6,298		5,011
Minority interest in net earnings of subsidiaries		—		—		236
	$	29,477		26,746		23,407

(11)	Income Taxes
	The components of the net deferred tax asset are as follows:

	In Thousands
	2007			2006
Deferred tax asset:
Federal	$	3,532			4,265
State		549			674
		4,081			4,939
Deferred tax liability:
Federal		(1,280	)		(1,435	)
State		(262	)		(293	)
		(1,542	)		(1,728	)
	$	2,539			3,211

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

	In Thousands
	2007			2006
Financial statement allowance for loan losses in excess of tax allowance	$	3,455			3,711
Excess of depreciation deducted for tax purposes over the amounts deducted in the financial statements		(374	)		(492	)
Financial statement deduction for deferred compensation in excess of deduction for tax purposes		385			336
Financial statement income on FHLB stock dividends not recognized for tax purposes		(435	)		(435	)
Deposit base premium related to acquisition of minority interest		(733	)		(801	)
Unrealized loss on securities available-for-sale		241			892
	$	2,539			3,211

31

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(11)	Income Taxes, Continued
	The components of income tax expense (benefit) are summarized as follows:

	In Thousands
	Federal			State			Total
2007
Current	$	5,199			947			6,146
Deferred		38			55			93
Total	$	5,237			1,002			6,239
2006
Current	$	6,000			1,146			7,146
Deferred		(559	)		84			(475	)
Total	$	5,441			1,230			6,671
2005
Current	$	5,983			1,267			7,250
Deferred		(335	)		(68	)		(403	)
Total	$	5,648			1,199			6,847

A reconciliation of actual income tax expense of $6,239,000, $6,671,000 and $6,847,000 for the years ended December 31, 2007, 2006 and 2005, respectively, to the “expected” tax expense (computed by applying the statutory rate of 34% to earnings before income taxes) is as follows:

	In Thousands
	2007			2006			2005
Computed “expected” tax expense	$	5,839			5,864			6,067
State income taxes, net of Federal income tax benefit		622			811			791
Tax exempt interest, net of interest expense exclusion		(204	)		(211	)		(209	)
Tax expense related to minority interest income in subsidiaries		—			—			80
Federal income tax expense above statutory rate related to taxable income over $10 million		76			139			111
Other		(94	)		68			7
	$	6,239			6,671			6,847

Total income tax expense for 2006 includes tax benefit of $48,000 related to the loss on sale of securities. There were no sales of securities in 2007 or 2005.

32

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(11)	Income Taxes, Continued
	FASB Interpretation 48, “Accounting for Income Tax Uncertainties” (“FIN 48”) was issued in June 2006 and defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. FIN 48 also provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties and includes guidance concerning accounting for income tax uncertainties in interim periods. The Company adopted the provisions of FIN 48 on January 1, 2007, and determined there was no need to make an adjustment to retained earnings upon adoption of this Interpretation.
	As of January 1, 2007, the Company has accrued no interest and no penalties related to uncertain tax positions. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense.
	The Company and its subsidiary file income tax returns in the United States (“U.S.”), as well as the State of Tennessee. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2004, which would include audits of acquired entities. The Company’s Federal tax returns have been audited through December 31, 2003 with no changes.

(12)	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.
	Wilson Bank leases 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
2008	$	133
2009		117
2010		94
2011		80
2012		42
	$	466

Total rent expense amounted to $167,000, $162,000 and $99,000, respectively, during the years ended December 31, 2007, 2006 and 2005.

The Company has lines of credit with other financial institutions totaling $45,900,000. At December 31, 2007 and 2006, there was no balance outstanding under these lines of credit.

33

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(13)	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
	2007		2006
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit	$	162,000		154,715
Standby letters of credit		20,992		23,159
Total	$	182,992		177,874

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

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Most guarantees extend from one to two years. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The fair value of standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the likelihood of the 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 $21.0 million at December 31, 2007.

34

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(14)	Concentration of Credit Risk
	Practically all of the Company’s loans, commitments, and commercial and standby letters of credit have been granted to customers in the Company’s market area. Practically all such customers are depositors of Wilson Bank. 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, 2007, the Company’s cash and due from banks and federal funds sold included commercial bank deposits aggregating $15,652,000 in excess of the Federal Deposit Insurance Corporation limit of $100,000 per institution.
	Federal funds sold were deposited with six banks.
(15)	Employee Benefit Plan
	Wilson Bank has in effect a 401(k) plan (the “401(k) Plan”) which covers eligible employees. To be eligible an employee must have obtained the age of 20 1/2. The provisions of the 401(k) Plan provide for both employee and employer contributions. For the years ended December 31, 2007, 2006 and 2005, Wilson Bank contributed $1,099,000, $961,000 and $848,000, respectively, to the 401(k) Plan.
(16)	Dividend Reinvestment Plan
	Under the terms of the Company’s dividend reinvestment plan (the “DRIP”) holders of common stock may elect to automatically reinvest cash dividends in additional shares of common stock. The Company may elect to sell original issue shares or to purchase shares in the open market for the account of participants. Original issue shares of 53,518 in 2007, 113,774 in 2006 and 111,914 in 2005 were sold to participants under the terms of the DRIP.
(17)	Regulatory Matters and Restrictions on Dividends
	The Company and Wilson Bank 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 bank’s capital status and the amount of dividends the subsidiary may distribute.

35

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(17)

Regulatory Matters and Restrictions on Dividends, Continued

The Company and Wilson Bank are required to maintain minimum amounts of capital to total “risk weighted” assets, as defined by the banking regulators. At December 31, 2007, the Company and its bank subsidiary are required to have minimum Tier I and total risk-based capital ratios of 4.0% and 8.0%, respectively and a leverage ratio of 4%. The capital ratios required to be well-capitalized under the Prompt Corrective Action Provisions of the regulations administered by the federal banking agencies are 6%, 10% and 5%, respectively. The actual ratios of the Company and Wilson Bank were as follows:

	Wilson Bank
	Holding Company						Wilson Bank
	2007			2006			2007			2006
Tier I ratio		10.77	%		10.80	%		11.08	%		10.77	%
Total risk-based ratio		11.67	%		11.87	%		12.08	%		11.84	%
Leverage ratio		8.63	%		9.32	%		8.60	%		9.29	%

	As of December 31, 2007, the most recent notification from the banking regulators categorized the Company and Wilson Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed the Company’s or Wilson Bank’s category.
(18)	Deferred Compensation Plan
	Wilson Bank provides its executive officers a deferred compensation plan (the “Deferred Compensation Plan”), which also provides for death and disability benefits. The Deferred Compensation 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 ten employees participating in the Deferred Compensation Plan at December 31, 2007.
	The Deferred Compensation Plan provides retirement benefits for a period of 180 months after the employee reaches the age of 65. This benefit can be reduced if Wilson Bank’s average return on assets falls below 1%. The Deferred Compensation Plan also provides benefits over a period of fifteen years in the event the executive should die or become disabled prior to reaching retirement. Wilson Bank has purchased insurance policies or other assets to provide the benefits listed above. The insurance policies remain the sole property of Wilson Bank and are payable to Wilson Bank. At December 31, 2007 and 2006, the deferred compensation liability totaled $1,006,000 and $879,000, respectively, the cash surrender value of life insurance was $1,334,000 and $1,231,000, respectively, and the face amount of the insurance policies in force approximated $5,358,000 and $6,075,000, respectively. The Deferred Compensation Plan is not qualified under Section 401 of the Internal Revenue Code.

36

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(19)	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 reserve additional shares for issuance under the Stock Option Plan as needed in order that the aggregate number of shares that may be issued during the term of the Stock Option 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.
	SFAS No. 123R was adopted by the Company as of January 1, 2006. This accounting standard revises SFAS No. 123 by requiring that all share-based payments to employees, including grants of employee stock options, be recognized in the financial statements based on their fair values at the date of grant. See additional discussion of this new accounting standard in note 1 to the consolidated financial statements, “Impact of New Accounting Standards”.
	Prior to January 1, 2006, the Company accounted for those stock-based employee compensation plans under the recognition and measurement provisions of APB No. 25 and related interpretations, as permitted by SFAS No. 123; therefore, no stock-based employee compensation cost was recognized in the consolidated statements of earnings for the year ended December 31, 2005. Rather, pro forma compensation cost amounts are disclosed below. Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123 using the modified-prospective transition method. Under that transition method, compensation cost recognized in the years ended December 31, 2007 and 2006 include: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123R. As the modified-retrospective transition method was not selected, results for prior periods have not been restated.

37

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(19)	Stock Option Plan, Continued
	The fair value of each grant is estimated on the date of grant using the BS option-pricing model with the following weighted average assumptions used for grants in 2007, 2006 and 2005:

	2007			2006			2005
Expected dividends		4.78	%		4.78	%		2.00	%
Expected term (in years)		7.75			7.75			10
Expected volatility		15.2	%		15.2	%		0	%
Risk-free rate		4.32	%		4.32	%		4.23	%

During the first quarter of 2006, the Company made refinements to the expected volatility and expected option life used in valuing stock options in conjunction with adopting SFAS No. 123R. Expected volatility was calculated at 15.2% based upon the consideration of historical and implied volatility of similar publicly traded companies. For 2005 the minimum value method permitted under SFAS No. 123 with an expected effective volatility of zero was used in the BS option pricing model. The Company lowered the expected option life based on historical results.

A summary of the stock option activity for 2007, 2006 and 2005 is as follows:

	2007						2006						2005
				Weighted						Weighted						Weighted
				Average						Average						Average
				Exercise						Exercise						Exercise
	Shares			Price			Shares			Price			Shares			Price
Outstanding at beginning of year		97,304		$	15.34			109,149		$	14.20			117,053		$	12.95
Granted		6,001			29.63			7,333			26.63			12,000			23.81
Exercised		(16,107	)		(12.61	)		(16,771	)		(12,26	)		(14,549	)		(11.85	)
Forfeited		(3,068	)		(18.89	)		(2,407	)		(19.24	)		(5,355	)		(14.72	)
Outstanding at end of year		84,130		$	16.76			97,304		$	15.34			109,149		$	14.20
Options exercisable at year end		30,549		$	13.47			33,189		$	13.14			37,675		$	11.96

38

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(19)	Stock Option Plan, Continued
	The following table summarizes information about fixed stock options outstanding at December 31, 2007:

	Options Outstanding					Options Exercisable
					Weighted					Weighted
			Weighted		Average			Weighted		Average
	Number		Average		Remaining	Number		Average		Remaining
	Outstanding		Exercise		Contractual	Exercisable		Exercise		Contractual
Range of Exercise Prices	at 12/31/07		Price		Term	at 12/31/07		Price		Term
$11.46 - $18.10		57,359	$	12.79	3.1 years		27,330	$	12.34	2.7 years
$20.63 - $29.63		26,771	$	25.26	8.5 years		3,219	$	23.11	7.8 years
		84,130					30,549
Aggregate intrinsic value (in thousands)	$	1,366				$	597

The weighted average fair value at the grant date of options granted during the years 2007, 2006 and 2005 was $1.16, $1.50 and $3.87, respectively. The total intrinsic value of options exercised during the years 2007, 2006 and 2005 was $311,000, $261,000 and $188,000, respectively.

As a result of adopting SFAS No. 123R on January 1, 2006, the Company’s earnings before income taxes and net earnings included $21,000 and $17,000 of expense that would not have been incurred if it had continued to account for share-based compensation expense under APB No. 25. Basic and diluted earnings per share were reduced by $.01 and $.01 per share by the adoption of SFAS No. 123R during the years ended December 31, 2007 and 2006.

Prior to the adoption of SFAS No. 123R, the Company presented all tax benefits of deductions resulting from the exercise of stock options as operating cash flows in the statement of cash flows. SFAS No. 123R requires the cash flows resulting from the tax benefits of tax deductions in excess of the compensation cost recognized for those options to be classified as financing cash flows. The Company had no excess tax benefits to reflect as financing cash inflows for the three years ended December 31, 2007.

39

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(19)

Stock Option Plan, Continued

Prior to the adoption of SFAS No. 123R on January 1, 2006, SFAS No. 123 allowed for the choice of continuing to follow No. APB 25, and the related interpretations, or selecting the fair value method of expense recognition as described in SFAS No. 123. The Company elected to follow APB No. 25 in accounting for its employee stock options in prior periods. Proforma net earnings and net earnings per share data is presented below for the year 2005, as if the fair-value method had been applied in measuring compensation costs. Proforma amounts for the years 2007 and 2006 are not applicable based upon the adoption of SFAS No. 123R during the first quarter of 2006.

		In Thousands,
		Except Per
		Share Amounts
		2005
Net earnings	As Reported	$10,996
	Proforma	$10,952
Basic earnings per	As Reported	$    2.27
common share	Proforma	$    2.25
Diluted earnings per	As Reported	$    2.25
common share	Proforma	$    2.24

	As of December 31, 2007, there was $67,000 of total unrecognized cost related to non-vested share-based compensation arrangements grant under the Stock Option Plan. The cost is expected to be recognized over a weighted-average period of 3.0 years.
(20)	Earnings Per Share
	SFAS No. 128 “Earnings Per Share” (“SFAS No. 128”) 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 2006 and 2005 have been restated to reflect a 4 for 3 stock split effective May 7, 2007.

40

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(20)	Earnings Per Share, Continued
	The following is a summary of the components comprising basic and diluted earnings per share (“EPS”):

	In Thousands (except share data)
	2007		2006		2005
Basic EPS Computation:
Numerator — Earnings available to common stockholders	$	10,936		10,575		10,996
Denominator — Weighted average number of common shares outstanding		6,901,447		6,771,455		6,459,315
Basic earnings per common share	$	1.58		1.56		1.70
Diluted EPS Computation:
Numerator — Earnings available to common stockholders	$	10,936		10,575		10,996
Denominator:
Weighted average number of common shares outstanding		6,901,447		6,771,455		6,459,315
Dilutive effect of stock options		35,994		39,602		46,532
		6,937,441		6,811,057		6,505,847
Diluted earnings per common share	$	1.58		1.55		1.69

41

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(21) Wilson Bank Holding Company - Parent Company Financial Information

WILSON BANK HOLDING COMPANY
(Parent Company Only)

Balance Sheets

December 31, 2007 and 2006

	In Thousands
	2007			2006
ASSETS
Cash	$	243	*		158	*
Investment in wholly-owned commercial bank subsidiary		117,766	*		105,863	*
Refundable income taxes		176			147
Total assets	$	118,185			106,168
LIABILITIES AND STOCKHOLDERS’ EQUITY
Stockholders’ equity:
Common stock, par value $2.00 per share, authorized 10,000,000 shares, 6,916,390 and 5,122,340 shares issued and outstanding, respectively	$	13,833			10,244
Additional paid-in capital		34,373			35,624
Retained earnings		70,368			61,738
Unrealized losses on available-for-sale securities, net of income taxes of $241,000 and $892,000, respectively		(389	)		(1,438	)
Total stockholders’ equity		118,185			106,168
Total liabilities and stockholders’ equity	$	118,185			106,168

* Eliminated in consolidation.

42

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(21) 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, 2007

	In Thousands
	2007			2006			2005
Expenses:
Directors’ fees	$	376			372			296
Other		43			29			12
Loss before Federal income tax benefits and equity in undistributed earnings of commercial bank subsidiaries		(419	)		(401	)		(308	)
Federal income tax benefits		176			147			118
		(243	)		(254	)		(190	)
Equity in undistributed earnings of commercial bank subsidiaries		11,179	*		10,829	*		11,186	*
Net earnings		10,936			10,575			10,996
Other comprehensive earnings (losses), net of tax:
Net unrealized gains (losses) on available-for-sale- securities arising during period, net of taxes of $651,000, $346,000 and $634,000, respectively		1,049			556			(1,021	)
Less reclassification adjustments for net losses included in net earnings, net of taxes of $48,000 in 2006		—			78			—
Other comprehensive earnings (losses)		1,049			634			(1,021	)
Comprehensive earnings	$	11,985			11,209			9,975

* Eliminated in consolidation.

43

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(21) 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, 2007

	In Thousands
									Net Unrealized
			Additional						Gain (Loss) On
	Common		Paid-In			Retained			Available-For-
	Stock		Capital			Earnings			Sale Securities			Total
Balance December 31, 2004	$	8,873		14,856			48,688			(856	)		71,561
Cash dividends declared, $.64 per share		—		—			(3,996	)		—			(3,996	)
Issuance of 111,914 shares of stock pursuant to dividend reinvestment plan		224		3,422			—			—			3,646
Issuance of 10,912 shares of stock pursuant to exercise of stock options		22		151			—			—			173
Issuance of 436,546 shares of stock pursuant to acquisition of minority interest in subsidiaries		873		13,073			—			(195	)		13,751
Net change in unrealized loss on available-for-sale securities during the year, net of taxes of $634,000		—		—			—			(1,021	)		(1,021	)
Net earnings for the year		—		—			10,996			—			10,996
Balance December 31, 2005		9,992		31,502			55,688			(2,072	)		95,110
Cash dividends declared, $.68 per share		—		—			(4,525	)		—			(4,525	)
Issuance of 113,774 shares of stock pursuant to dividend reinvestment plan		227		3,924			—			—			4,151
Issuance of 12,587 shares of stock pursuant to exercise of stock options		25		181			—			—			206
Share based compensation expense		—		17			—			—			17
Net change in unrealized loss on available-for-sale securities during the year, net of taxes of $394,000		—		—			—			634			634
Net earnings for the year		—		—			10,575			—			10,575
Balance December 31, 2006		10,244		35,624			61,738			(1,438	)		106,168
Cash dividends declared, $.34 per share		—		—			(2,306	)		—			(2,306	)
Issuance of 53,518 shares of stock pursuant to dividend reinvestment plan		107		2,007			—			—			2,114
Issuance of 1,724,425 shares of stock pursuant to a 4 for 3 stock split		3,450		(3,450	)		—			—			—
Issuance of 16,107 shares of stock pursuant to exercise of stock options		32		171			—			—			203
Share based compensation expense		—		21			—			—			21
Net change in unrealized loss on available-for-sale securities during the year, net of taxes of $651,000		—		—			—			1,049			1,049
Net earnings for the year		—		—			10,936			—			10,936
Balance December 31, 2007	$	13,833		34,373			70,368			(389	)		118,185

44

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(21) 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, 2007

Increase (Decrease) in Cash and Cash Equivalents

	In Thousands
	2007			2006			2005
Cash flows from operating activities:
Cash paid to suppliers and other	$	(398	)		(384	)		(308	)
Tax benefits received		147			118			118
Net cash used in operating activities		(251	)		(266	)		(190	)
Cash flows from investing activities:
Dividends received from commercial bank subsidiary		325			450			452
Dividends reinvested in commercial bank subsidiary		—			—			(68	)
Net cash provided by investing activities		325			450			384
Cash flows from financing activities:
Dividends paid		(2,306	)		(4,525	)		(3,996	)
Proceeds from sale of stock		2,114			4,151			3,646
Proceeds from exercise of stock options		203			206			173
Net cash provided by (used in) financing activities		11			(168	)		(177	)
Net increase in cash and cash equivalents		85			16			17
Cash and cash equivalents at beginning of year		158			142			125
Cash and cash equivalents at end of year	$	243			158			142

45

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(21) 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, 2007

Increase (Decrease) in Cash and Cash Equivalents

	In Thousands
	2007			2006			2005
Reconciliation of net earnings to net cash used in operating activities:
Net earnings	$	10,936			10,575			10,996
Adjustments to reconcile net earnings to net cash used in operating activities:
Equity in earnings of commercial bank subsidiaries		(11,179	)		(10,829	)		(11,186	)
Increase in refundable income taxes		(29	)		(29	)		—
Share based compensation expense		21			17			—
Total adjustments		(11,187	)		(10,841	)		(11,186	)
Net cash used in operating activities	$	(251	)		(266	)		(190	)
Supplemental Schedule of Non-Cash Activities:
Issuance of 436,546 shares of common stock for minority interest in subsidiaries	$	—			—			13,751
Issuance of 1,724,425 shares of common stock pursuant to a four for three stock split	$	3,450			—			—

46

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(22) Disclosures About Fair Value of Financial Instruments

SFAS No. 107, “Disclosures about Fair Value of Financial Instruments” (“SFAS No. 107”), 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.

47

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(22) 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 Wilson Bank’s 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.

48

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(22) 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, 2007 and 2006 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, 2007 and 2006 are as follows:

	In Thousands
	2007				2006
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial assets:
Cash and short-term investments	$	59,575		59,575		103,404		103,404
Securities		223,381		223,411		183,830		183,875
Loans, net of unearned interest		997,526				890,879
Less: allowance for loan losses		9,473				10,209
Loans, net of allowance		988,053		989,183		880,670		876,837
Loans held for sale		6,034		6,034		7,065		7,065
Restricted equity securities		2,983		2,983		2,940		2,940
Financial liabilities:
Deposits		1,182,590		1,186,242		1,086,729		1,087,786
Securities sold under repurchase agreements		9,771		9,771		13,394		13,394
Advances from Federal Home Loan Bank		15,470		15,745		17,092		16,849
Unrecognized financial instruments:
Commitments to extend credit		—		—		—		—
Standby letters of credit		—		—		—		—

49

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2007, 2006 and 2005

(22) 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, Wilson 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.

(23) Quarterly Financial Data (Unaudited)

Selected quarterly results of operations for the four quarters ended December 31 are as follows:

	(In Thousands, except per share data)
	2007								2006
	Fourth		Third		Second		First		Fourth		Third		Second		First
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Interest income	$	21,331		22,415		21,532		20,604		18,360		18,282		17,604		16,444
Net interest income		9,591		10,566		10,055		9,949		8,635		10,057		9,922		9,698
Provision for loan losses		1,788		805		790		762		1,967		922		485		432
Earnings before income taxes		3,862		4,651		4,559		4,103		2,880		4,627		5,130		4,609
Net earnings		2,705		2,875		2,820		2,536		1,695		2,882		3,156		2,842
Basic earnings per common share		.38		.42		.41		.37		.25		.43		.46		.42
Diluted earnings per common share		.38		.42		.41		.37		.25		.42		.46		.42

50

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF THE ISSUER

     The Company has a wholly-owned subsidiary, Wilson Bank and Trust, a state chartered bank incorporated under the laws of the State of Tennessee and doing business under the same name.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We consent to the incorporation by reference in the Registration Statement (Form S-8, No. 333-32442) pertaining to the Wilson Bank Holding Company 1999 Stock Option Plan and the Registration Statement (Form S-3, No. 333-81984) pertaining to the Wilson Bank Holding Company Dividend Reinvestment Plan of our reports dated January 11, 2008, with respect to the consolidated financial statements of Wilson Bank Holding Company and with respect to the effectiveness of internal control over financial reporting of Wilson Bank Holding Company, included in this Annual Report on Form 10-K for the year ended December 31, 2007.

/s/ Maggart & Associates, P.C.  

Maggart & Associates, P.C. 

Nashville, Tennessee
March 12, 2008

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 13, 2008

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

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Lisa Pominski , certify that:

1.	I have reviewed this annual report on Form 10-K of Wilson Bank Holding Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 13, 2008

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, 2007 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 13, 2008
 

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, 2007 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 13, 2008