10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2023

or

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

For the transition period from_________to_________

Commission file number 0-20402

WILSON BANK HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Tennessee	62-1497076
(State or other jurisdiction of<br><br>incorporation or organization)	(I.R.S. Employer<br><br>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:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

Common Stock, $2.00 par value per share

(Title of class)en

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting stock held by non-affiliates of the registrant on June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $765,337,230.00. For purposes of this calculation, “affiliates” are considered to be the directors and executive officers of the registrant. The market value calculation was determined using $70.00 per share.

Shares of common stock, $2.00 par value per share, outstanding on February 28, 2024 were 11,776,963.

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, 2023 are incorporated by reference into Items 1, 5, 7, 7A and 8.
Part III	Portions of the Registrant’s Proxy Statement to be filed relating to the Registrant’s Annual Meeting of Shareholders to be held on April 25, 2024 (the “2024 Annual Meeting of Shareholders”) are incorporated by reference into Items 10, 11, 12, 13 and 14.

Item 1. Business.

The disclosures set forth in this item are qualified by Item 1A. Risk Factors and the section captioned “Forward-Looking Statements” appearing elsewhere in this Annual Report on Form 10-K and other cautionary statements set forth elsewhere in this report.

General

Wilson Bank Holding Company (the “Company”) was incorporated on March 17, 1992 under the laws of the State of Tennessee. The purpose of the Company was to acquire all of the issued and outstanding capital stock of Wilson Bank and Trust (the “Bank”) and act as a one-bank holding company. On November 17, 1992, the Company acquired 100% of the capital stock of the Bank pursuant to the terms of an agreement and plan of share exchange. The Bank is the only direct subsidiary of the Company. The Bank also holds an ownership interest in Encompass Home Loan Lending, LLC ("Encompass"), a company offering mortgage banking services that is 51% owned by Wilson Bank and 49% owned by two home builders operating in Wilson Bank's market areas.

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 February 23, 2024, had the following full service banking offices located in the following counties:

Tennessee <br>County	Number of Full <br>Service Banking Offices
Davidson	3
DeKalb	2
Putnam	1
Rutherford	5
Smith	2
Sumner	3
Trousdale	1
Williamson	2
Wilson	10
Total	29

The Company's management believes that Wilson County, Trousdale County, Davidson County, Rutherford County, DeKalb County, Smith County, Sumner County, Putnam County and Williamson County offer an environment for continued banking growth in the Company’s target market, which consists of local consumers, professionals and small 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 through a relationship with a third-party investment advisory firm, 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 reasonably be expected to have a material adverse effect on the business of the Bank.

The Bank was organized in 1987 to provide Wilson County with a locally-owned, locally-managed commercial bank. Since its opening, the Bank has experienced a steady growth in deposits and loans, while expanding into other counties in and around middle Tennessee as a result of providing personal, service-oriented banking services to its targeted market. For the year ended December 31, 2023, the Company reported net earnings of approximately $48.938 million and at December 31, 2023 it had total assets of approximately $4.846 billion.

Financial and Statistical Information

The Company’s audited consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the selected portions of the Company’s 2023 Annual Report to Shareholders filed as Exhibit 13.1 hereto (the "2023 Annual Report"), are incorporated herein by reference.

Regulation and Supervision

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

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

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

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

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

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

• The bank holding company has registered securities under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or

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

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

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

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

• Factoring accounts receivable;

• Acquiring or servicing loans;

• Leasing personal property;

• Conducting discount securities brokerage activities;

• Performing selected data processing services;

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

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

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

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

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

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

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

• A bank’s investment in affiliates;

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

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

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

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

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

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

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

The FRB has the power to prohibit dividends by bank holding companies if their actions constitute unsafe or unsound practices. The FRB has issued a policy statement expressing its view that a bank holding company should pay cash dividends only to the extent that the company’s net income for the past year is sufficient to cover the cash dividends and only if the rate of earnings retention appears consistent with the company’s current and expected future capital needs, asset quality, and overall financial condition. As noted below, FRB regulations limit dividends, stock repurchases and discretionary bonuses to executive officers if a bank holding company’s capital is below the level of regulatory minimums plus the applicable capital conservation buffer. FRB policy also provides that a bank holding company should inform the FRB reasonably in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid or that could result in a material adverse change to the bank holding company's capital structure.

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

deciding whether or not to declare a dividend of any particular size, the Company’s board of directors must consider the Company’s current and prospective capital, liquidity, and other needs.

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

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

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

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

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

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

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

The minimum capital level requirements applicable to bank holding companies and banks subject to the rules are: (i) a Tier 1 common equity (“CET1”) capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4% for all institutions. The rules also established a “capital conservation buffer” of 2.5% (consisting of CET1 capital) above the regulatory

minimum capital ratios, and have resulted in the following minimum ratios: (i) a CET1 capital ratio of 7%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if capital levels fall below minimum levels plus the buffer amounts. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.

Under the Basel III capital rules, CET1 capital consists of common stock and paid in capital and retained earnings. CET1 capital is reduced by goodwill, certain intangible assets, net of associated deferred tax liabilities, deferred tax assets that arise from tax credit and net operating loss carryforwards, net of any valuation allowance, and certain other items specified in the Basel III capital rules. The Basel III capital rules also provide for a number of deductions from and adjustments to CET1 capital. These include, for example, the requirement that mortgage servicing rights, deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks and investments in non-consolidated financial institutions be deducted from CET1 capital to the extent that any one such category exceeds 25% of CET1 capital.

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

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

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

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

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

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

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

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

• applying a 250% risk weight to any non-deducted mortgage servicing rights;

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

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

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

In December 2017, the Basel Committee on Banking Supervision published the last version of the Basel III accord, generally referred to as “Basel IV” or the “Basel III Endgame.” The Basel Committee stated that a key objective of the revisions incorporated into the framework is to reduce excessive variability of risk-weighted assets (“RWA”), which will be accomplished by enhancing the robustness and risk sensitivity of the standardized approaches for credit risk and operational risk, which will facilitate the comparability of banks’ capital ratios; constraining the use of internally modeled approaches; and complementing the risk-weighted capital ratio with a finalized leverage ratio and a revised and robust capital floor. In July 2023, federal banking regulators issued a joint agency proposal that sought to implement the final components of the Basel III Endgame as well as seeking to make changes aimed at addressing the underlying causes of the turmoil in the banking industry that was experienced in the first half of 2023 with the failure of certain larger financial institutions. The proposal seeks to revise the capital framework for banks with total assets of $100 billion or more in four main areas of credit risk, market risk, operational risk and credit valuation adjustment risk. The proposal also would require banks with total assets of $100 billion or more to include unrealized gains and losses from certain securities in their capital ratios, to comply with supplementary leverage ratio requirements and to comply with countercyclical capital buffer requirements, if activated. The comment period for these proposed changes ends in the first quarter of 2024 and though the proposal applies only to banks with total assets of $100 billion or more, it’s unclear at this time whether any of these more stringent requirements will be imposed on the Company or the Bank through the ongoing regulatory oversight process.

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

In October 2019, the federal banking agencies approved final rules that, under the Growth Act, exempt from the risk-based and leverage capital requirements of the capital rules issued under the Dodd-Frank Act any qualifying community bank and its holding company that have leverage ratios, calculated as Tier 1 capital over average total consolidated assets (the “Community Bank Leverage Ratio”), of greater than 9 percent and hold 25% or less of total assets in off-balance sheet exposures and 5% or less of total assets in trading assets and liabilities. Tier 1 capital for purposes of calculating the Community Bank Leverage Ratio is defined as total equity less accumulated other comprehensive income, less goodwill, less all other intangible assets, less deferred tax assets that arise from net operating loss and tax carryforwards, net of any related valuation allowances. Off-balance sheet exposures include, among other items, unused portions of commitments, securities lent or borrowed, credit enhancement and financial standby letters of credit. A qualifying community banking organization and its holding company that have chosen the proposed framework are no longer required to calculate the generally applicable risk-based and leverage capital requirements. Such a bank is also considered to have met the capital ratio requirements to be well capitalized for the agencies’ PCA rules provided it has a Community Bank Leverage Ratio greater than 9 percent. The final rules also established a grace period of two fiscal quarters during which a qualifying financial institution that temporarily failed to meet any of the qualifying criteria for use of the Community Bank Leverage Ratio would nonetheless be considered well capitalized so long as the institution maintained a Community Bank Leverage Ratio of greater than 7%.

Pursuant to the CARES Act, the required Community Bank Leverage Ratio was lowered to 8% until the earlier of December 31, 2020 and 60 days following the end of the national emergency declared with respect to COVID-19. The federal regulators when establishing the Community Bank Leverage Ratio, also established a grace period of two fiscal quarters during which a qualifying financial institution that temporarily failed to meet any of the qualifying criteria for use of the Community Bank Leverage Ratio would nonetheless be considered well capitalized so long as the institution maintained a Community Bank Leverage Ratio of greater than 7.0%. Effective November 9, 2020, the federal banking regulatory agencies approved rules raising the Community Bank Leverage Ratio to 8.5% for 2021 and 9% thereafter. The regulatory agencies also modified the two-quarter grace period to require a Community Bank Leverage Ratio of 7.5% or greater in 2021 and 8% thereafter.

The Company and the Bank each opted to take advantage of this rule effective January 1, 2020. During the year ended December 31, 2021, the Company determined its total off balance sheet exposures, calculated in accordance with applicable regulations, exceeded 25% of its total consolidated assets during the period of time it had opted to utilize the Community Bank Leverage Ratio, and as a result, neither the Company nor the Bank was able to take advantage of the Community Bank Leverage Ratio rules, including as of December 31, 2021, in each case, applying the Basel III capital guidelines that were applicable to it as a result of its not qualifying for the Community Bank Leverage Ratio.

Pursuant to the CARES Act, lenders, like the Bank, were given the option to defer the implementation of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”) until 60 days after the

declaration of the end of the public health emergency related to the COVID-19 pandemic or December 31, 2020, whichever came first. The Coronavirus Relief Act subsequently gave lenders the option to further defer the implementation of CECL until January 1, 2022. In addition, the Securities and Exchange Commission (“SEC”) staff has stated that opting to delay the implementation of CECL shall be considered to be in accordance with generally accepted accounting principles. As a result, the Bank elected to delay implementation of CECL until January 1, 2022.

In February 2019, the federal bank regulatory agencies issued a final rule (the “2019 CECL Rule”) that revised certain capital regulations to account for changes to credit loss accounting under U.S. generally accepted accounting principles (“GAAP”). The 2019 CECL Rule included a transition option that allows banking organizations to phase in, over a three-year period, the day-one adverse effects of adopting a new accounting standard related to the measurement of CECL on their regulatory capital ratios (three-year transition option). In March 2020, the federal bank regulatory agencies issued an interim final rule that maintains the three-year transition option of the 2019 CECL Rule following the adoption of CECL. If adopted, the cumulative amount of transition adjustments will become fixed at the start of the three-year period, and will be phased out of the regulatory capital calculations evenly over such period, with 75% recognized in year one, 50% recognized in year two, and 25% recognized in year three. The Company did not take advantage of this option and recognized the effects of its adoption of CECL in full upon its adoption of CECL on January 1, 2022.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Bank’s deposit operations are subject to the:

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

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

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

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

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

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

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

A major focus of governmental policy on financial institutions has been aimed at combating money laundering and terrorist financing. The Bank Secrecy Act (the "BSA") and its implementing regulations and parallel requirements of the federal banking regulators require the Bank to maintain a risk-based anti-money laundering (“AML”) program reasonably designed to prevent and detect money laundering and terrorist financing and to comply with the recordkeeping and reporting requirements of the BSA, including the requirement to report suspicious activity. The Patriot Act substantially broadened the scope of AML laws and regulations by imposing significant new compliance and due diligence obligations on financial institutions, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States. Financial institutions, including banks, are required under final rules implementing Section 326 of the Patriot Act to establish procedures for collecting standard information from customers opening new accounts and verifying the identity of these new account holders within a reasonable period of time. Financial institutions are also prohibited from entering into specified financial transactions and account relationships and must take certain steps to assist government agencies in detecting and preventing money laundering and to report certain types of suspicious transactions. In May 2016, Treasury’s Financial Crimes Enforcement Network issued rules under the BSA requiring financial institutions to identify the beneficial owners who own or control certain legal entity customers at the time an account is opened and to update their AML compliance programs to include risk-based procedures for conducting ongoing customer due diligence. In January 2021, the Anti-Money Laundering Act of 2020 (“AMLA”), which amends the BSA, was

enacted as part of the National Defense Authorization Act for Fiscal Year 2021. Among other things, the AMLA codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for BSA compliance; and expands enforcement and investigation-related authority, including increasing available sanctions for certain BSA violations and instituting BSA whistleblower incentives and protections. The Bank currently has policies and procedures in place designed to comply with the Patriot Act, the BSA and the other regulations targeting terrorism and money laundering, and it will modify these policies and procedures as necessary to comply with the changes reflected in the AMLA and its future implementing regulations.

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

In December 2019, the FDIC and the Office of the Comptroller of the Currency (“OCC”) jointly proposed rules that would have significantly changed existing CRA regulations. In May 2020, the OCC issued its final CRA rule, effective October 1, 2020, however in December 2021, the OCC revoked the newly issued rule and largely reverted to its prior CRA rule. On October 24, 2023, the OCC, FRB and FDIC issued a final rule that the regulators believe will strengthen and modernize regulations implementing the CRA. The stated key objectives of the rule are to (1) strengthen the achievement of the core purpose of the CRA, (2) adapt to changes in the banking industry, including the expanded role of mobile and online banking, (3) provide greater clarity and consistency in the application of CRA regulations, (4) tailor performance standards to account for differences in bank size, business models and local conditions, (5) tailor data collection and reporting requirements and use existing data whenever possible, (6) promote transparency and public engagement, (7) confirm that CRA and fair lending responsibilities are mutually reinforcing and (8) promote a consistent regulatory approach that applies to banks regulated by all three agencies. This final rule becomes effective on April 1, 2024 though there is a multiyear phase-in period. Because of the Bank’s asset size it will be evaluated for compliance with the new rule under each of the rules four tests – the retail lending test, the retail services and products tests, a community development financing test and a community development services test. Among other things, the new rule expands those assessment areas where the Bank’s activities will be tested for compliance with the rules to include areas where the Bank may not have a physical presence but nonetheless engages in activity as a result of online banking activities. The Company is evaluating the impact of the changes within these new rules on its operations and the potential impact to its financial condition, results of operations, and/or liquidity, which cannot be predicted at this time.

The Bank is also subject to fair lending requirements and reporting obligations involving its home mortgage lending operations. Fair lending laws prohibit discrimination in the provision of banking services, and bank regulators have increasingly focused on the enforcement of these laws. Fair lending laws include the Equal Credit Opportunity Act of 1974 and the Fair Housing Act of 1968, which prohibit discrimination in credit and residential real estate transactions on the basis of prohibited factors including, among others, race, color, national origin, gender and religion. The Bank may be liable, either through administrative enforcement or private civil actions, for policies that result in a disparate treatment of or have a disparate impact on a protected class of applicants or borrowers. If a pattern or practice of lending discrimination is alleged by a regulator, then that agency may refer the matter to the U.S. Department of Justice (“DOJ”) for investigation. Pursuant to a Memorandum of Understanding, the DOJ and the Consumer Financial Protection Bureau (“the CFPB”) have agreed to share information, coordinate investigations and generally commit to strengthen their coordination efforts. The Bank is required to have a fair lending program that is of sufficient scope to monitor the inherent fair lending risk of the institution and that appropriately remediates issues which are identified. State and federal banking regulators have issued various policy statements and, in some cases, regulations, emphasizing the importance of technology risk management and supervision. In July 2023, the SEC adopted rules that require disclosure of material cybersecurity incidents, as well as cybersecurity risk management, strategy and governance. The final rule applicable to the cybersecurity disclosure to be included in the Company’s (i) Current Reports on Form 8-K became effective on December 18, 2023 and (ii) Annual Report on Form 10-K became effective for any fiscal year ending on or after December 15, 2023. On November 18, 2021, the federal banking agencies issued a joint final rule that requires a banking organization to notify their primary federal regulator within 36 hours of becoming aware that a significant “computer-security incident” has occurred. In general, a banking organization must notify its primarily federal regulator for incidents that have materially disrupted, degraded or impaired – or are reasonably likely to materially disrupt, degrade or impair – (i) the ability of such banking organization to carry out banking operations and activities or deliver banking products and services, (ii) such banking organization’s results of operations, or (iii) the financial stability of the financial sector. The final rule also requires a bank service provider to notify each of its affected customers as soon as possible when it determines that it has experienced a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption for four or more hours. Compliance with the final rule was required by May 1, 2022. This new rule and the earlier such policy statements and regulations indicate that financial institutions should design multiple layers of security controls to establish lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing internet-based services of the financial institution. A financial institution’s

management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the institution’s operations after a cyber-attack involving destructive malware. A financial institution is expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the institution or its critical service providers fall victim to this type of cyber-attack.

Federal statutes and regulations, including the GLB Act and the Right to Financial Privacy Act of 1978, limit the Company’s and the Bank’s ability to disclose non-public information about consumers, customers and employees to nonaffiliated third parties. Specifically, the GLB Act requires disclosure of the Company’s privacy policies and practices relating to sharing non-public information and enables retail customers to opt out of the institution’s ability to share information with unaffiliated third parties under certain circumstances. The GLB Act also requires the Company and the Bank to implement a comprehensive information security program that includes administrative, technical and physical safeguards to ensure the security and confidentiality of customer records and information and, if applicable state law is more protective of customer privacy than the GLB Act, financial institutions, including the Bank, will be required to comply with such state law. In addition to their obligations to safeguard customer information under GLB Act regulations, financial institutions, like the Bank, are subject to regulations that require the institutions when they become aware of an incident of unauthorized access to sensitive customer information, to conduct a reasonable investigation to promptly determine the likelihood that the information has been or will be misused. If the institution determines that misuse of the sensitive customer information has occurred or is reasonably possible, it should notify the affected customers as soon as possible. An increasing number of state laws and regulations have been enacted in recent years to implement privacy and cybersecurity standards and regulations, including data breach notification and data privacy requirements. This trend of state-level activity is expected to continue to expand, requiring continual monitoring of developments in the states in which the Company's customers are located and ongoing investments in the Company's information systems and compliance capabilities.

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

Examination and enforcement by the state and federal banking agencies, including the CFPB, and other such enforcement authorities, for non-compliance with consumer protection laws and their implementing regulations have increased and become more intense. Due to these heightened regulatory concerns, including increased enforcement of the CRA by the federal banking agencies, and the powers and authority of the CFPB, the Bank may incur additional compliance costs or be required to expend additional funds for investments in its local community or other assessments areas. Federal banking regulators have significantly increased their focus on compliance by banks with existing regulations, including those that seek to prevent unfair and deceptive trade practices, under the Biden administration, including a focus on deposit and other service charges and fees banks charge customers who overdraw their accounts or have checks or other items presented when a customer’s account does not have sufficient funds to cover those checks or other items.

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

New regulations and statutes are regularly proposed that contain wide-ranging provisions for altering the structures, regulations and competitive relationships of the nation’s financial institutions. The Company cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which the Company’s business may be affected by any new regulation or statute or change in applicable rules or regulations. Even if modifications are enacted to existing or proposed regulations, including raising certain assets thresholds above those currently in place, the Company may continue to face enhanced scrutiny from its regulators who may expect it to continue to comply with the current, more stringent requirements as part of their safety and soundness and compliance examinations and general oversight of the Company’s operations.

Competition

The banking business is highly competitive. The Company’s primary market areas consist of Wilson, Trousdale, Davidson, Rutherford, DeKalb, Smith, Sumner, Putnam and Williamson Counties in Tennessee. The Company competes with numerous commercial banks and savings institutions with offices in these market areas. In addition to these competitors, the Company competes for loans with insurance companies, private equity firms, regulated small loan companies, credit unions, and certain government agencies. The Company also

competes with numerous companies and financial institutions engaged in similar lines of business, such as mortgage banking companies, brokerage companies and non-bank lending companies. Also, technology has lowered barriers to entry and made it possible for nonbanks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems. Many of the Company's non-bank competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than the Bank can. Continued consolidation in the financial services industry has contributed to increases in the number of large competitors the Company faces in its markets. Some of the Company’s competitors have significantly greater financial resources and offer a greater number of branch locations. To offset this advantage of its larger competitors, the Company believes it can attract customers by providing loan and management decisions at the local level and by being more responsive to customers than some of its larger competitors. The Company does not experience significant seasonal trends in its operations.

Monetary Policies

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

Human Capital

As of February 23, 2024, the Company and the Bank collectively employed 584 full-time equivalent employees. As an independent, community-based bank, the Bank strives to provide friendly, professional, personal service from a caring staff, while offering an extensive assortment of financial services to its customers. As such, the Bank’s employees are central to the successful execution of its business strategy.

The Bank strives to recruit, attract and retain employees and future leaders whose skills and experience advance the mission of the Bank. The Bank's Human Resources Department works closely with its Training Department, managers and mentors to ensure a positive start for new employees. With regard to talent development, the Bank works to identify future leaders within the Bank to develop the skills necessary for career growth. The Bank is committed to professional development for all of its employees through internal and external training programs, mentorships and dedicated leadership workshops. In 2023, an employee engagement survey was conducted with a response rate of 95%. The survey resulted in an employee engagement score of 84% and an employee satisfaction rate of 87%. Although these are considered strong scores by industry observers, the Bank continually works to improve its relations with its employee and those employees’ experiences. In 2023, the Bank's retention rate was 89%.

The Bank strives to hire, train and develop a diverse workforce because it believes doing so allows it to better meet the financial needs of the diverse members of the communities the Bank serves. The Bank believes that all employees should feel a sense of belonging where they work and that collaboration among employees of diverse backgrounds improves the day-to-day experience of all of its employees.

The health and safety of the Bank’s employees has been and continues to be a top priority.

In addition to the substantial investments in employee professional development and safety, the Bank’s benefits and compensation programs are designed to ensure it recruits and retains top talent. The Bank offers employees a comprehensive health benefits package, provides a 401(k) match of $0.50 on the dollar on the first 8% of an employee's contributions to encourage retirement savings, and structures its bonus program for employees to create meaningful performance-based incentives. The Bank believes that these programs, combined with an intentional focus to create a positive, values-based culture will help to ensure that the Bank retains its status as a leading community bank in the markets that it serves.

Serving the needs of all of the members of the Company’s communities also remains a vital part of the Bank’s and the Company’s mission. Besides continuing its annual donations, fundraising and sponsorships in 2023, the Bank’s departments and employees were able to support local nonprofit organizations of their choosing through the We Believe Together giving program – including hundreds of hands-on volunteer hours with the recipient organizations that could permit them. The Bank created the We Believe Together Program in 2017 as a way for employees to contribute work hours and earn matching contribution funds from the Bank for local charities. The Bank also actively participates in the School Bank Program which allows elementary students to become familiar with banking at a young age. The Company also sponsors popular community events in its market areas, including the annual Southern Home & Garden Expo and the Wilson County Fair.

Environmental Matters

There is an increasing concern among individuals and governments over the risks of climate change and related environmental sustainability and the Company’s management and board is continuing to monitor developments in this area and evaluate those things that the Company can do to aid in addressing these concerns. To date, the Company has taken steps to reduce the amount of paper it uses by encouraging clients to receive digital statements. The use of e-signatures by clients has also increased in recent years, further reducing the amount of paper that the Company utilizes in its operations. Expansion of online and digital banking tools in recent years has allowed the Bank to further reduce the number of trips that customers have to make in person to branch locations. These digital and online offerings include remote deposit and mobile banking applications that allow customers to deposit checks without the need for physical delivery to the Bank’s branches.

In addition, the Bank's operations center contains many environmentally friendly features, including solar panels, LED motion-activated lighting and an HVAC computer-controlled system.

Information about our Executive Officers

The following information regarding the Company’s executive officers is included in Part I of this report in lieu of being included in the Company’s definitive proxy materials to be filed in connection with the Company’s 2024 Annual Meeting of Shareholders.

John McDearman (54) – Mr. McDearman is President and Chief Executive Officer of the Company and Chief Executive Officer of the Bank. Mr. McDearman joined the Bank in November of 1998. He has held positions in branch administration and commercial lending. From November 2002 to January 2009, he held the position of Senior Vice President-Central Division of the Bank. From January 2009 to January 2018, he served as Executive Vice President of the Bank and from January 2018 to January 1, 2020, he served as President of the Bank. Prior to joining the Bank in 1998, he was Assistant Vice President, Banking Center Manager for NationsBank, Chattanooga, Tennessee, a position he held from 1994 to 1998. Mr. McDearman also serves on the Boards of Directors of the Company and the Bank, including as the Chairman of the Bank’s Board of Directors.

John Foster (51) – Mr. Foster joined the Bank in January 1998. He has held positions in branch administration and consumer lending. From August 2017 to July 2018, Mr. Foster served as Senior Vice President/Head of Consumer Lending for the Bank, after having served as a Senior Vice President of the Bank from January 2013 to August 2017. From July 2018 to April 2019, he served as Executive Vice President/Small Business & Consumer Lending for the Bank. From April 2019 to January 1, 2020, he served as the Bank’s Executive Vice President/Chief Consumer/Commercial Banking Officer. Currently, he serves as President of the Bank, a position he has held since January 1, 2020.

Lisa Pominski (59) – Ms. Pominski is Executive Vice President and the Chief Financial Officer of the Bank and the Company, positions she has held since January 2017 and September 1997, respectively, and is the Company’s principal financial and accounting officer. Ms. Pominski has held several positions with the Bank including Asst. Cashier, Asst. Vice President and Senior Vice President since the Bank’s formation in May of 1987. Prior to 1987 Ms. Pominski was employed by People’s Bank, Lebanon, Tennessee.

Clark Oakley (54) – Mr. Oakley joined the Bank in October of 1995. He has held positions in mortgage origination and branch administration. From 2008 to 2016 he held the position of Senior Vice President- Eastern Division of the Bank, and since January 1, 2017, he has served as Executive Vice President and Chief Operating Officer of the Bank. Prior to joining the Bank, Mr. Oakley was most recently employed at Union Planters Bank in Alexandria, Tennessee. His primary duties include overseeing the operations of the Company and the Bank, including information technology and electronic banking.

Taylor Walker (39) – Mr. Walker has served as the Bank’s Chief Credit Officer since January 1, 2023. Prior to this he was employed by the Bank as Executive Vice President – Head of Commercial Lending since April 2022. Prior to that he served as Senior Vice President – Head of Commercial Lending from January 2021 through March 2022. From January 2017 through December 2022, Mr. Walker served as the Bank’s Senior Vice President and North Region President. Before that he was a Vice President and Business Development Manager from January 2016 through December 2016 and a Vice President and Office Manager from August 2012 through December 2015.

Available Information

The Company’s headquarters is located at 623 West Main Street, Lebanon, Tennessee where its phone number is (615) 444-2265. Its website is http://www.wilsonbank.com. Please note that the Company’s website address is provided as an inactive textual reference only. The Company makes available free of charge on its website the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after it files or furnishes such materials

to the SEC. The information provided on the Company’s website is not part of this report, and is therefore not incorporated by reference herein unless such information is otherwise specifically incorporated by reference.

Item 1A. Risk Factors.

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

Summary Risk Factors

The Company’s business is subject to a number of risks, including risks that may prevent the Company from achieving its business objectives or may adversely affect its business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are not limited to, risks related to:

Interest Rate Risks

● The Company’s net interest margin, and consequently its net earnings, are significantly affected by interest rate levels and movements in short-term rates as well as competitive pressures the Company faces.

● The Company’s hedging strategy may not be effective, including in the event that interest rates move in unanticipated manners.

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

Credit and Lending Risks

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

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

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

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

● The Company could sustain losses if its asset quality declines.

● Environmental liability associated with commercial lending could result in losses.

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

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

Liquidity and Capital Risks

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

● Excess levels of liquidity could negatively impact the Company’s earnings.

● The ability to maintain required capital levels and adequate sources of funding and liquidity could be impacted by changes in the capital markets and deteriorating economic and market conditions.

Operational and Market Risks

● Negative developments in the U.S. and local economies in the Company’s market areas may adversely impact the Company’s results in the future.

● 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's business may suffer if there are significant declines in the value of real estate.

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

● The Company is dependent on its information technology and telecommunications systems and third-party servicers, and systems failures, interruptions or breaches of security could have an adverse effect on its financial condition.

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

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

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

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

● The Company currently invests in bank owned life insurance and may continue to do so in the future.

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

● The Company’s business is dependent on technology, and an inability to invest in technological improvements may adversely affect the Company’s results of operations and financial condition.

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

● The soundness of other financial institutions, including those with whom the Company has engaged in transactions, could adversely affect the Company.

● Natural disasters and the effects of a changing climate may adversely affect the Company and its customers.

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

● If the Company fails to maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results.

Regulatory and Compliance Risks

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

● The Company, as well as the Bank, operates in an increasingly highly regulated environment and each is supervised and examined by various federal and state regulatory agencies who may adversely affect their ability to conduct business.

● The Company and the Bank must maintain adequate regulatory capital to support their business objectives.

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

● Non-compliance with the USA Patriot Act, the Bank Secrecy Act or other laws and regulations, like those issued by OFAC, could result in fines or sanctions against the Company or the Bank.

Risks Relating to the Company’s Securities

● 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 ability to declare and pay dividends is limited.

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

Interest Rate Risks

The Company’s net interest margin, and consequently its net earnings, are significantly affected by interest rate levels and movements in short-term rates as well as competitive pressures the Company faces.

The Company’s profitability is dependent to a large extent on net interest income, which is the difference between interest income earned on loans and investment securities and other interest-earning assets and interest expense paid on deposits and other borrowings. The absolute level of interest rates as well as changes in interest rates or that affect the yield curve may affect the Company’s level of interest income, the primary component of its gross revenue, as well as the level of its interest expense. Interest rate fluctuations are caused by many factors which, for the most part, are not under the Company’s direct control. For example, national monetary policy has played a significant role in the determination of interest rates and we expect this trend to continue during 2024. Additionally, competition, including competitor pricing, and the resulting negotiations that occur with the Company’s customers also impact the rates the Company collects on loans and the rates it pays on deposits as does its liquidity position and then-current loan demand and its orientation toward loan growth.

Changes in the level of interest rates also may negatively affect the Company’s ability to originate real estate loans, the value of its assets (as is currently the case with the Company’s investment securities portfolio) and its ability to realize gains from the sale of its assets, all of which could ultimately affect the Company’s results of operations and financial condition. A decline in the market value of the Company’s assets may limit the Company’s ability to borrow funds or otherwise create issues for the Company should its liquidity levels decline. As a result, the Company could be required to sell some of its loans and investments under adverse market conditions, upon terms that are not favorable to the Company, in order to maintain its liquidity. If those sales are made at prices lower than the amortized costs of the investments, which is the case with a portion of the Company’s investment securities portfolio at this time, the Company will incur losses. Following changes in the general level of interest rates, the Company’s ability to maintain a positive net interest spread and to increase its net interest margin is dependent on its ability to increase (in a rising rate environment) or maintain or minimize the decline in (in a falling rate environment) its loan offering rates, minimize increases on its deposit rates in a rising rate environment or promptly reduce the rates it pays on deposits in a falling rate environment, and maintain an acceptable level and mix of funding. Although at times the Company has implemented strategies it believes will reduce the potential effects of changes in interest rates on its net interest income, these strategies may not always be successful. Accordingly, changes in levels of market interest rates could materially and adversely affect

the Company’s net income, net interest income and net interest margin, asset quality, loan origination volume, liquidity, and overall profitability. The Company cannot assure you that it can minimize its interest rate risk.

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

Short-term interest rates rose significantly in 2022 and continued to be at elevated levels throughout 2023. Short-term interest rates are expected to stabilize during the first half of 2024 at current elevated levels, and potentially start to decline in the second half of 2024. In an elevated rate environment the Bank’s ability to maintain or increase the rates it charges on loans while limiting any further increase in, or potentially reducing, the rates it pays on deposits will be critical to maintaining or expanding the Company’s net interest margin. Elevated levels of interest rates, like those experienced in 2022 and 2023, can have a negative impact on the Company's business by reducing the amount of money its clients borrow or by adversely affecting their ability to repay outstanding loan balances that may increase due to adjustments in their variable rates. In addition, during the recent rising rate environment, the rates the Bank paid on its deposits increased, which had an increasingly negative impact on the Company’s net interest margin over the year. The Company expects deposit costs to continue to remain elevated during the first half of 2024 due to the expected persistence of heightened levels of short-term interest rates, increased levels of brokered deposits, the expected repricing of a portion of the Bank's time deposits that have been below the current market rates and competition in the Bank’s markets. In addition, many of the Bank’s variable rate loans have loan floors that limit the Bank’s ability to capture the full benefit of initial increases in short-term rates, though substantially all of these floors have been exceeded at this point.

While short-term interest rates are expected to stabilize through the first half of 2024, the Company believes that these rates may begin to fall during the second half of 2024. Were that to happen, the Company’s ability to lower the rates it pays on deposits will be critical to the Company’s ability to maintain or slow any potential decline in its net interest margin, as the Company anticipates that loan pricing in a falling rate environment would be competitive and existing loans that the Company has made may be refinanced at lower interest rates, particularly in the case of fixed rate loans with no prepayment penalties. The Company may also be limited in its ability to lower, in a timely manner, the rates it pays on its brokered deposits and other time deposits with stated maturities, the balances of which increased during 2023.

The Company attempts to manage its risk from changes in market interest rates by adjusting the rates, maturities, repricing characteristics, and balances of the different types of its interest-earning assets and interest-bearing liabilities and by utilizing hedging strategies to reduce the impact of changes in rates. Interest-rate risk management techniques are not exact. From time to time the Company has repositioned a portion of its investment securities portfolio in an effort to better position its balance sheet for potential changes in short-term rates. The Company employs the use of models and modeling techniques to quantify the levels of risks to net interest income, which inherently involve the use of assumptions, judgments, and estimates. While the Company strives to ensure the accuracy of its modeled interest rate risk profile, there are inherent limitations and imprecisions in this determination and actual results may differ.

The Company’s hedging strategy may not be effective, including in the event that interest rates move in unanticipated manners.

At times, the Company has entered into certain hedging transactions including interest rate swaps, which are designed to lessen elements of its interest rate exposure. During the second quarter of 2020, the Company entered into a hedge that converted the fixed interest rates on certain of the Bank’s outstanding loans to Secured Overnight Financing Rate (“SOFR”)-based variable interest rates (as a successor to LIBOR-based variable rates). The Company terminated this hedging transaction in 2023. In the event that short-term interest rates do not change in the manner that the Company anticipates at the times it institutes its hedging strategies or at the pace that the Company anticipated, including if interest rates were to increase further following the hedge termination in 2023, such transactions may materially and adversely affect its results of operations.

Hedging creates certain risks for the Company, including the risk that the other party to the hedge transaction will fail to perform (counterparty risk, which is a type of credit risk), and the risk that the hedge will not fully protect the Company from loss as intended (hedge failure risk). Unexpected counterparty failure or hedge failure could have a significant adverse effect on the Company’s liquidity and earnings.

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

Changes in interest rates can negatively affect the performance of most of the Company’s investment securities. Interest rate volatility can reduce unrealized gains or increase unrealized losses in the Company’s portfolio, as was the case in 2022 and 2023 with the rising rate environment. Interest rates are highly sensitive to many factors including monetary policies, domestic and international economic, social and political conditions and issues, including trade disputes and global health pandemics, and other factors beyond the Company’s control. Fluctuations in interest rates can materially affect both the returns on and market value of the Company’s investment securities. Additionally, actual investment income and cash flows from investment securities that carry prepayment risk, such as mortgage-backed securities and callable securities, may materially differ from those anticipated at the time of investment or subsequently as a result of changes in interest rates and market conditions.

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

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

In addition, from time to time the Company may restructure portions of its investment securities portfolio as part of its asset liability management strategies or in response to liquidity needs, and it may incur losses, which may be material, in connection with any such restructuring. The Company currently has a significant amount of unrealized losses in its securities portfolio. These losses are largely the result of the rising interest rate environment the Company experienced in 2022 and 2023, and the continued elevated interest rate environment the Company is experiencing so far in 2024. If the Company were to sell any of these securities before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs, the Company would be required to recognize these losses and the recognition of those losses could materially and adversely affect the Company’s results of operations, capital and financial condition.

Credit and Lending Risks

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

As of December 31, 2023, approximately 94% of the Company’s loans held for investment were secured by real estate. Of this amount, approximately 39% were commercial and multi-family real estate loans, 34% were residential 1-4 family real estate loans and 1-4 family equity lines of credit and 27% were construction and development and farmland loans. In total these loans made up approximately 91% of the Company’s non-performing loans at December 31, 2023. Construction and development lending is generally considered to have relatively high credit risks because the principal is concentrated in a limited number of loans with repayment dependent on the successful completion and operation of the related real estate project. Real estate industry pricing dynamics in the geographical markets in which the Company operates can vary from year to year, and with respect to construction, can vary between project funding and project completion. Asset values to which the Company underwrites loans can fluctuate from year to year and impact collateral values and the ability of its borrowers to repay their loans.

Weakness in residential real estate market prices as well as demand could result in price reductions in home and land values adversely affecting the value of collateral securing some of the construction and development loans that the Company holds. Reduced demand for new residential mortgage loans, whether the result of higher mortgage interest rates, inflationary pressures on building costs, depressed inventory levels or other factors, could also continue to cause reduced demand for mortgage loans, which would reduce the Company’s net interest income and noninterest income levels. If economic and real estate market conditions further deteriorate in the Company’s markets, the Company may experience increases in non-performing loans and other real estate owned, increased losses and expenses from the management and disposition of non-performing assets, increased charge-offs from the disposition of non-performing assets, increases in provision for credit losses, and increases in operating expenses as a result of the allocation of management time and resources to the collection and work out of these loans, all of which would negatively impact the Company’s financial condition and results of operations.

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

At December 31, 2023, the Company had significant credit exposures to borrowers in certain businesses, including new home builders and land subdividers. If the challenging economic conditions currently being experienced as a result of inflation and elevated short-term interest rates extend deep into 2024 or beyond, or worsen (including as a result of increased geopolitical tensions around the world), and negatively impact real estate conditions in the Company’s markets more than has been the case thus far, these industry or other concentrations could result in higher than normal deterioration in credit quality, past dues, loan charge-offs and collateral value declines, all of which would negatively impact the Company’s financial condition and results of operations. Furthermore, any of the Company’s large credit exposures that deteriorate unexpectedly could cause the Company to have to make significant additional loan loss provisions, negatively impacting the Company’s financial condition and results of operations.

A substantial focus of the Company’s marketing and business strategy is to serve small businesses in its market areas. As a result, a relatively high percentage of the Company’s loan portfolio consists of commercial loans primarily to small businesses. Small businesses frequently have smaller market shares than their competition, may be more vulnerable to economic downturns, or other operational challenges like those resulting from supply chain disruption, labor shortages or inflationary pressures on their costs, often need substantial additional capital to expand or compete and may experience substantial volatility in operating results, any of which may impair a borrower’s ability to repay a loan. In addition, the success of a small business often depends on the management skills, talents and efforts of one or two people or a small group of people, and the death, disability or resignation of one or more of these people could have an adverse impact on the business and its ability to repay its obligation to the Company. If general economic conditions negatively impact the markets in which the Company operates and small businesses are adversely affected or the Company’s borrowers are otherwise harmed by adverse business developments, the ability of such businesses to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact the Company’s results of operations and financial condition

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

The Company maintains an allowance for credit losses on loans, securities and off-balance sheet exposures. 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. The Company’s management makes various assumptions and judgments about the expected losses in the Company’s loan portfolio, including the credit worthiness of the Company’s borrowers and the collateral securing the loans. Utilizing objective and subjective factors, the Company maintains an allowance for credit losses, established through a provision for credit losses charged to expense, to cover its estimate of the current expected credit losses in its loan and securities portfolios. In determining the size of this allowance, the Company utilizes estimates based on analyses of volume and types of loans, internal loan classifications, trends in classifications, volume and trends in delinquencies, nonaccruals and charge-offs, loss experience of various loan categories, national and local economic conditions, including unemployment statistics, industry and peer bank loan quality indications, and other pertinent factors and information. Actual losses are difficult to forecast, especially if those losses stem from factors beyond the Company’s historical experience or are otherwise inconsistent with its credit quality assessments. If the Company’s assumptions are inaccurate, its current allowance may not be sufficient to cover potential credit losses, and additional provisions may be necessary which would negatively impact its results of operations and financial condition.

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

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

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

The Company could sustain losses if its asset quality declines.

The Company’s earnings are significantly affected by its ability to properly originate, underwrite and service loans. The Company could sustain losses if it incorrectly assesses the creditworthiness of its borrowers or fails to detect or respond to deterioration in asset quality in

a timely manner. Problems with asset quality, particularly within the commercial real estate segment of the Company’s loan portfolio, could cause the Company’s interest income and net interest margin to decrease and its provisions for credit losses and non-interest expenses to increase, which could adversely affect its results of operations and financial condition.

Environmental liability associated with commercial lending could result in losses.

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

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

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

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

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

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

Liquidity and Capital Risks

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

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

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

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

The Company’s ability to grow its loan portfolio is dependent on its ability to fund loan grow, which the Company primarily seeks to do through growth in deposits. Deposit levels may be affected by a number of factors, including demands by customers, rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, general economic and market conditions and other factors, including a loss of confidence in the Company by its customers. Loan repayments are a relatively stable source of funds but are subject to the borrowers’ ability to repay loans, which can be adversely affected by a number of factors including changes in general economic and geopolitical conditions, adverse trends or events affecting business industry groups or specific businesses, declines in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters, prolonged government shutdowns and other factors. Furthermore, loans generally are not readily convertible to cash. Accordingly, the Company may be required from time to time to rely on secondary sources of liquidity to meet growth in loans, deposit withdrawal demands or otherwise fund operations. Such secondary sources include advances from the FHLB Cincinnati, brokered deposits, secured and unsecured federal funds lines of credit from correspondent banks, FRB borrowings, liquidating securities that the company owns in its investment securities portfolio and/or accessing the equity or debt capital markets. The Company increased its level of brokered deposits during 2023 to provide additional liquidity. These deposits can require the Company to pay higher rates of interest than the Company pays on deposits from its customers. The competition for deposits the Company is currently experiencing may limit its ability to grow deposits, which may result in the Company seeking alternative sources of funding, as it did in 2023, that are more expensive or limiting its loan growth, either of which could have a material adverse effect on its financial condition or results of operations.

The Company anticipates it will continue to rely primarily on deposits, loan repayments, interest-bearing deposits in other banks and cash flows from its investment securities to provide liquidity. Additionally, where necessary, the secondary sources of borrowed funds described above, like advances from the FHLB Cincinnati, which the Bank has accessed from time to time, will be used to augment the Company’s primary funding sources. If the Company is unable to access any of these secondary funding sources when needed, it might be required to convert illiquid assets, like its bank owned life insurance contracts, to cash, which could result in the payment of associated taxes and penalties, or be unable to meet its customers’ or creditors’ needs, which would adversely affect its financial condition, results of operations, and liquidity.

The Company’s and the Bank’s ability to maintain required capital levels and adequate sources of funding and liquidity could be impacted by changes in the capital markets and deteriorating economic and market conditions.

Federal and state bank regulators require the Company and the Bank to maintain adequate levels of capital to support operations. At December 31, 2023, the Company’s and the Bank’s regulatory capital ratios were at “well-capitalized” levels under regulatory guidelines. Growth in assets (either organically or as a result of acquisitions) at rates in excess of the rate at which the Bank’s capital is increased through retained earnings, or significant losses, including as a result of selling investment securities that are in a loss position at the time of sale, will reduce its capital ratios unless it continues to increase capital. Failure by the Bank to meet applicable capital guidelines or to satisfy certain other regulatory requirements could subject the Bank and the Company to a variety of enforcement remedies available to the federal regulatory authorities and would negatively impact the Company’s ability to pursue expansion opportunities, including through the opening of new branch locations.

The Company may need to raise additional capital (including through the issuance of common stock or additional Tier 2 capital instruments) in the future to provide the Company and the Bank with sufficient capital resources and liquidity to meet their commitments and business needs or in connection with growth or as a result of deterioration in asset quality. The Company’s and the Bank’s ability to maintain capital levels, sources of funding and liquidity could be impacted by negative perceptions of their businesses or prospects, changes in the capital markets and deteriorating economic and market conditions. The Bank is required to obtain regulatory approval in order to pay dividends to the Company unless the amount of such dividends does not exceed its net income for that calendar year plus retained net income for the preceding two years. Any restriction on the ability of the Bank to pay dividends to the Company could impact the Company’s ability to continue to pay dividends on its common stock or its ability to pay interest on its indebtedness.

In addition, the Company receives additional capital from the issuance of common stock under its dividend reinvestment plan. Any unexpected termination or suspension of the Company’s dividend reinvestment plan, or the related payment of its historical biannual cash dividend, could materially and adversely affect the Company’s capital levels.

Operational and Market Risks

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

The Company’s financial performance is highly dependent on the business environment in the markets where it operates and in the U.S. as a whole. Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity, investor or business confidence, consumer sentiment, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, natural disasters, international trade disputes and retaliatory tariffs, supply-chain disruptions, labor shortages, terrorist attacks, global pandemics, acts of war, or a combination of these or other factors. Inflation rose sharply at the end of 2021 and continued at heightened levels throughout 2023, and, while inflation started to ease at the end of 2023, prices are currently expected to remain elevated for many goods and services in the near term. The Company and its customers experienced an uncertain and volatile economic environment during 2023, and economic growth and activity began to show signs of decline in the second half of 2023 due to issues of national security, inflation, and the pressure of sustained high levels of short-term interest rates. The Company believes that it is possible it and its customers will continue to experience an uneven or declining economic environment in 2024 for many of the same reasons. A worsening of business and economic conditions (including as a result of escalating geopolitical tensions around the world, including hostilities in the Middle East), or persistent inflationary pressures, and actions taken by the Federal Reserve in response thereto, or supply chain disruptions or labor shortages, generally or specifically in the principal markets in which the Company conducts business could have adverse effects, including the following:

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

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

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

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

● an increase in competition resulting from financial services companies.

There can be no assurance that economic conditions will improve in the near term or that conditions will not worsen. Such conditions could adversely affect the Company’s business, financial condition, and results of operations.

In addition, over the last several years, the federal government has shut down several times, in some cases for prolonged periods. It is possible that the federal government may shut down again in the future, particularly in light of the evenly divided United States Congress. If a prolonged government shutdown occurs, it could significantly impact business and economic conditions generally or specifically in the Company’s markets, which could have a material adverse effect on the Company’s results of operations and financial condition.

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

The Company operates primarily in Wilson, DeKalb, Trousdale, Smith, Rutherford, Putnam, Davidson, Williamson and Sumner counties in Tennessee and certain of the surrounding counties and substantially all of its loan customers and most of its deposit and other customers live or have operations in this same geographic area. Accordingly, the Company’s success significantly depends upon the growth in population, income levels, and deposits in these areas, along with the continued attraction of business ventures to the area and the area’s economic stability and strength of the housing market, and its profitability is impacted by the changes in general economic conditions in these markets. The Company cannot assure investors that economic conditions in its markets will not remain challenged during 2024 or thereafter, and continued volatile economic conditions in the Company’s markets could cause the Company to constrict its growth rate, affect the ability of its customers to repay their loans and negatively impact the Company’s financial condition and results of operations.

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

The Company’s business may suffer if there are significant declines in the value of real estate.

The market value of real estate can fluctuate significantly in a short period of time, including as a result of market conditions in the geographic area in which the real estate is located. If the value of the real estate serving as collateral for the Company’s loan portfolio

were to decline materially, a significant part of the Company’s loan portfolio could become under-collateralized. If the loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, the Company may not be able to realize the value of the security anticipated when it originated the loan, which in turn could have an adverse effect on the Company’s allowance and provision for credit losses and its financial condition, results of operations and liquidity..

Most of the Company’s foreclosed assets have historically been comprised of real estate properties. The Company carries these properties, if any, at their estimated fair values less estimated selling costs. While the Company believes the carrying values for such assets are reasonable and appropriately reflect current market conditions, there can be no assurance that the values of such assets will not further decline prior to sale or that the amount of proceeds realized upon disposition of foreclosed assets will approximate the carrying value of such assets. If the proceeds from any such dispositions are less than the carrying value of foreclosed assets, the Company will record a loss on the disposition of such assets, which in turn could have an adverse effect on the Company’s results of operations.

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

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

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

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

• identify and expand into suitable markets;

• obtain regulatory and other approvals;

• identify and acquire suitable sites for new banking offices;

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

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

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

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

• implement additional policies, procedures and operating systems required to support and monitor the risk associated with such growth.

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

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

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

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

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

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

The Company’s operations rely on the secure processing, storage and transmission of confidential, proprietary, personal and other information in its computer systems and networks. Although the Company takes protective measures and endeavors to modify these systems as circumstances warrant, the security of its computer systems, software and networks may be vulnerable to breaches, unauthorized access, misuse, computer viruses or other malicious code and other events that could have a security impact. The Company provides its customers the ability to bank remotely, including over the Internet or through their mobile device. The secure transmission of confidential information is a critical element of remote and mobile banking. The Company’s network, and the systems of parties with whom it contracts or on which it relies, as well as those of its customers and regulators, could be vulnerable to unauthorized access, computer viruses, phishing schemes, social engineering, spam attacks, ransomware attacks, human error, natural disasters, power loss and other security breaches. Sources of attacks vary and may include hackers, disgruntled employees or vendors, organized crime, terrorists, foreign governments, corporate espionage and activists. In recent periods, there continues to be a rise in electronic fraudulent activity (including wire fraud), security breaches and cyber-attacks within the financial services industry, especially in the commercial banking sector due to cyber criminals targeting commercial bank accounts or seeking to infiltrate legitimate transactions. The Company believes these types of efforts will continue to increase in frequency and in their level of sophistication. The Company has established policies, processes, and procedures to identify, measure, monitor, mitigate, report, and analyze risks associated with fraud, and continue to invest in systems, resources, and controls to detect and prevent it. There are inherent limitations, however, to the Company’s risk management strategies, systems, and controls as they may exist, or develop in the future. The Company may not appropriately anticipate, monitor, or identify these risks. If the Company’s risk management framework proves ineffective in connection with any fraudulent activity, it could suffer unexpected losses, it may have to expend resources detecting and correcting the failure in its systems, and it may be subject to potential claims from third parties and government agencies. The Company may also suffer reputational damage. Any of these consequences could adversely affect the Company’s business, financial condition, or results of operations.

Cybersecurity risks for banking organizations have significantly increased in recent years in part because of the proliferation of new technologies, and the use of the Internet and telecommunications technologies to conduct financial transactions. For example, cybersecurity risks may increase in the future as the Company continues to increase its mobile-payment and other Internet-based product offerings and expand its internal use of cloud-based products and applications. Even the most advanced internal control environment may be vulnerable to compromise. Targeted social engineering attacks are becoming more prevalent and sophisticated, and are extremely difficult to prevent. Generative artificial intelligence is further increasing risks in this area, including by making fraud detection more difficult, particularly with detection devices that use voice recognition or authentication. The techniques used by bad actors change frequently, may not be recognized until launched and may not be recognized until well after a breach has occurred. Additionally, the existence of cyber-attacks or security breaches at third parties with access to the Company’s data, such as vendors, may not be disclosed to the Company in a timely manner. Consistent with industry trends, the Company remains at risk for attempted electronic fraudulent activity, as well as attempts at security breaches and cybersecurity-related incidents. The Company spends significant capital and other resources to protect against the threat of security breaches and computer viruses, and may be required to spend significant capital and other resources to alleviate problems caused by security breaches or viruses. To the extent that the Company’s activities or the activities

of its vendors, regulators or customers involve the storage and transmission of confidential information, security breaches (including breaches of security of customer, vendor or regulatory systems and networks) and viruses could expose the Company to claims, litigation and other possible liabilities. Any inability to prevent or promptly detect security breaches or computer viruses could also cause existing customers to lose confidence in the Company’s systems and could adversely affect its reputation, results of operations and ability to attract and retain customers and businesses. In addition, a security breach could also subject the Company to additional regulatory scrutiny, expose it to civil litigation and possible financial liability and cause reputational damage.

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

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

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

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

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

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

Some of the Company’s competitors, including credit unions, are not subject to certain regulatory constraints, such as the CRA, which requires the Company to, among other things, implement procedures to make and monitor loans throughout the communities it serves, and which is expected to become more expansive in 2024. Credit unions also have federal tax exemptions that may allow them to offer lower rates on loans and higher rates on deposits than taxpaying financial institutions such as commercial banks. In addition, non-depository institution competitors are generally not subject to the extensive regulation applicable to institutions, like the Bank, that offer federally insured deposits, which affords them the advantage of operating with greater flexibility and lower cost structures. Other

institutions may have other competitive advantages in particular markets or may be willing to accept lower profit margins on certain products.

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

The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as mobile payment and other automatic transfer and payment systems, and for banks that do not have a physical presence in the Company’s markets to compete for deposits. The absence of regulatory requirements may give non-bank financial companies a competitive advantage over the Company.

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

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

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

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

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

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

Certain accounting policies are critical to presenting the Company’s financial condition and results of operations. They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. Because of the uncertainty of estimates involved in these matters, the Company may be required to do one or more of the following: significantly increase the allowance for credit losses or sustain loan losses that are significantly higher than the reserve provided; reduce the carrying value of an asset measured at fair value; recognize an other-than-temporary impairment of securities; or significantly increase the Company’s accrued tax liability. Any of these could have a material adverse effect on the Company’s business, financial condition or results of operations. For a discussion of the Company’s critical accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” contained in the 2023 Annual Report.

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

The Company had approximately $59.6 million in general, hybrid and separate account BOLI contracts at December 31, 2023. BOLI is an illiquid long-term asset that provides tax savings because cash value growth and life insurance proceeds are not taxable, subject to certain exceptions. However, if the Company needed additional liquidity and converted the BOLI to cash, such transaction would be subject to ordinary income tax and applicable penalties. The Company is also exposed to the credit risk of the underlying securities in the investment portfolio and to the insurance carrier’s credit risk (in a general account contract). If BOLI was exchanged to another carrier, additional fees would be incurred and a tax-free exchange could only be done for insureds that were still actively employed by the Company at that time. There is interest rate risk relating to the market value of the underlying investment securities associated with the BOLI in that there is no assurance that the market value of these securities will not decline. Investing in BOLI exposes the Company to liquidity, credit and interest rate risk, which could adversely affect the Company’s results of operations, financial condition and liquidity.

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

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

The Company’s business is dependent on technology, and an inability to invest in technological improvements may adversely affect the Company’s results of operations and financial condition.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. The Company has made significant investments in data processing, management information systems and internet banking accessibility, but additional investments may be required or necessary. The Company’s future success will depend in part upon its ability to create additional efficiencies in its operations through the use of technology. Many of the Company’s competitors have substantially greater resources to invest in technological improvements. The Company cannot make assurances that its technological improvements will increase its operational efficiency or that it will be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its customers.

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

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

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

The soundness of other financial institutions, including those with whom the Company has engaged in transactions, could adversely affect the Company.

The Company’s ability to engage in routine funding transactions could be adversely affected by the actions and financial stability of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. The Company has exposure to various counterparties, including brokers and dealers, commercial and correspondent banks, and others. As a

result, defaults by, or rumors or questions about, one or more financial services institutions, or the financial services industry generally, may result in market-wide liquidity problems and could lead to losses or defaults by such other institutions. Such occurrences could expose the Company to credit risk in the event of default of one or more counterparties and could have a material adverse effect on the Company’s financial position, results of operations and liquidity.

Natural disasters and the effects of a changing climate may adversely affect the Company and its customers.

The Company’s operations and customer base are located in markets where natural disasters, including tornadoes, severe storms, fires and floods often occur. Such natural disasters, like the tornado that struck the Company’s markets in March 2020, could significantly impact the local population and economies and the Company’s business, and could pose physical risks to its properties. Although the Company maintains insurance coverages for such events, a significant natural disaster in or near one or more of the Company’s markets could have a material adverse effect on its financial condition, results of operations or liquidity.

In addition to natural disasters, the impact of climate change, such as rising average global temperatures and rising sea levels, and the increasing frequency and severity of extreme weather events and natural disasters such as droughts, floods, wildfires and hurricanes could negatively impact the Company’s operations including its ability to provide financial products and services to its customers. Climate change also has the potential to negatively affect the collateral the Company takes to secure loans that it makes, the valuations of home prices or commercial real estate or the Company’s customers’ (particularly those that are engaged in industries that could be negatively affected by a shift to a low-carbon economy) ability and/or willingness to pay fees, repay outstanding loans or afford new products. Climate change could also cause insurability risk and/or increased insurance costs for the Company or its customers.

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

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

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

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

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

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

Changes in financial accounting and reporting standards, or the interpretation of those standards could affect the way the Company accounts for its operations and these changes could have a material adverse effect on the Company’s financial condition and results of operations.

The Financial Accounting Standards Board and the SEC may change the financial accounting and reporting standards, or the interpretation of those standards, that govern the preparation of the Company’s external financial statements from time to time. The impact of these changes or the application thereof on the Company’s financial condition and operations can be difficult to predict.

Regulatory and Compliance Risks

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

Federal bank regulators continue to closely scrutinize financial institutions, and additional restrictions have been proposed or adopted by regulators and by Congress. Changes in tax law, federal legislation, regulation or policies, such as bankruptcy laws, deposit insurance, consumer protection laws, laws and regulations regarding fair lending and investments in communities (including the recently adopted changes to the CRA rules), and capital requirements, among others, can result in significant increases in the Company’s expenses and/or charge-offs, which may adversely affect its results of operations and financial condition. Changes in state or federal tax laws or regulations can have a similar impact. State and municipal governments, including the State of Tennessee, could seek to increase their tax revenues through increased tax levies which could have a meaningful impact on the Company’s results of operations. Furthermore, financial institution regulatory agencies may continue to be aggressive in responding to concerns and trends identified in examinations, including in the case of service charges banks impose on customers related to overdrafts and instances in which customers’ accounts do not have sufficient funds to cover items that are presented. Regulatory scrutiny is also expected to remain high following the high profile bank failures in the first half of 2023. These actions and elevated scrutiny could include the issuance of additional formal or informal enforcement or supervisory actions and the imposition of monetary penalties, and whether formal or informal, could result in the Company’s or the Bank’s agreeing to limitations or monetary penalties or to take actions that limit its operational flexibility, restrict its growth, increase its operating expenses, lower the Company’s non-interest income or increase its capital or liquidity levels, any of which could materially and adversely affect the Company’s results of operations and financial condition. Failure to comply with any formal or informal regulatory actions or restrictions, including informal supervisory actions, could lead to further regulatory enforcement actions. Negative developments in the financial services industry, like the turmoil in the banking industry that was experienced in the first half of 2023, and the impact of recently enacted or proposed legislation (or interpretation of existing legislation) in response to those developments could negatively impact the Company’s operations by restricting its business operations, including its ability to originate or sell loans or by requiring it to hold move elevated levels of capital or deduct from its regulatory capital unrealized losses in its securities portfolio, and adversely impact its financial performance. In addition, industry, legislative or regulatory developments may cause the Company to materially change its existing strategic direction, business policies, capital strategies, compensation or operating plans.

Additionally, the Company is subject to laws regarding its handling, disclosure and processing of personal and confidential information of certain parties, such as its employees, customers, suppliers, counterparties and other third parties. The GLB Act requires the Company to periodically disclose its privacy policies and practices relating to sharing such information and enables retail customers to opt out of the Company’s ability to share information with unaffiliated third parties, under certain circumstances. Other laws and regulations impact the Company’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers. In addition to their obligations to safeguard customer information under GLB Act regulations, financial institutions, like the Bank, are subject to regulations that require the institutions when they become aware of an incident of unauthorized access to sensitive customer information, to conduct a reasonable investigation to promptly determine the likelihood that the information has been or will be misused. If the institution determines that misuse of the sensitive customer information has occurred or is reasonably possible, it should notify the affected customers as soon as possible. The Company is subject to laws that require it to implement a comprehensive information security program that includes administrative, technical and physical safeguards to protect the security and confidentiality of customer records and information. Additionally, other legislative and regulatory activity continue to lend uncertainty to privacy compliance requirements that impact the Company’s business. The Company also expects that there will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions. The potential effects of pending legislation are far-reaching and may require the Company to modify its data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

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

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

● explicit standards as to capital and financial condition;

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

● restrictions on permissible non-banking activities; and

● restrictions on dividend payments.

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

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

The Company expects that the current Presidential administration will continue to implement a regulatory reform agenda that is significantly different than that of the prior administration. This reform agenda has included, and its likely to continue to include, an increased level of attention and focus on consumer protection, deposit fees, fair lending and investments in communities, the regulation of loan portfolios and credit concentrations to borrowers impacted by climate change or that operate in industries that would not be favored in a low-carbon economy and heightened scrutiny of BSA and AML requirements among other areas. The Company cannot predict the effects of these changes, including the recently adopted changes to the CRA rules, on its business and profitability. Because government regulation greatly affects the business and financial results of commercial banks and bank holding companies, the Company’s cost of compliance could adversely affect its ability to operate profitably.

The Company and the Bank must maintain adequate regulatory capital to support the Company’s business objectives.

Under regulatory capital adequacy guidelines and other regulatory requirements, the Company and the Bank must satisfy capital requirements based upon quantitative measures of assets, liabilities and certain off-balance sheet items. The satisfaction of these requirements by the Company and the Bank is subject to qualitative judgments by regulators that may differ materially from management’s and that are subject to being determined retroactively for prior periods. Additionally, regulators can make subjective assessments about the adequacy of capital levels, even if the Bank’s reported capital exceeds the “well-capitalized” requirements.

Failure to meet regulatory capital standards could have a material adverse effect on the Company’s business, including damaging the confidence of customers in the Company, and adversely impacting its reputation and competitive position and retention of key personnel. Any of these developments could limit the Company’s access to:

● brokered deposits;

● the FRB discount window;

● advances from the FHLB Cincinnati;

● capital markets transactions; and

● development of new financial services

Failure to meet regulatory capital standards may also result in higher FDIC assessments. If the Bank falls below guidelines for being deemed “adequately capitalized” the FDIC or FRB could impose restrictions on the Company’s activities and a broad range of regulatory requirements in order to effect “prompt corrective action.” The capital requirements applicable to the Company and the Bank are in a process of continuous evaluation and revision in connection with actions of the Basel Committee and the Company’s and the Bank’s regulators. In July 2023, federal banking regulators issued a joint agency proposal that sought to implement the final components of the Basel III Endgame as well as make changes aimed at addressing the underlying causes of the turmoil in the banking industry that was experienced in the first half of 2023 with the failure of certain larger financial institutions. The proposal seeks to revise the capital framework for banks with total assets of $100 billion or more in four main areas of credit risk, market risk, operational risk and credit valuation adjustment risk. The proposal also would require banks with total assets of $100 billion or more to include unrealized gains and losses from certain securities in their capital ratios, to comply with supplementary leverage ratio requirements and to comply with countercyclical capital buffer requirements, if activated. The comment period for these proposed changes ends in the first quarter of 2024 and though the proposal applies only to banks with total assets of $100 billion or more, certain of these more stringent requirements could be imposed on the Company or the Bank through the ongoing regulatory oversight process, which could adversely impact the Company's profitability or, if it fails to satisfy any such requirements, its financial condition and results of operations.

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

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

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

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

Risks Relating to the Company’s Securities

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. As a result, shares of the Company's common stock have less liquidity than shares traded through an organized exchange. Therefore, recent prices at which the stock has traded may not necessarily reflect the actual value of the Company’s common stock. A shareholder’s ability to sell the shares of Company common stock in a timely manner, or in desired amounts, may be substantially limited by the lack of a trading market for the common stock.

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

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

Federal and state banking laws and regulations and state corporate laws restrict the amount of dividends the Company may declare and pay and that the Bank may declare and pay to the Company. For example, FRB regulations implementing the capital rules required under Basel III do not permit dividends unless capital levels exceed those minimum levels required to be adequately capitalized plus those amounts required by the capital conservation buffers. In addition, the FRB has issued supervisory guidance advising bank holding companies to eliminate, defer or reduce dividends paid on common stock and other forms of Tier 1 capital where the company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends, the company’s prospective rate of earnings retention is not consistent with the company’s capital needs and overall current and prospective financial condition or the company will not meet, or is in danger of not meeting, minimum regulatory capital adequacy ratios. Supplements to this guidance reiterate the need for bank holding companies to inform their applicable reserve bank sufficiently in advance of the proposed payment of a dividend in certain circumstances.

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

The Company’s common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in the Company’s common stock is inherently risky for the reasons described in

this “Risk Factors” section and elsewhere in this report and is subject to the equity market forces like other common stock. As a result, if you acquire the Company’s stock, you could lose some or all of your investment

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity

Information Security and Risk Management Overview

The Company places a high priority and focus on securing the confidential information it receives and stores about its borrowers, depositors and other customers and employees as well as sensitive information regarding financial transactions and the Company's information systems. This priority and focus starts at the Company’s board of directors, which is ultimately responsible for risk oversight, establishing the Company’s risk appetite, understanding the Bank’s key risks and assuring the risk management strategy, processes and internal controls are appropriate to manage risk, in each case inclusive of cybersecurity risk. The Company’s board of directors approves an information security policy and program (the “Information Security Policy and Program”), which contains a statement of the Company’s risk appetite with respect to cybersecurity matters, on an annual basis. The Company’s risk appetite includes specific information security risk tolerance thresholds and limits established with the approval of the Company’s board of directors and executive management. Key risk indicators are monitored by the Risk Oversight Committee of the Company’s board of directors (the “Risk Oversight Committee”), which receives quarterly reports from the Company’s Chief Risk Officer, Information Security Officer and Enterprise Risk Management Committee regarding management’s efforts to protect the Company from cybersecurity threats and the general threat landscape facing companies with operational characteristics similar to the Company’s. The Risk Oversight Committee reports quarterly to the Company’s board of directors regarding the Company’s cybersecurity risk oversight processes as the board of directors seeks to ensure the Company is operating within its stated risk appetite.

The Company’s objective for managing cybersecurity risk is to avoid or minimize the impacts of external threat events or other efforts to penetrate, disrupt or misuse the Company’s systems or information. A key part of the Company’s strategy for managing risks from cybersecurity threats is the ongoing assessment and testing of the Company’s processes and practices through auditing, security assessments, tabletop exercises, and other exercises focused on evaluating effectiveness of the Company’s processes and programs. The Company also deploys technical safeguards that are designed to protect its information systems from cybersecurity threats and incidents in a prompt and effective manner with the goal of minimizing disruptions to the Company’s business. The Company has also developed and periodically updates incident response plans that provide a documented framework for responding to actual or potential cybersecurity incidents, including timely notification and escalation to the appropriate management committees and to the Risk Oversight Committee of the board and full board of directors as appropriate. These incident response plans are coordinated through the Information Security Officer (“ISO”) and other key members of management, including the Chief Risk Officer.

The Company’s board of directors delegates authority to the Risk Oversight Committee to assist the board in carrying out its duties of risk oversight, including with respect to cybersecurity risk. The Risk Oversight Committee provides primary oversight of the Company’s enterprise-wide risk posture and the processes established to identify, measure, and monitor the Company’s risk level, including in regards to cybersecurity risk. This oversight includes reviewing and approving the Company’s risk appetite, including with respect to cybersecurity risk, risk related policies, and reviewing quarterly reporting from management on monitoring of performance of the Company against its risk appetite, including in regards to cybersecurity risk. The Risk Oversight Committee is responsible for the oversight, implementation, and maintenance of the Information Security Policy and Program and has delegated to it specific responsibility for the implementation of the program and reviewing management reports in this area. Quarterly reports are provided to the Company’s board of directors that describe the overall status of the Information Security Policy and Program, including, but not limited to:

• Decisions about risk management and control;

• Results of testing, including regular external and internal penetration testing;

• Security breaches or violations and management’s responses; and

• Recommendations for changes to the Information Security Policy and Program.

The Company’s Enterprise Risk Management Committee, which is a management committee consisting of key employees of the Company, including the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Credit Officer, Chief Administrative Officer, Chief Information Officer, and Chief Risk Officer, oversees implementation and monitoring of the Information Security Policy and Program. Testing of the Information Security Policy and Program is accomplished through the use of a comprehensive Information Systems Audit that is performed, at a minimum, on an annual basis by third-party expert consulting firms, the results of which are reviewed with the Risk Oversight Committee and Audit Committee. The company also conducts an internal and external penetration test, at a minimum, on an annual basis by outside expert consulting firms. In addition, in accordance with the Information Security Policy and Program, the Company’s Enterprise Risk Management Committee assesses information security risks on at least an annual basis, or

more often in response to changes in products or services that are offered, technological changes, changes in the threat landscape facing the Company, including as a result of cybersecurity incidents affecting financial institutions or their vendors generally or any change that may materially affect the Company’s risk environment.

The Company’s board of directors has appointed an Information Security Officer (the “ISO”), who has cybersecurity expertise primarily related to cybersecurity assurance, compliance, digital forensics, investigations, process design and collegiate instruction who holds various certifications in areas relevant to cybersecurity risk monitoring. The ISO, working together with the Company’s Chief Information Officer and Chief Risk Officer, handles the development and implementation of the Information Security Policy and Program and, together with the Company’s information technology staff and third-party vendors and other outside resources, the ISO monitors the Company’s information technology systems for threats and implements changes to those systems in an effort to protect the systems from attack. The ISO also coordinates the risk assessment process, facilitates annual employee training, and prepares an annual report to the Company’s board of directors that contains a summary of any cybersecurity incidents occurring during the report year, and an analysis of the results of the Information Systems Audit and the Company’s performance against the Information Security Policy and Program. The ISO reports directly to the Bank’s Chief Risk Officer, independent of the Company’s technology department, and the responsibilities of this role are in conjunction with security, fraud and other special projects concerning risk and operational issues identified. The Bank’s Chief Risk Officer reports directly to the Chief Executive Officer.

To date, no attempted cyber-attack or other attempted intrusion on the Company’s information technology networks has resulted in a material adverse impact on the operations or financial results of the Company or the Bank.

Information Security Training and Awareness

Information security awareness training is provided to all employees and bank business units no less often than annually and focuses on: new hire orientation, the Company’s overall information security program, roles and responsibilities of employees during an incident, how to report suspicious activity, and captures the Bank’s cybersecurity blog for consistent and relevant information.

Service Provider Arrangements

Management identifies, assesses, controls, monitors and reports on risks related to the Bank’s use of third parties per applicable laws, safe and sound business practices, and related supervisory guidance, particularly that of the Interagency Guidance on Third-Party Relationships: Risk Management.

It is the policy of the Company to ensure the internal controls and financial condition of a third-party vendor are carefully evaluated prior to the allowance of such support services to begin, and as an on-going condition of continuing support of such products or services. Vendors with access to customer information or direct access to the network are carefully reviewed to ensure that appropriate controls and mechanisms are in place to safeguard confidential information, and the Company’s contracts with such vendors include obligations on the part of the vendors to maintain the confidentiality of such information in compliance with applicable legal requirements.

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. The Bank's 67,000 square foot operations center is located at 105 North Castle Heights Avenue, Lebanon, Tennessee, which is adjacent to the 623 West Main Street office. In addition thereto, the Bank has twenty-nine branch locations located at the following locations: 1436 West Main Street, Lebanon, Tennessee; 1444 Baddour Parkway, Lebanon, Tennessee; 200 Tennessee Boulevard, Lebanon, Tennessee; 8875 Stewart’s Ferry Pike, Gladeville, Tennessee; 402 Public Square, Watertown, Tennessee; 1476 North Mt. Juliet Road, Mt. Juliet, Tennessee; 11835 Highway 70, Mount Juliet, Tennessee; 1130 Castle Heights Avenue North, Lebanon, Tennessee; 127 McMurry Blvd., Hartsville, Tennessee; 440 Highway 109 North, Lebanon, Tennessee; 4736 Andrew Jackson Parkway in Hermitage, Tennessee; 3110 Memorial Blvd in Murfreesboro, Tennessee; 210 Commerce Drive in Smyrna, Tennessee; 2640 South Church Street, Murfreesboro, Tennessee; 217 Donelson Pike, Nashville, Tennessee; 2930 West End Avenue, Nashville, Tennessee; 710 NW Broad in Murfreesboro, Tennessee; 4195 Franklin Road, Murfreesboro, Tennessee; 576 West Broad Street in Smithville, Tennessee; 306 Brush Creek Road in Alexandria, Tennessee; 1300 Main Street North in Carthage, Tennessee; 7 New Middleton Highway in Gordonsville, Tennessee; 709 South Mt. Juliet Road, Mt. Juliet, Tennessee; 455 West Main Street, Gallatin, Tennessee; 175 East Main Street, Hendersonville, Tennessee; 1630 Nashville Pike, Suite 100, Gallatin, Tennessee; 320 South Jefferson Avenue, Cookeville, Tennessee; 9200 Carothers Parkway, Suite 108, Franklin, Tennessee; and 5029 Harpeth Drive, Brentwood, Tennessee.

The Mt. Juliet office contains approximately 16,000 square feet of space; the Castle Heights Office contains 2,400 square feet of space; the Hartsville Office contains 8,000 square feet of space; the Leeville-109 branch contains approximately 4,000 square feet. The Hermitage branch opened in the fall of 1999 and contains 8,000 square feet of space. The Gladeville branch contains approximately 3,400 square feet

of space. The Lebanon facility at Tennessee Boulevard was expanded in 1997 to 2,200 square feet of space. The Mt. Juliet facility on Highway 70 was completed in July 2004 and contains approximately 3,450 square feet of space and the Providence facility which was opened in 2011 contains approximately 4,450 square feet of space. The NorthWest Broad Street facility was relocated from a leased office to an office owned by the Bank in 2011 and contains approximately 6,300 square feet of space. The Smyrna office opened in September of 2006 and contains approximately 3,600 square feet of space. The Memorial Blvd office in Murfreesboro opened in October of 2006 and contains approximately 7,800 square feet of space. The Highway 96 office in Murfreesboro opened in January 2017 and contains approximately 4,700 square feet of space. The South Church Street office in Murfreesboro opened in January 2008 and contains approximately 7,800 square feet of space. The West End office in Nashville opened in August 2017 and contains approximately 7,062 square feet of space. The Cool Springs office in Franklin opened in December 2018 and contains approximately 5,940 square feet of space. The Maryland Farms office in Brentwood opened in April 2023 and contains approximately 4,454 square feet of space. The Greenlea office in Gallatin opened in January 2022 and contains approximately 3,200 square feet of space. Each of the branch facilities of the Bank not otherwise described above contains approximately 1,000 square feet of space.

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

Item 3. Legal Proceedings

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

Item 4. Mine Safety Disclosures

Not Applicable.

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

Information required by this item is contained under the heading “Holding Company & Stock Information” in the Company’s 2023 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, 2023.

Item 6. Reserved

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” in the financial information included with the Company’s 2023 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” in the financial information included with the Company’s 2023 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 the financial information included with the Company’s 2023 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 Exchange Act, that are designed to ensure that information required to be disclosed by it in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

Management Report on Internal Control Over Financial Reporting

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

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).

Based on that assessment, management concluded that, as of December 31, 2023, 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 in the financial information included with the Company’s 2023 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, 2023 that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

During the quarter ended December 31, 2023, no officer or director of the Company adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-rule 10b5-1 trading arrangement" as such terms are defined in Item 408(a) and (c) of Regulation S-K. In addition, during the quarter ended December 31, 2023, the Company did not adopt or terminate any "Rule 10b5-1 trading arrangement" or "non-rule 10b5-1 trading arrangement" as such terms are defined in Item 408(a) and (d) of Regulation S-K

Item 9C. Disclosures Regarding Foreign Jurisdictions That Prevent Inspections

Not applicable.

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item with respect to directors is incorporated herein by reference to the sections entitled “Item-1 Election of Directors-Information Concerning Nominees” and “Item-1 Election of Directors-Director Qualifications” in the Company’s definitive proxy statement to be filed in connection with the 2024 Annual Meeting of Shareholders, which is expected to be filed no later than 120 days after the end of our fiscal year ended December 31, 2023 (the “Proxy Statement”). The information required by this item with respect to executive officers is set forth in Part I of this report under the caption “Information about our Executive Officers.”

The information required by this item with respect to Section 16(a) of the Exchange Act is incorporated herein by reference to the section entitled “Item-1 Election of Directors - Delinquent Section 16(a) Reports” in the Proxy Statement.

Item 11. Executive Compensation

Information required by this item is incorporated herein by reference to the information under the principal heading entitled “Executive Compensation,” including but not limited to the subheading entitled “Personnel Committee Report on Executive Compensation,” and the principal heading entitled “Director Compensation,” including but not limited to the subheading entitled “Personnel Committee Interlocks and Insider Participation,” in the Proxy Statement.

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 Proxy Statement.

The following table summarizes information concerning the Company’s equity compensation plans at December 31, 2023:

	Number of securities to be issued		Weighted average exercise price of		Number of securities remaining available for future
	upon exercise of outstanding options,		outstanding options, warrants and		issuance under equity compensation plans (excluding
Plan Category	warrants and rights		rights		securities reflected in first column)
Equity compensation plans approved by shareholders		214,974		57.08		228,633
Equity compensation plans not approved by shareholders		—		—		—
Total		214,974		57.08		228,633

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 Proxy Statement.

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 Proxy Statement.

Item 14. Principal Accountant Fees and Services

Information required by this item is incorporated herein by reference to the section entitled “Item-2 Ratification of the Appointment of the Independent Registered Public Accounting Firm” in the Proxy Statement.

Item 15. Exhibits, Financial Statement Schedules

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

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

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

Item 16. Form 10-K Summary

None.

INDEX TO EXHIBITS

3.1	Charter of Wilson Bank Holding Company, as amended (restated for SEC electronic filling purposes only) (incorporated herein by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 9, 2016).
3.2	Bylaws of Wilson Bank Holding Company, as amended (restated for SEC electronic filling purposes only) (incorporated herein by reference to Exhibit 3.2 of the Company’s Quarterly Report on form 10-Q for the quarter ended March 31, 2016 filed with the SEC on May 10, 2016).
4.1	Specimen Common Stock Certificate. (incorporated herein by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-4 (Registration No. 333-121943)).
4.2	Description of the Company's securities (incorporated by reference to Exhibit 4.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 12, 2021).
10.1	Wilson Bank Holding Company 2009 Stock Option Plan (incorporated herein by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 (Registration No. 333-158621)).*
10.2	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.3	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.4	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.5	Amendment, dated December 30, 2008, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.6	Amendment, dated December 30, 2008, to Executive Salary Continuation Agreement dated as of January 1, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.7	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.8	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.9	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.10	Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.11 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.11	Executive Salary Continuation Agreement dated as of July 28, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2009 (File No. 000-20402)).*
10.12	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
---	---
10.13	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.14	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.15	Amendment, dated November 23, 2012, to Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.16	Amendment, dated November 23, 2012, to Executive Salary Continuation Agreement dated as of January 1, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.17	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.18	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.19	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.20	Second Amendment, dated November 23, 2012 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002 by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.21	Amendment, dated November 23, 2012 to Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated as of July 28, 2006 by and between Wilson Bank and John C. McDearman III (incorporated by reference to Exhibit 10.10 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.22	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.11 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.23	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.24	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.13 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.25	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.14 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.26	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.15 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
---	---
10.27	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.16 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.28	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.17 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.29	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.18 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.30	Amendment, dated August 21, 2003 to Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.19 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.31	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.20 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.32	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.21 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.33	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.22 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.34	Wilson Bank and Trust Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement dated October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.23 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.35	Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated July 28, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.24 of the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2012).*
10.36	Executive Survivor Income Agreement, dated April 14, 2014, by and between the Bank and Lisa Pominski (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.37	Executive Survivor Income Agreement, dated April 14, 2014, by and between the Bank and Gary Whitaker (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.38	Executive Survivor Income Agreement, dated April 14, 2014, by and between the Bank and John C. McDearman, III (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.39	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and J. Randall Clemons (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.40	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and H. Elmer Richerson (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
---	---
10.41	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and Jack Bell (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.42	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and James Comer (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.43	Director Survivor Income Agreement, dated April 14, 2014, by and between the Bank and James Patton (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
10.44	Director Survivor Income Agreement, dated April 6, 2015, by and between the Bank and William Jordan (incorporated by reference to Exhibit 10.46 of the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 14, 2016).
10.45	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.46	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.47	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.48	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.49	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on May 29, 2015).*
10.50	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and J. Randall Clemons (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.51	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Elmer Richerson (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.52	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Lisa T. Pominski (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.53	Second Amendment to the Amended and Restated Executive Salary Continuation Agreement dated as of October 7, 2002, by and between Wilson Bank and Trust and Gary Whitaker (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.54	Second Amendment to the Executive Salary Continuation Agreement dated as of January 1, 2006, by and between Wilson Bank and Trust and John C. McDearman III (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.55	Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.56	Form of Stock Appreciation Rights Agreement for employees under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
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10.57	Form of Non-qualified Stock Option Agreement for employees under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.58	Form of Stock Appreciation Rights Agreement for employee directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.59	Form of Non-qualified Stock Option Agreement for employee directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.10 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.60	Form of Stock Appreciation Rights Agreement for directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.11 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.61	Form of Non-qualified Stock Option Agreement for directors under the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).*
10.62	Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated November 23, 2012, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.64 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 8, 2019).*
10.63	Supplemental Executive Retirement Plan Agreement, dated November 23, 2012, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.65 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 8, 2019).*
10.64	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement as of September 26, 2016, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.66 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 8, 2019).*
10.65	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.67 of the Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on March 8, 2019).*
10.66	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement Implemented May 22, 2015 by and between Wilson Bank and Trust and Clark Oakley (incorporated by reference to Exhibit 10.68 of the Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on March 8, 2019).*
10.67	Supplemental Executive Retirement Plan Agreement, dated May 22, 2015, by and between Wilson Bank and Trust and John Foster (incorporated by reference to Exhibit 10.68 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 12, 2020).*
10.68	Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated May 22, 2015, by and between Wilson Bank and Trust and John Foster (incorporated by reference to Exhibit 10.69 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 12, 2020).*
10.69	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and John McDearman (incorporated herein by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.70	Second Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and Clark Oakley (incorporated herein by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.71	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and Lisa Pominski (incorporated herein by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
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10.72	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and Gary Whitaker (incorporated herein by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.73	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and John Foster (incorporated herein by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.74	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and John McDearman (incorporated herein by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.75	Second Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and Clark Oakley (incorporated herein by reference to Exhibit 10.7 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.76	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and Lisa Pominski (incorporated herein by reference to Exhibit 10.8 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.77	First Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated October 26, 2020, by and between Wilson Bank and Trust and Gary Whitaker (incorporated herein by reference to Exhibit 10.9 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 9, 2020).*
10.78	Second Amendment to the Wilson Bank & Trust Supplemental Executive Retirement Plan Agreement Implemented May 22, 2015, by and between Wilson Bank and Trust and John C. McDearman (incorporated herein by reference to Exhibit 10.79 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 12, 2021).*
10.79	Second Amendment to the Wilson Bank & Trust Supplemental Executive Retirement Plan Agreement Implemented May 22, 2015, by and between Wilson Bank and Trust and John Foster (incorporated herein by reference to Exhibit 10.80 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 12, 2021).*
10.80	Second Amendment to the Wilson Bank & Trust Supplemental Executive Retirement Plan Agreement Implemented May 22, 2015, by and between Wilson Bank and Trust and Lisa Pominski (incorporated herein by reference to Exhibit 10.81 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 12, 2021).*
10.81	Third Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated as of November 29, 2021 (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on November 30, 2021).*
10.82	Second Amendment to the Wilson Bank and Trust Supplemental Executive Retirement Plan Agreement dated February 28, 2022, by and between Wilson Bank and Trust and Gary Whitaker.*
10.83	Independent Contractor Agreement by and between Wilson Bank & Trust and Gary Whitaker, dated as of November 21, 2022 (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on November 23, 2022).*
10.84	Supplemental Executive Retirement Plan Agreement dated November 26, 2018, by and between Wilson Bank and Trust and Taylor Walker.*+
10.85	Wilson Bank and Trust Life Insurance Endorsement Method Split Dollar Plan Agreement dated as of November 26, 2018 by and between Wilson Bank and Taylor Walker.*+
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10.86	Executive Survivor Income Agreement, dated April 14, 2014, by and between Wilson Bank and Trust and Clark Oakley.*+
10.87	Executive Survivor Income Agreement, dated June 1, 2020, by and between Wilson Bank and Trust and Taylor Walker.*+
10.88	First Amendment to the Executive Survivor Income Agreement dated September 14, 2021, by and between Wilson Bank and Trust and Taylor Walker.*+
13.1	Selected Portions of the Wilson Bank Holding Company Annual Report to Shareholders for the year ended December 31, 2023 incorporated by reference into items 1, 5, 7, 7A and 8.+
21.1	Subsidiaries of the Company.+
23.1	Consent of Independent Registered Public Accounting Firm.+
31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+
31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+
32.1	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+
32.2	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+
101.INS	Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Management compensatory plan or contract

• Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WILSON BANK HOLDING COMPANY
By:	/s/ John C. McDearman, III
	John C. McDearman, III
Title:	President and Chief Executive Officer
Date:	February 28, 2024

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

Signature	Title	Date
/s/ John C. McDearman, III	President, Chief Executive Officer and Director (Principal Executive Officer)	February 28, 2024
John C. McDearman, III
/s/ Lisa Pominski	Chief Financial Officer (Principal Financial and Accounting Officer)	February 28, 2024
Lisa Pominski
/s/ Jack W. Bell		February 28, 2024
Jack W. Bell	Director
/s/ James F. Comer		February 28, 2024
James F. Comer	Director
/s/ William P. Jordan		February 28, 2024
William P. Jordan	Director
/s/ James Anthony Patton		February 28, 2024
James Anthony Patton	Director
/s/ J. Randall Clemons		February 28, 2024
J. Randall Clemons	Director
/s/ Michael G.Maynard		February 28, 2024
Michael G.Maynard	Director
/s/ Clinton M. Swain		February 28, 2024
Clinton M. Swain	Director
/s/ H. Elmer Richerson		February 28, 2024
H. Elmer Richerson	Director
/s/ Deborah Varallo		February 28, 2024
Deborah Varallo	Director

EX-10.84

Exhibit 10.84

WILSON BANK & TRUST

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

This Supplemental Executive Retirement Plan (“Plan”) is adopted as of this 19th day November, 2018 (the “Effective Date”) by Wilson Bank & Trust, a Tennessee corporation (the “Employer” or the “Bank”) for the benefit of TAYLOR WALKER (the “Executive”). The purpose of the Plan is to provide certain supplemental nonqualified pension benefits to certain executives who have contributed substantially to the success of the Employer and the Employer desires to incentivize the executives to continue in its employ.

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

ARTICLE 1 DEFINITIONS

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

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

1.2. “Annuity Contract” means the following annuity contract(s) purchased and solely owned by the Bank: a Flexible Premium Indexed Deferred Annuity Contract issued by National Western Life Insurance Company, contract #0101385219 or such other annuity contracts as the Bank may purchase from time to time.

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

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

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

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

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

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

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

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

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

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

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

ARTICLE 2 DEFERRED COMPENSATION AND VALUATION OF ACCOUNT

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

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

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

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

ARTICLE 3 RETIREMENT AND OTHER BENEFITS

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

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

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

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

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

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

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

ARTICLE 4 BENEFICIARIES

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

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

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

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

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

ARTICLE 5 GENERAL LIMITATIONS

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

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

ARTICLE 6 CLAIMS AND REVIEW PROCEDURES

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

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

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

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

(i) The specific reasons for the denial,

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

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

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

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

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

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

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

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

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

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

(i) The specific reasons for the denial,

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

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

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

(f) Claims Criteria. All claim determinations under this Section 6 shall be made in accordance with Section 409A of the Code and the Regulations thereunder.

ARTICLE 7 MISCELLANEOUS

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE 8 ADMINISTRATION OF AGREEMENT

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

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

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

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

8.5. Employer Information. To enable the Plan Administrator to perform its functions, the Employer shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation of Service of the Executive and such other pertinent information as the Plan Administrator may reasonably require.

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

THE EXECUTIVE:		WILSON BANK & TRUST
/s/ Taylor Walker	By:	/s/ John C. McDearman III
TAYLOR WALKER	Title:	President

BENEFICIARY DESIGNATION

WILSON BANK & TRUST

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

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

Primary:
Contingent:
---

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

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

Signature:	/s/ Taylor Walker
	TAYLOR WALKER
Date:	11-26-2018

Accepted by the Employer this 26 day of November, 2018.

By:	/s/ John C. McDearman III
Print Name:	John C. McDearman III
Title:	President

EX-10.85

Exhibit 10.85

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

THIS AGREEMENT (the “Agreement”) is made and entered into this 19th day of November, 2018, by and between Wilson Bank & Trust, a banking corporation, located in Wilson County, Tennessee (the “Bank”), and TAYLOR WALKER, a current employee of the Bank (hereinafter referred to as the “Employee”).

INTRODUCTION

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

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

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

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

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

1. Ownership

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

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

2. Premiums.

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

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

3. Bank’s Interests. Upon the death of the Executive and whereby death proceeds are payable by the Insurance Carrier, the Bank shall be entitled to receive an amount equal to all death benefits due under the Insurance Policy

less those explicitly provided to the Employee’s designated beneficiary under Section 4 hereof (the “Bank’s Policy Interest”). The Bank’s Policy Interest shall be payable as provided in Section 6 of this Agreement. The Bank’s Policy Interest shall be reduced by any amount borrowed against the Insurance Policy(ies) by Bank.

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

5. Beneficiary

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

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

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

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

6. Death Claims.

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

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

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

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

7. Termination of Agreement.

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

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

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

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

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

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

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

9. Administration

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

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

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

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

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

10. Claims and Review Procedure

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

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

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

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

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

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

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

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

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

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

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

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

14. Entire Agreement; Oral Agreements Ineffective. This Agreement constitutes the entire and final agreement between the Bank and Employee as to the subject matter hereof and may not be contradicted by evidence of

prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

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

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

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

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

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

WILSON BANK & TRUST, BANK:		TAYLOR WALKER, EMPLOYEE:
By:	/s/ John C. McDearman III	By:	/s/ Taylor Walker
Print Name:	John C. McDearman III	Print Name:	Taylor Walker
Title:	President	Address:

WILSON BANK & TRUST

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

BENEFICIARY DESIGNATION FORM

Executive: TAYLOR WALKER

Social Security Number: ______ ____ ______

Definitions:

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

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

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

Primary Beneficiary DOB Social Security # Address % of Proceeds

____________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

Contingent Beneficiary DOB Social Security # Address % of Proceeds

____________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

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

/s/ Taylor Walker 11-26-2018

TAYLOR WALKER Date

Acknowledged Receipt by the Bank:

/s/ Lisa Pominski

Officer

WILSON BANK & TRUST

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

SCHEDULE OF POLICIES

TAYLOR WALKER

Insurer: Tennessee Farmers Life Insurance Company

Policy Number: BK0352024

EX-10.86

Exhibit 10.86

WILSON BANK & TRUST

Executive Survivor Income Agreement

This Executive Survivor Income Agreement is made this 14th day of April 2014, by and between Wilson Bank & Trust with its main office in Lebanon, Tennessee, (“Bank”), and Clark Oakley (“Executive”).

Whereas, to encourage the Executive to remain an employee of the Bank, the Bank is willing to provide benefits to the Executive’s beneficiary(ies) if the Executive dies prior to terminating employment. The Bank will pay the benefits from its general assets, but only so long as one of its general assets is a life insurance policy on the Executive’s life.

WHEREAS, this Agreement is designed primarily for purposes of providing benefits for a select group of management and highly compensated employees of the Bank and is intended to qualify as a “top hat” plan under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.

Now Therefore, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Bank and the Executive hereby agree as follows.

1. Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1. Termination of Employment means that the Executive shall have ceased to be actively employed by the Bank for any reason whatsoever. For purposes of this Agreement, if there is a dispute over the employment status of the Executive or the date of termination of the Executive’s employment, the Bank shall have the sole and absolute right to decide the dispute.

1.2. Notwithstanding the definition of Termination of Employment in Paragraph 1.1, a Termination of Employment shall not have occurred if the Executive continues service to the Bank as a member of the Board of Directors.

2. Entitlement to Benefit

2.1. Pre-Termination of Employment Survivor Income Benefit. If the Executive dies prior to Termination of Employment, the Bank shall pay to the Executive’s designated beneficiary in a single lump sum the survivor income benefit described in Paragraph 2.3.

2.2. Contingency for Payment. The Bank will pay the benefits from its general assets, but only so long as one of the Bank’s general assets is an enforceable life insurance policy on the Executive’s life that was issued by Massachusetts Mutual Life Insurance Company and Midland National Life Insurance Company.

2.3. Amount of Benefits. If the Executive dies prior to Termination of Service, the Bank shall pay the amount shown on Schedule A, attached to this Agreement. Any payments hereunder shall be paid to the Executive’s beneficiary(ies) in a single lump sum within 60 days after the Executive’s death.

3. Beneficiaries

3.1. Beneficiary Designations. The Executive shall designate a beneficiary by filing a written designation with the Bank. The Executive's beneficiary designation shall be deemed automatically revoked if the

beneficiary predeceases the Executive. If the Executive dies without a valid beneficiary designation, all payments shall be made to the Executive's estate.

3.2. Facility of Payment. If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Bank may pay such benefit to the guardian, legal representative, or person having the care or custody of such minor, incompetent person or incapable person. The Bank may require proof of incompetence, minority, or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Bank from all liability with respect to such benefit.

4. General Limitations

4.1. Termination. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not pay any benefit under this Agreement if Termination of Employment occurs as defined in Paragraph 1.1 or 1.2 above.

4.2. Suicide or Misstatement. The Bank shall not pay any benefit under this Agreement if the Executive commits suicide within three years after the date of this Agreement. In addition, the Bank shall not pay any benefit under this Agreement if the Executive has made any material misstatement of fact on any application or resume provided to the Bank, or on any application for any benefits provided by the Bank to the Executive.

4.3. Removal. Notwithstanding any provision of this Agreement to the contrary, if the Executive is removed from office or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), or is terminated for cause, all obligations of the Bank under this Agreement shall terminate as of the effective date of the order or Termination for Cause. Termination for Cause means the Bank has terminated the Executive’s employment for any of the following reasons:

(a) Gross negligence or gross neglect of duties;

(b) Commission of a felony or of a gross misdemeanor involving moral turpitude; or

(c) Fraud, disloyalty, or willful violation of any law or significant Bank policy committed in connection with the Executive’s employment and resulting in an adverse effect on the Bank.

4.4. Insolvency. Notwithstanding any provision of this Agreement to the contrary, if the Department of Banking appoints the Federal Deposit Insurance Corporation as receiver for the Bank all obligations under this Agreement shall terminate as of the date of the Bank’s declared insolvency.

5. Claims and Review Procedures

5.1. Claims Procedure. A participant or beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

(a) Initiation: Written Claim. The claimant initiates a claim by submitting to the Bank a written claim for the benefits.

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

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

i. The specific reasons for the denial;

ii. A reference to the specific provisions of the Agreement on which the denial is based;

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

iv. An explanation of the Agreement’s review procedures and the time limits applicable to such procedures; and

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

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

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

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

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

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

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

i. The specific reasons for the denial;

ii. A reference to the specific provisions of the Agreement on which the denial is based;

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

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

6. Miscellaneous

6.1. Amendments and Termination. The Bank may amend or terminate this Agreement at any time. In addition, the Bank may modify Schedule A at its sole discretion.

6.2. Binding Effect. This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, administrators and transferees.

6.3. No Guarantee of Employment. This Agreement is not a contract for employment. It does not give the Executive the right to remain an employee of the Bank, nor does it interfere with the Bank's right to discharge the Executive. It also does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any time.

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

6.5. Tax Withholding. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.

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

6.7. Unfunded Arrangement. The Executive’s beneficiary(ies) are general unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise by the Bank to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive's life is a general asset of the Bank to which the Executive and the Executive’s beneficiary(ies) have no preferred or secured claim.

6.8. Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive’s beneficiary by virtue of this Agreement other than those specifically set forth herein.

6.9. Administration. The Bank shall have all powers which are necessary to administer this Agreement, including but not limited to:

(a) Interpreting the provisions of the Agreement;

(b) Establishing and revising the method of accounting for the Agreement;

(c) Maintaining a record of benefit payments; and

(d) Establishing rules and prescribing any forms necessary or desirable to administer the Agreement.

6.10. Named Fiduciary. For purposes of the Employee Retirement Income Security Act of 1974, if applicable, the Bank shall be the named fiduciary and plan administrator under this Agreement. The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals.

6.11. Severability. If for any reason any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall, to the full extent consistent with the law, continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the remainder of such provision, not held so invalid and the remainder of such provision, together with all other provisions of this Agreement, shall continue in full force and effect to the full extent consistent with the law.

6.12. Headings. The headings of Sections herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement.

6.13. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice.

(a) If to the Bank, to:
	Wilson Bank & Trust
	ATTN: Lisa Pominski
	PO 768
	Lebanon, TN 37088
(b) If to the Executive, to:

and to such other or additional person or persons as either party shall have designated to the other party in writing by like notice.

IN WITNESS WHEREOF, the Executive and a duly authorized Bank Executive have signed this Agreement.

Executive:		Bank:
Clark Oakley		Wilson Bank & Trust
(Name of Executive)
/s/ Clark Oakley		By:	/s/ Elmer Richerson
(Signature of Executive)
Title:	SVP	Its:	President

SCHEDULE A

CLARK OAKLEY
Age	Benefit Amount
45	400,000
46	400,000
47	400,000
48	400,000
49	400,000
50	400,000
51	400,000
52	400,000
53	400,000
54	400,000
55	400,000
56	400,000
57	400,000
58	400,000
59	400,000
60	400,000
61	400,000
62	400,000
63	400,000
64	400,000
65	400,000
66	400,000
67	400,000
68	398,788
69	387,008
70	0

WILSON BANK & TRUST

EXECUTIVE SURVIVOR INCOME AGREEMENT

DESIGNATION OF BENEFICIARY

Executive:

Definitions:

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

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

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

Primary Beneficiary DOB Social Security # Address % of Proceeds

___________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

Contingent Beneficiary DOB Social Security # Address % of Proceeds

____________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

The undersigned employee acknowledges that Wilson Bank Bank (“Bank”) is providing this Death Benefit subject to the terms and conditions of the Agreement entered into with Executive.

Executive's Signature	Date
Acknowledged Receipt by the Bank:
Officer

This beneficiary designation supersedes all previously executed beneficiary designations.

EX-10.87

Exhibit 10.87

WILSON BANK & TRUST

Executive Survivor Income Agreement

This Executive Survivor Income Agreement is made this 1st day of June, 2020, by and between Wilson Bank & Trust with its main office in Lebanon, Tennessee, (“Bank”), and TAYLOR WALKER (“Executive”).

Whereas, to encourage the Executive to remain an employee of the Bank, the Bank is willing to provide benefits to the Executive’s beneficiary(ies) if the Executive dies prior to terminating employment. The Bank will pay the benefits from its general assets, but only so long as one of its general assets is a life insurance policy on the Executive’s life.

Whereas, this Agreement is designed primarily for purposes of providing benefits for a select group of management and highly compensated employees of the Bank and is intended to qualify as a “top hat” plan under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.

Now Therefore, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Bank and the Executive hereby agree as follows.

1. Definitions

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1. Termination of Employment means that the Executive shall have ceased to be actively employed by the Bank for any reason whatsoever. For purposes of this Agreement, if there is a dispute over the employment status of the Executive or the date of termination of the Executive’s employment, the Bank shall have the sole and absolute right to decide the dispute.

1.2. Notwithstanding the definition of Termination of Employment in Paragraph 1.1, a Termination of Employment shall not have occurred if the Executive continues service to the Bank as a member of the Board of Directors.

2. Entitlement to Benefit

2.1. Pre-Termination Survivor Income Benefit. If the Executives dies prior to Termination of Employment, the Bank shall pay to the Director’s designated beneficiary in a single lump sum the survivor income benefit described in Paragraph 2.3.

2.2. Contingency for Payment. The Bank will pay the benefits from its general assets, but only so long as one of the Bank’s general assets is an enforceable life insurance policy on the Executive’s life that was issued by Massachusetts Mutual Life Insurance Company and North American Company for Life and Health Insurance.

2.3. Amount of Benefits. If the Executive dies prior to Termination of Service, the Bank shall pay the amount shown on Schedule A, attached to this Agreement. Any payments hereunder shall be paid to the Executive’s beneficiary(ies) in a single lump sum within 60 days after the Executive’s death.

3. Beneficiaries

3.1. Beneficiary Designations. The Executive shall designate a beneficiary by filing a written designation with the Bank. The Executive’s beneficiary designation shall be deemed automatically revoked if the beneficiary predeceases the Executive. If the Executive dies without a valid beneficiary designation, all payments shall be made to the Executive’s estate.

3.2. Facility of Payment. If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Bank may pay such benefit to the guardian, legal representative, or person having the care or custody of such minor, incompetent person or incapable person. The Bank may require proof of incompetence, minority, or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Bank from all liability with respect to such benefit.

4. General Limitations

4.1. Termination. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not pay any benefit under this Agreement if Termination of Service occurs as defined in Paragraph 1.1 above.

4.2. Suicide or Misstatement. The Bank shall not pay any benefit under this Agreement if the Executive commits suicide within three years after the date of this Agreement. In addition, the Bank shall not pay any benefit under this Agreement if the Executive has made any material misstatement of fact on any application or resume provided to the Bank, or on any application for any benefits provided by the Bank to the Executive.

4.3. Removal. Notwithstanding any provision of this Agreement to the contrary, if the Executive is removed from office or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), or is terminated for cause, all obligations of the Bank under this Agreement shall terminate as of the effective date of the order or Termination for Cause. Termination for Cause means the Bank has terminated the Executive’s employment for any of the following reasons:

(a) Gross negligence or gross neglect of duties;

(b) Commission of a felony or of a gross misdemeanor involving moral turpitude; or

(c) Fraud, disloyalty, or willful violation of any law or significant Bank policy committed in connection with the Executive’s employment and resulting in an adverse effect on the Bank.

4.4. Insolvency. Notwithstanding any provision of this Agreement to the contrary, if the Department of Banking appoints the Federal Deposit Insurance Corporation as receiver for the Bank all obligations under this Agreement shall terminate as of the date of the Bank’s declared insolvency.

5. Claims and Review Procedures

5.1. Claims Procedure. A participant or beneficiary (claimant) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

(a) Initiation: Written Claim. The claimant initiates a claim by submitting to the Bank a written claim for the benefits.

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

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

i. The specific reasons for the denial;

ii. A reference to the specific provisions of the Agreement on which the denial is based;

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

iv. An explanation of the Agreement’s review procedures and the time limits applicable to such procedures; and

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

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

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

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

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

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

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

i. The specific reasons for the denial;

ii. A reference to the specific provisions of the Agreement on which the denial is based;

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

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

6. Miscellaneous

6.1. Amendments and Termination. The Bank may amend or terminate this Agreement at any time. In addition, the Bank may modify Schedule A at its sole discretion.

6.2. Binding Effect. This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, administrators and transferees.

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

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

6.5. Tax Withholding. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.

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

6.7. Unfunded Arrangement. The Executive’s beneficiary(ies) are general unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise by the Bank to pay such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive's life is a general asset of the Bank to which the Executive and the Executive’s beneficiary(ies) have no preferred or secured claim.

6.8. Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the Executive’s beneficiary by virtue of this Agreement other than those specifically set forth herein.

6.9. Administration. The Bank shall have all powers which are necessary to administer this Agreement, including but not limited to:

(a) Interpreting the provisions of the Agreement;

(b) Establishing and revising the method of accounting for the Agreement;

(c) Maintaining a record of benefit payments; and

(d) Establishing rules and prescribing any forms necessary or desirable to administer the Agreement.

6.10. Named Fiduciary. For purposes of the Employee Retirement Income Security Act of 1974, if applicable, the Bank shall be the named fiduciary and plan administrator under this Agreement. The named fiduciary may delegate to others certain aspects of the management and operation responsibilities of the plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals.

6.11. Severability. If for any reason any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall, to the full extent consistent with the law, continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the remainder of such provision, not held so invalid and the remainder of such provision, together with all other provisions of this Agreement, shall continue in full force and effect to the full extent consistent with the law.

6.12. Headings. The headings of Sections herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement.

6.13. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice.

(a) If to the Bank, to:
	Wilson Bank & Trust
	ATTN: Lisa Pominski
	PO 768
	Lebanon, TN 37088
(b) If to the Executive, to:

and to such other or additional person or persons as either party shall have designated to the other party in writing by like notice.

IN WITNESS WHEREOF, the Executive and a duly authorized Bank Officer have signed this Agreement.

Executive:		Bank:
By:	/s/ Taylor A. Walker	By:	/s/ John C. McDearman III
	TAYLOR WALKER		Wilson Bank & Trust
Its:		Its:	CEO
	(Signature of Executive)

SCHEDULE A

TAYLOR WALKER
Age	Benefit Amount
36	250,000
37	250,000
38	250,000
39	250,000
40	250,000
41	250,000
42	250,000
43	250,000
44	250,000
45	250,000
46	250,000
47	250,000
48	250,000
49	250,000
50	250,000
51	250,000
52	250,000
53	250,000
54	250,000
55	250,000
56	250,000
57	250,000
58	250,000
59	250,000
60	250,000
61	250,000
62	250,000
63	250,000
64	250,000
65	250,000
66	250,000
67	250,000
68	250,000
69	250,000
70	0

WILSON BANK & TRUST

EXECUTIVE SURVIVOR INCOME AGREEMENT

DESIGNATION OF BENEFICIARY

Definitions:

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

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

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

Primary Beneficiary DOB Social Security # Address % of Proceeds

____________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

Contingent Beneficiary DOB Social Security # Address % of Proceeds

____________________ ____ _______________ ___________________________ _______

____________________ ____ _______________ ___________________________ _______

The undersigned employee acknowledges that Wilson Bank & Trust (“Bank”) is providing this Death Benefit subject to the terms and conditions of the Agreement entered into with Executive.

Executive's Signature	Date

Acknowledged Receipt by the Bank:

Officer	Date

This beneficiary designation supersedes all previously executed beneficiary designations.

EX-10.88

Exhibit 10.88

WILSON BANK & TRUST

Amendment to the

Executive Survivor Income Agreement

This Amendment to the Executive Survivor Income Agreement is made this 14th day of September, 2021, by and between Wilson Bank & Trust with its main office in Lebanon, Tennessee, (“Bank”), and Taylor Walker (“Executive”).

Whereas, to encourage the Executive to remain an employee of the Bank, the Bank has previously established the Executive Survivor Income Agreement (the “Agreement”) effective June 1, 2020, which provides benefits to the Executive’s beneficiary(ies) if the Executive dies prior to terminating employment. The Bank will pay the benefits from its general assets, but only so long as one of its general assets is a life insurance policy on the Executive’s life.

WHEREAS, the Bank desires to amend the Agreement and update the Schedule A that is attached to the Agreement.

Now Therefore, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agreement is hereby amended as follows.

Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following Schedule A:

SCHEDULE A

Age	Benefit Amount
36	250,000
37	400,000
38	400,000
39	400,000
40	400,000
41	400,000
42	400,000
43	400,000
44	400,000
45	400,000
46	400,000
47	400,000
48	400,000
49	400,000
50	400,000
51	400,000
52	400,000
53	400,000
54	400,000
55	400,000
56	400,000
57	400,000
58	400,000
59	400,000
60	400,000
61	400,000
62	400,000
63	400,000
64	400,000
65	400,000
66	400,000
67	400,000
68	400,000
69	400,000
70	0

IN WITNESS WHEREOF, a duly authorized Bank Executive has signed this Amendment.

Wilson Bank & Trust
By:	/s/ John C. McDearman III
Title:	Chief Executive Officer

EX-13.1

Exhibit 13.1

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Forward-Looking Statements

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

The Company cautions investors that future financial and operating results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. The words “expect,” “intend,” “should,” “may,” “could,” “believe,” “suspect,” “anticipate,” “seek,” “plan,” “estimate” and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical fact may also be considered forward-looking. Such forward-looking statements involve known and unknown risks and uncertainties, including, but not limited to those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and also include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in credit losses and provisions for these losses, (ii) deterioration in the real estate market conditions in the Company’s market areas including demand for residential real estate loans as a result of elevated rates on residential real estate mortgage loans, (iii) the impact of increased competition with other financial institutions, including pricing pressures on loans and deposits, and the resulting impact on the Company's results, including as a result of compression to net interest margin, (iv) adverse conditions in local or national economies, including the economy in the Company’s market areas, including as a result of the impact of escalating geopolitical tensions (including hostilities in the Middle East), inflationary pressures and the elevated rate environment, supply chain disruptions and labor shortages on our customers and on their businesses, (v) fluctuations or differences in interest rates on earning assets and interest bearing liabilities from those that the Company is modeling or anticipating, including as a result of the Bank's inability to maintain deposit rates or defer increases to those rates in an elevated rate environment or lower rates in a falling rate environment, (vi) the ability to grow and retain low-cost core deposits, (vii) significant downturns in the business of one or more large customers, (viii) the inability of the Company to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels, or regulatory requests or directives, (ix) changes in state or Federal regulations, policies, or legislation applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, (x) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments, (xi) inadequate allowance for credit losses, (xii) the effectiveness of the Company’s activities in improving, resolving or liquidating lower quality assets, (xiii) results of regulatory examinations, (xiv) the vulnerability of the Company's network and online banking portals, and the systems of parties with whom the Company contracts, to unauthorized access, computer viruses, phishing schemes, social engineering, fraud, spam attacks, ransomware attacks, human error, natural disasters, power loss, and other security breaches, (xv) the possibility of additional increases to compliance costs or other operational expenses as a result of increased regulatory oversight, (xvi) loss of key personnel, and (xvii) adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, examinations or other legal and/or regulatory actions. These risks and uncertainties may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. The Company’s future operating results depend on a number of factors which were derived utilizing numerous assumptions that could cause actual results to differ materially from those projected in forward-looking statements

General

The Company is a registered bank holding company that owns 100% of the common stock of Wilson Bank and Trust (“Wilson Bank” or “the Bank”), a Tennessee state-chartered bank headquartered in Lebanon, Tennessee. The Company was formed in 1992. Wilson Bank commenced operations in 1987.

Wilson Bank is a community bank headquartered in Lebanon, Tennessee, principally serving Wilson County, DeKalb County, Smith County, Trousdale County, Rutherford County, Davidson County, Putnam County, Sumner County, Hamilton County, and Williamson County, Tennessee as its primary market areas. The markets served by the Bank are largely within the Nashville-Davidson-Murfreesboro-Franklin, Tennessee metropolitan statistical area. At December 31, 2023, Wilson Bank had thirty-one locations in Wilson, Davidson, DeKalb, Smith, Sumner, Rutherford, Putnam, Trousdale, Hamilton, and Williamson Counties, though Wilson Bank closed one of its locations in Wilson County in January 2024. 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,

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

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.

Wilson Bank also holds an ownership interest in Encompass Home Loan Lending, LLC ("Encompass"), a company offering mortgage banking services that is 51% owned by Wilson Bank and 49% owned by two home builders operating in Wilson Bank's market areas. The results of Encompass, which commenced operations on June 1, 2022, are consolidated in the Company's financial statements included elsewhere in this Annual Report.

The following discussion and analysis is designed to assist readers in their analysis of the Company’s consolidated financial statements and should be read in conjunction with such consolidated financial statements and the notes thereto.

Application of Critical Accounting Policies and Accounting Estimates

We follow accounting and reporting policies that conform, in all material respects, to accounting principles generally accepted in the United States and to general practices within the financial services industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base estimates on historical experience, current information, forecasted economic conditions, and other factors deemed to be relevant, actual results could differ from those estimates.

We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements.

Accounting policies related to the allowance for credit losses on financial instruments including loans and off-balance-sheet credit exposures are considered to be critical as these policies involve considerable subjective judgment and estimation by management. As discussed in Note 1 - Summary of Significant Accounting Policies, our policies related to allowances for credit losses changed on January 1, 2022 in connection with the adoption of a new accounting standard update as codified in Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”) Financial Instruments - Credit Losses. In the case of loans, the allowance for credit losses is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. In the case of off-balance-sheet credit exposures, the allowance for credit losses is a liability account, calculated in accordance with ASC 326, reported as a component of accrued interest payable and other liabilities in our consolidated balance sheets. The amount of each allowance account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy, changes in interest rates and the view of the regulatory authorities toward classification of assets. For additional information regarding critical accounting policies, refer to Note 1 - Summary of Significant Accounting Policies and Note 2 - Loans and Allowance for Credit Losses in the notes to consolidated financial statements contained elsewhere in this Annual Report.

Non-GAAP Financial Measures

This Annual Report contains certain financial measures that are not measures recognized under U.S. GAAP and, therefore, are considered non-GAAP financial measures. Members of Company management use these non-GAAP financial measures in their analysis of the Company’s performance, financial condition, and efficiency of operations. Management of the Company believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods. Management of the Company also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding underlying operating performance and identifying and analyzing ongoing operating trends. However, the non-GAAP financial measures discussed herein should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with U.S. GAAP. Moreover, the manner in which the non-GAAP financial measures discussed herein are calculated may differ from the manner in which measures with similar names are calculated by other companies. You should understand how other companies calculate their financial measures similar to, or with names similar to, the non-GAAP financial measures we have discussed herein when comparing such non-GAAP financial measures.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The non-GAAP measures in this Annual Report include “pre-tax pre-provision income,” “pre-tax pre-provision basic earnings per share,” “pre-tax pre-provision annualized return on average shareholders' equity,” and “pre-tax pre-provision annualized return on average assets.” A reconciliation of these measures to the comparable GAAP measures is included below.

Selected Financial Information

The executive management and Board of Directors of the Company evaluate key performance indicators (KPIs) on a continuing basis. These KPIs serve as benchmarks of Company performance and are used in making strategic decisions and, in some cases, are utilized for purposes of setting performance targets for our executive officers' incentive-based cash compensation. The following table represents the KPIs that management has determined to be important in making decisions for the Bank, in each case as of and for the year ended December 31, 2023, 2022 and 2021:

	2023			2022			2021
PER SHARE DATA:
Basic earnings per common share (GAAP)	$	4.21		$	4.66		$	4.44
Pre-tax pre-provision basic earnings per share (1)	$	5.70		$	6.66		$	5.89
Diluted earnings per common share (GAAP)	$	4.20		$	4.65		$	4.43
Cash dividends per common share	$	1.50		$	1.85		$	1.35
Dividends declared per common share as a percentage of basic earnings per common share		35.63	%		39.70	%		30.41	%

(1) Excludes income tax expense, and for 2023 and 2022 provision for credit losses-loans, provision for credit losses-available for sale securities, and provision for credit losses on off-balance sheet exposures. For 2021 excludes income tax expense, provision for loan losses, and provision for off-balance sheet exposures.

	2023			2022			2021
PERFORMANCE RATIOS:
Return on average shareholders' equity (GAAP) (1)		12.47	%		14.36	%		12.45	%
Pre-tax pre-provision return on average shareholders' equity (2)		16.86	%		20.51	%		16.52	%
Return on average assets (GAAP) (3)		1.08	%		1.29	%		1.35	%
Pre-tax pre-provision return on average assets (2)		1.47	%		1.84	%		1.79	%
Efficiency ratio (GAAP) (4)		60.38	%		55.11	%		56.60	%

(1) Return on average shareholders' equity is the result of net income divided by average shareholders' equity.

(2) Excludes income tax expense, and for 2023 and 2022 provision for credit losses-loans, provision for credit losses-available for sale securities, and provision for credit losses on off-balance sheet exposures. For 2021 excludes income tax expense, provision for loan losses, and provision for off-balance sheet exposures.

(3) Return on average assets is the result of net income divided by average assets.

(4) Efficiency ratio is the ratio of noninterest expense to the sum of net interest income and non-interest income.

	December 31, 2023			December 31, 2022
BALANCE SHEET RATIOS:
Total capital to assets ratio		8.86	%		8.41	%
Equity to asset ratio (Average equity divided by average total assets)		8.69	%		8.99	%
Tier 1 capital to average assets		10.60	%		11.18	%
Non-performing asset ratio		0.03	%		0.02	%
Book value per common share	$	36.74		$	31.42

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Reconciliation of Non-GAAP Financial Measures

	December 31, 2023			December 31, 2022			December 31, 2021
Pre-tax pre-provision income:
Net income attributable to common shareholders (GAAP)	$	48,938		$	53,042		$	49,426
Add: provision for credit losses - loans		6,300			8,656			1,143
Add: provision expense (benefit) for credit losses on off-balance sheet exposures		(2,989	)		(1,014	)		262
Add: Provision for credit losses - available-for-sale securities		—			—			—
Add: income tax expense		13,939			15,056			14,732
Pre-tax pre-provision income	$	66,188		$	75,740		$	65,563
Pre-tax pre-provision basic earnings per share:
Pre-tax pre-provision income	$	66,188		$	75,740		$	65,563
Weighted average shares		11,611,690			11,377,617			11,131,897
Basic earnings per common share (GAAP)	$	4.21		$	4.66		$	4.44
Provision for credit losses - loans	$	0.54		$	0.76		$	0.10
Provision expense (benefit) for credit losses on off-balance sheet exposures	$	(0.26	)	$	(0.09	)	$	0.02
Provision for credit losses - available-for-sale securities	$	—		$	—		$	—
Income tax expense	$	1.21		$	1.33		$	1.33
Pre-tax pre-provision basic earnings per common share	$	5.70		$	6.66		$	5.89
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision income	$	66,188		$	75,740		$	65,563
Average assets		4,517,697			4,107,738			3,653,528
Return on average assets (GAAP)		1.08	%		1.29	%		1.35	%
Provision for credit losses - loans		0.14	%		0.21	%		0.03	%
Provision expense (benefit) for credit losses on off-balance sheet exposures		(0.07	)%		(0.02	)%		0.01	%
Provision for credit losses - available-for-sale securities		—	%		—	%		—	%
Income tax expense		0.32	%		0.36	%		0.40	%
Pre-tax pre-provision return on average assets		1.47	%		1.84	%		1.79	%
Pre-tax pre-provision return on average shareholders' equity:
Pre-tax pre-provision income	$	66,188		$	75,740		$	65,563
Average total shareholders' equity		392,466			369,314			396,879
Return on average shareholders' equity (GAAP)		12.47	%		14.36	%		12.45	%
Provision for credit losses - loans		1.61	%		2.34	%		0.29	%
Provision expense (benefit) for credit losses on off-balance sheet exposures		(0.76	)%		(0.27	)%		0.07	%
Provision for credit losses - available-for-sale securities		—	%		—	%		—	%
Income tax expense		3.54	%		4.08	%		3.71	%
Pre-tax pre-provision return on average shareholders' equity		16.86	%		20.51	%		16.52	%

Results of Operations

Net earnings for the year ended December 31, 2023 were $48,938,000, a decrease of $4,104,000, or 7.74%, compared to net earnings of $53,042,000 for the year ended December 31, 2022. Our 2022 net earnings were 7.32%, or $3,616,000, higher than our net earnings of $49,426,000 for 2021. Basic earnings per share were $4.21 in 2023, compared with $4.66 in 2022 and $4.44 in 2021. Diluted earnings per share were $4.20 in 2023, compared to $4.65 in 2022 and $4.43 in 2021. The decrease in net earnings and diluted and basic earnings per share during the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to a decrease in net

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

interest income before provision for credit losses and an increase in non-interest expense, partially offset by an increase in non-interest income and a decrease in provision for credit losses - loans. The decrease in net interest income was due to an increase in cost of funds between the relevant periods, partially offset by an increase in average interest earning asset balances and an increase in the yield earned on interest earning assets. Net interest margin for the year ended December 31, 2023 was 3.30%, compared to 3.70% and 3.44% for the years ended December 31, 2022 and December 31, 2021, respectively. Net interest spread for the year ended December 31, 2023 was 2.97%, compared to 3.62% and 3.36% for the years ended December 31, 2022 and December 31, 2021, respectively. The increase in non-interest expense largely resulted from the Company's continued growth as well as rising costs of employees' salaries and benefits as a result of competition we are experiencing for human capital in our market areas. See below for further discussion regarding variances related to net interest income, provision for credit losses, non-interest income, non-interest expense and income taxes.

The decrease in Return on Average Assets (ROA) for the year ended December 31, 2023 when compared to December 31, 2022 as set forth in the table above was primarily attributable to an increase in average assets, interest expense, salaries and employee benefits, and FDIC insurance and data processing costs; partially offset by a decrease in the loss on sale of securities, an increase in service charges on deposit accounts, an increase in interest income and a decrease in the provision for credit losses.

The decrease in ROA for the year ended December 31, 2022 when compared to December 31, 2021 as set forth in the table above was primarily attributable to an increase in average assets, an increase in provision expense, a decrease in fees and gains on sales of mortgage loans, a loss on sale of securities, and an increase in employee salaries and benefits, partially offset by an increase in net interest income.

The increase in the total capital to assets ratio for the year ended December 31, 2023 when compared to December 31, 2022 as set forth in the table above was primarily attributable to a decrease in the unrealized loss of our available-for-sale securities as a result of an improvement in underlying market conditions. The equity to asset ratio declined as a result of a higher average of unrealized losses on our available-for-sale securities.

Net Interest Income

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

The difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities is net interest income, which is the Company's gross margin. An 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 21% for 2023, 2022 and 2021.

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.

	Dollars In Thousands
	2023								2022								2023/2022 Change
	Average			Rates/			Income/		Average			Rates/			Income/		Due to			Due to					Percent
	Balance			Yields			Expense		Balance			Yields			Expense		Volume			Rate		Total			Change
Loans, net of unearned interest (1) (2)	$	3,398,070			5.93	%		198,739	$	2,796,301			5.05	%		138,161	$	33,519			27,059		60,578
Investment securities—taxable		731,172			2.41			17,597		814,716			1.95			15,902		(1,747	)		3,442		1,695
Investment securities—tax exempt		66,600			2.36			1,574		72,724			1.91			1,392		(124	)		306		182
Taxable equivalent adjustment (3)		—			0.63			418		—			0.51			370		(33	)		81		48
Total tax-exempt investment securities		66,600			2.99			1,992		72,724			2.42			1,762		(157	)		387		230
Total investment securities		797,772			2.46			19,589		887,440			1.99			17,664		(1,904	)		3,829		1,925
Loans held for sale		4,637			5.26			244		7,131			3.70			264		(110	)		90		(20	)
Federal funds sold		8,157			5.16			421		15,486			0.72			111		(76	)		386		310
Interest bearing deposits		92,655			3.99			3,697		204,548			0.74			1,522		(1,238	)		3,413		2,175
Restricted equity securities		3,551			8.76			311		4,768			3.94			188		(58	)		181		123
Total earning assets		4,304,842			5.24			223,001		3,915,674			4.11			157,910		30,133			34,958		65,091			41.22	%
Cash and due from banks		25,066								24,087
Allowance for credit losses - loans		(42,214	)							(36,444	)
Bank premises and equipment		62,013								61,807
Other assets		167,990								142,614
Total assets	$	4,517,697							$	4,107,738

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

	Dollars In Thousands
	2023							2022							2023/2022 Change
	Average		Rates/			Income/		Average		Rates/			Income/		Due to			Due to						Percent
	Balance		Yields			Expense		Balance		Yields			Expense		Volume			Rate			Total			Change
Deposits:
Negotiable order of withdrawal accounts	$	976,154		0.60	%		5,847	$	1,083,028		0.24	%		2,546	$	(274	)		3,575			3,301
Money market demand accounts		1,123,482		2.03			22,769		1,250,916		0.47			5,905		(661	)		17,524			16,863
Time deposits		1,264,602		3.98			50,341		601,100		1.08			6,486		12,762			31,094			43,856
Other savings deposits		322,458		1.43			4,625		332,918		0.34			1,116		(36	)		3,545			3,509
Total interest-bearing deposits		3,686,696		2.27			83,582		3,267,962		0.49			16,053		11,791			55,738			67,529
Federal Home Loan Bank advances		63		3.05			2		—		—			—		2			—			2
Fed funds purchased		541		4.48			24		256		5.47			14		13			(3	)		10
Finance leases		2,266		3.14			71		1,928		3.43			66		11			(6	)		5
Total interest-bearing liabilities		3,689,566		2.27			83,679		3,270,146		0.49			16,133		11,817			55,729			67,546			418.68	%
Demand deposits		399,683							434,443
Other liabilities		35,982							33,835
Shareholders’ equity		392,466							369,314
Total liabilities and shareholders’ equity	$	4,517,697						$	4,107,738
Net interest income						$	139,322						$	141,777	$	18,316		$	(20,771	)	$	(2,455	)		(1.73	%)
Net interest margin (4)				3.30	%						3.70	%
Net interest spread (5)				2.97	%						3.62	%

(1) Yields on loans and total earning assets include the impact of State income tax credits related to incentive loans at below market rates and tax exempt loans to municipalities of $2.7 million and $3.0 million for the years ended December 31, 2023 and 2022, respectively.

(2) Loan fees of $12.0 million are included in interest income in 2023. Loan fees of $12.9 million are included in interest income in 2022, inclusive of $139,000 in SBA fees related to PPP loans.

(3) The tax equivalent adjustments have been computed using a 21% Federal tax rate.

(4) Net interest income on a tax equivalent basis divided by average interest-earning assets.

(5) Average interest rate on interest-earning assets less average interest rate on interest-bearing liabilities.

	Dollars In Thousands
	2022								2021								2022/2021 Change
	Average			Rates/			Income/		Average			Rates/			Income/		Due to			Due to						Percent
	Balance			Yields			Expense		Balance			Yields			Expense		Volume			Rate			Total			Change
Loans, net of unearned interest (1) (2)	$	2,796,301			5.05	%		138,161	$	2,382,262			5.07	%		118,676	$	20,079			(594	)		19,485
Investment securities—taxable		814,716			1.95			15,902		645,513			1.38			8,922		2,714			4,266			6,980
Investment securities—tax exempt		72,724			1.91			1,392		79,096			1.55			1,229		(105	)		268			163
Taxable equivalent adjustment (3)		—			0.51			370		—			0.41			327		(27	)		70			43
Total tax-exempt investment securities		72,724			2.42			1,762		79,096			1.97			1,556		(132	)		338			206
Total investment securities		887,440			1.99			17,664		724,609			1.45			10,478		2,582			4,604			7,186
Loans held for sale		7,131			3.70			264		16,478			2.66			438		(306	)		132			(174	)
Federal funds sold		15,486			0.72			111		31,083			0.04			13		(10	)		108			98
Interest bearing deposits		204,548			0.74			1,522		349,254			0.13			445		(256	)		1,333			1,077
Restricted equity securities		4,768			3.94			188		5,089			2.32			118		(7	)		77			70
Total earning assets		3,915,674			4.11			157,910		3,508,775			3.77			130,168		22,082			5,660			27,742			21.31	%
Cash and due from banks		24,087								30,971
Allowance for credit losses - loans		(36,444	)							(39,194	)
Bank premises and equipment		61,807								59,772
Other assets		142,614								93,204
Total assets	$	4,107,738							$	3,653,528

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

	Dollars In Thousands
	2022							2021							2022/2021 Change
	Average		Rates/			Income/		Average		Rates/			Income/		Due to			Due to						Percent
	Balance		Yields			Expense		Balance		Yields			Expense		Volume			Rate			Total			Change
Deposits:
Negotiable order of withdrawal accounts	$	1,083,028		0.24	%		2,546	$	912,577		0.20	%		1,866	$	378			302			680
Money market demand accounts		1,250,916		0.47			5,905		1,079,002		0.14			1,547		283			4,075			4,358
Time deposits		601,100		1.08			6,486		605,162		1.26			7,610		(51	)		(1,073	)		(1,124	)
Other savings deposits		332,918		0.34			1,116		253,265		0.19			480		185			451			636
Total interest-bearing deposits		3,267,962		0.49			16,053		2,850,006		0.40			11,503		795			3,755			4,550
Federal Home Loan Bank advances		—		—			—		858		15.50			133		(133	)		—			(133	)
Fed funds purchased		256		5.47			14		—		—			—		14			—			14
Finance leases		1,928		3.43			66		—		—			—		66			—			66
Total interest-bearing liabilities		3,270,146		0.49			16,133		2,850,864		0.41			11,636		742			3,755			4,497			38.65	%
Demand deposits		434,443							385,264
Other liabilities		33,835							20,521
Shareholders’ equity		369,314							396,879
Total liabilities and shareholders’ equity	$	4,107,738						$	3,653,528
Net interest income						$	141,777						$	118,532	$	21,340		$	1,905		$	23,245			19.61	%
Net interest margin (4)				3.70	%						3.44	%
Net interest spread (5)				3.62	%						3.36	%

(1) Yields on loans and total earning assets include the impact of State income tax credits related to incentive loans at below market rates and tax exempt loans to municipalities of $3.0 million and $2.1 million for the years ended December 31, 2022 and 2021, respectively.

(2) Loan fees of $12.9 million are included in interest income in 2022, inclusive of $139,000 in SBA fees related to PPP loans. Loan fees of $16.1 million are included in interest income in 2021, inclusive of $3.6 million in SBA fees related to PPP loans.

(3) The tax equivalent adjustment for 2022 and 2021 have been computed using a 21% Federal tax rate.

(4) Net interest income on a tax equivalent basis divided by average interest-earning assets.

(5) Average interest rate on interest-earning assets less average interest rate on interest-bearing liabilities.

The components of our loan yield, a key driver to our net interest margin for the years ended December 31, 2023, 2022, and 2021 were as follows:

	December 31, 2023					December 31, 2022					December 31, 2021
	Interest Income		Average Yield			Interest Income		Average Yield			Interest Income		Average Yield
Loan yield components:
Contractual interest rates		186,754		5.50	%		125,281		4.48	%		102,592		4.31	%
Origination and other fee income		11,985		0.35	%		12,741		0.46	%		12,476		0.52	%
PPP loan fee income		—		—	%		139		—	%		3,608		0.15	%
Loan tax credits and tax-exempt loan interest		2,677		0.08	%		2,953		0.11	%		2,112		0.09	%
Total	$	201,416		5.93	%	$	141,114		5.05	%	$	120,788		5.07	%

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 2023 was $222,583,000, up 41.29% when compared with $157,540,000 in 2022, which was up 21.33% when compared to $129,841,000 in 2021, in each case excluding tax exempt adjustments relating to tax exempt securities and loans. The increase in total interest income in 2023 when compared to 2022 was primarily attributable to an increase in interest earned on loans, an increase in interest and dividends earned on securities, and an increase in interest earned on interest bearing deposits. The increase in interest earned on loans resulted from an overall increase in average loan balances and an increase in the average yield earned on loans, which was primarily due to the elevated short term interest rate environment in 2023, as new loans were put on at higher contractual interest rates and a portion of the Bank's variable loan portfolio repriced to current market rates. Approximately eighty two percent of the loans in our loan portfolio are variable rate loans, primarily indexed to the Federal Reserve prime rate. Fees earned on loans totaled $11,985,000, $12,880,000 and $16,084,000 for the years ended 2023, 2022, and 2021, respectively. The decrease in fees earned on loans for the year ended 2023 when compared to the year ended 2022 was attributable to a decrease in the absolute number of loan originations. The total amount of state income tax credits and tax-exempt loan interest included in our loan yields were $2,677,000, $2,953,000 and $2,112,000 for the years ended 2023, 2022 and 2021, respectively. The increase in interest and dividends earned on securities in 2023 when compared to 2022 resulted from higher yields earned on the securities purchased throughout 2022 as management invested liquid funds into the securities portfolio. The increase in interest earned on interest bearing deposits over the same period resulted from an increase in the yield earned due to the increased rate

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

environment offset in part by declining average balances. The direction and speed with which short-term interest rates move has an impact on our net interest income. The Bank anticipates that its net interest margin is likely to continue to contract during 2024 because of the competitive pressures in its markets, which put pressure on the Bank's deposit and loan pricing which may contribute to a compression of its margin.

The ratio of average earning assets to total average assets was 95.3%, 95.3% and 96.0% for each of the years ended December 31, 2023, 2022 and 2021, respectively. Average earning assets increased $389,168,000 from $3,915,674,000 at December 31, 2022 to $4,304,842,000 at December 31, 2023. For the year ended December 31, 2021, average earning assets were $3,508,775,000. The average rate earned on earning assets for 2023 was 5.24%, compared with 4.11% in 2022 and 3.77% in 2021. The increase in average earning assets was largely due to an increase in the average balance of loans due to loan growth. This was partially offset by a decrease in the average balance of interest bearing deposits and a decrease in the average balance of securities. The increase in the average rate earned on earning assets resulted from the higher interest rate environment and the repricing of a portion of the bank's variable rate loan portfolio as mentioned previously.

Total interest expense for 2023 was $83,679,000, an increase of $67,546,000, or 418.68%, compared to total interest expense of $16,133,000 in 2022. For 2021, total interest expense totaled $11,636,000. Average interest-bearing deposits increased to $3,686,696,000 for 2023 compared to $3,267,962,000 for 2022. The average rate paid on interest-bearing deposits was 2.27% for 2023 compared to 0.49% for 2022. The increase in total interest expense in 2023 resulted from an increase in the volume and rate paid on average interest bearing deposits. Competitive pressures in the rising and subsequent elevated short-term interest rate environment required the Bank to raise, and then subsequently maintain, rates paid on deposits as well as the Bank's customers shifting deposits from lower rate earning or non-interest bearing accounts to higher rate earning accounts, and the Bank utilizing increased levels of brokered deposits. The Company was able to maintain its deposit rates at or below 2021 levels during the first two quarters of 2022 despite the rising rate environment. However, during the second half of 2022 the Company raised its time deposit rates to maintain liquidity levels and offer competitive rates in our markets. This continued throughout 2023 resulting in the increase in interest expense. the increase in brokered deposits, which typically carry higher rates than core deposits, that we experienced in 2023 also contributed to the increase in interest expense. Should our liquidity decrease, including as a result of loan growth that outpaces deposit growth, the rates we pay on our deposits may increase and we may have to further increase our use of brokered deposits. In addition, if interest rates remain elevated when those time deposits that were priced during the lower interest rate environment mature in 2024, our interest expense will likely increase if such deposits are renewed and repriced at current market rates.

Net interest income for 2023 totaled $138,904,000 as compared to $141,407,000 and $118,205,000 in 2022 and 2021, 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 2.97% in 2023 from 3.62% in 2022. The net interest spread was 3.36% in 2021. Net interest margin decreased to 3.30% in 2023 from 3.70% in 2022. The net interest margin was 3.44% in 2021. The decrease in net interest margin in 2023 was due to the increase in rates paid on our interest bearing liabilities outpacing the increase in the yield earned on all earning assets for the reasons discussed above. Changes in interest rates paid on products such as interest checking, savings, and money market accounts will generally increase or decrease in a manner that is consistent with changes in the short-term environment, but are also impacted by competitive market conditions.

Provision for Credit Losses

On January 1, 2022, we adopted FASB ASU 2016-13, which introduces the current expected credit losses (CECL) methodology and requires us to estimate all expected credit losses over the remaining life of our loan portfolio. The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management's evaluation is adequate to provide coverage for all expected credit losses. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity. Refer to Note 1, "Summary of Significant Accounting Policies" in the notes to our consolidated financial statements for a detailed discussion regarding ACL methodology.

The provision for credit losses-loans in 2023 and 2022 was $6,300,000 and $8,656,000 calculated under the CECL methodology. The provision for loan losses in 2021 was $1,143,000 under the incurred loss methodology. The benefit for the allowance for credit losses on off-balance sheet exposures in 2023 and 2022 were $2,989,000 and $1,014,000 calculated under the CECL methodology. In 2021, there was a provision of $262,000 under the incurred loss methodology.

The decrease in the provision for credit losses-loans for the year ended December 31, 2023 was primarily attributable to a decrease in the volume of loans originated during the period, partially offset by the macroeconomic forecast in our CECL model reflecting the potential for a recession. The increase in the provision for credit losses-loans for the year ended December 31, 2022 was primarily attributable to an increase in the volume of loans originated during the period. The provision for loan losses recorded during 2021 was primarily the result of loan growth.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

As discussed below under Financial Condition-Loans, loan growth tapered for the twelve months ended December 31, 2023 compared to the same period in 2022. Gross loan growth totaled $440,839,000, $671,824,000 and $165,338,000 for the years ended 2023, 2022 and 2021, respectively.

The increase in the benefit for credit losses on off-balance sheet credit exposures was the result of a decrease in our off-balance sheet commitments and an increase in our unconditionally cancellable commitments as a percentage of our off-balance sheet commitments, which are excluded from the calculation of the allowance of credit losses on off-balance sheet credit exposures under ASC 326.

The following detail provides a breakdown of the provision for credit loss-loans expense and net (charge-offs) recoveries at and for the twelve months ended December 31, 2023, 2022 and 2021:

	In Thousands, Except Percentages
	Provision for Credit Loss - Loans Expense (Benefit)			Net (Charge-Offs) Recoveries			Average Loans		Ratio of Net (Charge-offs) Recoveries to Average Loans
December 31, 2023
Residential 1-4 family real estate	$	1,435		$	20			909,742		—
Commercial and multi-family real estate		2,123			—			1,192,260		—
Construction, land development and farmland		702			20			893,031		—
Commercial, industrial and agricultural		125			(29	)		126,499		(0.02	)
1-4 family equity lines of credit		639			—			177,398		—
Consumer and other		1,276			(1,276	)		99,141		(1.29	)
Total	$	6,300		$	(1,265	)	$	3,398,070		(0.04	)%
December 31, 2022
Residential 1-4 family real estate	$	1,353		$	108		$	762,580		0.01	%
Commercial and multi-family real estate		1,886			—			974,101		—
Construction, land development and farmland		3,795			19			736,728		—
Commercial, industrial and agricultural		(117	)		6			119,855		0.01
1-4 family equity lines of credit		396			—			120,104		—
Consumer and other		1,343			(1,044	)		82,933		(1.26	)
Total	$	8,656		$	(911	)	$	2,796,301		(0.03	)%
December 31, 2021
Residential 1-4 family real estate	$	971		$	68		$	609,075		0.01	%
Commercial and multi-family real estate		(1,497	)		—			917,106		—
Construction, land development and farmland		1,296			371			551,183		0.07
Commercial, industrial and agricultural		(35	)		(27	)		144,209		(0.02	)
1-4 family equity lines of credit		101			—			84,460		—
Consumer and other		307			(462	)		76,229		(0.61	)
Total	$	1,143		$	(50	)	$	2,382,262		—	%

Following our adoption of CECL, the provision for credit losses - loans charged to operating expense requires us to estimate all expected credit losses over the remaining life of our loan portfolio. Other factors which, in management’s judgment, deserve current recognition in estimating expected credit losses - loans include growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for credit losses - loans to outstanding loans, adverse situations that may affect our borrowers' ability to repay, the estimated value of any underlying collateral and current economic conditions that may affect our borrowers' ability to pay.

Credit loss expense related to off-balance sheet exposures was previously reported as a component of other non-interest expense for the fiscal year ended December 31, 2021. Such amounts have been reclassified to credit loss expense to make prior periods comparable to the current presentation. See the section captioned "Allowance for Credit Losses" elsewhere in this discussion for further analysis of credit loss expense related to loans and off-balance sheet credit exposures.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

There was no provision for credit losses on available-for-sale securities for the twelve months ended December 31, 2023 or 2022, respectively.

Non-Interest Income

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

The following is a summary of our non-interest income for the years ended December 31, 2023, 2022 and 2021 (in thousands):

	Twelve Months Ended December 31,											Twelve Months Ended December 31,
	2023			2022			Increase (Decrease)		% Increase (Decrease)			2022			2021			Increase (Decrease)		% Increase (Decrease)
Service charges on deposits	$	7,890		$	7,382					6.88	%	$	7,382		$	6,137					20.29	%
Brokerage income		7,184			6,929					3.68			6,929			6,368					8.81
Debit and credit card interchange income, net		8,490			8,416					0.88			8,416			7,783					8.13
Other fees and commissions		1,408			1,653			)		(14.82	)		1,653			1,446					14.32
BOLI and annuity earnings		1,667			1,346					23.85			1,346			1,109					21.37
Gain (loss) on sale of securities, net		(1,009	)		(1,620	)				37.72			(1,620	)		28			)		(5,885.71	)
Fees and gains on sales of mortgage loans		2,635			2,973			)		(11.37	)		2,973			9,997			)		(70.26	)
Mortgage servicing income (loss), net		9			(28	)				132.14			(28	)		—			)		(100.00	)
Loss on sale of other real estate, net		—			—					—			—			(15	)				100.00
Gain (loss) on the sale of fixed assets, net		(55	)		291			)		(118.90	)		291			(43	)				776.74
Gain (loss) on sale of other assets, net		(10	)		8			)		(225.00	)		8			6					33.33
Other income (loss)		80			(69	)				215.94			(69	)		34			)		(302.94	)
Total non-interest income	$	28,289		$	27,281					3.69	%	$	27,281		$	32,850			)		(16.95	%)

All values are in US Dollars.

2023 v. 2022

The increase in non-interest income for the year ended December 31, 2023 when compared to the year ended December 31, 2022 is primarily attributable to increases in service charges on deposits, brokerage income, BOLI and annuity earnings, and a decrease in the realized loss on the sale of securities, partially offset by a decrease in fees and gains on sale of mortgage loans and a decrease in the gain on the sale of fixed assets.

The increase in service charges on deposits is primarily due to an increase in non-sufficient funds due to an increase in the number of customers and the more challenging economic environment in 2023.

The increase in brokerage income is primarily due to a strong fourth quarter of 2023, driven by multiple client acquisitions and an increase of overall market share in our market areas as well as the positive performance of financial markets during such quarter.

The increase in BOLI and annuity earnings is primarily attributable to an increase in rates in the market.

The loss on sale of securities for 2023 and 2022 was due to the Company selling securities in order to restructure the securities portfolio into higher yielding securities offsetting securities pricing in future periods. In 2023, the Company was able to take advantage of the improvement in underlying market conditions to limit the amount of realized losses.

The decrease in fees and gains on sale of mortgage loans was due to the higher interest rate environment which contributed to weakened demand for purchase money mortgage loans and refinancing transactions. The volume of mortgage loans originated for 2023 was $73,984,000 compared to $106,601,000 for 2022.

The loss on sale of fixed assets in 2023 is primarily due to the sale of a company vehicle. The gain on sale of fixed assets in 2022 was attributable to the sale of a lot which was originally purchased for a future branch location.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

2022 v. 2021

The decrease in non-interest income for the year ended December 31, 2022 when compared to the year ended December 31, 2021 was primarily attributable to a decrease in security gain (losses), net and a decrease in fees and gains on sales of mortgage loans, offset in part by an increase in service charges on deposit accounts, an increase in debit and credit card interchange income, an increase in brokerage income, and an increase in the gain on sale of fixed assets.

The loss on sale of securities we recorded in 2022 was due to management's decision to sell these securities due to the rising rate environment to restructure a portion of the securities portfolio into higher yielding securities in an effort to increase net interest margin in future periods.

The decrease in the fees and gains on sales of mortgage loans was due to the rising rate environment which contributed to weakened demand for purchase money mortgage loans and refinancing transactions, offset in part by gains in our mortgage hedging activities. The volume of mortgage loans originated for 2022 was $106,601,000 compared to $215,813,000 in 2021. In anticipation of the slowing of mortgage origination volume due to the rising rate environment, the Company began to retain servicing rights on some of the loans it originated during 2022.

Service charges on deposit accounts primarily increased due to an increase in overdraft fees and fees for paper statements.

Debit and credit card interchange income primarily increased due to an increase in the number and volume of debit card and credit card holders and transactions.

Brokerage income primarily increased due to the opening of new investment accounts as well as growth in assets under management, attributable to marketing efforts and overall population growth of the middle Tennessee markets. In addition, the increase in interest rates has increased customers' interest in opportunities to capitalize on products and services provided.

Non-Interest Expenses

Non-interest expenses consist primarily of employee costs, FDIC premiums, occupancy expenses, furniture and equipment expenses, advertising and public relations expenses, data processing expenses, directors’ fees, audit, legal and consulting fees, and other operating expenses.

The following is a summary of the Company's non-interest expense for the years ended December 31, 2023, 2022 and 2021 (in thousands):

	Twelve Months Ended December 31,									Twelve Months Ended December 31,
	2023		2022		Increase (Decrease)		% Increase (Decrease)			2022		2021		Increase (Decrease)		% Increase (Decrease)
Employee salaries and benefits	$	59,501	$	56,707				4.93	%	$	56,707	$	52,722				7.56	%
Equity-based compensation		1,528		1,864		)		(18.03	)		1,864		1,428				30.53
Occupancy expenses		6,532		5,563				17.42			5,563		5,473				1.64
Furniture and equipment expenses		3,202		3,389		)		(5.52	)		3,389		3,323				1.99
Data processing expenses		8,810		7,337				20.08			7,337		5,780				26.94
Advertising expenses		3,714		3,455				7.50			3,455		2,736				26.28
Accounting, legal & consulting expenses		1,789		1,409				26.97			1,409		1,287				9.48
FDIC insurance		3,120		1,527				104.35			1,527		1,130				35.13
Directors’ fees		713		650				9.69			650		686		)		(5.25	)
Other operating expenses		12,042		11,069				8.79			11,069		10,927				1.30
Total non-interest expense	$	100,951	$	92,970				8.58	%	$	92,970	$	85,492				8.75	%

All values are in US Dollars.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

2023 v. 2022

The increase in non-interest expenses for the year ended December 31, 2023 when compared to the year ended December 31, 2022 was primarily attributable to an increase in salaries and employee benefits, occupancy expenses, data processing expenses, FDIC insurance, other operating expenses, and advertising expenses.

Salaries and employee benefits increased for the year ended December 31, 2023 compared to the comparable period in 2022 primarily due to an increase in the number of employees necessary to support the Company’s growth in operations and branch count.

The increase in occupancy expense is primarily due to multiple branch renovations, repairs, ongoing branch maintenance, and costs associated with the termination of a lease associated with the branch closed in January 2024.

Data processing expenses increased due to an increase in computer maintenance, consumer and business online banking, and computer hardware/license expenses. The computer maintenance expenses increased as a result of, among other items, expenses associated with additional software applications and the number of open accounts. Enhanced business digital solutions, improved digital security for consumers, and an increase in the number of customers using digital services accounted for other increases. The Company anticipates that data processing expenses will continue to increase as the Company’s operations grow, the demand for digital products and services from customers increases, and the cyber threat environment grows.

FDIC assessment expense increased due to the Company's growth in 2022 as well as an increase in the assessment rate administered by the FDIC.

The increase in other operating expenses is primarily due to an increase in employee engagement and development, ATM servicing costs, and write-offs on customer deposit accounts resulting from fraudulent transactions.

The increase in advertising expenses is primarily attributable to an increase in customer acquisition costs, marketing expenses associated with the opening of two new branches, the advertising of new products, as well as an overall increase in the cost of marketing resources.

The efficiency ratio is a common and comparable KPI used in the banking industry. The Company uses this metric to monitor how effective management is at using our internal resources. It is calculated by taking our non-interest expense divided by our net-interest income plus non-interest income. Our efficiency ratio for the years ended 2023, 2022 and 2021 was 60.38%, 55.11% and 56.60%, respectively. The increase in the efficiency ratio in 2023 when compared to 2022 was due to higher non-interest expense and lower net interest income, partially offset by an increase in non-interest income, in each case for the reasons discussed above.

The Company expects non-interest expense will continue to increase in 2024, including as a result of increased salary and benefits expense and increased occupancy costs associated with our continued growth.

2022 v. 2021

The increase in non-interest expenses for the year ended December 31, 2022 when compared to the year ended December 31, 2021 was primarily attributable to a year-over-year increase in salaries and employee benefits, equity-based compensation, data processing expenses, advertising expenses, and FDIC insurance.

The increase in salaries and employee benefits for the year ended December 31, 2022 when compared to the year ended December 31, 2021 was primarily attributable to an increase in the number of employees necessary to support the Company’s growth in operations and branch count as well as an increase in incentives and temporary salaries, offset by a decrease in commission salaries and mortgage lender compensation. The increase in equity-based compensation was due to equity awards granted to certain of our directors, senior executive officers and other officers and an increase in the weighted average grant date value of those awards.

The increase in data processing expenses was primarily attributable to an increase in computer maintenance, computer license expense, and call center expense. The computer maintenance and license expenses included movement of in-house systems to cloud servers, additional investments in digital banking solutions, and an increase in information security expenses. The increase in call center expense resulted from the call center extending their operating hours.

The increase in advertising expenses was primarily attributable to the opening of a new branch which included targeted marketing efforts to drive traffic and awareness for the new location, as well as additional targeted marketing efforts to help increase market share in our growth areas. We also saw an increase in expenses related to the return of in-person events as COVID-19 restrictions continued to loosen.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The Company was also the sole sponsor for a Habitat for Humanity home build as well as a sponsor for several other community events for the markets we serve.

The increase in FDIC insurance was primarily attributable to the Company's growth.

The increase in other operating expenses was related to meals and entertainment, supplies, and debit and credit card losses.

Income Taxes

The Company’s income tax expense was $13,939,000 for 2023, a decrease of $1,117,000 from $15,056,000 for 2022, which was up by $324,000 from the 2021 total of $14,732,000. The percentage of income tax expense to earnings before taxes was 22.1% in 2023, 22.1% in 2022 and 23.0% in 2021. The decrease in income tax expense in 2023 from 2022 was due to a decrease in earnings before income taxes. The increase in 2022 from 2021 was due to an increase in earnings before income taxes, partially offset by additional state tax credits that lowered our effective tax rate. Our effective tax rate represents our blended statutory federal and state rate of 26.135% affected by the impact of anticipated favorable permanent differences between our book and taxable income such as earnings on bank-owned life insurance, income earned on tax-exempt securities and loans, and certain federal and state tax credits.

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

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, we begin with historical results adjusted for changes in accounting policies and incorporate assumptions including the amount of future state and federal pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income. Changes in current tax laws and rates could also affect recorded deferred tax assets and liabilities in the future as was the case with the passage of the Tax Cuts and Jobs Act in 2017.

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

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

Financial Condition

Balance Sheet Summary

The Company’s total assets increased in 2023 by $560,826,000 or 13.09%, to $4,846,476,000 at December 31, 2023, after increasing 7.42% in 2022 to $4,285,650,000 at December 31, 2022. Loans, net of allowance for credit losses, totaled $3,550,675,000 at December 31, 2023, a $436,879,000, or 14.03%, increase compared to December 31, 2022. In 2023, management targeted owner-occupied commercial real estate, residential real estate lending and small business lending as areas of focus. The increase in loans in 2023 resulted from the continued population growth and corporate relocations in the Bank's primary market areas, the opening of new branches, and increased marketing efforts. Although the Company continued to grow loans in 2023, the rate at which it grew loans slowed compared to 2022. The Company expects to experience slower loan growth in 2024 as elevated interest rates are expected to continue to dampen loan demand, particularly if a recessionary economic environment develops. In addition, we expect to continue to moderate the extent of our lending in 2024 to ensure adequate liquidity. At year-end 2023, securities totaled $811,081,000, a decrease of 1.43% from $822,812,000 at December 31, 2023, primarily due to a run-off of declining balance securities and the selling of securities, partially offset by the purchase of new securities and an improvement in the unrealized losses associated with our available-for-sale securities portfolio. As a result of deposit growth that outpaced loan growth, interest bearing deposits at other financial institutions increased by $135,007,000, to $213,701,000 at December 31, 2023. Deferred income taxes totaled $45,473,000 at December 31, 2023, a $5,850,000, or 11.40%, decrease

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

compared to December 31, 2022. The decrease in deferred income taxes was largely attributable to a decrease in the unrealized losses on our available-for-sale securities portfolio of $30,145,000.

Total liabilities increased by $491,873,000, or 12.53%, to $4,417,071,000 at December 31, 2023 compared to $3,925,198,000 at December 31, 2022. This increase was composed primarily of the $474,401,000 increase in total deposits to $4,367,106,000, a 12.19% increase from December 31, 2022. The increase in total deposits since December 31, 2022 was primarily attributable to growth in market share, branching and brokered deposit activities, and concerted marketing efforts to drive deposit growth which resulted in the opening of new deposit accounts. Accrued interest and other liabilities increased to $49,965,000 from $32,493,000 at respective year ends 2023 and 2022. The increase in accrued interest and other liabilities was due to an increase in interest payable on CDs as customers moved from lower earning and non-interest earning accounts to take advantage of the higher rates, an increase in interest payable on brokered CDs, and an increase in reserve for income taxes, partially offset by a decrease in reserve for off-balance sheet commitments, a decrease in escrow payable, and a decrease in operating lease liability in connection with the branch closure in January 2024.

Shareholders’ equity increased $68,953,000, or 19.13%, in 2023, due to an increase in the fair value of available-for-sale securities net of taxes, net earnings, the issuance of common stock pursuant to the Company’s Dividend Reinvestment Plan and the exercise of stock options. This increase in equity was partially offset by dividends paid on the Company’s common stock. A more detailed discussion of assets, liabilities and capital follows.

Loans

The following schedule details the loans and percentage of loans in each category of the Company at December 31, 2023 and 2022 (dollars in thousands):

	December 31, 2023						December 31, 2022
	AMOUNT			%			AMOUNT			%
Residential 1-4 family real estate	$	959,218			26.6	%	$	854,970			27.0	%
Commercial and multi-family real estate		1,313,284			36.4			1,064,297			33.6
Construction, land development and farmland		901,336			25.0			879,528			27.8
Commercial, industrial and agricultural		127,659			3.5			124,603			3.9
1-4 family equity lines of credit		202,731			5.6			151,032			4.8
Consumer and other		104,373			2.9			93,332			2.9
Total loans before net deferred loan fees		3,608,601			100.0	%		3,167,762			100.0	%
Net deferred loan fees		(13,078	)					(14,153	)
Total loans		3,595,523						3,153,609
Less: Allowance for credit losses		(44,848	)					(39,813	)
Net loans	$	3,550,675					$	3,113,796

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 credit losses, increased 14.03% at year-end 2023 when compared to year-end 2022. Overall, the Bank's loan demand and related new loan production has continued to be steady, though loan demand slightly slowed in 2023. The net loan growth of 14.03% from December 31, 2022 reflects the continued emphasis of management on growing the loan portfolio. The table above sets forth the loan categories and the percentage of such loans in the portfolio as of December 31, 2023 and 2022.

As represented in the above table, Wilson Bank experienced loan growth for the year ended December 31, 2023 in all loan categories. Contributing to the Company's loan growth in 2023 were the continued population growth and corporate relocations in the Bank's primary market areas, the opening of new branches, and increased marketing efforts. Residential 1-4 family real estate loans increased 12.2% in 2023 and comprised 26.6% of the total loan portfolio at December 31, 2023, compared to 27.0% at December 31, 2022. The increase in residential 1-4 family real estate loans is attributable to the Bank successfully growing its residential portfolio through enhanced marketing efforts directed at homebuilders in the Company's market areas, and the increase the Company is seeing in the investor sector of 1-4 family. Commercial and multi-family real estate loans increased 23.4% in 2023 and comprised 36.4% of the total loan portfolio at December 31, 2023, compared to 33.6% at December 31, 2022. Construction, land development and farmland loans increased 2.5% in 2023 and comprised 25.0% of the total loan portfolio at December 31, 2023, compared to 27.8% at December 31, 2022. One-to-four family equity lines of credit loans increased 34.2% in 2023 and comprised 5.6% of the total loan portfolio at December 31, 2023, compared to 4.8% at December 31, 2022. The increase in commercial and multi-family real estate, construction, land development and farmland loans, and 1-4 family equity lines of credit is primarily attributable to continued economic growth and expansion in the Bank's primary market areas. Wilson Bank continues to seek to diversify its real estate portfolio over the long term as it seeks to lessen concentrations in

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

any one type of loan. As noted above, the Company expects loan growth to further slow in 2024 as a result of the elevated interest rate environment and the potential challenging economic conditions, as well as the Company's continued moderation of its lending as it seeks to preserve adequate liquidity.

Because construction loans remain a meaningful portion of our portfolio, the Bank has implemented an additional layer of monitoring as it seeks to avoid advancing funds that exceed the present value of the collateral securing the loan. The responsibility for monitoring percentage of completion and distribution of funds tied to these completion percentages is now monitored and administered by a Credit Administration Department independent of the lending function. The Bank continues to seek to diversify its real estate portfolio as it seeks to lessen concentrations in any one type of loan.

Banking regulators define highly leveraged transactions to include leveraged buy-outs, acquisition loans and recapitalization loans of an existing business. Under the regulatory definition, at December 31, 2023, the Company had no highly leveraged transactions, and there were no foreign loans outstanding during any of the reporting periods. As of December 31, 2023, the Company had not underwritten any loans in connection with capital leases.

The following table classifies the Company's fixed and variable rate loans at December 31, 2023 according to contractual maturities of: (1) one year or less, (2) after one year through five years, (3) after five years through fifteen years, and (4) after fifteen years (dollars in thousands):

	December 31, 2023
	One Year or Less		After One Year Through Five Years		After Five Years Through Fifteen Years		After Fifteen Years		Total
Residential 1-4 family real estate	$	55,621	$	15,689	$	118,908	$	769,000	$	959,218
Commercial and multi-family real estate		34,976		79,687		252,214		946,407		1,313,284
Construction, land development and farmland		278,891		217,707		116,411		288,327		901,336
Commercial, industrial and agricultural		17,940		40,231		40,506		28,982		127,659
1-4 family equity lines of credit		17,108		26,592		156,232		2,799		202,731
Consumer and other		26,783		47,993		9,492		20,105		104,373
Total	$	431,319	$	427,899	$	693,763	$	2,055,620	$	3,608,601
Loans with fixed interest rates:
Residential 1-4 family real estate	$	48,758	$	2,969	$	18,423	$	108,665	$	178,815
Commercial and multi-family real estate		23,016		16,521		17,546		5,283		62,366
Construction, land development and farmland		168,562		64,977		17,298		7,832		258,669
Commercial, industrial and agricultural		13,356		28,990		8,724		11		51,081
1-4 family equity lines of credit		6,566		999		25		—		7,590
Consumer and other		15,017		44,090		6,732		6,323		72,162
Total	$	275,275	$	158,546	$	68,748	$	128,114	$	630,683
Loans with variable interest rates:
Residential 1-4 family real estate	$	6,863	$	12,720	$	100,485	$	660,335	$	780,403
Commercial and multi-family real estate		11,960		63,166		234,668		941,124		1,250,918
Construction, land development and farmland		110,329		152,730		99,113		280,495		642,667
Commercial, industrial and agricultural		4,584		11,241		31,782		28,971		76,578
1-4 family equity lines of credit		10,542		25,593		156,207		2,799		195,141
Consumer and other		11,766		3,903		2,760		13,782		32,211
Total	$	156,044	$	269,353	$	625,015	$	1,927,506	$	2,977,918

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following table details selected information as to non-accrual loans of the Company at December 31, 2023, 2022 and 2021:

	In Thousands, Except Percentages
	December 31, 2023		December 31, 2022		December 31, 2021
		Non-Accrual Loans		Non-Accrual Loans		Non-Accrual Loans
	Total Loans	Amount	Total Loans	Amount	Total Loans	Amount
Residential 1-4 family real estate	$959,218	—	$854,970	—	$689,579	—
Commercial and multi-family real estate	1,313,284	—	1,064,297	—	908,673	—
Construction, land development and farmland	901,336	—	879,528	—	612,659	—
Commercial, industrial and agricultural	127,659	—	124,603	—	118,155	—
1-4 family equity lines of credit	202,731	—	151,032	—	92,229	—
Consumer and other	104,373	—	93,332	—	74,643	—
Total	$3,608,601	—	$3,167,762	—	$2,495,938	—
Allowance for credit losses on loans		44,848		39,813		39,632
Ratio of non-accrual loans to total loans outstanding
Ratio of allowance for credit losses on loans to non-accrual loans		—%		—%		—%

All values are in US Dollars.

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 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 non-accrual status, the accrued but unpaid interest is also evaluated as to collectability. If collectability is doubtful, the unpaid interest is charged off. Thereafter, interest on non-accrual loans is recognized only as received. There were no non-accrual loans at December 31, 2023, 2022, or 2021.

At December 31, 2023, there were four outstanding loan modifications made to borrowers experiencing financial difficulty totaling $3,446,000, all of which were on accrual status.

At December 31, 2023, and December 31, 2022, there was no other real estate owned outstanding.

The following table sets forth for the reported periods loans that were at least 30 days but less than 60 days past due, 60 days but less than 90 days past due and nonaccrual loans and those loans past due greater than 89 days:

	(In thousands)
	30-59 Days Past Due		60-89 Days Past Due		Nonaccrual and Greater Than 89 Days Past Due		Past Due		Current		Total Loans		Loans Greater Than 89 Days Past Due and Accruing Interest
December 31, 2023
Residential 1-4 family real estate	$	1,544		552		1,178		3,274		955,944		959,218	$	1,178
Commercial and multi-family real estate		5,846		—		—		5,846		1,307,438		1,313,284		—
Construction, land development and farmland		2,959		1		—		2,960		898,376		901,336		—
Commercial, industrial and agricultural		52		—		7		59		127,600		127,659		7
1-4 family equity lines of credit		571		209		106		886		201,845		202,731		106
Consumer and other		350		78		118		546		103,827		104,373		118
Total	$	11,322		840		1,409		13,571		3,595,030		3,608,601	$	1,409
December 31, 2022
Residential 1-4 family real estate	$	2,046		1,080		426		3,552		851,418		854,970	$	426
Commercial and multi-family real estate		397		1,626		400		2,423		1,061,874		1,064,297		400
Construction, land development and farmland		591		—		—		591		878,937		879,528		—
Commercial, industrial and agricultural		49		62		—		111		124,492		124,603		—
1-4 family equity lines of credit		74		77		—		151		150,881		151,032		—
Consumer and other		403		184		43		630		92,702		93,332		43
Total	$	3,560		3,029		869		7,458		3,160,304		3,167,762	$	869

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Past due loans, which include nonaccrual loans and loans greater than 89 days past due, totaled $13,571,000 at December 31, 2023, an increase from $7,458,000 at December 31, 2022. The increase in 30-59 days past due loans during the year ended December 31, 2023 of $7,762,000 was primarily due to the additions of one large commercial real estate relationship, one large construction loan relationship, and several 1-4 family equity lines of credit. The increase in nonaccrual and greater than 89 days past due loans during the year ended December 31, 2023 of $540,000 was due primarily to the addition of one large residential 1-4 family real estate loan relationship that was greater than 89 days past due and the addition of one large 1-4 family equity line of credit loan relationship that was greater than 89 days past due. Management believes that it is probable that it will incur losses on nonaccrual and greater than 89 days past due loans but believes that these losses should not exceed the amount in the allowance for credit losses already allocated to these loans, unless there is a severe deterioration of local real estate values.

The net non-performing asset ratio (NPA) is used as a measure of the overall quality of the Company's assets. Our NPA ratio is calculated by dividing the total of our loans greater than 89 days past due and accruing interest, non-accrual loans, and other real estate owned by our total assets outstanding. Our NPA ratios for the periods ended December 31, 2023 and December 31, 2022 were 0.03% and 0.02%, respectively. The increase in our NPA ratio was impacted by increases in loans greater than 89 days past due and accruing interest as described above.

Other loans may be classified as collateral dependent 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. Such loans generally 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. Collateral dependent loans are measured at the fair value of the collateral less estimated selling costs. If the fair value of the collateral dependent loan less estimated selling costs is less than the recorded investment in the loan, the Company shall recognize impairment by creating a valuation allowance with a corresponding charge to the provision for credit losses or by adjusting an existing valuation allowance for the collateral dependent loan with a corresponding charge or credit to the provision for credit losses.

At December 31, 2023, the Company had a recorded investment in collateral dependent loans totaling $4,838,000, an increase from a recorded investment in collateral dependent loans totaling $638,000 at December 31, 2022. The increase during the year ended December 31, 2023 as compared to December 31, 2022 is primarily due to the addition of two 1-4 family real estate relationships and the addition of two commercial real estate relationships. As of December 31, 2023 and December 31, 2022, no valuation allowance was recorded on collateral dependent loans. The allowance for credit losses for loans related to collateral dependent loans was measured based upon the estimated fair value of related collateral.

The internally classified loans as a percentage of the allowance for credit losses were 13.2% and 16.0%, respectively, at December 31, 2023 and 2022. At December 31, 2023, loans totaling $5,900,000 were included in the Company’s internal classified loan list compared to $6,376,000 at December 31, 2022. Of these loans, $5,493,000 are real estate secured and $407,000 are secured by various other types of collateral. Classified loan balances have remained relatively consistent due to the stable markets in which we operate; however, if short-term rates continue to remain elevated for a significant period of time and economic conditions worsen, our classified loan balances could increase. 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 allowance for credit losses is discussed under “Critical Accounting Estimates”, “Provision for Credit Losses”, and "Summary of Significant Accounting Policies." The Company maintains its allowance for credit losses at an amount believed by management to be adequate to absorb expected credit losses inherent in the loan portfolio as of December 31, 2023.

Substantially all of the Company’s loans are from Wilson, DeKalb, Smith, Putnam, Trousdale, Davidson, Rutherford, Sumner, Williamson and adjacent counties. Although the majority of the Company's loans are in the real estate market, the Company seeks to exercise prudent risk management in lending through the diversification by loan category within the real estate segment, including residential 1-4 family real estate, commercial and multi-family real estate, construction, land development and farmland, and 1-4 family equity lines of credit.

The Company will target owner-occupied commercial real estate, residential real estate lending and consumer lending as areas of emphasis in 2024. At December 31, 2023, the Company’s total loans equaled 82.3% of its total deposits as compared to 81.0% at December 31, 2022. The Company may sell portions of the loans it generates to other financial institutions for cash in order to improve the liquidity of the Company’s loan portfolio or extend its lending capacity.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Allowance for Credit Losses

On January 1, 2022, we adopted FASB ASU 2016-13, which introduces the current expected credit losses (CECL) methodology and requires us to estimate all expected credit losses over the remaining life of our financial instrument portfolios. The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management’s evaluation, is adequate to provide coverage for all expected credit losses.

The allowance for credit losses for loans represents the portion of the loan's amortized cost basis that we do not expect to collect due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions considering macroeconomic forecasts. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses for loans is based on the loan's amortized cost basis, excluding accrued interest receivable, as we promptly charge off accrued interest receivable determined to be uncollectible. We determine the appropriateness of the allowance through quarterly discounted cash flow modeling of the loan portfolio which considers lending-related commitments and other relevant factors, including macroeconomic forecasts and historical loss rates. In future quarters, we may update information and forecasts that may cause significant changes in the estimate in those future quarters.

Our allowance for credit losses for loans at December 31, 2023 reflects an amount deemed appropriate to adequately cover all expected future losses as of the date the allowance is determined based on our allowance for credit losses for loans assessment methodology. Provision for credit losses for loans in 2023 resulted in an increase of the allowance for credit losses for loans (net of charge-offs and recoveries) to $44,848,000 at December 31, 2023 from $39,813,000 at December 31, 2022 and $39,632,000 at December 31, 2021. The allowance for credit losses for loans increased 12.65% from December 31, 2022 to December 31, 2023 as compared to the 14.01% increase in total loans over the same period. The allowance for credit losses for loans was 1.25% of total loans outstanding at December 31, 2023 compared to 1.26% at December 31, 2022. The allowance for loan losses was 1.60% at December 31, 2021. The internally classified loans as a percentage of the allowance for credit losses for loans were 13.2% and 16.0%, respectively, at December 31, 2023 and 2022.

The following schedule provides an allocation of the year-end allowance for credit losses for loans by portfolio segment for the Company as of and for the fiscal years ended December 31, 2023 and 2022:

	In Thousands, Except Percentages
	Amount of Allowance Allocated		Percent of Loans in Each Category to Total Loans			Total Loans			Ratio of Allowance Allocated to Loans in Each Category
December 31, 2023
Residential 1-4 family real estate	$	8,765		26.6	%	$	959,218			0.91	%
Commercial and multi-family real estate		17,422		36.4			1,313,284			1.33
Construction, land development and farmland		14,027		25.0			901,336			1.56
Commercial, industrial and agricultural		1,533		3.5			127,659			1.20
1-4 family equity lines of credit		1,809		5.6			202,731			0.89
Consumer and other		1,292		2.9			104,373			1.24
Total	$	44,848		100.0	%		3,608,601			1.24
Net deferred loan fees							(13,078	)
						$	3,595,523			1.25	%
December 31, 2022
Residential 1-4 family real estate	$	7,310		27.0	%	$	854,970			0.86	%
Commercial and multi-family real estate		15,299		33.6			1,064,297			1.44
Construction, land development and farmland		13,305		27.8			879,528			1.51
Commercial, industrial and agricultural		1,437		3.9			124,603			1.15
1-4 family equity lines of credit		1,170		4.8			151,032			0.77
Consumer and other		1,292		2.9			93,332			1.38
Total	$	39,813		100.0	%		3,167,762			1.26
Net deferred loan fees							(14,153	)
						$	3,153,609			1.26	%

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The allowance for credit losses for loans is an amount that management believes will be adequate to absorb expected losses on existing loans that may become uncollectible. The allowance for credit losses for loans as a percentage of total loans outstanding at December 31, 2023, net of deferred fees, decreased slightly from the year ended December 31, 2022. This decrease was due to the movement of loans out of the construction and land development pools, which had higher reserve rates, and into various other loan pools within the portfolio that had lower reserve rates, and a reduced provision expense due to slowing loan growth. This was offset in part by the increase in our historical modeled loss rates during the twelve months ended December 31, 2023 due to changes in our macroeconomic forecasts, which are discussed below in more detail, capturing the potential for a recession, that was not captured in our forecast at December 31, 2022.

We measure expected credit losses over the life of each loan utilizing two models. For residential 1-4 family, commercial and multi-family real estate, construction and land development, commercial and industrial, 1-4 family equity lines of credit, municipal, and certain other loan types, we use discounted cash flow models which measure probability of default and loss given default. For farmland, agricultural, credit cards, auto, and other consumer loans we use the remaining life method to estimate credit losses. The measurement of expected credit losses for loan segments utilizing discounted cash flow is impacted by certain macroeconomic variables. Models are adjusted to reflect the current impact of certain macroeconomic variables as well as their expected changes over a reasonable and supportable forecast period.

In estimating expected credit losses as of December 31, 2023, we utilized the Moody’s Analytics December 2023 Next-Cycle Recession Scenario (the “December N-CR Scenario”) to forecast the macroeconomic variables used in our models. The December NC-R Scenario was based on the review of a variety of surveys of forecasts of the U.S. economy. The December NC-R Scenario projections included, among other things, (i) U.S. Gross Domestic Product (“GDP”) annualized quarterly growth rates in the range of approximately (1.07)% to 1.64% during 2024 and 0.03% to 3.15% through the end of the forecast period in the fourth quarter of 2025; (ii) a U.S. unemployment rate in the range of approximately 4.78% to 6.11% during 2024 and 4.47% to 5.21% through the end of the forecast period in the fourth quarter of 2025; and (iii) a Home Price Index annualized quarterly growth rates in the range of approximately (6.50)% to 2.76% during 2024 and (4.55)% to 0.90% through the end of the forecast period in the fourth quarter of 2025.

We adjust model results using qualitative factor ("Q-factor") adjustments. Q-Factor adjustments are based upon management judgment and current assessment as to the impact of risks related to changes in lending policies and procedures; economic and business conditions; loan portfolio attributes and credit concentrations; and external factors, among other things, that are not already captured within the modeling inputs, assumptions and other processes. Management assesses the potential impact of such items within a range of major risk to improvement and adjusts the modeled expected credit loss by an aggregate adjustment percentage based upon the assessment.

Our charge-off policy for collateral dependent loans is similar to our charge-off policy for all loans in that loans are charged-off in the month when a determination is made that the loan is uncollectible. Net charge-offs increased to $1,265,000 in 2023 from net charge-offs of $911,000 in 2022 and net charge-offs of $50,000 in 2021. The ratio of net charge-offs to average total outstanding loans was 0.04% in 2023, 0.03% in 2022 and 0.00% in 2021. Overall, the Bank experienced minimal charge-offs during 2023. It is expected that charge-offs will be modest for 2024; however, a deterioration in local economic conditions more severe than currently expected may negatively impact charge-offs in the future.

We also maintain an allowance for credit losses on off-balance sheet exposures, which decreased $2,989,000 from December 31, 2022 to $3,147,000 at December 31, 2023 as a result of a decrease in our off-balance sheet commitments and an increase in our unconditionally cancellable commitments as a percentage of our off-balance sheet commitments, which are excluded from the calculation of the allowance for credit losses on off-balance credit exposure under ASC 326.

The level of the allowance and the amount of the provision for credit losses involve evaluation of uncertainties and matters of judgment. The Company maintains an allowance for credit losses - loans which management believes is adequate to absorb losses in the loan portfolio. A formal calculation is prepared quarterly by the Company's Chief Financial Officer and provided to the Board of Directors to determine the adequacy of the allowance for credit losses. The calculation includes an evaluation of historical default and loss experience, current and forecasted economic conditions, an evaluation of qualitative factors, industry and peer bank loan quality indicators and other factors. See the discussion above under “Application of Critical Accounting Policies and Accounting Estimates” for more information. Management believes the allowance for credit losses at December 31, 2023 to be adequate, but if forecasted economic conditions do not meet management’s current expectations, the allowance for credit losses may require an increase through additional provision for credit loss expense which would negatively impact earnings.

For a detailed discussion regarding our allowance for credit losses, see "Provision for Credit Losses and Allowance for Credit Losses" elsewhere in this document.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Securities

Securities decreased 1.43% to $811,081,000 at December 31, 2023 from $822,812,000 at December 31, 2022, and comprised the second largest and other primary component of the Company’s earning assets. Securities decreased due to the sale of securities and the run-off of our declining balance securities in 2023, partially offset by an increase in the fair market value of our securities portfolio due to a decline in interest rates that caused the fair market value of our securities portfolio to increase and by the purchase of new securities with higher yields. The average yield, including tax equivalent adjustment, of the securities portfolio at December 31, 2023 was 2.33% with a weighted average life of 8.25 years, as compared to an average yield of 2.15% and a weighted average life of 8.25 years at December 31, 2022. The weighted average lives on mortgage-backed securities reflect the repayment rate used for book value calculations.

Certain debt securities that management has the positive intent and ability to hold to maturity are classified as "held-to-maturity" and recorded at amortized cost. Trading securities are recorded at fair value with changes in fair value included in earnings. Securities not classified as held to maturity or trading, including equity securities with readily determinable fair values, are classified as “available-for-sale” and recorded at fair value, with unrealized gains and losses on our available-for-sale securities excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Upon and subsequent to adoption of CECL, for available-for-sale debt securities in an unrealized loss position, we evaluate the securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized through the allowance for credit losses on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via provision for credit loss. At December 31, 2023 and December 31, 2022, we determined that available-for-sale securities that experienced a decline in fair value below the amortized cost basis were driven by changes in interest rates and not due to credit-related factors. Therefore, there was no provision for credit loss recognized during the twelve months ended December 31, 2023 with respect to our available-for-sale securities.

No securities have been classified as trading securities or held-to-maturity at December 31, 2023, December 31, 2022, or December 31, 2021.

Investment securities at December 31, 2023 and December 31, 2022 consisted of the following:

	December 31, 2023
	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	$	4,901		—		472		4,429
U.S. Government-sponsored enterprises (GSEs)		167,738		—		23,570		144,168
Mortgage-backed securities		480,759		230		63,959		417,030
Asset-backed securities		51,183		193		1,403		49,973
Corporate bonds		2,500		—		77		2,423
Obligations of states and political subdivisions		223,358		397		30,697		193,058
	$	930,439		820		120,178		811,081

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

	December 31, 2022
	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	$	7,353		—		856		6,497
U.S. Government-sponsored enterprises (GSEs)		177,261		—		32,049		145,212
Mortgage-backed securities		518,727		1		74,290		444,438
Asset-backed securities		47,538		—		2,288		45,250
Corporate bonds		2,500		—		97		2,403
Obligations of states and political subdivisions		218,936		—		39,924		179,012
	$	972,315		1		149,504		822,812

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following table details the contractual maturities and weighted average yields of investment securities of the Company. Actual maturities may differ from contractual maturities of mortgage and asset-backed securities because the mortgages or other assets underlying

such securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories noted below as of December 31, 2023:

	December 31, 2023
Available-For-Sale Securities	Estimated Market Value		Weighted Average Yields
	(In Thousands, Except Yields)
Mortgage and asset-backed securities
One year or less	$	13		3.98	%
After one year through five years		24,584		1.44
After five years through ten years		88,445		3.69
After ten years		353,961		2.45
Total Mortgage and asset backed securities		467,003		2.63
U.S. Treasury and other U.S. government agencies:
One year or less		—		—
After one year through five years		4,429		1.11
After five years through ten years		—		—
After ten years		—		—
Total U.S. Treasury and other U.S. government agencies:		4,429		1.11
U.S. Government-sponsored enterprises (GSEs):
One year or less		—		—
After one year through five years		43,500	0.93
After five years through ten years		85,426	1.54
After ten years		15,242		2.14
Total U.S. Government-sponsored enterprises (GSEs)		144,168	1.42
Obligations of states and political subdivisions*:
One year or less		289		0.71
After one year through five years		15,123		1.86
After five years through ten years		70,113		1.93
After ten years		107,533		2.98
Total obligations of states and political subdivisions		193,058	2.51
Corporate bonds:
One year or less		—		—
After one year through five years		2,423	4.25
After five years through ten years		—		—
After ten years		—		—
Total corporate bonds		2,423	4.25
Total available-for-sale securities	$	811,081		2.33	%

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

We computed weighted average yields using coupon interest, adding discount accretion or subtracting premium amortization, as appropriate, on a ratable basis over the life of each security. We computed the weighted average yield for each maturity range using the fair value of each security in that range.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Premises and Equipment, net

Premises and equipment increased $367,000, or 0.59%, from December 31, 2022 to December 31, 2023. The primary reason for the increase was due to the purchase of equipment and furniture and fixtures, the remodeling of several branches, and an increase in computer software, substantially offset by current year depreciation and amortization of $4,313,000.

Bank Owned Life Insurance

Bank owned life insurance increased $1,638,000, or 2.82%, from December 31, 2022 to December 31, 2023. This increase was due to an increase in the overall cash surrender value.

Deposits

The increases in assets in 2023 and 2022 were funded primarily by increases in deposits and the Company’s earnings. Total deposits, which are the principal source of funds for the Company, totaled $4,367,106,000 at December 31, 2023 compared to $3,892,705,000 at December 31, 2022, an increase of 12.19%. Included in deposits at December 31, 2023 were $69,135,000 in brokered deposits, compared to $35,024,000 at December 31, 2022. The increase in brokered deposits from December 31, 2022 to December 31, 2023 was the result of management's decision to increase liquidity to fund anticipated loan growth during 2023. The increase in total deposits since December 31, 2022 was primarily attributable to growth in market share which resulted in the opening of new deposit accounts, a targeted effort to increase customer time deposits and the increase in brokered deposits mentioned above. 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 markets in which it operates are attractive economic markets offering growth opportunities for the Company; however, the Company competes with several larger banks and community banks that have bank offices in these areas which may negatively impact market growth or maintenance of current market share. Even though the Company is in a very competitive market, management currently believes that its deposit market share can be maintained or expanded, though, as discussed below, such competition may force the Company to further increase the rates it pays on deposits.

The $474,401,000, or 12.19%, growth in deposits in 2023 was due to a $788,958,000, or 112.44%, increase in certificates of deposits and a $9,860,000, or 15.12%, increase in individual retirement accounts. This was partially offset by a $144,655,000, or 11.12%, decrease in money market accounts, a $135,920,000, or 12.70%, decrease in NOW accounts, a $25,180,000, or 6.07%, decrease in demand deposit accounts, and a $18,662,000, or 5.51%, decrease in savings accounts. The increase in time deposits is due to the Bank increasing rates to remain competitive in our market areas and customers shifting to these products from lower earning and non-interest earning accounts to take advantage of higher rates. The average rate paid on average total interest-bearing deposits was 2.27% for 2023 compared to 0.49% for 2022. The average rate paid in 2021 was 0.40%. Competitive pressure from other banks in our market area relating to deposit pricing could adversely affect the rates paid on deposit accounts as it limits our ability to lower deposit rates should short-term interest rates fall. It’s these same competitive pressures that may cause our deposit rates to continue to rise in an elevated rate environment. If either of these scenarios were to happen, our net interest margin would experience compression and our results of operations would be negatively impacted. As noted above, we raised rates on deposits to maintain liquidity levels and offer competitive rates in our markets. The ratio of average loans to average deposits was 83.2% in 2023, 75.5% in 2022, and 73.6% in 2021.

The average amounts and average interest rates for deposits for 2023 and 2022 are detailed in the following schedule:

	2023					2022
	Average					Average
	Balance					Balance
	In		Average			In		Average
	Thousands		Rate			Thousands		Rate
Non-interest bearing deposits	$	399,683		—	%	$	434,443		—	%
Interest-bearing deposits:
Negotiable order of withdrawal accounts		976,154		0.60			1,083,028		0.24
Money market demand accounts		1,123,482		2.03			1,250,916		0.47
Time deposits		1,264,602		3.98			601,100		1.08
Other savings		322,458		1.43			332,918		0.34
Total interest-bearing deposits		3,686,696		2.27	%		3,267,962		0.49	%
Total deposits	$	4,086,379		2.05	%	$	3,702,405		0.43	%

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

At December 31, 2023 and 2022, we estimate that we had approximately $1.2 billion in uninsured deposits, which are the portion of deposit amounts that exceed the FDIC insurance limit. Approximately 28% of our total deposits exceeded the FDIC deposit insurance limits at December 31, 2023 while approximately 31% exceeded the FDIC deposit insurance limits at December 31, 2022. However, we offer large depositors access to the Certificate of Deposit Account Registry Service (“CDARS”) and the Insured Cash Sweep (“ICS Product”), which allows us to divide customers' deposits that exceed the FDIC insurance limits into smaller amounts, below the FDIC insurance limits, and place those excess deposits in other participating FDIC insured institutions with the convenience of managing all deposit accounts through our Bank. Our total deposits in CDARS and the ICS Products increased to $104,204,000, or 2.39% of total deposits, at December 31, 2023, compared to $4,730,000, or 0.12% of total deposits, at December 31, 2022.

The following schedule details the maturities of estimated uninsured time deposits greater than $250,000 at December 31, 2023:

	In Thousands
Time deposits otherwise uninsured with a maturity of:
Three months or less	$	105,037
Over three through six months		74,366
Over six through twelve months		160,802
Over twelve months		64,246
Portion of U.S. time deposits in excess of insurance limit	$	404,451

Off Balance Sheet Arrangements

At December 31, 2023, the Company had unfunded lines of credit of $1.0 billion and outstanding standby letters of credit of $106 million, compared to unfunded lines of credit of $1.2 billion and outstanding standby letters of credit of $118 million at December 31, 2022. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally represent future cash requirements. If needed to fund these outstanding commitments, the Bank has the ability to access interest-bearing deposits in other financial institutions, 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 Bank could sell participations in these or other loans to correspondent banks. Liquidation of securities available-for-sale could trigger recognition of losses by the Bank if those securities sold to meet these commitments were in a loss position when sold. As mentioned below, Wilson Bank has been able to fund its ongoing liquidity needs through its stable core deposit base, brokered deposits, loan repayments, its investment security maturities, and short-term borrowings.

Quantitative and Qualitative Disclosures About Market Risk

The Company’s primary component of market risk is interest rate volatility. Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on a large portion of the Company’s assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities, other than those which possess a short term to maturity. Based upon the nature of the Company’s operations, the Company is not subject to foreign currency exchange or commodity price risk.

Interest rate risk (sensitivity) management focuses on the earnings risk associated with changing interest rates. Management seeks to maintain profitability in both short term and long term earnings through funds management/interest rate risk management. The Company’s rate sensitivity position has an important impact on earnings. Senior management of the Company meets 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.

Liquidity and Asset Liability Management

Liquidity

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 a measure of our ability to meet our cash flow requirements, including inflows and outflows of cash for depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs. Several factors influence our liquidity needs, including depositor and borrower activity, interest rate trends, changes in the economy, maturities, re-pricing and interest rate sensitivity of our debt securities, loan portfolio and deposits. We strive to maintain appropriate levels of liquidity. We calculate our liquidity ratio by taking cash and due from banks, interest bearing deposits, federal funds sold, and available-for-sale debt securities not pledged as collateral and dividing by total assets. Our total liquidity ratios were 13.09% at December 31, 2023 and 12.21% at December 31, 2022. The increase in our liquidity ratio is primarily attributable to an increase in cash

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

and due from banks, interest bearing deposits, and federal funds sold, partially offset by a decrease in the amount of available-for-sale securities not pledged as collateral.

The Company’s primary source of liquidity is a stable core deposit base. In addition, federal funds purchased, advances from the Federal Home Loan Bank of Cincinnati, and brokered deposits provide a secondary source. These sources of liquidity are generally short-term in nature and are used to fund asset growth and meet other short-term liquidity needs. Liquidity needs can also be met from loan payments and investment security sales or maturities. While maturities and scheduled amortization of loans and debt securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and competition. At December 31, 2023, the Company’s liquid assets totaled approximately $634.0 million, an increase from $522.7 million at December 31, 2022, though a portion of these liquid assets include available-for-sale securities that are in an unrealized loss position at December 31, 2023. If the Company was required to sell any of these securities, including to meet liquidity needs, while they are in an unrealized loss position the Company would be required to recognize the loss on those securities through the income statement when they are sold. Recognition of these losses would negatively impact the Bank's and the Company's regulatory capital levels. Additionally, as of December 31, 2023, the Company had available approximately $127.5 million in unused federal funds lines of credit with regional banks and, subject to certain restrictions and collateral requirements, approximately $539.4 million of borrowing capacity with the Federal Home Loan Bank of Cincinnati to meet short term funding needs. The Company maintains a formal asset and liability management process in an effort to quantify, monitor and control interest rate risk, and to assist management as management seeks to maintain 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 and competitive market conditions.

The Company’s securities portfolio consists of earning assets that provide interest income. Securities classified as available-for-sale include securities intended to be used as part of the Company’s asset/liability strategy and/or securities that may be sold in response to changes in interest rates, prepayment risk, or the need to fund loan demand or other liquidity needs. At December 31, 2023, securities totaling approximately $40.2 million mature or will be subject to rate adjustments within the next twelve months.

A secondary source of liquidity is the Company’s loan portfolio. At December 31, 2023, loans totaling approximately $1.2 billion either will become due or will be subject to rate adjustments within twelve months from that date.

As for liabilities, at December 31, 2023, certificates of deposit and individual retirement accounts of $250,000 or greater totaling approximately $510.7 million will become due or reprice during the next twelve months. Historically, there has been no significant reduction in immediately withdrawable accounts such as negotiable order of withdrawal accounts, money market demand accounts, demand deposit accounts and regular savings accounts. Management does not anticipate that there will be significant withdrawals from these accounts in the next twelve months.

Management believes that with present maturities, borrowing capacity in unused federal funds lines of credit and with the Federal Home Loan Bank of Cincinnati and the efforts of management in its asset/liability management program, the Company should be able to meet its liquidity needs in the near term future.

Asset Liability Management

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 cannot 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.

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Interest Rate Sensitivity Gaps

The following schedule details the Company's interest rate sensitivity gaps for different time periods at December 31, 2023:

	Repricing Within
(In Thousands)	Total		0-30 Days			31-90 Days			91-180 Days			181-365 Days			Over 1 Year
Earning assets:
Loans, net of deferred fees	$	3,595,523		620,510			107,913			147,565			289,298			2,430,237
Securities		811,081		37,630			1,793			452			288			770,918
Loans held for sale		2,294		—			—			—			—			2,294
Interest bearing deposits		213,701		213,701			—			—			—			—
Federal funds sold		10,159		10,159			—			—			—			—
Restricted equity securities		3,436		3,436			—			—			—			—
Total earning assets		4,636,194		885,436			109,706			148,017			289,586			3,203,449
Interest-bearing liabilities:
Negotiable order of withdrawal accounts		934,709		934,709			—			—			—			—
Money market demand accounts		1,156,694		1,156,694			—			—			—			—
Individual retirement accounts		75,062		1,883			6,208			7,621			14,694			44,656
Other savings		320,301		320,301			—			—			—			—
Certificates of deposit		1,490,615		65,228			284,631			187,504			660,729			292,523
Finance leases		2,251		—			—			—			—			2,251
		3,979,632		2,478,815			290,839			195,125			675,423			339,430
Interest-sensitivity gap	$	656,562		(1,593,379	)		(181,133	)		(47,108	)		(385,837	)		2,864,019
Cumulative gap				(1,593,379	)		(1,774,512	)		(1,821,620	)		(2,207,457	)		656,562
Interest-sensitivity gap as % of total assets				(32.9	)%		(3.7	)%		(1.0	)%		(8.0	)%		59.1	%
Cumulative gap as % of total assets				(32.9	)%		(36.6	)%		(37.6	)%		(45.5	)%		13.5	%

As detailed in the chart, as of December 31, 2023, the Company is forecasted to maintain a liability sensitive position over the next twelve months, meaning that its liabilities should reprice faster than its assets in a changing interest rate environment. 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 of funds.

The Company also uses simulation modeling to evaluate both the level of interest rate sensitivity as well as potential balance sheet strategies. The Company's Asset Liability Committee meets quarterly to analyze the interest rate shock simulation. The interest rate shock simulation model is based on a number of assumptions. The assumptions include, but are not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and replacement of asset and liability cash flows and balance sheet management strategies. We model instantaneous change in interest rates using a growth in the balance sheet as well as a flat balance sheet to understand the impact to earnings and capital. Based on the Company's IRR simulation, the Company had a neutral interest-rate risk position as of December 31, 2023, though the Company’s net interest margin and earnings could be negatively impacted if short-term rates continue to rise or remain elevated and competitive pressures in the Company's market areas force the Company to increase deposit rates faster than it is able to increase yields on loans. If short term rates begin to decline, as the Company expects may begin to happen in the second half of 2024, the Company’s net interest margin and earnings could be negatively impacted if the yields on loans decrease faster than the Company is able to lower deposit rates. As discussed elsewhere herein, the Bank anticipates that its net interest margin is likely to contract during 2024 because of such competitive pressures, and the elevated rate environment we are currently experiencing that is expected to continue in the near term. The Company also uses Economic Value of Equity (“EVE”) sensitivity analysis to understand the impact of changes in interest rates on long-term cash flows, income and capital. EVE is calculated by discounting the cash flows for all balance sheet instruments under different interest rate scenarios. The EVE is a longer term view of interest rate risk because it measures the present value of the future cash flows. Presented below is the estimated impact on the Bank’s net interest income and EVE as of December 31, 2023, assuming an immediate shift in interest rates:

	% Change from Base Case for Immediate Parallel Changes in Rates
	-300 BP			-200 BP			-100 BP			+100 BP			+200 BP			+300 BP
Net interest income		(6.65	)%		(4.61	)%		(2.18	)%		(1.95	)%		(3.87	)%		(5.94	)%
EVE		(13.47	)%		(5.29	)%		(1.20	)%		(3.05	)%		(6.55	)%		(10.65	)%

While an instantaneous and severe shift in interest rates was used in this analysis to provide an estimate of exposure under these scenarios, we believe that a gradual shift in interest rates would have a more modest impact. Further, the earnings simulation model does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changing product spreads that could mitigate any potential adverse impact of changes in interest rates. Moreover, since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, EVE does not take into account factors such as

WILSON BANK HOLDING COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

future balance sheet growth, changes in product mix, changes in yield curve relationships, hedging strategies that we may institute, and changing product spreads that could mitigate any potential adverse impact of changes in interest rates.

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 analyzes the rate sensitivity position quarterly. Management focuses on the spread between the Company’s cost of funds and interest yields generated primarily through loans and investments.

In addition to the ALCO, the Audit Committee as well as the Chief Risk Officer are all responsible for the “risk management framework” of the Company. The ALCO meets monthly and the Audit Committee meets quarterly, with the authority to convene additional meetings, as circumstances require.

Impact of Inflation

Although interest rates are significantly affected by inflation, for the fiscal years ended December 31, 2023, 2022 and 2021, the inflation rate is believed to have had an immaterial impact on the Company’s results of operations. Outside of its potential impact on our customers and their ability to make loan payments, we do not expect such inflation to have a material impact on our operations in 2024 other than any effect it may have on interest rates, though continued elevated levels of inflation could also negatively impact our non-interest expense.

Capital Resources, Capital Position and Dividends

At December 31, 2023, total shareholders’ equity was $429,405,000, or 8.86% of total assets, which compares with $360,452,000, or 8.41% of total assets, at December 31, 2022, and $413,717,000, or 10.37% of total assets, at December 31, 2021. The dollar increase in the Company’s shareholders’ equity during 2023 reflects (i) net income of $48,938,000, (ii) less cash dividends of $1.50 per share totaling $17,303,000, (iii) the issuance of 189,471 shares of common stock for $12,979,000, as reinvestment of cash dividends, (iv) the issuance of 24,711 shares of common stock pursuant to exercise of stock options for $1,044,000, (v) the net positive change in unrealized loss on available-for-sale securities of $22,267,000, (vi) stock-based compensation expense of $974,000, and (vii) $54,000 of net income attributable to the other members of Encompass.

For a discussion of the Company's and Wilson Bank's capital levels and required minimum levels of capital each is required to maintain under applicable regulatory requirements see Note 17, Regulatory Matters and Restrictions on Dividends in the notes to the Company's consolidated financial statements appearing elsewhere in this report.

Holding Company & Stock Information

Wilson Bank Holding Company Directors

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

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 shareholders of record at February 23, 2024 was 4,797. Based solely on information made available to the Company from limited numbers of buyers and sellers, the Company believes that the following table sets forth the quarterly range of sale prices for the Company’s common stock during the years 2022 and 2023.

On January 1, 2022, a $.75 per share cash dividend was declared, on April 11, 2022, a $.35 per share cash dividend was declared, and on July 1, 2022, a $.75 per share cash dividend was declared and thereafter paid to shareholders of record as of those dates. On January 1, 2023, a $.75 per share cash dividend was declared and on July 1, 2023, a $.75 per share cash dividend was declared and paid to shareholders of record on those dates. Future dividends will be dependent upon the Company’s profitability, its capital needs, overall financial condition and economic and regulatory considerations.

Stock Prices

2022	High			Low
First Quarter	$	64.40		$	63.25
Second Quarter	$	65.55		$	63.25	1
Third Quarter	$	70.00	2	$	65.55
Fourth Quarter	$	67.85		$	65.55	1
2023	High			Low
---	---	---	---	---	---	---
First Quarter	$	69.00		$	67.85
Second Quarter	$	70.00		$	67.85	1
Third Quarter	$	75.00	3	$	70.00
Fourth Quarter	$	71.75	4	$	70.00	5

1. Represents one transaction of 712 shares during the second quarter of 2022, one transaction of 500 shares during the fourth quarter of 2022, and one transaction of 303 shares during the second quarter of 2023 of which the Company is aware where the sale price was at least $1.15 lower than any other trade during the quarter. The volume weighted average stock price during the second quarter of 2022 was $64.44, the volume weighted average stock price during the fourth quarter of 2022 was $67.36, and the volume weighted average stock price during the second quarter of 2023 was $69.21.

2. Represents one transaction of 2,429 shares during the third quarter of 2022 of which the Company is aware where the sale price was at least $3.30 higher than any other trade during the quarter. The volume weighted average stock price during the third quarter of 2022 was $66.14.

3. Represents one transaction of 102 shares during the third quarter of 2023 of which the Company is aware where the sale price was at least $4.25 higher than any other trade during the quarter. The volume weighted average stock price during the third quarter of 2023 was $70.07.

4. Represents one transaction of 50 shares during the fourth quarter of 2023 of which the Company is aware where the sale price was at least $0.25 higher than any other trade during the quarter. The volume weighted average stock price during the fourth quarter of 2023 was $70.90.

5. Represents one transaction of 406 shares and one transaction of 311 shares during the fourth quarter of 2023 of which the Company is aware where the sale price was at least $.75 lower than any other trade during the quarter. The volume weighted average stock price during the fourth quarter of 2023 was $70.90.

Annual Meeting and Information Contacts

The Annual Meeting of Shareholders of Wilson Bank Holding Company will be held on Thursday, April 25, 2024 at 5:00 p.m. (CDT) at the Clemons-Richerson Operations Center, located at 105 North Castle Heights Avenue, Lebanon, TN 37087.

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 Kayla Hawkins at Wilson Bank & Trust, P.O. Box 768, Lebanon, Tennessee 37088-0768, phone (615) 443-5901.

WILSON BANK HOLDING COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED)

	In Thousands, Except Per Share Information
	As Of December 31,
	2023		2022		2021		2020		2019
CONSOLIDATED BALANCE SHEETS:
Total assets end of year	$	4,846,476		4,285,650		3,989,596		3,369,604		2,794,209
Loans, net	$	3,550,675		3,113,796		2,444,282		2,282,766		2,057,175
Securities	$	811,081		822,812		897,585		580,543		421,145
Deposits	$	4,367,106		3,892,705		3,555,071		2,960,595		2,417,605
Shareholders’ equity	$	429,405		360,452		413,717		380,121		336,984
	Years Ended December 31,
---	---	---	---	---	---	---	---	---	---	---	---	---
	2023			2022			2021		2020		2019
CONSOLIDATED STATEMENTS OF EARNINGS:
Interest income	$	222,583			157,540			129,841		122,968		118,077
Interest expense		83,679			16,133			11,636		18,219		23,379
Net interest income		138,904			141,407			118,205		104,749		94,698
Provision for credit losses - loans		6,300			8,656			1,143		9,696		2,040
Provision for credit losses - off-balance sheet exposures		(2,989	)		(1,014	)		262		259		75
Net interest income after provision for credit losses		135,593			133,765			116,800		94,794		92,583
Non-interest income		28,289			27,281			32,850		29,795		25,410
Non-interest expense		100,951			92,970			85,492		76,479		70,882
Earnings before income taxes		62,931			68,076			64,158		48,110		47,111
Income taxes		13,939			15,056			14,732		9,618		11,067
Net earnings		48,992			53,020			49,426		38,492		36,044
Net loss (gain) attributable to noncontrolling interest		(54	)		22			—		—		—
Net earnings attributable to Wilson Bank Holding Company	$	48,938			53,042			49,426		38,492		36,044
Cash dividends declared	$	17,303			20,880			14,909		13,013		11,725
PER SHARE DATA:
Basic earnings per common share	$	4.21			4.66			4.44		3.52		3.36
Diluted earnings per common share	$	4.20			4.65			4.43		3.51		3.35
Cash dividends	$	1.50			1.85			1.35		1.20		1.10
Book value	$	36.74			31.42			36.93		34.58		31.24
RATIOS:
Return on average shareholders’ equity		12.47	%		14.36			12.45		10.65		11.31
Return on average assets		1.08	%		1.29			1.35		1.24		1.34
Total capital to assets		8.86	%		8.41			10.37		11.28		12.06
Dividends declared per share as a percentage of basic earnings per share		35.63	%		39.70			30.41		34.09		32.74

WILSON BANK HOLDING COMPANY

Consolidated Financial Statements

December 31, 2023 and 2022

(With Independent Auditor’s Report Thereon)

Stephen M. Maggart, CPA, ABV, CFF<br><br>J. Mark Allen, CPA<br><br>Chris Conro, CPA<br><br>Michael T. Holland, CPA, ABV, CFF<br><br>M. Todd Maggart, CPA, ABV, CFF<br><br>P. Jason Ricciardi, CPA, CGMA<br><br>David B. von Dohlen, CPA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Wilson Bank Holding Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Wilson Bank Holding Company (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of earnings, comprehensive earnings, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2024 expressed an unqualified opinion thereon.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company changed its method for accounting for allowance or credit losses effective January 1, 2022, due to the adoption of Financial Accounting Standards Board Accounting Standards Codification No. 326, Financial Instrument - Credit Losses (“ASC 326”). The Company adopted the new credit loss standard using the ;modified retrospective method provided in Accounting Standards Update No. 2016-13 such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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

www.maggartpc.com

To the Shareholders and the Board of Directors of

Wilson Bank Holding Company

Page Two

Basis for Opinion, Continued

We conducted our audits in accordance with the standards of the PCAOB. Those standard require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosure in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Allowance for Credit Losses on Loans - Reasonable and Supportable Forecasts and Qualitative Adjustments

The Company adopted ASC 326, Financial Instruments - Credit Losses, as of January 1, 2022, which, among other things, required that the Company recognize expected credit loses over the contractual life of financial assets utilizing the Current Expected Credit Losses (“CECL”) methodology. The Company’s allowance for credit losses on loans (“ACL”) was $44.8 as of December 31, 2023 and the provision for credit losses on loans was $6.3 million for the year ended December 31, 2023. Loans were $3.6 billion at December 31, 2023. The Company disclosed information regarding the adoption of the standard and the Company’s financial assets and allowance for credit losses in Note 1. Summary of Significant accounting Policies and Note 2 Loans and Allowance for Credit Losses to the consolidated financial statements.

The Company primarily used a discounted cash flow (DCF) model to calculate its ACL. DCF calculates the present value of the future expected cash flows for all loans included in the analysis at the loan’s effective interest rate. The analysis was performed using a bottom-up approach with the loan-level data. The loan-level calculations were rolled up to the pool level to get the total amortized cost of cash flow loans by each pool. The amortized cost is then discounted back to the present value. The total dollar reserve applied to the pool is the total amortized cost net present value.

Within its DCF model, the Company primarily employed a probability of default (“PD”) and loss given default (“LGD”) modeling approach. The PD assumption of the Company’s ACL model utilized historical correlations between default experience and certain macroeconomic factors as determined through a statistical regression analysis. Losses are forecasted over a period of time determined to be reasonable and supportable, and then reverted to long term historical averages. The Company adjusted it overall ACL with qualitative adjustment that are not inherently considered in the quantitative component of the methodology.

To the Shareholders and the Board of Directors of

Wilson Bank Holding Company

Page Three

While the qualitative categories and the measurements utilized to quantify the risks associated with each of the qualitative adjustments are built primarily upon objective measurements where applicable, they are subjectively developed and interpreted by management.

The audit procedures over the reasonable and supportable forecast scenarios and qualitative adjustments utilized in management's methodology involved challenging and subjective auditor judgment. Therefore, we identified auditing the reasonable and supportable forecast scenarios and qualitative adjustments applied as a critical audit matter.

The primary audit procedures we performed to address this critical audit matter included the following:

• Tested the operating effectiveness of controls specific to:

o Determining the reasonableness of the forecasted macroeconomic scenarios used in the model.

o The identification and application of qualitative adjustments to the ACL model.

o The relevance and reliability of data used by the Company’s third-party vendor to develop forecast scenarios.

o The Company’s allowance committee’s oversight and review of the overall ACL.

• Performed substantive testing over the qualitative adjustments including:

o Evaluated the reasonableness and appropriateness of the policies and methodologies employed including, but not limited to, evaluating their conceptual soundness and inspecting and testing significant assumptions and judgments.

o Evaluated management’s judgments in the selection and application of the forecasted macroeconomic scenarios.

o Evaluated management's rationale for determining qualitative adjustments were relevant and warranted for each loan segment and assessed the measurement of qualitative factor adjustments applied by management.

o Assessed changes in qualitative factors year-over-year against overall trends in credit quality within the Company and broader trends within the industry and local and national economies to evaluate reasonableness of management’s qualitative factor adjustments.

/s/ MAGGART & ASSOCIATES, P.C.
We have served as the Company’s auditor since 1987.
Nashville, Tennessee (PCAOB 763)
February 28, 2024
Stephen M. Maggart, CPA, ABV, CFF<br><br>J. Mark Allen, CPA<br><br>Chris Conro, CPA<br><br>Michael T. Holland, CPA, ABV, CFF<br><br>M. Todd Maggart, CPA, ABV, CFF<br><br>P. Jason Ricciardi, CPA, CGMA<br><br>David B. von Dohlen, CPA
---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Wilson Bank Holding Company

Opinion on Internal Control over Financial Reporting

We have audited Wilson Bank Holding Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Wilson Bank Holding Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, and the related consolidated statements of earnings, comprehensive earnings, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 28, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

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

www.maggartpc.com

To the Shareholders and the Board of Directors of

Wilson Bank Holding Company

Page Two

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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

/s/ MAGGART & ASSOCIATES, P.C.
Nashville, Tennessee (PCAOB 763)
February 28, 2024

WILSON BANK HOLDING COMPANY

Consolidated Balance Sheets

December 31, 2023 and 2022

			2022
ASSETS
Loans, net of allowance for credit losses of 44,848 and 39,813, respectively	3,550,675			3,113,796
Available-for-sale securities, at market (amortized cost 930,439 and 972,315, respectively)	811,081			822,812
Loans held for sale	2,294			3,355
Interest bearing deposits	213,701			78,694
Federal funds sold	10,159			308
Restricted equity securities, at cost	3,436			4,357
Total earning assets	4,591,346			4,023,322
Cash and due from banks	28,775			25,787
Premises and equipment, net	62,398			62,031
Accrued interest receivable	15,197			11,397
Deferred income taxes	45,473			51,323
Bank owned life insurance	59,645			58,007
Goodwill	4,805			4,805
Other assets	38,837			48,978
Total assets	4,846,476			4,285,650
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	389,725			414,905
Interest bearing	3,977,381			3,477,800
Total deposits	4,367,106			3,892,705
Accrued interest and other liabilities	49,965			32,493
Total liabilities	4,417,071			3,925,198
Shareholders’ equity:
Common stock, par value 2.00 per share, authorized 50,000,000 shares, 11,686,363 and 11,472,181 shares issued and outstanding, respectively	23,373			22,944
Additional paid-in capital	136,866			122,298
Retained earnings	357,260			325,625
Noncontrolling interest in consolidated subsidiary	69			15
Accumulated other comprehensive losses, net of taxes of 31,195 and 39,073, respectively	(88,163	)		(110,430	)
Total shareholders’ equity	429,405			360,452
Total liabilities and shareholders’ equity	4,846,476			4,285,650

All values are in US Dollars.

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Earnings

Three Years Ended December 31, 2023

	Dollars In Thousands (except per share data)
	2023			2022			2021
Interest income:
Interest and fees on loans	$	198,739			138,161			118,676
Interest and dividends on securities:
Taxable securities		17,597			15,902			8,922
Exempt from Federal income taxes		1,574			1,392			1,229
Interest on loans held for sale		244			264			438
Interest on Federal funds sold		421			111			13
Interest on interest bearing deposits		3,697			1,522			445
Interest and dividends on restricted equity securities		311			188			118
Total interest income		222,583			157,540			129,841
Interest expense:
Interest on negotiable order of withdrawal accounts		5,847			2,546			1,866
Interest on money market accounts and other savings accounts		27,394			7,021			2,027
Interest on certificates of deposit and individual retirement accounts		50,341			6,486			7,610
Interest on Federal funds purchased		24			14			—
Interest on Federal Home Loan Bank advances		2			—			133
Interest on finance leases		71			66			—
Total interest expense		83,679			16,133			11,636
Net interest income before provision for credit losses		138,904			141,407			118,205
Provision for credit losses - loans		6,300			8,656			1,143
Provision for credit losses - off-balance sheet exposures		(2,989	)		(1,014	)		262
Net interest income after provision for credit losses		135,593			133,765			116,800
Non-interest income		28,289			27,281			32,850
Non-interest expense		100,951			92,970			85,492
Earnings before income taxes		62,931			68,076			64,158
Income taxes		13,939			15,056			14,732
Net earnings		48,992			53,020			49,426
Net loss (gain) attributable to noncontrolling interest		(54	)		22			—
Net earnings attributable to Wilson Bank Holding Company	$	48,938			53,042			49,426
Basic earnings per common share	$	4.21			4.66			4.44
Diluted earnings per common share	$	4.20			4.65			4.43
Weighted average common shares outstanding:
Basic		11,611,690			11,377,617			11,131,897
Diluted		11,641,366			11,408,924			11,162,956

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Comprehensive Earnings

Three Years Ended December 31, 2023

	Dollars In Thousands
	2023			2022			2021
Net earnings	$	48,992			53,020			49,426
Other comprehensive earnings (losses):
Unrealized gains (losses) on available-for-sale securities		29,136			(142,573	)		(18,223	)
Reclassification adjustment for net losses (gains) included in net earnings		1,009			1,620			(28	)
Tax effect		(7,878	)		36,838			4,771
Other comprehensive earnings (losses)		22,267			(104,115	)		(13,480	)
Comprehensive earnings (losses)		71,259			(51,095	)		35,946
Comprehensive (earnings) losses attributable to noncontrolling interest		(54	)		22			—
Comprehensive earnings (losses) attributable to Wilson Bank Holding Company	$	71,205			(51,073	)		35,946

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Changes in Shareholders’ Equity

Three Years Ended December 31, 2023

		Additional Paid In Capital			Retained Earnings			Noncontrolling Interest			Accumulated Other Comprehensive Earnings (Loss)			Total
Balance January 1, 2021	21,987		93,034			257,935			—			7,165			380,121
Cash dividends declared, 1.35 per share	—		—			(14,909	)		—			—			(14,909	)
Issuance of 186,583 shares of common stock pursuant to dividend reinvestment plan			10,815			—			—			—			11,188
Issuance of 21,517 shares of common stock pursuant to exercise of stock options			819			—			—			—			862
Share based compensation expense	—		509			—			—			—			509
Net change in fair value of available-for-sale securities during the year, net of taxes of 4,771	—		—			—			—			(13,480	)		(13,480	)
Net earnings for the year	—		—			49,426			—			—			49,426
Balance December 31, 2021	22,403		105,177			292,452			—			(6,315	)		413,717
Cash dividends declared, 1.85 per share	—		—			(20,880	)		—			—			(20,880	)
Issuance of 250,365 shares of common stock pursuant to dividend reinvestment plan			15,616			—			—			—			16,117
Issuance of 19,687 shares of common stock pursuant to exercise of stock options		596				—			—			—			635
Vesting of 625 restricted share awards			(1	)		—			—			—			—
Share based compensation expense	—	910				—			—			—			910
Net change in fair value of available-for-sale securities during the year, net of taxes of 36,838	—		—			—			—			(104,115	)		(104,115	)
Cumulative effect of change in accounting principle from the adoption of ASC 326	—		—			1,011			—			—			1,011
Noncontrolling interest contribution	—		—			—			37			—			37
Net earnings for the year	—		—			53,042			(22	)		—			53,020
Balance December 31, 2022	22,944		122,298			325,625			15			(110,430	)		360,452
Cash dividends declared, 1.50 per share	—		—			(17,303	)		—			—			(17,303	)
Issuance of 189,471 shares of common stock pursuant to dividend reinvestment plan			12,600			—			—			—			12,979
Issuance of 24,711 shares of common stock pursuant to exercise of stock options		994				—			—			—			1,044
Share based compensation expense	—	974				—			—			—			974
Net change in fair value of available-for-sale securities during the year, net of taxes of (7,878)	—		—			—			—			22,267			22,267
Net earnings for the year	—		—			48,938			54			—			48,992
Balance December 31, 2023	23,373		136,866			357,260			69			(88,163	)		429,405

All values are in US Dollars.

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows

Three Years Ended December 31, 2023

Increase (Decrease) in Cash and Cash Equivalents

	Dollars In Thousands
	2023			2022			2021
OPERATING ACTIVITIES
Consolidated net income	$	48,992			53,020			49,426
Adjustments to reconcile consolidated net income to net cash provided by<br>   operating activities
Provision for credit losses		3,311			7,642			1,405
Deferred income taxes provision		(2,029	)		(2,051	)		(932	)
Depreciation and amortization of premises and equipment		4,313			4,462			4,235
Loss (gain) on disposal of premises and equipment		55			(291	)		43
Net amortization of securities		2,879			4,003			5,377
Net realized losses (gains) on sales of securities		1,009			1,620			(28	)
Gains on mortgage loans sold, net		(2,635	)		(2,973	)		(9,997	)
Stock-based compensation expense		1,948			1,864			1,428
Loss on other real estate		—			—			15
Loss (gain) on sale of other assets		10			(8	)		(6	)
Increase in value of life insurance and annuity contracts		(1,667	)		(1,345	)		(1,109	)
Mortgage loans originated for resale		(73,984	)		(106,601	)		(215,813	)
Proceeds from sale of mortgage loans		77,680			118,062			233,441
Gain on lease modification		(1,463	)		—			—
Right of use asset amortization		29			397			387
Change in
Accrued interest receivable		(3,800	)		(3,756	)		(125	)
Other assets		9,373			248			(4,458	)
Accrued interest payable		21,055			1,516			(1,458	)
Other liabilities		1,028			(2,602	)		(383	)
TOTAL ADJUSTMENTS		37,112			20,187			12,022
NET CASH PROVIDED BY OPERATING ACTIVITIES		86,104			73,207			61,448
INVESTING ACTIVITIES
Activities in available for sale securities
Purchases		(51,116	)		(200,075	)		(530,155	)
Sales		32,740			42,728			39,652
Maturities, prepayments and calls		56,364			85,544			149,861
Redemptions of restricted equity securities		921			732			—
Net increase in loans		(442,452	)		(673,871	)		(164,095	)
Purchase of buildings, leasehold improvements, and equipment		(4,643	)		(5,022	)		(8,922	)
Proceeds from sale of premises and equipment		—			1,758			—
Proceeds from sale of other assets		49			34			109
Proceeds from sale of other real estate		—			—			167
Purchase of life insurance and annuity contracts		—			(10,978	)		(15,079	)
Redemption of annuity contracts		419			248			—
Increase in other investments		—			—			(2,000	)
NET CASH USED IN INVESTING ACTIVITIES		(407,718	)		(758,902	)		(530,462	)
FINANCING ACTIVITIES
Net change in deposits - non-maturing		(324,417	)		163,933			612,696
Net change in deposits - time		798,818			173,701			(18,220	)
Net change in Federal Home Loan Bank Advances		—			—			(3,638	)
Change in escrow balances		(1,631	)		3,549			(4,403	)
Repayment of finance lease obligation		(30	)		(26	)		—
Noncontrolling interest contributions		—			37			—
Issuance of common stock related to exercise of stock options		1,044			635			862
Issuance of common stock pursuant to dividend reinvestment plan		12,979			16,117			11,188
Cash dividends paid on common stock		(17,303	)		(20,880	)		(14,909	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		469,460			337,066			583,576
NET CHANGE IN CASH AND CASH EQUIVALENTS		147,846			(348,629	)		114,562
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR		104,789			453,418			338,856
CASH AND CASH EQUIVALENTS - END OF YEAR	$	252,635			104,789			453,418

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Consolidated Statements of Cash Flows, Continued

Three Years Ended December 31, 2023

Increase (Decrease) in Cash and Cash Equivalents

	Dollars In Thousands
	2023		2022			2021
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	62,624	$	14,617		$	12,106
Taxes	$	16,511	$	19,446		$	16,827
Non-cash investing and financing activities:
Change in fair value of securities available-for-sale, net of taxes of $(7,878) in 2023,<br>   $36,838 in 2022, and $4,771 in 2021,	$	22,267	$	(104,115	)	$	(13,480	)
Non-cash transfers from loans to other real estate	$	—	$	—		$	182
Non-cash transfers from loans to other assets	$	—	$	—		$	129

See accompanying notes to consolidated financial statements.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements

December 31, 2023, 2022 and 2021

(1)

Summary of Significant Accounting Policies

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

(a)

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary, Wilson Bank, and Wilson Bank's 51% owned subsidiary, Encompass Home Lending, LLC ("Encompass"). On June 1, 2022, the Bank began operations with a newly-formed joint venture, Encompass Home Lending, LLC. Encompass offers residential mortgage banking services to customers of certain home builders in the Company's markets. All significant intercompany accounts and transactions have been eliminated in consolidation.

(b)

Nature of Operations

Wilson Bank operates under a state bank charter and provides full banking services. As a Tennessee state-chartered bank that is not a member of the Federal Reserve, Wilson Bank is subject to regulations of the Tennessee Department of Financial Institutions and the Federal Deposit Insurance Corporation (“FDIC”). The areas served by Wilson Bank include Wilson County, DeKalb County, Rutherford County, Smith County, Trousdale County, Putnam County, Sumner County, Hamilton County, Davidson County and Williamson County, Tennessee and surrounding counties in Middle Tennessee. As of December 31, 2023, services were provided at the main office, twenty-nine branch locations and one loan production office. In January 2024, Wilson Bank closed one of its branch locations.

(c)

Use of Estimates

In preparing consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses - loans and off-balance sheet credit exposures, the valuation of deferred tax assets, determination of any impairment of goodwill or other intangibles, the valuation of other real estate (if any), and the fair value of financial instruments.

(d)

Significant Group Concentrations of Credit Risk

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

(e)

Loans

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

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

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

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

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

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

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

(f)

Allowance for Credit Losses - Loans

On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” as subsequently updated for certain clarifications, targeted relief and codification improvements. Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”) replaces the previous “incurred loss” model for measuring credit losses, which encompassed allowances for current known and inherent losses within the portfolio, with an “expected loss” model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. The new current expected credit loss (“CECL”) model requires the measurement of all expected credit losses for financial assets measured at amortized cost and certain off-balance-sheet credit exposures based on historical experience, current conditions, and reasonable and supportable forecasts. ASC 326 also requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASC 326 includes certain changes to the accounting for available-for-sale securities including the requirement to present credit losses as an allowance rather than as a direct write-down for available-for-sale securities management does not intend to sell or believes that it is more likely than not they will not be required to sell.

Effective January 1, 2022, the Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off- balance-sheet credit exposures. Upon adoption, the Company recognized an after-tax cumulative effect increase to retained earnings totaling $1.0 million. Operating results for periods after January 1, 2022 are presented in accordance with ASC 326 while prior period amounts continue to be reported in accordance with previously applicable standards and the accounting policies described below.

In connection with the adoption of ASC 326, the Company revised certain accounting policies and implemented certain accounting policy elections. Further information regarding our policies and methodology used to estimate the allowance for credit losses on loans is presented in Note 2 - Loans and Allowance for Credit Losses.

(g)

Allowance for Loan Losses (Allowance)

Prior to the Adoption of FASB ASC 326 on January 1, 2022, which introduced the CECL methodology for credit losses, the allowance for loan losses was composed of the result of two independent analyses pursuant to the provisions of ASC 450-20, Loss Contingencies and ASC 310-10-35, Receivables. The ASC 450-20 analysis was intended to quantify the inherent risks in the performing loan portfolio. The ASC 310-10-35 analysis included a loan-by-loan analysis of impaired loans, primarily consisting of loans reported as nonaccrual or troubled-debt restructurings.

The allowance allocation began with a process of estimating the probable losses in each of the twelve loan segments. The estimates for these loans were based on our historical loss data for that category over twenty quarters. Each segment was then analyzed such that an allocation of the allowance was estimated for each loan segment.

The estimated loan loss allocation for all twelve loan portfolio segments was then adjusted for several “environmental” factors. The allocation for environmental factors was particularly subjective and did not lend itself to exact mathematical calculation. This amount represented estimated probable inherent credit losses which existed, but had not yet been identified, as of the balance sheet date, and were based upon quarterly trend assessments in delinquent and nonaccrual loans, unanticipated charge-offs, credit concentration changes, prevailing economic conditions, changes in lending personnel experience, changes in lending policies, increase in interest rates, or procedures and other influencing factors. These environmental factors were considered for each of the twelve loan segments and the allowance allocation, as determined by the processes noted above for each component, was increased or decreased through provision expense based on the incremental assessment of those various environmental factors.

We then tested the resulting allowance by comparing the balance in the allowance to industry and peer information. Our management then evaluated the result of the procedures performed, including the result of our testing, and concluded on the appropriateness of the

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

balance of the allowance in its entirety. The board of directors reviewed and approved the assessment prior to the filing of quarterly and annual financial information.

A loan was impaired when, based on current information and events, it was probable that we would be unable to collect all amounts due according to the contractual terms of the loan agreement. Collection of all amounts due according to the contractual terms means that both the interest and principal payments of a loan would be collected as scheduled in the loan agreement.

An impairment allowance was recognized if the fair value of the loan was less than the recorded investment in the loan (recorded investment in the loan was the principal balance plus any accrued interest, net of deferred loan fees or costs and unamortized premium or discount). The impairment was recognized through the allowance. Loans that were impaired were recorded at the present value of expected future cash flows discounted at the loan’s effective interest rate, or if the loan was collateral dependent, impairment measurement was based on the fair value of the collateral, less estimated disposal costs. If the measure of the impaired loan was less than the recorded investment in the loan, the Company recognized an impairment by creating a valuation allowance with a corresponding charge to the provision for loan losses or by adjusting an existing valuation allowance for the impaired loan with a corresponding charge or credit to the provision for loan losses. Management believes it followed appropriate accounting and regulatory guidance in determining impairment and accrual status of impaired loans.

(h)

Allowance for Credit Losses - Off-Balance Sheet Credit Exposures

The allowance for credit losses on off-balance sheet credit exposures is a liability account, calculated in accordance with ASC 326, representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Company has the unconditional right to cancel the obligation. Off-balance sheet credit exposures primarily consist of amounts available under outstanding lines of credit and letters of credit. For the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment or other off-balance sheet exposure. The likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents management's best estimate of expected credit losses on commitments expected to be funded over the contractual life of the commitment. The allowance is reported as a component of accrued interest and other liabilities in the Company's consolidated balance sheets. Adjustments to the allowance are reported in the Company's income statement as a component of provision for credit losses - off-balance sheet exposures.

Estimating credit losses on amounts expected to be funded uses the same methodology as described for loans in note 1 - Summary of Significant Accounting Policies, letter (f) Allowance for Credit Losses - Loans as if such commitments were funded.

(i)

Debt Securities

Certain debt securities that management has the positive intent and ability to hold to maturity are classified as “held-to-maturity” and recorded at amortized cost. Trading securities are recorded at fair value with changes in fair value included in earnings. Securities not classified as held-to-maturity or trading, including equity securities with readily determinable fair values, are classified as “available-for-sale” and recorded at fair value based on available market prices, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) on an after-tax basis. Securities classified as “available- for-sale” are held for indefinite periods of time and may be sold in response to movements in market interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

A debt security is placed on nonaccrual status at the time any principal and interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.

No securities have been classified as trading securities or held-to-maturity securities at December 31, 2023 or 2022.

(j)

Allowance for Credit Losses - Securities Available-for-Sale

For any securities classified as available-for-sale that are in an unrealized loss position at the balance sheet date, the Company assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through net income. If neither criteria is met, the Company evaluates whether any portion of the decline in fair value is the result of credit deterioration. Such evaluations consider the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security. If the evaluation indicates that a credit loss exists, an allowance for credit losses is recorded for the amount by which the amortized cost basis of the security exceeds the present value of cash flows

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

expected to be collected, limited by the amount by which the amortized cost exceeds fair value. Any impairment not recognized in the allowance for credit losses is recognized in other comprehensive income.

(k)

Equity Securities

Equity securities are carried at fair value, with changes in fair value reported in net income. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment.

(l)

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

(m)

Federal Home Loan Bank (FHLB) Stock

The Company is a member of the FHLB system. Members are required to own a certain amount of stock in the FHLB based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

(n)

Loans Held for Sale

Mortgage loans held for sale are carried at fair value. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

(o)

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 ranging from 3 to 40 years. Gains or losses realized on items retired and otherwise disposed of are credited or charged to operations and cost and related accumulated depreciation are removed from the asset and accumulated depreciation accounts.

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

(p)

Foreclosed Assets

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

(q)

Goodwill and Other Intangible Assets

Goodwill arises from business combinations and is determined as the excess of fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company has selected September 30th as the date to perform the annual impairment test. No impairment was determined as a result of the test performed by the Company on September 30, 2023. Intangible assets with finite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(r)

Leases

Leases are classified as operating or finance leases at the lease commencement date. The Company leases certain locations and equipment. The Company records leases on the balance sheet in the form of a lease liability for the present value of future minimum payments under the lease terms and right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives, and any impairment of the right-of-use asset. The discount rate used in determining the lease liability is based upon incremental borrowing rates the Company could obtain for similar loans as of the date of commencement or renewal. The Company does not record leases on the consolidated balance sheets that are classified as short term (less than one year).

At lease inception, the Company determines the lease term by considering the minimum lease term and all optional renewal periods that the Company is reasonably certain to renew. The lease term is also used to calculate straight-line rent expense. The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are reasonably certain to be renewed. The Company’s leases do not contain residual value guarantees or material variable lease payments that will impact the Company’s ability to pay dividends or cause the Company to incur additional expenses.

Operating lease expense consists of a single lease cost allocated over the remaining lease term on a straight-line bases, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset. Rent expense and variable lease expense are included in occupancy and equipment expense on the Company’s consolidated statements of earnings. The Company’s variable lease expense include rent escalators that are based on market conditions and include items such as common area maintenance, utilities, parking, property taxes, insurance and other costs associated with the lease. The amortization of the right-of- use asset arising from finance leases is expensed through occupancy and equipment expense and the interest on the related lease liability is expenses through interest expense on borrowings on the Company’s consolidated statements of earnings.

(s)

Mortgage Servicing Rights

When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are reported within non-interest income on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Servicing fee income, which is reported on the income statement as mortgage servicing income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal; or a fixed amount per loan and are recorded as income when earned. The amortization of mortgage servicing rights is netted against servicing fee income. Servicing fees totaled $9,000 for the year ended December 31, 2023. Late fees and ancillary fees related to loan servicing are not significant.

(t)

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, interest-bearing deposits with maturities fewer than 90 days, 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 believes to be financially sound.

(u)

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.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(v)

Bank Owned Life Insurance

The Bank has purchased life insurance policies on certain current and former key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

(w)

Income Taxes

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

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

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

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

(x)

Derivatives

Mortgage Banking Derivatives

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

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. The Company utilizes interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate loans. The hedging strategy on loans converts the fixed interest rates to SOFR-based variable interest rates. These derivatives are designated as partial term hedges of selected cash flows covering specified periods of time prior to the maturity dates of the hedged loans.

(y)

Stock-Based Compensation

Stock compensation accounting guidance (FASB ASC 718, “Compensation—Stock Compensation”) requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options, restricted share awards, restricted share unit awards, performance-based

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

awards, cash-settled stock appreciation rights (SARs), and employee share purchase plans. Because cash-settled SARs do not give the grantee the choice of receiving stock, all cash-settled SARs are accounted for as liabilities, not equity, as expense is accrued over the requisite service period.

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

(z)

Retirement Plans

Employee 401(k) and profit sharing plan expense is the amount of matching contributions and profit sharing contributions. Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service.

(aa) Advertising Costs

Advertising costs are expensed as incurred by the Company and totaled $3,714,000, $3,455,000 and $2,736,000 for 2023, 2022 and 2021, respectively.

(bb) Earnings Per Share

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

(cc) Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, net of taxes, which are also recognized as separate components of equity.

(dd) Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

(ee) Restrictions on Cash

Cash on hand or on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements.

(ff) Segment Reporting

Management analyzes the operations of the Company assuming one operating segment, community lending services.

(gg) Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in note 22 - Disclosures About Fair Value of Financial Instruments of the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.

(hh) Reclassification

Certain reclassifications have been made to the 2022 and 2021 figures to conform to the presentation for 2023.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(ii) 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.

(jj) Subsequent Events

The Company has evaluated subsequent events for recognition and disclosure through February 28, 2024, which is the date the financial statements were available to be issued.

(kk) Accounting Standard Updates

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. As noted above, effective

January 1, 2022

the Company adopted ASU 2016-13, which resulted in a $7.6 million decrease to the allowance for credit losses and a $6.2 million increase to the reserve for off-balance sheet exposures, resulting in a $1.0 million increase in retained earnings (net of taxes). See Note 2 – Loans and Allowance for Credit Losses for additional information. ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” In March 2020, the FASB issued this ASU and has issued subsequent amendments thereto, which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance was effective for all entities as of March 12, 2020 through December 31, 2022. In December 2022, the FASB issued an update to Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting with Accounting Standards Update 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which updated the effective date to be March 12, 2020 through December 31, 2024. The Company has implemented a transition plan to identify and modify its loans and other financial instruments, including certain indebtedness, with attributes that are either directly or indirectly influenced by LIBOR. The Company has moved substantially all of its LIBOR-based loans to its preferred replacement index, a Secured Overnight Financing Rate ("SOFR") based index as of December 31, 2023. For the Company’s currently outstanding LIBOR-based loan, the timing and manner in which such customer's interest rate transitions to a replacement index should occur at the next repricing date for such loan.

ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method.” ASU 2022-01 was issued to expand the scope of assets eligible for portfolio layer method hedging to include all financial assets. The update also expanded the then current last-of-layer method that permitted only one hedged layer to allow multiple hedged layers of a single closed portfolio. The last-of-layer method is renamed the portfolio layer method, because more than the last layer of a portfolio could be hedged. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The adoption of ASU 2022-01 did not have a significant impact on the Company's financial statements.

ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” ASU 2022-02 was issued to respond to feedback received from post-implementation review of Topic 326. The amendments eliminate the troubled debt restructuring (TDR) recognition and measurement guidance and now require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments enhance existing disclosures and include new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. To improve consistency for vintage disclosures, the ASU requires that public business entities disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The adoption of ASU-2022-02 did not have a significant impact on the Company's financial statements.

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

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(2)

Loans and Allowance for Credit Losses

Loans are reported at their outstanding principal balances less unearned income, the allowance for credit losses and any deferred fees or costs on originated loans. Interest income on loans is accrued based on the principal balance outstanding. Loan origination fees, net of certain loan origination costs, are deferred and recognized as an adjustment to the related loan yield using a method which approximates the interest method.

For financial reporting purposes, the Company classifies its loan portfolio based on the underlying collateral utilized to secure each loan. This classification is consistent with that utilized in the Quarterly Report of Condition and Income filed by the Bank with the Federal Deposit Insurance Corporation (“FDIC”).

The classification of loans at December 31, 2023 and 2022 is as follows:

	In Thousands
	2023			2022
Residential 1-4 family real estate	$	959,218		$	854,970
Commercial and multi-family real estate		1,313,284			1,064,297
Construction, land development and farmland		901,336			879,528
Commercial, industrial and agricultural		127,659			124,603
1-4 family equity lines of credit		202,731			151,032
Consumer and other		104,373			93,332
Total loans before net deferred loan fees		3,608,601			3,167,762
Net deferred loan fees		(13,078	)		(14,153	)
Total loans		3,595,523			3,153,609
Less: Allowance for credit losses		(44,848	)		(39,813	)
Net loans	$	3,550,675			3,113,796

At December 31, 2023, variable rate and fixed rate loans totaled $2,977,918,000 and $630,683,000, respectively. At December 31, 2022, variable rate and fixed rate loans totaled $2,546,325,000 and $621,437,000, respectively.

Risk characteristics relevant to each portfolio segment are as follows:

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

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

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

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

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

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

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

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

The following tables present the Company’s nonaccrual loans, certain credit quality indicators and past due loans as of December 31, 2023 and 2022.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Loans on Nonaccrual Status

	In Thousands
	2023		2022
Residential 1-4 family real estate	$	—	$	—
Commercial and multi-family real estate		—		—
Construction, land development and farmland		—		—
Commercial, industrial and agricultural		—		—
1-4 family equity lines of credit		—		—
Consumer and other		—		—
Total	$	—	$	—

Loans are placed on nonaccrual status when there is a significant deterioration in the financial condition of the borrower, which often is determined when the principal or interest on the loan is more than 90 days past due, unless the loan is both well-secured and in the process of collection. Generally, all interest accrued but not collected for loans that are placed on nonaccrual status, is reversed against current income. Interest income is subsequently recognized only to the extent cash payments are received while the loan is classified as nonaccrual, but interest income recognition is reviewed on a case-by-case basis. A nonaccrual loan is returned to accruing status once the loan has been brought current and collection is reasonably assured or the loan has been “well-secured” through other techniques. Past due status is determined based on the contractual due date per the underlying loan agreement.

At December 31, 2023 and December 31, 2022 the Company had no collateral dependent loans that were on non-accruing interest status. Accordingly, there was no impact on net interest income given the lack of these types of loans for the years ended December 31, 2023, December 31, 2022, and December 31, 2021.

Potential problem loans, which include nonperforming loans, amounted to approximately $5.9 million at December 31, 2023 compared to $6.4 million at December 31, 2022. Potential problem loans represent those loans with a well-defined weakness and where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by the FDIC, Wilson Bank’s primary federal regulator, for loans classified as special mention, substandard, or doubtful, excluding the impact of nonperforming loans.

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

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

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

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

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Credit Quality Indicators

The following table presents loan balances classified within each risk rating category by primary loan type and based on year of origination as well as current period gross charge-offs by primary loan type and based on year of origination as of December 31, 2023.

	In Thousands
													Revolving
	2023		2022		2021		2020		2019		Prior		Loans		Total
December 31, 2023
Residential 1-4 family real estate:
Pass	$	165,655		297,535		239,035		89,563		56,092		90,119		16,585		954,584
Special mention		76		859		225		876		137		1,558		—		3,731
Substandard		—		—		—		—		128		775		—		903
Total Residential 1-4 family real estate	$	165,731		298,394		239,260		90,439		56,357		92,452		16,585		959,218
Residential 1-4 family real estate:
Current-period gross charge-offs	$	—		—		—		—		—		—		—		—
Commercial and multi-family real estate:
Pass	$	103,050		321,767		378,418		143,178		91,640		217,645		57,320		1,313,018
Special mention		—		—		155		—		—		31		—		186
Substandard		—		—		—		—		—		80		—		80
Total Commercial and multi-family real estate	$	103,050		321,767		378,573		143,178		91,640		217,756		57,320		1,313,284
Commercial and multi-family real estate:
Current-period gross charge-offs	$	—		—		—		—		—		—		—		—
Construction, land development and farmland:
Pass	$	231,337		306,056		99,456		26,710		7,586		10,141		219,999		901,285
Special mention		—		—		—		—		—		51		—		51
Substandard		—		—		—		—		—		—		—		—
Total Construction, land development and farmland	$	231,337		306,056		99,456		26,710		7,586		10,192		219,999		901,336
Construction, land development and farmland:
Current-period gross charge-offs	$	—		—		—		—		—		—		—		—
Commercial, industrial and agricultural:
Pass	$	16,811		34,507		7,460		12,272		17,066		7,593		31,832		127,541
Special mention		93		7		6		—		—		—		12		118
Substandard		—		—		—		—		—		—		—		—
Total Commercial, industrial and agricultural	$	16,904		34,514		7,466		12,272		17,066		7,593		31,844		127,659
Commercial, industrial and agricultural:
Current-period gross charge-offs	$	—		30		—		—		—		—		—		30
1-4 family equity lines of credit:
Pass	$	—		—		—		—		—		—		202,189		202,189
Special mention		—		—		—		—		—		—		404		404
Substandard		—		—		—		—		—		—		138		138
Total 1-4 family equity lines of credit	$	—		—		—		—		—		—		202,731		202,731
1-4 family equity lines of credit:
Current-period gross charge-offs	$	—		—		—		—		—		—		—		—
Consumer and other:
Pass	$	27,998		15,511		5,331		14,497		4,728		6,381		29,638		104,084
Special mention		4		52		57		7		—		—		—		120
Substandard		51		106		—		11		—		1		—		169
Total Consumer and other	$	28,053		15,669		5,388		14,515		4,728		6,382		29,638		104,373
Consumer and other:
Current-period gross charge-offs	$	1,843		213		98		22		—		—		151		2,328

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

The following table presents loan balances classified within each risk rating category based on year of origination as of December 31, 2023.

	In Thousands
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
December 31, 2023
Pass	$	544,851		975,376		729,700		286,220		177,112		331,879		557,563		3,602,701
Special mention		173		918		443		883		137		1,640		416		4,610
Substandard		51		106		—		11		128		856		138		1,290
Total	$	545,075		976,400		730,143		287,114		177,377		334,375		558,117		3,608,601

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

The following table presents loan balances classified within each risk rating category by primary loan type and based on year of origination as well as current period gross charge-offs by primary loan type and based on year of origination as of December 31, 2022.

	In Thousands
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
December 31, 2022
Residential 1-4 family real estate:
Pass	$	290,315		262,690		106,107		61,984		29,526		81,229		17,751		849,602
Special mention		245		300		885		62		115		1,955		349		3,911
Substandard		—		—		—		131		—		1,326		—		1,457
Total Residential 1-4 family real<br>   estate	$	290,560		262,990		106,992		62,177		29,641		84,510		18,100		854,970
Residential 1-4 family real estate:
Current-period gross charge-offs	$	—		—		—		—		—		8		—		8
Commercial and multi-family real<br>   estate:
Pass	$	271,403		246,265		161,326		107,908		74,494		166,267		36,342		1,064,005
Special mention		—		—		162		—		—		40		—		202
Substandard		—		—		—		—		—		90		—		90
Total Commercial and multi-<br>   family real estate	$	271,403		246,265		161,488		107,908		74,494		166,397		36,342		1,064,297
Commercial and multi-family real<br>   estate:
Current-period gross charge-offs	$	—		—		—		—		—		—		—		—
Construction, land development<br>   and farmland:
Pass	$	364,681		237,051		90,341		9,648		5,212		9,445		163,076		879,454
Special mention		—		—		—		—		—		60		—		60
Substandard		—		—		—		—		—		14		—		14
Total Construction, land<br>   development and farmland	$	364,681		237,051		90,341		9,648		5,212		9,519		163,076		879,528
Construction, land development<br>   and farmland:
Current-period gross charge-offs	$	—		—		—		—		—		1		—		1
Commercial, industrial and<br>   agricultural:
Pass	$	39,222		10,812		15,743		20,441		5,062		4,641		28,567		124,488
Special mention		7		44		17		—		—		47		—		115
Substandard		—		—		—		—		—		—		—		—
Total Commercial, industrial and<br>   agricultural	$	39,229		10,856		15,760		20,441		5,062		4,688		28,567		124,603
Commercial, industrial and<br>   agricultural:
Current-period gross charge-offs	$	21		—		—		—		—		—		—		21
1-4 family equity lines of credit:
Pass	$	—		—		—		—		—		—		150,849		150,849
Special mention		—		—		—		—		—		—		67		67
Substandard		—		—		—		—		—		—		116		116
Total 1-4 family equity lines of<br>   credit	$	—		—		—		—		—		—		151,032		151,032
1-4 family equity lines of credit:
Current-period gross charge-offs	$	—		—		—		—		—		—		—		—
Consumer and other:
Pass	$	28,487		11,163		18,075		5,995		345		6,757		22,166		92,988
Special mention		74		130		20		2		—		—		—		226
Substandard		74		19		13		—		11		1		—		118
Total Consumer and other	$	28,635		11,312		18,108		5,997		356		6,758		22,166		93,332
Consumer and other:
Current-period gross charge-offs	$	66		74		41		1		—		—		1,345		1,527

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

The following table presents loan balances classified within each risk rating category based on year of origination as of December 31, 2022.

	In Thousands
	2022		2021		2020		2019		2018		Prior		Revolving<br>Loans		Total
December 31, 2022
Pass	$	994,108		767,981		391,592		205,976		114,639		268,339		418,751		3,161,386
Special mention		326		474		1,084		64		115		2,102		416		4,581
Substandard		74		19		13		131		11		1,431		116		1,795
Total	$	994,508		768,474		392,689		206,171		114,765		271,872		419,283		3,167,762

Age Analysis of Past Due Loans

	In Thousands
	30-59 Days Past Due		60-89 Days Past Due		Nonaccrual and Greater Than 89 Days		Total Nonaccrual and Past Due		Current		Total Loans		Recorded Investment Greater Than 89 Days and Accruing
December 31, 2023
Residential 1-4 family real estate	$	1,544		552		1,178		3,274		955,944		959,218	$	1,178
Commercial and multi-family real estate		5,846		—		—		5,846		1,307,438		1,313,284		—
Construction, land development and farmland		2,959		1		—		2,960		898,376		901,336		—
Commercial, industrial and agricultural		52		—		7		59		127,600		127,659		7
1-4 family equity lines of credit		571		209		106		886		201,845		202,731		106
Consumer and other		350		78		118		546		103,827		104,373		118
Total	$	11,322		840		1,409		13,571		3,595,030		3,608,601	$	1,409
December 31, 2022
Residential 1-4 family real estate	$	2,046		1,080		426		3,552		851,418		854,970	$	426
Commercial and multi-family real estate		397		1,626		400		2,423		1,061,874		1,064,297		400
Construction, land development and farmland		591		—		—		591		878,937		879,528		—
Commercial, industrial and agricultural		49		62		—		111		124,492		124,603		—
1-4 family equity lines of credit		74		77		—		151		150,881		151,032		—
Consumer and other		403		184		43		630		92,702		93,332		43
Total	$	3,560		3,029		869		7,458		3,160,304		3,167,762	$	869

Allowance for Credit Losses ("ACL") - Loans

The allowance for credit losses on loans is a contra-asset valuation account, calculated in accordance with ASC 326 that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance represents management's best estimate of current expected credit losses on loans considering available information from internal and external sources, relevant to assessing collectability over the loans' contractual terms, adjusted for expected prepayments when appropriate. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. The allowance for credit losses is measured on a collective basis for portfolios of loans when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Expected credit losses for collateral dependent loans, including loans where the borrower is experiencing financial difficulty but foreclosure is not probable, are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

The Company’s discounted cash flow methodology incorporates a probability of default and loss given default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts. Together, the probability of default and loss given default models with the use of reasonable and supportable forecasts generate estimates for cash flows expected and not expected to be collected over the estimated life of a loan. Estimates of future expected cash flows ultimately reflect assumptions made

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

concerning net credit losses over the life of a loan. The use of reasonable and supportable forecasts requires significant judgment. Management leverages economic projections from reputable and independent third parties to inform and provide its reasonable and supportable economic forecasts. The Company’s model reverts to a straight line basis for purposes of estimating cash flows beyond a period deemed reasonable and supportable. The Company forecasts probability of default and loss given default based on economic forecast scenarios over an eight quarter time period before reverting to a straight line basis for a four quarter time period. The duration of the forecast horizon, the period over which forecasts revert to a straight line basis, the economic forecasts that management utilizes, as well as additional internal and external indicators of economic forecasts that management considers, may change over time depending on the nature and composition of our loan portfolio. Changes in economic forecasts, in conjunction with changes in loan specific attributes, impact a loan’s probability of default and loss given default, which can drive changes in the determination of the ACL. Expectations of future cash flows are discounted at the loan’s effective interest rate. The resulting ACL represents the amount by which the loan’s amortized cost exceeds the net present value of a loan’s discounted cash flows expected to be collected. The ACL is recorded through a charge to provision for credit losses and is reduced by charge-offs, net of recoveries on loans previously charged-off. It is the Company’s policy to charge-off loan balances at the time they have been deemed uncollectible.

For segments where the discounted cash flow methodology is not used, a remaining life methodology is utilized. The remaining life method uses an average annual charge-off rate applied to the contractual term, further adjusted for estimated prepayments to determine the unadjusted historical charge-off rate for the remaining balance of assets.

The estimated credit losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative categories and the measurements used to quantify the risks within each of these categories are subjectively selected by management. The data for each measurement may be obtained from internal or external sources. The current period measurements are evaluated and assigned a factor commensurate with the current level of risk relative to past measurements over time. The resulting qualitative adjustments are applied to the relevant collectively evaluated loan portfolios. These adjustments are based upon the following:

1. Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses.

2. Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments.

3. Changes in the nature and volume of the portfolio and in the terms of loans.

4. Changes in the experience, ability, and depth of lending management and other relevant staff.

5. Changes in the volume and severity of past-due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans.

6. Changes in the quality of the Company's loan review system.

7. Changes in the value of underlying collateral for collateral-dependent loans.

8. The existence and effect of any concentrations of credit, and changes in the level of such concentrations.

9. The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing portfolio.

The qualitative allowance allocation, as determined by the processes noted above, is increased or decreased for each loan segment based on the assessment of these various qualitative factors.

Loans that do not share similar risk characteristics with the collectively evaluated pools are evaluated on an individual basis and are excluded from the collectively evaluated pools. Individual evaluations are generally performed for loans greater than $500,000 which have experienced significant credit deterioration. Such loans are evaluated for credit losses based on either discounted cash flows or the fair value of collateral. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral, less selling costs. For loans for which foreclosure is not probable, but for which repayment is expected to be provided substantially through the operation or sale of the collateral, the Company has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of collateral, with selling costs considered in the event sale of the collateral is expected. Loans greater than $100,000 for which terms have been modified either through principal forgiveness, payment delay, term extension, or interest rate reduction are evaluated using these same individual evaluation methods.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

In assessing the adequacy of the allowance for credit losses, the Company considers the results of the Company's ongoing independent loan review process. The Company undertakes this process both to ascertain those loans in the portfolio with elevated credit risk and to assist in its overall evaluation of the risk characteristics of the entire loan portfolio. Its loan review process includes the judgment of management, independent internal loan reviewers and reviews that may have been conducted by third-party reviewers including regulatory examiners. The Company incorporates relevant loan review results in the allowance.

In accordance with CECL, losses are estimated over the remaining contractual terms of loans, adjusted for prepayments and curtailment. The contractual term excludes expected extensions, renewals and modifications.

Credit losses are estimated on the amortized cost basis of loans, which includes the principal balance outstanding and deferred loan fees and costs.

While management utilizes its best judgment and information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors beyond management's control, including the performance of the loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.

Loans are charged off when management believes that the full collectability of the loan is unlikely. As such, a loan may be partially charged-off after a “confirming event” has occurred which serves to validate that full repayment pursuant to the terms of the loan is unlikely.

Transactions in the allowance for credit losses for the years ended December 31, 2023 and 2022 are summarized as follows:

	In Thousands
	Residential 1-4 Family Real Estate		Commercial and Multi-family Real Estate		Construction, Land Development and Farmland		Commercial, Industrial and Agricultural			1-4 family Equity Lines of Credit		Consumer and Other			Total
December 31, 2023
Allowance for credit losses - loans:
Beginning balance	$	7,310		15,299		13,305		1,437			1,170		1,292			39,813
Provision		1,435		2,123		702		125			639		1,276			6,300
Charge-offs		—		—		—		(30	)		—		(2,328	)		(2,358	)
Recoveries		20		—		20		1			—		1,052			1,093
Ending balance	$	8,765		17,422		14,027		1,533			1,809		1,292			44,848
	In Thousands
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Residential 1-4 Family Real Estate			Commercial and Multi-family Real Estate			Construction, Land Development and Farmland			Commercial, Industrial and Agricultural			1-4 family Equity Lines of Credit			Consumer and Other			Total
December 31, 2022
Allowance for credit losses - loans:
Beginning balance	$	9,242			16,846			9,757			1,329		1098				1,360			39,632
Impact of adopting ASC 326		(3,393	)		(3,433	)		(266	)		219			(324	)		(367	)		(7,564	)
Provision		1,353			1,886			3,795			(117	)		396			1,343			8,656
Charge-offs		(8	)		—			(1	)		(21	)		—			(1,527	)		(1,557	)
Recoveries	116				—		20			27				—		483				646
Ending balance	$	7,310			15,299			13,305			1,437			1,170			1,292			39,813

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

The following tables detail the allowance for loan losses and recorded investment in loans by loan classification and by impairment evaluation method as of December 31, 2021, as determined in accordance with ASC 310 prior to the adoption of ASC 326:

	In Thousands
	Residential 1-4 Family Real Estate		Commercial and Multi-family Real Estate			Construction, Land Development and Farmland			Commercial, Industrial and Agricultural			1-4 family Equity Lines of Credit		Consumer and Other			Total
December 31, 2021
Allowance for loan losses:
Beginning balance	$	8,203		18,343			8,090			1,391			997		1,515			38,539
Provision		971		(1,497	)		1,296			(35	)	101		307				1,143
Charge-offs		—		—			(23	)		(33	)		—		(992	)		(1,048	)
Recoveries		68		—			394			6			—	530				998
Ending balance	$	9,242		16,846			9,757			1,329			1,098		1,360			39,632
Ending balance individually evaluated for impairment		—		—			—			—			—		—			—
Ending balance collectively evaluated for impairment	$	9,242		16,846			9,757			1,329			1,098		1,360			39,632
Loans:
Ending balance	$	689,579		908,673			612,659			118,155			92,229		74,643			2,495,938
Ending balance individually evaluated for impairment	$	134		531			—			—			—		—			665
Ending balance collectively evaluated for impairment	$	689,445		908,142			612,659			118,155			92,229		74,643			2,495,273

The following tables present the amortized cost basis of collateral dependent loans at December 31, 2023 and December 31, 2022 which are individually evaluated to determine expected credit losses:

	In Thousands
	Real Estate		Other		Total
December 31, 2023
Residential 1-4 family real estate	$	1,949		—		1,949
Commercial and multi-family real estate		2,889		—		2,889
Construction, land development and farmland		—		—		—
Commercial, industrial and agricultural		—		—		—
1-4 family equity lines of credit		—		—		—
Consumer and other		—		—		—
	$	4,838		—		4,838
	In Thousands
---	---	---	---	---	---	---
	Real Estate		Other		Total
December 31, 2022
Residential 1-4 family real estate	$	130		—		130
Commercial and multi-family real estate	508			—		508
Construction, land development and farmland		—		—		—
Commercial, industrial and agricultural		—		—		—
1-4 family equity lines of credit		—		—		—
Consumer and other		—		—		—
	$	638		—	638

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Loan Modifications to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company adopted ASU 2022-02 which eliminated the accounting guidance for TDRs and requires disclosures for certain loan modifications when a borrower is experiencing financial difficulty.

Occasionally, the Company modifies loans to borrowers in financial distress by providing, principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the "combination" columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction.

The following table presents the amortized cost basis of loans at December 31, 2023 that were both experiencing financial difficulty and modified during the twelve months ended December 31, 2023, by class and type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.

	(In Thousands)
	Principal<br>Forgiveness		Payment<br>Delay		Term<br>Extension		Interest Rate<br>Reduction		Combination<br>Term<br>Extension and<br>Principal<br>Forgiveness		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Residential 1-4 family real estate	$	—	$	947	$	—	$	—	$	—	$	—		0.10	%
Commercial and multi-family real estate		—		2,406		—		—		—		—		0.18	%
Construction, land development and<br>   farmland		—		—		—		—		—		—		—	%
Commercial, industrial and agricultural		—		—		93		—		—		—		0.07	%
1-4 family equity lines of credit		—		—		—		—		—		—		—	%
Consumer and other		—		—		—		—		—		—		—	%
Total	$	—	$	3,353	$	93	$	—	$	—	$	—		0.10	%

The Company has not committed to lend additional amounts to the borrowers included in the previous table.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified within the last 12 months and that are at least 30 days past due.

	In Thousands
December 31, 2023	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due
Residential 1-4 family real estate	$	—	$	—	$	—	$	—
Commercial and multi-family real estate		—		—		—		—
Construction, land development and<br>   farmland		—		—		—		—
Commercial, industrial and agricultural		—		—		—		—
1-4 family equity lines of credit		—		—		—		—
Consumer and other		—		—		—		—
Total	$	—	$	—	$	—	$	—

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

As evidenced above, no such loans that have been modified within the last 12 months were thirty days or more past due at December 31, 2023.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the twelve months ended December 31, 2023 (dollars in thousands):

Twelve Months Ended December 31, 2023	Principal<br>Forgiveness		Weighted-Average<br>Interest Rate Reduction			Weighted-Average Months of Term Extension
Residential 1-4 family real estate	$	—		—	%		—
Commercial and multi-family real estate		—		—			—
Construction, land development and farmland		—		—			—
Commercial, industrial and agricultural		—		—			37
1-4 family equity lines of credit		—		—			—
Consumer and other		—		—			—
Total	$	—		—	%		37

The following table presents the amortized cost basis of loans that had a payment default during the twelve months ended December 31, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

	In Thousands
Twelve Months Ended December 31, 2023	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction
Residential 1-4 family real estate	$	—	$	—	$	—	$	—
Commercial and multi-family real estate		—		—		—		—
Construction, land development and<br>   farmland		—		—		—		—
Commercial, industrial and agricultural		—		—		—		—
1-4 family equity lines of credit		—		—		—		—
Consumer and other		—		—		—		—
Total	$	—	$	—	$	—	$	—

There were no payment defaults during the twelve months ended December 31, 2023 on loans that had been modified in the twelve months prior to December 31, 2023.

Upon the Company's determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized costs basis of the loan is reduced by the amount deemed uncollectible and the allowance for credit losses is adjusted by the same amount.

TDR Disclosures Prior to Adoption of ASU 2022-02

Prior to the adoption of ASU 2022-02 the restructuring of a loan was considered a TDR if both (i) the borrower was experiencing financial difficulties and (ii) the creditor had granted a concession. Concessions may have included interest rate reductions or below market interest rates, principal forgiveness, extension of terms and other actions intended to minimize potential losses.

The Company did not modify any loan that was considered a TDR during the twelve months ended December 31, 2022.

The following table summarizes the carrying balances of TDRs at December 31, 2022 (dollars in thousands):

	2022
Performing TDRs	$	778
Nonperforming TDRs		150
Total TDRs	$	928

The following table outlines the amount of each TDR categorized by loan classification for the years ended December 31, 2022 and 2021 (dollars in thousands):

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

	December 31, 2022						December 31, 2021
	Number of Loans		Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment, Net of Related Allowance		Number of Loans		Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment, Net of Related Allowance
Residential 1-4 family real estate		—	$	—	$	—		—	$	—	$	—
Commercial and multi-family real estate		—		—		—		—		—		—
Construction, land development and farmland		—		—		—		—		—		—
Commercial, industrial and agricultural		—		—		—		—		—		—
1-4 family equity lines of credit		—		—		—		—		—		—
Consumer and other		—		—		—		—		—		—
Total		—	$	—	$	—		—	$	—	$	—

As of December 31, 2022 and 2021 the Company did not have any loan previously classified as a TDR default within twelve months of the restructuring. A default is defined as an occurrence which violates the terms of the receivable’s contract.

As of December 31, 2023 the Bank had no consumer mortgage loans in the process of foreclosure. As of December 31, 2022 the Bank had $11,000 of consumer mortgage loans in the process of foreclosure.

The Company’s principal customers are primarily in Middle Tennessee. Credit is extended to businesses and individuals and is evidenced by promissory notes. The terms and conditions of the loans including collateral vary depending upon the purpose of the credit and the borrower’s financial condition. In 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 $7,768,000 and $6,859,000 at December 31, 2023 and 2022, respectively. None of these loans were restructured, charged-off or involved more than the normal risk of collectibility or presented other unfavorable features during the three years ended December 31, 2023.

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

	In Thousands
	December 31,
	2023			2022
Balance, January 1	$	6,859		$	5,725
New loans and renewals during the year		9,860			13,379
Repayments (including loans paid by renewal) during the year		(8,951	)		(12,245	)
Balance, December 31	$	7,768		$	6,859

In 2023, 2022 and 2021, Wilson Bank originated mortgage loans for sale into the secondary market of $73,984,000, $106,601,000 and $215,813,000, respectively. The fees and gain on sale of these loans totaled $2,635,000, $2,973,000 and $9,997,000 in 2023, 2022 and 2021, respectively.

In some instances, Wilson Bank sells loans that contain provisions which permit the buyer to seek recourse against Wilson Bank in certain circumstances. At December 31, 2023 and 2022, total mortgage loans sold with recourse in the secondary market aggregated $69,308,000 and $84,162,000, respectively. At December 31, 2023, Wilson Bank has not been required to repurchase a significant amount of the mortgage loans originated by Wilson Bank and sold in the secondary market. Management expects no significant losses to result from these recourse provisions.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(3)

Debt Securities

Debt securities have been classified in the consolidated balance sheet according to management’s intent. Debt securities at December 31, 2023 consist of the following:

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Fair
	Amortized Cost		Gains		Losses		Value
U.S. Treasury and other U.S. government agencies	$	4,901		—		472		4,429
U.S. Government-sponsored enterprises (GSEs)		167,738		—		23,570		144,168
Mortgage-backed securities		480,759		230		63,959		417,030
Asset-backed securities		51,183		193		1,403		49,973
Corporate bonds		2,500		—		77		2,423
Obligations of states and political subdivisions		223,358		397		30,697		193,058
	$	930,439		820		120,178		811,081

The Company’s classification of securities at December 31, 2022 was as follows:

	Securities Available-For-Sale
	In Thousands
			Gross Unrealized		Gross Unrealized		Fair
	Amortized Cost		Gains		Losses		Value
U.S. Treasury and other U.S. government agencies	$	7,353		—		856		6,497
U.S. Government-sponsored enterprises (GSEs)		177,261		—		32,049		145,212
Mortgage-backed securities		518,727		1		74,290		444,438
Asset-backed securities		47,538		—		2,288		45,250
Corporate bonds		2,500		—		97		2,403
Obligations of states and political subdivisions		218,936		—		39,924		179,012
	$	972,315		1		149,504		822,812

As of December 31, 2023, there was no allowance for credit losses on available-for-sale securities.

Included in mortgage-backed securities are collateralized mortgage obligations totaling $145,179,000 (fair value of $124,005,000) and $148,460,000 (fair value of $126,190,000) at December 31, 2023 and 2022, respectively.

The amortized cost and estimated market value of debt securities at December 31, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities of mortgage and asset-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	In Thousands
Securities Available-For-Sale	Amortized Cost		Fair Value
Due in one year or less	$	308		302
Due after one year through five years		99,749		90,059
Due after five years through ten years		279,313		243,984
Due after ten years		551,069		476,736
	$	930,439		811,081

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Results from sales of debt securities are as follows:

	In Thousands
	2023			2022			2021
Gross proceeds	$	32,740			42,728			39,652
Gross realized gains	$	17			—			137
Gross realized losses		(1,026	)		(1,620	)		(109	)
Net realized gains (losses)	$	(1,009	)		(1,620	)		28

Securities carried on the balance sheet of approximately $500,046,000 (approximate market value of $429,705,000) and $477,051,000 (approximate market value of $405,043,000) were pledged to secure public deposits and for other purposes as required or permitted by law at December 31, 2023 and 2022, respectively.

At December 31, 2023, there were no holdings of securities of any one issuer, other than U.S. Government and its agencies, in an amount greater than 10% of shareholders' equity.

Included in the securities above are $116,000,000 (approximate market value of $99,000,000) and $111,505,000 (approximate market value of $90,008,000) at December 31, 2023 and 2022, respectively, in obligations of political subdivisions located within the states of Tennessee, Alabama, and Texas.

The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2023 and 2022.

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2023	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
U.S. Treasury and other U.S. government agencies	$	—	$	—		—	$	4,429	$	472		2	$	4,429	$	472
U.S. Government-sponsored enterprises (GSEs)		—		—		—		144,169		23,569		55		144,169		23,569
Mortgage-backed securities		8,889		63		7		390,557		63,897		221		399,446		63,960
Asset-backed securities		2,500		44		1		30,666		1,359		26		33,166		1,403
Corporate bonds		—		—		—		2,423		77		1		2,423		77
Obligations of states and political subdivisions		5,375		14		2		171,157		30,683		193		176,532		30,697
	$	16,764	$	121		10	$	743,401	$	120,057		498	$	760,165	$	120,178

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

	In Thousands, Except Number of Securities
	Less than 12 Months						12 Months or More						Total
					Number of						Number of
			Unrealized		Securities				Unrealized		Securities				Unrealized
2022	Fair Value		Losses		Included		Fair Value		Losses		Included		Fair Value		Losses
Available-for-Sale Securities:
Debt securities:
U.S. Treasury and other U.S. government agencies	$	—	$	—		—	$	6,497	$	856		—	$	6,497	$	856
U.S. Government-sponsored enterprises (GSEs)		9,747		872		4		135,465		31,177		54		145,212		32,049
Mortgage-backed securities		148,441		14,601		113		295,431		59,689		136		443,872		74,290
Asset-backed securities		35,276		1,607		21		9,974		681		11		45,250		2,288
Corporate bonds		2,403		97		1		—		—		—		2,403		97
Obligations of states and political subdivisions		58,567		6,056		76		120,445		33,868		128		179,012		39,924
	$	254,434	$	23,233		215	$	567,812	$	126,271		332	$	822,246	$	149,504

The applicable date for determining when securities are in an unrealized loss position is December 31, 2023 and 2022. As such, it is possible that a security had a market value less than its amortized cost on other days during the twelve-month periods ended December 31, 2023 and 2022, but is not in the "Investments with an Unrealized Loss of less than 12 months" category above.

As shown in the tables above, at December 31, 2023 and 2022, the Company had unrealized losses of $120.2 million and $149.5 million on $760.2 million and $822.2 million, respectively, of securities in an unrealized loss position at those dates. As described in Note 1. Summary of Significant Accounting Policies, for any security classified as available-for-sale that is in an unrealized loss position at the balance sheet date, the Company assesses whether or not it intends to sell the security, or more-likely-than-not will be required to sell the security, before recovery of its amortized cost basis which would require a write-down to fair value through net income. Because the Company currently does not intend to sell those securities that have an unrealized loss at December 31, 2023, and it is likely that the Company will not be required to sell the securities before recovery of their amortized cost bases, which may be maturity, the Company has determined that no write-down is necessary. In addition, the Company evaluates whether any portion of the decline in fair value is the result of credit deterioration, which would require the recognition of an allowance for credit losses. Such evaluations consider the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security. The unrealized losses associated with securities at December 31, 2023 are driven by changes in interest rates and not due to the credit quality of the securities, and accordingly, no allowance for credit losses is considered necessary related to available-for- sale securities at December 31, 2023. These securities will continue to be monitored as a part of the Company's ongoing evaluation of credit quality.

Mortgage-Backed Securities

At December 31, 2023, approximately 97% of the mortgage-backed securities held by the Company were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is largely attributable to interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired (OTTI) at December 31, 2023.

The Company's mortgage-backed securities portfolio includes non-agency collateralized mortgage obligations with a fair value of $11.5 million which had unrealized losses of approximately $1.5 million at December 31, 2023. These non-agency mortgage-backed securities were rated A or higher at December 31, 2023. The Company monitors to ensure it has adequate credit support and as of December 31, 2023, the Company believes there is no OTTI and does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The issuers continue to make timely principal and interest payments on the bonds.

Obligations of States and Political Subdivisions

Unrealized losses on municipal bonds have not been recognized into income because the issuers' bonds are of high credit quality (rated A or higher), management does not intend to sell the securities and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

Asset-Backed Securities

The Company's asset-backed securities portfolio includes agency and non-agency asset backed and other amortizing debt securities with a fair value of $50.0 million which had unrealized losses of approximately $1.4 million at December 31, 2023. The Company monitors these securities to ensure it has adequate credit support and as of December 31, 2023, the Company believes there is no OTTI and does not have the intent to sell these securities and it is not more likely than not that it will be required to sell the securities before their anticipated recovery. The issuers continue to make timely principal and interest payments on the bonds.

Corporate Bonds

The Company's lone corporate debt security with a fair value of $2.4 million had an unrealized loss of approximately $0.1 million at December 31, 2023. The Company monitors this security to ensure it has adequate credit support and as of December 31, 2023, the Company believes there is no OTTI and does not have the intent to sell this security and it is not more likely than not that it will be required to sell the security before its anticipated recovery. The issuer continues to make timely principal and interest payments on the bond.

(4)

Restricted Equity Securities

Restricted equity securities consists of stock of the FHLB of Cincinnati amounting to $3,436,000 and $4,357,000 at December 31, 2023 and 2022, 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, 2023 and 2022 is as follows:

	In Thousands
	2023			2022
Land	$	20,822		$	20,822
Buildings		49,784			46,579
Leasehold improvements		1,710			1,621
Furniture and equipment		16,524			14,858
Automobiles	345			373
Construction-in-progress		2,469			2,711
		91,654			86,964
Less accumulated depreciation		(29,256	)		(24,933	)
	$	62,398		$	62,031

During 2023, 2022 and 2021, payments of $1,442,000, $379,000 and $1,227,000, respectively, were made to an entity owned by a director for the construction of buildings utilized by Wilson Bank and repair work on existing buildings utilized by Wilson Bank.

Depreciation expense was $4,221,000, $4,370,000 and $4,235,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(6)

Goodwill

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

	In Thousands
	2023		2022
Goodwill:
Balance at January 1,	$	4,805		4,805
Goodwill acquired during year		—		—
Impairment loss		—		—
Balance at December 31,	$	4,805		4,805

(7)

Leases

Lessee Accounting

The majority of leases in which the Company is the lessee are comprised of real estate property for branches and office space and are recorded as operating leases with terms extending beyond 2028. The Company has one finance lease, which it entered into in 2022, with a lease term through 2046. These leases are classified as operating or finance leases at commencement. Right-of-use assets representing the right to use the underlying asset and lease liabilities representing the obligation to make future lease payments are recognized on the balance sheet. These assets and liabilities are estimated based on the present value of future lease payments discounted using the Company's incremental secured borrowing rates as of the commencement date of the lease. Certain lease agreements contain renewal options which are considered in the determination of the lease term if they are deemed reasonably certain to be exercised. The Company has elected not to recognize leases with an original term of less than 12 months on the balance sheet.

The following table represents lease assets and lease liabilities as of December 31, 2023 and 2022 (in thousands).

Lease right-of-use assets	Classification	December 31, 2023		December 31, 2022
Operating lease right-of-use assets	Other Assets	$	3,542		4,519
Finance lease right-of-use assets	Other Assets		2,123		2,215
Lease liabilities	Classification	December 31, 2023		December 31, 2022
---	---	---	---	---	---
Operating lease liabilities	Other Liabilities	$	3,736		4,671
Finance lease liabilities	Other Liabilities		2,251		2,281

The total lease cost related to operating leases and short term leases is recognized on a straight-line basis over the lease term. For finance leases, right-of-use assets are amortized on a straight-line basis over the lease term and interest imputed on the lease liability is recognized using the effective interest method. The components of the Bank's total lease cost were as follows for the years ended December 31, 2023 and 2022.

	In Thousands
	2023		2022
Operating lease cost	$	637		563
Finance lease cost		158		159
Short-term lease cost		—		—
Net lease cost	$	795		722

The weighted average remaining lease term and weighted average discount rate for operating leases at December 31, 2023 and 2022 were as follows:

	2023			2022
Operating Leases
Weighted average remaining lease term (in years)		10.10			10.53
Weighted average discount rate		4.31	%		4.25	%

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

The weighted average remaining lease term and weighted average discount rate for finance leases at December 31, 2023 and 2022 were as follows:

	2023			2022
Finance Leases
Weighted average remaining lease term (in years)		23.34			24.35
Weighted average discount rate		2.90	%		2.90	%

Cash flows related to operating and finance leases during the year ended December 31, 2023 and 2022 were as follows:

	In Thousands
	2023		2022
Operating cash flows related to operating leases	$	595		547
Operating cash flows related to finance leases		66		66
Financing cash flows related to finance leases		30		26

Future undiscounted lease payments for operating leases with initial terms of more than 12 months at December 31, 2023 and 2022 were as follows:

	In Thousands
	2023			2022
Operating Leases
2024	$	553			595
2025		560			635
2026		568			642
2027		576			649
2028		547			657
Thereafter		1,854			2,686
Total undiscounted lease payments		4,658			5,864
Less: imputed interest		(922	)		(1,193	)
Net lease liabilities	$	3,736		$	4,671

Future undiscounted lease payments for finance leases with initial terms of more than 12 months at December 31, 2023 and 2022 were as follows:

	In Thousands
	2023			2022
Finance Leases
2024	$	98		$	96
2025		101			98
2026		105			101
2027		108			105
2028		111			108
Thereafter		2,676			2,787
Total undiscounted lease payments		3,199			3,295
Less: imputed interest		(948	)		(1,014	)
Net lease liabilities	$	2,251		$	2,281

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(8)

Mortgage Servicing Rights

During the first quarter of 2022, the Company began selling a portfolio of residential mortgage loans to a third party, while retaining the rights to service the loans. Mortgage loans serviced for others are not reported as assets. The principal balances of these loans as of December 31, 2023 and December 31, 2022 are as follows:

	In Thousands
	December 31, 2023		December 31, 2022
Mortgage loan portfolios serviced for:
FHLMC	$	99,441		85,742

For the years ended December 31, 2023 and 2022, the change in carrying value of the Company's mortgage servicing rights accounted for under the amortization method was as follows:

	In Thousands
	December 31, 2023			December 31, 2022
Balance at beginning of period	$	1,065			—
Servicing rights retained from loans sold		245			1,597
Amortization		(227	)		(532	)
Valuation Allowance Provision		—			—
Balance at end of period	$	1,083			1,065
Fair value, end of period	$	1,398			1,252

The key data and assumptions used in estimating the fair value of the Company's mortgage servicing rights as of December 31, 2023 and 2022 were as follows:

	December 31, 2023			December 31, 2022
Prepayment speed		7.92	%		7.18	%
Weighted-average life (in years)		8.55			8.98
Weighted-average note rate		4.73	%		4.34	%
Weighted-average discount rate		9.00	%		9.00	%

(9)

Deposits

Deposits at December 31, 2023 and 2022 are summarized as follows:

		2022
Demand deposits	389,725		414,905
Savings accounts	320,301		338,963
Negotiable order of withdrawal accounts	934,709		1,070,629
Money market demand accounts	1,156,694		1,301,349
Certificates of deposit 250,000 or greater	548,269		230,408
Other certificates of deposit	942,346		471,249
Individual retirement accounts 250,000 or greater	11,018		7,727
Other individual retirement accounts	64,044		57,475
Total	4,367,106		3,892,705

All values are in US Dollars.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Principal maturities of certificates of deposit and individual retirement accounts at December 31, 2023 are as follows:

	(In Thousands)
Maturity	Total
2024	$	1,228,675
2025		258,962
2026		38,934
2027		22,734
2028		15,579
Thereafter		793
	$	1,565,677

The aggregate amount of overdrafts reclassified as loans receivable was $858,000 and $1,453,000 at December 31, 2023 and 2022, respectively. The aggregate balances of related party deposits at December 31, 2023 and 2022 were $15,640,000 and $11,823,000, respectively.

As of December 31, 2023 and 2022, Wilson Bank was not required to maintain a cash balance with the Federal Reserve.

(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, 2023, 2022 and 2021 are presented below:

	In Thousands
	2023			2022			2021
Non-interest income:
Service charges on deposits	$	7,890			7,382			6,137
Brokerage income		7,184			6,929			6,368
Debit and credit card interchange income, net		8,490			8,416			7,783
Other fees and commissions		1,408			1,653			1,446
BOLI and annuity earnings		1,667			1,346			1,109
Gain (loss) on sale of securities, net		(1,009	)		(1,620	)		28
Fees and gains on sales of mortgage loans		2,635			2,973			9,997
Mortgage servicing income (loss), net		9			(28	)		—
Loss on sale of other real estate, net		—			—			(15	)
Gain (loss) on sale of fixed assets, net		(55	)		291			(43	)
Gain (loss) on sale of other assets, net		(10	)		8			6
Other income (loss)		80			(69	)		34
	$	28,289			27,281			32,850
	In Thousands
---	---	---	---	---	---	---
	2023		2022		2021
Non-interest expense:
Employee salaries and benefits	$	59,501		56,707		52,722
Equity-based compensation		1,528		1,864		1,428
Occupancy expenses		6,532		5,563		5,473
Furniture and equipment expenses		3,202		3,389		3,323
Data processing expenses		8,810		7,337		5,780
Advertising expenses		3,714		3,455		2,736
Accounting, legal & consulting expenses		1,789		1,409		1,287
FDIC insurance		3,120		1,527		1,130
Directors’ fees		713		650		686
Other operating expenses		12,042		11,069		10,927
	$	100,951		92,970		85,492

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(11)

Income Taxes

The components of the net deferred tax asset at December 31, 2023 and 2022 were as follows:

	In Thousands
	2023			2022
Deferred tax asset:
Federal	$	36,034			40,690
State		11,641			13,095
		47,675			53,785
Deferred tax liability:
Federal		(1,654	)		(1,850	)
State		(548	)		(612	)
		(2,202	)		(2,462	)
Net deferred tax asset	$	45,473			51,323

The tax effects of each type of significant item that gave rise to deferred tax assets (liabilities) at December 31, 2023 and 2022 were:

	In Thousands
	2023			2022
Financial statement allowance for credit losses in excess of tax allowance	$	11,509			10,128
Excess of depreciation deducted for tax purposes over the amounts deducted in the financial statements		(1,546	)		(1,801	)
Financial statement deduction for deferred compensation in excess of deduction for tax purposes		1,487			1,464
Financial statement income on FHLB stock dividends not recognized for tax purposes		(327	)		(327	)
Financial statement off-balance sheet exposure allowance for credit losses in excess of tax allowance		822			1,604
Unrealized loss on securities available-for-sale		31,195			39,073
Equity based compensation		1,355			1,224
Other items, net		978			(42	)
Net deferred tax asset	$	45,473			51,323

The components of income tax expense (benefit) at December 31, 2023, 2022 and 2021 are summarized as follows:

	In Thousands
	Federal			State			Total
2023
Current	$	14,023			1,945			15,968
Deferred		(1,458	)		(571	)		(2,029	)
Total	$	12,565			1,374			13,939
2022
Current	$	15,096			2,011			17,107
Deferred		(1,565	)		(486	)		(2,051	)
Total	$	13,531			1,525			15,056
2021
Current	$	13,580			2,084			15,664
Deferred		(698	)		(234	)		(932	)
Total	$	12,882			1,850			14,732

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

A reconciliation of actual income tax expense of $13,939,000, $15,056,000 and $14,732,000 for the years ended December 31, 2023, 2022 and 2021, respectively, to the “expected” tax expense (computed by applying the statutory rate of 21% for 2023, 2022 and 2021 to earnings before income taxes) is as follows:

	In Thousands
	2023			2022			2021
Computed “expected” tax expense	$	13,204			14,301			13,473
State income taxes, net of Federal income tax benefit		1,120			1,117			1,584
Tax exempt interest, net of interest expense exclusion		(190	)		(274	)		(237	)
Earnings on cash surrender value of life insurance		(344	)		(273	)		(205	)
Expenses not deductible for tax purposes	74			23			12
Equity based compensation		(46	)		(55	)		(28	)
Other		121			217			133
	$	13,939			15,056			14,732

Total income tax expense (benefit) for 2023, 2022 and 2021, includes $(264,000), $(423,000) and $7,000 of expense (benefit) related to the realized gain and loss on sale of securities, respectively.

As of December 31, 2023, 2022 and 2021 the Company has not accrued or recognized interest or penalties related to uncertain tax positions. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense.

No valuation allowance for deferred tax assets was recorded at December 31, 2023 and 2022 as management believes it is more likely than not that all of the deferred tax assets will be realized against deferred tax liabilities and projected future taxable income. There were no unrecognized tax benefits during any of the reported periods.

The Company and Wilson Bank file income tax returns in the United States (“U.S.”), as well as in the State of Tennessee. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before

2020

.

(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 Company's consolidated financial position.

At December 31, 2023 and 2022, respectively, the Company has lines of credit with other correspondent banks totaling $102,485,000 and $101,208,000. At December 31, 2023 and 2022, respectively, there was no balance outstanding under these lines of credit.

The Company also has a Cash Management Advance ("CMA") Line of Credit agreement. The CMA is a component of the Company's Blanket Agreement for advances with the FHLB of Cincinnati. The purpose of the CMA is to assist with short-term liquidity management. Under the terms of the CMA, the Company may borrow a maximum of $25,000,000, selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. There were no borrowings outstanding under the CMA at December 31, 2023 or December 31, 2022.

(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.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

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
	2023		2022
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit	$	1,010,899		1,217,963
Standby letters of credit		106,420		118,064
Total	$	1,117,319		1,336,027

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

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Most guarantees extend from one to two years. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The fair value of standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the likelihood of the counterparties drawing on such financial instruments and the present creditworthiness of such counterparties. Such commitments have been made on terms which are competitive in the markets in which the Company operates; thus, the fair value of standby letters of credit equals the carrying value for the purposes of this disclosure. The maximum potential amount of future payments that the Company could be required to make under the guarantees totaled $106,420,000 at December 31, 2023.

Allowance For Credit Losses - Off-Balance-Sheet Credit Exposures. The allowance for credit losses on off-balance-sheet credit exposures is a liability account, calculated in accordance with ASC 326, representing expected credit losses over the contractual period for which we are exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if we have the unconditional right to cancel the obligation. Off-balance-sheet credit exposures primarily consist of amounts available under outstanding lines of credit and letters of credit detailed in the table above. For the period of exposure, the estimate of expected credit losses considers both the likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment or other off-balance-sheet exposure. The likelihood and expected amount of funding are based on historical utilization rates. The amount of the allowance represents management's best estimate of expected credit losses on commitments expected to be funded over the contractual life of the commitment.

Estimating credit losses on amounts expected to be funded uses the same methodology as described for loans in Note 2 - Loans and Allowance for Credit Losses as if such commitments were funded.

The following table details activity in the allowance for credit losses on off-balance-sheet credit exposures for the years ended December 31, 2023, 2022 and 2021.

	(In Thousands)
	2023			2022			2021
Beginning balance, January 1	$	6,136			955			693
Impact of adopting ASC 326		—			6,195			—
Credit loss expense (benefit)		(2,989	)		(1,014	)		262
Ending balance, December 31,	$	3,147			6,136			955

The Bank originates residential mortgage loans, sells them to third-party purchasers, and may or may not retain the servicing rights. These loans are originated internally and are primarily to borrowers in the Company’s geographic market footprint. These sales are typically to investors that follow guidelines of conventional government sponsored entities ("GSE") and the Department of Housing and Urban Development/U.S. Department of Veterans Affairs ("HUD/VA"). Generally, loans held for sale are underwritten by the

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Company, including HUD/VA loans. The Bank participates in a mandatory delivery program that requires the Bank to deliver a particular volume of mortgage loans by agreed upon dates. A majority of the Bank’s secondary mortgage volume is delivered to the secondary market via mandatory delivery with the remainder done on a best efforts basis. The Bank does not realize any exposure delivery penalties as the mortgage department only bids loans post-closing to ensure that 100% of the loans are deliverable to the investors.

Each purchaser has specific guidelines and criteria for sellers of loans, and the risk of credit loss with regard to the principal amount of the loans sold is generally transferred to the purchasers upon sale. While the loans are sold without recourse, the purchase agreements require the Bank to make certain representations and warranties regarding the existence and sufficiency of file documentation and the absence of fraud by borrowers or other third parties such as appraisers in connection with obtaining the loan. If it is determined that the loans sold were in breach of these representations or warranties or the loan had an early payoff or payment default, the Bank has obligations to either repurchase the loan for the unpaid principal balance and related investor fees or make the purchaser whole for the economic benefits of the loan.

To date, repurchase activity pursuant to the terms of these representations and warranties or due to early payoffs or payment defaults has been insignificant and has resulted in insignificant losses to the Company.

Based on information currently available, management believes that the Bank does not have significant exposure to contingent losses that may arise relating to the representations and warranties that it has made in connection with its mortgage loan sales or for early payoffs or payment defaults of such mortgage loans.

Various legal claims also arise from time to time in the normal course of business. In the opinion of management, the resolution of these claims outstanding at December 31, 2023 will not have a material impact on the Company’s consolidated financial statements.

(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. The concentrations of credit by type of loan are set forth in Note 2 - Loans and Allowance for Credit Losses.

Interest bearing deposits totaling $63,870,000 were deposited with five commercial banks at December 31, 2023. In addition, the Bank has funds deposited with the FHLB of Cincinnati in the amount of $902,000. Funds deposited with the FHLB of Cincinnati are not insured by the FDIC.

Federal funds sold in the amount of $10,159,000 were deposited with one commercial bank at December 31, 2023.

(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 18. The provisions of the 401(k) Plan provide for both employee and employer contributions. For the years ended December 31, 2023, 2022 and 2021, Wilson Bank contributed $3,662,000, $3,309,000, and $3,120,000, 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 in the DRIP. Original issue shares of 189,471 in 2023, 250,365 in 2022 and 186,583 in 2021 were sold to participants under the terms of the DRIP.

(17)

Regulatory Matters and Restrictions on Dividends

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of December 31, 2023, the Bank and the Company met all capital adequacy requirements to which they are subject.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If an institution is classified as adequately capitalized or lower, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is growth and expansion, and capital restoration plans are required. As of December 31, 2023 and 2022, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

The Company's and Wilson Bank's actual capital amounts and ratios as of December 31, 2023 and 2022 are presented in the following tables. The capital conservation buffer of 2.5% is not included in the required minimum ratios of the tables presented below.

											For Classification Under
						Minimum					Corrective Action Plan
	Actual					Capital Adequacy					as Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2023
Total capital to risk weighted assets:
Consolidated	$	560,757		14.5	%	$	308,449		8.0	%	$	385,562		10.0	%
Wilson Bank		559,224		14.5			308,333		8.0			385,417		10.0
Tier 1 capital to risk weighted assets:
Consolidated		512,762		13.3			231,337		6.0			308,449		8.0
Wilson Bank		511,229		13.3			231,250		6.0			308,334		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		512,693		13.3			173,503		4.5		N/A		N/A
Wilson Bank		511,160		13.3			173,438		4.5			250,521	6.5
Tier 1 capital to average assets:
Consolidated		512,762		10.6			193,564		4.0		N/A		N/A
Wilson Bank		511,229		10.6			193,492		4.0			241,865		5.0
											For Classification Under
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
						Minimum					Corrective Action Plan
	Actual					Capital Adequacy					as Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2022
Total capital to risk weighted assets:
Consolidated	$	512,025		13.5	%	$	303,440		8.0	%	$	379,300		10.0	%
Wilson Bank		509,169		13.4			303,334		8.0			379,168		10.0
Tier 1 capital to risk weighted assets:
Consolidated		466,076		12.3			227,580		6.0			303,440		8.0
Wilson Bank		463,220		12.2			227,500		6.0			303,333		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		466,061		12.3			170,685		4.5		N/A		N/A
Wilson Bank		463,205		12.2			170,625		4.5			246,458	6.5
Tier 1 capital to average assets:
Consolidated		466,076		11.2			166,712		4.0		N/A		N/A
Wilson Bank		463,220		11.1			166,648		4.0			208,310		5.0

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

Dividend Restrictions

The Company and the Bank are subject to dividend restrictions set forth by the Tennessee Department of Financial Institutions and federal banking agencies, as applicable. Additional restrictions may be imposed by the Tennessee Department of Financial Institutions and federal banking agencies under the powers granted to them by law.

(18)

Salary Deferral Plans

The Company provides some of its officers non-qualified pension benefits through an Executive Salary Continuation Plan ("the Plan") and Supplemental Executive Retirement Plan (SERP) Agreements ("SERP Agreements"). The Plan and SERP Agreements were established by the Board of Directors to reward executive management for past performance and to provide additional incentive to retain the service of executive management. The Plan and SERP Agreements generally provide executives with benefits of a portion of their salary beginning at retirement through life. As a result, the Company has accrued a liability for future obligations under the Plan and SERP Agreements. At December 31, 2023 and 2022, the liability related to the Plan totaled $1,475,000 and $1,575,000, respectively. At December 31, 2023 and 2022 the liability related to the SERP Agreements totaled $4,219,000 and $4,026,000 respectively. The expense incurred for these plans totaled $547,000, $789,000 and $705,000 for the year ended December 31, 2023, 2022 and 2021, respectively.

The Company has purchased life insurance policies to provide the benefits related to the Plan, which at December 31, 2023 and 2022 had an aggregate cash surrender value of $6,462,000 and $6,306,000, respectively, and an aggregate face value of insurance policies in force of $16,407,000 and $16,377,000, respectively. The life insurance policies remain the sole property of the Company and are payable to the Company.

The Company has also purchased bank owned life insurance policies on some of its current and former officers. The insurance policies remain the sole property of the Company and are payable to the Company. The cash surrender value of the life insurance contracts totaled $53,183,000 and $51,701,000 and the face amount of the insurance policies in force approximated $122,010,000 and $121,634,000 at December 31, 2023 and 2022, respectively.

The Company has also purchased Flexible Premium Indexed Deferred Annuity Contracts (“Annuity Contracts”) to provide benefits related to the SERP Agreements. The Annuity Contracts remain the sole property of the Company and are payable to the Company. Included in other assets at December 31, 2023 and 2022 are the Annuity Contracts with an aggregate value of $23,745,000 and $24,135,000, respectively.

(19)

Equity Incentive Plan

In April 2009, the Company’s shareholders approved the Wilson Bank Holding Company 2009 Stock Option Plan (the “2009 Stock Option Plan”). The 2009 Stock Option Plan was effective as of April 14, 2009. Under the 2009 Stock Option Plan, awards could be in the form of options to acquire common stock of the Company. Subject to adjustment as provided by the terms of the 2009 Stock Option Plan, the maximum number of shares of common stock with respect to which awards could be granted under the 2009 Stock Option Plan was 100,000 shares. The 2009 Stock Option Plan terminated on April 13, 2019, and no additional awards may be issued under the 2009 Stock Option Plan. The awards granted under the 2009 Stock Option Plan prior to the Plan's expiration will remain outstanding until exercised or otherwise terminated. As of December 31, 2023, the Company had outstanding 2,433 options under the 2009 Stock Option Plan with a weighted average exercise price of $35.96.

During the second quarter of 2016, the Company’s shareholders approved the Wilson Bank Holding Company 2016 Equity Incentive Plan, which authorizes awards of up to 750,000 shares of common stock. The 2016 Equity Incentive Plan was approved by the Board of Directors and effective as of January 25, 2016 and approved by the Company’s shareholders on April 12, 2016. On September 26, 2016, the Board of Directors approved an amendment and restatement of the 2016 Equity Incentive Plan (as amended and restated the “2016 Equity Incentive Plan”) to make clear that directors who are not also employees of the Company may be awarded stock appreciation rights. The primary purpose of the 2016 Equity Incentive Plan is to promote the interest of the Company and its shareholders by, among other things, (i) attracting and retaining key officers, employees and directors of, and consultants to, the Company and its subsidiaries and affiliates, (ii) motivating those individuals by means of performance-related incentives to achieve long-range performance goals, (iii) enabling such individuals to participate in the long-term growth and financial success of the Company, (iv) encouraging ownership of stock in the Company by such individuals, and (v) linking their compensation to the long-term interests of the Company and its shareholders. Except for certain limitations, awards can be in the form of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted shares and restricted share units, performance awards and other stock-based awards. As of December 31, 2023, the Company had 175,045 shares remaining available for issuance under the 2016 Equity Incentive Plan. As of December 31, 2023, the Company had outstanding under the 2016 Equity Incentive Plan 212,541 stock options with a weighted average exercise price of $57.32, 157,020 cash-settled stock appreciation rights

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

with a weighted average exercise price of $54.88, and 15,866 restricted share awards, restricted share unit awards, and performance share unit awards.

Stock Options and Stock Appreciation Rights

As of December 31, 2023, the Company had outstanding 214,974 stock options with a weighted average exercise price of $57.08 and 157,020 cash-settled stock appreciation rights with a weighted average exercise price of $54.88. Included in other liabilities at December 31, 2023 and 2022 were $3,297,000 and $3,020,000 in accrued cash-settled stock appreciation rights, respectively.

The fair value of each stock option and cash-settled SAR grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 2023, 2022 and 2021:

	2023			2022			2021
Expected dividends		2.38	%		1.85	%		1.53	%
Expected term (in years)	8.25			7.78			9.13
Expected stock price volatility		38	%		37	%		36	%
Risk-free rate		3.54	%		3.03	%		1.45	%

The expected stock price volatility is based on historical volatility adjusted for consideration of other relevant factors. The risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield and forfeiture rate assumptions are based on the Company’s history and expectation of dividend payouts and forfeitures.

A summary of the stock option and cash-settled SAR activity for 2023, 2022 and 2021 is as follows:

	2023					2022					2021
				Weighted Average					Weighted Average					Weighted Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Outstanding at beginning of year		414,778		$	55.13		357,254		$	50.18		284,591		$	43.71
Granted		5,000			69.00		117,665		64.13			121,830		61.48
Exercised		(42,617	)	47.23			(58,841	)	43.27			(48,867	)	40.76
Forfeited or expired		(5,167	)		60.35		(1,300	)		45.50		(300	)		37.60
Outstanding at end of year		371,994		$	56.15		414,778		$	55.13		357,254		$	50.18
Options and cash-settled SARs exercisable at year end		186,431		$	50.22		167,918		$	46.09		159,560		$	41.93

The weighted average fair value at the grant date of options and cash-settled SARs granted during the years 2023, 2022 and 2021 was $24.76, $22.64 and $22.10, respectively. The total intrinsic value of options and cash-settled SARs exercised during the years 2023, 2022 and 2021 was $959,000, $1,310,000 and $962,000, respectively.

The following table summarizes information about outstanding and exercisable stock options and cash-settled SARs at December 31, 2023:

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

						Options and Cash-Settled SARs Exercisable
Range of Exercise Prices		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)		Number Outstanding at 12/31/23		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)
34.31 - 54.75	112,500	$	42.30		3.27		108,368	$	42.14	3.24
55.75 - 69.00	259,494	$	62.16	7.62			78,063	$	61.43		7.00
	371,994						186,431
Aggregate intrinsic value (in thousands)	5,710					$	3,968

All values are in US Dollars.

As of December 31, 2023, there was $3,497,000 of total unrecognized cost related to non-vested stock options and cash-settled SARs granted under the Company’s equity incentive plans. The cost is expected to be recognized over a weighted-average period of

2.88

years.

Time-Based Vesting Restricted Shares and Restricted Share Units

A summary of restricted share awards and restricted shares unit awards activity for the twelve months ended December 31, 2023 is as follows:

	Restricted Share Awards					Restricted Share Units
	Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value
December 31, 2022		1,075		$	64.03		—		$	—
Granted		—			—		14,833			69.00
Vested		(774	)		62.99		—			—
Forfeited		—			—		(375	)		69.00
Outstanding at December 31, 2023		301		$	66.70		14,458		$	69.00

The restricted shares and restricted share units vest over various time periods. As of December 31, 2023, there was $18,000 of unrecognized compensation cost related to non-vested restricted share awards. The cost is expected to be expensed over a weighted-average period of

1.88

years. As of December 31, 2023, the fair value of restricted share awards vested totaled $55,000. As of December 31, 2023, there was $805,000 of unrecognized compensation cost related to non-vested restricted share units, all of which were granted to employees of the Bank in the second quarter of 2023. The cost is expected to be expensed over a weighted-average period of

4.38

years.

Performance-Based Vesting Restricted Stock Units ("PSUs")

The Company awards performance-based restricted stock units to officers and other employees of the Bank. Under the terms of the awards, the number of units that will be earned and thereafter settled in shares of common stock will be based on the employee's performance against certain performance metrics over a fixed three-year performance period. Compensation expense for PSUs is estimated each period based on the fair value of the Company's common stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the performance period of the awards.

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

The following tables detail the PSUs outstanding at December 31, 2023.

	Performance Stock Units Outstanding		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2022		—	$	—
Granted		1,107		67.85
Vested		—		—
Forfeited or expired		—		—
Outstanding at December 31, 2023		1,107	$	67.85
Grant Year	Grant Price		Applicable Performance Period	Period in which units to be settled	PSUs Outstanding
---	---	---	---	---	---	---
2023	$	67.85	2023-2025	2024-2026		1,107

As of December 31, 2023, there was $50,000 of total unrecognized cost related to non-vested performance based restricted share units. The cost is expected to be expensed over a weighted-average period of

2.09

years.

(20)

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, restricted share units and performance share units.

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

	Years Ended December 31,
	2023		2022		2021
Basic EPS Computation:
Numerator – Earnings available to common shareholders	$	48,938		53,042		49,426
Denominator – Weighted average number of common shares outstanding		11,611,690		11,377,617		11,131,897
Basic earnings per common share	$	4.21		4.66	4.44
Diluted EPS Computation:
Numerator – Earnings available to common shareholders	$	48,938		53,042		49,426
Denominator – Weighted average number of common shares outstanding		11,611,690		11,377,617		11,131,897
Dilutive effect of stock options, RSUs and PSUs		29,676		31,307		31,059
		11,641,366		11,408,924		11,162,956
Diluted earnings per common share	$	4.20		4.65	4.43

(21)

Derivatives

Derivatives Designated as Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. The Company utilizes interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate loans. The hedging strategy on loans converts the fixed interest rates to variable interest rates tied to the applicable reference rate. These derivatives are designated as partial term hedges of selected cash flows covering specified periods of time prior to the maturity dates of the hedged loans.

During the second quarter of 2020, the Company entered into one swap transaction with a notional amount of $30,000,000 pursuant to which the Company paid the counter-party a fixed interest rate and received a floating rate, which until August 31, 2023 equaled

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

1 month LIBOR. On September 1, 2023, the Company began receiving a daily compounded SOFR rate plus a spread adjustment in lieu of 1 month LIBOR as part of the LIBOR transition event. The derivative transaction was designated as a fair value hedge.

During the fourth quarter of 2023 the Company voluntarily terminated the interest rate swap as the market indicated that rates had peaked, further rate increases were unlikely, and the Company’s balance sheet could support the market’s current demand for fixed rate loans without the interest rate swap. The termination of the fair value hedge resulted in an unrealized gain totaling $3,747,000 which is being reclassified to increase interest income over the original term of the swap contract.

A summary of the Company's fair value hedge relationships as of December 31, 2023 and December 31, 2022 are as follows (in thousands):

December 31, 2023
	Balance Sheet<br>Location	Weighted<br>Average<br>Remaining<br>Maturity<br>(In Years)		Weighted<br>Average<br>Pay Rate			Receive<br>Rate		Notional<br>Amount		Estimated<br>Fair Value
Interest rate swap agreements - loans	Other assets		—		—	%		—	$	—		—
December 31, 2022
---	---	---	---	---	---	---	---	---	---	---	---
	Balance Sheet<br>Location	Weighted<br>Average<br>Remaining<br>Maturity<br>(In Years)		Weighted<br>Average<br>Pay Rate			Receive<br>Rate	Notional<br>Amount		Estimated<br>Fair Value
Interest rate swap agreements - loans	Other assets		7.42		0.65	%	1 month LIBOR	$	30,000		4,520

The effects of fair value hedge relationships reported in interest income on loans on the consolidated statements of income for the twelve months ended December 31, 2023 and 2022 were as follows (in thousands):

	Twelve Months Ended December 31,
Gain (loss) on fair value hedging relationship	2023		2022			2021
Interest rate swap agreements - loans:
Hedged items	$	—		(3,265	)		(1,125	)
Derivative designated as hedging instruments		—		3,328			1,243

The following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges at December 31, 2023 and December 31, 2022 (in thousands):

	Carrying Amount of the<br>Hedged Assets				Cumulative Amount of<br>Fair Value Hedging<br>Adjustment Included<br>in the Carrying Amount<br>of the Hedged Assets
Line item on the balance sheet	December 31, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Loans	$	—		25,452		—		(4,548	)

The following table presents the net effects of derivative hedging instruments on the Company's consolidated statements of income for twelve months ended December 31, 2023 and 2022. The effects are presented as an increase to income before taxes in the relevant caption of the Company's consolidated statements of income.

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

		In Thousands
		2023		2022		2021
Location in the Consolidated Statements of Income
Interest income	Interest and fees on loans	$	271		63		118
Net increase (decrease) to income before taxes		$	271		63		118

Mortgage Banking Derivatives

Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Company's practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. At December 31, 2023 and December 31, 2022, the Company had approximately $2,265,000 and $6,923,000, respectively, of interest rate lock commitments and approximately $2,500,000 and $6,250,000, respectively, of forward commitments for the future delivery of residential mortgage loans. The fair value of these mortgage banking derivatives was reflected by derivative assets of $65,000 and $123,000 and a derivative liability of $13,000 and derivative asset of $62,000, respectively, at December 31, 2023 and December 31, 2022. Changes in the fair values of these mortgage-banking derivatives are included in net gains on sale of loans.

The net gains (losses) relating to free-standing derivative instruments used for risk management is summarized below:

	In Thousands
	2023			2022
Interest rate contracts for customers	$	(58	)		(535	)
Forward contracts related to mortgage loans held for sale and interest rate contracts		(75	)		56

The following table reflects the amount and fair value of mortgage banking derivatives included in the consolidated balance sheet as of December 31, 2023 and December 31, 2022:

	In Thousands
	2023					2022
	Notional Amount		Fair Value			Notional Amount		Fair Value
Included in other assets (liabilities):
Interest rate contracts for customers	$	2,265		65			6,923		123
Forward contracts related to mortgage loans held-for-sale		2,500		(13	)		6,250		62

(22)

Disclosures About Fair Value of Financial Instruments

Fair Value of Financial Instruments

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. The definition of fair value focuses on the exit price, i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not the entry price, i.e., the price that would be paid to acquire the asset or received to assume the liability at the measurement date. The statement emphasizes that fair value is a market-based measurement; not an entity-specific measurement. Therefore, the fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.

Valuation Hierarchy

FASB ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

• Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

• Level 2 - inputs to the valuation methodology include all prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs to the valuation methodology that are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Asset

Securities available-for-sale - Where quoted prices are available for identical securities in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and certain other financial products. If quoted market prices are not available, then fair values are estimated by using pricing models that use observable inputs or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. In certain cases where there is limited activity or less transparency around inputs to the valuation and more complex pricing models or discounted cash flows are used, securities are classified within Level 3 of the valuation hierarchy. Quarterly, the Company will validate prices supplied by its third party vendor by comparison to prices obtained from third parties.

Hedged loans - The fair value of the Company's hedged loan portfolio is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction.

Collateral dependent loans - Collateral dependent loans are measured at the fair value of the collateral securing the loan less estimated selling costs. The fair value of real estate collateral is determined based on real estate appraisals which are generally based on recent sales of comparable properties which are then adjusted for property specific factors. Non-real estate collateral is valued based on various sources, including third party asset valuations and internally determined values based on cost adjusted for depreciation and other judgmentally determined discount factors. Collateral dependent loans are classified within Level 3 of the valuation hierarchy due to the unobservable inputs used in determining their fair value such as collateral values and the borrower's underlying financial condition.

Other real estate owned - Other real estate owned (“OREO”) represents real estate foreclosed upon by the Company through loan defaults by customers or acquired in lieu of foreclosure. Upon acquisition, the property is recorded at the lower of cost or fair value, based on appraised value, less selling costs estimated as of the date acquired with any loss recognized as a charge-off through the allowance for credit losses. Additional OREO losses for subsequent valuation downward adjustments are determined on a specific property basis and are included as a component of noninterest expense along with holding costs. Any gains or losses realized at the time of disposal are also reflected in noninterest income. OREO is included in Level 3 of the valuation hierarchy due to the lack of observable market inputs into the determination of fair value. Appraisal values are property-specific and sensitive to the changes in the overall economic environment.

Mortgage loans held for sale - Mortgage loans held for sale are carried at fair value, and are classified within Level 2 of the valuation hierarchy. The fair value of mortgage loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan.

Derivative instruments - The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2).

Other investments - Included in other investments are investments recorded at fair value primarily in certain nonpublic investments and funds. The valuation of these nonpublic investments requires management judgment due to the absence of observable quoted market prices, inherent lack of liquidity and the long-term nature of such assets. These investments are valued initially based upon transaction price. The carrying values of other investments are adjusted either upwards or downwards from the transaction price to reflect expected exit values as evidenced by financing and sale transactions with third parties. These investments are included in Level 3 of the valuation hierarchy if the entities and funds are not widely traded and the underlying investments are in privately-held and/or start-up companies for which market values are not readily available.

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WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

The following tables present the financial instruments carried at fair value as of December 31, 2023 and December 31, 2022, by caption on the consolidated balance sheet and by FASB ASC 820 valuation hierarchy (as described above) (in thousands):

	Measured on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2023
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agencies	$	4,429		4,429		—		—
U.S. Government sponsored enterprises		144,168		—		144,168		—
Mortgage-backed securities		417,030		—		417,030		—
Asset-backed securities		49,973		—		49,973		—
Corporate bonds		2,423		—		2,423		—
State and municipal securities		193,058		—		193,058		—
Total investment securities available-for-sale		811,081		4,429		806,652		—
Mortgage loans held for sale		2,294		—		2,294		—
Derivative instruments		52		—		52		—
Other investments		2,045		—		—		2,045
Total assets	$	815,472		4,429		808,998		2,045
Derivative instruments	$	—		—		—		—
Total liabilities	$	—		—		—		—
	Measured on a Recurring Basis
---	---	---	---	---	---	---	---	---
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2022
Hedged Loans	$	25,452		—		25,452		—
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agencies		6,497		6,497		—		—
U.S. Government sponsored enterprises		145,212		—		145,212		—
Mortgage-backed securities		444,438		—		444,438		—
Asset-backed securities		45,250		—		45,250		—
Corporate bonds		2,403		—		2,403		—
State and municipal securities		179,012		—		179,012		—
Total investment securities available-for-sale		822,812		6,497		816,315		—
Mortgage loans held for sale		3,355		—		3,355		—
Derivative instruments		4,705		—		4,705		—
Other investments		1,965		—		—		1,965
Total assets	$	858,289		6,497		849,827		1,965
Derivative instruments	$	—		—		—		—
Total liabilities	$	—		—		—		—

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

	Measured on a Non-Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)		Models with Significant Observable Market Parameters (Level 2)		Models with Significant Unobservable Market Parameters (Level 3)
December 31, 2023
Other real estate owned	$	—		—		—		—
Collateral dependent loans (¹)		4,838		—		—		4,838
Total	$	4,838		—		—		4,838
December 31, 2022
Other real estate owned	$	—		—		—		—
Collateral dependent loans (¹)		638		—		—		638
Total	$	638		—		—		638

(1) As of December 31, 2023 and December 31, 2022 no reserve was recorded on collateral dependent loans.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value at December 31, 2023 and 2022:

	Valuation Techniques (2)	Significant Unobservable Inputs	Range (Weighted Average)
Collateral dependent loans	Appraisal	Estimated costs to sell	10%
Other real estate owned	Appraisal	Estimated costs to sell	10%

(1)

The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

In the case of its investment securities portfolio, the Company monitors the valuation technique utilized by various pricing agencies to ascertain when transfers between levels have been affected. The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare. For the twelve months ended December 31, 2023, there were no transfers between Levels 1, 2 or 3.

The table below includes a rollforward of the balance sheet amounts for the year ended December 31, 2023 and 2022 (including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis. When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, since Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources), the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology (in thousands):

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

	For the Year Ended December 31,
	2023		2022
	Other Assets		Other Assets
Fair value, January 1	$	1,965	$	2,034
Total realized gains (losses) included in income		80		(69	)
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at December 31		—		—
Purchases, issuances and settlements, net		—		—
Transfers out of Level 3		—		—
Fair value, December 31	$	2,045	$	1,965
Total realized gains (losses) included in income related to financial assets and liabilities still on the consolidated balance sheet at December 31	$	80	$	(69	)

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments that are not measured at fair value. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flow models. Those models are significantly affected by the assumptions used, including the discount rates, estimates of future cash flows and borrower creditworthiness. The fair value estimates presented herein are based on pertinent information available to management as of December 31, 2023 and December 31, 2022. Such amounts have not been revalued for purposes of these consolidated financial statements since those dates and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Cash and cash equivalents - The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Loans - The fair value of the Company's loan portfolio includes a credit risk factor in the determination of the fair value of its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company's loan portfolio is initially fair valued using a segmented approach. The Company divides its loan portfolio into the following categories: variable rate loans, collateral dependent loans and all other loans. The results are then adjusted to account for credit risk.

For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying values. Fair values for collateral dependent loans are estimated using discounted cash flow models or based on the fair value of the underlying collateral. For other loans, fair values are estimated using discounted cash flow models, using current market interest rates offered for loans with similar terms to borrowers of similar credit quality. The values derived from the discounted cash flow approach for each of the above portfolios are then further discounted to incorporate credit risk to determine the exit price.

Mortgage servicing rights - The fair value of servicing rights is based on the present value of estimated future cash flows of mortgages sold, stratified by rate and maturity date. Assumptions that are incorporated in the valuation of servicing rights include assumptions about prepayment speeds on mortgages and the cost to service loans.

Deposits and Federal Home Loan Bank advances - Fair values for deposits and Federal Home Loan Bank advances are estimated using discounted cash flow models, using current market interest rates offered on deposits with similar remaining maturities.

Off-balance sheet instruments - The fair values of the Company’s off-balance-sheet financial instruments are based on fees charged to enter into similar agreements. However, commitments to extend credit do not represent a significant value to the Company until such commitments are funded.

The following table presents the carrying amounts, estimated fair value and placement in the fair value hierarchy of the Company’s financial instruments at December 31, 2023 and December 31, 2022. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization.

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(in Thousands)	Carrying/Notional<br>Amount		Estimated Fair<br>Value (¹)		Quoted Market Prices in an Active Market<br>(Level 1)		Models with Significant Observable Market Parameters<br>(Level 2)		Models with Significant Unobservable Market Parameters<br>(Level 3)
December 31, 2023
Financial assets:
Cash and cash equivalents	$	252,635		252,635		252,635		—		—
Loans, net		3,550,675		3,372,666		—		—		3,372,666
Mortgage servicing rights		1,083		1,398		—		1,398		—
Financial liabilities:
Deposits		4,367,106		3,885,724		—		—		3,885,724
December 31, 2022
Financial assets:
Cash and cash equivalents	$	104,789		104,789		104,789		—		—
Loans, net		3,088,344		2,992,161		—		—		2,992,161
Mortgage servicing rights		1,065		1,252		—		1,252		—
Financial liabilities:
Deposits		3,892,705		3,210,581		—		—		3,210,581

(1) Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market- participant would realize in a hypothetical orderly transaction.

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(23)

Wilson Bank Holding Company -

Parent Company Financial Information

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Balance Sheets

December 31, 2023 and 2022

				2022
ASSETS
Cash	3,134		*		4,241		*
Investment in wholly-owned commercial bank subsidiary	427,872		*		357,596		*
Deferred income taxes	1,356				1,223
Refundable income taxes	485				538
Total assets	432,847				363,598
LIABILITIES AND SHAREHOLDERS’ EQUITY
Other liabilities	3,442				3,146
Total liabilities	3,442				3,146
Shareholders’ equity:
Common stock, par value 2.00 per share, authorized 50,000,000 shares, 11,686,363 and 11,472,181 shares issued and outstanding, respectively	23,373				22,944
Additional paid-in capital	136,866				122,298
Retained earnings	357,260				325,625
Noncontrolling interest in consolidated subsidiary	69				15
Accumulated other comprehensive losses, net of taxes of 31,195 and 39,073, respectively	(88,163	)			(110,430	)
Total shareholders’ equity	429,405				360,452
Total liabilities and shareholders’ equity	432,847				363,598

All values are in US Dollars.

* Eliminated in consolidation.

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Earnings

Three Years Ended December 31, 2023

	Dollars In Thousands
	2023			2022			2021
Income:
Dividends from Wilson Bank (commercial bank subsidiary)	$	2,500	*		4,200	*		4,300	*
Other income		—			—			—
		2,500			4,200			4,300
Expenses:
Directors’ fees		387			355			341
Other		1,747			2,187			1,575
		2,134			2,542			1,916
Income before Federal income tax benefits and equity in undistributed earnings of Wilson Bank		366			1,658			2,384
Federal income tax benefits		617			733			475
		983			2,391			2,859
Equity in undistributed earnings of Wilson Bank		47,955	*		50,651	*		46,567	*
Net earnings	$	48,938			53,042			49,426

* Eliminated in consolidation.

---

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

WILSON BANK HOLDING COMPANY

(Parent Company Only)

Statements of Cash Flows

Three Years Ended December 31, 2023

Increase (Decrease) in Cash and Cash Equivalents

	Dollars In Thousands
	2023			2022			2021
Cash flows from operating activities:
Net earnings	$	48,938			53,042			49,426
Adjustments to reconcile net earnings to net cash used in operating activities:
Equity in earnings of commercial bank subsidiary		(50,455	)		(54,851	)		(50,867	)
Decrease (increase) in refundable income taxes		53			(176	)		(120	)
Increase in deferred taxes		(133	)		(195	)		(174	)
Share based compensation expense		1,528			1,866			1,428
Increase in other liabilities		19			14			113
Total adjustments		(48,988	)		(53,342	)		(49,620	)
Net cash used in operating activities		(50	)		(300	)		(194	)
Cash flows from investing activities:
Dividends received from commercial bank subsidiary		2,500			4,200			4,300
Net cash provided by investing activities		2,500			4,200			4,300
Cash flows from financing activities:
Payments made to stock appreciation rights holders		(277	)		(644	)		(515	)
Dividends paid		(17,303	)		(20,880	)		(14,909	)
Proceeds from sale of stock pursuant to dividend reinvestment plan		12,979			16,117			11,188
Proceeds from exercise of stock options		1,044			635			862
Net cash used in financing activities		(3,557	)		(4,772	)		(3,374	)
Net increase (decrease) in cash and cash equivalents		(1,107	)		(872	)		732
Cash and cash equivalents at beginning of year		4,241			5,113			4,381
Cash and cash equivalents at end of year	$	3,134			4,241			5,113

WILSON BANK HOLDING COMPANY

Notes to Consolidated Financial Statements, Continued

December 31, 2023, 2022 and 2021

(24)

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)
	2023								2022								2021
	Fourth		Third		Second		First		Fourth		Third		Second		First		Fourth		Third		Second		First
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Interest income	$	61,809		57,857		53,987		48,930	$	44,920		42,024		37,097		33,499	$	33,810		33,719		31,570		30,742
Interest expense		26,548		23,697		19,934		13,500		7,855		3,894		2,240		2,144		2,507		2,840		3,031		3,258
Net interest income		35,261		34,160		34,053		35,430		37,065		38,130		34,857		31,355		31,303		30,879		28,539		27,484
Provision for credit losses - loans		619		1,641		2,078		1,962		2,596		2,543		1,625		1,892		131		130		55		827
Earnings before income taxes		14,220		14,745		16,039		17,927		15,342		19,706		18,484		14,544		17,512		17,405		14,449		14,792
Net earnings attributable to Wilson Bank Holding Company		11,222		11,486		12,389		13,841		12,340		15,190		14,139		11,373		13,801		13,342		11,139		11,144
Basic earnings per common share		0.96	0.99			1.07		1.20	1.08		1.33			1.25	1.01		1.23		1.19			1.00	1.01
Diluted earnings per common share		0.95	0.98			1.07		1.20	1.07		1.33			1.24		1.00		1.23		1.19		1.00		1.00

(25)

Revenue from Contracts with Customers

All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within noninterest income. The following table presents the Company’s sources of non-interest income for the periods presented. Items outside the scope of ASC Topic 606 are noted as such.

	Years ended December 31,
	2023			2022			2021
	(dollars in thousands)
Fees and gains on sales of mortgage loans(1)	$	2,635		$	2,973		$	9,997
Service charges on deposits		7,890			7,382			6,137
Debit and credit card interchange income, net		8,490			8,416			7,783
Brokerage income		7,184			6,929			6,368
BOLI and annuity earnings(1)		1,667			1,346			1,109
Security gain (loss), net(1)		(1,009	)		(1,620	)		28
Other non-interest income		1,432			1,855			1,428
Total non-interest income	$	28,289		$	27,281		$	32,850

(1) Not within the scope of ASC Topic 606.

A description of the Company's revenue streams accounted for under ASC Topic 606 follows:

Service charges on deposit accounts - The Company earns fees on its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM usage fees, stop payment charges, statement rendering, and ACH fees are recognized at the time the transaction is executed and the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Account maintenance fees are recognized in the same month the Company earns and satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance.

Debit and credit card interchange income, net - The Company earns interchange fees from debit and credit cardholder transactions conducted through the Mastercard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Certain expenses directly associated with the debit and credit cards are recorded on a net basis with the interchange income.

Brokerage income - The Company earns fees from investment brokerage services provided to its customers by a third-party service provider. The Company receives commissions from the third-party service provider on a bi-monthly basis based upon customer activity for the month. The fees are recognized monthly when the Company satisfies the performance obligation. Because the Company (1) acts as an agent in arranging the relationship between the customer and third-party service provider and (2) does not control the services rendered to the customer, investment brokerage fees are presented net of related servicing and administration costs.

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.

Wilson Bank holds an ownership interest in Encompass Home Loan Lending, LLC, a Tennessee limited liability company doing business under the same name, offering mortgage banking services that is 51% owned by Wilson Bank.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports, dated February 28, 2024, with respect to the consolidated financial statements of Wilson Bank Holding Company and its subsidiaries and the effectiveness of the internal control over financial reporting of Wilson Bank Holding Company as of December 31, 2023, in accordance, included in the Annual Report of Wilson Bank Holding Company on Form 10-K for the year ended December 31, 2023. We consent to the incorporation by reference of said reports in the following Registration Statements of Wilson Bank Holding Company:

• Registration Statement (Form S-8, No. 333-158621) pertaining to the Wilson Bank Holding Company 2009 Stock Option Plan

• Registration Statement (Form S-8, No. 333-210927) pertaining to the Wilson Bank Holding Company Amended and Restated 2016 Equity Incentive Plan

• Registration Statement (Form S-3, No. 333-265894) pertaining to the Amended and Restated Wilson Bank Holding Company Dividend Reinvestment Plan

/s/ Maggart & Associates, P.C.
Maggart & Associates, P.C.
Nashville, Tennessee
February 28, 2024

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, John C. McDearman III, certify that:

1. I have reviewed this annual report on Form 10-K of Wilson Bank Holding Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

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

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

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

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

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

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

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

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

Date: February 28, 2024

By:/s/ John C. McDearman III
Name: John C. McDearman
President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Lisa Pominski , certify that:

1. I have reviewed this annual report on Form 10-K of Wilson Bank Holding Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

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

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

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

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

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

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

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

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

Date: February 28, 2024

By:/s/ Lisa Pominski
Name: Lisa Pominski
Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Wilson Bank Holding Company (the “Company”) on Form 10-K for the period ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John C. McDearman, III, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John C. McDearman III
John C McDearman III
President and Chief Executive Officer
Date: February 28, 2024

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Wilson Bank Holding Company (the “Company”) on Form 10-K for the period ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lisa Pominski, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lisa Pominski
Lisa Pominski, Executive Vice President and Chief
Financial Officer
Date: February 28, 2024