WBHC 10-K & 10-Q changes, risk factors and insider trading

TheHedging Company’sstrategies hedgingthat strategythe Company may implement from time-to-time may not be effective, including in the event that interest rates move in unanticipatedmanner manners.different from those anticipated at the time that a hedging strategy is implemented.

Competition from financial institutions and other financial service providersproviders, including non-depository institutions, may adversely affect the Company’s profitability.

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, changes in national monetary policy hashave played a significant role in the determination of interest rates and we expect this trend to continue during 2025.2026. 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,liquidity and overall profitability. The Company cannot assure you that it can minimize its interest rate risk.

Short-term interest rates rose significantly in 2022 and continued to be at elevated levels throughout 2023 and 2024. Short-term interest rates began to decline infrom elevated levels during the second half of 2024, butand remaincontinued atto elevateddecline levelsin 2025 and mayare remainexpected atto elevatedcontinue levelsto throughdecline 2025.in 2026. In an elevated rate environmentenvironment, 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 bebecomes critical to maintaining or expanding the Company’s net interest margin. Elevated levels of interest rates, like those experienced in recent years, can also 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. The Company expects deposit rates to remain at or near their current levels in 2025; however, this may not happen if short-term interest rates rise or if competitive pressures in the Company's markets re-intensify.

Short-termIf short-term interest rates fell during 2024. If those rates continue to fall in 2025,2026, as expected, 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 competitivecompetitive, 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 expects deposit rates to decrease in 2026; however, this may not happen if short-term interest rates remain unchanged or rise, or if competitive pressures in the Company's markets re-intensify. The Company may also be limited in its ability to lower, in a timely manner, the rates it pays on its time deposits with stated maturities, the balances of which increased during 2024.2025.

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 timetime, 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.

TheHedging Company’sstrategies hedging strategythat may not be effective, including in the event that interest rates move in unanticipatedmanners manners.different from those anticipated at the time a hedging strategy is implemented.

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 or at the pace that the Company anticipates at the times it institutes its hedging strategies 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 (known as 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 (known as hedge failure risk). Unexpected counterparty failure or hedge failure could have a significant adverse effect on the Company’s liquidity and earnings.

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 2022recent and 2023 with the rising interest rate environment.years. 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 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 ana other-than-temporarywrite impairmentdown charge,through income, 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 recent2023 years,and 2024, and the continued elevatedelevated, though declining, interest rate environment thein Company has experienced since 2024.2025. 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.

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.

At December 31, 2024,2025, the Company had significant credit exposures to borrowers in certain businesses, including new home builders and land subdividers. If the uneven economic conditions currently being experienced as a result of inflation and elevated short-term interest rates extend deep into 20252026 or beyond, or worsen (including as a result of increased geopolitical tensionstensions, terrorist activity around the world or terroristincreased activityinternational intrade thedisputes Unitedand Statesretaliatory tariffs), 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-offscharge-offs, provision expense 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, extreme weather events, 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 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,FRB, 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 growth, 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, rising interest rates, 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 washad able to decrease its level ofno brokered deposits during 20242025 as a result of its ability to grow lower cost core deposits; however, the Company may be required to once again increase its levels of brokered deposits, which may require the Company to pay higher rates of interest than the Company pays on deposits from customers if competition once again limits its ability to grow core deposits.

Federal and state bank regulators require the Company and the Bank to maintain adequate levels of capital to support operations. At December 31, 2024,2025, 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), like the Bank's proposed acquisition of certain assets in connection with its pending acquisition of a branch office of another bank located in Cookeville, Tennessee, 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 Company or 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 any then outstanding indebtedness.

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, political 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, monetary policy, supply-chain disruptions, labor shortages (including as a result of deportations), 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 into 2024,2024. and,Heightened whilelevels of inflation startedremained to easeconstant through 2024,2025 and 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 20242025 due to issues of national security, inflation, international trade disputes and retaliatory tariffs, increasing levels of unemployment, and the resulting pressure of sustainedthese highfactors levelson ofmonetary short-term interest rates.policy. The Company believes that it is possible it and its customers will continue to experience an uneven economic environment in 20252026 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 the ongoing conflicts in Ukraine and the Middle EastEast, the potential conflict in Venezuela or increased terrorist activity in the United States), or persistent inflationary pressures,pressures combined with increasing levels of unemployment, and actions taken by the Federal ReserveFRB in response thereto, intensifying trade disputes and tariffs, or supply chain disruptions or labor shortages,disruptions, 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.

In addition, over the last several years, the federal government has shut down several times, in some cases for prolonged periods, including during the Fall of 2025, and it is possible that the federal government may shut down again in the future. If aanother 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 operates primarily in Wilson, DeKalb, Trousdale, Smith, Rutherford, Putnam, Davidson, WilliamsonWilliamson, Sumner and SumnerHamilton 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 uneven during 20252026 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.

Since 2014, the Company has opened branch locations in Hamilton County, Putnam County, Rutherford County, Sumner County, Davidson County and Williamson CountyCounty, and acquired an existing branch location in Putnam County, as it sought to expand its footprint beyond its historical markets. Expansion, whether by opening new branches (like the recently opened branch in Hamilton County) or acquiring existing branches (like the branch office itthe isCompany currently seeking to acquireacquired in Cookeville,Putnam TennesseeCounty) or whole banks, involves various risks, including:

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, including through the compromise of the Bank's clients' email systems. 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,fraud (including check fraud), and continues 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.

Competition from financial institutions and other financial service providersproviders, including non-depository institutions, may adversely affect the Company’s profitability.

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 whichother isfair expectedlending torequirements becomeand morereporting expansiveobligations ininvolving 2025.the Company's home mortgage lending operations. 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. As a result, competition from non-depository institutions is intensifying.

The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation.consolidation, the pace of which increased in 2025 and is expected to continue in 2026. 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.

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 this report.

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 and communities 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,publicity (including through content on social media platforms), cybersecurity incidents, the way in which the Company conducts its businessbusiness, including the actions of its employees 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 operations and customer base are located in markets where natural disasters, including tornadoes, severe storms, and floods often occur. SuchThese, and other, such natural disasters, like the tornado that struck the Company’s markets in March 2020,disasters could significantly impact the local population and economies and the Company’s business, and could pose physical risks to its properties. Although the Company maintains insurance coverages for such events, a significant natural disaster in or near one or more of the Company’s markets could have a material adverse effect on its financial condition, results of operations or liquidity.

In addition to natural disasters, the impact of a changing climate, such as rising average global temperatures and rising sea levels, and any 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. A changing climate 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. The impact of natural disasters occurring in our market areas, including those that may be a result of a changing climate could also cause insurability risk and/or increased insurance costs for the Company or its customers.

During periods of market disruption, including periods of significantly risinghigh volatility in interest rate markets 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.

FederalWhile the current Presidential administration has to date been mainly focused on easing or rolling back previously adopted regulations and restrictions (including the previously adopted changes to the CRA rules), federal bank regulators continue to closely scrutinize financial institutions, and additional restrictions havemay beenbe 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),communities, 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. Elevated regulatory scrutiny of our industry 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 and the impact of 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 movemore 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.

There is uncertainty as to the level of regulatory reform that the new Presidential administration may seek to undertake. The prior Presidential administration implemented a regulatory reform agenda that included 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. While the newcurrent Presidential administration mayis becurrently less focused on the areas targeted by the prior administration, theand effectsis ofmore focused on easing or rolling back changes implemented by the prior administration, the effects of such implemented changes, if not rolled back, are likely to increase the Company’s compliance costs, negatively impacting its profitability.

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 sought 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 have required 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. Even though because of their size, these rules would not directly apply to the Company or the Bank, regulators may have sought to impose elements of the changes on the Company or the Bank through the regulatory oversight process. The comment period for these proposed changes ended in the first quarter of 2024 and the proposed rule changes have not yet been finalized.finalized, As a result ofand the recentCompany changecontinues to monitor developments in thethis Presidentialarea. administration,Even we believe the regulatory agencies may re-propose a modified version of the proposed rules that would remove most of theif Basel III Endgame changesis onadopted thewith $100 billion to $250 billionincreased asset sizedtests banks,for but as of the date of this Annual Report on Form 10-K no re-proposed rules have been issued. If such re-proposal does occur,applicability, certain of the more stringent requirements could still 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’s common stock is not traded through an organized exchange, but rather is primarily 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 Company's common stock.

While the Company has historically paid a biannual cash dividenddividends 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.

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 common stock, you could lose some or all of your investment.

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 this annual report for the year ended December 31, 20242025 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 the ongoing conflicts in Ukraine and the Middle EastEast, the potential conflict in Venezuela or increased terrorist activities inaround the United Statesworld), inflationary pressures and the elevated rate environment,pressures, international trade disputes and retaliatory tariffs, increased terrorist activity in the United States,unemployment, supply chain disruptions and labormonetary shortages (including as a result of deportations)policy on our customers and on their businesses, (iv) 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, (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) risks associated with a prolonged shutdown of the United States federal government, including adverse effects on the national or local economies and adverse effects from a shutdown of the U.S. Small Business Administration's loan program, (vii) the sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs, (viii) the ability to grow and retain low-cost core deposits, (viiix) significant downturns in the business of one or more large customers, (viiix) 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, (ixxi) 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, (xxii) the impact of changes in interest rates on the value of the Company's mortgage servicing rights, (xiii) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments, (xixiv) inadequate allowance for credit losses, (xiixv) the effectiveness of the Company’s activities in improving, resolving or liquidating lower quality assets, (xiiixvi) results of regulatory examinations, (xivxvii) 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, (xvxviii) the possibility of additional increases to compliance costs or other operational expenses as a result of increased regulatory oversight, (xvixix) loss of key personnel, and (xviixx) 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 statementsstatements.

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, 2024,2025, Wilson Bank had thirty-onethirty-three office locations in Wilson, Davidson, DeKalb, Smith, Sumner, Rutherford, Putnam, Trousdale, Hamilton, and Williamson counties in Tennessee. Management believes that these counties offer an environment for continued growth, and the Company’s target market is local consumers, professionals and small businesses. Wilson Bank offers a wide range of banking services, including checking, savings and money market deposit accounts, certificates of deposit and loans for consumer, commercial and real estate purposes. The Company also offers an investment center which offers a full line of investment services to its customers.

WilsonThe Bank alsowas holdspreviously aninvested ownershipin Encompass, a joint venture of which the Bank owned 51% of the outstanding membership interests. Effective June 1, 2025, the Bank sold its 51% membership interest in Encompass to Encompass Home LoanLending Lending,Investors, LLCLLC, ("which owned 49% of the outstanding membership interests in Encompass"), aprior companyto offeringthe sale. Encompass offered residential mortgage banking services thatto iscustomers 51%of owned by Wilson Bank and 49% owned by twocertain home builders operating in Wilsonthe Bank's marketmarkets areas.as well as other mortgage customers. The results of Encompass, which commenced operations on June 1, 2022, through June 1, 2025 are consolidated in the Company's financial statements included elsewhere in this Annual Report on FromForm 10-K.

Net earnings for the year ended December 31, 20242025 were $56,530,000,$75,699,000, an increase of $7,592,000,$19,169,000, or 15.51%,33.91%, compared to net earnings of $48,938,000$56,530,000 for the year ended December 31, 2023.2024. Our 20232024 net earnings were 7.74%,15.51%, or $4,104,000,$7,592,000, lowerhigher than our net earnings of $53,042,000$48,938,000 for 2022.2023. Basic earnings per share were $4.79$6.28 in 2024,2025, compared with $4.79 in 2024 and $4.21 in 2023 and $4.66 in 2022.2023. Diluted earnings per share were $4.78$6.26 in 2024,2025, compared to $4.78 in 2024 and $4.20 in 2023 and $4.65 in 2022.2023. The increase in net earnings and diluted and basic earnings per share during the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 was primarily due to an increase in net interest income before provision for credit losses and an increase in non-interest income partially offset by an increase in non-interest expense and an increase in provision for credit losses. The increase in net interest income was due to an increase in average interest earning asset balances andbalances, an increase in the yield earned on interest earning assets, partiallyand offseta by an increasedecrease in cost of fundsfunds, andpartially offset by an increase in average interest bearing deposit balances. Net interest margin for boththe year ended December 31, 2025 was 3.69%, compared to 3.30% for the years ended December 31, 2024 and December 31, 2023 was 3.30%, and 3.70% for the year ended December 31, 2022.2023. Net interest spread for the year ended December 31, 20242025 was 2.88%,3.29%, compared to 2.97%2.88% and 3.62%2.97% for the years ended December 31, 20232024 and December 31, 2022,2023, respectively. The increase in non-interest expense was primarily due to increases in salaries and employee benefits and data processing fees. 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 increase in Returnnet on Average Assets (ROA)earnings for the year ended December 31, 2024 whenas compared to the year ended December 31, 2023 as set forth in the table above was primarily attributabledue to an increase in net interest income before provision for credit losses and an increase in brokeragenon-interest income,income partially off-setoffset by increases in salaries and employee benefits, data processing costs, an increase in thenon-interest lossexpense on sale of securities,and an increase in provision for credit losses, and an increase in average assets.losses.

The decreaseincrease in Return on Average Assets (ROA) for the year ended December 31, 20232025 when compared to December 31, 20222024 as set forth in the table above was primarily attributable to an increase in net interest marginincome compression,and an increase in noninterest income, partially off-set by increases in salaries and employee benefits, data processing expense, an increase in provision for credit losses, and an increase in FDICaverage 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, and a decrease in the provision for credit losses.assets.

SubsequentIn toJuly December2025, 31, 2024, Wilsonthe Bank committedopened to expand the Chattanoogaa loan production office toin Nolensville, Tennessee in a fullleased service branch. As a part of this expansion the Bank entered into a lease for the location for the new full service branch and is currently remodeling the space.location. The costs associated with thisthe expansion, including construction, equipment and lease expenses,expenses arewere not expected to be significant.

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 for the years ended December 31, 2024 and 2023.municipalities.

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.municipalities.

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 20242025 was $284,116,000,$326,187,000, up 14.81% when compared with $284,116,000 in 2024, which was up 27.64% when compared withto $222,583,000 in 2023, which was up 41.29% when compared to $157,540,000 in 2022, in each case excluding tax exempt adjustments relating to tax exempt securities and loans. The increase in total interest income in 20242025 when compared to 20232024 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 loansloans. While market rates declined overall in 2025, the Bank experienced upward rate yields within the portfolio as existing loan volume originated in prior years repriced to current market rates, and new loans were originated at higher contractual interest ratesrates. andThe net effect resulted in a portionhigher ofaverage theyield Bank'son variable loan portfolio repriced to current market rates.loans. Approximately 84% of the loans in our loan portfolio are variable rate loans, primarily indexed to the Federal Reserve prime rate. Fees earned on loans totaled $15,217,000,$17,006,000, $11,985,000$15,217,000 and $12,880,000$11,985,000 for the years ended 2024,2025, 20232024 and 2022,2023, respectively. The increase in fees earned on loans for the year ended 20242025 when compared to the year ended 20232024 was attributable to an increase in theprepayment volume of new loan originations.fees. The total amount of state income tax credits and tax-exempt loan interest included in our loan yields were $2,720,000,$4,553,000, $2,677,000$2,720,000 and $2,953,000$2,677,000 for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. The increase in interest and dividends earned on securities in 20242025 when compared to 20232024 resulted from higher yields earned on the securities purchased inthroughout December 20232024 and throughout 20242025 as management invested liquid funds into the securities portfolio, as well as management's decision to restructure a portion of the securities portfolio in 2024 and 2025, and invest the proceeds in higher yielding securities in 2024.securities. The increase in interest earned on interest bearing deposits overwas theprimarily samea periodresult resultedof fromhigher andeposit increasebalances, partially offset by a decrease in average balances and the yieldrates earned on these deposits as a result of the Federal Reserve raisinglowering rates throughout 2023.rates.

The ratio of average earning assets to total average assets was 95.9%,96.2%, 95.3%95.9% and 95.3% for each of the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. Average earning assets increased $549,268,000$581,047,000 from $4,304,842,000 at December 31, 2023 to $4,854,110,000 at December 31, 2024.2024 to $5,435,157,000 at December 31, 2025. For the year ended December 31, 2022,2023, average earning assets were $3,915,674,000.$4,304,842,000. The average rate earned on earning assets for 20242025 was 5.92%,6.09%, compared with 5.92% in 2024 and 5.24% in 2023 and 4.11% in 2022.2023. The increase in average earning assets was largely due to an increase in the average balance of loans due to loan growth, an increase in the average balance of interest bearing deposits and an increase in the average balance of securities. The increase in the average rate earned on earning assets is primarily due to an increase in the average yield earned on loans as new loans were originated at higher contractual interest rates and a portion of the Bank's variable loan portfolio repriced to current market rates as mentioned previously.previously, and the increase in yield earned on securities as a result of the Bank investing in higher yielding securities, offset by a decrease in yield on interest-bearing deposits with other depository institutions.

Total interest expense for 20242025 was $126,809,000,$130,611,000, an increase of $43,130,000,$3,802,000, or 51.54%,3.00%, compared to total interest expense of $83,679,000$126,809,000 in 2023.2024. For 2022,2023, total interest expense totaled $16,133,000.$83,679,000. Average interest-bearing deposits increased to $4,165,427,000$4,663,099,000 for 20242025 compared to $3,686,696,000$4,165,427,000 for 2023.2024. The average rate paid on interest-bearing deposits was 3.04%2.80% for 20242025 compared to 2.27%3.04% for 2023.2024. The increase in total interest expense in 20242025 resulted from an increase in the volume andof average interest bearing deposits offset in part by a reduction in the average interest rate paid on average interest bearing deposits. CompetitiveWe pressureshave ingenerally been able to lower the elevated short-term interest rate environment required the Bank to raise, and then subsequently maintain rates paidwe pay on deposits at higher levels while the Bank's customers shifting deposits from lower rate earning or non-interest bearing accounts to higher rate earning accounts and the increase in Certificate of Deposit Account Registry Service and Insured Cash Sweep products also negatively impacted interest expense. As competitive pressures began to ease in the second half of 2024 and the 100 basis points in rate cuts byas the Federal Reserve tookhas effect,lowered we began loweringshort-term interest rates; on some of our deposit products. However,however, if the competitive pressures beginincrease, to rise once again,if the Federal Reserve does notdoesn't cut the federal funds rate any further or if loan growth outpaces deposit growth, the Bankwe may have to once again raise the rates itwe payspay on deposits.deposits Wewhich would negatively impact our net interest margin. Even if rates remain at current levels or the Federal Reserve continues to cut rates, we expect interest expense to continue to increase due to an increase in overall deposit balances.

Net interest income for 20242025 totaled $157,307,000$195,576,000 as compared to $138,904,000$157,307,000 and $141,407,000$138,904,000 in 20232024 and 2022,2023, 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), decreasedincreased to 3.29% in 2025 from 2.88% in 2024 from 2.97% in 2023.2024. The net interest spread was 3.62%2.97% in 2022.2023. Net interest margin didincreased notto change3.69% andin was2025 from 3.30% in 2024 and 2023.2024. The net interest margin was 3.70%3.30% in 2022.2023. Net interest margin remained the same in 20242025 as it was in 2023increased as a result of the growthincrease in netaverage interest incomeearning assets, an increase in the yield earned on loans and thesecurities, levelhigher ofdeposit averagebalances earningwith assetsdepository off-settinginstitutions theand increasesa decrease in cost of fundsfunds, partially offset by an increase in interest-bearing deposits and the level of our average interest bearing liabilities. Changes in interest rates paid on products such as interest checking, savings, and money market accounts will generally increase ora decrease in ayield manneron thatinterest-bearing is consistentdeposits with changesother indepository the short-term environment, but those rates are also impacted by competitive market conditions.institutions.

The direction and speed with which short-term interest rates move has an impact on our net interest income. The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate decreased by 100175 basis points frombetween September 18, 2024 throughand December 31, 20242025, as the Federal Reserve cut the target rate for the federal funds rate by 100175 basis points.points during that time. The Company believes that short-term interest rates willcould remaindecrease atfurther orin near their current levels throughout 2025,2026, and in such a rate environment, expansion of the Company's net interest margin will be dependent upon, in part, whether the Company iscan forced to maintainlower deposit rates atquicker their current levels or further increase them forthan the reasonsrates notedit above.earns on loans and other interest earning assets reprice. However, if short-term interest rates decline further the Company's net interest margin and earnings could be negatively impacted if the yields on loans and other interest-earning assets decrease faster than the Company is able to lower deposit rates, including as a result of loan growth outpacing our ability to add lower cost core deposits or competitive pressures in our markets limiting our ability to reduce the rates we pay on deposits, particularly given that 84% of the loans in our loan portfolio are variable rate loans. Alternatively, if the Company is able to reprice its deposits more quickly than it reprices the rates it earns on loans in such a falling rate environment, the Company expects its net interest margin would expand.

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 appearing elsewhere in this Annual Report on 10-K for a detailed discussion regarding ACL methodology.

For the year ended December 31, 2024,2025, an increase in off-balance sheet credit exposures was more than offset by 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, resulting in a benefit for the year. For the year ended December 31, 2024, an increase in off-balance sheet credit exposures was more than offset by an increase in our unconditionally cancellable commitments as a percentage of our off-balance sheet commitments 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, 2025, 2024 and 2023:

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 factorsFactors which, in management’smanagement'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, relevantadverse information that may affect our borrowers' ability to repay, the estimated value of any underlying collateralsituations and/or current economic conditions that may affect our borrowers' ability to pay.repay and the estimated value of any underlying collateral.

The increase in non-interest income for the year ended December 31, 2024 when compared to the year ended December 31, 2023 iswas primarily attributable to increases in brokerage income, service charges on deposits, other fees and commissions, and fees and gains on sales of mortgage loans, partially offset by an increase in the loss on sale of securities and an increase in the loss on sale of fixed assets.

The increase in brokerage income iswas primarily due to multiple client acquisitions resulting in an increase of overall market share, the completion of estate planning and corporate benefit cases, and the overall positive performance of financial markets.

The increase in other fees and commissions iswas primarily due to an increase in fees related to safe deposit box rentals and cashier checks, as well as an increase in rental income. Beginning in November 2023, the Company entered into a lease agreement with a third party for use of the Company's unoccupied office building.

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 2025 Form 10-K, 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 U.S. and global economic conditions, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom and from geopolitical instability, including as a result of the conflict in IranIran, (iv) 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, (v) 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 the conflict in Iran, political uncertainty, inflationary pressures and the elevated rate environment, supply chain disruptions and labor shortages on our customers and on their businesses, (vi) risks associated with a prolonged shutdown of the United States federal government, including adverse effects on the national or local economies and adverse effects from a shutdown of the U.S. Small Business Administration's loan program, (vii) the sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs, (viii) 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, (ix) the ability to grow and retain low-cost core deposits, (x) the impact of changes in interest rates on the value of the Company's mortgage servicing rights, (xi) significant downturns in the business of one or more large customers, (xii) 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, (xiii) 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, (xiv) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments, (xv) an inadequate allowance for credit losses,losses ("ACL"), (xvi) the effectiveness of the Company’s activities in improving, resolving or liquidating lower quality assets, (xvii) results of regulatory examinations, (xviii) 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, (xix) the possibility of additional increases to compliance costs or other operational expenses as a result of increased regulatory oversight, (xx) loss of key personnel, (xxi) 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, and (xxii) the impact of changes in corporate tax rates. 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.

Accounting policies related to the allowance for credit lossesACL 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. In the case of loans, the allowance for credit lossesACL 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 lossesACL 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. The ACL process is continually reviewed and updated as needed based on quarterly reviews, new data, and/or calculation improvements with material impacts disclosed as appropriate. 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 Quarterly Report.

Net earnings of the Company for the three months ended MarchJune 31,30, 2026 were $22,261,000,$20,810,000, an increase of $5,869,000,$1,695,000, or 35.80%,8.87%, from net earnings of $16,392,000$19,115,000 for the three months ended MarchJune 31,30, 2025. Net earnings of the Company increased $7,564,000, or 21.30%, to $43,071,000 for the six months ended June 30, 2026, from $35,507,000 for the six months ended June 30, 2025. The increase in net earnings for the three and six months ended MarchJune 31,30, 2026 was primarily due to an increase in net interest income, and non-interest income, and a decrease in provision for credit losses, partially offset by an increase in non-interest expense and provision for credit losses.expense.

The increase in net interest income for the three and six months ended MarchJune 31,30, 2026 when compared to the comparable periodperiods in 2025 was primarily due to an increase in average interest earning asset balances and a decrease in the cost of funds, partially offset by an increase in average interest bearing deposit balances.balances and a slight decrease in the yield earned on earning assets.

Return on average assets ("ROA") and return on average shareholders' equity ("ROE") are common benchmarks for bank profitability and in the case of the Company are calculated by taking our annualized net earnings for the relevant period and dividing that amount by our average assets and average equity for the relevant periods, respectively. ROA and ROE measure a company’s return on investment in a format that is easily comparable to other financial institutions. ROA is a particularly important performance metric to the Company as it serves as the basis for certain employee bonuses. The ROA for the three and six months ended MarchJune 31,30, 2026 was 1.53%,1.39% and 1.46%, respectively, while the ROA for the three and six months ended MarchJune 31,30, 2025 was 1.23%.1.38% and 1.31%, respectively. The ROE for the three and six months ended MarchJune 31,30, 2026 was 15.18%,13.76% and 14.46%, respectively, while the ROE for the three and six months ended MarchJune 31,30, 2025 was 13.35%.14.69% and 14.04%, respectively. The increasesincrease in ROA for the three and six months ended June 30, 2026 and the increase in ROE for the firstsix months ended June 30, 2026 was primarily due to an increase in net interest income resulting from the increase in earning assets and a decrease in provision for credit losses, partially offset by an increase in non-interest expense. While net earnings and shareholder's equity both increased for the three months ended June 30, 2026 when compared to the same period of 2025, the decrease in ROE between the periods is due to the growth in average shareholders' equity outpacing the growth in net earnings in the second quarter of 2026 were primarily driven by higher net interest income.2026.

Effective January 1, 2026, Wilson Bank entered into a definitive agreement with an unaffiliated third party to divest of its credit card business. The transaction closed in January 2026; however, Wilson Bank will continue to subservice the credit cards until April 2027. In connection with the sale, credit card balances totaling $6.7 million were moved out of our portfolio and a premium of $1.1 million was recognized into income, based upon the sales agreement with the purchaser. The reserve for credit card points in the amount of $1.2 million was reversed and an additional expense of $120,000 for such points was recognized on the settlement date. The sale allows the Bank to redirect operational resources toward core lending activities and strategic initiatives in an effort to better position the Bank for future growth and improved operating efficiency, while also enhancing the Bank's ability to offer additional credit card products to its customers.

The average balances, interest, and average rates of our assets and liabilities for the three and six months ended MarchJune 31,30, 2026 and 2025 are presented in the following table (dollars in thousands):

Loan fees of $3,618,000$4,457,000 are included in interest income for the period ended MarchJune 31,30, 2026. Loan fees of $3,574,000$4,163,000 are included in interest income for the period ended MarchJune 31,30, 2025.

The components of our loan yield, a key driver to our net interest margin for the three and six months ended MarchJune 31,30, 2026 and 2025, were as follows:

Net interest margin for the three months ended MarchJune 31,30, 2026 and 2025 was 3.92%3.86% and 3.53%,3.73%, respectively. Net interest margin for the six months ended June 30, 2026 and 2025 was 3.89% and 3.63%, respectively. The increase in net interest margin for the three and six months ended MarchJune 31,30, 2026 when compared to the comparable periods in 2025 was primarily due to the increase in average interest earning asset balances, an increase in the yield earned on loans and securities, and a decrease in the cost of funds, and for the six months ended June 30, 2026, an increase in the yield earned on loans. The increase in net interest margin was partially offset by a decrease in the yield on accounts with depository institutions and increased average interest-bearing deposit balances.balances, Whileand marketfor short-termthe interestthree ratesmonths declinedended overallJune 30, 2026, a decrease in 2025,the yield earned on loans. The yield earned on loans for the Bankthree experiencedand upwardsix loanmonths rateended yieldsJune within30, 2026 was 6.80% and 6.87%, respectively, while the portfolioyield asearned existingon loanloans volumefor the three and six months ended June 30, 2025 was 6.88% and 6.82%, respectively. The increase in the yield earned on loans for the six months ended June 30, 2026 reflected the repricing of loans originated in prior years to current market rates and additional state tax credit loans. During the three months ended June 30, 2026, a higher proportion of variable rate loans repriced downward to current market rates,rates and, in most cases,and new loans were originated at higher contractual interestlower rates thancompared to the previous portfolio rate.yield as a result of increasing competitive pressures, more than offsetting the effect of upward repricing. As a result the yield earned on loans declined compared to the same period in 2025. The net interest spread was 3.54%3.49% and 3.13%3.33% for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The net interest spread was 3.52% and 3.24% for the six months ended June 30, 2026 and 2025, respectively.

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. Net interest income, excluding tax equivalent adjustments relating to tax exempt securities and loans, for the three and six months ended MarchJune 31,30, 2026 totaled $53,828,000$54,433,000 and $108,261,000, respectively, compared to $44,579,000$48,938,000 and $93,517,000 for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

The increase in net interest income for the three and six months ended MarchJune 31,30, 20262026, compared to the comparablecorresponding periodperiods in 20252025, was primarily dueattributable to an increasegrowth in the volume of average interest-earning assets, anhigher increase in the yield earnedyields on loans and securities, and a decrease in interest expense resulting from the decrease in thelower cost of funds, partially offset by an increase in the volume of average interest-bearing deposits. The increase for the six month period was further supported by higher loan yields, while the increase for the three month period was partially offset by lower loan yields.

The ratio of average interest-earning assets to total average assets for the three and six months ended MarchJune 31,30, 2026 was 96.4%, compared to 96.2% for the three and six months ended MarchJune 31,30, 2025.

Fees earned on loans totaled $3,618,000$4,457,000 and $3,574,000$4,163,000 infor the first three months ofended June 30, 2026 and 2025, respectively. Fees earned on loans totaled $8,075,000 and $7,737,000 for the six months ended June 30, 2026 and 2025, respectively. The increase in fees earned on loans for the firstthree quarterand ofsix months ended June 30, 2026 when compared to the firstthree quarterand ofsix months ended June 30, 2025 was attributable to an increase in origination fees, late fees, and fees for letters of credit. For the six month period ended June 30, 2026 the increase was partially offset by a decrease in prepayment fees. The total amount of state income tax credits and tax-exempt loan interest included in our loan yields werefor $1,071,000the three and $643,000six months ended June 30, 2026 was $1,214,000 and $2,284,000, respectively, compared to $756,000 and $1,399,000 for the three-monththree periodsand six months ended MarchJune 31, 2026 and30, 2025, respectively. The increase in interest and dividends earned on securities in the firstthree threeand six months ofended June 30, 2026 when compared to comparable periodperiods in 2025 resultedis fromdue to the growth in the securities portfolio over such periods and the higher yields earned on the securities purchased throughout 20252025, and in the first half of 2026, as management invested liquid funds into the securities portfolio, as well as management's decision to restructure a portion of the securities portfolio in 2025,2025 and invest the proceeds of such restructuring in higher yielding securities. The increase in interest earned on interest bearing deposits during the threesix months ended MarchJune 31,30, 2026 when compared to the threesix months ended MarchJune 31,30, 2025 was primarily a result of higher average deposit balances, partially offset by a decrease in rates earned on these deposits as a result of the Federal Reserve lowering rates. The decrease in interest earned on interest bearing deposits during the three months ended June 30, 2026 when compared to the three months ended June 30, 2025 was primarily a result of a decrease in rates earned on these deposits, partially offset by an increase in average deposit balances.

Interest expense decreased in the three and six months ended MarchJune 31,30, 2026 when compared to the comparable periodperiods in 2025 due to a decrease in the average rate paid on interest-bearing deposits, partially offset by the increase in volume of average interest-bearing deposits. We have generally been able to lower the rates we pay on deposits as the Federal Reserve has lowered short-term interest rates; however, if competitive pressures increase,have ifbegun to increase. Although the Federal Reserve doeshas not cutadjusted the federal funds rate any further orsince December 2025, loan growth outpacesis outpacing deposit growth, and as a result we may havebegan to raise the rates we pay on deposits whichlate would negatively impact our net interest margin. Even if rates remain at current levels orin the Federalsecond Reservequarter continuesof to2026. cut rates, weWe expect interest expense to increase due to an increase in overall deposit balances.balances and an increase in cost of funds due to competitive pressures in our markets.

The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit lossesACL that, in management's evaluation is adequate to provide coverage for all expected credit losses. The determination of the amount of the allowance for credit losses ("ACL") 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 appearing elsewhere in this Quarterly Report on Form 10-Q for a detailed discussion regarding ACL methodology.

There was a provision for credit losses-off balance sheet exposures of $144,000$572,000 for the three months ended MarchJune 31,30, 2026 related to increased loan commitments. There was a benefitprovision of $393,000$123,000 for the credit losses-off balance sheet exposures for the three months ended MarchJune 31,30, 2025.

The following detail provides a breakdown of the provision for credit loss-loans expense and net (charge-offs) recoveries as of and for the threesix months ended MarchJune 31,30, 2026 and 2025:

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. Factors which, in management’s judgment, deserve current recognition in estimating expected credit losses include growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for credit lossesACL to outstanding loans, adverse situations and/or current economic conditions that may affect our borrowers' ability to repay and the estimated value of any underlying collateral.

There was no provision for credit losses on available-for-sale securities for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively.

Our non-interest income is composed of several components, some of which vary significantly between quarterly and annual periods. The following is a summary of our non-interest income for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

The increase in non-interest income for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025 is primarily attributable to the increase in brokerage income and service charges on deposit accounts partially offset by a decrease in gain on sale of loans and an increase in loss on sale of other real estate. The increase in non-interest income for the six months ended June 30, 2026 when compared to the six months ended June 30, 2025 is primarily attributable to the premium earned on the sale of the Company's credit card portfolio,portfolio ansale, increase in brokerage income, and service charges on deposit accounts and an increase in brokerage income, partially offset by a decrease in gain on sale of loans, debit and credit card interchange income.income, and an increase in loss on sale of other real estate.

The increase in brokerage income for the three and six months ended MarchJune 31,30, 2026 when compared to the three and six months ended MarchJune 31,30, 2025 was due to continued client acquisitions resulting in an increase of overall production and market share.share coupled with the continued growth and positive returns of the investment markets.

The decreaseincrease in debitservice andcharges crediton carddeposit interchange incomeaccounts for the three and six months ended MarchJune 31,30, 2026 when compared to the three and six months ended MarchJune 31,30, 2025 was primarily due to thean saleincrease ofin theoverdraft Company's credit card portfolio mentioned above.fees.

Non-interest expense consists primarily of employee costs, occupancy expenses, furniture and equipment expenses, advertising and public relations expenses, data processing expenses, directors' fees, audit, legal and consulting fees, FDIC insurance and other operating expenses. The following is a summary of our non-interest expense for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

The increase in non-interest expense for the three and six months ended MarchJune 31,30, 2026 when compared to the comparable periodperiods in 2025 iswas primarily attributable to increases in salaries and employee benefits, occupancy expense, data processing expense, audit, legal and otherconsulting, operatingand advertising & public relations expense, partially offset by a reduction in FDIC insurance.

The increase in salaries and benefits in the three and six months ended MarchJune 31,30, 2026 when compared to the threecomparable monthsperiods endedin March 31, 2025,2025 was primarily attributable to normal annual salary increases, an increased number of employees, promotions, the implementation of a higher minimum starting wage, and an increased bonus accrual based on higher projected earnings.

The increase in occupancy expense in the three months and six months ended MarchJune 31,30, 2026 when compared to the threecomparable monthsperiods endedin March 31, 2025,2025 was primarily attributable to expense related to the remodel of multiple properties.branches.

The increase in data processing expense in the three and six months ended MarchJune 31,30, 2026 when compared to the threecomparable monthsperiods ended March 31,in 2025 was primarily due to implementation of additional information security solutions, replacement of technology equipment, additional software licensing needs, and an increase in the overall number of customers. The Company anticipates that data processing expenses will continue to increase as the Company's operations and employee base grows, the demand for digital products and services from employees and customers increases, and the cyber threat environment grows.