Deposit growth across middle Tennessee, a one-time credit card divestiture gain and improving credit metrics drove the Lebanon-based lender’s strongest opening quarter in years.

May 11, 2026

Wilson Bank Holding Company, the Lebanon, Tennessee parent of Wilson Bank & Trust, reported sharply higher first-quarter earnings, citing wider margins, deposit growth across middle Tennessee and a one-time gain tied to the sale of its credit card portfolio.

Net earnings attributable to the company climbed to $22.3 million for the three months ended March 31, 2026, an increase of roughly $5.9 million, or 35.8%, from $16.4 million in the same period a year earlier. Basic earnings per common share rose to $1.82 from $1.37, while diluted earnings per share advanced to $1.81 from $1.37.

The board declared a quarterly cash dividend of $1.35 per share, up from $1.00, a 35% increase that brought total declared dividends for the quarter to about $16.5 million. Roughly $10.9 million of that was reinvested under the company’s dividend reinvestment plan.

Profitability Ratios Strengthen

The earnings gain pushed key return metrics higher:

• Annualized return on average assets: 1.53%, up from 1.23%
• Annualized return on average equity: 15.18%, up from 13.35%
• Efficiency ratio: improved to 50.08% from 55.54%
• Book value per share: $48.40, up from $47.89 at year-end 2025

Margin Expansion Powers Net Interest Income

The largest contributor to the gain was net interest income, which rose to $53.8 million from $44.6 million a year earlier. On a tax-equivalent basis, the net interest margin widened to 3.92% from 3.53%, and the net interest spread expanded to 3.54% from 3.13%.

Management attributed the improvement to higher average earning-asset balances, better loan and securities yields, and a lower overall cost of funds, partially offset by a larger base of interest-bearing deposits. Average loans yielded 6.94% during the quarter, up from 6.75%, as legacy loans repriced upward and new originations carried higher contractual rates than the existing portfolio average.

On the funding side, the cost of total interest-bearing deposits fell to 2.55% from 2.89%, helped by lower rates paid on time deposits and money market accounts after the Federal Reserve cut its target rate by a cumulative 175 basis points between September 2024 and the end of 2025. The federal funds target was unchanged during the first quarter of 2026.

Balance Sheet Growth and Credit Quality

Total assets grew 1.91% during the quarter to $5.99 billion, up from $5.88 billion at year-end 2025. Net loans expanded modestly to $4.34 billion from $4.30 billion. Management said it was prioritizing owner-occupied commercial real estate, residential real estate and small-business lending in 2026. Commercial and multi-family real estate posted the strongest segment growth, while construction, land development and farmland balances declined.

Total deposits rose 1.78% to $5.34 billion, supported by new account openings and broader market-share gains. The company reported no brokered deposits at quarter-end. Roughly 27% of deposits exceeded standard FDIC insurance limits, though some exposure is mitigated through the CDARS and ICS sweep programs, which together held about $279 million, or 5.23% of total deposits.

Credit metrics generally improved:

• Non-performing loans fell to $22.8 million from $28.3 million, helped by the payoff of a single large commercial real estate relationship.
• The non-performing asset ratio dropped to 0.39% from 0.49%.
• The allowance for credit losses on loans climbed to $57.2 million, or 1.30% of total loans, up from 1.26%, reflecting a softer national economic outlook and weaker collateral values on certain individually measured credits.
• The provision for credit losses on loans totaled $2.5 million, with net charge-offs of just $328,000, equal to 0.01% of average loans.

Credit Card Sale and Fee Income

Effective January 1, 2026, the bank sold its credit card business to an unaffiliated third party, transferring roughly $6.7 million in card balances out of its portfolio and recognizing a $1.1 million premium in non-interest income. A $1.2 million reserve for customer rewards points was reversed, while an additional $120,000 in points expense was recorded at settlement. The bank will continue to subservice the cards through April 2027.

Total non-interest income reached $9.6 million, up 18.7% from $8.1 million. Beyond the card-sale premium, the company saw higher deposit service charges, increased brokerage income from continued client acquisition and a rebound in mortgage servicing income, partly offset by lower debit and credit card interchange revenue following the divestiture.

Non-interest expense climbed 8.6% to $31.8 million, with higher salaries and benefits, occupancy costs tied to branch remodels and data processing expense reflecting added cybersecurity tools and software licensing. FDIC insurance fell on a lower assessment rate.

Capital, Buybacks and Trading Notes

The company and the bank remained well capitalized, with consolidated total capital to risk-weighted assets of 15.8% and a consolidated Tier 1 leverage ratio of 10.9%. Total shareholders’ equity stood at $594.6 million, equal to 9.92% of assets. Accumulated other comprehensive losses widened slightly to $59.4 million, reflecting $81.9 million of unrealized losses on available-for-sale securities, which management attributed to interest rates rather than credit deterioration.

The board separately authorized an $8.0 million share repurchase program in late January 2026, running through March 31, 2027. The company had not bought shares under that authorization through the report date but repurchased 350 shares at an average price of $80.45 under the prior program during the quarter.

The company also flagged that two transactions in its common stock were reported in the over-the-counter market during the quarter at $550 per share, though those trades were not settled through Wilson Bank, the company’s transfer agent. The most recent price recorded on the company’s books was $81.95 per share. As of May 8, there were 12,287,938 shares outstanding.