WILSON BANK HOLDING CO

Results of Operations

Net earnings for the year ended December 31, 2023 were $48,938,000, a decrease of $4,104,000, or 7.74%, compared to net earnings of $53,042,000 for the year ended December 31, 2022. Our 2022 net earnings were 7.32%, or $3,616,000, higher than our net earnings of $49,426,000 for 2021. Basic earnings per share were $4.21 in 2023, compared with $4.66 in 2022 and $4.44 in 2021. Diluted earnings per share were $4.20 in 2023, compared to $4.65 in 2022 and $4.43 in 2021. The decrease in net earnings and diluted and basic earnings per share during the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to a decrease in net interest income before provision for credit losses and an increase in non-interest expense, partially offset by an increase in non-interest income and a decrease in provision for credit losses - loans. The decrease in net interest income was due to an increase in cost of funds between the relevant periods, partially offset by an increase in average interest earning asset balances and an increase in the yield earned on interest earning assets. Net interest margin for the year ended December 31, 2023 was 3.30%, compared to 3.70% and 3.44% for the years ended December 31, 2022 and December 31, 2021, respectively. Net interest spread for the year ended December 31, 2023 was 2.97%, compared to 3.62% and 3.36% for the years ended December 31, 2022 and December 31, 2021, respectively. The increase in non-interest expense largely resulted from the Company's continued growth as well as rising costs of employees' salaries and benefits as a result of competition we are experiencing for human capital in our market areas. See below for further discussion regarding variances related to net interest income, provision for credit losses, non-interest income, non-interest expense and income taxes.

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

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

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