FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 0-26480
PSB HOLDINGS, INC.
(Exact name of registrant as specified in charter)
WISCONSIN 39-1804877
(State of incorporation) (I.R.S Employer Identification
Number)
1905 WEST STEWART AVENUE
WAUSAU, WISCONSIN 54401
(Address of principal executive office)
Registrant's telephone number, including area code: 715-842-2191
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
The number of common shares outstanding at June 30, 1996 was 902,425.
<PAGE>
PSB HOLDINGS, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 1996
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of
Income, Six Months Ended and Three
Months Ended June 30, 1996 (unaudited)
and June 30, 1995 (unaudited) 1
Condensed Consolidated Balance
Sheets June 30, 1996 (unaudited)
and December 31, 1995 (derived from
audited financial statements) 2
Condensed Consolidated Statements
of Cash Flows Six Months and Three
Months Ended Ended June 30, 1996
(unaudited) and June 30, 1995 (unaudited) 3
Notes to Condensed Consolidated
Financial Statements 4
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 5
PART II. OTHER INFORMATION
Item 4. Submission of Matters to Vote of
Securities Holders 9
Item 6. Exhibits and Reports on form 8-K 10
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
ITEM 1. FINANCIAL STATEMENTS
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
($ thousands except share data-unaudited) Six Months Ended Three Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $5,734 $5,165 $2,866 $2,651
Interest on investment securities
Taxable 1,135 1,075 591 551
Tax-exempt 276 288 139 142
Other interest income 123 48 28 22
Total interest income 7,268 6,576 3,624 3,366
Interest Expenses:
Deposits 3,479 3,003 1,738 1,615
Short-term borrowings 352 304 174 157
Total interest expense 3,831 3,307 1,912 1,772
Net interest income 3,437 3,269 1,712 1,594
Provisions for losses on loans 90 150 45 75
Net Interest Income 3,347 3,119 1,667 1,519
Other income:
Service fees 241 232 121 102
Insurance commissions 43 54 14 47
Net gains on other real estate 188 -0- -0- -0-
Net gains on securities sales -0- 26 -0- 18
Other operating income 52 43 29 36
Total other income 524 355 164 203
Other Expenses
Salaries and related benefits 1,146 1,037 621 570
Net occupancy expense 346 269 165 132
FDIC insurance 1 154 -0- 77
Computer operations 169 95 124 47
Other operating expense 485 479 193 226
Total other expenses 2,147 2,034 1,103 1,052
Income before income taxes 1,724 1,440 728 670
Provision for income taxes 573 459 233 216
Net income $1,151 $ 981 $ 495 $ 454
Income per share
Basis: Weighted Average of 902,425
shares in 1996
Weighted Average of 902,425
shares in 1995
Net income per share $ 1.28 $ 1.09 $ .55 $ .51
</TABLE>
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
($ thousands) June 30, December 31,
ASSETS 1996* 1995*
<S> <C> <C>
Cash and cash equivalents $ 11,390 $ 10,868
Federal Funds Sold 2,506 5,683
Investment Securities -
Held to Maturity
(Market Value $11,102,404 at 1996
$10,428,735 at 1995, respectively) 11,146 10,333
Available for sale (at $36,543,943 at 1996
and $34,273,321 at 1995, respectively) 36,051 34,643
Total Loans 129,605 125,325
Allowance for Loan Losses (1,889) (1,781)
Net Loans 127,716 123,544
Bank premises and equipment 3,918 3,445
Other Assets 2,786 2,265
TOTAL ASSETS $195,513 $190,781
LIABILITIES
Noninterest-bearing Deposits $ 23,202 $ 26,560
Interest-bearing Deposits 140,905 133,885
Total Deposits 164,107 160,445
Federal Funds purchased -0- -0-
Short-term borrowings 12,265 11,099
Other Liabilities 1,411 1,785
Total liabilities 177,783 173,329
STOCKHOLDERS' EQUITY
Common stock - no par value with a stated
value of $2.00 per share
- 1,000,000 shares authorized
- 902,425 shares issued 1,805 1,805
Additional Paid in Capital 7,159 5,927
Retained Earnings 9,074 9,488
Net unrealized gains (loss) on securities
available for sale (308) 232
Total stockholders' equity 17,730 17,452
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $195,513 $190,781
<FN>
*The consolidated balance sheet at June 30, 1996 is unaudited. The
December 31, 1995 consolidated balance sheet is derived from audited
financial statements.
</TABLE>
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
($ thousands - unaudited) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $ 1,151 $ 981 $ 495 $ 454
Provision for depreciation, and
net amortization 182 138 111 50
Provisions for loan losses 90 150 45 75
Gain on sale of other real estate (188) -0-
Changes in operating assets and liabilities:
Other assets (548) 333 (204) 365
Other liabilities (378) (281) 148 122
Net cash provided by operating activities 309 1,321 595 1,066
Cash flows from investing activities:
Proceeds from sale and maturities of:
Held to maturity securities 971 753 826 668
Available for sale securities 10,077 7,247 3,980 3,004
Payment for purchase of:
Held to maturity securities (1,791) (1,482) (500) (1,114)
Available for sale securities (12,033) (5,511) (2,182) (2,321)
Net change in loans (4,263) (7,296) (1,778) (4,520)
Net (increase) decrease in
federal funds sold 3,177 (1,248) (2,506) 314
Proceeds from sale of other real estate 215 23 -0- 23
Capital expenditures (640) (339) (531) (168)
Net cash used in investing activities (4,287) (7,853) (2,691) (4,114)
Cash flows from financing activities:
Net increase (decrease) in deposits 3,663 8,926 7,555 612
Net increase in short-term borrowings 1,165 2,320 506 2,620
Net increase in federal funds purchased -0- (4,999) (1,246) -0-
Proceeds from exercise of stock options -0- -0- -0- -0-
Dividends paid (328) (361) (328) (361)
Net cash used in financing activities 4,500 5,886 6,487 2,871
Net increase in cash and cash equivalents 522 (646) 4,391 (177)
Cash and cash equivalents at beginning of year 10,868 9,018 6,999 8,549
Cash and cash equivalents at end of quarter $11,390 $ 8,372 $11,390 $ 8,372
Supplemental Cash Flow Information:
Cash paid during the quarter for: Interest 3,831 3,307 1,912 1,772
Income taxes 505 494 470 477
</TABLE>
<PAGE>
PSB HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying financial statements in the opinion of management
reflect all adjustments which are normal and recurring in nature and
which are necessary for a fair statement of the results for the
periods presented. In all material respects, the financial statements
have been presented in accordance with generally accepted accounting
principles.
2. Earnings per share of common stock is based on the weighted average
number of common shares outstanding.
3. Refer to notes to the financial statements which appear in the 1995
annual report for the company's accounting policies which are
pertinent to these statements.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(All $ amounts are in thousands, except per share amounts)
RESULTS OF OPERATIONS
TOTAL ASSETS
Total assets have increased by over $4.7 million from December 31, 1995 to
June 30, 1996. This is an increase of 2.5%. Loan growth is primarily
responsible for this increase.
LOANS
Net loans have increased by $4.1 million from December 31, 1995 to
June 30, 1996. This is an increase of 3.4%.
CASH AND INVESTMENTS
Investments & Fed Funds Sold have decreased slightly as a whole in the
first six months of 1996. Fed Funds Sold as of year end have been
reinvested in U.S. Government securities.
DEPOSITS
Deposit growth from December 31, 1995 to June 30, 1996 was $3.6 million.
This is an increase of 2.3%. Deposit growth was used to fund loans.
SHORT TERM BORROWINGS
Short term borrowing increased as of June 30. A $1 million Certificate
of Deposit which was borrowed in May will mature in early July.
EQUITY
Equity grew by $.28 million or 1.6% due to the following: An expected
increase in Retained Earnings from 1996 Net Income of $1.15 million, less
an increase in the "Unrealized loss on securities available for Sale" of
$.54 million, and cash dividends declared. The increase in the unrealized
loss is a result of the market prices of the investment portfolio
experiencing some losses as of June 30, 1996.
OPERATING DATA SUMMARY
GENERAL
Net interest income for the first two quarters of 1996 is 7.3% higher
than it was for the same period in 1995. This increase occurred despite
the overall increase in deposit rates. Net interest income for the
second quarter of 1996 is 9.7% higher than the same period in 1995.
NON-INTEREST INCOME
Non-interest income increased by 48% from the period ending June 30,
1996 compared to the period ending June 30, 1995. This increase is
attributed to the net gain on sale of other Real Estate. Non-interest
income for the second quarter of 1996 is 19.2% lower than the same period
in 1995 as a result of lower insurance commissions.
NON-INTEREST EXPENSE
Non-interest expenses increased by 5.6% for the period ending June 30,
1996 when compared to the period ending June 30, 1995. The primary
reasons for the change are an increase in overhead costs from adding a
new branch office and the operating costs attributed to growth. Computer
operations increased as a result of our conversion to an in-house
<PAGE>
processing system. These expenses were offset by a significant decrease
in FDIC Insurance premiums. Non-interest expense for the second quarter
of 1996 was 4.8% higher than the same period in 1995.
NET INCOME
Net income for the first half of 1996 is 17.3% higher than the first half
of 1995 and earnings per share increased from $1.09 to $1.28, or 17.4% as
well. Net income for the second quarter of 1996 was 9.0% higher than the
same period of 1995 and Earnings per share was 7.8% higher in 1996
compared to 1995.
<PAGE>
<TABLE>
<CAPTION>
KEY OPERATING RATIOS
(unaudited) Ended June 30, 1996
SIX MONTH PERIOD THREE MONTH PERIOD
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Return on assets (net income
divided by average assets) (1) 1.20% 1.13% 1.03% 1.02%
Return on Average Equity (net
income divided by average
equity) (1) 13.33% 13.44% 11.05% 11.00%
Average Equity to Average Assets 9.25% 9.21% 9.29% 9.31%
Interest Rate Spread (difference
between average yield on interest
earning assets and average cost of
interest bearing liabilities) (1) 2.96% 2.99% 2.91% 2.94%
Net Interest Margin (net interest
income as a percentage of average
interest earning assets) (1) 3.84% 4.00% 3.84% 4.07%
Non-interest Expense to average
assets (1) 2.32% 2.51% 2.29% 2.37%
Allowance for loan losses to total
loans at end of period 1.46% 1.48% 1.46% 1.48%
<FN>
(1) Annualized
</TABLE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS
The annual meeting of shareholders of the Company was held on
April 16, 1996. The matters voted upon, including the number of votes
cast for, against or withheld, as well as the number of abstentions and
broker non-votes, as to each such matter were as follows:
<TABLE>
<CAPTION>
MATTER SHARES
Broker
For Withheld Against Abstain Non-Vote
<S> <C> <C> <C> <C> <C>
Election of Directors
(a) Leonard C. Britten 621,539 1,060 N/A N/A 0
(b) Gordon P. Connor 622,599 0 N/A N/A 0
(c) Patrick L. Crooks 622,599 0 N/A N/A 0
(d) William J. Fish 622,584 15 N/A N/A 0
(e) George L. Geisler 611,466 11,133 N/A N/A 0
(f) Gordon P. Gullickson 622,314 285 N/A N/A 0
(g) Lawrence Hanz, Jr. 620,334 2,265 N/A N/A 0
(h) Thomas R. Polzer 622,599 0 N/A N/A 0
(i) Thomas A. Riiser 622,599 0 N/A N/A 0
(j) Dr. Albert H. Stahmer 611,466 11,133 N/A N/A 0
(k) Eugene Witter 622,599 0 N/A N/A 0
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits required by Item 601 of Regulation S-K.
(27) Financial Data Schedule
(b) Reports on Form 8-K:
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PSB HOLDINGS, INC.
August 14, 1996 TODD R. TOPPEN
Todd R. Toppen
Secretary and Controller
(On behalf of the Registrant and as
Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
PURSUANT TO <section>232.102(D), REGULATION S-T
EXHIBIT (27) Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 11,390
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,506
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 36,051
<INVESTMENTS-CARRYING> 11,146
<INVESTMENTS-MARKET> 11,102
<LOANS> 129,605
<ALLOWANCE> 1,889
<TOTAL-ASSETS> 195,513
<DEPOSITS> 164,107
<SHORT-TERM> 12,265
<LIABILITIES-OTHER> 1,411
<LONG-TERM> 0
0
0
<COMMON> 1,805
<OTHER-SE> 15,925
<TOTAL-LIABILITIES-AND-EQUITY> 195,513
<INTEREST-LOAN> 5,734
<INTEREST-INVEST> 1,411
<INTEREST-OTHER> 123
<INTEREST-TOTAL> 7,268
<INTEREST-DEPOSIT> 3,479
<INTEREST-EXPENSE> 3,831
<INTEREST-INCOME-NET> 3,437
<LOAN-LOSSES> 90
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,147
<INCOME-PRETAX> 1,724
<INCOME-PRE-EXTRAORDINARY> 1,724
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,151
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
<YIELD-ACTUAL> 3.84
<LOANS-NON> 278
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,746
<ALLOWANCE-OPEN> 1,781
<CHARGE-OFFS> 15
<RECOVERIES> 33
<ALLOWANCE-CLOSE> 1,889
<ALLOWANCE-DOMESTIC> 1,889
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
