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 MARCH 31, 1997
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:
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 March 31, 1997 was 895,425.
<PAGE>
PSB HOLDINGS, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of
Income, Three Months Ended
March 31, 1997 (unaudited) and
March 31, 1996 (unaudited) 1
Condensed Consolidated Balance
Sheets March 31, 1997 (unaudited)
and December 31, 1996 (derived from
audited financial statements) 2
Condensed Consolidated Statements
of Cash Flows Three Months
Ended March 31, 1997 (unaudited)
and March 31, 1996 (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 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to Vote of
Securities Holders 7
Item 5. Other Information 9
Item 6. Exhibits and Reports on form 8-K 9
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
($ thousands except share data - unaudited) Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Interest Income
Interest and fees on loans $2,994 $2,868
Interest on investment securities
Taxable 611 544
Tax-exempt 142 137
Other interest income 10 95
Total interest income 3,757 3,644
Interest Expenses:
Deposits 1,901 1,741
Short-term borrowings 77 178
Total interest expense 1,978 1,919
Net interest income 1,779 1,725
Provisions for losses on loans 45 45
Net Interest Income After Provision for
Loan Losses 1,734 1,680
Other income:
Service fees 117 120
Insurance commissions 26 29
Net security gains 0 0
Net gain on other real estate 0 188
Other operating income 45 23
Total other income 188 360
Other Expenses
Salaries and related benefits 590 525
Net occupancy expense 188 181
FDIC insurance 5 1
Computer operations 8 45
Other operating expense 268 292
Total other expenses 1,059 1,044
Income before income taxes 863 996
Provision for income taxes 282 340
Net income $ 581 $ 656
Income per share
Basis: Weighted Average of 895,425
shares in 1997
Weighted Average of 902,425
shares in 1996
Net income per share $ .65 $ .73
</TABLE>
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
($ thousands) March 31, December 31,
ASSETS 1997* 1996*
<S> <C> <C>
Cash and cash equivalents $ 11,062 $ 10,152
Federal Funds Sold 0 0
Investment Securities -
Held to Maturity
(Market Value $12,582 & $11,763 12,575 11,714
at 1997 & 1996 respectively)
Available for sale (at fair market
value, cost $37,512 & $39,881 37,178 39,871
at 1997 & 1996 respectively)
Total Loans 138,154 138,011
Allowance for Loan Losses (1,891) (1,925)
Net Loans 136,263 136,086
Bank premises and equipment 3,673 3,701
Other Assets 2,779 2,634
TOTAL ASSETS $ 203,530 $ 204,158
LIABILITIES
Noninterest-bearing Deposits $ 24,373 $ 28,486
Interest-bearing Deposits 153,629 149,643
Total Deposits 178,002 178,129
Federal Funds purchased 1,599 2,197
Short-term borrowings 4,032 3,569
Other Liabilities 1,235 1,974
Total liabilities 184,868 185,869
STOCKHOLDERS' EQUITY
Common stock - no-par value, with a stated
value of $2 per share
- 1,000,000 shares authorized
- 902,425 shares issued 1,805 1,805
Additional paid-in capital 7,159 7,159
Retained earnings 10,231 9,649
Net unrealized loss on securities available
for sale, net of deferred income taxes (218) (9)
Treasury stock, at cost - 7,000 shares (315) (315)
Total stockholders' equity 18,662 18,289
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 203,530 $ 204,158
<FN>
*The consolidated balance sheet at March 31, 1997 is unaudited. The
December 31, 1996 consolidated balance sheet is derived from audited
financial statements.
</TABLE>
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
Three Months Ended
March 31,
($ thousands - unaudited) 1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 581 $ 656
Provision for depreciation, and
net amortization 113 71
Provisions for loan losses 45 45
Changes in operating assets and liabilities:
Gain on sale of other real estate 0 (188)
Other assets (145) (344)
Other liabilities (739) (526)
Net cash used in operating activities (145) (286)
Cash flows from investing activities:
Proceeds from sale and maturities of:
Held to maturity securities 200 145
Available for sale securities 2,977 6,097
Payment for purchase of
Held to maturity securities (1,066) (1,291)
Available for sale securities (495) (9,851)
Net change in loans (221) (2,485)
Net increase in
federal funds sold 0 5,683
Proceeds from sale of other real estate 0 215
Capital expenditures (79) (109)
Net cash provided by (used in) investing
activities 1,316 (1,596)
Cash flows from financing activities:
Net decrease in deposits (126) (3,892)
Net increase in short-term borrowings 463 659
Net increase (decrease) in federal funds
purchased (598) 1,246
Proceeds from exercise of stock options 0 0
Dividends paid 0 0
Net cash used in financing activities (261) (1,987)
Net increase (decrease) in cash and cash
equivalents 910 (3,869)
Cash and cash equivalents at beginning of year 10,152 10,868
Cash and cash equivalents at end of quarter $11,062 $ 6,999
Supplemental Cash Flow Information:
Cash paid during the period for : Interest 1,978 1,919
Income taxes 46 35
</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 regards, 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 1996
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 decreased by $628 from December 31, 1996 to March 31,
1997. This is a decrease of .31%. This is a normal occurrence since
historically total assets do not increase over the prior year end until
the 3rd quarter of the year.
LOANS
Net loans have increased by $177 from December 31, 1996 to March 31, 1997.
This is an increase of .13%.
CASH AND INVESTMENTS
Cash remained fairly constant as of March 31, 1997 compared to December
31, 1996. Investments, on the other hand decreased by $1,832 or 3.55%.
However, as of March 31 a pending security purchase of $1,500 is not
reflected in the totals.
DEPOSITS
Deposits decreased slightly by $127 from December 31, 1996 to March 31,
1997.
SHORT TERM BORROWINGS
Fed funds purchased decreased by $598 from December 31, 1996 to March 31,
1997. Repurchase agreements increased $463.
EQUITY
Equity grew by $373 or 2.04% due to the following: Net income for the
first three months of $581 and an increase in the "Net unrealized loss on
securities available for sale" of $208. The increase in the unrealized
loss is a result of the market prices of the investment portfolio dropping
as of March 31, 1997.
OPERATING DATA SUMMARY
GENERAL
Net interest income for the first quarter of 1997 is $54 or 3.13% greater
than it was for the same period in 1996.
NON-INTEREST INCOME
Non-interest income decreased by $172 from the period ending March 31,
1997 compared to the period ending March 31, 1996. This decrease is
attributable to the sale of Other Real Estate in January of 1996. Total
proceeds were $215 with a net gain of $188.
NON-INTEREST EXPENSE
Non-interest expenses increased 1.44% or $15 for the period ending March
31, 1997 when compared to the period ending March 31, 1996.
NET INCOME
Net income for three months of 1997 is 11.43% lower than the same period
in 1996 and earnings per share decreased from $.73 to $.65, or 10.96%.
<PAGE>
<TABLE>
<CAPTION>
KEY OPERATING RATIOS
(unaudited) Ended March 31, 1997
THREE MONTH PERIOD
1997 1996
<S> <C> <C>
Return on assets (net income divided
by average assets) (1) 1.15% 1.17%
Return on Average Equity (net income
divided by average equity) (1) 12.65% 12.19%
Average Equity to Average Assets 9.12% 9.23%
Interest Rate Spread (difference between
average yield on interest earning assets
and average cost of interest bearing
liabilities) (1) 3.01% 2.98%
Net Interest Margin (net interest income as a
percentage of average interest earning assets (1) 3.78% 3.83%
Non-interest Expense to average assets (1) 2.10% 2.17%
Allowance for loan losses to total loans
at end of period 1.37% 1.44%
<FN>
(1) Annualized
</TABLE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits required by Item 601 of Regulation S-K.
The following exhibits required by Item 601 of Regulation S-K are
filed with the Securities and Exchange Commission as part of this
report. Exhibits incorporated by reference are indicated by footnote
reference to incorporated filing.
EXHIBIT (3) - ARTICLES OF INCORPORATION AND BYLAWS
PAGE OR
INCORPORATED
EXHIBIT <dagger>
(i) Restated Articles of Incorporation, as amended. 4(a)(1)
(ii) Bylaws ....................................... 4(b)(1)
EXHIBIT (4) - INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
(a) Articles of Incorporation and
Bylaws (see Exhibits 3(a) and (b))
EXHIBIT (10) - MATERIAL CONTRACTS
(a) Bonus Plan of Directors of the Bank* ......... 10(a)(2)
(b) Bonus Plan of Officers and Employees of the
Bank* ........................................ 10(b)(2)
(c) Non-Qualified Retirement Plan for Directors
of the Bank* ................................. 10(c)(2)
EXHIBIT (21) - SUBSIDIARIES OF THE REGISTRANT ..... 22(2)
EXHIBIT (27) - FINANCIAL DATA SCHEDULE
* Denotes Executive Compensation Plans and Arrangements.
<dagger>Where exhibit has been previously filed and is
incorporated herein by reference, exhibit numbers set forth
herein correspond to the exhibit number where such exhibit can be
found in the following reports of the registrant (Commission File
No. 0-26480) filed with the Securities and Exchange Commission:
(1) Registrant's current report on Form 8-K dated May 30, 1995
(2) Registrant's annual report on Form 10-K for the fiscal year ended
December 31, 1995
(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.
May 12, 1997 TODD R. TOPPEN
Todd R. Toppen
Secretary and Controller
(On behalf of the Registrant and as
Principal Financial Officer)
<PAGE>
EXHIBIT INDEX<dagger>
TO
FORM 10-Q
OF
PSB HOLDINGS, INC.
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
Pursuant to Section 102(d) of Regulation S-T
(17 C.F.R. <section>232.102(d))
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
<dagger>Exhibits required by Item 601 of Regulation S-K
which have been previously filed and are incorporated by
reference are set forth in Part IV, Item 14(c) of the Form
10-Q to which this Exhibit Index relates.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 11,062
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 37,178
<INVESTMENTS-CARRYING> 12,575
<INVESTMENTS-MARKET> 12,582
<LOANS> 138,154
<ALLOWANCE> 1,891
<TOTAL-ASSETS> 203,530
<DEPOSITS> 178,002
<SHORT-TERM> 5,631
<LIABILITIES-OTHER> 1,235
<LONG-TERM> 0
0
0
<COMMON> 1,805
<OTHER-SE> 16,857
<TOTAL-LIABILITIES-AND-EQUITY> 203,530
<INTEREST-LOAN> 2,994
<INTEREST-INVEST> 753
<INTEREST-OTHER> 10
<INTEREST-TOTAL> 3,757
<INTEREST-DEPOSIT> 1,901
<INTEREST-EXPENSE> 1,978
<INTEREST-INCOME-NET> 1,779
<LOAN-LOSSES> 45
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,059
<INCOME-PRETAX> 863
<INCOME-PRE-EXTRAORDINARY> 863
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 581
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
<YIELD-ACTUAL> 3.83
<LOANS-NON> 813
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,110
<ALLOWANCE-OPEN> 1,925
<CHARGE-OFFS> 79
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,891
<ALLOWANCE-DOMESTIC> 1,891
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
