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, 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: 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, 1997 was 886,190.
<PAGE>
PSB HOLDINGS, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 1997
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of
Income, Six Months Ended and
Three Months Ended June 30, 1997
(unaudited) and June 30, 1996
(unaudited) 1
Condensed Consolidated Balance
Sheets June 30, 1997 (unaudited)
and December 31, 1996 (derived from
audited financial statements) 2
Condensed Consolidated Statements
of Cash Flows Six Months and Three
Months Ended June 30, 1997 (unaudited)
and June 30, 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
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to Vote of
Securities Holders 9
Item 5. Other Information
Item 6. Exhibits and Reports on form 8-K 10
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
($ thousands except share data -unaudited) Six Months Ended Three Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $6,115 $5,734 $3,121 $2,866
Interest on investment securities
Taxable 1,223 1,135 612 591
Tax-exempt 287 276 145 139
Other interest income 30 123 20 28
Total interest income 7,655 7,268 3,898 3,624
Interest expenses:
Deposits 3,825 3,479 1,924 1,738
Short-term borrowings 194 352 117 174
Total interest expense 4,019 3,831 2,041 1,912
Net interest income before provision
for losses on loans 3,636 3,437 1,857 1,712
Provision for losses on loans 90 90 45 45
Net interest income 3,546 3,347 1,812 1,667
Other income:
Service fees 232 241 115 121
Insurance commissions 35 43 9 14
Net gains on other real estate -0- 188 -0- -0-
Net gains on securities sales -0- -0- -0- -0-
Other operating income 92 52 47 29
Total other income 359 524 171 164
Other expenses
Salaries and related benefits 1,278 1,146 688 621
Net occupancy expense 355 346 167 165
FDIC insurance 10 1 5 -0-
Computer operations 26 169 18 124
Other operating expense 552 485 284 193
Total other expenses 2,221 2,147 1,162 1,103
Income before income taxes 1,684 1,724 821 728
Provision for income taxes 542 573 260 233
Net income $1,142 $1,151 $ 561 $ 495
Income per share
Basis: Weighted average of 890,099 shares
in 1997
Weighted average of 902,425 shares
in 1996
Net income per share $ 1.28 $ 1.28 $ .63 $ .55
</TABLE>
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
($ thousands) June 30, December 31,
1997* 1996*
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 11,812 $ 10,152
Federal funds sold -0- -0-
Investment securities -
Held to maturity
(Market value $12,212 & $11,763
at 1997 & 1996 respectively) 12,146 11,714
Available for sale (at fair market
value, cost $38,391 & $39,881
at 1997 & 1996 respectively) 38,368 39,871
Total loans 141,646 138,011
Allowance for loan losses (1,798) (1,925)
Net Loans 139,848 136,086
Bank premises and equipment 3,600 3,701
Other assets 2,628 2,634
TOTAL ASSETS $ 208,402 $ 204,158
LIABILITIES
Noninterest-bearing deposits $ 25,837 $ 28,486
Interest-bearing deposits 153,765 149,643
Total deposits 179,602 178,129
Federal funds purchased 4,295 2,197
Short-term borrowings 4,274 3,569
Other liabilities 1,489 1,974
Total liabilities 189,660 185,869
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 10,481 9,649
Net unrealized loss on securities
available for sale, net of deferred
income taxes (19) (9)
Treasury stock, at cost - 16,235 shares
in 1997, 7,000 shares in 1996 (684) (315)
Total stockholders' equity 18,742 18,289
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 208,402 $204,158
<FN>
*The consolidated balance sheet at June 30, 1997 is unaudited. The
December 31, 1996 consolidated balance sheet is derived from audited financial
statements.
</TABLE>
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
($ thousands - unaudited) 1997 1996 1997 1996
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $1,142 $ 1,151 $ 561 $ 495
Provision for depreciation, and
net amortization 227 182 114 111
Provisions for loan losses 90 90 45 45
Changes in operating assets and
liabilities:
Gain on sale of other real estate -0- (188)
Other assets 6 (548) 150 (204)
Other liabilities (485) (378) 254 148
Net cash provided by operating activities 980 309 1,124 595
Cash flows from investing activities:
Proceeds from sale and maturities of:
Held to maturity securities 980 971 780 826
Available for sale securities 3,957 10,077 980 3,980
Payment for purchase of:
Held to maturity securities (1,417) (1,791) (350) (500)
Available for sale securities (2,473) (12,033) (1,978) (2,182)
Net change in loans (3,852) ( 4,263) (3,630) (1,778)
Net (increase) decrease in
federal funds sold -0- 3,177 -0- (2,506)
Proceeds from sale of other real
estate -0- 215 -0- -0-
Capital expenditures (112) (640) (33) (531)
Net cash used in investing activities (2,917) (4,287) (4,231) (2,691)
Cash flows from financing activities:
Net increase in deposits 1,473 3,663 1,599 7,555
Net increase in short-term borrowings 705 1,165 241 506
Net increase (decrease) in federal
funds purchased 2,098 -0- 2,696 (1,246)
Dividends paid (310) (328) (310) (328)
Purchase of stock (369) -0- (369) -0-
Net cash provided by financing
activities 3,597 4,500 3,857 6,487
Net increase in cash and cash
equivalents 1,660 522 750 4,391
Cash and cash equivalents at
beginning of period 10,152 10,868 11,062 6,999
Cash and cash equivalents at end of
period $11,812 $11,390 $11,812 $11,390
Supplemental cash flow information:
Cash paid during the period for :
Interest 4,019 3,831 2,041 1,912
Income taxes 492 505 446 470
</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 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 increased by $4,244 from December 31, 1996 to June 30,
1997. This is an increase of 2.08% due to increases in deposits of $1,473 and
increases in borrowings of $2,803. Average total assets for June were
$204,807.
LOANS
Net loans have increased by $3,762 from December 31, 1996 to June 30,
1997. This is an increase of 2.76%.
CASH AND INVESTMENTS
Cash increased by approximately $1,660 as of June 30, 1997 compared to
December 31, 1996. Investments, on the other hand decreased by $1,071 or
2.08%. Two securities totalling $2,300 were sold without replacement.
DEPOSITS
Deposits increased by $1,473 from December 31, 1996 to June 30, 1997.
Reflective of the day of the week of June 30. Average deposits for June
were $178,897.
SHORT TERM BORROWINGS
Fed funds purchased increased by $2,098 from December 31, 1996 to June 30,
1997. Repurchase agreements increased $705.
EQUITY
Equity grew by $453 or 2.48% due to the following: Net income for the
first six months of $1,142, an increase in the "Net unrealized loss on
securities available for sale" of $10, dividends paid of $310 and treasury
stock acquired of $369. The increase in the unrealized loss is a result
of the market prices of the investment portfolio dropping as of June 30,
1997.
OPERATING DATA SUMMARY
GENERAL
Net interest income for the first half of 1997 is $199 or 5.79% greater
than it was for the same period in 1996.
NON-INTEREST INCOME
Non-interest income decreased by $165 in the period ending June 30, 1997
compared to the period ending June 30, 1996. This decrease is attribuable
to the sale of Other Real Estate in January of 1996. Total proceeds from the
sale were $215 with a net gain of $188.
NON-INTEREST EXPENSE
Non-interest expenses increased by 3.45% or $74 for the period ending
June 30, 1997 when compared to the period ending June 30, 1996.
NET INCOME
Net income for the first half of 1997 is .78% lower than the same period
in 1996 but earnings per share increased due to the reduced weighted
average number of shares outstanding in the first half of 1997.
<PAGE>
<TABLE>
KEY OPERATING RATIOS
(unaudited) Ended June 30, 1997
<CAPTION>
SIX MONTH PERIOD THREE MONTH PERIOD
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Return on assets (net
income divided by average
assets)(1) 1.13% 1.20% 1.10% 1.03%
Return on Average Equity
(net income divided by
average equity)(1) 12.37% 13.33% 12.09% 11.05%
Average Equity to Average
Assets 9.12% 9.25% 9.12% 9.29%
Interest Rate Spread
(difference between
average yield on interest
earning assets and average
cost of interest bearing
liabilities) (1) 3.02% 2.96% 3.06% 2.91%
Net Interest Margin (net
interest income as a
percentage of average
interest earning assets)(1) 3.75% 3.84% 3.83% 3.84%
Non-interest Expense to
average assets(1) 2.19% 2.32% 2.28% 2.29%
Allowance for loan losses
to total loans at end of
period 1.27% 1.46% 1.27% 1.46%
<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.
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)
<PAGE>
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.
August 14, 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 10Q
OF
PSB HOLDINGS, INC.
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 11,812
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 38,368
<INVESTMENTS-CARRYING> 12,146
<INVESTMENTS-MARKET> 12,212
<LOANS> 141,646
<ALLOWANCE> 1,798
<TOTAL-ASSETS> 208,402
<DEPOSITS> 179,602
<SHORT-TERM> 8,569
<LIABILITIES-OTHER> 1,489
<LONG-TERM> 0
0
0
<COMMON> 1,805
<OTHER-SE> 16,937
<TOTAL-LIABILITIES-AND-EQUITY> 208,402
<INTEREST-LOAN> 6,115
<INTEREST-INVEST> 1,510
<INTEREST-OTHER> 30
<INTEREST-TOTAL> 7,655
<INTEREST-DEPOSIT> 3,825
<INTEREST-EXPENSE> 4,019
<INTEREST-INCOME-NET> 3,636
<LOAN-LOSSES> 90
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,221
<INCOME-PRETAX> 1,684
<INCOME-PRE-EXTRAORDINARY> 1,684
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,142
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
<YIELD-ACTUAL> 3.75
<LOANS-NON> 894
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,697
<ALLOWANCE-OPEN> 1,925
<CHARGE-OFFS> 239
<RECOVERIES> 22
<ALLOWANCE-CLOSE> 1,798
<ALLOWANCE-DOMESTIC> 1,798
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
