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, 2000
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 June 30, 2000 was 855,945.
<PAGE>
PSB HOLDINGS, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 2000
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
June 30, 2000 (unaudited) and December 31,
1999 (derived from audited financial statements) 1
Consolidated Statements of Income,
Three Months Ended and Six Months Ended
June 30, 2000 and 1999 (unaudited) 2
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2000 and 1999 (unaudited) 3
Accountant's Review Report 4
Notes to Condensed Consolidated Financial
Statements 5
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to Vote of Securities
Holders 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
-i-
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
($ thousands - June 30, 2000 unaudited, December 31, 1999
derived from audited financial statements)
June 30, December 31,
ASSETS 2000 1999
<S> <C> <C>
Cash and due from banks $ 9,424 $ 11,926
Interest bearing deposits and money market funds 75 62
Federal funds sold 16
Securities:
Held to maturity (fair values of $12,888 and
$13,473 respectively) 13,232 13,843
Available for sale (at fair value) 47,757 46,489
Loans held for sale 88
Loans receivable, net of allowance for loans losses
of $2,299 and $2,099 in 2000 and 1999, respectively 206,943 180,524
Accrued interest receivable 1,862 1,746
Premises and equipment 4,291 3,897
Other assets 1,392 1,402
TOTAL ASSETS $285,080 $259,889
LIABILITIES
Noninterest-bearing deposits $30,711 $33,657
Interest-bearing deposits 191,270 168,697
Total deposits 221,981 202,354
Short-term borrowings 14,822 21,215
Long-term borrowings 25,000 13,000
Other liabilities 2,210 2,273
Total liabilities 264,013 238,842
STOCKHOLDERS' EQUITY
Common stock - no-par value, with a stated value of
$2 per share
Authorized - 1,000,000 shares
Issued - 902,425 shares 1,805 1,805
Additional paid-in capital 7,159 7,159
Retained earnings 14,856 13,929
Accumulated other comprehensive loss, net of tax (1,005) (1,043)
Treasury stock, at cost - 46,480 and 19,190 shares
at June 30, 2000 and December 31, 1999,
respectively (1,748) (803)
Total stockholders' equity 21,067 21,047
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $285,080 $259,889
</TABLE>
See Accountant's Review Report
-1-
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
($ thousands except share data -unaudited) Six Months Ended Three Months Ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Interest income
Interest and fees on loans $8,433 $6,659 $4,414 $3,392
Interest on investment securities
Taxable 1,433 1,412 714 701
Tax-exempt 299 331 146 163
Other interest income 48 58 31 25
Total interest income 10,213 8,460 5,305 4,281
Interest expense:
Deposits 4,407 3,749 2,353 1,861
Short-term borrowings 591 256 268 175
Long-term borrowings 566 138 370 57
Total interest expense 5,564 4,143 2,991 2,093
Net interest income 4,649 4,317 2,314 2,188
Provision for losses on loans 300 150 150 75
Net interest income after provision for
loan losses 4,349 4,167 2,164 2,113
Non-interest income:
Service fees 348 305 186 152
Gain on sale of loans 18 169 14 78
Investment product sales commissions 101 69 56 38
Other operating income 212 180 100 128
Total non-interest income 679 723 356 396
Non-interest expenses
Salaries and employee benefits 1,928 1,610 892 852
Occupancy 463 430 225 215
Data processing and other office
operations 228 220 105 101
Other operating 617 631 315 296
Total non-interest expenses 3,236 2,891 1,537 1,464
Income before income taxes 1,792 1,999 983 1,045
Provision for income taxes 539 642 303 323
Net income $1,253 $1,357 $680 $722
Basic and diluted earnings per share $1.44 $1.54 $0.78 $0.82
Weighted average shares outstanding 872,524 883,235 866,433 883,235
</TABLE>
See Accountant's Review Report
-2-
<PAGE>
<TABLE>
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
Six Months Ended
($ thousands - unaudited) June 30,
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net income $1,253 $1,357
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for depreciation, and net amortization 306 255
Provisions for loan losses 300 150
Gain on sale of loans (18) (169)
Changes in operating assets and liabilities:
Other assets (136) 890
Other liabilities (63) (913)
Net cash provided by operating activities 1,642 1,570
Cash flows from investing activities:
Proceeds from sale and maturities of:
Held to maturity securities 836 1,903
Available for sale securities 1,710 7,755
Payment for purchase of:
Held to maturity securities (249) (2,664)
Available for sale securities (2,929) (7,993)
Net increase in loans (26,789) (13,629)
Net (increase) decrease in interest-bearing deposits (13) 72
Net decrease (increase) in federal funds sold (16) 3,934
Capital expenditures (657) (224)
Net cash used in investing activities (28,107) (10,846)
Cash flows from financing activities:
Net increase (decrease) in deposits 19,627 (2,407)
Net increase (decrease) in short-term borrowings (6,393) 13,865
Net increase (decrease) in long-term borrowings 12,000 (1,770)
Dividends paid (326) (335)
Purchase of treasury stock (945)
Net cash provided by financing activities 23,963 9,353
Net increase (decrease) in cash and due from banks (2,502) 77
Cash and due from banks at beginning 11,926 8,752
Cash and due from banks at end $9,424 $8,829
Supplemental Cash Flow Information:
Cash paid during the period for :
Interest $5,315 $4,143
Income taxes 539 647
</TABLE>
See Accountant's Review Report
-3-
<PAGE>
ACCOUNTANT'S REVIEW REPORT
Board of Directors and Stockholders
PSB Holdings, Inc.
Wausau, Wisconsin
We have reviewed the accompanying unaudited condensed consolidated
balance sheet of PSB Holdings, Inc. and Subsidiary as of June 30, 2000,
and the related unaudited consolidated statements of income and cash
flows for the three-month and six-month periods then ended. These
financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying consolidated financial
statements for them to be in conformity with generally accepted
accounting principles.
WIPFLI ULLRICH BERTESLON LLP
Wipfli Ullrich Bertelson LLP
July 31, 2000
Wausau, Wisconsin
-4-
PSB HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEE ACCOUNTANT'S REVIEW REPORT
1. In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments necessary
to present fairly PSB Holdings, Inc.'s ("Company") financial
position, results of its operations and cash flows for the periods
presented, and all such adjustments are of a normal recurring
nature. The consolidated financial statements include the accounts
of all subsidiaries. All material intercompany transactions and
balances are eliminated. The results of operations for the interim
periods are not necessarily indicative of the results to be
expected for the full year.
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 1999
annual report for the Company's accounting policies which are
pertinent to these statements.
<PAGE>
4. Generally accepted accounting principles require comprehensive
income and its components, as recognized under the accounting
standards, to be displayed in a financial statement with the same
prominence as other financial statements. The disclosure
requirements with respect to the Form 10-Q have been included in
the Corporation's consolidated balance sheets. Comprehensive
income totaled the following for the periods indicated:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
($ thousands) 6/30/00 6/30/99 6/30/00 6/30/99
<S> <C> <C> <C> <C>
Net Income $1,253 $1,357 $680 $722
Change in net unrealized gain or
loss on securities available
for sale, net of tax 38 (605) (23) (394)
Comprehensive income $1,291 $752 $657 $328
</TABLE>
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FASB 133). FASB 133 establishes
new accounting and reporting requirements for derivative instruments,
including certain derivative instruments embedded in other contracts
and hedging activities. The standard requires all derivatives to be
measured at fair value and recognized as either assets or liabilities
in the statement of condition. Under certain conditions, a derivative
may be specifically designated as a hedge. Accounting for the changes
in the fair value of a derivative depends on the intended use of the
derivative and the resulting designation. Adoption of the standard is
required for the Corporation's December 31, 2001 financial statements
with early adoption allowed as of the beginning of any quarter after
June 30, 1998. Management is in the process of assessing the impact
and period of adoption of the standard. Adoption is not expected to
result in material financial impact.
-5-
5. Subsequent Event
During August 2000, the Company purchased land for a proposed branch
location from an executive officer for $475,000.
6. Investment Securities
<PAGE>
The amortized cost and estimated fair value of investment securities
are as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
($ thousands) COST GAINS LOSSES VALUE
JUNE 30, 2000
<S> <C> <C> <C> <C>
Securities held to maturity:
Obligations of states and
political subdivisions $13,232 $11 $355 $12,888
Securities available for sale:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $47,208 $11 $1,448 $45,771
Other equity securities 1,986 1,986
Totals $49,194 $11 $1,448 $47,757
DECEMBER 31, 1999
Securities held to maturity
Obligations of states and
political subdivisions $13,843 $18 $388 $13,473
Securities available for sale:
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $47,246 $13 $1,517 $45,742
Other equity securities 747 747
Totals $47,993 $13 $1,517 $46,489
</TABLE>
-6-
<PAGE>
7. Loans
<TABLE>
The composition of gross loans (excluding loans held for sale) at June
30, 2000, and December 31, 1999, follows:
<CAPTION>
6/30/00 % OF TOTAL 12/31/99 % OF TOTAL
($ thousands)
<S> <C> <C> <C> <C>
Commercial $ 51,461 24.59 $ 51,054 27.96
Real Estate 141,686 67.71 118,195 64.72
Consumer 16,095 7.70 13,374 7.32
Total $209,242 100.00 $182,623 100.00
</TABLE>
Gross loans outstanding increased 14.58% for the six months ended June
30, 2000, increasing to $209,242 at June 30, 2000 from $182,623 at
December 31, 1999.
The Company's process for monitoring loan quality includes weekly
analysis of delinquencies, nonperforming assets, and potential problem
loans. Loans are placed on a nonaccrual status when they become
contractually past due 90 days or more as to interest or principal
payments. All interest accrued but not collected for loans (including
applicable impaired loans) that are placed on nonaccrual or charged off
is reversed to interest income. The interest on these loans is
accounted for on the cash basis until qualifying for return to accrual
status. Loans are returned to accrual status when all principal and
interest amounts contractually due have been collected and there is
reasonable assurance that repayment will continue within a reasonable
time frame.
A loan is considered impaired when, based on current information, it is
probable that the bank will not collect all amounts due in accordance
with the contractual terms of the loan agreement. Impairment is based
on discounted cash flows of expected future payments using the loan's
initial effective interest rate or the fair value of the collateral if
the loan is collateral dependent.
The aggregate amount of nonperforming assets was $640 and $620 at June
30, 2000, and December 31, 1999, respectively. Nonperforming assets
are those which are either contractually past due 90 days or more as to
interest or principal payments, on a nonaccrual status, or the terms of
which have been renegotiated to provide a reduction or deferral of
interest or principal.
-7-
<PAGE>
The following table shows the amount of nonperforming assets and other
real estate owned as of the dates indicated.
<TABLE>
AGGREGATE AMOUNT OF NONPERFORMING LOANS
<CAPTION>
% of Total % of Total
06/30/00 LOANS 12/31/99 LOANS
<S> <C> <C> <C> <C>
Loans on a non-accrual basis
Real estate - mortgage $324 0.15 $225 0.12
Installment loans 107 0.05 52 0.03
Commercial & all other loans 209 0.11 343 0.19
Total non-accrual $640 0.31 $620 0.34
Loans contractually past due
30 through 89 days
and still accruing
Real estate - mortgage $494 0.24 $185 0.10
Installment loans 198 0.09 69 0.04
Commercial & all other loans 463 0.22 173 0.09
Total 30 - 89 days $1,155 0.55 $427 0.23
Loans contractually past due
90 days or more as to interest
or principal payments
Real estate - mortgage $0 $0
Installment loans
Commercial & all other loans
Total over 90 days $0 $0
Other real estate owned $24 $24
</TABLE>
-8-
<PAGE>
SUMMARY OF LOAN LOSS EXPERIENCE
The following table summarizes loan balances at the end of each period,
changes in the allowance for loan losses arising from loans charged off
and recoveries on loans previously charged off, by loan category and
additions to the allowance which have been charged to expense.
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
($ thousands) 6/30/00 12/31/99
<S> <C> <C>
Allowance for loan losses at
beginning of period $2,099 $1,947
Loans charged off
Commercial & Industrial (100) (322)
Real Estate - Mortgage (14) (72)
Installment & Other
Consumer Loans (6) (38)
Total Charge Offs (120) (432)
Recoveries on loans previously
charged off
Commercial & Industrial 15 67
Real Estate - Mortgage 3 7
Installment & Other
Consumer Loans 2 50
Total Recoveries 20 124
Net loans charged off (100) (308)
Additions charged to operations 300 460
Allowance for loan losses
at end of period $2,299 $2,099
</TABLE>
-9-
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(All $ amounts are in thousands, except per share amounts)
This discussion will focus on information about the Company's financial
condition and results of operations that are not otherwise apparent
from the consolidated financial statements included in this report.
Reference should be made to those statements presented elsewhere in
this report for an understanding of the following discussion and
analysis.
This report contains certain of management's expectations and other
forward-looking information regarding the Company. While the Company
believes that these forward-looking statements are based on reasonable
assumptions, all such statements involve risk and uncertainties that
could cause actual results to differ materially from these contemplated
<PAGE>
in this report. A more comprehensive discussion of the risks and
uncertainties which could cause actual results to be materially
different from such expectations are set forth in Part I of the
Company's Annual Report of Form 10-K for the year ended December
31, 1999 under the heading "Cautionary Statement Regarding
Forward-Looking Information."
BALANCE SHEET
During the first six months of 2000, total assets increased by $25,191.
Fed funds sold and investments increased $673. Total loans (excluding
loans held for sale) increased $26,619. The majority of the increase
in the loan portfolio was from real estate loans. Real estate loans
increased $23,491 and commercial loans increased $407. Total deposits
increased $19,627. Short-term borrowings decreased $6,393. Within
short-term borrowings, fed funds purchased decreased $3,090 and
repurchase agreements decreased $3,303. Long-term borrowings increased
$12,000 from additional FHLB advances.
LIQUIDITY
Liquidity refers to the ability of the Company to generate adequate
amounts of cash to meet the Company's need for cash. The Company
manages its liquidity to provide adequate funds to support borrowing
needs and deposit flow of its customers. Management views liquidity as
the ability to raise cash at a reasonable cost or with a minimum of
loss and as a measure of balance sheet flexibility to react to
marketplace, regulatory, and competitive changes. The primary sources
of the Company's liquidity are marketable assets maturing within one
year. At June 30, 2000, the carrying value of debt securities maturing
within one year amounted to $5,498 or 9.32% of the total debt
securities portfolio. Additional loan advances from the FHLB totaling
approximately $6,000 were also available at June 30, 2000. Earning
assets maturing within one year amounted to $91,812 at June 30, 2000.
Interest-bearing deposits maturing within one year totaled $91,353.
The Company attempts, when possible, to match relative maturities of
assets and liabilities while maintaining the desired net interest
margin. Marketable assets maturing within one year will continue to
be the primary source of liquidity along with stable earnings and
strong capital position.
-10-
CAPITAL RESOURCES
Stockholders' equity at June 30, 2000 increased $20, or 0.10% since
December 31, 1999. This net increase was composed of: net income for
the first six months of $1,253, a cash dividend of $326, and a decrease
in the "net unrealized loss on securities available for sale" of $38.
Treasury stock purchases totaled $945 during the six months ended June
30, 2000 or an average of $34.63 per share repurchased during that
period. Equity to assets at June 30, 2000 was 7.39%.
Cash dividends of $0.38 per share were declared in the first half of
2000, representing a payout ratio of 26.02% for the period ended June
30, 2000.
The adequacy of the Company's capital is regularly reviewed to ensure
sufficient capital is available for current and future needs and is in
compliance with regulatory guidelines. As of June 30, 2000, the
<PAGE>
Company's tier 1 risk-based capital ratio, total risk-based capital,
and tier 1 leverage ratio were well in excess of regulatory minimums.
RESULTS OF OPERATIONS
Net income for the six months ended June 30, 2000, totaled $1,253, a
decrease of $104 over the $1,357 earned during the same period of 1999.
Earnings per share were $1.44 for the six months ended June 30, 2000
and $1.54 for the same period in 1999. Cash dividends declared were
$0.38 per share in June 2000 and 1999.
Return on average common stockholders' equity amounted to 11.90% for
the six months ended June 30, 2000; compared to 13.07% for the six
months ended June 30, 1999.
Return on average assets for the six months ended June 30, 2000
amounted to 0.92%; compared to 1.17% for the six months ended June
30, 1999.
NET INTEREST INCOME
Net interest income is the most significant component of earnings. For
analysis purposes, interest earned on tax exempt assets is adjusted to
a fully taxable equivalent basis.
Total earning assets grew $27.2 million in the first six months of
2000. The annualized net interest margin for the first six months of
2000 was 3.77% or 20 basis points less than the 3.97% margin in the
first six months of 1999. The interest rate spread also decreased to
3.02% from 3.16% reported for June 30, 1999.
The Company's net interest income was impacted by the interest rate
environment encountered in the first six months of 2000 as compared to
1999. The higher rate environment increased our yields on earning
assets to 8.15% compared to 7.80% in 1999. However, our costs for
interest-bearing deposits also increased to 5.13% from 4.64%.
-11-
PROVISION FOR LOAN LOSSES
Management determines the adequacy of the allowance for loan losses
based on past loan experience, current economic conditions, composition
of the loan portfolio, and the potential for future loss. Accordingly,
the amount charged to expense is based on management's evaluation of
the loan portfolio. It is the Company's policy that when available
information confirms that specific loans and leases, or portions
thereof, including impaired loans, are uncollectible, these amounts are
promptly charged off against the allowance. The provision for loan
losses was $300 for the six months ended June 30, 2000 and $150 for the
six months ended June 30, 1999. The allowance for loan losses as a
percentage of gross loans outstanding was $2,299 or 1.10% of total
loans on June 30, 2000, compared to $2,099 or 1.15% of total loans on
December 31, 1999. Net charge-offs as a percentage of average loans
outstanding were .05% during the six months ended June 30, 2000 and
.01% during the first six months of 1999.
Nonperforming loans are reviewed to determine exposure for potential
<PAGE>
loss within each loan category. The adequacy of the allowance for
loan losses is assessed based on loan quality and other pertinent
loan portfolio information. The adequacy of the reserve and the
provision for loan losses is consistent with the composition of the
loan portfolio and recent loan quality history.
NONINTEREST INCOME
Noninterest income decreased 6.09% to $679 during the six months ended
June 30, 2000, from $723 during the six months ended June 30, 1999.
Fee income on deposit accounts increased $43 to $348 during the six
months ended June 30, 2000, from $305 during six months ended June 30,
1999. Gain on the sale of loans decreased $151 to $18 for the six
months ended June 30, 2000 from $169 for the six months ended June 30,
1999. Other operating income in 2000 includes a gain of $57 from an
easement required to be sold to the City of Wausau for road
construction. A gain of $12 was also recognized from the sale of
property purchased by the Bank once considered a potential branch site.
Other noninterest income included an increase of $32 in commissions
from investment product sales.
NONINTEREST EXPENSE
Noninterest expense increased 11.93% to $3,236 for the six months ended
June 30, 2000, from $2,891 for the six months ended June 30, 1999. The
Company instituted an incentive compensation program for 2000 and is
expensing the estimated costs of the program throughout 2000. The
Company is expanding the use of technology throughout the bank in order
to provide increased customer service and allow for more efficient
consolidation of its operational area. The Company has placed emphasis
on increased productivity and standardization of programs and
procedures throughout all of its locations.
-12-
<PAGE>
<TABLE>
<CAPTION>
KEY OPERATING RATIOS
Three Months and Six Months Ended June 30, 2000 and 1999 (unaudited)
Six-Month Period Three-Month Period
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Return on assets (net income divided
by average assets) (1) 0.92% 1.17% 0.98% 1.22%
Return on Average Equity (net income
divided by average equity) (1) 11.90% 13.07% 12.81% 13.77%
Average Equity to Average Assets 7.73% 8.95% 7.63% 8.90%
Interest Rate Spread (difference between
average yield on interest earning assets
and average cost of interest bearing
liabilities) (1) (2) 3.02% 3.16% 2.88% 3.17%
Net Interest Margin (net interest
income as a percentage of average
interest earning assets) (1) (2) 3.77% 3.97% 3.65% 3.97%
Non-interest Expense to average assets (1) 2.37% 2.54% 2.21% 2.56%
Allowance for loan losses to total loans
at end of period 1.10% 1.25% 1.10% 1.25%
<FN>
(1) Annualized
(2) Tax exempt income has been adjusted to its
fully taxable equivalent with a 34% tax rate.
</TABLE>
-13-
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
The following table presents consolidated financial data of PSB
Holdings, Inc. and Subsidiary.
2000
Second First
QUARTER QUARTER
($ in thousands except per share amounts)
<S> <C> <C>
FINANCIAL HIGHLIGHTS:
Earnings and Dividends:
Net interest income $2,314 $2,331
Provision for loan losses 150 105
Other noninterest income 356 327
Other noninterest expense 1,537 1,698
Net income 680 573
Per common share
Basic and diluted earnings 0.78 0.65
Dividends declared 0.38 0.00
Book value 24.61 24.42
Average common shares 866,433 878,616
Dividend payout ratio(1) 26.02% 0.00%
Balance Sheet Summary:
Loans net of unearned income 206,943 195,224
Assets 285,080 270,315
Deposits 221,981 208,027
Shareholders' equity 21,067 21,320
Average balances:
Loans net of unearned income 201,128 188,247
Assets 277,698 263,364
Deposits 215,004 204,245
Shareholders' equity 21,194 21,138
Performance Ratios:
Return on average assets (1) 0.98% 0.87%
Return on average common equity (1) 12.81% 10.88%
Tangible Equity to assets 7.74% 8.25%
Net loan charge-offs as a percentage
of average loans 0.05% 0.01%
Nonperforming assets as a percentage
of average loans 0.32% 0.54%
Net interest margin (1) (2) 3.65% 3.89%
Efficiency ratio (2) 55.99% 62.04%
Service fee revenue as a percentage of
average assets (1) 0.27% 0.24%
<FN>
(1) Annualized
(2) Tax-exempt income has been adjusted to its fully taxable equivalent
with a 34% tax rate
</TABLE>
-14-
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change in the information provided in
response to Item 7A of the Company's Form 10-K for the year ended
December 31, 1999.
-15-
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
The annual meeting of shareholders of the Company was held on April 18,
2000. 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:
<PAGE>
<TABLE>
MATTER SHARES
<CAPTION>
Broker
For Withheld Against Abstain Non-Vote
Election of Directors
<S> <C> <C> <C> <C> <C>
(a) Leonard C. Britten 556,321 11,223 N/A N/A 0
(b) Gordon P. Connor 567,544 0 N/A N/A 0
(c) Patrick L. Crooks 567,534 10 N/A N/A 0
(d) William J. Fish 567,544 0 N/A N/A 0
(e) George L. Geisler 556,201 11,343 N/A N/A 0
(f) Charles A. Ghidorzi 561,459 6,085 N/A N/A 0
(g) Gordon P. Gullickson 567,259 285 N/A N/A 0
(h) Lawrence Hanz, Jr. 564,679 2,865 N/A N/A 0
(i) David K. Kopperud 567,534 10
(j) Thomas R. Polzer 567,454 90 N/A N/A 0
(k) William M. Reif 567,544 0 N/A N/A 0
(l) Thomas A. Riiser 567,544 0 N/A N/A 0
(m) Eugene Witter 567,214 330 N/A N/A 0
</TABLE>
-16-
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-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.
Exhibit
NUMBER DESCRIPTION
3.1 Restated Articles of Incorporation, as amended (incorporated by
reference to Exhibit 4(a) to the Company's Current Report on
Form 8-K dated May 30, 1995)
1.2 Bylaws (incorporated by reference to Exhibit 4(b) to the
Company's Current Report on Form 8-K dated May 30, 1995)
4.1 Articles of Incorporation and Bylaws (see Exhibits 3.1 and 3.2)
<PAGE>
10.1 Bonus Plan of Directors of the Bank (incorporated by reference
to Exhibit 10(a) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995)*
10.2 Bonus Plan of Officers and Employees of the Bank* (incorporated
by reference to Exhibit 10(b) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995)*
10.3 Nonqualified Retirement Plan for Directors of the Bank
(incorporated by reference to Exhibit 10(c) to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1995)*
10.4 Senior Management Incentive Compensation Plan*
21.1 Subsidiaries of the Company (incorporated by reference to
Exhibit 22 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995)
27.1 Financial Data Schedule (electronic filing only)
*Denotes Executive Compensation Plans and Arrangements
(b) Reports on Form 8-K:
None.
-17-
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 11, 2000 TODD R. TOPPEN
Todd R. Toppen
Secretary and Controller
(On behalf of the Registrant and as
Principal Financial Officer)
-18-
EXHIBIT INDEX
TO
FORM 10-Q
OF
PSB HOLDINGS, INC.
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
Pursuant to Section 102(d) of Regulation S-T
(17 C.F.R. '232.102(d))
10.4 SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
27.1 FINANCIAL DATA SCHEDULE (ELECTRONIC FILING ONLY)
