10-Q 1 0001.txt 10-Q - 06/30/2000 FOR PSB HOLDINGS, INC. 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. 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- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PSB HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS
($ thousands - June 30, 2000 unaudited, December 31, 1999 derived from audited financial statements) June 30, December 31, ASSETS 2000 1999 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 $259,889
See Accountant's Review Report -1- PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME
($ thousands except share data -unaudited) Six Months Ended Three Months Ended June 30, June 30, 2000 1999 2000 1999 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 $0.82 Weighted average shares outstanding 872,524 883,235 866,433 883,235
See Accountant's Review Report -2- PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW
Six Months Ended ($ thousands - unaudited) June 30, 2000 1999 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
See Accountant's Review Report -3- 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. 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:
Six Months Ended Three Months Ended ($ thousands) 6/30/00 6/30/99 6/30/00 6/30/99 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
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 $475,000. 6. Investment Securities The amortized cost and estimated fair value of investment securities are as follows:
Gross Gross Estimated Amortized Unrealized Unrealized Fair ($ thousands) COST GAINS LOSSES VALUE JUNE 30, 2000 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 $46,489
-6- 7. Loans The composition of gross loans (excluding loans held for sale) at June 30, 2000, and December 31, 1999, follows:
6/30/00 % OF TOTAL 12/31/99 % OF TOTAL ($ thousands) 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
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- The following table shows the amount of nonperforming assets and other real estate owned as of the dates indicated. AGGREGATE AMOUNT OF NONPERFORMING LOANS
% of Total % of Total 06/30/00 LOANS 12/31/99 LOANS 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 $24
-8- SUMMARY OF LOAN LOSS EXPERIENCE The following table summarizes loan balances at the end of each period, changes in the allowance for loan losses arising from loans charged off and recoveries on loans previously charged off, by loan category and additions to the allowance which have been charged to expense.
Six Months Year Ended Ended ($ thousands) 6/30/00 12/31/99 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
-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 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 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 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 $2,891 for the six months ended June 30, 1999. The Company instituted an incentive compensation program for 2000 and is expensing the estimated costs of the program throughout 2000. The Company is expanding the use of technology throughout the bank in order to provide increased customer service and allow for more efficient consolidation of its operational area. The Company has placed emphasis on increased productivity and standardization of programs and procedures throughout all of its locations. -12-
KEY OPERATING RATIOS Three Months and Six Months Ended June 30, 2000 and 1999 (unaudited) Six-Month Period Three-Month Period 2000 1999 2000 1999 Return on assets (net income divided by average assets) (1) 0.92% 1.17% 0.98% 1.22% Return on Average Equity (net income divided by average equity) (1) 11.90% 13.07% 12.81% 13.77% Average Equity to Average Assets 7.73% 8.95% 7.63% 8.90% Interest Rate Spread (difference between average yield on interest earning assets and average cost of interest bearing liabilities) (1) (2) 3.02% 3.16% 2.88% 3.17% Net Interest Margin (net interest income as a percentage of average interest earning assets) (1) (2) 3.77% 3.97% 3.65% 3.97% Non-interest Expense to average assets (1) 2.37% 2.54% 2.21% 2.56% Allowance for loan losses to total loans at end of period 1.10% 1.25% 1.10% 1.25% (1) Annualized (2) Tax exempt income has been adjusted to its fully taxable equivalent with a 34% tax rate.
-13- SELECTED FINANCIAL DATA
The following table presents consolidated financial data of PSB Holdings, Inc. and Subsidiary. 2000 Second First QUARTER QUARTER ($ in thousands except per share amounts) 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% (1) Annualized (2) Tax-exempt income has been adjusted to its fully taxable equivalent with a 34% tax rate
-14- 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: MATTER SHARES
Broker For Withheld Against Abstain Non-Vote Election of Directors (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
-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) 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)