10-Q 1 psb10q.txt PSB HOLDINGS, INC. 10-Q - 6/30/01 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, 2001 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, 2001 was 839,705. PSB HOLDINGS, INC. FORM 10-Q QUARTER ENDED MARCH 31, 2001 PAGE NO. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets June 30, 2001 (unaudited) and December 31, 2000 (derived from audited financial statements) 1 Consolidated Statements of Income, Three Months Ended and Six Months Ended June 30, 2001 and 2000 (unaudited) 2 Condensed Consolidated Statements of Cash Flows Six Months Ended June 30, 2001 and 2000 (unaudited) 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Quantitative and Qualitative Disclosures About Market Risk 14 -i- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
PSB HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS ($ thousands - June 30, 2001 unaudited, December 31, 2000 derived from audited financial statements) June 30, December 31, 2001 2000 ASSETS Cash and due from banks $ 9,720 $ 9,226 Federal funds sold 9,560 53 Interest-bearing deposits and money market funds 803 88 Investment securities: Held to maturity (fair values of $16,772 and $14,005, respectively) 18,849 13,975 Available for sale (at fair value) 46,662 48,123 Federal Home Loan Bank stock, at cost 2,084 2,008 Loans held for sale 986 114 Loans receivable, net of allowance for loan losses of $2,682 at June 30, 2001 and $2,407 at December 31, 2000 218,300 224,702 Accrued interest receivable 1,971 2,102 Premises and equipment 4,522 4,751 Other assets 1,260 1,097 TOTAL ASSETS $314,717 $306,239 LIABILITIES Non-interest-bearing deposits $29,497 $35,192 Interest-bearing deposits 211,380 206,342 Total deposits 240,877 241,534 Short-term borrowings 9,047 11,515 Long-term borrowings 38,000 28,000 Other liabilities 2,725 2,915 Total liabilities 290,649 283,964 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 17,016 15,727 Accumulated other comprehensive loss, net of tax 379 (125) Treasury stock, at cost - 62,720 shares at June 30, 2001 and December 31, 2000 (2,291) (2,291) Total stockholders' equity 24,068 22,275 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $314,717 $306,239
-1- PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended Three Months Ended June 30, June 30, ($ thousands except share data - unaudited) 2001 2000 2000 2000 Interest income: Interest and fees on loans $ 9,931 $ 8,433 $ 4,910 $ 4,414 Interest on investment securities: Taxable 1,458 1,433 710 714 Tax-exempt 351 299 192 146 Other interest and dividends 284 48 167 31 Total interest income 12,024 10,213 5,979 5,305 Interest expense: Deposits 5,490 4,407 2,629 2,353 Short-term borrowings 305 591 150 268 Long-term borrowings 1,112 566 570 370 Total interest expense 6,907 5,564 3,349 2,991 Net interest income 5,117 4,649 2,630 2,314 Provision for loan losses 300 300 150 150 Net interest income after provision for loan losses 4,817 4,349 2,480 2,164 Noninterest income: Service fees 498 348 252 186 Net realized gain on sale of premises and equipment 54 57 Gain on sale of loans 112 18 83 14 Investment product sales commissions 120 101 74 56 Other operating income 126 155 46 100 Total noninterest income 910 679 455 356 Noninterest expenses: Salaries and employee benefits 2,028 1,928 1,016 892 Occupancy 463 463 227 225 Data processing and other office operations 242 228 120 105 Other operating 709 617 375 315 Total noninterest expenses 3,442 3,236 1,738 1,537 Income before income taxes 2,285 1,792 1,197 983 Provision for income taxes 677 539 358 303 Net income $ 1,608 $ 1,253 $ 839 $ 680 Basic and diluted earnings per share $ 1.91 $ 1.44 $ 1.00 $ 0.78 Weighted average shares outstanding 839,705 872,524 839,705 866,433
-2- PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW
Six Months Ended June 30, ($ thousands - unaudited) 2001 2000 Cash flows from operating activities: Net income $1,608 $1,253 Adjustments to reconcile net income to net cash provided by operating activities: Provision for depreciation and net amortization 310 306 Provision for loan losses 300 300 Gain on sale of loans (112) (18) Gain on sale of premises and equipment (54) (57) Changes in operating assets and liabilities: Other assets (315) (79) Other liabilities (190) (63) Net cash provided by operating activities: 1,547 1,642 Cash flows from investing activities: Proceeds from sale and maturities of: Held to maturity securities 930 836 Available for sale securities 19,664 1,710 Payment for purchase of: Held to maturity securities (5,805) (249) Available for sale securities (17,457) (2,929) Increase in Federal Home Loan Bank stock (76) Net change in loans 5,590 (26,789) Net change in interest-bearing deposits (715) (13) Net change in federal funds sold (9,507) (16) Capital expenditures (264) (718) Proceeds from sale of premises and equipment 31 61 Net cash used in investing activities (7,609) (28,107) Cash flows from financing activities: Net change in deposits (657) 19,627 Net change in short-term borrowings (2,468) (6,393) Net change in long-term borrowings 10,000 12,000 Dividends paid (319) (326) Purchase of treasury stock (945) Net cash provided by financing activities 6,556 23,963 Net increase (decrease) in cash and due from banks 494 (2,502) Cash and due from banks at beginning 9,226 11,926 Cash and due from banks at end $9,720 $9,424 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for: Interest $6,860 $5,315 Income taxes 760 539
-3- PSB HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - GENERAL 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. These interim consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission and, therefore, certain information and footnote disclosures normally presented in accordance with generally accepted accounting principles have been omitted or abbreviated. The information contained in the consolidated financial statements and footnotes in the Company's 2000 annual report on Form 10-K, should be referred to in connection with the reading of these unaudited interim financial statements. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Estimates that are susceptible to significant change include the determination of the allowance for credit losses and the valuations of investments. NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities." Under these SFAS, the Company must recognize all material derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. Changes in fair value are generally recognized in earnings during the period the changes occur. The adoption of SFAS No. 133 and No. 138 did not have a material impact on the Company's financial condition or results of operations. Effective April 1, 2001, the Company adopted SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." This SFAS revises the standards for accounting for and reporting securitizations and other transfers of financial assets and collateral and extinguishments of liabilities originally governed by SFAS No. 125. The adoption of SFAS No. 140 did not have material impact on the Company's financial condition or results of operations. -4- In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 supersedes Accounting Principles Board (APB) Opinion No. 16, "Business Combinations", and SFAS No. 38, "Accounting for Preacquisition Contingencies of Purchased Enterprises." SFAS No. 141 requires the use of the purchase method of accounting for business combinations initiated after June 30, 2001. SFAS No. 142 supersedes APB Opinion No. 17, "Intangible Assets." SFAS No. 142 addresses how intangible assets acquired outside of a business combination should be accounted for upon acquisition and how goodwill and other intangible assets should be accounted for after they have been initially recognized. SFAS No. 142 eliminates the amortization for goodwill and other intangible assets with indefinite lives. Other intangible assets with a finite life will be amortized over their useful life. Goodwill and other intangible assets with indefinite useful lives shall be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. The Corporation's adoption of SFAS No. 142 on January 1, 2002 is not anticipated to have a material impact on the consolidated financial statements as of the date of adoption. NOTE 3 - EARNINGS PER SHARE Earnings per share of common stock is based on the weighted average number of common shares outstanding during the period. On April 17, 2001, the stockholders of the Company approved an incentive stock option plan. The plan calls for up to 15,000 options to purchase common shares to be issued to selected officers during 2001 and 2002. Criteria regarding the extent and timing of stock option grants have not been finalized, and no grants have been made as of June 30, 2001. NOTE 4 - COMPREHENSIVE INCOME 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 Company's consolidated balance sheets. Comprehensive income totaled the following for the periods indicated:
Six Months Ended Three Months Ended ($ thousands - unaudited) 6/30/01 6/30/00 6/30/01 6/30/00 Net income $1,608 $1,253 $ 839 $ 680 Change in net unrealized gain or loss on securities available for sale, net of tax 504 38 72 (23) Comprehensive income $2,112 $1,291 $ 911 $ 657
-5- NOTE 5 - 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, 2001 Securities held to maturity: Obligations of states and political subdivisions $18,849 $ 294 $ 29 $19,114 Securities available for sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $46,030 $ 643 $ 59 $46,614 Other equity securities 48 48 Totals $46,078 $ 643 $ 59 $46,662 DECEMBER 31, 2000 Securities held to maturity: Obligations of states and political subdivisions $13,975 $ 101 $ 71 $14,005 Securities available for sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $48,279 $ 195 $ 399 $48,075 Other equity securities 48 48 Totals $48,327 $ 195 $ 399 $48,123
-6- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is presented to assist in the understanding and evaluation of the Company's financial condition and results of operations. It is intended to complement the unaudited financial statements, footnotes, and supplemental financial data appearing elsewhere in this Form 10-Q and should be read in conjunction therewith. Dollar amounts are in thousands, except per share amounts. Forward-looking statements have been made in this document that are subject to risks and uncertainties. While the Company believes 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 those contemplated in this report. The assumptions, risks, and uncertainties relating to the forward-looking statements in this report include those described under the caption "Cautionary Statements Regarding Forward-Looking Information" in Part I of the Company's Form 10-K for the year ended December 31, 2000 and, from time to time, in the Company's other filings with the Securities and Exchange Commission. BALANCE SHEET At June 30, 2001, total assets were $314,717, an increase of $29,637, or 10.4%, over June 30, 2000, while assets grew $8,478 over December 31, 2000. Gross loans (excluding loans held for sale) were $220,982 at June 30, 2001, growing $11,740 over second quarter 2000 and decreasing $6,127 over fourth quarter 2000.
Table 1: Period-End Loan Composition JUNE 30 PERCENT DECEMBER 31 PERCENT 2001 OF TOTAL 2000 OF TOTAL Commercial and financial $ 48,647 22.01% $ 53,421 23.52% Real estate 156,368 70.76% 157,904 69.53% Consumer installment 15,967 7.23% 15,784 6.95% Total loans $220,982 100.00% $227,109 100.00%
The loan portfolio is the Company's primary asset subject to credit risk. The Company's process for monitoring credit risks includes weekly analysis of loan quality, delinquencies, non-performing 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 the principal and interest amounts contractually due have been collected and there is reasonable assurance that repayment will continue within a reasonable time frame. -7- The term "impaired loan" refers to certain commercial loans with respect to which, based on current information, it is probable that the Company will not be able to 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 effective interest rate or the fair value of the collateral if the loan is collateral dependent. The aggregate amount of nonperforming assets increased $1,462 to $2,383 at June 30, 2001 from $921 at June 30, 2000, primarily because of additional restructured loans. Nonperforming assets include: 1) loans that 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 and 2) other real estate owned.
Table 2: Allowance for Loan Losses and Nonperforming Assets SIX MONTHS ENDED 6/30/2001 6/30/2000 Allowance for loan losses at beginning of period $ 2,407 $ 2,099 Provision charged to operating expense 300 300 Recoveries on loans 1 20 Loans charged off (26) (120) Allowance for loan losses at end of period $ 2,682 $ 2,299
Table 3: Nonperforming Assets SIX MONTHS ENDED 6/30/2001 6/30/2000 Nonaccrual loans $ 1,167 $ 640 Loans past due 90 days or more and still accruing interest 23 0 Restructured loans 795 257 Total nonperforming loans 1,985 897 Other real estate owned 398 24 Total nonperforming assets $ 2,383 $ 921
Management is not aware of any additional loans that represent material credits or of any information that causes management to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms. -8- 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. Deposit growth is the primary source of liquidity. Deposits as a percentage of total funding sources were 83.7% at June 30, 2001 and 84.8% at June 30, 2000. Wholesale funding represents the balance of the Company's total funding needs. As of June 30, 2001, loan principal and investment securities maturing within one year totaled $103,818, while certificates of deposit and short- term borrowings maturing within one year totaled $89,579. Unused credit advances available to the Company at June 30, 2001 totaled approximately $13,000. The primary funding sources utilized are Federal Home Loan Bank advances, federal funds purchased, repurchase agreements from a base of individuals, businesses, and public entities, and brokered CDs. The Company attempts, when possible, to match relative maturities of assets and liabilities, while maintaining the desired net interest margin. CAPITAL RESOURCES Stockholders' equity at June 30, 2001 increased $3,001 from $21,067 at June 30, 2000. Stockholders' equity included unrealized gains on securities available for sale, net of their tax effect, of $379 at June 30, 2001 compared to unrealized losses of $1,005 at 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, 2001, the Company's subsidiary bank's Tier 1 risk-based capital ratio, total risk-based capital, and tier 1 leverage ratio were well in excess of regulatory minimums.
Table 4: Capital Ratios - Subsidiary Bank TIER 1 TOTAL TIER 1 CAPITAL CAPITAL LEVERAGE March 31, 2001 11.36% 12.61% 7.37% March 31, 2000 11.00% 12.14% 7.88% Regulatory requirements to be considered well capitalized 6.00% 10.00% 5.00%
RESULTS OF OPERATIONS Net income for the quarter ended June 30, 2001, totaled $839, or $1.00 per share for basic and diluted earnings per share. Comparatively, net income for the quarter ended June 30, 2000 was $680, or $.78 per share for basic and diluted earnings per share. Operating results for the second quarter 2001 generated an annualized return on average assets of 1.06% and an -9- annualized return on average equity of 14.12%, compared to .98% and 12.81% for the comparable period in 2000. The net interest margin for the second quarter 2001 was 3.64% compared to 3.65% for the comparable quarter in 2000.
Table 5: Summary Results of Operations The following table presents consolidated financial data of PSB Holdings, Inc. and Subsidiary. 2001 2000 Second First Fourth Third Second ($ thousands except per share amounts) Quarter Quarter Quarter Quarter Quarter FINANCIAL HIGHLIGHTS Earnings and dividends: Net interest income $2,630 $2,487 $2,503 $2,252 $2,314 Provision for credit losses 150 150 150 150 150 Other noninterest income 455 455 408 355 356 Other noninterest expense 1,738 1,704 1,533 1,706 1,537 Net income 839 769 872 545 680 Per common share: Basic and diluted earnings 1.00 0.91 1.04 0.64 0.78 Dividends declared 0.38 0.00 0.65 0.00 0.38 Book value 28.65 27.96 26.53 25.44 24.61 Average common shares 839,705 839,705 840,512 847,895 866,433 Dividend payout ratio 38.02% 0.00% 62.04% 0.00% 48.72% Balance sheet summary: Loans net of unearned income 218,300 223,373 224,702 217,778 206,943 Assets 314,717 320,762 306,239 300,406 285,080 Deposits 240,877 247,967 241,534 232,051 221,981 Shareholders' equity 24,068 23,476 22,274 21,420 21,067 Average balances: Loans net of unearned income 220,837 224,038 221,240 214,773 201,128 Assets 317,740 313,474 303,323 292,743 277,698 Deposits 244,422 244,751 236,793 227,016 215,004 Shareholders' equity 23,772 22,859 21,847 21,244 21,194 Performance Ratios: Return on average assets (1) 1.06% 0.98% 1.15% 0.74% 0.98% Return on average common equity (1) 14.12% 13.46% 15.97% 10.26% 12.81% Tangible equity to assets 7.53% 7.22% 7.31% 7.37% 7.74% Net loan charge-offs as a percentage of average loans 0.01% 0.01% 0.08% 0.01% 0.05% Nonperforming assets as a percentage of average gross loans 1.07% 1.06% 1.11% 0.35% 0.32% Net interest margin (1) (2) 3.64% 3.47% 3.62% 3.40% 3.65% Efficiency ratio (2) 54.59% 56.35% 51.29% 63.59% 55.99% Service fee revenue as a percent of average assets (1) 0.32% 0.31% 0.32% 0.36% 0.27% (1) Annualized (2) Tax-exempt income has been adjusted to its fully taxable equivalent with a 34% tax rate
-10- NET INTEREST INCOME Net interest income is the most significant component of earnings. Net interest income for the three months ended June 30, 2001 was $2,630. Comparatively, net interest income for the second quarter 2000 was $2,314. Fully taxable equivalent net interest income for the second quarter 2001 increased $340 from second quarter 2000 to $2,728. Average earning assets grew $38,080 from the second quarter 2000. The net interest margin for the three months ended June 30, 2001 was 3.64% or 1 basis point less than the 3.65% margin in the second quarter 2000. Yields on earning assets decreased to 8.10% compared to 8.22% in 2000. Similarly, the costs for interest-bearing liabilities decreased to 5.14% from 5.34%. The Company is trying to position more assets to reprice with the market to maintain or increase the net interest margin. PROVISION FOR LOAN LOSSES Management determines the adequacy of the provision 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 $150 for the three months ended June 30, 2001 and June 30, 2000. Net charge-offs as a percentage of average loans outstanding were .01% and .05% during the three months ended June 30, 2001 and June 30, 2000, respectively. 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 credit 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 credit quality history. NONINTEREST INCOME Noninterest income increased 27.8% to $455 during the three months ended June 30, 2001, from the comparable second quarter of 2000. There were no gains or losses on securities during the three months ended June 30, 2001 and 2000. Service fees on deposit accounts increased $66, or 35.5%, for the three months ended June 30, 2001 from the three months ended June 30, 2000. NONINTEREST EXPENSE Noninterest expense increased 13.0% to $1,738 for the three months ended June 30, 2001, from $1,537 for the three months ended June 30, 2000. -11-
Table 6: Key Operating Ratios Three Months Ended and Six Months ended June 30, 2001 and 2000 (unaudited) Six-Month Period Three-Month Period 2001 2000 2001 2000 Return on assets (net income divided by average assets) (1) 1.04% 0.92% 1.06% 0.98% Return on average equity (net income divided by average equity) (1) 13.88% 11.90% 14.12% 12.81% Average equity to average assets 7.46% 7.73% 7.48% 7.63% Interest rate spread (difference between average yield on interest-earning assets and average cost of interest-bearing liabilities) (1) (2) 2.85% 3.02% 2.96% 2.88% Net interest margin (net interest income as a percentage of average interest- earning assets) (1) (2) 3.61% 3.77% 3.64% 3.65% Noninterest expense to average assets (1) 2.22% 2.37% 2.19% 2.21% Allowance for loan losses to total loans at end of period 1.21% 1.10% 1.21% 1.10% (1) Annualized (2) Tax-exempt income has been adjusted to its fully taxable equivalent with a 34% tax rate
-12- 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, 2000. 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:
(a) Election of Directors Broker FOR WITHHELD NON-VOTE Gordon P. Connor 529,305 63,376 0 Patrick L. Crooks 528,175 64,506 0 William J. Fish 529,305 63,376 0 Charles A. Ghidorzi 524,143 68,538 0 Gordon P. Gullickson 526,388 66,293 0 Lawrence Hanz, Jr. 525,843 66,838 0 David K. Kopperud 529,305 63,376 0 Thomas R. Polzer 529,215 63,466 0 William M. Reif 529,305 63,376 0 Thomas A. Riiser 529,155 63,526 0 Eugene Witter 528,399 64,282 0
-13-
(b) Amendment of Article 5 of Restated Articles of Incorporation Broker FOR AGAINST ABSTAIN NON-VOTE 505,953 91,212 5,981 0
(c) Approval of 2001 Stock Option Plan Broker FOR AGAINST ABSTAIN NON-VOTE 504,292 88,220 10,634 0
ITEM 5. OTHER INFORMATION Not Applicable ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: (a) Exhibits. The following exhibits have been filed with the Securities and Exchange Commission. Exhibits filed as part of this report, and listed below, are set forth on the Exhibit Index which follows the signature page. Exhibit NUMBER DESCRIPTION 3.1 Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000) 3.2 Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000) 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 10.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000) 10.2 Non-Qualified Retirement Plan for Directors of the Bank (incorporated by reference to Exhibit 10.2 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000) -14- 10.3 Senior Management Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2000)* 10.4 Consulting Agreement with Chairman of the Board (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000)* 10.5 2001 Stock Option Plan (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2001)* 21.1 Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000) *Denotes Executive Compensation Plans and Arrangements. (b) Reports on Form 8-K: None. -15- 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 13, 2001 TODD R. TOPPEN Todd R. Toppen Secretary and Controller (On behalf of the Registrant and as Principal Financial Officer) -16- EXHIBIT INDEX TO FORM 10-Q OF PSB HOLDINGS, INC. FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001 Pursuant to Section 102(d) of Regulation S-T (17 C.F.R. Section 232.102(d)) The following exhibits are filed as part this report: NONE