-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FX7Dz2+gojjRcGIlqd0KVmDhE6Vf7Mb//hAzncbX+k9nTlIwy3GBFxXKUOeUDvLL Eqv9BzqU8sRPjXv9EQPaIg== 0000916480-04-000008.txt : 20040129 0000916480-04-000008.hdr.sgml : 20040129 20040129170122 ACCESSION NUMBER: 0000916480-04-000008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040129 ITEM INFORMATION: ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PSB HOLDINGS INC /WI/ CENTRAL INDEX KEY: 0000948368 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 391804877 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26480 FILM NUMBER: 04553265 BUSINESS ADDRESS: STREET 1: 1905 WEST STEWART AVE CITY: WAUSAU STATE: WI ZIP: 54401 BUSINESS PHONE: 7158422191 MAIL ADDRESS: STREET 1: P.O. BOX 1686 CITY: WAUSAU STATE: WI ZIP: 54402-1686 FORMER COMPANY: FORMER CONFORMED NAME: PEOPLES STATE BANK /WI/ DATE OF NAME CHANGE: 19950721 8-K 1 psb8k129.txt PSB HOLDINGS, INC. FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 _________________________ Date of Report (date of earliest event reported): JANUARY 29, 2004 PSB HOLDINGS, INC. (Exact name of registrant as specified in its charter) WISCONSIN 0-26480 39-1804877 (State or other (Commission File (IRS Employer jurisdiction of Number) Identification incorporation) Number) 1905 W. STEWART AVENUE WAUSAU, WI 54401 (Address of principal executive offices, including Zip Code) (715) 842-2191 Registrant's telephone number, including area code INFORMATION TO BE INCLUDED IN THE REPORT ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE On January 29, 2004, PSB Holdings, Inc. reported net income of $1,290,000, or $.74 per share, for the fourth quarter ended December 31, 2003, as compared to net earnings of $1,332,000, or $.76 per share, for the fourth quarter ended December 31, 2002. The Company also reported net income of $4,806,000 or $2.76 per share ($2.74 fully diluted), for the year ended December 31, 2003, compared to net income of $4,365,000, or $2.48 per share, for the 2002 fiscal year. All per share amounts have been adjusted to reflect a 5% stock dividend payable January 29, 2004, to shareholders of record on January 6, 2004. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (C) EXHIBITS 99.1 Press release dated January 29, 2004 ITEM 9. REGULATION FD DISCLOSURE On January 29, 2004, PSB Holdings, Inc. issued a press release announcing its earnings for the fourth quarter and fiscal year ended December 31, 2003, a copy of which is attached hereto as Exhibit 99.1 and incorporated in this Item 9 by reference. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On January 29, 2004, PSB Holdings, Inc. issued a press release announcing its earnings for the fourth quarter and fiscal year ended December 31, 2003, a copy of which is attached hereto as Exhibit 99.1 and incorporated in this Item 12 by reference. 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 hereunto duly authorized. PSB HOLDINGS, INC. Date: January 29, 2004 By: SCOTT M. CATTANACH Scott M. Cattanach Treasurer -2- EXHIBIT INDEX TO FORM 8-K OF PSB HOLDINGS, INC. DATED JANUARY 29, 2004 Pursuant to Section 102(d) of Regulation S-T (17 C.F.R. Section 232.102(d)) 99.1 PRESS RELEASE DATED JANUARY 29, 2004 -3- EX-99.1 4 psbex99129.txt PSB HOLDINGS, INC. EXHIBIT 99.1 TO FORM 8-K Exhibit 99.1 PSB ANNOUNCES 4TH QUARTER EARNINGS OF $.74 PER SHARE Wausau, Wisconsin - January 29, 2004 HIGHLIGHTS o Quarterly 2003 earnings per share of $.74, down from $.76 in 2002. Net income for the 4th quarter December 2003 was $1.29 million compared to $1.33 million in December 2002, a decline of 3.2%. The decline was due in part to the anticipated drop in residential mortgage loan refinancing nationally compared to the prior year. Quarterly mortgage banking income in 2003 was down 53% from 2002. o Calendar year net income of $2.74 per diluted share in 2003 ($2.76 per basic share) compared to $2.48 in 2002, an increase of 10.5%. Net income for the year ended December 2003 was $4.81 million compared to $4.37 million in 2002, an increase of 10.1%. o Semi-annual cash dividend of $.30 per share followed by a special 5% stock dividend to be paid on January 29 to shareholders of record January 6, 2004. PSB Holdings, Inc. (OTCBB:PSBQ.OB), parent company of Peoples State Bank of Wausau, Wisconsin today reported fourth quarter December 2003 earnings of $.74 per share compared to $.76 per share during the fourth quarter of 2002. Net book value increased to $18.54 per share, compared to $16.75 at December 2002. A 2 for 1 stock split was effective November 19, 2002 and a special 5% stock dividend was declared during December 2003. All per share information has been updated to reflect the split and the stock dividend. Financial performance is expressed in thousands, except per share data. Peoples State Bank is headquartered in Wausau, Wisconsin with seven retail locations serving north central Wisconsin in Marathon, Oneida, and Vilas counties. During December 2003, the Company announced its plans to open full service branch locations in Minocqua and Weston, Wisconsin during 2004. In addition to traditional retail and commercial loan and deposit products, the Bank provides investments, commercial property and casualty insurance services, retirement planning and long-term fixed rate residential mortgages. Net income for the quarter ended December 31, 2003 was $1,290 compared to $1,235 in the third quarter of 2003 and $1,332 in December 2002. Operating results for the fourth quarter 2003 generated an annualized return on average assets (ROA) and return on average equity (ROE) of 1.28% and 15.95%, respectively. Comparable ratios for the same quarter in 2002 were ROA of 1.45% and ROE of 18.43%. Year-to-date net income was $4,806 and $4,365 in 2003 and 2002, respectively. Year-to-date ROA and ROE for 2003 were 1.26% and 15.45%, compared to 2002 ROA and ROE of 1.25% and 15.97%, respectively. -4- Market Expansion and Outlook for 2004 Profits The Company continues its expansion plan of opening de novo branch locations in economically vibrant communities adjacent to existing Peoples market areas. Potential branching locations are identified but not acted upon until a key person or location (or both) is identified. During 2001 and 2002, branches were opened in Eagle River (supermarket) and Rhinelander, respectively. During 2003, work began on a new banking and administrative home office (on the existing site) anticipated to be completed by June 2004. During December 2003, the Company announced plans to begin new branches in Minocqua (opening date May 2004), and Weston, Wisconsin (opening date October 2004). Although the new locations will generate net losses during 2004, each is expected to reach net income on a month-to-month basis within the first two years of operations. These long-term investments in facilities and quality local banking professionals combined with the anticipated decline in mortgage refinancing income are expected to challenge quarter over quarter profits during 2004, despite management's goal of increasing assets by over 12% during the year. President David K. Kopperud commented "These market expansions are consistent with our past successful efforts of reaching nearby communities with quality and experienced local bank professionals when the right opportunity presents itself. The Company anticipates that 2004 earnings will be below 2003 and more in line with 2002. Despite the anticipated decline in annual 2004 earnings, management considers each office a long-term investment for the benefit of our shareholders and the future vibrancy of People State Bank." Net Interest Income Net interest income increased $87 from $3,288 for the quarter ended December 31, 2002 to $3,375 for the current quarter ended December 31, 2003 due to increased earning assets held, although margin on those assets has declined. Tax-adjusted net interest margin as a percent of average interest earning assets decreased from the year earlier quarter to 3.65% from 3.89%. Net interest margin for all of calendar year 2003 was 3.75% compared to 3.95% in 2002. The Company has experienced compressed interest rate margins as existing prime rate adjustable and other maturing term loans and securities are repriced at today's significantly lower rates while deposit rates remained near their floor. Compared to the year earlier quarter, earning assets yields have decreased 85 basis points from 6.45% at December 2002 to 5.60% at December 2003. However, the cost of liabilities declined only 73 basis points from 3.09% at December 2002 to 2.36% at December 2003. The Company continues to seek net interest income growth by originating and funding assets with terms in line with proactive asset-liability management and capital leveraging as appropriate. The Company's balance sheet remains "asset sensitive" and therefore margins would improve in a rising interest rate environment. Management expects the net interest margin to begin 2004 at a similar level to the past quarter as much of the balance sheet has repriced at current interest rates. The Company saw growth in total average loans of $46,900, or 18.3% over the comparable year-ago quarter. The majority of this growth came from additional real estate loans, both commercial real estate and residential 15 year fixed rate first mortgages that fit into the -5- Company's asset-liability management plans. Approximately $23 million of this growth was originated by the Company's new Rhinelander, Wisconsin branch location which opened during August 2002. Total assets increased to $408,933 at December 31, 2003 compared to $371,468 at December 31, 2002. Regarding growth, President Kopperud said "Our growth drove 2003 bank profits to an all time high, up 10% over last year. As the construction of our Stewart Avenue Financial Center provides for future growth, we reached a new mark for today's growth - $400 million in total on-balance sheet assets." Service Fee and Noninterest Income Noninterest income grew $80 in the fourth quarter 2003 to $1,120 compared to $1,040 in 2002. However, this growth was due to special income items including a $131 gain on curtailment of the Company's post-retirement health benefits plan, and a $144 gain on sale of securities and SBA loans. Separate from these items, noninterest income declined $195, due primarily to a $313 decline in mortgage banking income from the prior year's unusually high refinancing levels. Offsetting the mortgage decline was an increase in investment sales commissions of $70. Management expects mortgage banking income to decline during 2004 to a level similar to the December 2003 quarter, down from a high of $655 during the quarter ended September 30, 2003. For all of 2004, the Company expects mortgage banking income to be approximately 2/3 of the level seen during 2003. The Company serviced $152,718 of mortgage principal for other investors at December 31, 2003 compared to $95,408 at December 31, 2002. During September 2003, the Company announced formation of Peoples Insurance Services LLC, a commercial property and casualty insurance agency and brokerage. Despite being a start-up enterprise, the agency has obtained direct placement commitments from a wide range of insurance underwriters. Agency President Mr. Jeffrey Cole commented "Obtaining direct commitments allows us to avoid much of the co-broker fees often seen by start-up agencies. Doing so will significantly increase our retained sales commissions." The agency's net loss during 2003 was approximately $47. Operating Expenses Noninterest operating expenses increased $407 to $2,479 in December 2003 compared to $2,072 during December 2002, an increase of 19.6%. Increases in employee salaries and benefits totaled $417 during the quarter. Final 2003 year-end incentive compensation funding increased salaries and benefits by $378 as income performance before incentives reached the higher tier levels set at the beginning of 2003. President Kopperud noted "Company profits rebounded strongly from the first half of the year for the benefit of both shareholders and employees. Bank incentive plans reward employees for specific goal attainment but against a back drop of net income improvement to ensure shareholders also benefit." Company employees were also granted inflationary and merit increases effective January 1, 2004 averaging 2.9% of base pay. Operating expenses as a percent of average assets increased to 2.46% during the fourth quarter December 2003 compared to 2.26% during December 2002. Operating expenses as a percent of average assets were 2.45% and 2.36% during all of 2003 and 2002, respectively. Year to date, the expense efficiency ratio increased to 52.46% during 2003 compared to 50.68% in 2002 due to declining net interest margin and an increase in salaries and benefits compared to the prior year. -6- Credit Quality and Capitalization The Company ceases to accrue interest on loans which are 90 days past due and considers them nonperforming loans until the borrower has made up any late payments and is able to continue required payments in the future. Nonperforming loans also include restructured loans until 6 consecutive monthly payments are received under the new loan terms. Nonperforming loans to gross loans was 1.08% at December 31, 2003, compared to .94% at December 2002. The Company also tracks delinquencies on a contractual basis quarter to quarter since some problem loans currently making payments remain on non-accrual status until ongoing ability to repay according to the contract is shown. Loans contractually delinquent 30 days or more as a percentage of gross loans were ..63% at December 2003 compared to 1.02% at September 2003 and .87% at December 2002. The allowance for loan losses was 1.15% of gross loans at December 2003 compared to 1.22% at December 2002. Average tangible stockholder's equity was 7.85% during the quarter ended December 2003 compared to 7.71% in the prior year quarter. Management believes the Company to be well capitalized at December 31, 2003 and to remain well capitalized during 2004 based on planned asset growth and dividend payments. During the year ended December 2003, the Company repurchased 17,535 shares at an average price of $31.52 per share in its annual buyback program of 1% of outstanding shares. During 2002, the Company repurchased 20,830 shares at an average price of $18.93 per share. The Company anticipates repurchasing approximately 17,300 shares during 2004 under the program on the open market at prices then in effect. Effective with the dividend declared during June 2003, the Company adopted a policy to equalize the amount of the semi-annual cash dividend. Accordingly, the cash dividend declared during December 2003 of $.29 per share (after adjusting for the subsequent 5% stock dividend) was less than the $.36 per share (following stock dividend adjustment) declared in December 2002. However for all of 2003, cash dividends were $.57 per share compared to $.54 per share in 2002. Forward Looking Statements Certain matters discussed in this news release, including those relating to the growth of the Company, its profits, and future interest rates, are forward- looking statements and are made pursuant to the safe harbor provisions of the Securities Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in this release. Among other things, these risks and uncertainties include the strength of the economy, the effects of government policies, including, in particular, interest rate policies, and other risks and assumptions described under "Cautionary Statement Regarding Forward Looking Information" in Item 1 of the company's Form 10-K for the year ended December 31, 2002. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. -7- (tables follow)
PSB HOLDINGS, INC. QUARTERLY FINANCIAL SUMMARY (dollars in thousands, except per share data) QUARTER ENDED - UNAUDITED DEC. 31 SEPT. 30 JUNE 30 MARCH 31 DEC. 31 EARNINGS AND DIVIDENDS: 2003 2003 2003 2003 2002 Net income $1,290 $1,235 $1,057 $1,224 $1,332 Basic earnings per share (3) $0.74 $0.71 $0.61 $0.70 $0.76 Diluted earnings per share (3) $0.74 $0.71 $0.60 $0.70 $0.76 Dividends declared per share (3) $0.29 $- $0.29 $- $0.36 Net book value per share $18.54 $18.11 $17.74 $17.37 $16.75 Dividend payout ratio 38.40% 0.00% 46.88% 0.00% 46.88% Average common shares outstanding 1,733,398 1,733,828 1,744,199 1,749,015 1,750,708 BALANCE SHEET - AVERAGE BALANCES: Loans receivable, net of allowances $302,491 $288,448 $265,863 $256,715 $255,591 Assets $399,351 $389,267 $371,537 $365,906 $363,507 Deposits $312,376 $307,752 $292,698 $289,635 $291,049 Stockholders' equity $32,095 $31,085 $30,670 $29,848 $28,677 PERFORMANCE RATIOS: Return on average assets (1) 1.28% 1.26% 1.14% 1.36% 1.45% Return on average equity (1) 15.95% 15.76% 13.82% 16.63% 18.43% Average tangible equity to average assets 7.85% 7.70% 7.92% 7.84% 7.71% Net loan charge-offs to average loans 0.09% 0.02% 0.01% 0.03% 0.21% Nonperforming loans to gross loans 1.08% 1.09% 1.06% 1.13% 0.94% Allowance for loan loss to gross loans 1.15% 1.23% 1.26% 1.28% 1.22% Net interest rate margin (1)(2) 3.65% 3.67% 3.83% 3.89% 3.89% Net interest rate spread (1)(2) 3.24% 3.21% 3.34% 3.42% 3.36% Service fee revenue as a percent of average demand deposits (1) 2.70% 2.48% 2.83% 2.99% 2.98% Noninterest income as a percent of gross revenue 17.56% 17.90% 12.13% 17.49% 15.81% Efficiency ratio (2) 53.47% 50.94% 53.86% 51.67% 46.42% Noninterest expenses to average assets 2.46% 2.38% 2.40% 2.57% 2.26% STOCK PRICE INFORMATION: High $36.19 $32.61 $32.38 $25.95 $23.81 Low $31.43 $31.43 $28.57 $22.62 $19.57 Market value at quarter-end $33.62 $31.90 $31.67 $25.95 $23.81 (1) Annualized (2) The yield on tax-exempt loans and securities is computed on a tax- equivalent basis. (3) Due to rounding, cumulative quarterly per share performance may not equal annual per share totals.
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PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED YEAR ENDED (dollars in thousands, DECEMBER 31, DECEMBER 31, except per share data - unaudited) 2003 2002 2003 2002 Interest income: Interest and fees on loans $4,498 $4,556 $17,964 $18,022 Interest on securities: Taxable 468 691 1,943 2,724 Tax-exempt 240 224 916 898 Other interest and dividends 52 68 227 271 Total interest income 5,258 5,539 21,050 21,915 Interest expense: Deposits 1,339 1,640 5,651 6,835 FHLB advances 469 577 1,989 2,289 Other borrowings 75 34 229 149 Total interest expense 1,883 2,251 7,869 9,273 Net interest income 3,375 3,288 13,181 12,642 Provision for loan losses 130 300 835 1,110 Net interest income after provision for loan loss 3,245 2,988 12,346 11,532 Noninterest income: Service fees 331 327 1,282 1,217 Mortgage banking 268 581 1,767 1,223 Investment and insurance sales commissions 131 61 434 250 Net gain on sale of securities 99 - 80 - Gain on curtailment of post-retirement plan 131 - 131 - Other noninterest income 160 71 417 358 Total noninterest income 1,120 1,040 4,111 3,048 Noninterest expense: Salaries and employee benefits 1,609 1,192 5,952 4,927 Occupancy 268 262 1,127 1,094 Data processing and other office operations 129 170 547 583 Advertising and promotion 39 65 172 319 Other noninterest expenses 434 383 1,553 1,304 Total noninterest expense 2,479 2,072 9,351 8,227 Income before provision for income taxes 1,886 1,956 7,106 6,353 Provision for income taxes 596 624 2,300 1,988 Net income $1,290 $1,332 $4,806 $4,365 Basic earnings per share $ 0.74 $ 0.76 $ 2.76 $ 2.48 Diluted earnings per share $ 0.74 $ 0.76 $ 2.74 $ 2.48
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PSB HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS December 31, 2003 unaudited, December 31, 2002 derived from audited financial statements) (dollars in thousands, except per share data) DECEMBER 31, 2003 2002 ASSETS Cash and due from banks $13,754 $15,890 Interest-bearing deposits and money market funds 1,214 5,490 Federal funds sold 3,959 172 Cash and cash equivalents 18,927 21,552 Securities available for sale (at fair value) 72,472 81,057 Federal Home Loan Bank stock (at cost) 2,444 2,264 Loans held for sale 207 949 Loans receivable, net of allowance for loan losses of $3,536 and $3,158, respectively 304,339 256,015 Accrued interest receivable 1,617 1,732 Foreclosed assets, net 84 573 Premises and equipment 7,557 6,158 Mortgage servicing rights, net 814 697 Other assets 472 472 TOTAL ASSETS $408,933 $371,469 LIABILITIES Non-interest-bearing deposits $ 50,563 $ 45,457 Interest-bearing deposits 265,851 252,373 Total deposits 316,414 297,830 Federal Home Loan Bank advances 47,000 38,000 Other borrowings 10,475 3,302 Accrued expenses and other liabilities 2,903 3,034 Total liabilities 376,792 342,166 STOCKHOLDERS' EQUITY Common stock - no par value with a stated value of $1 per share: Authorized - 3,000,000 shares Issued - 1,804,850 shares 1,805 1,805 Common stock dividend distributable - 90,017 shares 90 - Additional paid-in capital 9,932 7,150 Retained earnings 22,543 21,607 Unrealized gain on securities available for sale, net of tax 844 1,306 Treasury stock, at cost - 161,469 and 138,748 shares, respectively (3,073) (2,565) Total stockholders' equity 32,141 29,303 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $408,933 $371,469
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