-----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, WPvGCg5zJPl0Uf5ArG0BI4Cft39COvNxGX1GDIxL22zawUn8RAcZwLLXE0sZS9Dr bRBWmxLJ7lmu/NeYplcE3A== 0000916480-04-000067.txt : 20040629 0000916480-04-000067.hdr.sgml : 20040629 20040628173620 ACCESSION NUMBER: 0000916480-04-000067 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040629 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: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26480 FILM NUMBER: 04886382 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 11-K 1 psb11k123103.txt PSB HOLDINGS FORM 11-K - 12/31/03 FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 0-26480 PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN (Full title of the plan and the address of the plan, if different from the issuer named below) PSB HOLDINGS, INC. 1905 WEST STEWART AVENUE WAUSAU, WI 54401 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-11 SUPPLEMENTAL SCHEDULES: Schedule 1 - Item 4i - Schedule of Assets (Held at End of Year) 12 2003 Form 5500 Line 4a - Schedule of Delinquent Participant Contributions 13 Schedules not filed herewith are omitted because of the absence of conditions under which they are required. -i- WIPFLI Independent Auditor's Report Board of Trustees Peoples State Bank Wausau, Wisconsin We have audited the accompanying statements of net assets available for benefits of Peoples State Bank Profit Sharing 401(k) Plan as of December 31, 2003 and 2002, and the related statement of changes in net assets available for benefits for the year ended December 31, 2003. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2003 and 2002, and the changes in its net assets available for benefits for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) and the supplemental schedule of delinquent participant contributions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. WIPFLI LLP Wipfli LLP June 8, 2004 Wausau, Wisconsin -1- PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 2003 and 2002 2003 2002 Assets Receivables: Employer contributions $ 238,000 $ 203,055 Participant contributions 0 7,570 Investments 3,874,639 2,723,069 Net assets available for benefits $4,112,639 $ 2,933,694
-2- PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS Year Ended December 31, 2003 Additions: Employer contributions $ 324,321 Participant deferral contributions 259,531 Participant rollover contributions 14,725 Interest income - Participant loans 6,006 Investment income 641,484 Total additions 1,246,067 Deductions: Participant benefits and withdrawals 66,743 Loan processing and maintenance fees 300 Commissions on purchases of PSB Holdings, Inc. common stock 79 Total deductions 67,122 Net additions 1,178,945 Net assets available for benefits at beginning 2,933,694 Net assets available for benefits at end $ 4,112,639 -3- PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002 NOTE 1 DESCRIPTION OF PLAN AND FUNDING POLICIES The following description of the Peoples State Bank Profit Sharing 401(k) Plan (the "Plan") provides only general information. Participants should refer to the Plan Agreement for a more complete description of the Plan's provisions. GENERAL The Plan was established on October 1, 1989. It is a defined contribution plan covering all full-time employees of Peoples State Bank (the "Bank"). An employee becomes eligible to participate in the Plan on the first entry date (the first day of the quarter) following the completion of 1,000 hours of service or one year of service, provided they have reached the age of 21. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). CONTRIBUTIONS Participants are allowed to contribute 50% of pretax annual compensation, up to the annual maximum allowed by the Internal Revenue Service (IRS). The Plan allows participants to roll over distributions from other retirement plans. The Bank currently matches 50% of the first 6% of compensation a participant contributes to the Plan. Additionally, the Bank may make a discretionary profit sharing contribution as determined by its Board of Directors. Contributions are subject to certain limitations. All investments in the participants' accounts are participant directed. The Plan currently offers nine mutual funds, PSB Holdings, Inc. common stock, and a stable value fund as investment options for participants. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution, the Bank's matching contribution and allocations of (a) the Bank's discretionary profit sharing contribution and (b) plan earnings/losses. Discretionary profit sharing allocations are based upon each participant's eligible pay in proportion to the pay of all eligible participants. Allocations of plan earnings are based on investment options and account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. -4- VESTING Participants are fully vested in their salary deferral and rollover contributions plus actual earning/losses thereon. Vesting in the Bank's matching and discretionary contributions plus actual earnings/losses thereon is based on years of continuous service. A participant is fully vested in the Bank's contributions after six years of continuous full-time service. PARTICIPANT LOANS Participants may borrow from their fund accounts up to a maximum of one-half the participant's total vested balance, not to exceed $50,000. Loan transactions are treated as transfers between the participant's investment fund and the Participant Loan Fund. Loan terms range from one to five years. The loans are secured by the balance in the participant's account. Loans originated under the current plan bear interest at a rate equal to the prime rate at the time the loan is taken out plus 1%. Interest rates on existing loans range from 4.75% to 9.0%. Principal and interest are paid ratably through bi-weekly payroll deductions or through bi-weekly cash payments by Plan participants who are no longer employees of the Bank. PAYMENT OF BENEFITS On termination of service due to death, disability, retirement, or termination of employment, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account or annual installments over a period of time if the vested account balance exceeds $5,000. If the participant's vested account balance does not exceed $5,000, the Plan will distribute that portion, in lump-sum, on the first distribution date after the participant terminates employment with the Bank, or as soon as administratively practical following that date. FORFEITURES Plan forfeitures arise as a result of participants who terminate service with the Bank before becoming 100% vested in the Bank's contribution. These forfeitures are applied first to payment of plan administrative expenses. Any remaining forfeited amounts will be allocated to qualifying participants as if they were additional employer profit sharing contributions. EXPENSES OF THE PLAN The Bank absorbs various plan expenses, including third-party administration and audit fees. PLAN TERMINATION The Bank intends to continue the Plan indefinitely, but reserves the right to terminate the Plan at any time. In the event of termination, the account of each participant will be 100% vested and nonforfeitable. The account will be held under the Plan and continue to -5- accrue investment earnings until it is used to provide benefits according to the terms of the Plan. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are presented on the accrual basis of accounting in accordance with generally accepted accounting principles. USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. INVESTMENT VALUATION Investments are stated at fair value. The Plan's various mutual fund investments are carried at current value, which represents the quoted market values of the underlying investments. The fair value of common stocks and other investments are based on published market prices on the last business day of the plan year. Loans are valued at cost, which approximates fair value, and are deemed collectible. Securities transactions are accounted for on the trade-date basis (the date the order to buy or sell is executed). Gains or losses on security transactions are recorded as the difference between proceeds received and the carrying value of the investments. Interest income is recognized on the accrual method, and dividend income is recorded on the ex-dividend date. Investment income on the statement of changes in net assets available for benefits includes unrealized appreciation or depreciation, realized gains and losses, interest, and dividends. Specific detail of investment income is not available from the trustee. PAYMENT OF BENEFITS Benefit payments to participants are recorded upon distribution. -6- NOTE 3 INVESTMENTS The following represents a summary of the market value of investments at December 31, 2003 and 2002. Investments that individually represent 5% or more of the Plan's net assets available for benefits are separately identified.
ASSET MARKET VALUE 2003 2002 INVESTMENTS AT FAIR VALUE AS DETERMINED BY QUOTED MARKET PRICE Common stock - PSB Holdings, Inc. $ 23,157 $ 0 Registered investment companies: Janus Adviser Worldwide 388,879 0 Delaware Diversified Income Fund 272,274 0 Delaware Small Cap Value Fund 988,729 0 Delaware S&P 500 Index Fund 1,258,185 0 Morley Stable Value - Omnibus Fund 0 420,156 Neuberger Genesis Fund 0 729,431 Strong Government Securities Fund 0 254,567 Vanguard 500 Index Fund 0 921,873 Vanguard International Growth Fund 0 256,908 Other 412,855 0 INVESTMENTS AT ESTIMATED FAIR VALUE Security Trust Company - Cash 0 18,040 Participant loans 94,110 122,094 INVESTMENTS AT CONTRACT VALUE Common collective trust with Delaware Management Trust Company - Stable Value Trust 436,450 0 Total investments $ 3,874,639 $ 2,723,069
-7- During 2003, the Plan's investments (including investments bought, sold, and held during the year) appreciated (depreciated) in value as follows: NET CHANGE INVESTMENTS AT FAIR VALUE AS IN FAIR DETERMINED BY QUOTED MARKET PRICE VALUE Common stock - PSB Holdings, Inc. $ (1,500) Registered investment companies 640,652 INVESTMENTS AT CONTRACT VALUE Investment contract with Delaware Management Trust Company - Stable Value Trust 2,332 Net change in fair value $ 641,484 NOTE 4 RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits at December 31, 2003 to Form 5500. Reconciling differences exist since the financial statements are prepared on the accrual basis of accounting and the Form 5500 is prepared on a modified cash basis.
2003 2002 Net assets available for benefits $ 4,112,639 $ 2,933,694 Less - Receivables for employer and participant contributions 238,000 210,625 Less - Cash received by the Plan during 2002 and not allocated to participants until 2003 18,040 Net assets available for benefits - Form 5500 $ 3,874,639 $ 2,705,029
-8- Following is a reconciliation of contributions received per the financial statements at December 31, 2003, to Form 5500:
EMPLOYER PARTICIPANT Contributions per the financial statements $ 324,321 $ 259,531 (accrual basis) Less - Contributions receivable at December 31, 2003 238,000 0 Plus - Contributions receivable at December 31, 2002 203,055 7,570 Plus - Contributions received by the Plan during the 2002 Plan year - not allocated to participants until the 2003 Plan year 4,682 13,358 Contributions per Form 5500 $ 294,058 $ 280,459
NOTE 5 TRANSACTIONS WITH PARTIES-IN-INTEREST PSB Holdings, Inc. is the parent company of Peoples State Bank, which serves as the sponsor of the Plan. The Plan had the following transactions with PSB Holdings, Inc. 2003 Purchases of stock: Number of shares 656 Value of shares on transaction dates $ 24,657 Average share price purchased $ 37.59 Sales of stock: Number of shares 0 Value of shares on transaction dates N/A At December 31, 2003, the Plan held 656 shares of PSB Holdings, Inc. common stock. Plan investments are managed by Delaware Investments. Delaware Management Trust Company, a company related to Delaware Investments, is the custodian and trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. -9- NOTE 6 PARTY-IN-INTEREST NONEXEMPT TRANSACTIONS During the Plan years ended December 31, 2003 and 2002, the Bank engaged in nonexempt prohibited transactions by not timely remitting employee deferral contributions to the Plan's trust as required by the Department of Labor's plan asset regulations for the majority of payroll periods subsequent to June 15, 2002. Prior to June 15, 2002, the transmittal of employee deferral contributions to the trust funding the Plan was the responsibility of the Bank's controller, and deferrals were deposited timely in accordance with the Department of Labor's plan asset regulations. On or around June 15, 2002, responsibility for the transmittal of deferrals was transferred to a new department. Due to inadequate training of employees in this new department on the time period for remitting deferrals, deferrals were not remitted to the trust timely for a majority of the payroll periods subsequent to June 15, 2002. As a result, employee deferral contributions were generally remitted to the Plan approximately 15 days after the date the funds were withheld from employee's paychecks. The Department of Labor has established a Voluntary Fiduciary Correction Program (VFCP), which allows plan sponsors to correct nonexempt prohibited transactions such as the failure to timely remit employee deferral contributions and obtain full relief from any civil investigation by the Department of Labor and civil penalties. Under this program, the Bank is required to correct the breach fully and make the Plan whole. The Bank is working with employee benefits counsel to file an application under the VFCP, correct the violations, and make the Plan whole. The Bank anticipates its application under VFCP will result in the issuance of a "no action letter" by the Department of Labor. The prohibited transactions have been reported on the supporting schedules as nonexempt prohibited transactions with a party-in- interest in accordance with the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA. NOTE 7 INVESTMENT CONTRACTS The Plan maintains an investment contract fund with Delaware Management Trust Company, referred to as the Stable Value Trust. This fund holds investment contracts with various investment companies. Contributions are maintained in a common/collective trust account. The account is credited with earnings on the underlying investments and charged for plan withdrawals and administrative expenses charged by Delaware Management Trust Company. The contract is included in the financial statements at contract value, which approximates fair value, as reported to the Plan by Delaware Management Trust Company. Contract value represents contributions made under the contract, plus earnings, less plan withdrawals and administrative expenses. -10- NOTE 8 TAX-EXEMPT STATUS OF THE PLAN The Bank adopted a Prototype Nonstandard 401(k) Profit-Sharing Plan with CODA (cash or deferred arrangement) and utilizes the services of its third-party administrator, Retirement Financial Services, Inc. Retirement Financial Services, Inc. has received an IRS notification letter dated August 7, 2001, which indicates that an employer who adopts this plan may rely on the notification letter with respect to the qualification of its plan under the appropriate sections of the Internal Revenue Code. Companies that adopt a prototype plan approved by the IRS are no longer required to obtain a determination letter. -11- PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN PLAN'S EIN #39-1305529 PLAN #002
SCHEDULE 1 - ITEM 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR) December 31, 2003 (A) (B) (C) (D) (E) IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, CURRENT LESSOR, OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, PAR, OR MATURITY VALUE COST VALUE * Delaware Investments Cash reserve ** $ 11,763 * Delaware Management Trust Company Delaware Stable Value Trust A ** 436,450 MFS MFS Massachusetts Investors Growth Stock Fund ** 57,104 Janus Janus Adviser Worldwide ** 388,879 Van Kampen Van Kampen Comstock Fund ** 60,579 * PSB Holdings, Inc. PSB Holdings, Inc. common stock ** 23,157 * Delaware Investments Delaware Trend Fund ** 53,947 * Delaware Investments Delaware Diversified Income Fund ** 272,274 * Delaware Investments Delaware Foundation Balanced Fund ** 179,464 * Delaware Investments Delaware Foundation Growth Fund ** 49,998 * Delaware Investments Delaware Small Cap Value Fund ** 988,729 * Delaware Investments Delaware S&P 500 Index Fund ** 1,258,185 Participant Loans Loans receivable - 4.75% to 9.00% 94,110 **All investments are participant-directed, therefore cost information may be omitted.
-12- PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN PLAN'S EIN #39-1305529 PLAN #002
2003 FORM 5500 LINE 4A - SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS December 31, 2003 Participant Total that Constitute Nonexempt Prohibited Transactions Total Fully Contributions Contributions Contributions Corrected Transferred Contributions Corrected Pending Correction Under VFCP and Late to Plan Not Corrected Outside VFCP in VFCP PTE 2002-51 $ 439,797 $ 0 $ 0 $ 439,797 $ 0
-13- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan administrator of the Peoples State Bank Profit Sharing 401(k) Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. PEOPLES STATE BANK DATE: June 28, 2004 By: SCOTT M. CATTANACH Scott M. Cattanach Senior Vice President and Chief Financial Officer -14- EXHIBIT INDEX TO FORM 11-K OF PEOPLES STATE BANK PROFIT SHARING 401(K) PLAN FOR THE YEAR ENDED DECEMBER 31, 2003 Pursuant to Section 102(d) of Regulation S-T (17 C.F.R. Section 232.102(d)) Exhibit 23.1 Consent of Wipfli, LLP -14- EX-23.1 3 psbex23111k.txt PSB HOLDINGS EXHIBIT 23.1 TO FORM 11-K Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333- 109878 of PSB Holdings, Inc. on Form S-8 of our report dated June 8, 2004, appearing in this annual report on Form 11-K of the Peoples State Bank Profit Sharing 401(k) Plan for the year ended December 31, 2003. Wausau, Wisconsin June 28, 2004 -----END PRIVACY-ENHANCED MESSAGE-----