-----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, BtaeCkNKozfST9h8WNjmQJ1HHph8DHZQwYS7aWUu6sTSyyrIhwGoZ6CdW4/9SueK EGsSqr5nLkuvQCRJjn7LwA== 0000916480-05-000110.txt : 20050728 0000916480-05-000110.hdr.sgml : 20050728 20050728170112 ACCESSION NUMBER: 0000916480-05-000110 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050728 DATE AS OF CHANGE: 20050728 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: 05981871 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 psb8k728.txt PSB FORM 8-K - 7/28/05 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): JULY 28, 2005 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 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: * Written communications pursuant to Rule 425 under the Securities Act (17 CFR 23.425) * Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) * Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) * Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) INFORMATION TO BE INCLUDED IN THE REPORT ITEM 2 - FINANCIAL INFORMATION ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On July 28, 2005, PSB Holdings, Inc. reported net income of $1,171,000, or $.68 per share, for the quarter ended June 30, 2005, as compared to net earnings of $782,000, or $.45 per share, for the quarter ended June 30, 2004. SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS Exhibit 99.1*Press release dated July 28, 2005 * This exhibit is furnished pursuant to Item 2.02 and shall not be deemed to have been filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or Securities Exchange Act of 1934 unless expressly so provided by specific reference in such filing. 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: July 28, 2005 By: SCOTT M. CATTANACH Scott M. Cattanach Treasurer EXHIBIT INDEX TO FORM 8-K OF PSB HOLDINGS, INC. DATED JULY 28, 2005 Pursuant to Section 102(d) of Regulation S-T (17 C.F.R. Section 232.102(d)) 99.1* PRESS RELEASE DATED JULY 28, 2005 * This exhibit is furnished pursuant to Item 2.02 and shall not be deemed to have been filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or Securities Exchange Act of 1934 unless expressly so provided by specific reference in such filing. EX-99.1 3 psbex998k728.txt PSB EXHIBIT 99.1 - PRESS RELEASE AND FINANCIAL INFORMATION Exhibit 99.1 PSB ANNOUNCES 2ND QUARTER EARNINGS OF $.68 PER SHARE Wausau, Wisconsin - David K. Kopperud, President of PSB Holdings, Inc. ("PSB") and Peoples State Bank ("Peoples") today announced PSB's financial results for the second quarter of 2005. "PSB earned $.68 per share (on net income of $1,171,000) this quarter compared to $.45 (on net income of $782,000) during the second quarter last year. However, abandonment of the old main office located on the same property generated a cumulative one-time charge to operations of $199,000 after-tax benefits during the prior year quarter. Prior to the abandonment charge, June 2004 quarterly earnings were $.56 per share. Disregarding the prior year special charge, quarterly earnings per share are up 21% over 2004. Year to date through June 30, 2005, PSB earned $1.28 per share (on net income of $2,211,000) compared to $.99 (on net income of $1,736,000) during 2004." "In June 2005, PSB raised $7.5 million of regulatory capital for the bank for general corporate purposes from the issuance of trust preferred securities. This capital will support continued asset growth at a minimal cost of capital without diluting the holdings of existing shareholders. This capital issue is reflected as junior subordinated debentures on PSB's balance sheet in accordance with current accounting standards." "PSB has seen improving credit quality for several quarters, as well as origination of a significant number of high credit quality commercial loans from large local businesses as part of our strategic product expansion in Treasury Management services. This high level of credit quality has allowed us to reduce the amount of provisions for loan losses, which helped to increase second quarter 2005 net income to the highest level since the December 2003 quarter. We continue to work aggressively to achieve our goal of net income in the range of $4.3 million to $4.6 million for all of 2005, which would be a substantial improvement over 2004 earnings of approximately $3.5 million." Kopperud further noted "PSB is continuing its history of increased cash dividend payments with a semi-annual dividend of $.31 per share to be paid July 29, compared to $.30 per share paid last year." PSB Holdings, Inc. (OTCBB:PSBQ.OB), is the parent company of Peoples. Peoples is headquartered in Wausau, Wisconsin with eight retail locations serving north central Wisconsin in Marathon, Oneida, and Vilas counties. In addition to traditional retail and commercial banking products, Peoples provides retail investments, retirement planning, commercial property and casualty insurance services, and long-term fixed rate residential mortgages. Asset Growth and Net Interest Income PSB continues to have strong asset growth, increasing $17.5 million, or 3.7% since March 2005, to $486.2 million. Asset growth since June 2004 has been $55.0 million, or 12.8%. A large portion of the recent quarter's growth has been in the non real estate commercial and industrial loan portfolio, which increased $7.1 million or 8.5% during the past three months. Cash and cash equivalents also grew during the quarter as $7.5 million in trust preferred capital securities proceeds were received on June 28, 2005. Asset growth during the quarter was funded primarily by an increase in wholesale brokered deposits totaling $16.9 million, continuing a trend of significant wholesale funding during 2005. Wholesale broker deposits have increased $6.7 million, or 10.2% since June 2004. Retail and local deposits continue to comprise the bulk of asset funding and were 63.2% of total assets at June 30, 2005 compared to 66.2% of total assets at March 31, 2005 and 63.7% at June 30, 2004. In addition to growth, credit quality remains strong. Nonperforming loans (including non-accrual and restructured loans) to gross loans was .60% at June 2005 compared to .74% at March 2005, and .98% at June 2004. PSB 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 .57% at June 2005 compared to .59% at March 2005, and .84% at June 2004. The allowance for loan losses was 1.15% of gross loans at June 2005 compared to 1.19% at June 2004. The continued improvement in credit quality and growing history of minimal net loan charge-offs of similar loans allowed PSB to reduce the provision for loan losses during the June 2005 quarter. The provision for loan loses was $30,000 during the quarter ended June 2005 and $240,000 during the quarter ended June 2004. Tax-adjusted net interest income increased $63,000, or 1.7% to $3,723,000 for the quarter ended June 30, 2005 from $3,660,000 for the quarter ended June 30, 2004, and increased $60,000 from $3,663,000 for the quarter ended March 31, 2005. Net interest income has been negatively impacted by a flattening yield curve and competitive pressures on deposit rates while funding continued loan growth with higher cost wholesale funds. Margin on earning assets declined from 3.64% in the June 2004 quarter, and from 3.40% in the March 2005 quarter to 3.32% during the June 2005 quarter. Earning asset yields increased slightly and were 5.78% at June 2005, 5.66% at March 2005, and 5.57% at June 2004. However, the cost of interest-bearing liabilities increased from 2.27% at June 2004 to 2.61% at March 2005, and 2.82% at June 2005. PSB updated accounting procedures early during 2005 to improve recognition and amortization of deferred loan origination fees and costs in accordance with Statement of Financial Accounting Standard No. 91, Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans ("FAS 91"). This change is more fully described in this press release under operating expenses. Tax-adjusted net interest margin before accounting adjustments for FAS 91 would have been 3.46% during the June 2005 quarter (compared to a reported 3.32%), 3.51% during the March 2005 quarter (compared to a reported 3.40%), and 3.68% in the June 2004 quarter (compared to a reported 3.64%). PSB's balance sheet is slightly asset sensitive as assets are expected to reprice faster than liabilities if interest rates increase. However, rising short-term rates with stable longer-term rates producing a flatter yield curve are expected to contribute to a decline in net margin during the coming quarter. As a measure of margin variability from the current base rate scenario, the most current internal interest rate simulations project net interest income for the next 12 months to increase $190,000 (1.34%) if rates increase 200 basis points, and decrease $709,000 (5.02%) if interest rates decrease 200 basis points. Service Fee and Noninterest Income Quarterly noninterest income increased $92,000 in the June 2005 quarter to $947,000 compared to $855,000 in June 2004. The change was led by an increase of $110,000 in commissions from the sale of retail investment products. A decline in mortgage banking income of $59,000 to $249,000 in June 2005 compared to $308,000 in June 2004 was offset by a $46,000 increase in the cash surrender value of life insurance. Service fee income of $324,000 during the June 2005 quarter was similar to income of $322,000 during the June 2004 quarter, but recovered substantially from $260,000 of fees in the March 2005 quarter. Fees for retail service products increased effective April 1, 2005, contributing to the increase over March 2005. Operating Expenses Noninterest operating expenses declined $134,000 to $2,780,000 in the quarter ended June 2005 compared to $2,914,000 during the quarter ended June 2004. However, the June 2004 quarter included a special charge to write-off the remaining investment in the prior home office totaling $329,000. In addition, salaries and wages in the June 2005 quarter were reduced by $183,000 during the June 2005 quarter as PSB implemented a daily automated system to improve accounting for deferred loan fees and costs (including lender and support personnel salaries) in accordance with current accounting standards (FAS 91) earlier in 2005. FAS 91 requires loan origination fees and direct loan origination costs to be deferred and amortized as a yield adjustment earned on the loan. Previously, these accounting adjustments for deferral of costs were made only at year-end and in prior years had an immaterial impact on the individual quarterly financial statements. The change in accounting procedure was made to simplify operations and improve the accuracy of earnings reporting. Before the June 2005 deferral of wages under FAS 91 and the June 2004 special home office write-off, noninterest expenses were $2,963,000 for June 2005, and $2,585,000 in June 2004, an increase of $378,000, or 14.6%. The increase over the prior year quarter consisted primarily of $277,000 in additional wages and benefits and $66,000 in additional occupancy expenses in the June 2005 quarter. Total quarterly operating expenses to average total assets before the FAS 91 deferral of wages and the June 2004 special home office write-off were 2.47% for June 2005 and 2.43% for June 2004 (annualized). Offsetting the increase to June 2005 income from deferred employee wage expense related to new loan originations under FAS 91 were reductions to income from deferral of loan origination fees collected, and amortization of previously capitalized net loan origination costs against net interest income. Taken together, all FAS 91 accounting adjustments increased June 2005 net income by $18,000 and decreased June 2004 net income by $22,000. Forward Looking Statements Certain matters discussed in this news release, including those relating to the growth of PSB, 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, 2004. PSB assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. (tables follow)
PSB HOLDINGS, INC. QUARTERLY FINANCIAL SUMMARY (dollars in thousands, except per share data) Quarter ended - Unaudited JUNE 30, March 31, Dec. 31, Sept. 30 June 30, EARNINGS AND DIVIDENDS: 2005 2005 2004 2004 2004 Net income $ 1,171 $ 1,040 $ 1,043 $ 747 $ 782 Basic earnings per share (3) $ 0.68 $ 0.60 $ 0.61 $ 0.43 $ 0.45 Diluted earnings per share (3) $ 0.68 $ 0.60 $ 0.60 $ 0.43 $ 0.45 Dividends declared per share (3) $ 0.31 $ - $ 0.30 $ - $ 0.30 Net book value per share $ 20.27 $ 19.77 $ 19.55 $ 19.41 $ 18.68 Semi-annual dividend payout ratio 24.06% n/a 28.82% n/a 28.84% Average common shares outstanding 1,714,134 1,721,058 1,717,394 1,720,436 1,728,322 BALANCE SHEET - AVERAGE BALANCES: Loans receivable, net of allowances $367,948 $354,136 $341,997 $331,167 $320,471 Total assets $480,325 $465,083 $448,591 $439,177 $426,826 Deposits $376,252 $367,394 $353,310 $347,015 $330,337 Stockholders' equity $ 34,665 $ 33,989 $ 34,076 $ 33,010 $ 32,942 PERFORMANCE RATIOS: Return on average assets (1) 0.98% 0.91% 0.92% 0.67% 0.73% Return on avg. stockholders' equity (1) 13.55% 12.41% 12.18% 8.98% 9.52% Average tangible stockholders' equity to average assets 7.22% 7.25% 7.49% 7.46% 7.61% Net loan charge-offs to average loans 0.01% 0.00% 0.04% 0.00% 0.01% Nonperforming loans to gross loans 0.60% 0.74% 0.80% 0.94% 0.98% Allowance for loan loss to gross loans 1.15% 1.18% 1.19% 1.22% 1.19% Net interest rate margin (1)(2) 3.32% 3.40% 3.50% 3.51% 3.64% Net interest rate spread (1)(2) 2.96% 3.05% 3.12% 3.17% 3.30% Service fee revenue as a percent of average demand deposits (1) 2.56% 2.19% 2.22% 2.52% 2.63% Noninterest income as a percent of gross revenue 13.00% 11.87% 11.64% 11.93% 13.54% Efficiency ratio (2) 59.53% 59.11% 58.52% 63.95% 64.54% Noninterest expenses to avg. assets (1) 2.32% 2.30% 2.33% 2.56% 2.74% STOCK PRICE INFORMATION: High $31.85 $32.20 $33.25 $35.25 $35.60 Low $30.63 $31.85 $32.00 $33.00 $34.50 Market value at quarter-end $30.75 $31.85 $32.10 $33.00 $34.50 (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.
PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Six Months Ended (dollars in thousands, June 30, June 30, except per share data - unaudited) 2005 2004 2005 2004 Interest and dividend income: Loans, including fees $ 5,581 $ 4,714 $10,784 $ 9,268 Securities: Taxable 467 453 919 914 Tax-exempt 237 245 478 488 Other interest and dividends 55 46 123 92 Total interest and dividend income 6,340 5,458 12,304 10,762 Interest expense: Deposits 2,141 1,360 3,952 2,651 FHLB advances 507 504 1,057 970 Other borrowings 106 77 189 150 Junior subordinated deferrable interest debentures 4 - 4 - Total interest expense 2,758 1,941 5,202 3,771 Net interest income 3,582 3,517 7,102 6,991 Provision for loan losses 30 240 180 480 Net interest income after provision for loan losses 3,552 3,277 6,922 6,511 Noninterest income: Service fees 324 322 584 613 Mortgage banking 249 308 404 468 Investment and insurance sales commissions 202 90 372 181 Net gain on sale of securities - - 6 111 Increase in cash surrender value of life insurance 46 - 66 - Other noninterest income 126 135 318 222 Total noninterest income 947 855 1,750 1,595 Noninterest expense: Salaries and employee benefits 1,641 1,547 3,270 3,095 Occupancy and facilities 427 361 872 662 Loss on abandonment of premises and equipment - 329 - 329 Data processing and other office operations 168 187 340 347 Advertising and promotion 95 64 158 98 Other noninterest expenses 449 426 780 985 Total noninterest expense 2,780 2,914 5,420 5,516 Income before provision for income taxes 1,719 1,218 3,252 2,590 Provision for income taxes 548 436 1,041 854 Net income $ 1,171 $ 782 $ 2,211 $ 1,736 Basic earnings per share $ 0.68 $ 0.45 $ 1.29 $ 1.00 Diluted earnings per share $ 0.68 $ 0.45 $ 1.28 $ 0.99
PSB HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS June 30, 2005 unaudited, December 31, 2004 derived from audited financial statements JUNE 30, December 31, (dollars in thousands, except per share data) 2005 2004 ASSETS Cash and due from banks $ 13,019 $ 12,680 Interest-bearing deposits and money market funds 2,633 3,265 Federal funds sold 2,610 7,379 Cash and cash equivalents 18,262 23,324 Securities available for sale (at fair value) 72,464 68,894 Federal Home Loan Bank stock (at cost) 2,953 2,874 Loans held for sale 610 342 Loans receivable, net of allowance for loan losses of $4,309 and $4,157, respectively 370,252 343,923 Accrued interest receivable 1,971 1,744 Foreclosed assets 229 7 Premises and equipment 12,662 12,432 Mortgage servicing rights, net 853 839 Cash surrender value of bank-owned life insurance 4,627 - Other assets 1,347 595 TOTAL ASSETS $486,230 $454,974 LIABILITIES Non-interest-bearing deposits $ 53,759 $ 51,635 Interest-bearing deposits 325,781 306,590 Total deposits 379,540 358,225 Federal Home Loan Bank advances 55,000 52,000 Other borrowings 5,879 8,565 Junior subordinated deferrable interest debentures 7,732 - Accrued expenses and other liabilities 3,363 2,568 Total liabilities 451,514 421,358 STOCKHOLDERS' EQUITY Common stock - no par value with a stated value of $1 per share: Authorized - 3,000,000 shares Issued - 1,887,179 shares 1,887 1,887 Additional paid-in capital 9,655 9,672 Retained earnings 26,960 25,281 Accumulated other comprehensive income 72 384 Treasury stock, at cost - 174,408 and 167,586 shares, respectively (3,858) (3,608) Total stockholders' equity 34,716 33,616 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $486,230 $454,974
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