-----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, Bih3zyGWc6Gv/i/ynW1DMZsc0MuPzFMcl52J4pnHRbxjlhZjX4xbFCF7oz1OsgeW c4zzNPwedxrrvcCuZzDPAQ== 0000916480-05-000142.txt : 20051025 0000916480-05-000142.hdr.sgml : 20051025 20051025170045 ACCESSION NUMBER: 0000916480-05-000142 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051025 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051025 DATE AS OF CHANGE: 20051025 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: 051154989 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 psb8k1025.txt PSB FORM 8-K - 10/25/05 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): OCTOBER 25, 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 October 25, 2005, PSB Holdings, Inc. reported net income of $1,066,000, or $.62 per share, for the quarter ended September 30, 2005, as compared to net earnings of $747,000, or $.43 per share, for the quarter ended September 30, 2004. SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS Exhibit 99.1* Press release dated October 25, 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: October 25, 2005 By: SCOTT M. CATTANACH Scott M. Cattanach Treasurer EXHIBIT INDEX TO FORM 8-K OF PSB HOLDINGS, INC. DATED OCTOBER 25, 2005 Pursuant to Section 102(d) of Regulation S-T (17 C.F.R. Section 232.102(d)) 99.1* PRESS RELEASE DATED OCTOBER 25, 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 psbex998k1025.txt PSB EXHIBIT 99.1 - PRESS RELEASE AND FINANCIAL INFORMATION Exhibit 99.1 PSB ANNOUNCES 3RD QUARTER EARNINGS OF $.62 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 third quarter of 2005. "PSB earned $.62 per share (on net income of $1,066,000) this quarter compared to $.43 (on net income of $747,000) during the third quarter last year. In 2004, PSB settled an income tax audit with the Wisconsin Department of Revenue via a standardized agreement (as did many Wisconsin banks with out-of-state subsidiaries) which reduced earnings by $.09 per share (or $150,000). Year to date earnings in 2005 are $1.90 per diluted share (on net income of $3,277,000) compared to $1.42 per share (on net income of $2,483,000) in 2004. Even if the impact of the September 2004 quarter tax settlement and the June 2004 quarter charge on abandonment of the old home office of $199,000 are disregarded, 2005 year-to-date net income is up 16% over last year." "Similar to the quarter ended June 2005, PSB reduced provisions for loan losses in the current quarter as repayment was received from a long-time problem borrower without loss, allowing previously allocated reserves to be recaptured into income. Combined with a reduction on loans held on the balance sheet during the quarter, third quarter provision for loan losses was reduced $80,000 compared to the June 2005 quarter after being reduced $120,000 in the June 2005 quarter compared to the March 2005 quarter. These reductions from improved credit quality have contributed to increased earnings over 2004." "On September 14, 2005, PSB reached $500 million in assets. We reached this milestone with pro-active customer service and support by our local communities after reaching $300 million in the fourth quarter 2000 and $400 million in September 2003. Despite very competitive local markets, we continue to seek steady increases in market share for our stockholders." 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 Earnings in the September 2005 quarter were significantly impacted by a continued decline in net interest margin which was amplified by slower average loan growth. Average loans receivable increased just .40% on a linked quarter basis in September 2005 compared to June 2005, although average loan balances increased 11.6% over the prior year September 2004 quarter. Net loans receivable were $363.4 million as of September 30, 2005, down $6.8 million from June 30, 2005 and repaid loan principal contributed to an increase in overnight federal funds sold holdings by $9.1 million during the September quarter. However, total assets grew $8.5 million during the quarter to $494.7 million (1.7%) as of September 30, 2005 as interest bearing demand and savings accounts (primarily municipal funds) increased $13.6 million. David Kopperud commented "Competition in our market increased with a flattening yield curve and aggressive pricing from both large bank and community bank competitors. In some cases our profit analysis has shown competitor pricing to be out of line with borrower credit and interest rate risk. This past September, we were unwilling to match competitor terms on an existing $2.6 million loan and lost this relationship. In addition, our on-balance sheet residential mortgages declined $2.9 million in part to borrower construction loans placed into permanent financing and sold into the secondary market." Kopperud continued "Our credit quality continues to be strong and we were pleased to receive payoff from a long time problem borrower for which we had set aside a specific reserve of $160,000. Our statistical reserve analysis showed the decline in loans receivable and recapture of the problem borrower reserve allowed us to reduce our provision for loan losses resulting in a credit of $50,000 for the September 2005 quarter." Nonperforming loans (including non-accrual and restructured loans) to gross loans was .71% at September 2005 compared to .60% at June 2005, and .94% at September 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 .67% at September 2005 compared to .57% at June 2005, and .71% at September 2004. The allowance for loan losses was 1.14% of gross loans at September 2005 compared to 1.22% at September 2004. Tax-adjusted net interest income declined $12,000 to $3,654,000 for the quarter ended September 30, 2005 from $3,666,000 for the quarter ended September 30, 2004, and declined $69,000 from $3,723,000 for the quarter ended June 30, 2005. Net interest income has been negatively impacted by a flattening yield curve and competitive pressures on both loan and deposit rates. Margin on earning assets declined from 3.51% in the September 2004 quarter, and from 3.32% in the June 2005 quarter to 3.14% during the September 2005 quarter. Earning asset yields increased slightly and were 5.80% at September 2005, 5.78% at June 2005, and 5.54% at September 2004. However, the cost of interest-bearing liabilities increased from 2.37% at September 2004 to 2.82% at June 2005, and 3.08% at September 2005. PSB's balance sheet is asset sensitive (assets reprice faster than liabilities) with a cumulative 12 month gap ratio of approximately 112%. However, a flattening yield curve impacts the extent to which assets can reprice compared to greater repricing potential on shorter-term funding liabilities. Projecting continued rate increases of 200 basis points fully implemented over the next 12 months, net interest margin for the upcoming December 2005 quarter is expected to decline within a range of 0 to 10 basis points compared to the September 2005 quarter. Net margin is expected to continue to experience pressure into 2006 in the current interest rate and competitive environment. 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 3.27% during the September 2005 quarter (compared to a reported 3.14%), 3.46% during the June 2005 quarter (compared to a reported 3.32%), and 3.55% in the September 2004 quarter (compared to a reported 3.51%). Service Fee and Noninterest Income Quarterly noninterest income increased $142,000 in the September 2005 quarter to $906,000 compared to $764,000 in September 2004. The change was led by an increase of $100,000 in mortgage banking income and $47,000 from increase in the cash surrender value of life insurance. Year to date, noninterest income before gains on sale of securities has increased $402,000 to $2,650,000, or 17.9%. The increase was due primarily to higher retail investment sales commissions of $139,000, increase in cash surrender value of life insurance of $113,000, and $78,000 payout of our investment on the sale of the Pulse ATM system (a cooperative) to Discover Financial Services. Service fee income of $880,000 year to date through September 2005 declined $53,000, or 5.7% from $933,000 in September 2004. During 2005, substantial changes to deposit service fee structure have occurred for both retail and commercial accounts. Some changes reduced fee income in an effort to market more competitive demand deposit accounts. These changes, along with an emphasis on sale of demand accounts has increased average quarterly non- interest bearing demand account balances 11.1% from September 2004 to September 2005. Operating Expenses Noninterest operating expenses increased $51,000, or 1.8%, to $2,884,000 in the quarter ended September 2005 compared to $2,833,000 during the quarter ended September 2004. In addition, salaries and wages in the September 2005 quarter were reduced by $154,000 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 September 2005 deferral of wages under FAS 91, noninterest expenses were $3,038,000 for September 2005, and $2,833,000 in September 2004, an increase of $205,000, or 7.2%. The increase over the prior year quarter consisted primarily of $180,000 in additional wages and benefits in the September 2005 quarter. Total quarterly operating expenses to average total assets before the FAS 91 deferral of wages were 2.44% for September 2005 and 2.56% for September 2004 (annualized). Offsetting the increase to September 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 decreased September 2005 net income by $3,000 and decreased September 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 PSB'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 SEPT. 30 June 30, March 31, Dec. 31 Sept. 30, EARNINGS AND DIVIDENDS: 2005 2005 2005 2004 2004 Net income $ 1,066 $ 1,171 $ 1,040 $ 1,043 $ 747 Basic earnings per share (3) $ 0.62 $ 0.68 $ 0.60 $ 0.61 $ 0.43 Diluted earnings per share (3) $ 0.62 $ 0.68 $ 0.60 $ 0.60 $ 0.43 Dividends declared per share (3) $ - $ 0.31 $ - $0.30 $ - Net book value per share $ 20.81 $ 20.27 $ 19.77 $ 19.55 $ 19.41 Semi-annual dividend payout ratio N/A 24.06% n/a 28.82% n/a Average common shares outstanding 1,712,771 1,714,134 1,721,058 1,717,394 1,720,436 BALANCE SHEET - AVERAGE BALANCES: Loans receivable, net of allowances $ 369,489 $ 367,948 $ 354,136 $ 341,997 $ 331,167 Total assets $ 493,035 $ 480,325 $ 465,083 $ 448,591 $ 439,177 Deposits $ 387,969 $ 376,252 $ 367,394 $ 353,310 $ 347,015 Stockholders' equity $ 35,143 $ 34,665 $ 33,989 $ 34,076 $ 33,010 PERFORMANCE RATIOS: Return on average assets (1) 0.86% 0.98% 0.91% 0.92% 0.67% Return on avg. stockholders' equity (1) 12.03% 13.55% 12.41% 12.18% 8.98% Average tangible stockholders' equity to average assets 7.14% 7.22% 7.25% 7.49% 7.46% Net loan charge-offs to average loans 0.02% 0.01% 0.00% 0.04% 0.00% Nonperforming loans to gross loans 0.71% 0.60% 0.74% 0.80% 0.94% Allowance for loan loss to gross loans 1.14% 1.15% 1.18% 1.19% 1.22% Net interest rate margin (1)(2) 3.14% 3.32% 3.40% 3.50% 3.51% Net interest rate spread (1)(2) 2.72% 2.96% 3.05% 3.12% 3.17% Service fee revenue as a percent of average demand deposits (1) 2.10% 2.56% 2.19% 2.22% 2.52% Noninterest income as a percent of gross revenue 12.06% 13.00% 11.87% 11.64% 11.93% Efficiency ratio (2) 63.25% 59.53% 59.11% 58.52% 63.95% Noninterest expenses to avg. assets (1) 2.32% 2.32% 2.30% 2.33% 2.56% STOCK PRICE INFORMATION: High $32.00 $31.85 $32.20 $33.25 $35.25 Low $30.65 $30.63 $31.85 $32.00 $33.00 Market value at quarter-end $30.70 $30.75 $31.85 $32.10 $33.00 (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 Nine Months Ended (dollars in thousands, September 30, September 30, except per share data - unaudited) 2005 2004 2005 2004 Interest and dividend income: Loans, including fees $ 5,734 $ 4,882 $ 16,518 $ 14,150 Securities: Taxable 488 454 1,407 1,368 Tax-exempt 247 247 725 735 Other interest and dividends 137 55 260 147 Total interest and dividend income 6,606 5,638 18,910 16,400 Interest expense: Deposits 2,403 1,543 6,355 4,194 FHLB advances 532 515 1,589 1,485 Other borrowings 48 59 237 209 Junior subordinated debentures 115 - 119 - Total interest expense 3,098 2,117 8,300 5,888 Net interest income 3,508 3,521 10,610 10,512 Provision (credit) for loan losses (50) 195 130 675 Net interest income after provision for loan losses 3,558 3,326 10,480 9,837 Noninterest income: Service fees 296 320 880 933 Mortgage banking 287 187 691 655 Investment and insurance sales commissions 159 164 531 345 Net gain on sale of securities - - 6 111 Increase in cash surrender value of life insurance 47 - 113 - Other noninterest income 117 93 435 315 Total noninterest income 906 764 2,656 2,359 Noninterest expense: Salaries and employee benefits 1,744 1,718 5,014 4,813 Occupancy and facilities 436 445 1,308 1,107 Loss on abandonment of premises and equipment - - - 329 Data processing and other office operations 192 155 532 502 Advertising and promotion 73 97 231 195 Other noninterest expenses 439 418 1,219 1,403 Total noninterest expense 2,884 2,833 8,304 8,349 Income before provision for income taxes 1,580 1,257 4,832 3,847 Provision for income taxes 514 510 1,555 1,364 Net income $ 1,066 $ 747 $ 3,277 $ 2,483 Basic earnings per share $ 0.62 $ 0.43 $ 1.91 $ 1.44 Diluted earnings per share $ 0.62 $ 0.43 $ 1.90 $ 1.42
PSB HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS September 30, 2005 unaudited, December 31, 2004 derived from audited financial statements (dollars in thousands, except per share data) - Unaudited 2005 2004 ASSETS Cash and due from banks $ 11,978 $ 12,680 Interest-bearing deposits and money market funds 3,324 3,265 Federal funds sold 1,683 7,379 Cash and cash equivalents 26,985 23,324 Securities available for sale (at fair value) 78,598 68,894 Federal Home Loan Bank stock (at cost) 2,989 2,874 Loans held for sale 451 342 Loans receivable, net of allowance for loan losses of $4,200 and $4,157, respectively 363,428 343,923 Accrued interest receivable 2,108 1,744 Foreclosed assets 313 7 Premises and equipment 12,737 12,432 Mortgage servicing rights, net 880 839 Cash surrender value of bank-owned life insurance 4,674 - Other assets 1,541 595 TOTAL ASSETS $ 494,704 $ 454,974 LIABILITIES Non-interest-bearing deposits $ 56,653 $ 51,635 Interest-bearing deposits 335,497 306,590 Total deposits 392,150 358,225 Federal Home Loan Bank advances 52,000 52,000 Other borrowings 4,090 8,565 Junior subordinated debentures 7,732 - Accrued expenses and other liabilities 3,089 2,568 Total liabilities 459,061 421,358 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 28,026 25,281 Accumulated other comprehensive income (loss) (67) 384 Treasury stock, at cost - 174,408 and 167,586 shares, respectively (3,858) (3,608) Total stockholders' equity 35,643 33,616 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 494,704 $ 454,974
-----END PRIVACY-ENHANCED MESSAGE-----