-----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, DtGrZNLWhyhjeLDueqeD7YiIiNvOpHWmOuPWPZyJ3g7OWow2oS1Bl/ZQv+qAl+EB LyPr4u+JbmsjyhCNkaml1Q== 0000916480-06-000072.txt : 20060510 0000916480-06-000072.hdr.sgml : 20060510 20060510171548 ACCESSION NUMBER: 0000916480-06-000072 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20060510 DATE AS OF CHANGE: 20060510 SUBJECT COMPANY: 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: SC TO-I SEC ACT: 1934 Act SEC FILE NUMBER: 005-80482 FILM NUMBER: 06827342 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 FILED BY: 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: SC TO-I 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 SC TO-I 1 psbschedto.txt PSB HOLDINGS, INC. SCHEDULE TO SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- SCHEDULE TO Tender Offer Statement Under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934 PSB HOLDINGS, INC. (Name of Subject Company (Issuer)) PSB HOLDINGS, INC. (Issuer) Common stock (Title of Class of Securities) 69360N108 (Cusip Number of Class of Securities) SCOTT M. CATTANACH TREASURER PSB HOLDINGS, INC. 1905 WEST STEWART AVENUE WAUSAU, WI 54401 TELEPHONE: 715-842-2191 (Name, address and telephone number of person authorized to receive notices and communications on behalf of the person(s) filing statement) Copies to: ARNOLD J. KIBURZ III RUDER WARE, L.L.S.C. 500 THIRD STREET, SUITE 700 P.O. BOX 8050 WAUSAU, WI 54402 TELEPHONE: 715-845-4336 CALCULATION OF FILING FEE* Transaction Valuation: $3,375,000 Amount of Filing Fee: $361.13 * Calculated solely for the purpose of determining the filing fee, in accordance with Rule 0-11 and based upon the purchase of 100,000 shares of common stock at the tender offer price per share of $33.75. (box) Check the box if any part of the fee is offset as provided by Rule 0- 11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount Previously Paid: NOT APPLICABLE Filing Party: NOT APPLICABLE Form or registration Number: NOT APPLICABLE Date Filed: NOT APPLICABLE (box) Check the box if the filing relates solely to preliminary communications made before commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: (box) third-party tender offer subject to Rule 14d-1. (checked box) issuer tender offer subject to Rule 13e-4. (box) going-private transaction subject to Rule 13e-3. (box) amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: (box) -1- This Issuer Tender Offer Statement on Schedule TO relates to the tender offer by PSB Holdings, Inc., a Wisconsin corporation ("PSB"), to purchase up to 100,000 shares of its common stock at a price, net to the seller in cash, without interest thereon, of $33.75 per share. PSB's offer is made on the terms and subject to the conditions set forth in its Offer to Purchase dated May 10, 2006, filed herewith as Exhibit 99.(a)(1)(A) (the "Offer to Purchase"), and the related Letter of Transmittal, filed herewith as Exhibit 99.(a)(1)(B) (the "Letter of Transmittal"), which together constitute the tender offer. This Issuer Tender Offer Statement on Schedule TO is filed in satisfaction of the reporting requirements of Rule 13e-4(c)(2) promulgated under the Securities Exchange Act of 1934, as amended. The information contained in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference in response to all of the items of this Schedule TO, as more particularly described below. ITEM 1. SUMMARY TERM SHEET. The information set forth under "Summary" in the Offer to Purchase is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) The name of the issuer is PSB Holdings, Inc. and the address and telephone number of its principal executive offices is 1905 West Stewart Avenue, Wausau, Wisconsin 54401, telephone number 715-842-2191. (b) As of May 1, 2006, PSB Holdings, Inc. had 1,702,748 shares of common stock issued and outstanding. (c) The information set forth in the Offer to Purchase under "Section 7. Price Range of Shares; Dividends" is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a) PSB, the issuer, is the filing person. See Item 2(a) for address and telephone number. The information set forth under "Section 10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Shares" is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a) The information set forth in the following sections of the Offer to Purchase contain a description of the material terms of the transaction and is incorporated herein by reference: -2- (circle)Summary (circle)Section 1. Number of Shares; Proration (circle)Section 2. Purpose of the Offer; Certain Effects of the Offer (circle)Section 3. Procedures for Tendering Shares (circle)Section 4. Withdrawal Rights (circle)Section 5. Purchase of Shares and Payment of Purchase Price (circle)Section 6. Conditions of the Offer (circle)Section 10. Interests of Directors and Officers;Transactions and Arrangements Concerning the Shares (circle)Section 13. Material Federal Income Tax Consequences (circle)Section 14. Extension of Offer; Termination; Amendment (b) The information set forth in the penultimate paragraph on the cover page of the Offer to Purchase, in the Offer to Purchase under the third paragraph of "Section 2. Purpose of the Offer; Certain Effects of the Offer - Certain Effects of the Offer," and under "Section 10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Shares - Material Agreements" is incorporated herein by reference. ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (e) The information set forth in the Offer to Purchase under "Section 10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Shares - Material Agreements" is incorporated herein by reference. ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. (a), (b), and (c) The information set forth in the Offer to Purchase under "Section 2. Purpose of the Offer; Certain Effects of the Offer" is incorporated herein by reference. ITEM 7. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION. (a) The information set forth in the Offer to Purchase under "Section 8. Source and Amount of Funds" is incorporated herein by reference. (b) and (d) Not applicable. ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) and (b) The information set forth in the Offer to Purchase under "Section 10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Shares," is incorporated herein by reference. -3- ITEM 9. PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED, OR USED. (a) The information set forth in the Offer to Purchase under "Section 15. Fees and Expenses" is incorporated herein by reference. ITEM 10. FINANCIAL STATEMENTS. (a) and (b) Not applicable, pursuant to Instruction 2 of Item 10 of Schedule TO. ITEM 11. ADDITIONAL INFORMATION. (a) The information set forth in the Offer to Purchase under "Section 9. Certain Additional Information Concerning PSB - Information Incorporated by Reference" is incorporated herein by reference. (b) Not applicable. ITEM 12. MATERIAL TO BE FILED AS EXHIBITS. 99.(a)(1)(A) Offer to Purchase dated May 10, 2006. 99.(a)(1)(B) Letter of Transmittal (including Certification of Taxpayer Identification Number on Substitute Form W-9). 99.(a)(1)(C) Form of Letter to Shareholders of PSB dated May 10, 2006. (a)(2)-(4) Not applicable. 99.(a)(5)(A) News Release issued by PSB dated May 10, 2006. (b) Not applicable. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. (g) Not applicable. (h) Not applicable. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. Not applicable. -4- SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. PSB HOLDINGS, INC. May 10, 2006 By: SCOTT M. CATTANACH Scott M. Cattanach Treasurer -5- EXHIBIT INDEX TO SCHEDULE TO DATED MAY 10, 2006 OF PSB HOLDINGS, INC. Pursuant to Section 102(d) of Regulation S-T (17 C.F.R. Section 232.102(d)) 99.(a)(1)(A) Offer to Purchase dated May 10, 2006. 99.(a)(1)(B) Letter of Transmittal (including Certification of Taxpayer Identification Number on Substitute Form W-9). 99.(a)(1)(C) Form of Letter to Shareholders of PSB dated May 10, 2006. 99.(a)(5)(A) News Release issued by PSB dated May 10, 2006. -6- EX-99.A.1.A 3 psbex99a1a.txt PSB HOLDINGS, INC. EXHIBIT 99.A.1.A - OFFER TO PURCHASE Exhibit 99.(a)(1)(A) PSB HOLDINGS, INC. OFFER TO PURCHASE 100,000 SHARES PURCHASE PRICE: $33.75 PER SHARE MAY 10, 2006 THIS OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON THURSDAY, JUNE 15, 2006, UNLESS THE OFFER IS EXTENDED. EXCEPT AS DESCRIBED IN SECTION 4, YOUR RIGHT TO WITHDRAW YOUR SHARES WILL ALSO EXPIRE AT THAT TIME. _________________ PSB Holdings, Inc. is offering to purchase up to 100,000 shares of common stock in a tender offer at a price of $33.75 per share. You may accept our offer and tender all or part of your shares by following the instructions in this Offer to Purchase and the enclosed Letter of Transmittal. Our offer is subject to the terms and conditions described in this document and related Letter of Transmittal. Our common stock is quoted on the OTC Bulletin Board under the symbol "PSBQ." On May 3, 2006, the bid and ask quotations for our common stock were $30.60 and $31.00, respectively. There is no active trading market for PSB's common stock and such prices may not reflect actual trades. See Section 7. __________________ PSB'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS OFFER. HOWEVER, NEITHER WE NOR OUR BOARD MAKES ANY RECOMMENDATION TO YOU CONCERNING THIS TENDER OFFER. OUR DIRECTORS AND EXECUTIVE OFFICERS HAVE ADVISED US THAT THEY DO NOT INTEND TO TENDER ANY OF THEIR SHARES IN OUR OFFER. SEE SECTION 10. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES AUTHORITY HAS APPROVED OR DISAPPROVED OF THE TRANSACTION OR PASSED UPON THE MERITS OR FAIRNESS OF OUR OFFER OR UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS OFFER TO PURCHASE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. TABLE OF CONTENTS SUMMARY....................................................................1 FORWARD-LOOKING STATEMENTS.................................................5 INTRODUCTION...............................................................5 THE OFFER..................................................................5 1. Number of Shares; Proration....................................5 2. Purpose of the Offer; Certain Effects of the Offer.............7 3. Procedures for Tendering Shares................................9 4. Withdrawal Rights.............................................11 5. Purchase of Shares and Payment of Purchase Price..............11 6. Conditions of the Offer.......................................12 7. Price Range of Shares; Dividends..............................14 8. Source and Amount of Funds....................................15 9. Certain Additional Information Concerning PSB.................15 10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Shares............................16 11. Effects of the Offer on the Market for Shares; Registration Under the Exchange Act........................................18 12. Certain Legal Matters; Regulatory Approvals...................18 13. Material Federal Income Tax Consequences......................18 14. Extension of Offer; Termination; Amendment....................21 15. Fees and Expenses.............................................21 16. Miscellaneous.................................................22 ADDITIONAL COPIES AND ASSISTANCE You may obtain additional copies of this Offer to Purchase, the Letter of Transmittal, and other tender offer materials without charge. Please contact Registrar and Transfer's Investor Relations Department at 1-800-368-5948 between 8:00 a.m. and 7:00 p.m., New York time, or via e-mail at info@rtco.com to request additional copies or if you have any questions or requests for assistance. You may also contact your local broker, dealer, commercial bank, trust company, or other nominee for assistance concerning our offer. i SUMMARY In this document, PSB Holdings, Inc. is also referred to as "PSB." The terms "we," "us," and "our," also refer to PSB Holdings, Inc. The terms "shares" and "stock" refer to shares of common stock of PSB. This summary highlights certain material information contained in this Offer to Purchase. It is not intended to be a substitute for the more detailed information about our offer that begins on page 5. We urge you to read the entire Offer to Purchase and the Letter of Transmittal carefully in order to understand the full details of our offer. Some common questions about our tender offer and our answers follow. The highlighted references to "Sections" refer to the detailed discussion of our offer that begins on page 5. 1. Q: IS PSB HOLDINGS OFFERING TO PURCHASE MY SHARES? A: Yes. We are offering to purchase up to 100,000 shares of our outstanding common stock from our shareholders. SEE SECTION 1. 2. Q: HAS THE BOARD APPROVED OR RECOMMENDED THIS OFFER? A: Our Board has approved the offer. However, we neither we nor our Board makes any recommendation regarding whether you should tender your shares or retain them. You must decide whether to tender your shares and, if so, how many shares to tender. We recommend that you discuss whether to tender your shares with your broker or other financial or tax advisor. SEE SECTION 2. 3. Q: WHO CAN ANSWER MY QUESTIONS ON THE TENDER OFFER? A: Please contact Registrar and Transfer's Investor Relations Department at 1-800-368-5948 between 8:00 a.m. and 7:00 p.m., New York time, or via e-mail at info@rtco.com if you have any questions or requests for assistance about the tender offer. 4. Q: WHAT IS THE PURCHASE PRICE? A: We are offering to purchase your shares for $33.75 per share. SEE SECTION 1. 5. Q: WHAT IS THE RECENT MARKET PRICE FOR PSB COMMON STOCK? A: Prices for our common stock are quoted on the OTC Bulletin Board. On May 3, 2006, the bid was $30.60 and the ask was $31.00. Although the market for our common stock is not active, we urge you to obtain more current market quotations for your shares before accepting our offer. SEE SECTION 7. 6. Q: HOW MUCH TIME DO I HAVE TO DECIDE WHETHER TO TENDER MY SHARES? A: You may tender your shares until our offer expires. As of the date of this document, our offer is scheduled to expire on Thursday, June 15, 2006, at 5:00 p.m., New York time, but we may choose to extend it at any time if we believe it is appropriate to do so. SEE SECTIONS 1 AND 14. 7. Q: HOW WILL I KNOW IF THE OFFER IS EXTENDED BEYOND JUNE 15, 2006? A: If our offer is extended, we will make a public announcement before 9:00 a.m., New York time, on the first business day after the offer was scheduled to expire. SEE SECTION 14. 8. Q: DO I HAVE TO TENDER ALL OF MY SHARES? A: No. Our offer is completely voluntary on your part. You may specify on the Letter of Transmittal the number of shares you wish to tender. If your stock certificate represents more -1- shares than you wish to tender, we will issue you a new certificate for the shares you do not tender. SEE SECTION 3. 9. Q: HOW DO I TENDER MY SHARES? A: To tender all or any part of your shares, (circle)IF YOU HOLD CERTIFICATES IN YOUR OWN NAME, you must complete and sign a Letter of Transmittal (or a copy), and either mail or deliver to Registrar and Transfer Company: (circle)the Letter of Transmittal with any required signature guarantee and any other required documents, AND (circle)the stock certificates for your tendered shares (circle)IF YOU HAVE SHARES REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY, OR OTHER NOMINEE, you must contact that broker, dealer, commercial bank, trust company, or other nominee if you desire to tender your shares. SEE SECTION 3. (circle)If you are unable to deliver the certificates for the shares or the other required documents to Registrar and Transfer Company, you must comply with the guaranteed delivery procedure described in Section 3. You may contact Registrar and Transfer's Investor Relations Department for assistance at 1-800-368-5948 or via e-mail at info@rtco.com. 10. Q: HOW DO I COMPLETE THE LETTER OF TRANSMITTAL? A: The following points will help you in filling out the Letter of Transmittal. Be sure to read the instructions included on the reverse side of the form. If you are not sure how to complete the form, please call Registrar and Transfer's Investor Relations Department at 1-800- 368-5948. (circle)Enter your certificate numbers, number of shares, and number of shares being tendered. SEE DESCRIPTION OF CERTIFICATES SURRENDERED. (circle)Complete the order in which you want your shares purchased if more than 100,000 shares are tendered. SEE INSTRUCTION 3 OF THE LETTER OF TRANSMITTAL. (circle)Complete the "Odd Lot" information only if you own fewer than 100 shares and wish to sell all of your shares. SEE INSTRUCTION 4 OF THE LETTER OF TRANSMITTAL. (circle)If you have lost a certificate, complete the box on the first page and the Affidavit for Lost Stock Certificate(s) on the reverse side of the form. SEE INSTRUCTION 8. (Also see Q/A 12.) (circle)Complete the "Special Payment and/or Issuance Instructions" and "Special Delivery Instructions" portions only if you want someone else to receive the check, or shares are to be issued in someone else's name if you are not tendering all of your shares. SEE INSTRUCTIONS 1, 6, AND 7. (circle)Sign, date, and include your telephone number on the form. (Please be sure to sign your name(s) exactly as it/they appear in the registration on your certificate.) -2- (circle)Complete the Substitute Form W-9 on the top of the reverse side or you may be subject to backup withholding tax. (See Q/A 11 concerning Substitute Form W-9). 11. Q: WHAT IS THE SUBSTITUTE FORM W-9 AND WHY DO I HAVE TO FILL IT OUT? A: The Substitute Form W-9 is an IRS requirement. If we do not receive it, the IRS will require that we deduct 28% from whatever monies are due you. You should fill out the spaces provided for your name, address, and social security number, and then sign and date this form. Only one social security number and signature is needed on the Substitute Form W-9 in the case of joint accounts. The Certificate of Awaiting Taxpayer Identification Number should be used if you are awaiting a social security number or other federal tax identification number. Remember, your Tax Identification (TIN), in most cases, is your social security number. 12. Q: WHAT HAPPENS IF MY CERTIFICATE(S) IS LOST, STOLEN, DESTROYED, OR NOT ACCESSIBLE TO ME? A: If you have lost a certificate, you should indicate under "Description of Certificates Surrendered" on the Letter of Transmittal that the certificate is lost, complete the section on the reverse side of the form called "Affidavit for Lost Stock Certificate(s)" and return it with the Letter of Transmittal along with a check to cover the lost stock certificate bond premium of 1.5% of the value of your shares (minimum $25.00). If your premium exceeds $1,500.00 you must contact Registrar and Transfer's Investor Relations Department at 1-800-368- 5948. 13. Q: CAN I CHANGE MY MIND AFTER I HAVE TENDERED MY SHARES? A: Yes. If you tender your shares and change your mind, you may withdraw your shares at any time before our offer expires. In addition, after our offer expires, if we have not accepted your shares for payment, you may withdraw your shares at any time after 5:00 p.m., New York time, on Thursday, July 6, 2006. SEE SECTION 4. To withdraw your shares, you must deliver a written notice of your withdrawal to us before the withdrawal deadlines described in the preceding paragraph. Your notice of withdrawal must specify your name, the number of shares to be withdrawn, and the name of the registered holder of the shares. Some additional requirements apply if the certificates for shares to be withdrawn have been delivered to us. You may give notice by mail, courier delivery, personal delivery, or by facsimile to Registrar and Transfer Company. SEE SECTION 4. 14. Q: WILL I HAVE TO PAY A BROKERAGE COMMISSION OR STOCK TRANSFER TAX IF I TENDER MY SHARES? A: If you are a registered shareholder and tender your shares directly to us, you will not need to pay any brokerage commissions. If you hold shares through a broker or bank, however, you should ask your broker or bank to see if you will be charged a fee to tender your shares. SEE SECTION 3. If you instruct us in the Letter of Transmittal to make the payment for the shares to the registered holder, you will not incur any stock transfer tax. SEE SECTION 5. 15. Q: WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SELLING MY SHARES IN THE TENDER OFFER? A: Generally, you will be subject to United States federal income taxation when you receive cash from us in exchange for the shares you tender. The cash you receive will be treated either as: (circle)a sale or exchange eligible for capital gains treatment; or (circle)a dividend likely subject to qualified dividend tax rates. -3- We believe that most of our shareholders will be able to report the sale as a capital gains transaction. SEE SECTION 13. 16. Q: WILL YOU PURCHASE ALL OF THE SHARES I TENDER TO YOU? A: Yes, unless shareholders tender more than 100,000 shares. If more than 100,000 shares are tendered we will purchase shares based on the following order of priority: (circle)First, we will purchase shares from all holders of "odd lots" (less than 100 shares) who properly tender all of their shares. (circle)Second, we will purchase shares from all other shareholders who properly tender shares on a pro rata basis. As a result, we will purchase the same percentage of shares from each tendering shareholder in this second category. We will announce this proration percentage, if it is necessary, after our offer expires. As we noted above, we may also choose to purchase an additional 2% of the outstanding shares (approximately 34,055 shares), subject to applicable legal rules. SEE SECTION 1. 17. Q: HOW AND WHEN WILL I BE PAID? A: You will be paid the purchase price, in cash, as soon as practicable after the expiration of the offer and the acceptance of the shares for payment. No interest will be paid on the purchase price. There may be tax consequences to receiving this payment. SEE SECTIONS 1, 3, 5, AND 13. 18. Q: HOW MANY SHARES WILL PSB PURCHASE? A: We will purchase up to 100,000 shares of our common stock pursuant to our offer. We also reserve the right to purchase additional shares up to 2% of the outstanding shares (approximately 34,055 additional shares), subject to applicable legal requirements. Our offer is not conditioned on any minimum number of shares being tendered. SEE SECTION 1. 19. Q: HOW WILL YOU PAY FOR THE SHARES? A: We will need approximately $3,400,000 to purchase 100,000 shares and pay the estimated expenses of our tender offer. We expect to have sufficient cash to be able to pay for all shares tendered and the related expenses without borrowing funds. SEE SECTION 8. 20. Q: IS YOUR OFFER SUBJECT TO ANY CONDITIONS? A: Yes. Our obligation to accept and pay for your tendered shares is conditioned upon the satisfaction or waiver of the conditions described in Section 6 of this document. SEE SECTION 6. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION TO OUR SHAREHOLDERS AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER ON OUR BEHALF. DO NOT RELY ON ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF GIVEN OR MADE, AS HAVING BEEN AUTHORIZED BY US. -4- FORWARD-LOOKING STATEMENTS This Offer to Purchase and our other filings with the Securities and Exchange Commission may both contain and incorporate by reference forward- looking statements that involve risks, uncertainties, and assumptions. Forward-looking statements are not guarantees of performance. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of PSB may differ materially from those expressed or implied by such forward- looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements may be identified by, among other things, expressions of beliefs or expectations that certain events may occur or are anticipated, and projections or statements of expectations. Risks, uncertainties, and assumptions relating to forward-looking statements include general business and economic conditions, changes in fiscal and monetary policies, increased competition, changes in customers' preferences for types and sources of financial services, the timely development and acceptance of new products and services, increased costs of operation (including increased funding costs), changes in laws and regulation that govern PSB's operations, increases in credit risks and losses, loss of key personnel, unforeseen liabilities arising from current or prospective claims or litigation, the inability to execute expansion plans, errors in the application of critical accounting policies, unanticipated adverse decisions by tax authorities, the inability to pay dividends, lack of marketability of PSB stock, and the effect of certain organizational anti-takeover provisions. These and other risks, uncertainties, and assumptions are described under the caption "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2005 and from time to time in our other filings with the Securities and Exchange Commission after the date of that report. We assume no obligation, and do not intend, to update these forward-looking statements. INTRODUCTION We invite our shareholders to tender up to 100,000 shares of our common stock to us at a price of $33.75 per share upon the terms and subject to the conditions described in this Offer to Purchase and in the related Letter of Transmittal. Our Board of Directors believes that the offer is in the best interests of PSB. See Section 2. If you desire liquidity, our offer provides you with an opportunity to sell all or a portion of your shares without the usual transaction costs associated with open market sales. If you do not accept our offer, your proportionate interest in our equity, and thus in our future earnings and assets, will increase subject to our right to issue additional shares and other equity securities in the future. See Section 2. THE OFFER 1. NUMBER OF SHARES; PRORATION. Subject to the terms and conditions described in this Offer to Purchase, we will purchase up to 100,000 shares of our common stock at a price of $33.75 per share. To be purchased, shares must be validly tendered and not withdrawn in accordance with Section 4 prior to the Expiration Time. The term "Expiration Time" means 5:00 p.m., New York time, on Thursday, June 15, 2006, or such later date as we determine as the period of time during which our offer will remain open. If we extend our offer, the term "Expiration Time" will mean the latest time and date at which our offer, as so extended by us, expires. See Section 14 for a description of our right to extend, delay, terminate, or amend our offer. We reserve the right, in our sole discretion, to purchase more than 100,000 shares pursuant to the offer. In accordance with applicable regulations of the Securities and Exchange Commission (the -5- "Commission"), we may purchase an additional amount of shares not to exceed 2% of the outstanding shares (a total of 34,055 additional shares) without amending or extending the offer. See Section 14. Certificates for all shares tendered and not purchased pursuant to the offer will be returned to the tendering shareholders at our expense as promptly as practicable following the Expiration Time. See "Proration" below, in this Section 1. PRIORITY OF PURCHASES If more than 100,000 shares (or any greater number of shares as we may elect to purchase pursuant to the offer) have been validly tendered and not withdrawn, we will purchase validly tendered and not withdrawn shares on the basis set forth below: (circle)First, we will purchase all shares tendered and not withdrawn prior to the Expiration Time by any Odd Lot Holder who tenders all shares beneficially owned or held as record by such Odd Lot Holder; and (circle)Second, after purchase of all Odd Lot shares, we will purchase all other shares tendered and not withdrawn prior to the Expiration Time, on a pro rata basis as described below. ODD LOTS For purposes of the offer, the term "Odd Lot shares" means all shares validly tendered prior to the Expiration Time and not withdrawn by an Odd Lot Holder. An "Odd Lot Holder" is any person: (circle)who owns beneficially or of record fewer than 100 shares, and (circle)who checks the appropriate box on the Letter of Transmittal. This preference is not available to Odd Lot Holders who do not tender all of their shares or to beneficial or record holders of an aggregate of 100 or more shares, even if such holders have separate accounts or certificates representing fewer than 100 shares. PRORATION In the event that more than 100,000 shares are tendered (or more than the maximum number of shares we will purchase if we decide to purchase more than 100,000 shares), the shares we will purchase from any one shareholder (other than Odd Lot Holders) will be pro rated. We will determine the proration factor as soon as practicable following the Expiration Time. We will first purchase all Odd Lot shares. Proration for each shareholder who is not an Odd Lot Holder, will be based on the ratio of the number of shares tendered by each shareholder and not withdrawn to the total number of shares tendered by all shareholders, other than Odd Lot Holders, and not withdrawn. Any fractional shares resulting from the proration factor will be rounded up to the next full share. Because of the difficulty in determining the number of shares properly tendered and not withdrawn, and because of the Odd Lot procedure, we do not expect that we will be able to announce the final proration factor or commence payment for any shares purchased pursuant to the offer until approximately three business days after the Expiration Time. As described in Section 13, the number of shares that we will purchase from a shareholder may affect the federal income tax consequences to the shareholder of such purchase and therefore may be relevant to a shareholder's decision whether to tender shares. The Letter of Transmittal affords each -6- tendering shareholder the opportunity to designate the order of priority in which shares tendered are to be purchased in the event of proration. 2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER. PURPOSE With our sale of trust preferred securities in 2005, we believe that we have more than adequate capital to fund currently anticipated growth of our Peoples State Bank subsidiary, whether through internal operations or appropriate acquisitions. Over the past several years, we have been purchasing approximately one percent of our outstanding shares in open market transactions. Given our current level of capital, our Board believes that the purchase of shares in a tender offer is a more attractive use of our financial resources. Our offer also provides some opportunities for benefits to our shareholders not present with past share purchases. Although prices for the shares are quoted on the OTC Bulletin Board, quotations may not reflect actual trades as transactions are sporadic and do not reflect an active trading market for the shares. Therefore, shareholders may receive a price in the open market that the Board believes may undervalue our stock. Moreover, shareholders may not always be able to find a ready buyer for their shares. Our offer also provides an opportunity for shareholders to sell shares for cash without the usual transaction costs associated with market sales. This alternative may be particularly attractive to Odd Lot Holders (shareholders owning fewer than 100 shares) as they may avoid not only the payment of brokerage commissions, but any applicable odd lot discounts payable on a sale of their shares. CERTAIN EFFECTS OF THE OFFER Shareholders who do not tender their shares pursuant to our offer and shareholders who otherwise retain an equity interest as a result of a partial tender of shares or proration will continue to be shareholders. As a result, those shareholders will realize a proportionate increase in their relative equity interest in PSB and will bear the attendant risks associated with owning PSB stock. We can give no assurance, however, that we will not issue additional shares or equity interests in the future. Shareholders may be able to sell non-tendered shares in the future on the OTC Bulletin Board or otherwise, at a net price significantly higher or lower than the purchase price in our offer. Our offer will reduce the number of shares owned by non-affiliate shareholders and available for trading in the securities markets, and is likely to reduce the number of our shareholders. These reductions may result in lower stock prices and/or reduced liquidity in the trading market for our stock following completion of the offer. Because our directors and executive officers have advised us that they do not intend to tender any of their shares in our offer, the offer will increase the proportional holdings of our directors and executive officers. However, after termination of the offer, our directors and executive officers may, in compliance with applicable law, sell their shares in open market transactions, including through one or more pre-arranged stock trading plans in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any future sales by our directors and officers may be at prices that are higher or lower than the purchase price to be paid to our shareholders in our offer. Shares we acquire pursuant to our offer will be retained as treasury stock by us (unless and until we determine to retire such shares) and will be available for us to issue without further shareholder action -7- (except as required by applicable law or, if retired, the rules of any securities exchange or over-the-counter market on which our shares may be listed in the future). Shares may be reissued for many purposes, including, but not limited to, the acquisition of other businesses, the raising of additional capital for use in our business, and the satisfaction of obligations under existing or future stock option and employee benefit plans. We have no current plans for issuance of the shares repurchased pursuant to our offer. OTHER TENDERS OR PURCHASES We may, in the future, purchase additional shares on the open market or in private transactions. We may also conduct additional tender offers. Any such purchases may be on the same terms as, or on terms that are more or less favorable to shareholders than, the terms of our offer. However, Rule 13e-4 promulgated under the Exchange Act, generally prohibits us and our affiliates from purchasing any shares, other than pursuant to our offer, until at least ten business days after the expiration or termination of our offer. Any possible future purchases by us will depend on several factors including, without limitation, the market price of our shares, the results of this offer, our business and financial position, and general economic and market conditions. OTHER PLANS Except as otherwise disclosed in this Offer to Purchase, we currently have no plans, proposals, or negotiations underway that relate to or would result in: (circle)any extraordinary transaction, such as a merger, reorganization, or liquidation, involving us or any of our subsidiaries; (circle)any purchase, sale, or transfer of an amount of our assets or any of our subsidiaries' assets which is material to us and our subsidiaries, taken as a whole; (circle)except as previously announced to our shareholders concerning David K. Kopperud, any change in our present board of directors or management or any plans or proposals to change the number or the term of directors or to fill any vacancies on the board (except that we may fill vacancies arising on the board in the future) or to change any material terms of employment of any executive officer (See Section 10); (circle)any material change in our present dividend rate or policy, our indebtedness or capitalization, our corporate structure or our business; (circle)any class of our equity securities becoming eligible for termination of registration under Section 12(g) of the Exchange Act; (circle)the suspension of our obligation to file reports under Section 13 of the Exchange Act; (circle)the acquisition or disposition by any person of our securities (except by us pursuant to this offer); or (circle)any changes in our articles of incorporation or by-laws that could impede the acquisition of control of us. -8- 3. PROCEDURES FOR TENDERING SHARES. PROPER TENDER OF SHARES For shares to be validly tendered pursuant to our offer: (circle)You must comply with the instructions set forth in the Letter of Transmittal and deliver the properly completed Letter of Transmittal, the certificates for your shares, and any other documents required by the Letter of Transmittal to us prior to the Expiration Time; or (circle)You must comply with the guaranteed delivery procedures described below. YOU MAY ELECT THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR STOCK, THE LETTER OF TRANSMITTAL, AND ANY OTHER REQUIRED DOCUMENTS. YOU ASSUME ALL RISKS ASSOCIATED WITH PROPER DELIVERY. IF DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. SIGNATURE GUARANTEES A signature guarantee IS NOT REQUIRED if the Letter of Transmittal is signed by the registered holder(s) of the shares being tendered OR the shares are tendered for the account of a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company (not a savings bank or a savings and loan association) having an office, branch, or agency in the United States (each of these entities is referred to as an "Eligible Institution"). A signature guarantee IS REQUIRED if the registered holder has completed the "Special Delivery Instructions" or the "Special Payment and/or Issuance Instructions" in the Letter of Transmittal. See Instructions 6 and 7 of the Letter of Transmittal. For example, if a certificate for stock is registered in the name of a person other than the person executing the Letter of Transmittal, or if payment is to be made to a person other than the registered holder, then the certificate must be endorsed or accompanied by an appropriate stock power. The stock power must be signed exactly as the name of the registered holder appears on the certificate or stock power guaranteed by an Eligible Institution. GUARANTEED DELIVERY If you wish to tender shares under the offer and your certificates for shares are not immediately available or time will not permit all required documents to reach Registrar and Transfer Company prior to the Expiration Time, your tender will still be effective if all the following conditions are met: (circle)your tender is made by or through an Eligible Institution; (circle)a properly completed and duly executed Notice of Guaranteed Delivery in the form we have provided, is received by Registrar and Transfer Company, as provided below, prior to the Expiration Time; and (circle)Registrar and Transfer Company receives, within the period of three trading days after the date of execution of that Notice of Guaranteed Delivery, the certificates representing the shares being tendered, in the proper form for transfer, together with (1) a Letter of Transmittal, or a facsimile thereof, relating thereto, which has been properly completed -9- and duly executed and includes all signature guarantees required thereon and (2) all other required documents. For purposes of the guaranteed delivery procedure, a "trading day" is any day on which the New York Stock Exchange is open for business. A Notice of Guaranteed Delivery must be delivered to Registrar and Transfer Company by hand, overnight courier, facsimile transmission or mail before the Expiration Time and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. FEDERAL INCOME TAX BACKUP WITHHOLDING Under the federal income tax backup withholding rules, unless an exemption applies under applicable law and regulations, 28% of the gross proceeds payable to you or another payee pursuant to the offer must be withheld by us and remitted to the Internal Revenue Service. This withholding is not required if you or the other payee provides the appropriate taxpayer identification number (employer identification number or social security number) and certifies that such number is correct. IF YOU TENDER YOUR SHARES, YOU SHOULD COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 (INCLUDED AS PART OF THE LETTER OF TRANSMITTAL) TO AVOID BACKUP WITHHOLDING. See Instruction 10 of the Letter of Transmittal. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISORS REGARDING THE APPLICATION OF FEDERAL INCOME TAX WITHHOLDING REQUIREMENTS. For a discussion of certain federal income tax consequences to tendering shareholders, see Section 13. DETERMINATION OF VALID TENDER All questions as to the number of shares to be accepted and the validity, form, eligibility (including time of receipt), and acceptance of any tender of shares (including proper completion of the Letter of Transmittal) will be determined by us, in our sole discretion. Our determination will be final and binding on all parties. We reserve the absolute right to reject any or all tenders of any shares that we determine are not in appropriate form or if we determine that acceptance of the shares may be unlawful. We also reserve the absolute right to waive any of the conditions of our offer or any defect or irregularity in any tender with respect to any particular shares or any particular shareholder. We will not consider any particular tender of shares to have been properly made until all defects or irregularities have been cured by the tendering shareholder or waived by us. We are not obligated to give you notice of any defects or irregularities in tenders. Neither we nor any of our directors, officers, employees, or agents will incur any liability for failure to give any such notice. YOUR REPRESENTATIONS AND WARRANTIES; OUR ACCEPTANCE CONSTITUTES AN AGREEMENT You will have accepted the terms of our offer if you tender your shares and submit a properly completed Letter of Transmittal. Your tender and completion of the Letter of Transmittal also means that you are making the following representations and warranties to us: (circle)you have a "net long position" in the shares being tendered within the meaning of Exchange Act Rule 14e-4; (circle)the tender of shares complies with Rule 14e-4; (circle)you have full power and authority to execute the Letter of Transmittal and tender the shares; and -10- (circle)we will acquire good and marketable title free and clear of all liens, security interests, charges, encumbrances, or other obligations and that the shares are not subject to any adverse claims. It is a violation of Rule 14e-4 for you, directly or indirectly, to tender shares for your own account unless, at the time of tender and at the end of the proration period or period during which the shares are accepted by lot (including any extensions thereof), (circle)you have a "net long position" equal to or greater than the amount of the shares tendered, and (circle)you will deliver the shares or cause the shares to be delivered in accordance with the terms of the offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. Our acceptance for payment of shares tendered pursuant to our offer will constitute a binding agreement between you and us upon the terms and conditions of our offer. 4. WITHDRAWAL RIGHTS. Shares tendered pursuant to our offer may be withdrawn at any time prior to the Expiration Time. Unless we have accepted tendered shares for payment after the Expiration Time, you may also withdraw your shares at any time after 5:00 p.m. New York time, on Thursday, July 6, 2006. For a withdrawal to be effective, a written notice of withdrawal must be received by Registrar and Transfer Company before the applicable deadlines described in the preceding paragraph. You may deliver your withdrawal in person, by mail, courier delivery, or personal delivery. Any notice of withdrawal must include your name, the name of the registered holder (if different from your name), the number of shares tendered, and the number of shares to be withdrawn. If the certificates for shares to be withdrawn have been delivered to us, then, prior to the release of such certificates by us, you must also submit the serial numbers shown on the particular certificates for the shares to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of shares tendered by an Eligible Institution). We will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of notices of withdrawal. Our determination will be final and binding. We are not obligated to give notice of any defects or irregularities in any notice of withdrawal. Neither we, nor any of our directors, officers, or employees will incur liability for failure to give any such notice. You may not rescind a withdrawal. If the Expiration Time has not occurred, withdrawn shares may be validly retendered prior to the Expiration Time by again following one of the procedures described in Section 3. If we extend our offer, if we are delayed in the purchase of shares, or if we are unable to purchase shares pursuant to our offer for any reason, then, without prejudice to our rights under the offer, we may, subject to applicable law, retain tendered shares on our behalf, and such shares may not be withdrawn except to the extent tendering shareholders are entitled to withdrawal rights as described in this Section 4. 5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE. As promptly as practicable following the Expiration Time, we will accept for payment and pay for (and thereby purchase) shares validly tendered and not withdrawn prior to the Expiration Time. In -11- accordance with applicable regulations of the Commission, we may purchase an additional number of shares not to exceed 2% of our outstanding common stock pursuant to our offer without amending or extending the offer. If: (circle)we increase or decrease the price to be paid for the shares in our offer, or (circle)we increase the number of shares being sought in our offer by more than 2% of our outstanding common stock, and (circle)in either case, our offer is scheduled to expire at any time earlier than the 10th business day from, and including, the date that notice of such increase or decrease is first published, sent, or given in the manner specified in Section 14, our offer will be extended until the expiration of such period of 10 business days. We will pay for all of the shares accepted for payment pursuant to our offer as soon as practicable after the Expiration Time. In all cases, payment for shares tendered and accepted for payment pursuant to our offer will be made promptly (subject to possible delay in the event of proration), but only after timely receipt by us of certificates representing tendered shares and all properly completed documents required by this offer. In the event of proration, we will determine the proration factor and pay for those tendered shares accepted for payment as soon as practicable after the Expiration Time. We do not expect to be able to announce the final results of any proration and commence payment for shares purchased until approximately five business days after the Expiration Time. Certificates representing all shares tendered and not purchased due to proration or because the Letter of Transmittal was not properly completed will be returned to the tendering shareholder as promptly as practicable after the Expiration Time without expense to the tendering shareholders. Under no circumstances will interest on the purchase price be paid by us because of any delay in making payment. In addition, if certain events occur, we may not be obligated to purchase any shares pursuant to our offer. See Section 6. In most cases, we will pay or cause to be paid all stock transfer taxes, if any, payable on the transfer to us of shares purchased pursuant to our offer. If, however, payment of the purchase price is to be made to, or (in the circumstances permitted by our offer) if unpurchased shares are to be registered in the name of, any person other than the registered holder(s), or if tendered certificates are registered in the name of any person other than the person(s) signing the Letter of Transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder(s) or such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of the stock transfer taxes, or exemption therefrom, is submitted. 6. CONDITIONS OF THE OFFER. Our obligation to accept your shares or to pay for your shares is subject to the conditions described below. Notwithstanding any other provision of our offer, we will not be required to accept for payment or pay for any shares tendered, and may terminate or amend and may postpone (subject to the requirements of the Exchange Act for prompt payment for or return of shares tendered) the acceptance for payment of shares tendered, if at any time after May 10, 2006, and before we have made payment for any of the shares, any of the following shall have occurred: (circle)there shall have been threatened, instituted, or pending any action or proceeding by any government or governmental, regulatory, or administrative agency or authority or tribunal -12- or any other person, domestic or foreign, or before any court, authority, agency, or tribunal that: (circle)challenges the acquisition of the shares pursuant to our offer or otherwise in any manner relates to or affects the offer; (circle)in our reasonable judgment, could materially and adversely affect our business, condition (financial or other), income, or operations, taken as a whole; (circle)there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order, or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced, or deemed to be applicable to our offer or to us by any legislative body, court, authority, agency, or tribunal which, in our reasonable judgment, would or might directly or indirectly: (circle)make the acceptance for payment of, or payment for, some or all of the shares illegal or otherwise restrict or prohibit consummation of our offer; (circle)delay or restrict us or render us unable, to accept for payment or pay for some or all of the shares; (circle)materially affect our business, condition (financial or other), income, operations, taken as a whole; (circle)it has been publicly disclosed or we have learned that: (circle)any person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act) has acquired or proposes to acquire beneficial ownership of more than 5% of our outstanding shares whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than as disclosed in a Schedule 13D or 13G on file with the Commission on May 10, 2006 or otherwise known to us on such date); or (circle)any such person or group that on or prior to May 10, 2006, had filed such a schedule with the Commission thereafter shall have acquired or shall propose to acquire, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise, beneficial ownership of additional shares representing 2% or more of the outstanding shares; (circle)there has occurred: (circle)any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market; (circle)a decrease of more than 10% in the market price of our common stock, the Dow Jones Industrial Average, the Nasdaq Composite Index, or the S&P 500 Composite Index since May 10, 2006; (circle)any change in the general political, market, economic, or financial condition in the United States or abroad that could, in our reasonable judgment, have a material adverse effect on our business, condition (financial or otherwise), -13- income, operations, or ability to obtain financing generally, or the trading in our common stock; (circle)the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or any limitation on, or any event which, in our reasonable judgment, might affect the extension of credit by lending institutions in the United States; (circle)the commencement of a war, armed hostilities, or other international or national calamity directly or indirectly involving the United States; or (circle)in the case of any of the foregoing existing at the time of the commencement of our offer, in our reasonable judgment, a material acceleration or worsening thereof; (circle)a tender or exchange offer with respect to some or all of our common stock (other than our offer, or a merger, acquisition, or other business combination proposal for PSB, shall have been proposed, announced, or made by another person or group (within the meaning of Section 13(d)(3) of the Exchange Act); (circle)there has occurred any other event or events that has resulted, or may in our reasonable judgment result, directly or indirectly, in an actual or threatened change in our business, condition (financial or other), income, operations, or stock ownership; and, in our reasonable judgment, such event or events make it undesirable or inadvisable to proceed with the offer or with such acceptance for payment. The foregoing conditions are for our sole benefit and may be asserted by us on or before the Expiration Time regardless of the circumstances giving rise to any such condition (other than conditions that are proximately caused by our action or failure to act) and may be waived by us, in whole or in part, at any time and from time to time in our sole discretion. Our failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time or before the Expiration Time. Any determination by us concerning the events described above will be final and binding on all parties. Our obligation to accept your shares or to pay for your shares is also subject to the condition, which cannot be waived by us, that the purchase of shares pursuant to the offer will not result in our common stock becoming eligible for deregulation under the Exchange Act. 7. PRICE RANGE OF SHARES; DIVIDENDS. Prices for our common stock are quoted on the OTC Bulletin Board. Prices are also published periodically in the Milwaukee Journal Sentinel. The following table sets forth, for the periods indicated, the high and low bid quotations on the OTC Bulletin Board and the dividends per share for the periods indicated. The quotations reflect bid prices, without retail mark-up, mark-down, or commissions, and may not necessarily represent actual transactions. There is no active established trading market for our common stock. -14-
2005 2004 2003 Quarter High Low Dividends High Low Dividends High Low Dividends 1st $32.15 $31.85 $ - $35.00 $33.30 $ - $24.86 $21.24 $ - 2nd $31.85 $30.75 $ 0.310 $34.75 $34.10 $ 0.300 $31.52 $24.86 $ 0.285 3rd $31.00 $30.65 $ - $34.50 $32.75 $ - $31.90 $31.43 $ - 4th $30.90 $29.25 $ 0.310 $32.75 $32.10 $ 0.300 $35.24 $31.43 $ 0.285
8. SOURCE AND AMOUNT OF FUNDS. Assuming that we purchase 100,000 shares pursuant to the offer at a purchase price of $33.75 per share, we expect the maximum amount required to purchase shares pursuant to our offer and to pay related taxes, fees, and expenses will be approximately $3,400,000. We expect the full amount of our purchase obligation under our offer will be available from our general corporate funds. 9. CERTAIN ADDITIONAL INFORMATION CONCERNING PSB. GENERAL We are a Wisconsin corporation and own all of the stock of our principal subsidiary, Peoples State Bank. As a registered one-bank holding company under the Bank Holding Company Act of 1956, we file periodic reports with the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"). Our office is located at the main office of the bank, 1905 W. Stewart Avenue, Wausau, Wisconsin 54401 Through our bank subsidiary, we are engaged in general commercial and retail banking and operate eight full-service locations in the communities of Wausau, Rib Mountain, Weston, Marathon, Rhinelander, Minocqua, and Eagle River, Wisconsin. WHERE YOU CAN FIND ADDITIONAL INFORMATION We are subject to the informational filing requirements of the Exchange Act and accordingly, are required to file reports, statements, and other information with the Commission relating to our business, financial condition, and other matters, including information concerning our directors and officers and their remuneration and beneficial ownership of our common stock. You can inspect and copy our annual, quarterly, and special reports, proxy statements, and other information filed with the Commission at the Commission's public reference facilities, Room 1580, 100 F. Street, N.E., Washington, D.C. 20549; 233 Broadway, New York, New York 10279; and Suite 1400, Citicorp Center, 500 W. Madison Street, Chicago, Illinois 60661-2511. You can also obtain copies of these materials from the public reference section of the Commission at 100 F. Street, N.E., Washington, D.C. 20549, at prescribed rates. Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms. The Commission also maintains a web site that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the Commission (http://www.sec.gov). SCHEDULE TO Pursuant to Exchange Act Rule 13e-4, we have filed with the Commission an Issuer Tender Offer Statement on Schedule TO which contains additional information with respect to our offer. Our Schedule TO, including the exhibits and any amendments thereto, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth in the preceding paragraph with respect to information concerning us. -15- INFORMATION INCORPORATED BY REFERENCE. The rules of the SEC allow us to "incorporate by reference" information into this document, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. This Offer to Purchase incorporates by reference the descriptions of our compensation plans and agreements with our directors and executive officers contained under the captions "The Board of Directors - The Board - Certain Relationships and Related Transactions," "The Board - Compensation of Directors," and "Executive Officer Compensation - Employment and Change of Control Agreements" in our definitive proxy statement filed with the Commission on March 10, 2006 WE RECOMMEND THAT YOU REVIEW OUR FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2005, AND OUR PROXY STATEMENT DATED MARCH 10, 2006, AS WELL AS SUBSEQUENT FILINGS WITH THE COMMISSION IN CONNECTION WITH YOUR EVALUATION OF OUR TENDER OFFER. 10. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES. MATERIAL AGREEMENTS Except for outstanding options to purchase stock granted from time to time to certain employees (including executive officers) pursuant to our 2001 Stock Option Plan (see "Beneficial Ownership of Shares," below), neither we nor, to the best of our knowledge, any of our affiliates, directors, or executive officers is a party to any contract, arrangement, understanding, or relationship with any other person relating, directly or indirectly, to our offer with respect to any of our securities including, but not limited to, any contract, arrangement, understanding, or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss, or the giving or withholding of proxies, consents, or authorizations. Our directors and executive officers have advised us that they do not intend to tender any shares in the offer. BENEFICIAL OWNERSHIP OF SHARES As of May 1, 2006, we had 1,702,748 shares of stock issued and outstanding and options with respect to 19,794 shares were exercisable within 60 days of such date. The 100,000 shares that we are offering to purchase represent approximately 5.9% of the shares outstanding on May 1, 2006. The following table sets forth, based on statements filed with the Securities and Exchange Commission ("SEC") or information otherwise known to us, the name of each person believed by us to own more than 5% of our common stock and the number of shares of common stock held by each person.
SHARES OF BANK STOCK PERCENT OF NAME AND ADDRESS BENEFICIALLY OWNED CLASS The Banc Fund Company, LLC/ 108,700 6.4% Charles J. Moore(1) 208 S. LaSalle Street Chicago, IL 60604 Lawrence Hanz, Jr. 92,893 5.5% 2102 Clarberth Schofield, WI 54476 -16- (1) Shares held in various funds controlled by The Banc Fund Company, LLC, over which Mr. Moore exercises sole voting and dispositive power.
The following table sets forth, based on statements filed with the SEC, the amount of common stock which is deemed beneficially owned on May 1, 2006, by each of our directors, each of the current executive officers named in the summary compensation table, and our directors and executive officers as a group. The amounts indicated include, as applicable, shares held by spouses and minor children, shares held indirectly in trust for the benefit of the directors and/or their spouses, children, or parents, shares held by businesses or trusts over which directors exercise voting control, and shares subject to exercisable options. The address of each person listed is c/o PSB Holdings, Inc., 1905 W. Stewart Avenue, Wausau, WI 54401.
SHARES OF STOCK PERCENT OF NAME BENEFICIALLY OWNED CLASS Gordon P. Connor 20,106(1) 1.2% Patrick L. Crooks 16,788 * William J. Fish 18,665 1.1% Charles A. Ghidorzi 613 * Gordon P. Gullickson 6,044 * David K. Kopperud 20,502(2) 1.2% Thomas R. Polzer 20,012 1.2% William M. Reif 3,532 * Thomas A. Riiser 17,556 1.0% John H. Sonnentag 6,102 * David A. Svacina 10,988(2) * Scott M. Cattanach 820(2) * All directors and officers as a group (12 persons) 141,728(2) 8.3% * Less than 1% (1) Includes 6,331 shares held by two trusts for which beneficial ownership is disclaimed. (2) Includes shares which may be acquired through the exercise of options on or before 60 days from the record date, March 1, 2006, for Mr. Kopperud, 8,973 shares; Mr. Svacina, 3,263; and Mr. Cattanach, 560 shares.
RECENT TRANSACTIONS IN OUR STOCK Except as described herein, neither we, nor, to the best of our knowledge, any of our directors or executive officers, nor any affiliates of any of the foregoing, had any transactions in the stock during the 60 business days prior to the date hereof. The following open market transactions occurred during the 60 days prior to the date hereof:
Name Date Transactions No. of Shares Purchase Price Gordon P. Connor 3/15/06 Sale 350 shares $30.75 David K. Kopperud 3/15/06 Purchase 500 shares $30.75 PSB 3/17/06 Purchase 4,000 shares $30.75
-17- 11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE EXCHANGE ACT. Our purchase of shares pursuant to our offer will reduce the number of shares that might otherwise be traded publicly and may reduce the number of shareholders. One of the conditions of our offer to purchase, which cannot be waived by us, is that our purchase of shares pursuant to the offer will not result in our common stock becoming eligible for deregistration under the Exchange Act. Our common stock is not currently a "margin security" under the rules of the Federal Reserve Board. 12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. We are required, under certain circumstances, to provide prior notice to the Federal Reserve Board if the gross consideration to be paid for our common stock, when added to the amount paid for other purchases of common stock, during the preceding twelve-month period is equal to 10% or more of our consolidated net worth. We do not believe that such prior notice requirement is applicable to our offer and no other regulatory approval is required to purchase the shares pursuant to the offer. 13. MATERIAL FEDERAL INCOME TAX CONSEQUENCES. The following paragraphs describe the material United States federal income tax consequences of the sale of shares pursuant to our offer under the Internal Revenue Code of 1986, as amended (the "Code"). We recommend that you consult your own tax advisor as to the particular United States federal income tax consequences to you of tendering shares pursuant to our offer and the applicability and effect of any state, local, or foreign tax laws and recent changes in applicable tax laws. GENERAL The following is a discussion of the material United States federal income tax consequences to shareholders with respect to a sale of shares pursuant to our offer. The discussion is based upon the provisions of the Code, Treasury regulations, Internal Revenue Service ("IRS") rulings, and judicial decisions, all in effect as of the date hereof and all of which are subject to change (possibly with retroactive effect) by subsequent legislative, judicial, or administrative action. The discussion does not address all aspects of United States federal income taxation that may be relevant to a particular shareholder in light of the shareholder's particular circumstances or to certain types of holders subject to special treatment under the United States federal income tax laws (such as certain financial institutions, tax exempt organizations, life insurance companies, dealers in securities or currencies, employee benefit plans, or shareholders holding the shares as part of a conversion transaction, as part of a hedge or hedging transaction, or as a position in a straddle for tax purposes). In addition, the discussion below does not consider the effect of any foreign, state, local, or other tax laws that may be applicable to particular shareholders. The discussion assumes that the shares are held as "capital assets" within the meaning of Section 1221 of the Code. We have neither requested nor obtained a written opinion of counsel or a ruling from the IRS with respect to the tax matters discussed below. CHARACTERIZATION OF THE SURRENDER OF SHARES PURSUANT TO THE OFFER TO PURCHASE If you surrender shares to us pursuant to our offer, it will be a taxable transaction for United States federal income tax purposes and may also be a taxable transaction under applicable state, local, and foreign tax laws. The United States federal income tax consequences may vary depending upon your particular facts and circumstances. Under Section 302 of the Code, the surrender of shares by you pursuant to our offer will be treated as a "sale or exchange" of such shares for United States federal income tax purposes if the receipt of cash upon surrender (1) is "substantially disproportionate" with -18- respect to you, (2) results in a "complete redemption" of your interest in PSB, or (3) is "not essentially equivalent to a dividend" with respect to you (each as described below). If any of the above three tests is satisfied, and the surrender of the shares is therefore treated as a "sale or exchange" of such shares for United States federal income tax purposes, you will recognize gain or loss equal to the difference between the amount of cash received by you and your tax basis in the shares surrendered pursuant to our offer. Any such gain or loss will be capital gain or loss, and will be long term capital gain or loss if the shares have been held for more than one year. If none of the above three tests is satisfied, you will be treated as having received a distribution by us with respect to your shares in an amount equal to the cash received by you pursuant to our offer. The distribution will be treated as dividend income to the extent of our current or accumulated earnings and profits for tax purposes. The amount of the distribution in excess of our current or accumulated earnings and profits will be treated as a return of your tax basis in the shares, and then as gain from the sale or exchange of the shares. If you are treated as having received a distribution by us with respect to your shares, your basis in your remaining shares will generally be adjusted to take into account the return of your basis in the shares tendered. To the extent your distribution is dividend income from our current or accumulated earnings and profits, you may be eligible for the 15% (or possibly lower) tax rate for qualified dividend income. The determination of whether you are eligible for this lower tax rate will depend in large part on how long you have owned your shares. Although reduced tax rates apply to both capital gain and qualified dividend income, it may be more advantageous for you to qualify for the lower capital gain rate because doing so would ensure that you recover the entire basis of your shares tax free. We recommend that you consult your own tax advisers with respect to the tax rate and classification applicable to your distribution. CONSTRUCTIVE OWNERSHIP In determining whether any of the three tests under Section 302 of the Code is satisfied, you must take into account not only the shares that are actually owned by you, but also shares that are constructively owned by you within the meaning of Section 318 of the Code. Under Section 318 of the Code, you may constructively own shares actually owned, and in some cases constructively owned, by certain related individuals or entities and shares that you have the right to acquire by exercise of an option or by conversion. PRORATION Contemporaneous dispositions or acquisitions of shares by a shareholder or related individuals or entities may be deemed to be part of a single integrated transaction and may be taken into account in determining whether any of the three tests under Section 302 of the Code has been satisfied. You should be aware that because proration may occur in the offer, even if all the shares actually and constructively owned by you are tendered pursuant to our offer, fewer than all of these shares may be purchased by us. Thus, proration may affect whether the surrender by you will meet any of the three tests under Section 302 of the Code. SECTION 302 TESTS Generally, the receipt of cash by you will be "substantially disproportionate" if the percentage of our outstanding shares actually and constructively owned by you immediately following the surrender of shares pursuant to our offer is less than 80% of the percentage of the outstanding shares actually and constructively owned by you immediately before the sale of shares pursuant to our offer. There are -19- additional tests which must be satisfied in order to qualify as a substantially disproportionate transaction. We recommend that you consult your tax advisors with respect to the application of the "substantially disproportionate" test to your particular situation. The receipt of cash by you will be a "complete redemption" if either (1) you own no shares either actually or constructively immediately after the shares are surrendered pursuant to our offer, or (2) you actually own no shares immediately after the surrender of shares pursuant to our offer and, with respect to shares of family members constructively owned by you immediately after our offer, you are eligible to waive (and effectively waive) constructive ownership of all such shares under procedures described in Section 302(c) of the Code. A director, officer, or employee of PSB is not eligible to waive constructive ownership under the procedures described in Section 302(c) of the Code. Even if the receipt of cash by you fails to satisfy the "substantially disproportionate" test or the "complete redemption" test, you may nevertheless satisfy the "not essentially equivalent to a dividend" test if your surrender of shares pursuant to our offer results in a "meaningful reduction" in your interest in PSB. Whether the receipt of cash by you will be "not essentially equivalent to a dividend" will depend upon your individual facts and circumstances. The IRS has indicated in published rulings that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a "meaningful reduction." If you are expecting to rely upon the "not essentially equivalent to a dividend" test, We recommend that you consult your own tax advisors as to its application in your particular situation. CORPORATE SHAREHOLDER DIVIDEND TREATMENT If a sale of shares by a corporate shareholder is treated as a dividend, the corporate shareholder may be entitled to claim a deduction equal to 70% or more of the dividend under Section 243 of the Code, subject to other applicable limitations. Corporate shareholders should, however, consider the effect of Section 246(c) of the Code, which disallows a dividends received deduction with respect to stock that is held for 45 days or less. For this purpose, the length of time a taxpayer is deemed to have held stock may be reduced by periods during which the taxpayer's risk of loss with respect to the stock is diminished by reason of the existence of certain options or other transactions. Moreover, under Section 246A of the Code, if a corporate shareholder has incurred indebtedness directly attributable to an investment in shares, the dividends received deduction may be reduced. In addition, amounts received by a corporate shareholder pursuant to our offer that are treated as a dividend may constitute an "extraordinary dividend" under Section 1059 of the Code. The "extraordinary dividend" rules of the Code are highly complicated. Accordingly, any corporate shareholder that might have a dividend as a result of the sale of shares pursuant to our offer should review the "extraordinary dividend" rules to determine the applicability and impact of such rules to it. WE RECOMMEND THAT SHAREHOLDERS CONSULT THEIR OWN TAX ADVISORS REGARDING ANY POSSIBLE IMPACT ON THEIR OBLIGATION TO MAKE ESTIMATED TAX PAYMENTS AS A RESULT OF THE RECOGNITION OF ANY CAPITAL GAIN (OR THE RECEIPT OF ANY ORDINARY INCOME) CAUSED BY THE SURRENDER OF ANY SHARES TO US PURSUANT TO OUR OFFER TO PURCHASE. BACKUP WITHHOLDING See Section 3 with respect to the application of the United States federal income tax backup withholding. -20- 14. EXTENSION OF OFFER; TERMINATION; AMENDMENT. We expressly reserve the right, in our sole discretion, at any time and from time to time and for any reason, to extend the period of time during which our offer is open. If we extend our offer, it will also delay acceptance for payment of, and payment for, any shares. We may extend our offer by giving oral or written notice of extension to you and making a public announcement. We also expressly reserve the right, in our sole discretion, to terminate our offer and not accept for payment or pay for any shares not theretofore accepted for payment or paid for. We may also, subject to applicable law, postpone payment for the shares upon the occurrence of any of the conditions specified in Section 6. We must give oral or written notice of such termination or postponement to you and make a public announcement. Our reservation of the right to delay payment for the shares which have been accepted for payment is limited by Exchange Act Rule 13e-4(f)(5) which requires that we must pay the consideration offered or return the shares tendered promptly after termination or withdrawal of a tender offer. Subject to compliance with applicable law, we further reserve the right, in our sole discretion, and for any reason, to amend our offer in any respect (including, without limitation, by decreasing or increasing the consideration offered to holders of shares or by decreasing or increasing the number of shares being sought in our offer). Amendments to our offer may be made at any time and from time to time and will be effective upon public announcement by us. Public announcement, in the case of an extension, must be issued no later than 9:00 a.m., New York time, on the next business day after the last previously scheduled or announced Expiration Time. Any public announcement made pursuant to our offer will be disseminated promptly to shareholders in a manner reasonably designed to inform shareholders of such change. If we materially change the terms of our offer or the information concerning the offer, or if we waive a material condition of our offer, we will extend the offer to the extent required by Exchange Act Rules 13e-4(d)(2) and 13e-4(e)(2). These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. If (1) we increase or decrease the price to be paid for our shares or the number of shares being sought in our offer and, in the event of an increase in the number of shares being sought, such increase exceeds 2% of the outstanding shares, and (2) our offer is scheduled to expire at any time earlier than the 10th business day from, and including, the date that notice of an increase or decrease is first published, sent or given in the manner specified in this Section 14, the offer will then be extended until the expiration of such 10 business days. 15. FEES AND EXPENSES. We have retained our stock transfer agent, Registrar and Transfer Company, to act on our behalf with respect to the distribution of this Offer to Purchase and Letter of Transmittal to our shareholders. Registrar and Transfer Company will receive reasonable and customary compensation for its services, will be reimbursed for its reasonable out-of-pocket expenses, and will be indemnified against certain liabilities in connection with our offer, including certain liabilities under federal securities laws. We will not pay fees or commissions to any broker, dealer, or other person for soliciting tenders pursuant to our offer. We will, however, upon request, reimburse brokers, dealers, and commercial banks for customary mailing and handling expenses incurred by such persons in forwarding our offer and related materials to the beneficial owners of shares held by any such person as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank, or trust company has been authorized to act as our agent for purposes of our offer. -21- We will pay or cause to be paid all stock transfer taxes, if any, on our purchase of shares unless payment of the purchase price is to be made to, or shares not tendered or not purchased is to be registered in the name of, any person other than the registered holder; or if tendered shares are registered in the name of any person other than the person who executes the Letter of Transmittal. 16. MISCELLANEOUS. We are not aware of any jurisdiction where the making of our offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of our offer is not in compliance with any valid applicable law, we will make a good faith effort to comply with such law. If, after such good faith effort, we cannot comply with such law, our offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of shares residing in such jurisdiction. In any jurisdiction the securities or blue sky laws of which require our offer to be made by a licensed broker or dealer, the offer shall be deemed to be made on our behalf by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Facsimile copies of the Letter of Transmittal will be accepted from Eligible Institutions. The Letter of Transmittal and certificates for shares and any other required documents should be sent or delivered by each shareholder or his or her broker, dealer, commercial bank, trust company, or other nominee to us. -22- EX-99.A.1.B 4 psbex99a1b.txt PSB HOLDINGS, INC. EXHIBIT 99.A.1.B. - LETTER OF TRANSMITTAL Exhibit 99.(a)(1)(B)
LETTER OF TRANSMITTAL TO ACCOMPANY CERTIFICATES REPRESENTING SHARES OF COMMON STOCK OF By Mail: PSB HOLDINGS, INC. By Hand and Overnight Delivery: Registrar and Transfer Company DEPOSITARY: REGISTRAR AND TRANSFER COMPANY Registrar and Transfer Company Attn: Reorg/Exchange Dept. Attn: Reorg/ Exchange Dept. P.O. Box 645 THIS OFFER EXPIRES 5:00 P.M., NEW YORK TIME 10 Commerce Drive Cranford, New Jersey 07016 ON JUNE 15, 2006 Cranford, New Jersey 07016
DESCRIPTION OF CERTIFICATES SURRENDERED Certificate(s) Enclosed (Attach List if necessary) See Instruction 2 *Unless otherwise indicated it will be assumed all shares are Total Number of Number of being tendered Shares Represented Shares (See Instruction 2) Certificate by Certificate(s) Tendered* Name and Address of Registered Holder Number(s) TOTAL SHARES
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. Indicate below the order (by certificate number) in which shares are to be purchased in the event of proration (attach additional signed list if necessary). If you do not designate an order, if less than all shares tendered are purchased due to proration, shares will be selected for purchase by the Depositary. See Instruction 3. 1st: _______ 2nd: _______ 3rd: _______ 4th: _______ 5th: _______ (See Instruction) (box) CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY. ENCLOSE A PHOTO-COPY OF THE NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s): Date of Execution of Notice of Guaranteed Delivery: Name of Institution that Guaranteed Delivery: ODD LOTS (SEE INSTRUCTION 4) To be completed only if shares are being tendered by or on behalf of a person owning, beneficially or of record, an aggregate of fewer than 100 shares. The undersigned either (check one box): (box) is the beneficial or record owner of an aggregate of fewer than 100 shares, all of which are being tendered; or (box) is a broker, dealer, commercial bank, trust company, or other nominee that (a) is tendering for the beneficial owner(s), shares with respect to which it is the record holder, and (b) believes, based upon representations made to it by the beneficial owner(s), that each such person is the beneficial owner of an aggregate of fewer than 100 shares and is tendering all of the shares. I have lost my certificate(s) for _____________ shares of PSB Holdings, Inc. common stock and have completed the Affidavit for Lost Stock Certificate(s) on the reverse side and submitted the required check. (See Instruction 8.) SIGNATURES MUST BE PROVIDED BELOW - PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY A PROPERLY EXECUTED LETTER OF TRANSMITTAL, ALONG WITH THE STOCK CERTIFICATES COVERED THEREBY OR A GUARANTEE OF DELIVERY OF SUCH CERTIFICATES, MUST BE RECEIVED BY THE DEPOSITARY BY 5:00 P.M., NEW YORK CITY TIME, ON JUNE 15, 2006 (THE "EXPIRATION TIME"), UNLESS THE OFFER IS EXTENDED. Ladies and Gentlemen: The undersigned hereby tenders the above-described shares of common stock, (the "shares") of PSB Holdings, Inc. (the "Company") on the terms and subject to the conditions set forth in the Company's Offer to Purchase dated May 10, 2006 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with any supplements or amendments thereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged. Subject to and effective on acceptance for payment of, and payment for, the shares tendered with this Letter of Transmittal in accordance with the terms -1- and subject to the conditions of the Offer, the undersigned hereby sells, assigns, and transfers to, or upon the order of, the Company, all right, title, and interest in and to all the shares that are being tendered hereby and irrevocably constitutes and appoints Registrar and Transfer Company (the "Depositary"), the true and lawful agent and attorney-in-fact of the undersigned, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to the full extent of the undersigned's rights with respect to such shares, all in accordance with the terms and subject to the conditions of the Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign, and transfer the shares tendered hereby and that, when the same are accepted for purchase by the Company, the Company will acquire good title thereto, free and clear of all security interests, liens, restrictions, claims, and encumbrances, and the same will not be subject to any adverse claim or right. The undersigned will, on request by the Depositary or the Company, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment, and transfer of the shares tendered hereby, all in accordance with the terms of the Offer. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that the valid tender of shares pursuant to any of the procedures described in Section 3 of the Offer to Purchase and in the instructions to this Letter of Transmittal will constitute a binding agreement between the undersigned and the Company on the terms and subject to the conditions of the Offer. This Letter of Transmittal must be signed by registered holder(s) exactly as name appears on the certificate(s), or by the authorized agent of such registered holder(s). The signature must be accompanied by a signature guarantee if Special Payment Instructions are provided below. SPECIAL PAYMENT AND/OR ISSUANCE INSTRUCTIONS (SEE INSTRUCTION 1,6, AND 7) To be completed ONLY if certificates for shares not tendered or not accepted for payment and/or the check for payment of the purchase price of shares accepted for payment are to be issued in the name of someone other than the undersigned. Issue and deliver certificate and/or check to: Name: __________________________________________ (Please Print First, Middle, & Last Name) Address: _______________________________________ ________________________________________________ ________________________________________________ (including Zip Code) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 6, AND 7) To be completed ONLY if certificates for shares not tendered or not accepted for payment and/or the check for payment of the purchase price of shares accepted for payment are to be sent to someone other than the undersigned or to the undersigned at an address other than that above. Mail certificate and/or check to: Name: __________________________________________ (Please Print First, Middle, & Last Name) Address: __________________________________________ ___________________________________________________ ___________________________________________________ (including Zip Code) IMPORTANT - THE BOX BELOW MUST BE SIGNED AND DATED AND THE SUBSTITUTE FORM W-9 ON THE REVERSE SIDE MUST BE COMPLETED WITH SIGNATURE AND TAX ID NUMBER IMPORTANT SHAREHOLDER SIGN HERE (ALSO COMPLETE SUBSTITUTE FORM W-9) X _____________________________________________________ X _____________________________________________________ Must be signed by registered holder(s) exactly as name(s) appear on stock certificate(s). If signature is by attorney, executor, administrator, trustee or guardian, agent, or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 5. Dated ________________________________________________ Name(s): _____________________________________________ (Please Print) Capacity: ____________________________________________ Area Code and Telephone No.: _________________________ MEDALLION SIGNATURE GUARANTEE REQUIRED ONLY IF SPECIAL PAYMENT AND/OR ISSUANCE INSTRUCTIONS ARE PROVIDED. (SEE INSTRUCTION 6) The signature(s) should be guaranteed by an eligible financial institution or a member of a registered national securities exchange or the NASD pursuant to Securities and Exchange Commission Rule 17Ad-15. -2- PAYER'S NAME: PSB HOLDINGS, INC. SUBSTITUTE FORM W-9 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (See Instruction 10) Please fill in your name and address below. ____________________________________________ Name ____________________________________________ Business name, if different from above Check appropriate box: (box) Individual/Sole proprietor (box) Corporation (box) Partnership (box) Other___________ (box) Exempt from backup withholding ____________________________________________ Address (number and street) ____________________________________________ City, State, and Zip Code PART 1 - TAXPAYER IDENTIFICATION NO. - FOR ALL ACCOUNTS ENTER YOUR TAXPAYER IDENTIFICATION NUMBER IN THE APPROPRIATE BOX. FOR MOST INDIVIDUALS AND SOLE PROPRIETORS, THIS IS YOUR SOCIAL SECURITY NUMBER. FOR OTHER ENTITIES, IT IS YOUR EMPLOYER IDENTIFICATION NUMBER. _________________________________ Social Security Number(s) OR _________________________________ Employer Identification Number(s) PART 2 - CERTIFICATION - For Payees Exempt from Backup Withholding - Under penalties of perjury, I certify that: (1) The number shown on the form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); and (2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding; and (3) I am a U.S. person (including a U.S. resident alien). CERTIFICATION INSTRUCTIONS - You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. However, if after being notified by the IRS stating that you were subject to backup withholding you received another notification from the IRS stating you are no longer subject to backup withholding, do not cross out item (2). SIGNATURE ____________________________________ DATE _____________ , 200______ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW INSTRUCTION 10 BELOW FOR ADDITIONAL INFORMATION. INSTRUCTIONS FOR TENDERING CERTIFICATES FORMING PART OF THE TERMS AND CONDITIONS OF THIS LETTER OF TRANSMITTAL 1. GENERAL. The Letter of Transmittal, properly filled in and signed by or on behalf of the registered holder(s) of the Company's common stock (or properly constituted assignees) and accompanied by certificate(s) for such shares when tendered to the Depositary, Registrar and Transfer Company, at the addresses set forth on the reverse side, will entitle you to receive the Offer price, subject to the terms and conditions of the Offer for all shares accepted for tender. For your convenience, a return envelope addressed to the Depositary is enclosed. THE METHOD OF DELIVERY OF THE CERTIFICATE(S) IS AT THE OPTION AND RISK OF THE SHAREHOLDER, BUT IF THE CERTIFICATE(S) OR DOCUMENTS ARE SENT BY MAIL, IT IS SUGGESTED THAT INSURED OR REGISTERED MAIL BE USED FOR THE SHAREHOLDER'S PROTECTION, AND YOU SHOULD INSURE YOUR CERTIFICATE(S) FOR 1.5% OF THEIR VALUE AT $____ PER SHARE. PLEASE NOTE THAT THE CERTIFICATE(S) OR DOCUMENTS MUST BE IN GOOD ORDER AND RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION TIME IN ORDER TO BE ACCEPTED. 2. SHARES TENDERED. Insert the certificate number(s) of the stock certificates which you are enclosing, the number of shares represented by the certificate, and the number of shares being tendered. If fewer than all the shares represented by any certificate are to be tendered, fill in the number of shares that are to be tendered in the box entitled "Number of Shares Tendered." In such case, a new certificate for the remainder of the shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the "Special Payment and/or Issuance Instructions" or "Special Delivery Instructions" boxes. All shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 3. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of the Offer to Purchase, shareholders may designate the order in which their shares are to be purchased in the event of proration. The order of purchase may have an effect on the federal income tax classification of any gain or loss on the shares purchased. See Sections 1 and 13 of the Offer to Purchase. 4. ODD LOTS. The shares purchased first will consist of all shares tendered by any shareholder who owns beneficially or of record, an aggregate of fewer than 100 shares. Partial tenders of shares will not qualify for this preference and THIS PREFERENCE WILL NOT BE AVAILABLE UNLESS ONE OF THE BOXES UNDER "ODD LOTS," IN THIS LETTER OF TRANSMITTAL IS COMPLETED. 5. AUTHORITY OF SIGNATORY. If the Letter of Transmittal is executed by an agent, attorney, executor, administrator, trustee, guardian or other fiduciary, or by a person acting in any other fiduciary or representative capacity, or by an officer of a corporation on behalf of the corporation, the full title of such person must be given and proper documentary evidence of his appointment and authority to act in such capacity (including, where necessary, bylaws, corporate resolutions, and court orders) must be forwarded with the tendered stock certificate(s) and this Letter of Transmittal. 6. NEW CERTIFICATE/CHECK ISSUED IN DIFFERENT NAME. IF THE SECTION ENTITLED "SPECIAL PAYMENT AND/OR ISSUANCE INSTRUCTIONS" IS COMPLETED, THEN SIGNATURES ON THIS LETTER OF TRANSMITTAL MUST BE GUARANTEED BY A FIRM THAT IS A BANK, BROKER, DEALER, CREDIT UNION, SAVINGS ASSOCIATION, OR OTHER ENTITY WHICH IS A MEMBER IN GOOD STANDING OF THE SECURITIES TRANSFER AGENTS' MEDALLION PROGRAM (EACH AN "ELIGIBLE INSTITUTION"). If the surrendered certificates are registered in the name of a person other than the signer of this Letter of Transmittal, or if issuance is to be made to a person other than the registered owner(s), surrendered certificates must be accompanied by a properly endorsed Letter of Transmittal or duly executed stock power(s), in either case signed exactly as the name(s) of the registered owners appear on such certificate(s) with the signatures on the Letter of Transmittal or stock power(s) guaranteed by an Eligible Institution as provided herein. -3- 7. SPECIAL DELIVERY INSTRUCTIONS. Indicate the name and address to which the new Certificate and/or Check is to be sent if different from the name and/or address of the person(s) signing this Letter of Transmittal. The shareholder is required to give the social security number or employee identification number of the record owner of the shares or payment. If Special Payment and/or Issuance Instructions have been completed, the shareholder named therein will be considered the record owner for this purpose. See Instruction 6. 8. LOST CERTIFICATE(S). If you cannot locate your certificate(s), please complete the Affidavit for Lost Certificates below along with the rest of this Letter of Transmittal and return it to the Depositary at the address listed on the front. If the bond premium exceeds $1,500.00 you must contact the Investors Relations Department at (800) 368-5948 immediately (bond premium calculation: $33.75 x number of shares of common stock you have lost x 1.5% = bond premium; example: 200 shares x $33.75 = 6,750 x 1.5% = $101.25 bond premium). (Minimum $25.00). AFFIDAVIT FOR LOST STOCK CERTIFICATE(S) The undersigned hereby attests and certifies the following: That I am the lawful owner of the certificate(s) listed on this Letter of Transmittal as lost. That a search for the certificate(s) has been conducted and that these certificate(s) cannot be located. That these certificate(s) have not been endorsed, hypothecated, sold, or had their ownership pledged or encumbered in any form, whatsoever. In requesting the replacement of this certificate(s), I hereby agree that: If these certificate(s) are subsequently located, they will be tendered for cancellation. That I indemnify, protect and hold harmless PSB Holdings, Inc., Seaboard Surety Company, and Registrar and Transfer Company, and any other party from and against all losses, expenses, costs and damages including legal fees that may be subjected to these parties at any time in the future as a result of the cancellation and replacement of the certificate(s). All rights accruing to these parties will not be limited by their negligence, breach of duty, accident, or other obligation on the part of or by any officer or employee of the parties. I acknowledge that the certificate(s) will be replaced under an insurance bond underwritten by Seaboard Surety Company. My check, payable to the Seaboard Surety Company, to cover the lost stock certificate bond premium of 1.5% of the value of the stock at $33.75 per share (Minimum $25.00) is enclosed. I further acknowledge that any filing of an insurance application with materially false or misleading information is a fraudulent insurance act and may be considered a crime. Note: If bond premium exceeds $1,500.00 you must contact Registrar and Transfer Company (800) 368-5948 immediately. Sign Here: ______________________________________ Co-Owner, if any: _______________________________ Date: ____________ , 20____ 9. VALIDITY OF TENDER; IRREGULARITIES. All questions as to validity, form, and eligibility of any tender of certificate(s) will be determined by the Company (which may delegate the power to so determine in whole or in part to the Depositary), and such determination shall be final and binding absent manifest error. The Company reserves the right to waive any irregularities or defects in the tender of any certificate(s) and its interpretation of the terms and conditions of this Letter of Transmittal or any other documents delivered therewith with respect to such irregularities or defects shall be in its sole discretion. A tender will not be deemed to have been validly made until all irregularities and defects have been cured. 10. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide the Depositary with such holder's correct taxpayer identification number ("TIN") on the above Substitute Form W-9 and to certify whether the shareholder is subject to backup withholding. Failure to provide such information on the form, may subject the tendering shareholder to federal income tax withholding at the applicable withholding rate on payments made to such tendering shareholder with respect to the shares. If such holder is an individual, the TIN is his or her social security number. A holder must cross out item (2) in part 2 of Substitute Form W-9 if such holder is subject to backup withholding. The box in part 3 of the form should be checked if the tendering holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in part 3 is checked, the tendering holder must also complete the certificate of awaiting taxpayer identification number in order to avoid backup withholding. If you checked the box in part 3 and do not provide the Depositary with a properly certified TIN by the time for payment the Depositary will withhold 28%. Certain holders, (including, among others, all corporations and certain foreign individuals) are exempt from these backup withholding and reporting requirements. Exempt holders should indicate their exempt status by checking the box in the substitute form W-9 above. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement, signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements may be obtained from the Depositary. If backup withholding applies, the Depositary is required to withhold tax at the applicable rate of any payments made to the holder or other payee. Backup withholding is not an additional tax. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. 11. INQUIRIES. All inquiries with respect to the tender of certificates of shares should be made directly to the DEPOSITARY, REGISTRAR AND TRANSFER COMPANY, AT 1-800-368-5948, OR VIA EMAIL TO INFO@RTCO.COM. -4- EX-99.A.1.C 5 psbex99a1c.txt PSB HOLDINGS, INC. EXHIBIT 99.1.A.C - LETTER TO SHAREHOLDERS Exhibit 99.(a)(1)(C) May 10, 2006 Re: Offer to Purchase Stock Dear Shareholder: PSB Holdings is offering to purchase up to 100,000 shares of our stock at a price of $33.75 per share. Our offer provides an opportunity to sell your stock without brokerage commissions and at a price which is approximately 9.6% higher than the average of recent bid and ask OTC quotations. In particular, shareholders owning fewer than 100 shares may find that our offer provides a good opportunity to sell their shares and avoid any "odd lot" charges that might be imposed by brokers should they wish to sell. If shareholders tender more than 100,000 shares, we will first purchase all shares from those shareholders who own fewer than 100 shares (if they tender all of their shares). All other shares will then be purchased on a pro rata basis. We have also reserved the right to purchase an additional 34,055 shares (2% of our shares outstanding) should conditions warrant. There are several reasons for making this tender offer. We now have more capital than is needed to satisfy applicable bank regulations. Our capital level is also higher than the amount we can use to best advantage in our normal banking operations even after we consider anticipated growth of Peoples State Bank. In addition, the Board believes that the OTC price quotations do not accurately reflect the true market value of our stock because of the limited number of trades in the over-the-counter market. Our offer and instructions on how to tender your shares are explained in detail in the enclosed Offer to Purchase and Letter of Transmittal. In particular, please review the information under the caption "Summary" which is located immediately following the table of contents in the Offer to Purchase. We have appointed our transfer agent, Registrar and Transfer Company, to act for us in processing our tender offer. IF YOU HAVE ANY QUESTIONS ABOUT THE TENDER OFFER OR NEED HELP IN COMPLETING THE LETTER OF TRANSMITTAL YOU MAY CONTACT THEIR INVESTOR RELATIONS DEPARTMENT AT 1-800-368-5948 DURING THE HOURS OF 8:00 A.M. TO 7:00 P.M., NEW YORK TIME, OR BY E-MAIL AT INFO@RTCO.COM. I encourage you to read these materials carefully before making any decision with respect to our offer. OUR OFFER IS COMPLETELY VOLUNTARY. We make no recommendation whether any shareholder should tender any or all shares. It is not necessary to return the Letter of Transmittal if you do not wish to sell any shares to us at this time. Please note that the offer is scheduled to expire at 5:00 p.m., New York time, on Thursday, June 15, 2006, unless the Company decides to extend the offer. Sincerely, David K. Kopperud President EX-99.A.5.A 6 psbex99a5a.txt PSB HOLDINGS, INC. EXHIBIT 99.A.5.A - NEWS RELEASE Exhibit 99.(a)(5)(A) THE LATEST NEWS FOR IMMEDIATE RELEASE: MAY 10, 2006 PSB HOLDINGS, INC. TENDERS FOR 100,000 SHARES OF ITS COMMON STOCK. Wausau, Wisconsin (OTC Bulletin Board - PSBQ) - PSB Holdings, Inc. ("PSB") announced today that it has commenced a tender offer to purchase up to 100,000 shares of its common stock at a price of $33.75 per share. The tender offer, which began today, May 10, will expire, unless extended, at 4:00 p.m., CDST, on Thursday, June 15, 2006. David K. Kopperud, President of PSB, stated, "There are several reasons for making this tender offer. We now have more capital than is needed to satisfy applicable bank regulations. Our capital level is also higher than the amount we can use to best advantage in our normal banking operations even after we consider anticipated growth of Peoples State Bank. In addition, our Board of Directors believes that the OTC price quotations do not accurately reflect the true market value of our stock because of the limited number of trades in the over-the-counter market." The terms of PSB's tender offer are contained in the Offer to Purchase and Letter of Transmittal mailed to its shareholders. The offer provides for the acceptance of all tenders by shareholders who own odd lots (fewer than 100 shares). In the event that more shares are tendered than can be accepted, shares (other than odd lot tenders) will be accepted for purchase on a pro rata basis. Securities and Exchange Commission rules allow PSB to exercise its discretion and purchase up to approximately 34,000 additional shares if the 100,000 share tender offer is oversubscribed. This news release is neither an offer to purchase nor a solicitation of an offer to sell PSB common stock. PSB's offer is made only by the Offer to Purchase dated May 10, 2006, and the related Letter of Transmittal. On May 3, 2006, the quotations for PSB common stock on the OTC Bulletin Board were $30.60 bid and $31.00 ask. Shareholders may contact Registrar and Transfer's Investor Relations Department at 1-800-368-5948 during the hours of 8:00 a.m. to 7:00 p.m., New York time, or by e-mail at info@rtco.com for more information or assistance concerning the tender offer. PSB Holdings, Inc. is the parent company of Peoples State Bank, which is headquartered in Wausau, Wisconsin. The bank had total assets of approximately $502 million as of March 31, 2006 and operates eight retail locations serving north central Wisconsin in Marathon, Oneida, and Vilas counties. In addition to traditional retail and commercial banking products, Peoples State Bank provides retail investments, retirement planning, commercial treasury management services, and long-term fixed rate residential mortgages. -----END PRIVACY-ENHANCED MESSAGE-----