-----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, VV+duenDiFR5jwQINczOgw5a+BBSwrwjGtkvimGEhf+FvXrzfxvLxMS6C1lmRj3V OEdEV6bvg+GoMfArAcjByw== 0000916480-98-000027.txt : 19980817 0000916480-98-000027.hdr.sgml : 19980817 ACCESSION NUMBER: 0000916480-98-000027 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PSB HOLDINGS INC /WI/ CENTRAL INDEX KEY: 0000948368 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 391804877 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-26480 FILM NUMBER: 98688483 BUSINESS ADDRESS: STREET 1: 1905 WEST STEWART AVE CITY: WAUSAU STATE: WI ZIP: 54401 BUSINESS PHONE: 7158422191 MAIL ADDRESS: STREET 1: 1905 WEST STEWART AVE CITY: WAUSAU STATE: WI ZIP: 54401 FORMER COMPANY: FORMER CONFORMED NAME: PSB HOLDINGS INC /WI/ DATE OF NAME CHANGE: 19950721 FORMER COMPANY: FORMER CONFORMED NAME: PEOPLES STATE BANK /WI/ DATE OF NAME CHANGE: 19950721 10-Q 1 10-Q FOR 06/30/98 FOR PSB HOLDINGS, INC. FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: PSB HOLDINGS, INC. (Exact name of registrant as specified in charter) WISCONSIN 39-1804877 (State of incorporation) (I.R.S Employer Identification Number) 1905 WEST STEWART AVENUE WAUSAU, WISCONSIN 54401 (Address of principal executive office) Registrant's telephone number, including area code: 715-842-2191 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of common shares outstanding at June 30, 1998 was 883,235. PSB HOLDINGS, INC. FORM 10-Q QUARTER ENDED JUNE 30, 1998 PAGE NO. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Income, Six Months Ended and Three Months Ended June 30, 1998 (unaudited) and June 30, 1997 (unaudited) 1 Condensed Consolidated Balance Sheets June 30, 1998 (unaudited) and December 31, 1997 (derived from audited financial statements) 2 Condensed Consolidated Statements of Cash Flows Six Months Ended and Three Months Ended June 30, 1998 (unaudited) and June 30, 1997 (unaudited) 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 2. Changes in Securities 10 Item 3. Defaults Upon Senior Securities 10 Item 4. Submission of Matters to Vote of Securities Holders 10 Item 5. Other Information 10 Item 6. Exhibits and Reports on form 8-K 11 -i- PART I. FINANCIAL INFORMATION ITEM 1.FINANCIAL STATEMENTS PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME
($ thousands except share data - unaudited) Six Months Ended Three Months Ended June 30, June 30 1998 1997 1998 1997 Interest Income Interest and fees on loans $ 6,883 $ 6,115 $ 3,511 $ 3,121 Interest on investment securities Taxable 1,139 1,223 556 612 Tax-exempt 303 287 155 145 Other interest income 109 30 66 20 Total interest income 8,434 7,655 4,288 3,898 Interest Expense: Deposits 4,072 3,825 2,036 1,924 Short-term borrowings 266 194 138 117 Total interest expense 4,338 4,019 2,174 2,041 Net interest income 4,096 3,636 2,114 1,857 Provisions for losses on loans 150 90 75 45 Net interest income after provision for loan losses 3,946 3,546 2,039 1,812 Other income: Service fees 290 232 159 115 Insurance commissions 28 35 20 9 Net security gains 36 -0- -0- -0- Net gain on other real estate 20 -0- 20 -0- Other operating income 158 92 69 47 Total other income 532 359 268 171 Other Expenses Salaries and related benefits 1,864 1,278 818 688 Net occupancy expense 399 355 205 167 Computer operations 50 26 26 18 Other operating expense 684 562 324 289 Total other expenses 2,997 2,221 1,373 1,162 Income before income taxes 1,481 1,684 934 821 Provision for income taxes 453 542 296 260 Net income $ 1,028 $ 1,142 $ 638 $ 561 Income per share Basis: Weighted Average of 883,235 shares in 1998 Weighted Average of 890,099 shares in 1997 Net income per share $ 1.16 $ 1.28 $ .72 $ .63
-1- PSB HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS
($ thousands) June 30, December 31, 1998* 1997* ASSETS Cash and cash equivalents $ 8,733 $ 10,623 Interest bearing deposits with banks 383 153 Federal funds sold 7,079 -0- Investment securities - Held to maturity (Market value $13,922 & $12,704 13,801 12,549 at 1998 & 1997 respectively) Available for sale (at fair market value, cost $36,352 & $37,422 36,495 37,579 at 1998 & 1997 respectively) Total loans 147,640 149,317 Allowance for loan losses (1,966) (1,845) Net loans 145,674 147,472 Bank premises and equipment 4,004 3,746 Other assets 2,199 2,897 TOTAL ASSETS $ 218,368 $ 215,019 LIABILITIES Noninterest-bearing deposits $ 28,514 $ 27,564 Interest-bearing deposits 158,592 159,038 Total deposits 187,106 186,602 Short-term borrowings 3,619 3,960 Long-term borrowings 6,000 3,000 Other liabilities 1,717 2,239 Total liabilities 198,442 195,801 STOCKHOLDERS' EQUITY Common stock - no-par value, with a stated value of $2 per share - 1,000,000 shares authorized - 902,425 shares issued 1,805 1,805 Additional paid-in capital 7,159 7,159 Retained earnings 11,674 10,956 Net unrealized gain on securities available for sale, net of tax 91 101 Treasury stock, at cost - 19,190 shares (803) (803) Total stockholders' equity 19,926 19,218 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $218,368 $ 215,019 *The consolidated balance sheet at June 30, 1998 is unaudited. The December 31, 1997 consolidated balance sheet is derived from audited financial statements.
-2- PSB HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW
Six Months Ended Three Months Ended June 30, June 30, 1998 1997 1998 1997 ($ thousands - unaudited) Cash flows from operating activities: Net income $ 1,028 $ 1,142 $ 638 $ 561 Provision for depreciation, and net amortization 214 227 118 114 Provisions for loan losses 150 90 75 45 Changes in operating assets and liabilities: Gain on sale of securities available for sale (36) -0- -0- -0- Gain on sale of other real estate (20) -0- (20) -0- Other assets 361 6 155 150 Other liabilities (522) (485) 245 254 Net cash provided by operating activities 1,175 98 1,211 1,124 Cash flows from investing activities: Proceeds from sale and maturities of: Held to maturity securities 731 980 466 780 Available for sale securities 11,494 3,957 3,484 980 Payment for purchase of Held to maturity securities (1,992) (1,417) (1,577) (350) Available for sale securities (10,360) (2,473) (4,961) (1,978) Net change in loans 1,648 (3,852) 3,553 (3,630) Net (increase) decrease in interest-bearing deposits with banks (230) -0- 198 -0- Net increase in federal funds sold (7,079) -0- (3,374) -0- Proceeds from sale of other real estate 356 -0- 356 -0- Capital expenditures (486) (112) (186) (33) Net cash used in investing activities (5,918) (2,917) (2,041) (4,231) Cash flows from financing activities: Net increase (decrease) in deposits 504 1,473 764 1,599 Net increase (decrease) in short-term borrowings (341) 705 (12) 241 Net increase (decrease) in long-term borrowings 3,000 2,098 -0- 2,696 Dividends paid (310) (310) (310) (310) Purchase of stock -0- (369) -0- (369) Net cash provided by financing activities 2,853 3,597 442 3,857 Net increase (decrease) in cash and cash equivalents (1,890) 1,660 (388) 750 Cash and cash equivalents at beginning of period 10,623 10,152 9,121 11,062 Cash and cash equivalents at end of period $ 8,733 $ 11,812 $ 8,733 $ 11,812 Supplemental Cash Flow Information: Cash paid during the period for: Interest 4,339 4,019 2,175 2,041 Income taxes 402 492 402 446
-3- PSB HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The accompanying financial statements in the opinion of management reflect all adjustments which are normal and recurring in nature and which are necessary for a fair statement of the results for the periods presented. In all regards, the financial statements have been presented in accordance with generally accepted accounting principles. 2. Earnings per share of common stock is based on the weighted average number of common shares outstanding. 3. Refer to notes to the financial statements which appear in the 1997 annual report for the company's accounting policies which are pertinent to these statements. -4- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (All $ amounts are in thousands, except per share amounts) RESULTS OF OPERATIONS TOTAL ASSETS Total assets have increased by $3,349 from December 31, 1997 to June 30, 1998. This is an increase of 1.56%. In 1997, total assets increased $4,244 or 2.08% in the first six months. LOANS Net loans have decreased by $1,798 from December 31, 1997 to June 30, 1998. This is a decrease of 1.22%. Real Estate Loans refinancing in the secondary market account for much of this decrease. In 1997, loans increased $3,762 or 2.76% in the first six months. CASH AND INVESTMENTS Cash decreased by $1,890 as of June 30, 1998 compared to December 31, 1997. Efforts continue at decreasing this non-earning asset. Fed Funds Sold increased $7,079 as of June 30, 1998 compared to December 31, 1997. Investments increased by $168. DEPOSITS Deposits increased slightly by $504 from December 31, 1997 to June 30, 1998. In 1997, deposits increased by $1,473 in the first six months. SHORT TERM BORROWINGS There were no Fed funds purchased as of June 30, 1998. Repurchase agreements decreased by $341 from December 31, 1997 to June 30, 1998. LONG TERM BORROWINGS An additional advance of $3,000 was taken out at the FHLB Chicago in the first quarter of 1998. EQUITY Equity grew by $708 or 3.68% due to the following: Net income for the first six months of $1,028, a cash dividend paid of $310, and a decrease in the "Net unrealized gain on securities available for sale" of $10. The decrease in the unrealized gain is a result of the market prices of the investment portfolio dropping as of June 30, 1998. In the first half of 1997 equity grew by $453 or 2.48%. OPERATING DATA SUMMARY GENERAL Net interest income for the first six months of 1998 is $460 or 12.65% greater than it was for the same period in 1997. -5- NON-INTEREST INCOME Non-interest income increased by $173 or 48.19% from the period ending June 30, 1998 compared to the period ending June 30, 1997. This increase is attributable to the implementation of a profit improvement project which in many areas increased our service charges and fees for services. NON-INTEREST EXPENSE Non-interest expenses increased 34.94% or $776 for the period ending June 30, 1998 when compared to the period ending June 30, 1997. An additional Pension Plan expense of $403 from the termination of our DB Pension Plan and expenses related to the opening of a supermarket branch in March of 1998 contributed to this increase. NET INCOME Net income for six months of 1998 is 9.98% lower than the same period in 1997 and earnings per share decreased from $1.28 to $1.16, or 9.38%. Again, the additional expenses outlined above attributed to the lower first six months results of operations. YEAR 2000 PSB has conducted a comprehensive review of its computer system to identify the systems that could be affected by the Year 2000 Issue and is developing an implementation plan to resolve the issue. The Year 2000 Issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of PSB's programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a major system failure or miscalculations. PSB presently believes that, with modifications to exiting software and conversions to new software, the Year 2000 problem will not pose significant operational problems for PSB's computer system as so modified and converted. -6- KEY OPERATING RATIOS (unaudited) Ended June 30, 1998
Six Month Period Three Month Period 1998 1997 1998 1997 Return on assets (net income divided by average assets) (1) .95% 1.13% 1.17% 1.10% Return on Average Equity (net income divided by average equity) (1) 10.63% 12.37% 12.93% 12.09% Average Equity to Average Assets 8.93% 9.12% 9.06% 9.12% Interest Rate Spread (difference between average yield on interest earning assets and average cost of interest bearing liabilities) (1) 3.23% 3.02% 3.31% 3.06% Net Interest Margin (net interest income as a percentage of average interest earning assets (1) 4.06% 3.75% 4.16% 3.83% Non-interest Expense to average assets (1) 2.72% 2.19% 2.52% 2.28% Allowance for loan losses to total loans at end of period 1.33% 1.27% 1.33% 1.27% (1) Annualized
-7- SUMMARY OF LOAN LOSS EXPERIENCE The following table summarizes loan balances at the end of each period, changes in the allowance for loan losses arising from loans charged off and recoveries on loans previously charged off, by loan category and additions to the allowance which have been charged to expense.
Six Months Ended Year Ended JUNE 30, 1998 DECEMBER 31, 1997 Allowance for loan losses at beginning of period $1,845,064 $1,924,686 Loans charged off Commercial & Industrial -0- (155,650) Agricultural -0- -0- Real Estate - Mortgage -0- (136,011) Installment & Other Consumer Loans (31,265) (58,581) Total Charge Offs (31,265) (350,242) Recoveries on loans previously charged off Commercial & Industrial 210 17,538 Agricultural -0- -0- Real Estate - Mortgage -0- 18,582 Installment & Other Consumer Loans 2,087 4,500 Total Recoveries 2,297 40,620 Net loans charged off (28,968) (309,622) Additions charged to operations 150,000 230,000 Allowance for loan losses at end of period $1,966,096 $1,845,064
-8- AGGREGATE AMOUNT OF NON-PERFORMING LOANS
June 30, December 31, 1998 1997 Loans on a non-accrual basis Real estate - mortgage $ 322,172 $ 332,655 Installment loans 105,316 54,665 Credit cards & related plans -0- -0- Commercial & all other loans 683,740 447,554 Total non-accrual $ 1,111,228 $ 834,874 Loans contractually past due thirty through eighty-nine days and still accruing Real estate - mortgage $ 779,850 $ 153,578 Installment loans 438,386 162,243 Credit cards & related plans -0- -0- Commercial & all other loans 1,301,142 57,268 Total 30 - 89 days $2,519,378 $ 373,089 Loans contractually past due ninety days or more as to interest or principal payments Real estate - mortgage $ -0- $ 7,117 Installment loans -0- -0- Credit cards & related plans -0- -0- Commercial & all other loans -0- -0- Total over 90 days $ -0- $ 7,117
-9- PART II - OTHER INFORMATION ITEM 1.LEGAL PROCEEDINGS Not Applicable ITEM 2. CHANGES IN SECURITIES Not Applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS The annual meeting of shareholders of the Company was held on April 21, 1998. The matters voted upon, including the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes, as to each such matter were as follows:
MATTER SHARES Broker For Withheld Against Abstain Non-Vote Election of Directors (a) Leonard C. Britten 589,974 1,380 N/A N/A 0 (b) Gordon P. Connor 591,354 N/A N/A 0 (c) Patrick L. Crooks 591,354 N/A N/A 0 (d) William J. Fish 591,354 N/A N/A 0 (e) George L. Geisler 590,094 1,260 N/A N/A 0 (f) Charles A. Ghidorzi 582,534 8,820 N/A N/A 0 (g) Gordon P. Gullickson 591,069 285 N/A N/A 0 (h) Lawrence Hanz, Jr. 591,234 120 N/A N/A 0 (i) Thomas R. Polzer 591,354 N/A N/A 0 -10- (j) William M. Reif 591,354 N/A N/A 0 (k) Thomas A. Riiser 591,309 45 N/A N/A 0 (l) Eugene Witter 591,024 330 N/A N/A 0
ITEM 5. OTHER INFORMATION Not Applicable -11- Item 6. Exhibits and Reports on Form 8-K: (a) Exhibits required by Item 601 of Regulation S-K. EXHIBIT (3) - ARTICLES OF INCORPORATION AND BYLAWS PAGE OR INCORPORATED EXHIBIT (i) Restated Articles of Incorporation, as amended ...4(a)(1) (ii) Bylaws ........................................ 4(b)(1) EXHIBIT (4) - INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS (a) Articles of Incorporation and Bylaws (see Exhibits 3(a) and (b)) EXHIBIT (10) - MATERIAL CONTRACTS (a) Bonus Plan of Directors of the Bank* ............. 10(a)(2) (b) Bonus Plan of Officers and Employees of the Bank* 10(b)(2) (c) Non-Qualified Retirement Plan for Directors of the Bank* ............................................ 10(c)(2) EXHIBIT (21) - SUBSIDIARIES OF THE REGISTRANT ......... 22(2) EXHIBIT (27) - FINANCIAL DATA SCHEDULE * Denotes Executive Compensation Plans and Arrangements. Where exhibit has been previously filed and is incorporated herein by reference, exhibit numbers set forth herein correspond to the exhibit number where such exhibit can be found in the following reports of the registrant (Commission File No. 0-26480) filed with the Securities and Exchange Commission: (1) Registrant's current report on Form 8-K dated May 30, 1995 (2) Registrant's annual report on Form 10-K for the fiscal year ended December 31, 1995 (b) Reports on Form 8-K: None -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PSB HOLDINGS, INC. August 13, 1998 TODD R. TOPPEN Todd R. Toppen Secretary and Controller (On behalf of the Registrant and as Principal Financial Officer) -13- EXHIBIT INDEX TO FORM 10Q OF PSB HOLDINGS, INC. FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998 Pursuant to Section 102(d) of Regulation S-T (17 C.F.R.
232.102(d) EXHIBIT 27 - FINANCIAL DATA SCHEDULE Exhibits required by Item 601 of Regulation S-K which have been previously filed and are incorporated by reference are set forth in Item 6 of the Form 10-Q to which this Exhibit Index relates. EX-27 2 ART. 9 FDS FOR 3-MONTHS 10-Q ENDED JUNE 30, 1998
9 1,000 6-MOS DEC-31-1998 JUN-30-1998 8,733 383 7,079 0 36,495 13,801 13,922 147,640 1,966 218,368 187,106 3,619 1,717 6,000 0 0 1,805 18,121 218,368 6,883 1,442 109 8,434 4,072 4,338 4,096 150 36 2,997 1,481 1,481 0 0 1,028 1.16 1.16 4.06 1,111 0 0 2,519 1,845 31 2 1,966 1,966 0 0
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