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, 2001
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, 2001 was 839,705.
PSB HOLDINGS, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 2001
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
June 30, 2001 (unaudited) and December 31,
2000 (derived from audited financial statements) 1
Consolidated Statements of Income,
Three Months Ended and Six Months Ended
June 30, 2001 and 2000 (unaudited) 2
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2001 and 2000 (unaudited) 3
Notes to Condensed Consolidated Financial
Statements 4
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 14
-i-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PSB HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
($ thousands - June 30, 2001 unaudited, December 31, 2000
derived from audited financial statements)
June 30, December 31,
2001 2000
ASSETS
Cash and due from banks $ 9,720 $ 9,226
Federal funds sold 9,560 53
Interest-bearing deposits and money market funds 803 88
Investment securities:
Held to maturity (fair values of $16,772 and $14,005, respectively) 18,849 13,975
Available for sale (at fair value) 46,662 48,123
Federal Home Loan Bank stock, at cost 2,084 2,008
Loans held for sale 986 114
Loans receivable, net of allowance for loan losses of $2,682 at
June 30, 2001 and $2,407 at December 31, 2000 218,300 224,702
Accrued interest receivable 1,971 2,102
Premises and equipment 4,522 4,751
Other assets 1,260 1,097
TOTAL ASSETS $314,717 $306,239
LIABILITIES
Non-interest-bearing deposits $29,497 $35,192
Interest-bearing deposits 211,380 206,342
Total deposits 240,877 241,534
Short-term borrowings 9,047 11,515
Long-term borrowings 38,000 28,000
Other liabilities 2,725 2,915
Total liabilities 290,649 283,964
STOCKHOLDERS' EQUITY
Common stock - No par value with a stated value of $2 per share:
Authorized - 1,000,000 shares
Issued - 902,425 shares 1,805 1,805
Additional paid-in capital 7,159 7,159
Retained earnings 17,016 15,727
Accumulated other comprehensive loss, net of tax 379 (125)
Treasury stock, at cost - 62,720 shares at June 30, 2001 and
December 31, 2000 (2,291) (2,291)
Total stockholders' equity 24,068 22,275
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $314,717 $306,239
-1-
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended Three Months Ended
June 30, June 30,
($ thousands except share data - unaudited) 2001 2000 2000 2000
Interest income:
Interest and fees on loans $ 9,931 $ 8,433 $ 4,910 $ 4,414
Interest on investment securities:
Taxable 1,458 1,433 710 714
Tax-exempt 351 299 192 146
Other interest and dividends 284 48 167 31
Total interest income 12,024 10,213 5,979 5,305
Interest expense:
Deposits 5,490 4,407 2,629 2,353
Short-term borrowings 305 591 150 268
Long-term borrowings 1,112 566 570 370
Total interest expense 6,907 5,564 3,349 2,991
Net interest income 5,117 4,649 2,630 2,314
Provision for loan losses 300 300 150 150
Net interest income after provision for loan losses 4,817 4,349 2,480 2,164
Noninterest income:
Service fees 498 348 252 186
Net realized gain on sale of premises and equipment 54 57
Gain on sale of loans 112 18 83 14
Investment product sales commissions 120 101 74 56
Other operating income 126 155 46 100
Total noninterest income 910 679 455 356
Noninterest expenses:
Salaries and employee benefits 2,028 1,928 1,016 892
Occupancy 463 463 227 225
Data processing and other office operations 242 228 120 105
Other operating 709 617 375 315
Total noninterest expenses 3,442 3,236 1,738 1,537
Income before income taxes 2,285 1,792 1,197 983
Provision for income taxes 677 539 358 303
Net income $ 1,608 $ 1,253 $ 839 $ 680
Basic and diluted earnings per share $ 1.91 $ 1.44 $ 1.00 $ 0.78
Weighted average shares outstanding 839,705 872,524 839,705 866,433
-2-
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
Six Months Ended
June 30,
($ thousands - unaudited) 2001 2000
Cash flows from operating activities:
Net income $1,608 $1,253
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for depreciation and net amortization 310 306
Provision for loan losses 300 300
Gain on sale of loans (112) (18)
Gain on sale of premises and equipment (54) (57)
Changes in operating assets and liabilities:
Other assets (315) (79)
Other liabilities (190) (63)
Net cash provided by operating activities: 1,547 1,642
Cash flows from investing activities:
Proceeds from sale and maturities of:
Held to maturity securities 930 836
Available for sale securities 19,664 1,710
Payment for purchase of:
Held to maturity securities (5,805) (249)
Available for sale securities (17,457) (2,929)
Increase in Federal Home Loan Bank stock (76)
Net change in loans 5,590 (26,789)
Net change in interest-bearing deposits (715) (13)
Net change in federal funds sold (9,507) (16)
Capital expenditures (264) (718)
Proceeds from sale of premises and equipment 31 61
Net cash used in investing activities (7,609) (28,107)
Cash flows from financing activities:
Net change in deposits (657) 19,627
Net change in short-term borrowings (2,468) (6,393)
Net change in long-term borrowings 10,000 12,000
Dividends paid (319) (326)
Purchase of treasury stock (945)
Net cash provided by financing activities 6,556 23,963
Net increase (decrease) in cash and due from banks 494 (2,502)
Cash and due from banks at beginning 9,226 11,926
Cash and due from banks at end $9,720 $9,424
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $6,860 $5,315
Income taxes 760 539
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PSB HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly
PSB Holdings, Inc.'s ("Company") financial position, results of its
operations, and cash flows for the periods presented, and all such
adjustments are of a normal recurring nature. The consolidated financial
statements include the accounts of all subsidiaries. All material
intercompany transactions and balances are eliminated. The results of
operations for the interim periods are not necessarily indicative of the
results to be expected for the full year.
These interim consolidated financial statements have been prepared
according to the rules and regulations of the Securities and Exchange
Commission and, therefore, certain information and footnote disclosures
normally presented in accordance with generally accepted accounting
principles have been omitted or abbreviated. The information contained in
the consolidated financial statements and footnotes in the Company's 2000
annual report on Form 10-K, should be referred to in connection with the
reading of these unaudited interim financial statements.
In preparing the consolidated financial statements, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance sheet and revenues
and expenses for the period. Actual results could differ significantly
from those estimates. Estimates that are susceptible to significant
change include the determination of the allowance for credit losses and
the valuations of investments.
NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE
Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities" and SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities." Under
these SFAS, the Company must recognize all material derivatives as either
assets or liabilities in the balance sheet and measure those instruments
at fair value. Changes in fair value are generally recognized in earnings
during the period the changes occur. The adoption of SFAS No. 133 and No.
138 did not have a material impact on the Company's financial condition or
results of operations.
Effective April 1, 2001, the Company adopted SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." This SFAS revises the standards for accounting for and
reporting securitizations and other transfers of financial assets and
collateral and extinguishments of liabilities originally governed by SFAS
No. 125. The adoption of SFAS No. 140 did not have material impact on the
Company's financial condition or results of operations.
-4-
In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets."
SFAS No. 141 supersedes Accounting Principles Board (APB) Opinion No. 16,
"Business Combinations", and SFAS No. 38, "Accounting for Preacquisition
Contingencies of Purchased Enterprises." SFAS No. 141 requires the use of
the purchase method of accounting for business combinations initiated
after June 30, 2001. SFAS No. 142 supersedes APB Opinion No. 17,
"Intangible Assets." SFAS No. 142 addresses how intangible assets
acquired outside of a business combination should be accounted for upon
acquisition and how goodwill and other intangible assets should be
accounted for after they have been initially recognized. SFAS No. 142
eliminates the amortization for goodwill and other intangible assets with
indefinite lives. Other intangible assets with a finite life will be
amortized over their useful life. Goodwill and other intangible assets
with indefinite useful lives shall be tested for impairment annually or
more frequently if events or changes in circumstances indicate that the
asset may be impaired. SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001. The Corporation's adoption of SFAS No.
142 on January 1, 2002 is not anticipated to have a material impact on the
consolidated financial statements as of the date of adoption.
NOTE 3 - EARNINGS PER SHARE
Earnings per share of common stock is based on the weighted average number
of common shares outstanding during the period. On April 17, 2001, the
stockholders of the Company approved an incentive stock option plan. The
plan calls for up to 15,000 options to purchase common shares to be issued
to selected officers during 2001 and 2002. Criteria regarding the extent
and timing of stock option grants have not been finalized, and no grants
have been made as of June 30, 2001.
NOTE 4 - COMPREHENSIVE INCOME
Generally accepted accounting principles require comprehensive income and
its components, as recognized under the accounting standards, to be
displayed in a financial statement with the same prominence as other
financial statements. The disclosure requirements with respect to the
Form 10-Q have been included in the Company's consolidated balance sheets.
Comprehensive income totaled the following for the periods indicated:
Six Months Ended Three Months Ended
($ thousands - unaudited) 6/30/01 6/30/00 6/30/01 6/30/00
Net income $1,608 $1,253 $ 839 $ 680
Change in net unrealized gain or loss on
securities available for sale, net of tax 504 38 72 (23)
Comprehensive income $2,112 $1,291 $ 911 $ 657
-5-
NOTE 5 - INVESTMENT SECURITIES
The amortized cost and estimated fair value of investment securities are
as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
($ THOUSANDS) COST GAINS LOSSES VALUE
JUNE 30, 2001
Securities held to maturity:
Obligations of states and political
subdivisions $18,849 $ 294 $ 29 $19,114
Securities available for sale:
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies $46,030 $ 643 $ 59 $46,614
Other equity securities 48 48
Totals $46,078 $ 643 $ 59 $46,662
DECEMBER 31, 2000
Securities held to maturity:
Obligations of states and political
subdivisions $13,975 $ 101 $ 71 $14,005
Securities available for sale:
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies $48,279 $ 195 $ 399 $48,075
Other equity securities 48 48
Totals $48,327 $ 195 $ 399 $48,123
-6-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis is presented to assist in the
understanding and evaluation of the Company's financial condition and
results of operations. It is intended to complement the unaudited
financial statements, footnotes, and supplemental financial data appearing
elsewhere in this Form 10-Q and should be read in conjunction therewith.
Dollar amounts are in thousands, except per share amounts.
Forward-looking statements have been made in this document that are
subject to risks and uncertainties. While the Company believes these
forward-looking statements are based on reasonable assumptions, all such
statements involve risk and uncertainties that could cause actual results
to differ materially from those contemplated in this report. The
assumptions, risks, and uncertainties relating to the forward-looking
statements in this report include those described under the caption
"Cautionary Statements Regarding Forward-Looking Information" in Part I of
the Company's Form 10-K for the year ended December 31, 2000 and, from
time to time, in the Company's other filings with the Securities and
Exchange Commission.
BALANCE SHEET
At June 30, 2001, total assets were $314,717, an increase of $29,637, or
10.4%, over June 30, 2000, while assets grew $8,478 over December 31,
2000. Gross loans (excluding loans held for sale) were $220,982 at June
30, 2001, growing $11,740 over second quarter 2000 and decreasing $6,127
over fourth quarter 2000.
Table 1: Period-End Loan Composition
JUNE 30 PERCENT DECEMBER 31 PERCENT
2001 OF TOTAL 2000 OF TOTAL
Commercial and financial $ 48,647 22.01% $ 53,421 23.52%
Real estate 156,368 70.76% 157,904 69.53%
Consumer installment 15,967 7.23% 15,784 6.95%
Total loans $220,982 100.00% $227,109 100.00%
The loan portfolio is the Company's primary asset subject to credit risk.
The Company's process for monitoring credit risks includes weekly analysis
of loan quality, delinquencies, non-performing assets, and potential
problem loans. Loans are placed on a nonaccrual status when they become
contractually past due 90 days or more as to interest or principal
payments. All interest accrued but not collected for loans (including
applicable impaired loans) that are placed on nonaccrual or charged off is
reversed to interest income. The interest on these loans is accounted for
on the cash basis until qualifying for return to accrual status. Loans
are returned to accrual status when all the principal and interest amounts
contractually due have been collected and there is reasonable assurance
that repayment will continue within a reasonable time frame.
-7-
The term "impaired loan" refers to certain commercial loans with respect
to which, based on current information, it is probable that the Company
will not be able to collect all amounts due in accordance with the
contractual terms of the loan agreement. Impairment is based on
discounted cash flows of expected future payments using the loan's
effective interest rate or the fair value of the collateral if the loan is
collateral dependent.
The aggregate amount of nonperforming assets increased $1,462 to $2,383 at
June 30, 2001 from $921 at June 30, 2000, primarily because of additional
restructured loans. Nonperforming assets include: 1) loans that are
either contractually past due 90 days or more as to interest or principal
payments, on a nonaccrual status, or the terms of which have been
renegotiated to provide a reduction or deferral of interest or principal
and 2) other real estate owned.
Table 2: Allowance for Loan Losses and Nonperforming Assets
SIX MONTHS ENDED
6/30/2001 6/30/2000
Allowance for loan losses at beginning of period $ 2,407 $ 2,099
Provision charged to operating expense 300 300
Recoveries on loans 1 20
Loans charged off (26) (120)
Allowance for loan losses at end of period $ 2,682 $ 2,299
Table 3: Nonperforming Assets
SIX MONTHS ENDED
6/30/2001 6/30/2000
Nonaccrual loans $ 1,167 $ 640
Loans past due 90 days or more and still accruing interest 23 0
Restructured loans 795 257
Total nonperforming loans 1,985 897
Other real estate owned 398 24
Total nonperforming assets $ 2,383 $ 921
Management is not aware of any additional loans that represent material
credits or of any information that causes management to have serious
doubts as to the ability of such borrowers to comply with the loan
repayment terms.
-8-
LIQUIDITY
Liquidity refers to the ability of the Company to generate adequate
amounts of cash to meet the Company's need for cash. The Company manages
its liquidity to provide adequate funds to support borrowing needs and
deposit flow of its customers. Management views liquidity as the ability
to raise cash at a reasonable cost or with a minimum of loss and as a
measure of balance sheet flexibility to react to marketplace, regulatory,
and competitive changes. Deposit growth is the primary source of
liquidity. Deposits as a percentage of total funding sources were 83.7%
at June 30, 2001 and 84.8% at June 30, 2000. Wholesale funding represents
the balance of the Company's total funding needs.
As of June 30, 2001, loan principal and investment securities maturing
within one year totaled $103,818, while certificates of deposit and short-
term borrowings maturing within one year totaled $89,579. Unused credit
advances available to the Company at June 30, 2001 totaled approximately
$13,000. The primary funding sources utilized are Federal Home Loan Bank
advances, federal funds purchased, repurchase agreements from a base of
individuals, businesses, and public entities, and brokered CDs.
The Company attempts, when possible, to match relative maturities of
assets and liabilities, while maintaining the desired net interest margin.
CAPITAL RESOURCES
Stockholders' equity at June 30, 2001 increased $3,001 from $21,067 at
June 30, 2000. Stockholders' equity included unrealized gains on
securities available for sale, net of their tax effect, of $379 at June
30, 2001 compared to unrealized losses of $1,005 at June 30, 2000.
The adequacy of the Company's capital is regularly reviewed to ensure
sufficient capital is available for current and future needs and is in
compliance with regulatory guidelines. As of June 30, 2001, the Company's
subsidiary bank's Tier 1 risk-based capital ratio, total risk-based
capital, and tier 1 leverage ratio were well in excess of regulatory
minimums.
Table 4: Capital Ratios - Subsidiary Bank
TIER 1 TOTAL TIER 1
CAPITAL CAPITAL LEVERAGE
March 31, 2001 11.36% 12.61% 7.37%
March 31, 2000 11.00% 12.14% 7.88%
Regulatory requirements to be considered well capitalized 6.00% 10.00% 5.00%
RESULTS OF OPERATIONS
Net income for the quarter ended June 30, 2001, totaled $839, or $1.00 per
share for basic and diluted earnings per share. Comparatively, net income
for the quarter ended June 30, 2000 was $680, or $.78 per share for basic
and diluted earnings per share. Operating results for the second quarter
2001 generated an annualized return on average assets of 1.06% and an
-9-
annualized return on average equity of 14.12%, compared to .98% and 12.81%
for the comparable period in 2000. The net interest margin for the second
quarter 2001 was 3.64% compared to 3.65% for the comparable quarter in
2000.
Table 5: Summary Results of Operations
The following table presents consolidated financial data of PSB Holdings,
Inc. and Subsidiary.
2001 2000
Second First Fourth Third Second
($ thousands except per share amounts) Quarter Quarter Quarter Quarter Quarter
FINANCIAL HIGHLIGHTS
Earnings and dividends:
Net interest income $2,630 $2,487 $2,503 $2,252 $2,314
Provision for credit losses 150 150 150 150 150
Other noninterest income 455 455 408 355 356
Other noninterest expense 1,738 1,704 1,533 1,706 1,537
Net income 839 769 872 545 680
Per common share:
Basic and diluted earnings 1.00 0.91 1.04 0.64 0.78
Dividends declared 0.38 0.00 0.65 0.00 0.38
Book value 28.65 27.96 26.53 25.44 24.61
Average common shares 839,705 839,705 840,512 847,895 866,433
Dividend payout ratio 38.02% 0.00% 62.04% 0.00% 48.72%
Balance sheet summary:
Loans net of unearned income 218,300 223,373 224,702 217,778 206,943
Assets 314,717 320,762 306,239 300,406 285,080
Deposits 240,877 247,967 241,534 232,051 221,981
Shareholders' equity 24,068 23,476 22,274 21,420 21,067
Average balances:
Loans net of unearned income 220,837 224,038 221,240 214,773 201,128
Assets 317,740 313,474 303,323 292,743 277,698
Deposits 244,422 244,751 236,793 227,016 215,004
Shareholders' equity 23,772 22,859 21,847 21,244 21,194
Performance Ratios:
Return on average assets (1) 1.06% 0.98% 1.15% 0.74% 0.98%
Return on average common equity (1) 14.12% 13.46% 15.97% 10.26% 12.81%
Tangible equity to assets 7.53% 7.22% 7.31% 7.37% 7.74%
Net loan charge-offs as a percentage
of average loans 0.01% 0.01% 0.08% 0.01% 0.05%
Nonperforming assets as a percentage
of average gross loans 1.07% 1.06% 1.11% 0.35% 0.32%
Net interest margin (1) (2) 3.64% 3.47% 3.62% 3.40% 3.65%
Efficiency ratio (2) 54.59% 56.35% 51.29% 63.59% 55.99%
Service fee revenue as a percent of
average assets (1) 0.32% 0.31% 0.32% 0.36% 0.27%
<FN>
(1) Annualized
(2) Tax-exempt income has been adjusted to its fully taxable equivalent with a
34% tax rate
-10-
NET INTEREST INCOME
Net interest income is the most significant component of earnings. Net
interest income for the three months ended June 30, 2001 was $2,630.
Comparatively, net interest income for the second quarter 2000 was $2,314.
Fully taxable equivalent net interest income for the second quarter 2001
increased $340 from second quarter 2000 to $2,728. Average earning assets
grew $38,080 from the second quarter 2000. The net interest margin for
the three months ended June 30, 2001 was 3.64% or 1 basis point less than
the 3.65% margin in the second quarter 2000. Yields on earning assets
decreased to 8.10% compared to 8.22% in 2000. Similarly, the costs for
interest-bearing liabilities decreased to 5.14% from 5.34%. The Company
is trying to position more assets to reprice with the market to maintain
or increase the net interest margin.
PROVISION FOR LOAN LOSSES
Management determines the adequacy of the provision for loan losses based
on past loan experience, current economic conditions, composition of the
loan portfolio, and the potential for future loss. Accordingly, the
amount charged to expense is based on management's evaluation of the loan
portfolio. It is the Company's policy that when available information
confirms that specific loans and leases, or portions thereof, including
impaired loans, are uncollectible, these amounts are promptly charged off
against the allowance. The provision for loan losses was $150 for the
three months ended June 30, 2001 and June 30, 2000. Net charge-offs as a
percentage of average loans outstanding were .01% and .05% during the
three months ended June 30, 2001 and June 30, 2000, respectively.
Nonperforming loans are reviewed to determine exposure for potential loss
within each loan category. The adequacy of the allowance for loan losses
is assessed based on credit quality and other pertinent loan portfolio
information. The adequacy of the reserve and the provision for loan
losses is consistent with the composition of the loan portfolio and recent
credit quality history.
NONINTEREST INCOME
Noninterest income increased 27.8% to $455 during the three months ended
June 30, 2001, from the comparable second quarter of 2000. There were no
gains or losses on securities during the three months ended June 30, 2001
and 2000. Service fees on deposit accounts increased $66, or 35.5%, for
the three months ended June 30, 2001 from the three months ended June 30,
2000.
NONINTEREST EXPENSE
Noninterest expense increased 13.0% to $1,738 for the three months ended
June 30, 2001, from $1,537 for the three months ended June 30, 2000.
-11-
Table 6: Key Operating Ratios
Three Months Ended and Six Months ended June 30, 2001 and 2000 (unaudited)
Six-Month Period Three-Month Period
2001 2000 2001 2000
Return on assets (net income divided by
average assets) (1) 1.04% 0.92% 1.06% 0.98%
Return on average equity (net income
divided by average equity) (1) 13.88% 11.90% 14.12% 12.81%
Average equity to average assets 7.46% 7.73% 7.48% 7.63%
Interest rate spread (difference between
average yield on interest-earning assets
and average cost of interest-bearing
liabilities) (1) (2) 2.85% 3.02% 2.96% 2.88%
Net interest margin (net interest income
as a percentage of average interest-
earning assets) (1) (2) 3.61% 3.77% 3.64% 3.65%
Noninterest expense to average assets (1) 2.22% 2.37% 2.19% 2.21%
Allowance for loan losses to total loans
at end of period 1.21% 1.10% 1.21% 1.10%
<FN>
(1) Annualized
(2) Tax-exempt income has been adjusted to its fully taxable equivalent
with a 34% tax rate
-12-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change in the information provided in response
to Item 7A of the Company's Form 10-K for the year ended December 31,
2000.
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 18,
2000. 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:
(a) Election of Directors
Broker
FOR WITHHELD NON-VOTE
Gordon P. Connor 529,305 63,376 0
Patrick L. Crooks 528,175 64,506 0
William J. Fish 529,305 63,376 0
Charles A. Ghidorzi 524,143 68,538 0
Gordon P. Gullickson 526,388 66,293 0
Lawrence Hanz, Jr. 525,843 66,838 0
David K. Kopperud 529,305 63,376 0
Thomas R. Polzer 529,215 63,466 0
William M. Reif 529,305 63,376 0
Thomas A. Riiser 529,155 63,526 0
Eugene Witter 528,399 64,282 0
-13-
(b) Amendment of Article 5 of Restated Articles of Incorporation
Broker
FOR AGAINST ABSTAIN NON-VOTE
505,953 91,212 5,981 0
(c) Approval of 2001 Stock Option Plan
Broker
FOR AGAINST ABSTAIN NON-VOTE
504,292 88,220 10,634 0
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits.
The following exhibits have been filed with the Securities and Exchange
Commission. Exhibits filed as part of this report, and listed below, are
set forth on the Exhibit Index which follows the signature page.
Exhibit
NUMBER DESCRIPTION
3.1 Restated Articles of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2000)
3.2 Bylaws (incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
2000)
4.1 Articles of Incorporation and Bylaws (see Exhibits 3.1 and 3.2)
10.1 Bonus Plan of Directors of the Bank (incorporated by reference to
Exhibit 10.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000)
10.2 Non-Qualified Retirement Plan for Directors of the Bank
(incorporated by reference to Exhibit 10.2 to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 2000)
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10.3 Senior Management Incentive Compensation Plan (incorporated by
reference to Exhibit 10.4 to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 2000)*
10.4 Consulting Agreement with Chairman of the Board (incorporated by
reference to Exhibit 10.4 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2000)*
10.5 2001 Stock Option Plan (incorporated by reference to Exhibit 10.5
to the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 2001)*
21.1 Subsidiaries of the Company (incorporated by reference to Exhibit
21.1 to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000)
*Denotes Executive Compensation Plans and Arrangements.
(b) Reports on Form 8-K:
None.
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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, 2001 TODD R. TOPPEN
Todd R. Toppen
Secretary and Controller
(On behalf of the Registrant and as
Principal Financial Officer)
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EXHIBIT INDEX
TO
FORM 10-Q
OF
PSB HOLDINGS, INC.
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
Pursuant to Section 102(d) of Regulation S-T
(17 C.F.R. Section 232.102(d))
The following exhibits are filed as part this report:
NONE