Exhibit 99.1
PRESS RELEASE
SOURCE: PSB HOLDINGS, INC.
PSB ANNOUNCES QUARTERLY NET INCOME UP 22%
Wausau, Wis. - July 12, 2002
Earnings per share of $1.22, up 22%
Net interest margin of 4.04%, up 40 basis points
Return on stockholder equity of 15.23%, up 111 basis points
Board of Directors approve stock buyback of up to 1% of outstanding
shares per year
PSB Holdings, Inc. (OTC BB:PSBQ), parent company of Peoples State Bank
Wausau, Wisconsin today reported second quarter June 2002 earnings of
$1.22 per share, compared to $1.00 per share during the second quarter of
2001. Book value increased to $32.68, compared to $28.65 in the year-
earlier quarter. Peoples State Bank is headquartered in Wausau, Wisconsin
with six retail locations serving markets in Marathon, Lincoln, Oneida,
and Vilas counties Wisconsin. In addition to traditional loan and deposit
products, the Bank provides investments and retirement planning and long-
term fixed rate residential mortgages. Financial performance is expressed
in thousands, except per share data.
Net income for the quarter ended June 30, 2002 was $1,024 compared to $958
in the first quarter of 2002 and $839 in June 2001. Operating results for
the second quarter 2002 generated an annualized return on average assets
(ROA) and return on average equity (ROE) of 1.22 percent and 15.23
percent, respectively. Comparable ratios for the same quarter in 2001
were ROA of 1.06 percent and ROE of 14.12 percent. ROA and ROE for the
year ended December 31, 2001 were 1.05 percent and 13.96 percent,
respectively.
In addition to these positive financial results, PSB Holdings, Inc.
President and CEO David Kopperud is pleased to announce the Board of
Directors have approved a stock buyback program of up to 1 percent of
total outstanding shares per year to begin immediately.
NET INTEREST INCOME
Improved net interest income was a significant contributor to increased
earnings. Net interest income increased $474 from $2,630 for the quarter
ended June 30, 2001 to $3,104 for the current quarter ended June 30, 2002.
Tax-adjusted net interest margin as a percent of average interest earning
assets improved from 3.64 percent in June 2001 to 4.04 percent in 2002 as
continued overall market interest rate declines reduced deposit funding
costs. Net interest margin was 3.73 percent for the year ended December
31, 2001. Also contributing to the increase in net interest income was
growth in total average loans of $19,765, or 9% over the comparable year-
ago period. Total assets increased to $342,104 at June 30, 2002, an
increase of 9% over June 2001.
SERVICE FEE AND NONINTEREST INCOME
Earnings continue to improve from an increase of income from the sale of
long-term fixed rate mortgage loans to outside investors. The Bank does
not retain such fixed rate loans as part of its asset liability management
strategy. Gain on sale of such loans was $134 in June 2002 compared to
$83 during June 2001. The majority of loans sold to outside investors
continue to be serviced by the Bank directly with the customer. At June
30, 2002, the Bank serviced over $50 million of loans for outside
investors.
Earlier during 2002, the Bank began to offer a new overdraft protection
product that increased the level of collected service fees. The new
product has helped to increase service fees by $69 in the June 2002
quarter compared to the year-ago quarter. Total service fee and
noninterest income, including gain on sale of loans, was $602 (10.0
percent of gross income) during June 2002 compared to $455 (7.1 percent of
gross income) during June 2001.
OPERATING EXPENSES
Noninterest operating expenses increased $308 to $2,046 in June 2002
compared to $1,738 during June 2001. In addition, operating costs as a
percentage of average assets increased from 2.19 percent in June 2001 to
2.44 percent in the current quarter. The majority of the increase in
operating expenses was from additional salaries, wages, and benefits paid
to employees. As part of the Bank's strategic growth plan, additional
employees have joined the Company since June 2001 at Bank locations in
Wausau and Eagle River, Wisconsin. These additional operating costs have
been offset by increased revenue, as the expense efficiency ratio has
improved from 54.6% in June 2001, to 53.2% in the current quarter.
Certain matters discussed in this news release, including those relating
to the growth of the Company and future interest rates, are forward-
looking statements and are made pursuant to the safe harbor provisions of
the Securities Reform Act of 1995. Such statements involve risks and
uncertainties which may cause results to differ materially from those set
forth in this release. Among other things, these risks and uncertainties
include the strength of the economy, the effects of government policies,
including, in particular, interest rate policies, and other risks and
assumptions described under "Cautionary Statement Regarding Forward
Looking Information" in Item 1 of the company's Form 10-K for the year
ended December 31, 2001. The Company assumes no obligation to update or
supplement forward-looking statements that become untrue because of
subsequent events.
(UNAUDITED) (AUDITED)
FINANCIAL HIGHLIGHTS Three months ended Six months ended Calendar
(DOLLARS IN THOUSANDS, JUNE 30, JUNE 30, Year
EXCEPT PER SHARE DATA) 2002 2001 2002 2001 2001
EARNINGS:
Net Income $ 1,024 $ 839 $ 1,982 $ 1,608 $ 3,366
Basic and diluted earnings
per share 1.22 1.00 2.36 1.91 4.01
Net book value per share 32.68 28.65 32.68 28.65 30.19
PERIOD END BALANCE SHEET:
Gross loans receivable $249,938 $220,982 $249,938 $220,982 $239,542
Total assets 342,104 314,717 342,104 314,717 344,296
Deposits 271,088 240,877 271,088 240,877 273,635
Borrowings 41,194 47,047 41,194 47,047 42,327
KEY EARNINGS RATIO{(1)}:
Return on average assets 1.22% 1.06% 1.19% 1.04% 1.05%
Return on stockholders' equity 15.23% 14.12% 15.13% 13.88% 13.96%
Net interest margin 4.04% 3.64% 3.99% 3.61% 3.73%
Efficiency ratio 53.23% 54.59% 53.87% 55.45% 54.50%
{(1)} annualized and tax adjusted
as necessary
CREDIT QUALITY AND CAPITALIZATION:
Allowance for loan losses
to gross loans 1.30% 1.21% 1.30% 1.21% 1.24%
Net loans charge-offs to
average loans 0.03% 0.01% 0.03% 0.02% 0.14%
Average tangible stockholders'
equity to average assets 7.87% 7.53% 7.68% 7.37% 7.53%
SHARE PRICE INFORMATION:
High $ 39.25 $ 40.00 $ 39.25 $ 40.00 $ 40.00
Low 35.00 29.00 33.25 27.00 27.00
Market value at period end 38.50 30.00 38.50 30.00 33.40