Exhibit 99.1
PSB Announces Quarterly Net Income Up 19%
For more information, contact:
Scott M. Cattanach
Treasurer and Chief Financial Officer
715-847-4020
scattanach@psbwi.com
Wausau, Wisconsin - October 18, 2002
HIGHLIGHTS
o Diluted earnings per share of $1.25, up 19% over prior year quarter.
o Asset growth of 13% to $360 million compared to September 2001.
o Return on equity of 15.00%, up 69 basis points over prior year quarter.
o Board of Directors announces 2 for 1 stock split effective upon
shareholder approval of increase in authorized shares.
PSB Holdings, Inc. (OTCBB:PSBQ.OB), parent company of Peoples State Bank
Wausau, Wisconsin today reported third quarter September 2002 earnings of
$1.26 per share ($1.25 per share fully diluted), compared to $1.05 per share
during the third quarter of 2001. Book value increased to $33.66, compared to
$30.25 at September 2001.
Peoples State Bank is headquartered in Wausau, Wisconsin with seven retail
locations serving north central Wisconsin in Marathon, Lincoln, Oneida, and
Vilas counties. 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 September 30, 2002 was $1,051 compared to
$1,024 in the second quarter of 2002 and $885 in September 2001. Operating
results for the third quarter 2002 generated an annualized return on average
assets (ROA) and return on average equity (ROE) of 1.17 percent and 15.00
percent, respectively. Comparable ratios for the same quarter in 2001 were
ROA of 1.12 percent and ROE of 14.31 percent. ROA and ROE for the year ended
December 31, 2001 were 1.05 percent and 13.96 percent, respectively.
On October 4, 2002, the Company also announced a 2 for 1 stock split pending
shareholder approval of an increase in authorized shares at a special meeting
on November 19, 2002.
NET INTEREST INCOME
Improved net interest income was a significant contributor to increased
earnings. Net interest income increased $347 from $2,909 for the quarter
ended September 30, 2001 to $3,256 for the current quarter ended September 30,
2002. Tax-adjusted net interest margin as a percent of average interest
earning assets declined slightly from 4.03 percent in September 2001 to 3.95
percent in 2002 as loans were originated with lower interest rates. 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 $29,898, or 14% over the comparable year-ago period. Total
assets increased to $360,305 at September 30, 2002, an increase of 13% over
September 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. Gain on sale of such
loans was $310 in September 2002 compared to $34 during September 2001. The
majority of loans sold to outside investors continue to be serviced by the
Bank directly with the customer. At September 30, 2002, the Bank serviced
over $65 million of loans for outside investors compared to $19 million in the
prior year period. President and CEO David Kopperud said, "Peoples was the
largest mortgage lender in Marathon County during August 2002 and the Bank is
proud to meet the needs of homeowners and families in our communities."
During the past quarter, the Bank also introduced a new annuity investment
product for customers looking for a higher yield than available on traditional
certificates of deposit. The product generated an additional $47 of
commission income during the quarter. Senior Vice President David Svacina
remarked, "Our goal is to meet the needs of our customers using new products
when appropriate and many customers have enjoyed the benefits of this
additional flexibility."
OPERATING EXPENSES
Noninterest operating expenses increased $229 to $2,097 in September 2002
compared to $1,868 during September 2001. However, operating costs as a
percentage of average assets decreased from 2.36 percent in September 2001 to
2.34 percent in the current quarter. The majority of the increase in
operating expenses was from additional salaries, wages, and benefits paid to
employees. These additional operating costs have been offset by increased
revenue, as the expense efficiency ratio has improved from 55.38% in September
2001, to 49.52% in the current quarter.
The Company continues to work with borrowers negatively affected by the
current recession and provided $450 to increase the allowance for estimated
loan losses during September 2002 compared to $150 in the prior year quarter.
Management reviews the activity in identified problem loans weekly and
recognizes adequate and reasonable loan loss reserves as required.
FORWARD LOOKING STATEMENTS
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.
(table follows)
PSB HOLDINGS, INC.
(Unaudited)
FINANCIAL HIGHLIGHTS Three months ended Nine months ended
(DOLLARS IN THOUSANDS, September 30, September 30,
EXCEPT PER SHARE DATA) 2002 2001 2002 2001
EARNINGS
Net income $ 1,051 $ 885 $ 3,033 $ 2,493
Diluted earnings per share 1.25 1.05 3.61 2.97
Net book value per share 33.66 30.25 33.66 30.25
PERIOD END BALANCE SHEET
Gross loans receivable $255,680 $224,585 $255,680 $224,585
Total assets 360,305 318,466 360,305 318,466
Deposits 288,592 249,477 288,592 249,477
Borrowings 41,514 41,692 41,514 41,692
KEY EARNINGS RATIOS
(annualized and tax adjusted)
Return on average assets 1.17% 1.12% 1.18% 1.06%
Return on stockholders' equity 15.00% 14.31% 15.07% 13.94%
Net interest margin 3.95% 4.03% 3.97% 3.75%
Efficiency ratio 49.52% 55.38% 52.30% 55.42%
CREDIT QUALITY AND CAPITALIZATION
Allowance for loan losses
to gross loans 1.33% 1.24% 1.33% 1.24%
Net loans charge-offs to
average loans 0.12% 0.02% 0.15% 0.04%
Average tangible stockholders'
equity to average assets 7.61% 7.57% 7.65% 7.39%
SHARE PRICE INFORMATION
High $ 42.10 $ 31.75 $ 42.10 $ 40.00
Low 38.35 29.00 33.25 27.00
Market value at period end 41.15 31.75 41.15 31.75