Exhibit 99.1
PSB ANNOUNCES 4TH QUARTER EARNINGS OF $.62 PER SHARE
Wausau, Wisconsin - David K. Kopperud, President of PSB Holdings, Inc. ("PSB")
and Peoples State Bank ("Peoples") today announced 2005 fourth quarter net
income of $.62 per diluted share, or $1,063,000, as compared to $.60 per
diluted share, or $1,043,000, in the fourth quarter of 2004. Fourth quarter
net income increased 1.9% over the same period in 2004.
Net income for the year ended December 31, 2005, was $2.52 per diluted share,
or $4,340,000, as compared to $2.03 per diluted share, or $3,526,000, in 2004.
Net income for 2005 increased 23.1% over 2004.
Earnings for the year ended December 31, 2005 included the following special
items:
* A pre-tax realized gain of $78,000 on sale of PULSE ATM (a cooperative)
stock.
* Pre-tax reduction to collection expenses of $101,000 from a recovery of
collection expenses recorded in 2004.
The net effect of these items was an increase of $.07 per share, or $108,000.
Without these items, diluted earnings per share would have been $2.45 for the
year ended December 31, 2005.
Earnings for the year ended December 31, 2004 included the following special
items:
* A pre-tax loss of $329,000 on abandonment of PSB's previous home office.
* An increase to provision for income taxes of $150,000 from a tax
settlement paid to Wisconsin on certain Nevada investment subsidiary
earnings.
* A pre-tax expense of $165,000 on closure of a Rhinelander, Wisconsin
branch location.
* Pre-tax increase to collection expense of $127,000 from fees written off
in response to regulatory requirements.
The net effect of these items was a decrease of $.30 per share, or $526,000.
Without these items, diluted earnings per share would have been $.66 and $2.33
for the quarter and year ended December 31, 2004, respectively.
Return on average assets based on net income for the fourth quarter and full
year was .85% and .90%, respectively, as compared to .92% and .82%,
respectively, for the same periods in 2004. Return on equity based on net
income for the fourth quarter and full year was 11.79% and 12.39%,
respectively, as compared to 12.18% and 10.66%, respectively, for the same
periods in 2004.
Assets at December 31, 2005 were $506.2 million, compared to $455.0 million at
the end of 2004, an increase of $51.2 million or 11.2%. Total net loans were
$372.4 million at December 31, 2005 compared to $343.9 million at the end of
2004, an increase of $28.5 million or 8.3%. Book value per share was $20.81 at
December 31, 2005 compared to $19.55 for the same date a year ago.
PSB's provision for loan losses was $30,000 in the fourth quarter 2005, versus
$180,000 in the same period last year. Net charge-offs were .01% of total
average loans this quarter, compared to .04% a year ago. At December 31, 2005,
the allowance for loan losses was 1.11% of total loans, compared to 1.19% a
year earlier. Nonperforming loans were .83% of total loans at December 31,
2005, and .80% at December 31, 2004. Although 2005 benefited from reduced
provisions for loan losses (compared to 2004) due to improving credit quality
and favorable resolution of some long-time problem loans, provision expense is
expected to increase during 2006 over 2005 levels from continued loan growth
without recurrence of the recapture of specific problem loan reserves seen
during 2005.
Tax adjusted net interest margin was 3.09% during the fourth quarter 2005
compared to 3.50% in the same period last year. Continued yield curve
flattening continues to compress net interest spread as short-term deposit cost
increases are greater than corresponding loan yield increases. Loan yield in
the quarter ended December 31, 2005 was 6.26% compared to 5.83% a year ago, an
increase of 43 basis points. Rate paid on interest-bearing non-maturity
deposits was 2.19% during the fourth quarter 2005 compared to .87% a year ago,
an increase of 132 basis points.
PSB updated accounting procedures during the first quarter of 2005 to improve
recognition and amortization of deferred loan origination fees and costs in
accordance with Statement of Financial Accounting Standard No. 91, ACCOUNTING
FOR NONREFUNDABLE FEES AND COSTS ASSOCIATED WITH ORIGINATING OR ACQUIRING LOANS
("FAS 91"). FAS 91 requires loan origination fees and direct loan origination
costs to be deferred and amortized as a yield adjustment earned on the loan.
Previously, these accounting adjustments for deferral of costs were made only
at year-end and in prior years had an immaterial impact on the individual
quarterly financial statements. The change in accounting procedure was made to
simplify operations and improve the accuracy of earnings reporting. Certain
financial measure and ratio comparisons between the fourth quarter 2005 and
2004 are impacted by this change. These ratios are presented on a pro-forma
basis before all FAS 91 impacts as follows:
Quarter ended December 31, As Reported Pro-forma
2005 2004 2005 2004
Tax adjusted net interest margin 3.09% 3.50% 3.23% 3.64%
Operating expenses to average assts 2.18% 2.33% 2.31% 2.60%
Net income ($000s omitted) $ 1,063 $ 1,043 $ 1,067 $ 946
Earnings per diluted share $ 0.62 $ 0.60 $ 0.62 $ 0.55
PSB Holdings, Inc. (OTCBB:PSBQ.OB), is the parent company of Peoples. Peoples
is headquartered in Wausau, Wisconsin with eight retail locations serving north
central Wisconsin in Marathon, Oneida, and Vilas counties. In addition to
traditional retail and commercial banking products, Peoples provides retail
investments, retirement planning, commercial treasury management services, and
long-term fixed rate residential mortgages.
Forward Looking Statements
Certain matters discussed in this news release, including those relating to the
growth of PSB, its profits, 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
PSB's Form 10-K for the year ended December 31, 2004. PSB assumes no
obligation to update or supplement forward-looking statements that become
untrue because of subsequent events.
(tables follow)
PSB HOLDINGS, INC.
QUARTERLY FINANCIAL SUMMARY
(dollars in thousands, except per share data)
Quarter ended - Unaudited
DEC. 31, Sept. 30, June 30, March 31, Dec.31
EARNINGS AND DIVIDENDS: 2005 2005 2005 2005 2004
Net income $ 1,063 $ 1,066 $ 1,171 $ 1,040 $ 1,043
Basic earnings per share (3) $ 0.62 $ 0.62 $ 0.68 $ 0.60 $ 0.61
Diluted earnings per share (3) $ 0.62 $ 0.62 $ 0.68 $ 0.60 $ 0.60
Dividends declared per share (3) $ 0.31 $ - $ 0.31 $ - $ 0.30
Net book value per share $ 20.81 $ 20.81 $ 20.27 $ 19.77 $ 19.55
Semi-annual dividend payout ratio 24.83% n/a 24.06% n/a 28.82%
Average common shares outstanding 1,710,720 1,712,771 1,714,134 1,721,058 1,717,394
BALANCE SHEET - AVERAGE BALANCES:
Loans receivable, net of allowances $ 366,224 $ 369,489 $ 367,948 $ 354,136 $ 341,997
Total assets $ 498,429 $ 493,035 $ 480,325 $ 465,083 $ 448,591
Deposits $ 394,161 $ 387,969 $ 376,252 $ 367,394 $ 353,310
Stockholders' equity $ 35,756 $ 35,143 $ 34,665 $ 33,989 $ 34,076
PERFORMANCE RATIOS:
Return on average assets (1) 0.85% 0.86% 0.98% 0.91% 0.92%
Return on avg. stockholders' equity (1) 11.79% 12.03% 13.55% 12.41% 12.18%
Average tangible stockholders' equity to
average assets 7.24% 7.14% 7.22% 7.25% 7.49%
Net loan charge-offs to average loans 0.01% 0.02% 0.01% 0.00% 0.04%
Nonperforming loans to gross loans 0.83% 0.71% 0.60% 0.74% 0.80%
Allowance for loan loss to gross loans 1.11% 1.14% 1.15% 1.18% 1.19%
Net interest rate margin (1)(2) 3.09% 3.14% 3.32% 3.40% 3.50%
Net interest rate spread (1)(2) 2.61% 2.72% 2.96% 3.05% 3.12%
Service fee revenue as a percent of
average demand deposits (1) 2.10% 2.10% 2.56% 2.19% 2.22%
Noninterest income as a percent
of gross revenue 10.59% 12.06% 13.00% 11.87% 11.64%
Efficiency ratio (2) 61.35% 63.25% 59.53% 59.11% 58.52%
Noninterest expenses to avg. assets (1) 2.18% 2.32% 2.32% 2.30% 2.33%
Stock price information:
High $ 30.70 $ 32.00 $ 31.85 $ 32.20 $ 33.25
Low $ 29.75 $ 30.65 $ 30.63 $ 31.85 $ 32.00
Market value at quarter-end $ 30.70 $ 30.70 $ 30.75 $ 31.85 $ 32.10
<FN>
(1) Annualized
(2) The yield on tax-exempt loans and securities is computed on a tax-
equivalent basis.
(3) Due to rounding, cumulative quarterly per share performance may not equal
annual per share totals.
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Year Ended
(dollars in thousands, December 31, December 31,
except per share data - unaudited) 2005 2004 2005 2004
Interest and dividend income:
Loans, including fees $ 5,829 $ 5,057 $ 22,347 $ 19,207
Securities:
Taxable 559 430 1,966 1,798
Tax-exempt 253 247 978 982
Other interest and dividends 213 68 473 215
Total interest and dividend income 6,854 5,802 25,764 22,202
Interest expense:
Deposits 2,664 1,589 9,019 5,783
FHLB advances 544 576 2,133 2,061
Other borrowings 35 60 272 269
Junior subordinated debentures 112 - 231 -
Total interest expense 3,355 2,225 11,655 8,113
Net interest income 3,499 3,577 14,109 14,089
Provision for loan losses 30 180 160 855
Net interest income after provision for loan losses 3,469 3,397 13,949 13,234
Noninterest income:
Service fees 308 301 1,188 1,234
Mortgage banking 189 246 880 901
Investment and insurance sales commissions 158 139 689 484
Net gain (loss) on sale of securities - (14) 6 97
Increase in cash surrender value of life insurance 47 - 160 -
Other noninterest income 110 92 545 407
Total noninterest income 812 764 3,468 3,123
Noninterest expense:
Salaries and employee benefits 1,596 1,376 6,610 6,189
Occupancy and facilities 459 502 1,767 1,609
Loss on abandonment of premises and equipment - 50 - 379
Data processing and other office operations 209 153 741 655
Advertising and promotion 56 68 287 263
Other noninterest expenses 416 477 1,635 1,880
Total noninterest expense 2,736 2,626 11,040 10,975
Income before provision for income taxes 1,545 1,535 6,377 5,382
Provision for income taxes 482 492 2,037 1,856
Net income $ 1,063 $ 1,043 $ 4,340 $ 3,526
Basic earnings per share $ 0.62 $ 0.61 $ 2.53 $ 2.04
Diluted earnings per share $ 0.62 $ 0.60 $ 2.52 $ 2.03
PSB HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2005 unaudited, December 31, 2004 derived from audited financial
statements
(dollars in thousands, except per share data) - Unaudited 2005 2004
ASSETS
Cash and due from banks $ 15,708 $ 12,680
Interest-bearing deposits and money market funds 988 3,265
Federal funds sold 9,908 7,379
Cash and cash equivalents 26,604 23,324
Securities available for sale (at fair value) 81,501 68,894
Loans held for sale - 342
Loans receivable, net of allowance for loan losses of $4,180
and $4,157, respectively 372,411 343,923
Accrued interest receivable 2,245 1,744
Foreclosed assets 373 7
Premises and equipment 12,632 12,432
Mortgage servicing rights, net 880 839
Federal Home Loan Bank stock (at cost) 3,017 2,874
Cash surrender value of bank-owned life insurance 4,805 -
Other assets 1,690 595
TOTAL ASSETS $ 506,158 $ 454,974
LIABILITIES
Non-interest-bearing deposits $ 61,345 $ 51,635
Interest-bearing deposits 339,191 306,590
Total deposits 400,536 358,225
Federal Home Loan Bank advances 54,000 52,000
Other borrowings 4,497 8,565
Junior subordinated debentures 7,732 -
Accrued expenses and other liabilities 3,908 2,568
Total liabilities 470,673 421,358
STOCKHOLDERS' EQUITY
Common stock - no par value with a stated value of $1 per share:
Authorized - 3,000,000 shares
Issued - 1,887,179 shares 1,887 1,887
Additional paid-in capital 9,655 9,672
Retained earnings 28,561 25,281
Accumulated other comprehensive income (loss) (542) 384
Treasury stock, at cost - 181,608 and 167,586 shares, respectively (4,076) (3,608)
Total stockholders' equity 35,485 33,616
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 506,158 $ 454,974