SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
Commission File Number 0-22953
A. Pioneer Bank, FSB Profit Sharing 401(k) Plan
B. Pioneer Bank, FSB
PO Box 846
Baker City, Oregon 97814
Financial Statements and Exhibits
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(a) Financial Statements
Filed as a part of this report on Form 11-K are the audited financial
statements of the Plan as of and for the years ended December 31, 2002 and
2001.
(b) Exhibit 99 - Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Pioneer Bank, FSB Profit Sharing 401(k) Plan
Date: June 30, 2003 /s/Jonathan McCreary
------------------------ ---------------------------------------------
Jonathan McCreary
as Trustee for the Plan
Financial Statements
PIONEER BANK, FSB
PROFIT SHARING 401(k) PLAN
December 31, 2002 and 2001
TABLE OF CONTENTS
Page No.
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INDEPENDENT AUDITORS' REPORT...................................... 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits................ 2
Statement of Changes in Net Assets Available for Benefits...... 3
Notes to Financial Statements.................................. 4
SUPPLEMENTAL INFORMATION
Schedule of Assets (Held at End of Year)....................... 10
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee
Pioneer Bank, FSB Profit Sharing 401(k) Plan
Baker City, Oregon
We have audited the accompanying statements of net assets available for
benefits of Pioneer Bank, FSB Profit Sharing 401(k) Plan as of December 31,
2002 and 2001, and the related statement of changes in net assets available
for benefits for the year ended December 31, 2002. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Pioneer Bank,
FSB Profit Sharing 401(k) Plan as of December 31, 2002 and 2001 and the
changes in net assets available for benefits for the year ended December 31,
2002 in conformity with U.S. generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for purposes of additional analysis
and are not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ Balukoff, Lindstrom & Co., P.A.
Balukoff Lindstrom & Co., P.A.
June 3, 2003
Boise, Idaho
-1-
PIONEER BANK FSB PROFIT SHARING 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2002 and 2001
2002 2001
---------- ----------
ASSETS
Investments, at fair value $3,319,883 $3,550,879
Participant loans 110,173 113,520
---------- ----------
Total investments 3,430,056 3,664,399
Contributions receivable
Employer - 4,041
Employee - 7,839
---------- ----------
- 11,880
---------- ----------
TOTAL ASSETS 3,430,056 3,676,279
LIABILITIES - -
---------- ----------
TOTAL LIABILITIES - -
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $3,430,056 $3,676,279
========== ==========
See accompanying notes
-2-
PIONEER BANK FSB PROFIT SHARING 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 2002
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income
Net depreciation in fair value of investments $ (437,598)
Interest and dividends 60,035
----------
(377,563)
Contributions
Employee 222,377
Employer match 119,286
Rollover 34,448
----------
376,111
----------
TOTAL ADDITIONS (1,452)
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Withdrawals and benefit payments 243,721
Administrative expenses and other 1,050
----------
TOTAL DEDUCTIONS 244,771
----------
NET DECREASE IN NET ASSETS
AVAILABLE FOR BENEFITS (246,223)
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 3,676,279
----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $3,430,056
==========
See accompanying notes
-3-
PIONEER BANK, FSB PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF THE PLAN
General
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The following description of the Pioneer Bank, FSB (the Employer) Profit
Sharing 401(k) Plan (the Plan) provides general information. Participants
should refer to the Plan agreement for a description of the Plan provisions.
The Plan is a profit sharing plan established July 1, 1959, to provide
retirement and incidental benefits to eligible employees. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
All regular employees are eligible to participate in the Plan upon attaining
the age of 18 and completing one hour of service.
Prudential Mutual Fund Management, Inc. is the Plan Administrator and
Custodian. The Trustees are Michelle D. Kaseberg, William H. Winegar,
Jonathan McCreary, and Anne Raffetto.
Employee Contributions
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Participants may elect to defer up to 10% of their annual compensation, as
defined by the Plan, up to the maximum deferrable amount allowed by the
Internal Revenue Service. The Plan accepts rollover contributions of amounts
distributed from another qualified plan or a qualified individual retirement
account. Participants may elect to deposit their contributions in any of the
investment options available.
Employer Contributions
- ----------------------
The Employer makes dollar-for-dollar matching contributions to a participant's
account up to a maximum of 3.33% of the participant's annual pretax
compensation that is beneath the annual compensation limit imposed by the IRS.
Additional Employer contributions may be made on a discretionary basis, in
amounts determined by the Employer annually. Employer contributions are
allocated to all employees who are eligible for the Plan and employed on the
last day of the Plan year, as well as employees who died or became disabled
during the Plan year, and former employees who retired under the Plan.
Employer contributions are allocated based on the ratio of each participant's
compensation in relation to total compensation of all eligible participants.
-4-
PIONEER BANK, FSB PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
Vesting
- -------
Participants are, at all times, fully vested in their employee account
balance. Participants become vested in their employer account balance over a
six-year period based upon their years of service with the employer as
follows:
Years of Percentage of
Service Vested Interest
-------- ---------------
Less than 2 years 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
Six or more years 100%
Participants vest immediately in their employee deferrals and rollover
contributions plus actual earnings thereon. The Plan provides for
participants to be fully vested upon death, permanent disability or the
attainment of age 65.
Distributions
- -------------
Upon a participant's retirement, death or separation from service,
participants may elect either a lump sum cash payment or, if the value of the
benefit exceeds $5,000, approximate equal payments made at least once a year
over a period not to exceed the life expectancy of the participant or
beneficiary.
The Plan has provisions for hardship withdrawals from the participant's
deferral account. Matching contributions and allocated earnings are not
available for hardship withdrawals.
Forfeitures
- -----------
Upon termination of employment with the Employer, participants are entitled to
a distribution of their vested account balances. Forfeitures of terminated
participant's non-vested benefits are applied to pay administrative expenses
and reduce the Employer's contributions to the Plan. For the years ended
December 31, 2002 and 2001, there were $17,971 and $4,621 of forfeited account
balances, respectively.
-5-
PIONEER BANK, FSB PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
Participant Accounts
- --------------------
Each participant's account is credited with the employee's contributions and
the employer's discretionary matching contributions. Dividend and interest
income, net of administrative expenses with respect to each category of
investments, is allocated to participants' accounts based upon their pro-rata
share of the equity in each investment fund before such allocation.
Expenses
- --------
Substantially all administration expenses of the Plan are paid by the Employer
on behalf of the Plan and will not be reimbursed. The participant pays
expenses incident to certain transactions.
Termination
- -----------
Although the Employer expects to continue the Plan indefinitely, the Employer
may terminate the Plan in whole or in part at any time upon giving written
notice to the Administrator and Trustee. If the Plan is terminated, the
account of each participant will be fully vested and non-forfeitable as of the
effective date of the Plan termination.
Participant Loans
- -----------------
Participants may borrow from their fund accounts up to a maximum equal to the
lesser of $50,000 or 50% of their vested account balance. Loan transactions
are treated as a transfer from the investment to the Loan Fund. Payments on
loans are treated as a transfer from the Loan fund to the investment. Loan
terms generally range from 1-10 years with principal and interest payments
monthly. The loans are secured by the balance in the participant's account
and bear interest at a rate commensurate with local prevailing rates as
determined by the Plan administrator.
Plan Amendments
- ---------------
The Company has the right to amend or terminate the Plan and Trust Agreement.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
Investment Valuation and Income Recognition
- -------------------------------------------
Investments in guaranteed interest accounts are carried at contract value,
which approximates principal amounts contributed to the accounts, plus accrued
interest, less distributions from the contract. Investments in all other
investment options are carried at their fair value measured and quoted market
prices in active markets or by the contracted price. Investment income is
recorded as earned.
-6-
PIONEER BANK, FSB PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
Estimates
- ---------
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
NOTE C INVESTMENTS
At December 31, 2002 and 2001, investment that constitute 5% of Plan assets
are as follows:
Fund 2002 2001
-------- --------
Guaranteed Interest Accounts $275,389 $243,217
Prudential Jennison Growth Fund 335,398 428,443
Putnam International Growth Fund 299,574 345,310
Putnam New Opportunities Fund 207,159 288,453
AIM Constellation Fund 291,086 386,591
Fidelity Advisor Equity Income Fund 285,753 323,350
Oregon Trail Financial Corp Stock 923,545 835,325
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of realized gains or losses and unrealized
appreciation (depreciation) on those investments.
NOTE D - GUARANTEED INTEREST ACCOUNTS
The Plan invests in pooled guaranteed interest accounts with an average return
of 5.0% and 5.3% for the years ended December 31, 2002 and 2001, respectively.
NOTE E RELATED PARTIES
Oregon Trail Financial Corporation is the savings and loan holding company of
the Employer upon the conversion from a federally chartered mutual to a
federal chartered stock savings bank on October 3, 1997. Oregon Trail
Financial Corporation stock is an investment option available to all
participants within the Plan.
-7-
PIONEER BANK, FSB PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
NOTE F - INCOME TAX STATUS
The Plan adopted a prototype plan and consequently is relying on the
determination received by the prototype. The Plan has been amended since
adoption of the prototype plan. However, the Plan administrator and the
plan's tax counsel believe the Plan is currently designed and being operated
in compliance with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
NOTE G SUBSEQUENT EVENT
Oregon Trail Financial Corp. (the Company) has entered into an agreement to
merge with First Bank Northwest later this year. It is anticipated by
management that the plan will be terminated after the merger.
-8-
SUPPLEMENTAL INFORMATION
PIONEER BANK FSB PROFIT SHARING 401(k) PLAN
EIN: 93-0159250
Plan Number 001
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2002
Current
(a) (b) Identity of Issue (c) Description (d) Cost ** (e) Value
- --- --------------------- --------------- ----------- ---------
Prudential Investments
* Prudential Money Market Fund Money Market Fund $ 43,897
* Equity Fund Large Value Stock Fund 73,317
* Global Growth Fund Global Stock Fund 13,477
* High Yield Fund High Yield Bond Fund 115,465
* Short-Term Corporate Bond
Fund Short-Term Bond Fund 70,506
* Stock Index Fund Large Blend Stock Fund 40,165
* Jennison Growth Fund Large Growth Stock Fund 335,398
* Jennison Equity Opp A Mid-Cap Value 81,628
* Prudential US Emerging Growth
Fund Emerging Growth Stock Fund 12,215
* Prudential Natural Resources
Fund Sector Specific Stock Fund 16,635
Putnam Investments
International Growth Fund Foreign Stock Fund 299,574
New Opportunities Fund Large Growth Stock Fund 207,159
OTC Emerging Growth Fund Mid-Cap Growth Stock Fund 85,977
Davis Investments
Davis Growth Opportunity A Small and Mid Cap Stock Fund 4,281
PIMCO Investments
PIMCO Small Cap Value A Small Cap Stock Fund 20,244
Oppenheimer Investments
Quest Global Value A World Stock 17,685
Quest Balanced Value A Domestic Hybrid 51,350
AIM Investments
Constellation Fund Large Growth Stock Fund 291,086
Fidelity Advisor
Equity Income Fund Large Value Stock Fund 285,753
John Hancock
Technology Fund Specialty Stock Fund 55,137
Company Stock
* Oregon Trail Financial Corp. Stock 923,545
Guaranteed Interest Accounts
GIA Accounts Guaranteed Interest Accounts 275,389
-10-
PIONEER BANK FSB PROFIT SHARING 401(k) PLAN
EIN: 93-0159250
Plan Number 001
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2002
Current
(a) (b) Identity of Issue (c) Description (d) Cost ** (e) Value
- --- --------------------- --------------- ----------- ---------
Loans
Participant Loans Interest rate
4.75% - 8.75% - 0 - 110,173
----------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $3,430,056
==========
* Known party in interest
** Participant directed, therefore, no cost disclosure is necessary.
-11-
Exhibit 99
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report for the Pioneer Bank, FSB Profit Sharing
401(k) Plan (the "Plan") on Form 11-K for the period ended December 31, 2002,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, the undersigned, in my capacity as _____________ of Pioneer
Bank, A Federal Savings Bank and __________________________ [indicate if any
title with respect to Plan] of the Plan, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that to my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the net assets available for benefits and changes in net assets
available for benefits of the Plan.
-----------------------------------
Name
-----------------------------------
Title
Dated: June 30, 2003
A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature
that appears in typed form within the electronic version of this written
statement required by Section 906, has been provided to the Plan and will be
retained by the Plan and furnished to the Securities and Exchange Commission
or its staff upon request.