SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
UNITED STATES
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 0-22953
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Pioneer Bank, FSB Profit Sharing 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Pioneer Bank, FSB
PO Box 846
Baker City, Oregon 97814
Financial Statements and Exhibits
- ---------------------------------
(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, 2003
and 2002.
(b) Exhibit 23.1 and 23.2 Consent of Independent Auditors
SIGNATURES
The Plan. Pursuant to the requirement of the Securities and 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.
/s/ ANNE RAFFETTO
----------------------------------------
Trustee, Pioneer Bank, FSB 401(k) Plan
By: /s/ ANNE RAFFETTO
------------------------------------
Anne Raffetto
Human Resources Manager
Pioneer Bank, FSB
Date: June 28, 2004
PIONEER BANK, FSB
PROFIT SHARING 401(K) PLAN
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
and
FINANCIAL STATEMENTS
DECEMBER 31, 2003
TABLE OF CONTENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1-2
FINANCIAL STATEMENTS
Statement of net assets available for benefit 3
Statement of changes in net assets available for benefit 4
Notes to financial statements 5-9
SUPPLEMENTAL INFORMATION
Schedule H, Line 4i - 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 statement of net assets available for benefits
of Pioneer Bank, FSB Profit Sharing 401(k) Plan as of December 31, 2002. This
financial statement is the responsibility of the Plan's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit 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 audit provides 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 in conformity with U.S.
generally accepted accounting principles.
/s/ BALUKOFF LINDSTROM & CO., P.A.
June 3, 2003
Boise, Idaho
1
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Administrative Committee
Pioneer Bank, FSB Profit Sharing 401(k) Plan
Baker City, Oregon
We have audited the accompanying statement of net assets available for benefits
of Pioneer Bank, FSB Profit Sharing 401(k) Plan (the Plan) as of December 31,
2003, and the related statement of changes in net assets in liquidation
available for benefits for the year ended December 31, 2003. 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 audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 audit provides a
reasonable basis for our opinion.
As further discussed in Note 3 to the financial statements, Pioneer Bank was
acquired by FirstBank Northwest on October 31, 2003, which caused the Plan to
terminate. In accordance with accounting principles generally accepted in the
United States of America, the Plan has changed its basis of accounting from the
ongoing basis used in presenting the 2002 financial statements to the
liquidation basis used in presenting the 2003 financial statements.
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, 2003, and the changes in net
assets available for benefits for the year ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States of
America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets (held at end of
year) is presented for purposes of additional analysis and is 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
schedule has been subjected to the auditing procedures applied in our audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ MOSS ADAMS LLP
Spokane, Washington
May 6, 2004
2
PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
NET ASSETS AVAILABLE FOR BENEFIT
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ASSETS
December 31,
---------------------------
2003 2002
---------- ----------
Investment, at fair value
Mutual funds $1,667,284 $2,120,949
Guaranteed interest account 389,095 275,389
Common stock 181,634 923,545
Participants loans 76,244 110,173
---------- ----------
Total investments 2,314,257 3,430,056
---------- ----------
Receivables
Employer matching contribution 251 --
---------- ----------
NET ASSETS AVAILABLE FOR BENEFIT $2,314,508 $3,430,056
========== ==========
See accompanying notes. 3
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PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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December 31, 2003
-----------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net apreciation in fair value of investments $ 858,041
Interest and dividends 5,271
-----------------
863,312
-----------------
Contributions
Participants 234,406
Employer matching 127,316
-----------------
361,722
-----------------
Total additions 1,225,034
-----------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 2,319,149
Administrative expenses and other 21,433
-----------------
Total deductions 2,340,582
-----------------
Net decrease in net assets (1,115,548)
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 3,430,056
-----------------
NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 2,314,508
=================
4 See accompanying notes.
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PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 1 - Summary of Accounting Policies
Basis of accounting:
Since the Plan decided to liquidate, it measures its assets and liabilities at
the amounts of cash expected in liquidation and reports changes in estimates
when they are known. The adoption of the liquidation basis of accounting had no
effect on the statement of net assets available for benefits or the statement of
changes in net assets available for benefits.
Investment valuation and income recognition:
Investments are stated at fair value based upon quoted market prices, except for
participant loans that are stated at cost that approximates their fair value.
Net appreciation or depreciation in the fair value of investments presented in
the statement of changes in net assets available for benefits consists of both
realized and unrealized gains and losses on those investments.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Allowance for loss on receivables:
There has not been recognition of an allowance for loss on receivables as all
receivables are deemed to be 100% collectible or adequately secured as of the
date of this report.
Payment of benefits:
Benefits are recorded when paid.
Income tax status:
The Plan obtained its latest determination letter on October 30, 2003, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code.
Use of estimates:
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of additions to and deductions
from net assets available for benefits during the reporting period. Actual
results could differ from those estimates.
Risks and uncertainties:
The Plan provides for various investment options in any combination of common
stock, guaranteed investment accounts, and mutual funds. Investment securities
of these types are exposed to various risks, such as interest rate, market, and
credit. Due to the level of risk associated with certain investment securities,
it is at least reasonably possible that changes in the values of investment
securities will occur in the near-term, and that such changes could materially
affect participants' account balances and the amounts reported in the financial
statements.
5
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PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 1 - Summary of Accounting Policies (Continued)
Reclassifications:
Certain items in the 2002 financial statements have been reclassified to conform
to the 2003 presentation.
Note 2 - Plan Description
General:
The following description of the Pioneer Bank, FSB Profit Sharing 401(k) Plan
(the Plan) is provided for general information purposes only. Participants
should refer to the Plan agreement for more complete information.
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).
Trustee:
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.
Eligibility:
All regular employees are eligible to participate in the Plan upon attaining the
age of 18 and completing one hour of service.
Contributions:
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 (see Plan amendment below). 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.
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.
There were no discretionary contributions for the year ending December 31, 2003.
6
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PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
Note 2 - Plan Description (Continued)
Vesting:
Participants are immediately vested in their voluntary contributions and any
income or loss thereon. Vesting in the Company's matching or discretionary
contribution portion of their accounts plus actual earnings or losses thereon is
based on years of service. Participants become fully vested when six or more
years of service is completed, depending on the date of hire. Prior to the
completion of six years of service, the participant is vested on a graduated
scale depending on date of hire. A participant may also become 100% vested after
the attainment of normal retirement age, death, or disability.
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, 2003 and 2002, there were $19,165 and $17,971, respectively, of forfeited
account balances.
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.
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 one to ten 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.
7
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PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 2 - Plan Description (Continued)
Plan amendments:
The Plan was amended during 2003 to allow for an increase the maximum elective
deferral amount. The maximum elective deferral was increased from 10% to 100% of
each eligible participant's compensation to the maximum dollar amount permitted
under Code 402(g).
Note 3 - Liquidation Plan
On October 31, 2003, Oregon Trail Financial Corporation, the holding company of
Pioneer Bank, was acquired by FirstBank Northwest. This acquisition of the Bank
resulted in the termination of the Plan. Upon receipt of the determination
letter from the IRS, distribution paperwork was sent to all plan participants.
The funds are distributed to the participant once the distribution paperwork is
returned to the third party administrator. As of June 15, 2004, all assets have
been distributed.
Note 4 - Investments
At December 31, 2003 and 2002, investments that constitute 5% of Plan assets are
as follows:
2003 2002
---------- ----------
Mutual Funds:
Prudential Money Market fund $ 191,007 $ 43,897
Prudential Jennison Growth Fund 255,666 335,398
Putman International Growth Fund 248,057 299,574
Putman New Opportunities Fund 198,207 207,159
AIM Constellation Fund 203,991 291,086
Fidelity Advisor Equity Income Fund 170,071 285,753
Other mutual funds 400,285 658,082
---------- ----------
Total mutual funds 1,667,284 2,120,949
---------- ----------
Guaranteed interest accounts 389,095 275,389
---------- ----------
Common Stocks:
Oregon Trail Financial Corp. -- 923,545
FirstBank NW Corp. 181,634 --
---------- ----------
181,634 923,545
---------- ----------
Participant loans 76,244 110,173
---------- ----------
$2,314,257 $3,430,056
========== ==========
8
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PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
Note 4 - Investments (Continued)
During 2003, the Plan's investments (including investments bought, sold, and
held during the period) appreciated in value as follows:
Mutual funds $ 663,412
Common stock 194,629
----------
NET APPRECIATION OF FAIR VALUE OF INVESTMENTS $ 858,041
==========
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 5 - Guaranteed Interest Accounts
The Plan invests in pooled guaranteed interest accounts with an average return
of 7.49% and 5.0% for the years ended December 31, 2003 and 2002, respectively.
Note 6 - Related Parties
Oregon Trail Financial Corporation is the savings and loan holding company of
the plan sponsor, Pioneer Bank. Oregon Trail Financial Corporation stock is an
investment option available to all participants within the Plan. On October 31,
2003, Oregon Trail Financial Corporation was acquired by FirstBank Northwest.
Upon acquisition the Plan was terminated and contributions to the Plan ceased.
All of the Oregon Trail Financial Corporation stock in the Plan was converted to
cash and FirstBank NW Corp Stock.
Note 7 - Income Tax Status
The Plan obtained its latest determination letter on October 30, 2003, in which
the Internal Revenue Service stated that the Plan as then designed was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan has not be amended since receiving the determination letter.
Note 8 - Party in Interest Transactions
Certain Plan investments are shares of mutual funds managed by Prudential
Retirement Services. Prudential Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party in interest
transactions. The Plan also allows for loans to participants, which also qualify
as party in interest transactions.
9
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PIONEER BANK, FSB PROFIT SHARING 401(K) PLAN
SCHEDULE H, LINE 41 - SCHEDULE OF ASSETS IN LIQUIDATION
(HELD AT END OF YEAR)
================================================================================
December 31, 2003
-------------------------------------------------------
Description of
Investment,
including Maturity
Date, Rate of
Identity of Issue, Interest, Collateral,
Borrower, Lessor, or Par, or Maturity
Similar Party Value Cost Current Value
- ------------------------------------------- --------------------- ------------ ---------------
*Prudential Investments
Prudential Money Market fund Mutual Fund ** $ 191,007
Equity Fund Mutual Fund ** 31,540
Global Growth Fund Mutual Fund ** 19,013
High Yield Fund Mutual Fund ** 57,395
Short-Term Corporate Bond Fund Mutual Fund ** 92,104
Stock Index Fund Mutual Fund ** 9,447
Jennison Growth Fund Mutual Fund ** 255,666
Jennison Equity Opp A Mutual Fund ** 21,889
Prudential US Emerging Growth Fund Mutual Fund ** 6,071
Prudential Natural Resources Fund Mutual Fund ** 8,556
Putnam Investments
International Growth Fund Mutual Fund ** 248,057
New Opportunities Fund Mutual Fund ** 198,207
OTC Emerging Growth Fund Mutual Fund ** 87,738
Davis Investments
Davis Growth Opportunity A Mutual Fund ** 7,140
PIMCO Investments
PIMCO Small Cap Value A Mutual Fund ** 10,660
Oppenheimer Investments
Quest Global Value A Mutual Fund ** 1,787
Quest Balanced Value A Mutual Fund ** 26,703
AIM Investments
Constellation Fund Mutual Fund ** 203,991
Global Growth Fund Mutual Fund ** 894
Fidelity Advisor
Equity Income Fund Mutual Fund ** 170,071
John Hancock Mutual Fund
Technology Fund Mutual Fund ** 19,348
Company Stock
*FirstBank NW ** 181,634
Guaranteed interest accounts
GIA Accounts ** 389,095
Loans
*Participant loans 4.00% - 8.80% - 76,244
-----------
$ 2,314,257
===========
* - A party in interest as defined by ERISA.
** - The cost of participant-directed investments is not required to be
disclosed.
10
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