-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KY6FojH919oAtGIEaXm7VwbFv647DcCvrT+n2OGNKCrd2kUFwPi+1JSoX7YM+/mV RYqWq47yRxWsVLN++qoCow== 0000785024-08-000002.txt : 20080124 0000785024-08-000002.hdr.sgml : 20080124 20080124164907 ACCESSION NUMBER: 0000785024-08-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080124 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080124 DATE AS OF CHANGE: 20080124 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MID WISCONSIN FINANCIAL SERVICES INC CENTRAL INDEX KEY: 0000785024 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 061169935 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18542 FILM NUMBER: 08548110 BUSINESS ADDRESS: STREET 1: PO BOX 90 CITY: MEDFORD STATE: WI ZIP: 54451 BUSINESS PHONE: 7157484364 MAIL ADDRESS: STREET 1: PO BOX 90 CITY: MEDFORD STATE: WI ZIP: 54451 8-K 1 pr012408a.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 _________________________ Date of Report (date of earliest event reported): January 24, 2008 MID-WISCONSIN FINANCIAL SERVICES, INC. (Exact name of registrant as specified in its charter) WISCONSIN 0-18542 06-1169935 (State or Other (Commission File (IRS Employer Jurisdiction of Number) Identification Incorporation) Number) 132 WEST STATE STREET MEDFORD, WI 54451 (Address of principal executive offices, including Zip Code) (715) 748-8300 Registrant's telephone number, including area code Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 23.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) INFORMATION TO BE INCLUDED IN THE REPORT Section 2 - Financial Information Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On January 24, 2008, Mid-Wisconsin Financial Services, Inc. issued a press release announcing its results of operations for the fourth quarter and for the year ended December 31, 2007. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference. Section 9 - Financial Statements and Exhibits Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS 99.1* Press release dated January 24, 2008 * This exhibit is furnished pursuant to Item 2.02 and shall not be deemed to have been filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or Securities Exchange Act of 1934 unless expressly so provided by specific reference in such filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MID-WISCONSIN FINANCIAL SERVICES, INC. Date: January 24, 2008 By: JAMES F. WARSAW James F. Warsaw President and Chief Executive Officer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 99.1 *Press release dated January 24, 2008 * This exhibit is furnished pursuant to Item 2.02 and shall not be deemed to have been filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or Securities Exchange Act of 1934 unless expressly so provided by specific reference in such filing. EX-99.1 CHARTER 2 pe012408f.txt 99.1 - PRESS RELEASE Exhibit 99.1 Mid-Wisconsin Financial Services, Inc. Reports Financial Results for the Fourth Quarter and For the Year Ended December 31, 2007 January 24, 2008 Medford, Wisconsin Mid-Wisconsin Financial Services, Inc. (OTCBB: MWFS.OB), the holding Company of Mid-Wisconsin Bank headquartered in Medford, WI, reported net income for the fourth quarter of 2007 of $451,000 or $.27 per diluted share compared to a net loss of $1.8 million or ($1.11) per diluted share for the related quarter of 2006. The 2006 fourth quarter loss was attributable to the recording of a specific loan loss provision of $4.6 million or $2.75 million on an after-tax basis related to loans made to a business entity and its owners. The 2007 fourth quarter was impacted by an improvement in the net interest margin, and a decrease in noninterest expenses compared to the second and third quarters of 2007. These fourth quarter 2007 earnings improvements were partially offset by increases in nonaccrual loans and the establishment of higher specific loan loss reserves which resulted in an increased loan loss provision for the quarter. Net income earned for the twelve months ended December 31, 2007 was $1.1 million or $.68 per diluted share. This compares with net income of $1.1 million or $.66 per diluted share earned in 2006. Return on average assets (ROA) for 2007 was .24% compared to .25% in 2006. Return on equity (ROE) for 2007 was 3.25% versus 3.07% for 2006. The 2007 results were impacted by impairment write-downs related the impaired borrower in the second and third quarters totaling $2.4 million or $1.465 million on an after-tax basis. Net interest income on a taxable-equivalent basis for the fourth quarter of 2007 was $4.1 million which approximated the amount recorded in the related 2006 period. The net interest margin percentage was 3.64% in the fourth quarter of 2007, up from 3.59% in the third quarter of 2007, and down from 3.74% earned in the fourth quarter of 2006. Average loans in the fourth quarter of 2007 were $358 million compared with $362 million in the third quarter of 2007, and $350 million in the fourth quarter of 2006. A slowdown in the local market economies, pay downs of commercial loans, coupled with increased focus on loan quality and profitability all impacted loan volume. For the year ended December 31, 2007, the net interest margin on a taxable-equivalent basis was $15.9 million which equaled the 2006 results. The net interest margin percentage for 2007 was 3.60% compared with 3.83% the previous year. The 6.1% increase in average interest-earning assets during 2007 was funded with higher-cost broker deposits and long-term borrowings thereby driving down the net interest margin percentage. Also, the reversal of interest income on loans placed on nonaccrual status negatively impacted the 2007 net interest margin. The costs associated with hiring additional personnel and employee turnover, coupled with increased health costs between periods of $464,000, all contributed to the salaries and employee benefits expense increase of $1.5 million in a comparison of the twelve month period in 2007 versus 2006. Expenses associated with the operation of other real estate, including year-to-date impairment write-downs, the additional legal and professional costs associated with compliance and the impaired borrower, and costs associated with opening of new branches all contributed to the increase of $4.6 million in overall operating expenses between years. Net charge-offs during the fourth quarter of 2007 were $131,000 or .04% of average loans. Net charge-offs for 2007 totaled $5.1 million of which $4.6 million related to the impaired borrower described above. Excluding this specific amount, net charge-offs were $.5 million in 2007 compared with a net recovery of $23,000 in 2006. Nonaccrual loans increased to $6.3 million at year-end 2007 from $4.8 million at September 30, 2007. The increase is primarily attributable to the commercial real estate category and is the result of the overall weakness in the local economy. Such weakness impacts the cash flow of borrowers as well as the underlying value of the assets supporting the loans. Also, nonaccrual loans related to residential real estate and home equity increased 22% during the fourth quarter of 2007. Other real estate totaled $2.3 million at December 31, 2007 compared with $130,000 at December 31, 2006. The largest asset in this category is the real estate associated with the former car dealership of the impaired borrower described earlier. The amounts remaining on the financial statements related to the impaired borrower and classified as nonperforming assets were $2.8 million at December 31, 2007 and $3.0 million at September 30, 2007. Mid-Wisconsin Financial Services, Inc., headquartered in Medford, Wisconsin, Is the holding company of Mid-Wisconsin Bank which operates fourteen retail banking locations throughout central and northern Wisconsin serving markets in Clark, Eau Claire, Lincoln, Marathon, Oneida, Price, Taylor and Vilas counties. In addition to traditional loan and deposit products, the Bank offers trust, brokerage and private client services through its Wealth Management Services Group. This press release contains forward-looking statements or comments that are provided to assist in the understanding of anticipated future financial performance. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's view as of any subsequent date. Forward-looking estimates and statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this filing. Additional factors that that may cause actual results to differ materially from those expressed in the forward-looking statements include (i) other risks and assumptions described in Mid-Wisconsin's Annual Report on Form 10-K for the year ended December 31, 2006 under the headings "Forward-Looking Statements" and "Risk Factors" which factors are incorporated herein by reference, and (ii) such other factors as may be described in other Mid- Wisconsin filings with the Securities and Exchange Commission ("SEC"). We specifically disclaim any obligation to update factors or to publicly announce the result of revisions to any of the forward-looking statements or comments included herein to reflect future events or developments. Mid-Wisconsin Financial Services, Inc. Financial Information (unaudited)
Three Months Ended Twelve Months Ended December December December December 31, 31, Percent 31, 31, Percent (in thousands) 2007 2006 Change 2007 2006 Change Interest and dividend income: Loans, including fees $7,083 $6,984 1.4% $28,103 $25,758 9.1% Securities Taxable 755 675 11.9% 2,859 2,501 14.3% Tax-exempt 186 232 -19.8% 826 906 -8.8% Other interest and dividend income 80 113 -29.2% 356 454 -21.6% Total interest and dividend income 8,104 8,004 1.2% 32,144 29,619 8.5% Interest expense: Deposits 3,221 3,235 -0.4% 13,163 11,033 19.3% Short-term borrowings 138 206 -33.0% 773 945 -18.2% Long-term borrowings 576 377 52.8% 2,014 1,460 37.9% Subordinated debentures 153 153 0.0% 614 614 0.0% Total interest expense 4,088 3,971 2.9% 16,564 14,052 17.9% Net interest income 4,016 4,033 -0.4% 15,580 15,567 0.1% Provision for loan losses 690 4,750 -85.5% 1,140 5,133 -77.8% Net interest income after provision for loan losses 3,326 (717) NM 14,440 10,434 38.4% Non-interest income: Service fees 364 340 7.1% 1,352 1,111 21.7% Trust service fees 304 232 31.0% 1,218 917 32.8% Investment product commissions 49 77 -36.4% 260 334 -22.2% Other operating income 325 256 27.0% 1,227 1,086 13.0% Total non-interest income 1,042 905 15.1% 4,057 3,448 17.7% Non-interest expenses: Salaries and employee benefits 2,325 1,804 28.9% 8,840 7,372 19.9% Occupancy 510 409 24.7% 1,967 1,681 17.0% Data processing and information systems 191 210 -9.0% 777 734 5.9% Operation of other real estate 50 15 NM 2,527 18 NM Legal and professional 165 262 -37.0% 650 444 46.4% Other operating expenses 547 684 -20.0% 2,573 2,497 3.0% Total non-interest expenses 3,788 3,384 11.9% 17,334 12,746 36.0% Income before taxes 580 (3,196) -118.1% 1,163 1,136 2.4% Provision (benefit) for income taxes 129 (1,368) -109.4% 45 41 9.8% Net income $451 ($1,828) -124.7% $1,118 $1,095 2.1%
Three Months Ended Twelve Months Ended December December December December 31, 31, 31, 31, 2007 2006 2007 2006 PER SHARE DATA Basic earnings (loss) per share $0.27 ($1.10) $0.68 $0.67 Diluted earnings (loss) per share 0.27 (1.11) 0.68 0.66 Book value per share 21.06 20.82 21.06 20.82 Dividends per share 0.00 0.22 0.66 1.28 Dividend payout ratio 0.0% NM 96.8% 191.0% Average shares outstanding-basic (in 000's) 1,640 1,639 1,640 1,644 Average shares outstanding-diluted (in 000's) 1,640 1,643 1,641 1,648 Stock Price Information: High Bid $30.00 $37.90 $38.00 $38.25 Low Bid 19.75 37.75 19.75 35.40 Bid price at quarter end 19.75 37.90 19.75 37.90 KEY RATIOS Return on average assets 0.38% NM 0.24% 0.25% Return on average equity 5.19% NM 3.25% 3.07% Equity to assets 7.20% 7.41% 7.20% 7.41% Net interest margin (FTE) 3.64% 3.74% 3.60% 3.83% Net charge-offs to average loans 0.04% 0.01% 1.45% -0.01% Allowance for loan loss to period-end loans 1.17% 2.33% 1.17% 2.33%
Financial Information (unaudited)
As of As of December December 31, 31, Percent (in thousands) 2007 2006 Change ASSETS Cash and due from banks $15,371 $12,111 26.9% Interest-bearing deposits 33 22 50.0% Federal funds sold 3,180 369 761.8% Securities 82,551 82,472 0.1% Loans held for sale 1,168 216 440.7% Loans 357,988 351,447 1.9% Allowance for loan losses (4,174) (8,184) -49.0% Net loans 353,814 343,263 3.1% Accrued interest receivable 2,474 2,474 0.0% Premises and equipment, net 9,578 9,332 2.6% Goodwill 295 295 0.0% Other investments - at cost 2,616 2,616 0.0% Other assets 9,279 7,481 24.0% Total Assets $480,359 $460,651 4.3% LIABILITIES & STOCKHOLDERS' EQUITY Non-interest-bearing deposits $47,131 $47,693 -1.2% Interest-bearing deposits 322,348 294,560 9.4% Total deposits 369,479 342,253 8.0% Short-term borrowings 15,346 31,281 -50.9% Long-term borrowings 46,429 38,428 20.8% Subordinated debentures 10,310 10,310 0.0% Accrued interest payable 2,691 2,180 23.4% Accrued expenses and other liabilities 1,533 2,066 -25.8% Total liabilities 445,788 426,518 4.5% Total stockholders' equity 34,571 34,133 1.3% Total Liabilities & Stockholders' Equity $480,359 $460,651 4.3% Nonaccrual loans $6,261 $6,486 -3.5% Other real estate 2,352 130 NM Net charge-offs 5,150 (23) NM
Three Months Ended Twelve Months Ended December December December December 31, 31, 31, 31, 2007 2006 2007 2006 Margin Analysis EARNING ASSETS Loans (FTE) 7.85% 7.93% 7.92% 7.81% Investment securities: Taxable 4.77% 4.58% 4.73% 4.40% Tax-exempt (FTE) 5.78% 5.63% 5.77% 5.88% Other 4.06% 5.68% 5.12% 5.33% Total interest-earning assets (FTE) 7.27% 7.33% 7.35% 7.20% INTEREST-BEARING LIABILITIES Interest-bearing demand 1.57% 2.16% 1.94% 2.14% Savings deposits 3.13% 3.49% 3.28% 3.23% Time deposits 4.91% 4.81% 4.94% 4.42% Short-term borrowings 3.17% 4.58% 4.31% 4.32% Long-term borrowings 4.92% 4.21% 4.74% 4.06% Subordinated debentures 5.98% 5.98% 5.98% 5.98% Total interest-bearing liabilities 4.18% 4.21% 4.29% 3.93% Net Interest rate spread (FTE) 3.09% 3.12% 3.06% 3.27% Net interest rate margin (FTE) 3.64% 3.74% 3.60% 3.83% Average Balance Sheet (in thousands) Loans $358,419 $350,315 $355,307 $330,490 Deposits 360,554 356,884 360,101 332,955 Assets 474,149 461,344 470,209 440,865 Stockholders' equity 34,450 36,332 34,348 35,642
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