-----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, SMVsSEKw7SDxFrBgEwitRjRWGvkpkBUMQ4rCJu0Xwy0qCqHOESCFBveCGa8Wrn6u anp4bNVwcgQREpFQvacHNg== 0000785024-08-000011.txt : 20080724 0000785024-08-000011.hdr.sgml : 20080724 20080724163152 ACCESSION NUMBER: 0000785024-08-000011 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080724 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080724 DATE AS OF CHANGE: 20080724 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: 08968567 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 pr072408a.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): July 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 July 24, 2008, Mid-Wisconsin Financial Services, Inc. issued a press release announcing its statement of condition and results of operations for the six-month period ended June 30, 2008. 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 July 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: July 24, 2008 By: JAMES F. WARSAW James F. Warsaw President and Chief Executive Officer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 99.1 *Press release dated July. 24, 2008 o 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 pe072408a.txt 99.1 - PRESS RELEASE Exhibit 99.1 Mid-Wisconsin Financial Services, Inc. Reports Financial Results for the Second Quarter and For the Six Months Ended June 30, 2008 July 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 second quarter of 2008 of $500,000 or $.30 per diluted share compared to net income of $296,000 or $.18 per diluted share for the related quarter of 2007, a 69% improvement in quarterly earnings. The 2008 second quarter results were impacted by a positive improvement in the net interest margin and a decrease in noninterest expenses compared to the second quarter of 2007 and the first quarter of 2008. The second quarter 2008 earnings improvement was 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 six months ended June 30, 2008 was $903,000 or $.55 per diluted share. This compares with net income of $1,032,000 or $.63 per diluted share earned in the related 2007 period. Return on average assets (ROA) for 2008 was .38% compared to .45% in 2007. Return on equity (ROE) for 2008 was 5.15% versus 6.07% for 2007. The 2008 results were favorably impacted by an improvement in the net interest margin and by a tax benefit resulting from a favorable Tax Court ruling. These results were partially offset by a higher loan loss provision of $1,635,000 compared with $300,000 recorded in the same period in 2007. The loan loss provision was a result of increases in nonaccrual loans and higher estimated specific losses on loans for the second quarter. The 2007 six-month results were impacted by an impairment write-down related to the impaired borrower detailed in the 2007 Annual Report on Form 10- K ("Impaired Borrower") which totaled $365,000 on an after-tax basis, or a reduction of $.22 per diluted share. Net interest income on a taxable-equivalent basis for the second quarter of 2008 was $4.3 million, which represented an improvement of 10% compared with the amount recorded in the related 2007 period. The net interest margin percentage was 3.81% in the second quarter of 2008, up from 3.75% in the first quarter of 2008, and 3.55% earned in the second quarter of 2007. Average loans in the second quarter of 2008 were $362 million compared with $356 million in the first quarter of 2008, and $352 million in the second quarter of 2007. A slowdown in the local market economies coupled with an increased focus on loan quality and profitability all impacted loan volume. For the six months ended June 30, 2008, the net interest margin on a taxable-equivalent basis was $8.4 million, an increase of $659,000 or 8.5% over the related 2007 period. The net interest margin percentage for the first six months of 2008 was 3.79% compared with 3.59% the previous year. The 2008 net interest margin results were positively impacted by lower funding costs, the implementation of improved pricing disciplines, increased levels of commercial loan fees and a reduction in tax preference expense associated with municipal securities. Personnel expenses for the first six months of 2008 increased $471,000 over the 2007 period due to the costs associated with hiring additional personnel and employee turnover. Increased health care costs in 2008 due to higher claims experience were offset by a reduction in 401(k) expense in the period. Expenses associated with the carrying costs of other real estate were down $515,000 to $125,000 in 2008 due to the 2007 impairment write-down of $600,000 recorded in the second quarter of 2007. Other operating expenses in 2007 included a $100,000 loss on the sale of other real estate. Net charge-offs during the second quarter of 2008 were $577,000 or .16% of average loans. For the first six months of 2008, net charge-offs totaled $815,000 or .23% of average loans. Net charge-offs for the first six months of 2007 totaled $4.8 million of which $4.6 million related to the Impaired Borrower. Excluding this specific amount, net charge-offs were $203,000 during the first six months of 2007. Nonaccrual loans were $7.5 million, $7.4 million and $6.3 million at June 30, 2008, March 31, 2008 and at year-end 2007, respectively. The increase is primarily attributable to commercial real estate and the overall weakness in the local economy. Such weakness impacts the cash flow of borrowers as well as the continued deterioration in the underlying value of the assets supporting the loans. Other real estate totaled $2.7 million at June 30, 2008, and $2.3 million at March 31, 2008 and December 31, 2007. The largest asset in this category is the real estate associated with the former car dealership of the Impaired Borrower. The amounts remaining on the financial statements related to the impaired borrower and classified as nonperforming assets were $2.8 million at June 30, 2008 and December 31, 2007. A favorable Tax Court ruling during the first quarter resulted in a tax benefit of $247,000 of previously paid federal taxes for the periods 1999-2006. The interest income received from the Internal Revenue Service relative to the tax benefit was the primary reason for the increase in Other Operating Income between periods. 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, 2007 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 Six Months Ended June June June June 30, 30, Percent 30, 30, Percent (in thousands) 2008 2007 Change 2008 2007 Change Interest and dividend income: Loans, including fees $6,487 $6,968 -7% $13,198 $13,749 -4% Securities Taxable 793 708 12% 1,568 1,387 13% Tax-exempt 143 205 -30% 315 439 -28% Other interest and dividend income 56 85 -34% 136 190 -28% Total interest and dividend income 7,479 7,966 -6% 15,217 15,765 -3% Interest expense: Deposits 2,517 3,317 -24% 5,358 6,552 -18% Short-term borrowings 44 263 -83% 105 448 -77% Long-term borrowings 590 438 35% 1,197 865 38% Subordinated debentures 153 153 0% 307 307 0% Total interest expense 3,304 4,171 -21% 6,967 8,172 -15% Net interest income 4,175 3,795 10% 8,250 7,593 9% Provision for loan losses 705 150 370% 1,635 300 445% Net interest income after provision for loan losses 3,470 3,645 -5% 6,615 7,293 -9% Non-interest income: Service fees 349 342 2% 703 656 7% Trust service fees 288 305 -6% 575 607 -5% Investment product commissions 70 101 -31% 118 158 -25% Other operating income 351 291 21% 692 565 22% Total non-interest income 1,058 1,039 2% 2,088 1,986 5% Non-interest expenses: Salaries and employee benefits 2,274 2,209 3% 4,721 4,250 11% Occupancy 538 472 14% 1,059 952 11% Data processing and information systems 198 203 -2% 383 399 -4% Operation of other real estate 72 636 NM 125 640 -80% Legal and professional 177 162 9% 360 312 15% Other operating expenses 579 682 -15% 1,260 1,379 -9% Total non-interest expenses 3,838 4,364 -12% 7,908 7,932 0% Income before taxes 690 320 116% 795 1,347 -41% Provision (benefit) for income taxes 190 24 692% (108) 315 -134% Net income $500 $296 69% $903 $1,032 -13%
Three Months Ended Six Months Ended June June June June 30, 30, 30, 30, 2008 2007 2008 2007 PER SHARE DATA Basic earnings per share $0.30 $0.18 $0.55 $0.63 Diluted earnings per share 0.30 0.18 0.55 0.63 Book value per share 21.26 20.75 21.26 20.75 Dividends per share 0.11 0.22 0.33 0.44 Dividend payout ratio 36.2% 122.0% 60.0% 69.9% Average shares outstanding-basic (in 000's) 1,642 1,640 1,642 1,640 Average shares outstanding-diluted (in 000's) 1,643 1,642 1,642 1,642 Stock Price Information: High Bid $23.50 $34.25 $24.00 $38.00 Low Bid 20.67 32.00 20.67 32.00 Bid price at quarter end 21.00 32.00 21.00 32.00 KEY RATIOS Return on average assets 0.42% 0.25% 0.38% 0.45% Return on average equity 5.70% 3.43% 5.15% 6.07% Equity to assets 7.43% 7.40% 7.45% 7.38% Net interest margin (FTE) 3.81% 3.55% 3.78% 3.59% Efficiency ratio (FTE) 72.18% 88.68% 75.18% 81.21% Net charge-offs to average loans 0.16% 0.05% 0.23% 1.37% Allowance for loan loss to period-end loans 1.37% 1.03% 1.37% 1.03%
Mid-Wisconsin Financial Services, Inc. Financial Information (unaudited)
As of As of June December 30, 31, Percent (in thousands) 2008 2007 Change ASSETS Cash and due from banks $11,988 $15,371 -22% Interest-bearing deposits 33 33 0% Federal funds sold 3,135 3,180 -1% Securities 81,754 82,551 -1% Loans held for sale 816 1,168 -30% Loans 364,926 357,988 2% Allowance for loan losses (4,994) (4,174) 20% Net loans 359,932 353,814 2% Accrued interest receivable 2,318 2,474 -6% Premises and equipment, net 9,225 9,578 -4% Goodwill 295 295 0% Other investments - at cost 2,616 2,616 0% Other assets 9,673 9,279 4% Total Assets $481,785 $480,359 0% LIABILITIES & STOCKHOLDERS' EQUITY Non-interest-bearing deposits $49,861 $47,131 6% Interest-bearing deposits 320,495 322,348 -1% Total deposits 370,356 369,479 0% Short-term borrowings 10,705 15,346 -30% Long-term borrowings 52,429 46,429 13% Subordinated debentures 10,310 10,310 0% Accrued interest payable 2,059 2,691 -23% Accrued expenses and other liabilities 1,005 1,533 -34% Total liabilities 446,864 445,788 0% Total stockholders' equity 34,921 34,571 1% Total Liabilities & Stockholders' Equity $481,785 $480,359 0% Nonaccrual loans $7,540 $6,261 20% Other real estate $2,671 $2,352 14% Net charge-offs $815 $5,150 NM
Three Months Ended Six Months Ended June June June June 30, 30, 30, 30, 2008 2007 2008 2007 Margin Analysis EARNING ASSETS Loans (FTE) 7.22% 7.94% 7.41% 7.93% Investment securities: Taxable 4.82% 4.71% 4.84% 4.71% Tax-exempt (FTE) 6.55% 5.77% 6.36% 5.81% Other 2.60% 5.46% 2.86% 5.56% Total interest-earning assets 6.74% 7.37% 6.90% 7.36% INTEREST-BEARING LIABILITIES Interest-bearing demand 0.76% 1.99% 0.93% 2.14% Savings deposits 1.71% 3.30% 2.05% 3.30% Time deposits 4.30% 4.97% 4.49% 4.94% Short-term borrowings 1.54% 4.88% 1.78% 4.81% Long-term borrowings 4.52% 4.57% 4.64% 4.54% Subordinated debentures 5.98% 5.98% 5.98% 5.98% Total interest-bearing liabilities 3.39% 4.35% 3.59% 4.31% Net Interest rate spread (FTE) 3.35% 3.02% 3.31% 3.05% Net interest rate margin (FTE) 3.81% 3.55% 3.79% 3.59% Average Balance Sheet (in thousands) Loans $362,082 $352,533 $359,235 $350,225 Deposits 362,060 357,757 360,801 357,947 Assets 475,203 467,868 473,670 464,525 Stockholders' equity 35,305 34,629 35,284 34,293
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