FORM 10-K

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

    (Mark One)
      [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

      [  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

            For the transition period from __________ to __________

                          COMMISSION FILE NO. 0-26480

                              PSB HOLDINGS, INC.
              (Exact name of registrant as specified in charter)

        1905 W. STEWART AVENUE                        WISCONSIN
        WAUSAU, WI  54401                      (State of incorporation)
                                                     39-1804877
       (Address of principal executive office)    (I.R.S. Employer
                                                  Identification Number)

       Registrant's telephone number, including area code: 715-842-2191

       Securities registered pursuant to Section 12(b) of the Act: NONE

          Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK, NO PAR VALUE
                             (Title of each class)

 Indicate by check whether the registrant (1) has filed all reports
 required to be filed by Section 13 or 15(d) of the Securities Exchange
 Act of 1934 during the preceding 12 months (or for such shorter period
 that the registrant was required to file such report), and (2) has been
 subject to such filing requirements for the past 90 days.
                                   Yes   X      No ______
 Indicate by check mark if disclosure of delinquent filers pursuant to
 Item 405 of Regulation S-K is not contained herein, and will not be
 contained, to the best of registrant's knowledge, in definitive proxy
 or information statements incorporated by reference in Part III of this
 Form 10-K or any amendment to this Form 10-K.

 As of March 9, 2000, the aggregate market value of the common stock
 held by non-affiliates was $26,415,900.

 As of March 15, 2000, 872,967 shares of common stock were outstanding.
<PAGE>
                      DOCUMENTS INCORPORATED BY REFERENCE
  PROXY STATEMENT DATED MARCH 31, 2000 (TO THE EXTENT NOTED HEREIN):
  PART III
                         TABLE OF CONTENTS
                                                               PAGE

 PART I

 Item 1.  Business                                              1

 Item 2.  Properties                                            6

 Item 3.  Legal Proceedings                                     6

 Item 4.  Submission of Matters to a Vote of Security Holders   6

 PART II

 Item 5.  Market for Registrant's Common Equity and Related
          Stockholder Matters                                   7

 Item 6.  Selected Financial Data                               7

 Item 7.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                   9

 Item 7A. Quantitative and Qualitative Disclosure About
          Market Risk                                          23

 Item 8.  Financial Statements and Supplementary Data          24

 Item 9.  Changes in and Disagreements With Accountants on
          Accounting and Financial Disclosure                  52

 PART III

 Item 10.  Directors and Executive Officers of Registrant      53

 Item 11.  Executive Compensation                              53

 Item 12.  Security Ownership of Certain Beneficial Owners
           and Management                                      53

 Item 13.  Certain Relationships and Related Transactions      53

 PART IV

 Item 14.  Exhibits, Financial Statement Schedules and
           Reports on Form 8-K                                 54

                                     -i-
                              PART I


 ITEM 1.  BUSINESS.

 FORMATION
<PAGE>
     PSB Holdings, Inc., a Wisconsin corporation (the "Company"), is a
 one-bank holding company formed in 1995.  The Company owns 100% of the
 common stock of Peoples State Bank, Wausau, Wisconsin (the "Bank").

 BUSINESS OF THE COMPANY

     The Company is a one-bank holding company regulated by the Board of
 Governors of the Federal Reserve System (the "FRB") under the authority
 of the Bank Holding Company Act of 1956, as amended (the "BHCA").  The
 Company's sole business is the ownership and management of the Bank.

 BUSINESS OF THE BANK

     The Bank was organized as a state banking corporation under the
 laws of the state of Wisconsin in 1962.  In addition to its main office
 in Wausau, the Bank operates branch offices in the city of Wausau, Rib
 Mountain Township, Marathon City, and the city of Rhinelander
 Wisconsin.  The Bank offers personal and commercial deposit services,
 including checking and savings accounts of various kinds, IRA and other
 deposit instruments, ATM service and night depository and safety
 deposit box services.  The Bank also engages in consumer and commercial
 lending, including secured and unsecured term loans and real estate
 financing.  New services are frequently added to the Bank's retail
 banking business.  The Bank offers discount brokerage services at its
 Wausau branch location, including the sale of annuities, mutual funds
 and other investments to Bank customers and the general public.  The
 Bank maintains an investment subsidiary in Nevada to manage, hold and
 trade cash and securities.

 PRINCIPAL SOURCES OF REVENUE

     The table below shows the amount and percentages of the Bank's
 total consolidated operating revenues resulting from interest on loans
 and leases and interest on investment securities for each of the last
 three years:
                                     -1-
<TABLE>
<CAPTION>
                                      ($ in thousands)
                    Interest on loans and    Interest on Investment
                         LEASES                   SECURITIES
                               Percent             Percent
                              of  Total           of Total
 Year Ended                   Operating           Operating
 DECEMBER 31         AMOUNT   REVENUES  AMOUNT    REVENUES
  <S>              <C>         <C>     <C>         <C>
  1999             $14,065     74.3%   $3,471      18.3%
  1998              13,404     73.8     3,020      16.6
  1997              12,688     76.9     2,951      17.9
</TABLE>
 BANK MARKET AREA AND COMPETITION

     The Bank's primary trade area consists of the greater Wausau,
 Wisconsin area, Marathon County, and Rhinelander, Wisconsin in Oneida
 County.  There is a mix of retail, manufacturing, agricultural and
 service businesses in the areas served by the Bank.
<PAGE>
     Commercial and retail banking in the state of Wisconsin, and in the
 Wausau area in particular, is highly competitive with respect to price
 and services.  "Price" includes interest rates paid on deposits,
 interest rates charged on borrowings and fees charged for fiduciary
 services, while "services" includes the types of loan, deposit and
 other products offered, convenience of banking locations and the
 quality of service rendered to customers.  In addition to competition
 from other commercial banks, the Bank faces significant competition
 from savings and loan associations, credit unions and other financial
 institutions or financial service companies within its market area.
 Credit union deposits constitute a substantial portion of all financial
 institution deposits within the state of Wisconsin and these
 associations compete aggressively with commercial banks in the
 important area of consumer lending and interest-bearing checking
 accounts.

     The Bank is subject to direct competition in its trade area from
 nine commercial banks which offer a full line of competitive bank
 services, loan production offices of banks located outside of the
 region, and numerous savings and loan associations and credit unions.
 Several of the financial institutions with which the Bank competes are
 subsidiaries of the three largest state-wide multi-bank holding
 companies and many of the other financial institutions are also
 significantly larger and have more resources than the Bank.  In its
 primary trade area, the Bank has approximately 12% of total financial
 institution assets, deposits and loans.

     In addition to competition, the business of the Bank will be
 affected by general economic conditions, including the level of
 interest rates and the monetary policies of the FRB (see "Regulation
 and Supervision - Monetary Policy").
                                     -2-
 EMPLOYEES

     The Company has no employees.  Officers of the Company serve as
 full time employees of the Bank.

     As of December 31, 1999, the Bank had 106 employees, including 26
 employed on a part-time basis.  All officers, supervisors and full-time
 employees are salaried and all part-time employees are paid on an
 hourly basis.  The Bank considers its relations with its employees to
 be excellent.  None of the Bank's employees is covered by a collective
 bargaining agreement.

 REGULATION AND SUPERVISION

     REGULATION

     The Company and the Bank are subject to regulation under both
 federal and state law.  The Company is a registered bank holding
 company and is subject to regulation and examination by FRB pursuant
 to the BHCA.  The Bank is subject to regulation and examination by the
 Federal Deposit Insurance Corporation ("FDIC") and, as a Wisconsin
 chartered bank, by the Wisconsin Department of Financial Institutions.

     The FRB expects a bank holding company to be a source of strength
<PAGE>
 for its subsidiary banks.  As such, the Company may be required to take
 certain actions or commit certain resources to the bank when it might
 otherwise choose not to do so.  Under federal and state banking laws,
 the Company and the Bank are also subject to regulations which govern
 the Company's and the Bank's capital adequacy, loans and loan policies
 (including the extension of credit to affiliates), deposits, payment of
 dividends, establishment of branch offices, mergers and other
 acquistions, investments in or the conduct of other lines of business,
 management personnel, interlocking directorates and other aspects of
 the operation of the Company and the Bank.  Bank regulators having
 jurisdiction over the Company and the Bank generally have the authority
 to impose civil fines or penalties and to impose regulatory control for
 noncompliance with applicable banking regulations and policies.  In
 particular, the FDIC has broad authority to take corrective action if
 the Bank fails to maintain required captial.  Information concerning
 the Company's compliance with applicable capital requirements is set
 forth in Note 15 of the Notes to Consolidated Financial Statements.

     The Gramm-Leach-Bliley Act of 1999 (the "Act") will eliminate many
 of the legal barriers to affiliations among banks and securities firms,
 insurance companies and other financial service companies.  Under the
 Act, a financial holding company may engage in a broad list of
 "financial activities," and any non-financial activity that the FRB
 determines is "complementary" to a financial activity and poses no
 substantial risk to the safety and soundness of depository institutions
 or the financial system.
                                     -3-
     The Act also contains a number of other provisions that will affect
 the Company's operations and the operations of all financial
 institutions.  One of the new provisions relates to the financial
 privacy of consumers, authorizing federal banking regulators to adopt
 rules that will limit the ability of banks and other financial entities
 to disclose non-public information about consumers to non-affiliated
 entities.  These limitations will likely require more disclosure to
 consumers, and in some circumstances, will require consent by the
 consumer before information is allowed to be provided to a third party.

     The changes in the rules governing the affiliation of banks and
 securities firms and insurance companies became effective March 11,
 2000.  While certain other provisions of the Act became effective on
 November 12, 1999, other provisions are subject to delayed effective
 dates, and in some cases, will be implemented only upon the adoption by
 federal regulatory agencies of rules prescribed by the Act.

     The Act specifies certain activities that are deemed to be
 financial in nature, including lending, exchanging, transferring,
 investing for others, or safeguarding money or securities; underwriting
 and selling insurance; providing financial, investment, or economic
 advisory services; underwriting, dealing in or making a market in,
 securities; and any activity currently permitted for bank holding
 companies by the FRB under Section 4(c)(8) of BHCA.  The overall effect
 of the new law is expected to give consumers greater choice for
 banking, and insurance services and securities transactions.  While the
 effect of the new law will likely be an increase in competition from
 larger financial institutions, the Company cannot predict whether the
 Act will adversely affect its business, financial condition or results
<PAGE>
 of operations.  Banking laws and regulations have undergone periodic
 revisions that often have a direct effect on the Bank's operations and
 its competitive environment.  From time to time various formal or
 informal proposals, including new legislation, relating to, among other
 things, changes with respect to deposit insurance, permitted bank
 activities and restructuring of the federal regulatory scheme have been
 made and may be made in the future.  The Gramm-Leach-Bliley Act is an
 example of legislation which affects the operation of the Company's
 business.  Depending on the scope and timing of future regulatory
 changes, it is possible that additional legislation may have a material
 adverse effect on the Company's consolidated financial condition,
 liquidity or results of operations.

     MONETARY POLICY

     The earnings and growth of the Bank, and therefore the Company, are
 affected by the monetary and fiscal policies of the federal government
 and governmental agencies.  The FRB has broad power to expand and
 contract the supply of money and credit and to regulate the rates which
 its member banks can pay on time and savings deposits.  These broad
 powers are used to influence inflation and the growth of the economy
 and directly affect the growth of bank loans, investments and deposits,
 and may also affect the interest rates charged by banks on loans paid
 by banks in respect of deposits.  Governmental and FRB monetary
                                     -4-
 policies have had a significant effect on the operating results of
 commercial banks in the past and are expected to do so in the future.
 Management of the Company is not able to anticipate the future impact
 of such policies and practices on the growth or profitability of the
 Company.

 EXECUTIVE OFFICERS

     The executive officers of the Company as of March 18, 2000, their
 ages and principal occupations during the last five years are set forth
 below.
<TABLE>
<CAPTION>
     <S>                      <C>
     David K. Kopperud, 54    President of the Company and the Bank since
                              July, 1999; previously Executive Vice
                              President of the Bank (1994-1999) and
                              Vice President of the Bank (1991-1994).

     Kenneth M. Selner, 53    Vice President & Secretary of the Company;
                              Executive Vice President of the Bank.

     Todd R. Toppen, 41       Treasurer of the Company; Vice President of
                              the Bank since 1994, Assistant Vice President
                              1988 to 1993.
</TABLE>
 CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

     This report contains forward-looking statements within the meaning
 of the Private Securities Litigation Reform Act of 1995 (the "Reform
 Act"). In addition, certain statements in future filings by the Company
<PAGE>
 with the Securities and Exchange Commission, reports to shareholders,
 press releases, and in other oral and written statements made by or
 with the approval of the Company which are not statements of historical
 fact will constitute forward-looking statements within the meaning of
 the Act.

     Examples of forward-looking statements include, but are not limited
 to:  (i) expectations concerning financial performance of the Company,
 (ii) expectations concerning the payment of dividends, (iii) statements
 of plans and objectives of the Company, (iv) statements of future
 economic performance and (v) statements of assumptions underlying such
 statements.  Words such as "believes", "anticipates", "expects",
 "intends", "targeted" and similar expressions are intended to identify
 forward-looking statements but are not the exclusive means of
 identifying such statements.  In making forward-looking statements
 within the meaning of the Reform Act, the Company undertakes no
 obligation to publicly update or revise any such statement.

     Forward-looking statements of the Company are based on information
 available to the Company as of the date of such statements and reflect
 the Company's expectations as of such date, but are subject to risks
 and uncertainties that may cause actual results to vary materially.  In
                                     -5-
 addition to specific factors which may be described in connection with
 any of the Company's forward-looking statements, factors which could
 cause actual results to differ materially from those discussed in the
 forward-looking statements include, but are not limited to the
 following:  (i) the strength of the U.S. economy in general and the
 strength of the local economies in the markets served by the bank; (ii)
 the effects of and changes in government policies, including interest
 rate policies of the FRB; (iii) inflation, interest rate, market and
 monetary fluctuations; (iv) the timely development of and acceptance of
 new products and services, (v) changes in consumer spending, borrowing
 and saving habits; (vi) increased competition in the Company's
 principal market area; (vii) technological changes; (viii)
 acquisitions; (ix) the effect of changes in laws and regulations, (x)
 the effect of changes in accounting policies and practices, and (xi) the
 costs and effects of litigation and of unexpected or adverse outcomes
 in such litigation.

 ITEM 2.  PROPERTIES.

     The Company shares office space with the Bank.  The Bank operates a
 total of five office locations.  The Bank owns four of the buildings in
 which it conducts operations and each building is occupied solely by
 the Bank.  All four buildings are designed for commercial banking
 operations and are suitable for current operations and anticipated
 future needs.  Each facility contains teller and loan facilities and
 drive-up teller stations.  One location occupies  leased space within a
 supermarket.  The leased space is designed for commerical banking
 operations containing teller and loan facilities.

 ITEM 3.  LEGAL PROCEEDINGS.

     As of December 31, 1999, the Company was not involved in any legal
 proceedings, nor was it aware of any threatened litigation.
<PAGE>
     In the ordinary course of its business, the Bank is engaged from
 time to time in legal actions as both a plaintiff and a defendant.  In
 some cases, claims for significant compensatory or punitive damages, or
 unspecified damages, may be made against the Bank.  As of the date of
 this report, the Bank was not a party to any legal or administrative
 proceedings which, in the opinion of Bank management, would have a
 material adverse effect on the financial condition of the Bank.  As of
 the date of this report, no director, officer, affiliate of the Bank,
 or any associate of any such person, is an adverse party in any legal
 proceedings involving the Bank.

 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matters were submitted to a vote of the Company's shareholders
 during the fourth quarter of 1999.
                                     -6-

                              PART II

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

 MARKET

     There is no active public market for the Company's common stock.
 Transactions in the Company's common stock are sporadic and limited and
 prices have been determined by the buyer and seller.  No data regarding
 the prices at which trades are made was published or otherwise publicly
 available until price quotations for the stock began on the OTC
 Bulletin Board under the symbol "PSBQ" on January 10, 2000.  Management
 is not advised as to the terms of all transactions in the common stock.

 HOLDERS

     As of December 31, 1999 there were approximately 990 holders of
 record of the Company's common stock.

 DIVIDENDS

     Per share dividends declared by the Company in its two most recent
 fiscal years were:
<TABLE>
<CAPTION>
                         1998      1999
      <S>                <C>       <C>
      Second Quarter     $.35      $.38
      Fourth Quarter     $.58      $.62
</TABLE>
     The Company's source of funds for the payment of dividends is
 dividends paid by the Bank.  The payment of future dividends to
 shareholders of the Company is within the discretion of the Company's
 Board of Directors and will depend on various factors, including the
 Company's earnings, capital requirements, and the financial condition
 of the Company.

 ITEM 6.   SELECTED FINANCIAL DATA.
<PAGE>
     The following table presents consolidated financial data of the
 Company and its subsidiary.  This information and the following
 discussion and analysis should be read in conjunction with other
 financial information presented elsewhere in this report.
                                     -7-
<PAGE>
<TABLE>
<CAPTION>
                              YEARS ENDED DECEMBER 31
                      ($ in thousands, except per share amounts)
                                  1999          1998         1997         1996           1995
 CONSOLIDATED SUMMARY OF EARNINGS:
 <S>                         <C>          <C>          <C>           <C>           <C>
 Total interest income       $   17,671   $   16,746   $   15,744    $   14,824    $   13,653
 Total interest expense           8,598        8,722        8,253         7,769         7,055
 Provision for loan and
    lease losses                    460          300          230           180           180
 Net interest income after
    provision for loan and
    lease losses                  8,613        7,724        7,261         6,875         6,418
 Total other income               1,265        1,408          745           990           683
 Total other expense (except
    income taxes)                 6,221        6,115        4,932         4,715         4,190
 Net income                  $    2,589   $    2,089   $    2,103    $    2,156    $    2,020
 Per Share:
   Basic and diluted
      Earnings per share     $     2.93   $     2.36   $     2.37    $     2.39    $     2.24
   Common dividends declared       1.00          .93          .90           .85           .82
 Other significant data:
   Return on average
      shareholders equity         12.31%       10.62%       11.15%        11.98%        12.15%
   Return on average assets        1.08%         .96         1.02          1.10          1.13
   Dividend payout ratio          34.12        39.33        37.85         35.40         36.63
   Average equity to average
       assets ratio                8.75%        9.06         9.15          9.16          9.27

                                  1999          1998         1997         1996           1995
 CONSOLIDATED SUMMARY
       BALANCE SHEETS
 Total assets                $  259,889   $  233,491   $  215,019    $  204,158    $  190,781
 Total deposits                 202,354      199,800      186,603       178,129       160,444
 Short-term borrowings           21,215        4,549        3,960         5,766        11,099
 Long-term borrowings            13,000        6,000        3,000             0             0
 Stockholders' equity            21,046       20,556       19,217        18,289        17,453
 Other significant data:
   Book value per share
      at year end            $    23.83   $    23.27   $    21.76    $    20.42    $    19.34
   Average common shares
      outstanding               883,235      883,235      887,988       900,641       902,425
   Shareholders of record
      at year end                   990          975          974           974           940
   Employees at year end (FTE)       91           87           78            70            62
 Historically reported
      credit quality ratios:
   Net loan and lease charge-offs
      to average loans and leases   .19%         .14%         .22%          .03%          .04%
   Allowance for loan and
      lease losses to
      End of period loans
      and leases                   1.15         1.27         1.24          1.39          1.42
</TABLE>
                                     -8-
<PAGE>
 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS.

     The following discussion relates to Company and the Bank.  Unless
 noted, references to the "Company" mean the Company and the Bank on a
 consolidated basis.

     Management's discussion and analysis contains forward-looking
 statements that are provided to assist in the understanding of
 anticipated future financial performance.  However, such performance
 involves risks and uncertainties which may cause actual results to
 differ materially from those in such statements.  For a discussion of
 certain factors that may cause such forward-looking statements to
 differ materially from actual results see Item 1, "- Cautionary
 Statement Regarding Forward-Looking Information."

 RESULTS OF OPERATIONS

     The Company's consolidated net income for 1999 was $2,588,982
 compared with $2,088,577 in 1998, and $2,102,709 in 1997.  Net income
 increased 23.96% in 1999 from 1998 and decreased .7% in 1998 from 1997.
 Results for 1998 included a pre-tax expense of $405,891 relating to the
 termination of our defined benefit pension plan.

     Return on average common stockholders' equity amounted to 12.31% in
 1999 compared to 10.62% in 1998, and 11.15% in 1997.

     Return on average assets for 1999 amounted to 1.08% compared to
 .96% for 1998 and 1.02% in 1997.

     Net income per share amounted to $2.93 in 1999, compared to $2.36
 in 1998 and $2.37 in 1997.  Cash dividend declared in 1999 were $1.00
 per share, compared to $.93 in 1998 and $.90 in 1997.  The per share
 ratio of dividends to shareholders to net income was 34.12% in 1999,
 compared to 39.33% in 1998 and 37.85% in 1997.

 NET INTEREST INCOME

     The following table shows how net interest income is impacted by
 the change in volume and interest rates.  1999 and 1998 data shows a
 favorable spread due to increased volume.  Growth in net interest
 income will continue to be moderate and interest margins will need to
 be managed carefully during 2000.
                                     -9-
<PAGE>
<TABLE>
                    INTEREST INCOME & EXPENSE VOLUME & RATE CHANGE
<CAPTION>
                                1999 compared to 1998       1998 compared to 1997
                                   increase (decrease)         increase (decrease)
                                      due to (1)                  due to (1)
 ($ in thousands)              VOLUME    RATE     NET    VOLUME      RATE    NET
 <S>                          <C>        <C>    <C>     <C>        <C>     <C>
 Interest earned on:
  Loans (2)                   $  1,362   (696)    666   $ 706        10      716
  Taxable investment securities    445    (18)    427     110       (86)      24
  Non-taxable investment
     securities (2)                 58    (21)     37      88       (20)      68
  Other interest income           (183)    (5)   (188)    436      (217)     219

 Total                           1,682   (740)    942   1,340      (313)   1,027

 Interest paid on:
  Savings and demand deposits     509    (178)    331     335       179      514
  Time deposits                  (440)   (482)   (922)   (108)     (102)    (210)
  Short-term borrowings           465     (62)    403     (71)      (35)    (106)
  Long-term borrowings             87     (23)     64     265         6      271

 Total                            621    (745)   (124)    421        48      469

 Net interest earnings       $  1,061       5   1,066   $ 919      (361)     558
<FN>
 (1)The change in interest due to both rate and volume has been allocated to
    volume and rate changes in proportion to the relationship of the absolute
    dollar amounts of change in each.
 (2)The amount of interest income on non-taxable loans and investment
    securities has been adjusted to its fully taxable equivalent using a 34%
    tax rate.
</TABLE>
     The following table demonstrates how the changing interest rate
 environment affected the net yield on earning assets (on fully tax
 equivalent basis) for the three-year period ending December 31, 1999.
<TABLE>
<CAPTION>
 Year Ended December 31,            1999              1998              1997
                              Yield  Change     Yield  Change     Yield  Change
 <S>                          <C>      <C>      <C>      <C>      <C>     <C>
 Yield on earning assets      7.96%  - .31%     8.27%  - .09%     8.36%   .09%
 Effective rate on all
      liabilities as a %
      of earning assets       3.80   - .43      4.23   - .06      4.29    .04
 Net yield on earning assets  4.16     .12      4.04   - .03      4.07    .05
</TABLE>
                                     -10-
      The 1999 figures as a percent of average earning assets reflects a
 decrease in interest rates during 1999.  The Company will focus on
 increasing net interest income in 2000 through continued control of
 interest expense, maintaining the level of interest rates on loans, and
 managing rates on the investment portfolio.

     Average earning assets increased 9.49% to $226,082 in 1999, from
<PAGE>
 $206,480 in 1998.  Included in this increase was a 10.16% increase in
 average loans to $163,929 in 1999, up from $148,806 in 1998, and an
 18.82% increase in average taxable investments to $47,091 in 1999, up
 from $39,631 in 1998.  Federal funds sold decreased an average of
 82.45% in 1999 from 1998.

     The following table sets forth average consolidated balance sheet
 data and average rate data on a tax equivalent basis for the periods,
 indicated.
                                     -11-
<PAGE>
<TABLE>
<CAPTION>
                 DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
                                INTEREST RATES AND DIFFERENTIALS
                                  1999                     1998                         1997
                         Average          Yield/  Average          Yield/     Average           Yield/
   ($ IN THOUSANDS)      BALANCE INTEREST RATE    BALANCE INTEREST RATE       BALANCE INTEREST  RATE
 <S>                    <C>      <C>      <C>   <C>      <C>      <C>       <C>      <C>        <C>
 Assets
 Interest earning
   assets:
  Loans (1)(2)(3)       $163,929 $14,065  8.58% $148,806 $13,404  9.01%     $140,962 $12,692    9.00%
  Taxable investment
  securities              47,091   2,912  6.18%   39,631   2,470  6.23%       37,877   2,427    6.41%
  Nontaxable investment
  securities(2)           14,251     985  6.91%   13,423     947  7.06%       12,197      879   7.21%
  Federal funds sold         811      44  5.43%    4,620     248  5.37%          890       48   5.39%
  Total (2)              226,082  18,006  7.96%  206,480  17,069  8.27%      191,926   16,046   8.36%
 Non-interesting earning
  assets:
  Cash and due from
  banks                    8,694                   8,497                       8,347
  Premises & equip. - net  3,892                   3,949                       3,660
  Other assets             3,843                   3,578                       3,981
  Less: allow. loan loss  (2,085)                 (1,929)                     (1,846)
  Total                  240,426                 220,575                     206,068

 Liabilities &
 Stockholders' Equity
 Interest bearing
 liabilities:
  Savings and demand
  deposits                74,835   2,712  3.62%   61,657   2,381  3.86%       52,265  1,867     3.57%
  Time deposits           93,069   4,873  5.24%  100,713   5,795  5.75%      102,566  6,005     5.85%
  Short-term borrowings   11,661     640  5.49%    3,803     237  6.23%        5,556    343     6.18%
  Long-term borrowings     7,168     373  5.20%    5,724     309  5.40%          638     38     5.96%
  Total                  186,733   8,598  4.60%  171,897   8,722  5.07%      161,025  8,253     5.13%
 Non-interest bearing
  liabilities:
  Demand deposits         30,616                  26,827                      24,403
  Other liabilities        2,039                   1,875                       1,788
  Stockholders' equity    21,038                  19,976                      18,852
  Total                  240,426                 220,575                     206,068

 Net interest income               9,408           8,347                       7,793
 Rate spread                              3.36%                   3.20%                         3.23%
 Net yield on interest
  earnings assets                         4.16%                   4.04%                         4.07%
<FN>
 (1)For purposes of these computations, non-accruing loans are included in the
    daily average loan amounts outstanding.
 (2)The amount of interest income on non-taxable investment securities and
    loans has been adjusted to its fully taxable equivalent, using a federal tax
    rate of 34%.
 (3)Loan fees are included in total interest income as follows: 1999-$172,
    1998-$155, 1997-$164, 1996-$80, 1995-$55.
</TABLE>
                                     -12-
<PAGE>
      The preceding table shows a 1999 increase of .12% in net yield on
 interest earning assets.  The average rate on taxable investment
 securities decreased .5% in 1999 to 6.18%, down from 6.23% in 1998.
 Time deposits rates decreased by .51% while funds shifted into the more
 liquid Money Market deposit accounts, which the Company continued to
 offer throughout 1999 in an effort to retain deposits to support loan
 demand.  Total deposits at December 31, 1999 showed an increase of
 $2,554 increasing to $202,354 from 199,800 at December 31, 1998.
 Average borrowing increased $9,302 increasing from $9,527 in 1998 to
 $18,829 in 1999. The average rate on all interest bearing liabilities
 decreased by .47% in 1999 to 4.60% down from 5.07% in 1998.

     Loan growth is expected to increase again 2000 due to the increase
 in fixed rate and in- house home equity loan products being offered and
 promoted.  The sale of additional real estate loans in the secondary
 market will also provide increased loan fee income.
<TABLE>
<CAPTION>
 Year Ended December 31,       1999      1998        1997        1996        1995
 <S>                         <C>        <C>        <C>         <C>         <C>
 Item of income
 Interest and fees on loans
  and short-term borrowings    74.3%      73.8%      76.9%       74.3%       75.2%
 Interest on securities        18.3%      16.6%      17.9%       18.2%       18.8%
 Total operating income      18,936     18,153     16,489      15,814      14,336
  (000's omitted)
</TABLE>
  The bank does not have any foreign deposits or operations

 NON-INTEREST INCOME

  The following table shows the major components of non-interest income.
<TABLE>
<CAPTION>
                                      ($ in thousands)
                                       1999        1998      1997
 <S>                                  <C>        <C>        <C>
 Noninterest income:
   Service fees                        $709       $699      $484
   Net realized gain on sale of
       securities available for sale                36         3
   Gain on sale of loans                223        332        46
   Gain on sale of other real estate     21          4
   Investment sales commissions         138        147        74
   Other operating income               174        189       138

   Total noninterest income           1,265      1,407       745
</TABLE>
                                     -13-
   Service fees continued to increase to $709 in 1999, compared to $699
 in 1998 primarily due to profit improvement initiative implemented back
 in 1998.
                                     -13-
<PAGE>
 NON-INTEREST EXPENSE

   The following table shows the major components of non-interest
 expense.
<TABLE>
<CAPTION>
                                            ($ in thousands)
                                            1999    1998    1997
 <S>                                      <C>      <C>     <C>
 Salaries and employee benefits           $3,621   $3,331  $2,948
 Loss on settlement on pension plan                   406
 Occupancy                                   859      828     728
 Data processing and other office operations 441      421     319
 Advertising and promotion                   222      202     166
 Director compensation and benefits          170      142     180
 Other operating                             908      785     591

    Total noninterest expense             $6,221   $6,115  $4,932
</TABLE>
     Salaries increased $290 primarily due to the increased number of
 employees.  The number of full-time equivalent employees at the end of
 1999 was 91 compared to 87 at the end of 1998.

     Occupancy expense increased in 1999 due various remodeling projects
 increasing office space.  Data processing costs increased by 4.8% in
 1999 compared to 1998 as a result of additional computer systems added
 to the in-house system and Y2K costs.  Other operating expense
 increased in 1999 due to an increase in educational, marketing, and
 charitable contribution expense.

 PROVISIONS FOR LOAN LOSSES

     Management determines the adequacy of the allowance for loan losses
 based on past loan experience, current economic conditions, composition
 of the loan portfolio, and the potential for future loss.  Accordingly,
 the amount charged to expense is based on management's evaluation of
 the loan portfolio.  It is the Company's policy that when available
 information confirms that specific loans, or portions thereof,
 including impaired loans, are uncollectible, these amounts are promptly
 charged off against the allowance.  The provision for loan losses was
 $460,000 in 1999; compared to $300,000 in 1998 and $230,000 in 1997.
 The allowance for loan losses as a percentage of gross loans
 outstanding was 1.15% at December 31, 1999; 1.27% at December 31, 1998;
 and 1.24% at December 31, 1997.  The increased provision in 1999 is
 intended to provide adequate reserves for potential losses.
 Charge-offs as a percentage of average loans outstanding were .19% in
 1999; .13% in 1998; and .22% in 1997.  Charge-offs have not been
 concentrated in any industry or business segment as reflected in the
 schedule below.
                                     -14-
     Management feels the allowance for loan losses is adequate as of
 December 31, 1999.

     The allowance for loan losses shown in the following table
 represents a general allowance available to absorb future losses
 within the entire portfolio.
<PAGE>
<TABLE>
<CAPTION>
                                                  ($ in thousands)
                                               YEAR ENDED DECEMBER 31
                                    1999        1998      1997      1996      1995
 <S>                                <C>       <C>       <C>       <C>       <C>
 Average balance of loans
   for period                       $163,929  $148,806  $140,962  $130,783  $119,657

 Allowance for loan losses at
   beginning of period              $  1,947  $  1,845  $  1,925  $  1,781  $  1,644

 Loans charged off
   Commercial & Industrial              (322)     (138)     (156)      (48)      (54)
   Agriculture                             0         0         0         0         0
   Real Estate - Mortgage                (72)        0      (136)        0         0
   Installment & Other
     Consumer Loans                      (38)      (69)      (59)      (25)      (15)

   Total Charge Offs                    (432)     (207)     (351)      (73)      (69)

 Recoveries on loans previously
   charged off
   Commercial & Industrial                67         0        17        33        22
   Agricultural                            0         0         0         0         0
   Real Estate - Mortgage                  7         0        19         0         0
   Installment & Other
     Consumer Loans                       50         9         5         4         4

   Total Recoveries                     $124        $9       $41       $37       $26

 Net loans charged off                 ($308)    ($198)    ($310)     ($36)     ($43)

 Additions charged to
   operations                            460       300       230       180       180

 Allowance for loan losses
   at end of period                 $  2,099  $  1,947  $  1,845  $  1,925  $  1,781

 Ratio of net charge offs
   during period to average
   loans outstanding                    0.19%     0.13%     0.22%     0.03%     0.04%

 Ratio of allowance for loan
  losses to total loans
  receivable at end of period           1.15%     1.27%     1.24%     1.39%     1.42%
</TABLE>
                                     -15-

 LIQUIDITY AND INTEREST SENSITIVITY

      The Company's Asset Liability Management process provides an
 approach to management of liquidity, capital and interest rate risk,
 and to provide adequate funds to support the borrowing requirements and
 deposit flow of its customers.  Management views liquidity as the
 ability to raise cash at a reasonable cost or with a minimum of loss
<PAGE>
 and as a measure of balance sheet flexibility to react to market-place,
 regulatory, and competitive changes.  The primary sources of the
 Company's liquidity are marketable assets maturing within one year.
  The Company attempts, when possible to match relative maturities of
 assets and liabilities, while maintaining the desired net interest
 margin.  Management believes liquidity is adequate.

      Management's overall strategy is to coordinate the volume of
 rate sensitive assets and liabilities to minimize the impact of
 interest rate movement on the net interest margin.  From time to time,
 the Bank develops special term deposit products that will attract
 present and potential customers.  A significant portion of consumer
 deposits do not reprice or mature on a contractual basis.  These
 deposit balances and rates are considered to be core deposits since
 these balances are generally not susceptible to significant interest
 rate changes.  The Bank's Asset Liability Committee distributes these
 deposits over a number of periods to reflect those portions of such
 accounts that are expected to reprice fully with market rates over the
 simulation period.  The assumptions are based on historical experience
 with the Bank's individual markets and customers and include
 projections for how management expects to continue to price in response
 to marketplace and market changes.  However, markets and consumer
 behavior do change, and adjustments are necessary as customer
 preferences, competitive market conditions, liquidity, loan growth
 rates, and mix change.  Management considers that an acceptable ratio
 for the rate sensitive assets to rate sensitive liabilities during
 periods of extended and less volatile rate increases or decreases
 between .75 and 1.25.  The Bank is to generally maintain a one-year
 ratio of 1.00 - i.e., balanced ratio.  At December 31, 1999 and 1998
 the Company was within the ratio limits.
                                     -16-

 INVESTMENT PORTFOLIO

      The following table shows the relative maturities of the
 investment portfolio as of December 31, 1999.  Weighted average yields
 on tax-exempt securities have been calculated on a tax equivalent basis
 using a tax rate of 34%.  Yields on securities available for sale are
 calculated based on amortized cost.
<PAGE>
<TABLE>
<CAPTION>
                                              After one   After two        After five
                           Within             but within  but within     but within              Over
                          ONE YEAR            TWO YEARS  FIVE YEARS       TEN YEARS            TEN YEARS
 ($ in thousands)
                       AMOUNT   YIELD   AMOUNT  YIELD   AMOUNT   YIELD   AMOUNT  YIELD     AMOUNT    YIELD
 <S>                 <C>        <C>    <C>      <C>    <C>       <C>    <C>      <C>       <C>        <C>
 U.S. Treasury       $    --      --   $   497  4.60%  $    --     --   $     --   --      $    --       --

 U.S. Government
   agencies and
   corporations        3,310    5.94%    3,458  5.95%   10,600   6.03%   16,022  6.18%      11,855     6.20%

 State and political
   subdivisions
   (domestic)          1,291    7.54%      755  6.83%    3,230   7.01%    8,567  6.73%          --       --

 Other equity
   securities            747    6.30%       --    --        --     --         --        --      --       --
 Total               $ 5,348    6.39%  $ 4,710  5.95%  $13,830   6.25%  $24,589  6.36%     $11,855     6.20%
</TABLE>
     The Company follows Statement of Financial Accounting Standards No.
 115, "Accounting for Certain Investments in Debt and Equity Securities"
 (SFAS 115), which specifies the accounting for investments in
 securities that have readily determinable fair values.  The Bank
 classifies all U.S. Treasury and other U.S. Government Agencies &
 Corporations as available-for-sale.  State and Political subdivisions
 were classified as held-to maturity.

     At December 31, 1999 the net unrealized loss on securities available
 for sale, recorded as a separate component of stockholder's equity, was
 $1,043,128, net of deferred income taxes of $460,774.

     Securities with an approximate carrying value of $20,207,957 and
 $9,168,461, at December 31, 1999 and 1998 respectively, were pledged
 primarily to secure public deposits and for repurchase agreements.
                                     -17-

      The following table sets forth the distribution of investment
 securities as of the dates indicated.
<PAGE>
<TABLE>
<CAPTION>
                                ($ in thousands)
                                   DECEMBER 31

                              1999     1998      1997
 <S>                       <C>      <C>       <C>
 U.S. Treasury and
 other U.S. Government
 agencies and corporations $ 45,742 $ 47,185  $ 36,932

 State and political
 subdivisions (domestic)     13,843   14,068    12,549
 Other equity securities        747      701       647

      Total                $ 60,332 $ 61,954  $ 50,128
</TABLE>
      An investment subsidiary, PSB Investments, Inc. currently holds
 approximately $40,195,524 in securities.  Income tax expense was approximately
 $117,000 lower as a result of holding these securities at the subsidiary.

 LOAN PORTFOLIO

      The following table sets forth the approximate maturities of the loan
 portfolios and the sensitivity of loans to interest changes as of December 31,
 1999.
<TABLE>
<CAPTION>
                                                      MATURITY

                                                      Over one
 ($ in thousands)                       One year      year thru           Over
                                         OR LESS      FIVE YEARS       FIVE YEARS
 <S>                                   <C>            <C>              <C>
 Commercial, industrial, and financial $ 25,459       $ 22,476         $   869
 Agricultural                             1,145          1,102               2
 Real estate mortgage                    43,464         72,760           1,971
 Installment & other consumer loans       3,135          7,680           2,560

 Total                                 $ 73,203       $104,018         $ 5,402
</TABLE>
<TABLE>
<CAPTION>
 INTEREST SENSITIVITY

 Amounts of loans due after one year with:         Fixed         Variable
 ($ in thousands)                                  RATE            RATE
 <S>                                            <C>              <C>
 Commercial, industrial, and financial          $ 23,345         $     0
 Agriculture                                       1,104               0
 Real estate mortgage                             66,608           8,123
 Installment & other consumer loans               10,240               0

 Total                                          $101,297         $ 8,123
</TABLE>
                                     -18-
<PAGE>
     Loan growth for the year ended December 31, 1999 was 18.86%;
 increasing from $153,649,105 at December 31, 1998 to $182,623,354 at
 December 31, 1999. The composition of loans outstanding as of the dates
 indicated are as follows:
<TABLE>
<CAPTION>
                                                ($ in thousands)
 DECEMBER 31                      1999     1998     1997     1996      1995
 <S>                           <C>       <C>      <C>      <C>      <C>
 Commercial, industrial
   and financial               $ 48,804  $ 38,852 $ 31,314 $ 28,531 $ 27,291
 Agricultural                     2,249     1,662    2,488    1,820    2,356
 Real estate mortgage           118,195   101,380  103,253   93,450   84,221
 Installment and other
   consumer loans                13,375    11,755   12,262   14,210   11,457

 Total                         $182,623  $153,649 $149,317 $138,011 $125,325
</TABLE>
     There were no loans held for sale as of December 31, 1999 compared
 to $3,120,450 on December 31, 1998.

     The composition of loans in the loan portfolio shows an increase in
 installment and other consumer loans.  All other loan categories have
 been steadily increasing every year.  The Company has no foreign loans
 outstanding.

     The Company's process for monitoring loan quality includes monthly
 analysis of delinquencies, risk element loans and potential problem
 loans.  The Company's policy is to place loans on a non-accrual status
 when they become contractually past due 90 days or more as to interest
 or principal payments.  All interest accrued (including applicable
 impaired loans) but not collected for loans that are placed on
 nonaccrual or charged off is reversed to interest income.  The interest
 on these loans is accounted for on the cash basis until qualifying for
 return to accrual.  Loans are returned to accrual status when all the
 principal and interest amounts contractually due have been collected
 and there is reasonable assurance that repayment will continue within a
 reasonable time frame.

     A loan is impaired when, based on current information, it is
 probable that the Company will not collect all amounts due in
 accordance with the contractual terms of the loan agreement.
 Impairment is based on discounted cash flows of expected future
 payments using the loan's initial effective interest rate or the fair
 value of the collateral if the loan is collateral dependent.
                                     -19-
 An analysis of impaired loans follows:
<PAGE>
<TABLE>
<CAPTION>
                                         ($ in thousands)
 AT DECEMBER 31,                           1999          1998           1997
 <S>                                    <C>             <C>            <C>
 Nonaccrual                             $   510         $ 564          $ 484
 Accruing income                          1,696           406            640

 Total impaired loans                     2,206           970          1,124
 Less - Allowance for loan losses           297           328            178

 Net investment in impaired loans        $1,909          $642          $ 946
</TABLE>
<TABLE>
<CAPTION>
                                         ($ in thousands)
 YEARS ENDED DECEMBER 31,                 1999          1998           1997
 <S>                                    <C>            <C>            <C>
 Average recorded investment,
 net of allowance for loan losses       $1,874         $ 820          $1,191

 Interest income recognized             $  118         $  40          $   83
</TABLE>
     The Company maintained generally high loan quality during 1999.
 The following table sets forth the amount of risk element loans as
 of the dates indicated.
<TABLE>
<CAPTION>
                                              ($ in thousands)
                                                 DECEMBER 31
                                      1999       1998      1997      1996      1995
 <S>                                 <C>       <C>       <C>       <C>         <C>
 Loans on a non-accrual basis        $ 620     $   582   $   835   $   247     $ 376
 Loans contractually past due
     ninety days or more as to
     interest or principal payments  $   0     $     0   $     7   $   275     $   0
</TABLE>
                                     -20-

 DEPOSITS

     The average balances of deposits and the average rate paid on these
 deposits during the years ended December 31, 1999, 1998, and 1997 are:
<TABLE>
<CAPTION>
                                              ($ in thousands)
                                    1999            1998             1997
                              BALANCE   RATE  BALANCE    RATE  BALANCE   RATE
 <S>                         <C>       <C>    <C>        <C>   <C>        <C>
 Non-interest bearing
    demand deposits          $ 30,616         $ 26,827         $ 24,403
 Interest bearing demand and
   savings deposits            74,835  3.62%    61,657   3.86%    52,265  3.57%
 Time deposits                 93,069  5.24%   100,713   5.75%   102,566  5.85%

 Total                       $198,520         $189,197         $ 179,234
</TABLE>
<PAGE>
      The amount of time certificates of deposit issued in amounts of
 $100,000 or more and outstanding as of December 31, 1999 is
 approximately $29,127,000. Their maturity distribution as of December
 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
                                                   (in thousands)
                                                  1999          1998
     <S>                                      <C>           <C>
     - three months or less                   $  10,346     $ 11,420
     - over three months through six months   $  12,324     $ 11,001
     - over six months through twelve months  $   5,381     $  4,804
     - over one year through five years       $   1,076     $  1,663
     - over five years                        $       0     $     0
</TABLE>
     The Bank does not have any deposits in foreign banking offices.

 SHORT-TERM BORROWINGS

     Information related to the Bank's funds purchased and security
 repurchase agreements for the last three years is as follows:
<TABLE>
<CAPTION>
                                                       ($ in thousands)
                                                       1999          1998          1997
     <S>                                              <C>         <C>           <C>
     Amount outstanding at year end                   $21,215     $ 4,550       $ 3,960
     Average amount outstanding during the year        11,661       3,803         5,556
     Maximum amount outstanding at any month's end     21,215       5,220        11,983
     Weighted average interest rate at year end          5.90%       5.63%         6.14%
     Weighted average interest rate during the year      5.49%       6.23%         6.18%
</TABLE>
                                     -21-

 SUMMARY QUARTERLY FINANCIAL INFORMATION

      The following is a summary of the quarterly results of operations
 for the years ended December 31, 1999, 1998 and 1997.
<PAGE>
<TABLE>
<CAPTION>
                               Three months ended
                                   March 31    June 30  September 30 December 31
                      ($ in thousands, except per share data)
 <S>                                  <C>        <C>          <C>        <C>
 1999
 Interest income                      $4,179     $4,281       $4,547     $4,664
 Interest expense                     $2,050     $2,093       $2,208     $2,247
 Net interest income                  $2,129     $2,188       $2,339     $2,417
 Provision for loan losses               $75        $75         $105       $205
 Net income applicable to common stock  $635       $722         $759       $473
 Earnings per common share             $0.72      $0.82        $0.86      $0.53

 1998
 Interest income                      $4,146     $4,288       $4,252     $4,060
 Interest expense                     $2,164     $2,174       $2,205     $2,179
 Net interest income                  $1,982     $2,114       $2,047     $1,882
 Provision for loan losses               $75        $75          $75        $75
 Net income applicable to common stock  $390       $638         $719       $342
 Earnings per common share             $0.44      $0.72        $0.81      $0.39

 1997
 Interest income                      $3,757     $3,898       $3,977     $4,112
 Interest expense                     $1,978     $2,041       $2,088     $2,146
 Net interest income                  $1,779     $1,857       $1,889     $1,966
 Provision for loan losses               $45        $45          $65        $75
 Net income applicable to common stock  $581       $561         $626       $335
 Earnings per common share             $0.65      $0.63        $0.70      $0.39
</TABLE>

 STOCK REPURCHASE

     On December 21, 1999, the Company authorized the repurchase of up
 to 45,000 shares of its common stock.  As of December 31, 1999, no
 shares had been purchased under the authorization.

 YEAR 2000 DISCLOSURE

     YEAR 2000

     The Company's Year 2000 Project was intended to address Year 2000
 problems and prevent major interruptions in its business due to
 problems related to the Company's computerized financial and
                                     -22-
 information systems.  As part of its program, the Company's Year 2000
 Project Committee conducted an assessment of its financial and
 information systems, third party vendors, and customers.

     The Company did not experience any significant disruption as a
 result of Year 2000 problems.  As of March 21, 2000, neither the
 Company nor any of its key vendors or customers have experienced any
 material adverse effects related to Year 2000 problems. Based on its
 experience in the Year 2000 transition and its business operations
 through such date, the Company does not expect to encounter any year
 2000 problems that would have a material adverse effect on the results
<PAGE>
 of operations, liquidity and financial condition of the Company.

     The costs of achieving year 2000 readiness were approximately
 $13,573 and $11,476 in 1999 and 1998 respectively, exclusive of
 internal costs.  Internal costs for Year 2000 readiness were not
 tracked, but principally related to payroll costs of Company personnel.

 ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Market risk is the risk of loss from adverse changes in market
 prices and rates.  The Company's market risk arises primarily from
 interest-rate risk inherent in its lending and deposit taking
 activities.  Management actively monitors and manages its interest-rate
 risk exposure.  The measurement of the market risk associated with
 financial instruments is meaningful only when all related and
 offsetting on- and off-balance sheet transactions are aggregated,
 and the resulting net positions are identified.  Disclosures about the
 fair value of financial instruments at December 31, 1999, which reflect
 changes in market prices and rates, can be found in footnote 17 of
 the Notes to Consolidated Financial Statements.

     The Company's primary objective in managing interest-rate risk is
 to minimize the adverse impact of changes in interest rates on the
 Company's net interest income and capital, while adjusting the
 Company's asset-liability structure to obtain the maximum yield-cost
 spread on that structure.  The Company relies primarily on its
 asset-liability structure to control interest-rate risk.  However, a
 sudden and substantial increase in interest rates may adversely impact
 the Company's earnings, to the extent that the interest rates borne by
 assets and liabilities do not change at the same speed, to the same
 extent, or on the same basis.  The Company does not engage in trading
 activities.  The Company believes that it does not have a material
 exposure to interest-rate risk.

     Additional information required by this Item 7A is set forth in
 Item 6, "Selected Financial Data" and under subcaptions "Results of
 Operations", "Net Interest Income", "Provision for Loan Losses",
 "Liquidity and Interest Sensitivity", "Investment Portfolio", and
 "Deposits" under Item 7, Management's Discussion and Analysis of
 Financial Conditions.
                                     -23-

 ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                            INDEPENDENT AUDITOR'S REPORT

 Board of Directors
 PSB Holdings, Inc.
 Wausau, Wisconsin


 We have audited the accompanying consolidated balance sheets of PSB
 HOLDINGS, INC. and Subsidiary as of December 31, 1999 and 1998, and
 the related consolidated statements of income, changes in stockholders'
 equity, and cash flows for the three years ended December 31, 1999.
 These financial statements are the responsibility of the Company's
<PAGE>
 management.  Our responsibility is to express an opinion on these
 financial statements based on our audits.

 We conducted our audits in accordance with 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 consolidated financial statements referred to above
 present fairly, in all material respects, the financial position of PSB
 HOLDINGS, INC. and Subsidiary at December 31, 1999 and 1998, and the
 results of their operations and their cash flows for the three years
 ended December 31, 1999 in conformity with generally accepted
 accounting principles.



                                       WIPFLI ULLRICH BERTELSON LLP
                                       Wipfli Ullrich Bertelson LLP


 January 21, 2000
 Wausau, Wisconsin
                                     -24-
<PAGE>
<TABLE>
<CAPTION>
                                  PSB HOLDINGS, INC.
                                   AND SUBSIDIARY

                             CONSOLIDATED BALANCE SHEETS
                             December 31, 1999 and 1998
                                                                1999         1998
                                       ASSETS
 <S>                                                       <C>             <C>
 Cash and due from banks                                   $  11,925,985   $   8,751,763
 Interest-bearing deposits and money market funds                 61,779         740,993
 Federal funds sold                                                            3,934,000

 Securities:
   Held to maturity (fair values of $13,472,511
     and $14,345,897, respectively)                           13,843,068      14,068,362
   Available for sale (at fair value)                         46,489,186      47,886,132
 Loans held for sale                                                           3,120,450
 Loans receivable, net of allowance for loan losses of
   $2,099,241 and $1,946,864 in 1999 and 1998, respectively  180,524,113     148,581,791
 Accrued interest receivable                                   1,746,038       1,725,343
 Premises and equipment                                        3,897,223       3,885,986
 Other assets                                                  1,401,641         796,671

 TOTAL ASSETS                                              $ 259,889,033   $ 233,491,491


                         LIABILITIES AND STOCKHOLDERS' EQUITY

 Noninterest-bearing deposits                              $  33,657,598   $  33,149,909
 Interest-bearing deposits                                   168,696,643     166,649,988

   Total deposits                                            202,354,241     199,799,897

 Short-term borrowings                                        21,214,890       4,549,508
 Long-term borrowings                                         13,000,000       6,000,000
 Other liabilities                                             2,273,485       2,585,871

      Total liabilities                                      238,842,616     212,935,276

 Stockholders' equity:
   Common stock - No-par value with a stated value of $2
      per share:
      Authorized - 1,000,000 shares
      Issued       -   902,425 shares                          1,804,850       1,804,850
   Additional paid-in capital                                  7,158,505       7,158,505
   Retained earnings                                          13,928,790      12,223,043
   Accumulated other comprehensive income (loss),
      net of tax                                              (1,043,128)        172,417
   Treasury stock, at cost - 19,190 shares                      (802,600)       (802,600)
      Total stockholders' equity                              21,046,417      20,556,215

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $ 259,889,033   $ 233,491,491

             See accompanying notes to consolidated financial statements.
</TABLE>
                                     -25-
<PAGE>
<TABLE>
<CAPTION>
                                  PSB HOLDINGS, INC.
                                   AND SUBSIDIARY

                           CONSOLIDATED STATEMENTS OF INCOME
                     Years Ended December 31, 1999, 1998, and 1997
                                                          1999          1998           1997
  <S>                                                <C>            <C>           <C>
 Interest income:
   Interest and fees on loans                        $  14,065,041  $ 13,403,646  $ 12,688,023
   Interest on securities:
       Taxable                                           2,821,551     2,394,816     2,370,859
       Tax-exempt                                          649,901       625,427       580,323
   Other interest and dividends                            134,512       322,546       104,758

       Total interest income                            17,671,005    16,746,435    15,743,963
 Interest expense:
   Deposits                                              7,584,588     8,175,617     7,871,730
   Short-term borrowings                                   639,760       237,059       343,207
   Long-term borrowings                                    373,416       308,913        37,981

       Total interest expense                            8,597,764     8,721,589     8,252,918

 Net interest income                                     9,073,241     8,024,846     7,491,045
 Provision for loan losses                                 460,000       300,000       230,000
 Net interest income after provision for loan losses     8,613,241     7,724,846     7,261,045

 Noninterest income:
   Service fees                                            708,794       699,145       483,756
   Net realized gain on sale of securities available for sale             35,867         3,120
   Gain of sale of loans                                   223,002       332,027        45,588
   Investment sales commissions                            137,621       146,756        73,873
   Other operating income                                  195,230       192,903       138,367

       Total noninterest income                          1,264,647     1,406,698       744,704
 Noninterest expenses:
   Salaries and employee benefits                        3,621,239     3,330,964     2,948,292
   Loss on settlement of pension plan                                    405,891
   Occupancy                                               858,719       827,558       727,583
   Data processing and other office operations             440,588       421,488       319,453
   Advertising and promotion                               222,435       201,754       166,415
   Director compensation and benefits                      169,820       141,671       179,800
   Other operating                                         908,605       785,641       590,497

       Total noninterest expenses                        6,221,406     6,114,967     4,932,040

 Income before income taxes                              3,656,482     3,016,577     3,073,709
 Provision for income taxes                              1,067,500       928,000       971,000

 Net income                                          $   2,588,982  $  2,088,577  $  2,102,709

 Basic and diluted earnings per share                $        2.93  $       2.36  $       2.37

 Weighted average shares outstanding                       883,235       883,235       887,988
             See accompanying notes to consolidated financial statements.
</TABLE>
                                     -26-
<PAGE>
<TABLE>
<CAPTION>

                                   PSB HOLDINGS, INC.
                                   AND SUBSIDIARY

              CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     Years Ended December 31, 1999, 1998, and 1997
                                                                 Accumulated
                                            Additional               Other


                                    Common      Paid-In     Retained   Comprehensive   Treasury
                                     STOCK      CAPITAL      EARNINGS   INCOME (LOSS)     STOCK         TOTALS
 <S>                               <C>        <C>         <C>           <C>           <C>           <C>
 Balance, January 1, 1997          $1,804,850 $ 7,158,505 $  9,649,112  $   (8,543)   $  (315,000)  $18,288,924

 Comprehensive income:
    Net income                                               2,102,709                                2,102,709
    Unrealized gain on securities
     available for sale, net of tax                                        109,086                      109,086

        Total comprehensive income                                                                    2,211,795

 Purchase of treasury stock                                                              (487,600)     (487,600)
 Cash dividends declared
      $.90 per share                                          (795,944)                                (795,944)

 Balance, December 31, 1997         1,804,850   7,158,505   10,955,877     100,543       (802,600)   19,217,175

 Comprehensive income:
    Net income                                               2,088,577                                2,088,577
    Unrealized gain on securities
      available for sale, net of tax                                        71,874                       71,874

        Total comprehensive income                                                                    2,160,451

 Cash dividends declared
      $.93 per share                                          (821,411)                                (821,411)

 Balance, December 31, 1998         1,804,850   7,158,505   12,223,043     172,417       (802,600)    20,556,215

 Comprehensive income:
    Net income                                               2,588,982                                 2,588,982

    Unrealized loss on securities
     available for sale, net of tax                                    (1,215,545)                   (1,215,545)

        Total comprehensive income                                                                    1,373,437

 Cash dividends declared
      $1.00 per share                                         (883,235)                               (883,235)

 Balance, December 31, 1999        $1,804,850 $ 7,158,505 $ 13,928,790 $(1,043,128)    $ (802,600) $21,046,417

            See accompanying notes to consolidated financial statements.
                                     -27-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                        PSB HOLDINGS, INC. AND SUBSIDIARY
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  Years Ended December 31, 1999, 1998, and 1997
                                                           1999         1998           1997
 <S>                                                 <C>             <C>          <C>
 Cash flows from operating activities:
   Net income                                        $   2,588,982   $ 2,088,577  $  2,102,709
   Adjustments to reconcile net income to net
     cash provided by operating activities:
     Provision for depreciation and net amortization       554,059       520,981       482,664
     Benefit from deferred income taxes                    (70,000)     (169,900)     (108,900)
     Provision for loan losses                             460,000       300,000       230,000
     Proceeds from sales of loans held for sale         21,214,462    26,186,442     4,369,580
     Originations of loans held for sale               (17,871,010)  (28,674,365)   (4,344,817)
     Gain on sale of loans                                (223,002)     (332,027)      (45,588)
     Net gain on sale of other real estate                 (21,461)       (4,134)
     Net gain on sale of securities available for sale                   (35,867)       (3,120)
     Changes in operating assets and liabilities:
        Accrued interest receivable                        (20,695)       12,150        53,412
        Other assets                                      (109,686)      (25,811)     (285,484)
        Other liabilities                                  239,166       346,744       265,173
   Net cash provided by operating activities             6,262,483       212,790     2,715,629
   Cash flows from investing activities:
     Proceeds from sale and maturities of:
        Held to maturity securities                      2,865,000     1,340,000     2,366,913
        Available for sale securities                   13,262,495    17,470,126    10,953,084
     Payment for purchase of:
        Held to maturity securities                     (2,664,188)   (2,881,464)   (3,221,710)
        Available for sale securities                  (13,653,389)  (27,616,227)   (8,496,561)
     Net increase in loans                             (32,402,322)   (1,709,893)  (11,595,126)
     Net (increase) decrease in interest-bearing
       deposits and money market funds                     679,214      (587,722)       16,032
     Net decrease (increase) in federal funds sold       3,934,000    (3,934,000)
     Capital expenditures                                 (522,284)     (633,488)     (482,177)
     Proceeds from sale of other real estate                76,722       503,667
   Net cash used in investing activities               (28,424,752)  (18,049,001)  (10,459,545)
   Cash flows from financing activities:
   Net increase (decrease) in noninterest-bearing deposits 507,689     5,585,407      (921,753)
     Net increase in interest-bearing deposits           2,046,655     7,611,785     9,395,555
     Net increase (decrease) in short-term borrowings   16,665,382       589,466    (1,806,589)
     Proceeds from issuance of long-term borrowings     10,000,000     3,000,000     3,000,000
     Repayments of long-term borrowings                 (3,000,000)
     Dividends paid                                       (883,235)     (821,411)     (795,944)
     Purchase of treasury stock                                                       (487,600)
   Net cash provided by financing activities            25,336,491    15,965,247     8,383,669
 Net increase (decrease) in cash and due from banks      3,174,222    (1,870,964)      639,753
 Cash and due from banks at beginning                    8,751,763    10,622,727     9,982,974
 Cash and due from banks at end                      $  11,925,985   $ 8,751,763  $ 10,622,727
 Supplemental cash flow information:
  Cash paid during the year for:
     Interest                                        $   8,738,300   $ 8,734,905  $  8,101,757
     Income taxes                                        1,416,524       877,563     1,008,124
 Noncash investing and financing activities:
  Loans charged off                                        432,444       207,450       350,242
  Loans transferred to other real estate                    79,457       198,544       300,989
</TABLE>
<PAGE>
           See accompanying notes to consolidated financial statements.
                                     -28-

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 PRINCIPAL BUSINESS ACTIVITY

 PSB Holdings, Inc. and Subsidiary (the "Company"), operates Peoples
 State Bank (the "Bank"), a full service financial institution with a
 primary marketing area including, but not limited to, the greater
 Wausau, Wisconsin area and Marathon County, and Rhinelander, Wisconsin
 in Oneida County.  It provides a variety of banking products including
 investment product sales and long-term fixed rate residential
 mortgages.

 PRINCIPLES OF CONSOLIDATION

 All significant intercompany balances and transactions have been
 eliminated.  The accounting and reporting policies of the Company
 conform to generally accepted accounting principles and to the general
 practices within the banking industry.

 USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

 The preparation of financial statements in conformity with generally
 accepted accounting principles 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 revenue
 and expenses during the reporting period.  Actual results could differ
 from those estimates.

 CASH EQUIVALENTS

 For the purpose of presentation in the consolidated statements of cash
 flows, cash and cash equivalents are defined as those amounts included
 in the balance sheet caption "cash and due from banks."  Cash and due
 from banks includes cash on hand and non-interest-bearing deposits at
 correspondent banks.

 SECURITIES

 Investment securities are assigned an appropriate classification at the
 time of purchase in accordance with management's intent.  Securities
 held to maturity represent those securities for which the Company has
 the positive intent and ability to hold to maturity.  Accordingly,
 these securities are carried at cost adjusted for amortization of
 premium and accretion of discount calculated using the effective yield
 method.  Unrealized gains and losses on securities held to maturity are
 not recognized in the financial statements.

 Trading securities include those securities bought and held principally
 for the purpose of selling them in the near future.  The Company has no
 trading securities.

 Securities not classified as either securities held to maturity or
<PAGE>
 trading securities are considered available for sale and reported at
 fair value determined from estimates of brokers or other sources.
 Unrealized gains and losses are excluded from earnings but are reported
 as other comprehensive income, net of income tax effects, in a separate
 component of stockholders' equity.

 Any gains and losses on sales of securities are recognized at the time
 of sale using the specific identification method.
                                     -29-

 INTEREST AND FEES ON LOANS

 Interest on loans is credited to income as earned.  Interest income is
 not accrued on loans where management has determined collection of such
 interest doubtful.  When a loan is placed on nonaccrual status,
 previously accrued but unpaid interest deemed uncollectible is reversed
 and charged against current income.  Fees received on loans are
 credited to income when received.  After being placed on nonaccrued
 status, additional income is recorded only to the extent that payments
 are received or the collection of principal becomes reasonably assured.
 Interest income recognition on impaired loans is consistent with the
 recognition on all other loans (as detailed above).

 ALLOWANCE FOR LOAN LOSSES

 The allowance for loan losses is established through a provision for
 loan losses charged to expense.  Loans are charged against the
 allowance for loan losses when management believes that the
 collectibility of principal is unlikely.  Management believes the
 allowance for loan losses is adequate to cover probable credit losses
 relating to specifically identified loans, as well as probable credit
 losses inherent in the balance of the loan portfolio.  In accordance
 with current accounting standards, the allowance is provided for
 losses that have been incurred as of the balance sheet date.  The
 allowance is based on past events and current economic conditions, and
 does not include the effects of expected losses on specific loans or
 groups of loans that are related to future events or expected changes
 in economic conditions.  While management uses the best information
 available to make its evaluation, future adjustments to the allowance
 may be necessary if there are significant changes in economic
 conditions.  A loan is impaired when it is probable the creditor will
 be unable to collect all contractual principal and interest payments
 due in accordance with terms of loan agreement.  Impaired loans are
 measured based on the present value of expected future cash flows
 discounted at the loan's effective interest rate or, as a practical
 expedient, at the loanss observable market price or the fair value of
 the collateral if the loan is collateral dependent.

 In addition, various regulatory agencies periodically review the
 allowance for loan losses.  These agencies may require the subsidiary
 Bank to make additions to the allowance for loan losses based on their
 judgments of collectibility based on information available to them at
 the time of their examination.

 LOANS HELD FOR SALE
<PAGE>
 Mortgage loans originated and intended for sale in the secondary market
 are carried at the lower of cost or estimated market value in the
 aggregate.  Net unrealized losses are recognized through a valuation
 allowance by charges to income.  Gains and losses on the sale of loans
 held for sale are determined using the specific identification method
 using quoted market prices.  Mortgage servicing rights are not
 retained.

 PREMISES AND EQUIPMENT

 Premises and equipment are stated at cost.  Maintenance and repair
 costs are charged to expense as incurred.  Gains or losses on
 disposition of property and equipment are reflected in income.
 Depreciation is computed principally on the straight-line method and
 is based on the estimated useful lives of the assets varying from 5 to
 40 years on buildings, 5 to 20 years on equipment, and 3 years on
 software.

 FORECLOSED REAL ESTATE

 Real estate properties acquired through, or in lieu of, loan
 foreclosure are to be sold and are initially recorded at fair
 value at the date of foreclosure, establishing a new cost basis.
 Costs related to development and improvement of property are
 capitalized, whereas costs related to holding property are expensed.
 After foreclosure, valuations are periodically performed by management
 and the real estate is carried at the lower of carrying amount or fair
                                    -30-
 value less estimated costs to sell.  Revenue and expenses from
 operations and changes in any valuation allowance are included in loss
 on foreclosed real estate.

 RETIREMENT PLANS

 The Company maintains a defined contribution 401(k) profit-sharing plan
 which covers substantially all full-time employees.

 INCOME TAXES

 Deferred income taxes have been provided under the liability method.
 Deferred tax assets and liabilities are determined based on the
 difference between the financial statement and tax bases of assets and
 liabilities as measured by the enacted tax rates which will be in
 effect when these differences are expected to reverse.  Deferred tax
 expense is the result of changes in the deferred tax asset and
 liability.

 ADVERTISING AND PROMOTIONAL COSTS

 Costs relating to Company advertising and promotion are generally
 expensed when paid.

 EARNINGS PER SHARE

 Earnings per share are based upon the weighted average number of shares
 outstanding.
<PAGE>
 RECLASSIFICATIONS

 Certain prior year balances have been reclassified to conform to
 current year presentation.
                                     -31-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 - CHANGES IN ACCOUNTING PRINCIPLES

 Effective January 1, 1998, the Company adopted Statement of Financial
 Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
 Under this SFAS, the Company reports those items defined as
 comprehensive income in the statement of changes in stockholders'
 equity.  The adoption of SFAS No. 130 did not have an impact on the
 Company's financial condition or results of operations.

 Effective January 1, 1998, the Company adopted SFAS No. 132,
 "Employers' Disclosures about Pensions and Other Postretirement
 Benefits," which was issued in February 1998.  This statement revises
 employers' disclosures about pension and other postretirement benefit
 plans.  It did not change the measurement or recognition of those
 plans.  It standardized the disclosure requirement and required
 additional information on changes in benefit obligations and fair value
 of plan assets, and eliminated certain disclosures which were no longer
 considered useful.  The disclosure requirements had no impact on the
 Company's financial position or results of operations.

 NOTE 3 - CASH AND DUE FROM BANKS

 Cash and due from banks in the amount of $916,000 was restricted at
 December 31, 1999 to meet the reserve requirements of the Federal
 Reserve System.

 In the normal course of business, the Company and its subsidiary
 maintain cash and due from bank balances with correspondent banks.
 Accounts at each institution are insured by the Federal Deposit
 Insurance Corporation up to $100,000.  The Company and its subsidiary
 also maintain cash balances in money market funds.  Such balances are
 not insured.  Total uninsured balances at December 31, 1999 were
 $8,014,558.
                                     -32-
<PAGE>
<TABLE>
                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY
<CAPTION>
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 4 - SECURITIES

 The amortized cost and estimated fair value of investment securities
 are as follows:
                                                          Gross        Gross      Estimated
                                          Amortized     Unrealized  Unrealized       Fair
                                            COST          GAINS       LOSSES        VALUE
     <S>                                <C>            <C>        <C>         <C>
     DECEMBER 31, 1999

     Securities held to maturity:
       Obligations of states and
         political subdivisions         $  13,843,068  $  17,904  $  388,461  $ 13,472,511

     Securities available for sale:
     U.S. Treasury securities
       and obligations of U.S.
       government corporations
       and agencies                     $  47,245,814  $  13,398  $1,517,300  $ 45,741,912

     Other equity securities                  747,274                              747,274

     Totals                             $  47,993,088  $  13,398  $1,517,300  $ 46,489,186

     DECEMBER 31, 1998

     Securities held to maturity:
       Obligations of states and
         political subdivisions         $  14,068,362  $ 278,490  $      955  $ 14,345,897

     Securities available for sale:
       U.S. Treasury securities
         and obligations of U.S.
       government corporations
       and agencies                     $  46,920,044  $ 342,097   $  76,687  $ 47,185,454

         Other equity securities              700,678                              700,678

     Totals                             $  47,620,722  $ 342,097   $  76,687  $ 47,886,132
</TABLE>

 The amortized cost and estimated fair value of debt securities held to
 maturity and securities available for sale at December 31, 1999, by
 contractual maturity, are shown below.  Expected maturities will differ
 from contractual maturities because borrowers may have the right to
 call or prepay obligations with or without call or prepayment
 penalties.
                                     -33-
<PAGE>
<TABLE>
<CAPTION>

                                                                          Estimated
                                                          Amortized         Fair
 SECURITIES HELD TO MATURITY                                 COST          VALUE
 <S>                                                   <C>             <C>
 Due in one year or less                               $  1,290,960    $ 1,297,543
 Due after one year through five years                    3,984,718      3,976,350
 Due after five years through ten years                   8,567,390      8,198,618

 Totals                                                $ 13,843,068    $13,472,511

  SECURITIES AVAILABLE FOR SALE

 Due in one year or less                               $  3,319,446    $ 3,310,390
 Due after one year through five years                    6,507,241      6,183,651
 Due after five years through ten years                  16,970,976     16,332,265

 Mortgage-backed securities                              20,448,151     19,915,606

 Totals                                                $ 47,245,814   $ 45,741,912
</TABLE>
 Securities with an approximate carrying value of $20,207,957 and
 $9,168,461 at December 31, 1999 and 1998, respectively, were pledged
 to secure public deposits, short-term borrowings, and for other
 purposes required by law.

 No securities were sold in 1999.  Proceeds from securities sales in
 1998 were $1,533,300.  Gross gains of $35,867 were realized on those
 sales.  During 1997, proceeds from security sales were $2,351,230.
 Gross gains and losses on those sales were $17,656 and $14,536,
 respectively.

 As a member of the Federal Home Loan Bank (FHLB) system, the Bank is
 required to hold stock in the FHLB based on asset size.  This stock is
 recorded at cost which approximates fair value.  Transfer of the stock
 is substantially restricted.  Equity securities include $699,600 and
 $655,300 of FHLB stock at December 31, 1999 and 1998, respectively.

 NOTE 5 - LOANS
<TABLE>
<CAPTION>
 The composition of loans is as follows:

                                                      1999          1998
          <S>                                    <C>            <C>
          Commercial                             $  51,053,737  $ 40,513,628
          Real estate                              118,195,029    98,259,990
          Consumer                                  13,374,588    11,755,037

          Subtotals                                182,623,354   150,528,655
          Allowance for loan losses                 (2,099,241)   (1,946,864)

          Net loans                              $ 180,524,113  $148,581,791
</TABLE>
<PAGE>
 The Company, in the ordinary course of business, grants loans to its
 executive officers and directors, including their families and firms in
 which they are principal owners.  All loans to executive officers and
 directors are made on substantially the same terms, including interest
 rates and collateral, as those prevailing at the time for comparable
                                     -34-
 transactions with others and, in the opinion of management, did not
 involve more than the normal risk of collectibility or present other
 unfavorable features.  Activity in such loans is summarized below:
<TABLE>
<CAPTION>
                                                       1999          1998
 <S>                                             <C>           <C>
 Loans outstanding, January 1                    $  5,038,511  $ 7,792,986
 New loans                                          3,411,051    6,612,687
 Repayment                                         (4,104,883)  (9,367,162)

 Loans outstanding, December 31                  $  4,344,679  $ 5,038,511
</TABLE>

 The allowance for loan losses includes specific allowances related to
 commercial loans which have been judged to be impaired as defined by
 current accounting standards.   A loan is impaired when, based on
 current information, it is probable that the Company will not collect
 all amounts due in accordance with the contractual terms of the loan
 agreement.  These specific allowances are based on discounted cash
 flows of expected future payments using the loan's initial effective
 interest rate or the fair value of the collateral if the loan is
 collateral dependent.

 An analysis of impaired loans follows:
<TABLE>
<CAPTION>
     AT DECEMBER 31,                                            1999          1998
 <S>                                                       <C>           <C>
 Nonaccrual                                                $    509,971  $ 564,414
 Accruing income                                              1,696,412    406,000

 Total impaired loans                                         2,206,383    970,414
 Less - Allowance for loan losses                               297,009    328,511

 Net investment in impaired loans                          $  1,909,374  $ 641,903
</TABLE>

<TABLE>
<CAPTION>
 YEARS ENDED DECEMBER 31,                         1999         1998        1997
 <S>                                         <C>           <C>          <C>
 Average recorded investment, net of
   allowance for loan losses                 $  1,874,008  $  819,630   $ 1,191,098

 Interest income recognized                  $    118,162  $   39,569   $    83,195
</TABLE>

 The allowance for loan losses (including impaired loans) is maintained
 at a level which management believes is adequate for possible loan
<PAGE>
 losses.  Management periodically evaluates the adequacy of the
 allowance using the Company's past loan loss experience, known and
 inherent risks in the portfolio, composition of the portfolio, current
 economic conditions, and other relevant factors.  This evaluation is
 inherently subjective since it requires material estimates that may be
 susceptible to significant change.
                                     -35-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 An analysis of the allowance for loan losses for the three years ended
 December 31, follows:
<TABLE>
<CAPTION>
                                                   1999        1998          1997
 <S>                                         <C>           <C>          <C>
 Balance, January 1                          $  1,946,864  $ 1,845,064  $ 1,924,686
 Provision charged to operating expense           460,000      300,000      230,000
 Recoveries on loans                              124,821        9,250       40,620
 Loans charged off                               (432,444)    (207,450)    (350,242)

 Balance, December 31                        $  2,099,241  $ 1,946,864  $ 1,845,064
</TABLE>
 NOTE 6 - PREMISES AND EQUIPMENT

 An analysis of premises and equipment follows:
<TABLE>
<CAPTION>
                                                      1999        1998
 <S>                                             <C>           <C>
 Land                                            $    709,117  $  627,345
 Buildings and improvements                         3,466,588   3,455,946
 Furniture and equipment                            3,196,731   2,947,739
 Construction in progress                             162,947

 Total cost                                         7,535,383   7,031,030
 Accumulated depreciation and amortization          3,638,160   3,145,044

 Net book value                                  $  3,897,223  $3,885,986
</TABLE>
 Depreciation and amortization charged to operating expenses amounted to
 $511,047 in 1999, $493,934 in 1998, and $436,933 in 1997.
<PAGE>
 NOTE 7 - DEPOSITS
<TABLE>
<CAPTION>
 At December 31, 1999, certificate and IRA accounts have scheduled
 maturity dates as follows:
          <S>                                                 <C>
          2000                                                $  75,381,840
          2001                                                   10,632,861
          2002                                                    1,583,012
          2003                                                      287,183
          2004                                                        2,050

          Total                                               $  87,886,946
</TABLE>
 Certificate of deposit accounts with individual balances greater than
 $100,000 totaled $24,760,217 and $24,688,356 at December 31, 1999 and
 1998, respectively.

 Deposits from Company directors, officers, and related parties at
 December 31, 1999 and 1998 totaled $5,772,331 and $7,983,980,
 respectively.
                                     -36-
 NOTE 8 - SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
 Short-term borrowings consist of the following at December 31:
                                                     1999          1998
 <S>                                             <C>            <C>
 Securities sold under repurchase agreements     $  10,737,890  $ 4,549,508
 Federal funds purchased                            10,477,000

 Totals                                          $  21,214,890  $ 4,549,508
</TABLE>
 The book value of securities pledged under repurchase agreements
 totaled $15,378,207 and $4,801,348 at December 31, 1999 and 1998,
 respectively.

 Repurchase agreements with Company directors, officers, and related
 parties at December 31, 1999 and 1998 totaled $6,122,705 and $500,000,
 respectively.

 The following information relates to federal funds purchased and
 securities sold under repurchase agreements for the years ended
 December 31:
<TABLE>
<CAPTION>
                                                 1999         1998          1997
 <S>                                        <C>            <C>             <C>
 As of end of year:
   Weighted average rate                             5.90%       5.63%           6.14%
 For the year:
   Highest month-end balance                $  21,214,890  $ 5,220,455     $11,983,134
   Daily average balance                       11,660,602    3,803,415       5,555,857
   Weighted average rate                             5.49%        6.23%          6.18%
</TABLE>
                                     -37-
<PAGE>
                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


 NOTE 9 - LONG-TERM BORROWINGS
<TABLE>
<CAPTION>
 Long-term borrowings at December 31, consist of the following:

                                                                          1999           1998
 <S>                                                                  <C>           <C>
 Note payable to the FHLB, monthly interest payments only at 5.07%,
 due February, 2008, callable beginning February 2001                 $  3,000,000  $ 3,000,000

 Note payable to the FHLB, monthly interest payments only at 4.97%,
 due August, 2009, callable beginning February 2000                      3,000,000

 Note payable to the FHLB, monthly interest payments only at 5.15%,
 due October 2009, callable beginning April 2000                         4,000,000

 Note payable to the FHLB, monthly interest payments only at 4.98%,
 due July 2009, callable beginning July 2000                             3,000,000

 5.70% - 5.90% FHLB advances, interest payable monthly,
 principal repaid during 1999                                                         3,000,000

 Totals                                                              $  13,000,000  $ 6,000,000
</TABLE>
 The FHLB advances are secured by a blanket lien consisting principally
 of one-to-four family real estate loans totaling in excess of
 $22,000,000 and $10,000,000 at December 31, 1999 and 1998,
 respectively.  As a member of the FHLB system, the Company may draw on
 a line of credit totaling $35,327,000.  At December 31, 1999, the
 Company's available and unused portion of this line of credit
 totaled $22,327,000.
                                     -38-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 10 - RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS

 The Company has established a 401(k) profit-sharing contribution
 pension plan for its employees.  The Company  matches 50% of employees'
 salary deferrals up to the first 4% of pay deferred.  The Company also
 may declare a discretionary profit-sharing contribution.  The expense
 recognized for contributions to the plan for the years ended December
 31, 1999, 1998, and 1997 was $173,858, $159,014, and $143,940,
 respectively.

 The Company also maintains an unfunded retirement plan for its
 directors.  The plan pays directors who have at least 15 years of
 service at retirement 50% of the fees received during their final five
<PAGE>
 years as a director.  Currently, five directors are eligible for
 benefits.  Details regarding the actuarial benefit obligation and
 related disclosures are not available.  The liability recognized in the
 financial statements for this plan was $156,285 at December 31, 1999
 and 1998.  There was no provision for plan expense during 1999 or 1998.
 The plan expense totaled $46,000 December 31, 1997.

 The Company also maintains an unfunded postretirement health care
 benefit plan which covers the officers of the Company.  After
 retirement, the Company will pay between 25% and 50% of the health
 insurance premiums for former Company officers.  To qualify, an officer
 must have at least 15 years of service, be employed by the Company at
 retirement, and must be 62 years of age at retirement.  The actual
 amount paid is based upon years of service to the Company.

 Effective January 1, 1997, the Company terminated its defined benefit
 pension plan.  The Company received regulatory approval to distribute
 participants' vested defined benefit pension plan balances to
 participants or into the Company's 401(k) profit-sharing plan.  During
 January 1998, the Company settled the defined benefit pension plan
 obligation by transferring existing plan assets of $1,857,740, plus an
 additional cash payment of $202,738 to qualified retirement plans or
 directly to the plan participants.
                                     -39-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide a reconciliation of changes in the
 postretirement health care benefit plan and the defined benefit
 pension plan obligations and the fair value of assets for the years
 ended December 31, 1999 and 1998:
<PAGE>
<TABLE>
<CAPTION>
                                                                           Defined
                                                         Postretirement         Benefit
                                                          Health Care           Pension
                                                          BENEFIT PLAN           PLAN
                                                        1999        1998         1998
 <S>                                              <C>           <C>         <C>
 Reconciliation of benefit obligations:
    Obligations at January 1                      $    167,930  $  136,179  $ 1,666,759
    Service cost                                        13,134      11,176
    Interest cost                                       19,314      16,658        9,723
    Benefit payments                                    (6,137)     (3,479)      (5,820)
    Net amortization of prior service costs              7,396       7,396      (16,075)
    Loss on settlement of plan due to applicable
    benefit payout interest rates at time of
     settlement                                                                 405,891
    Liquidating distributions to qualified
     retirement plans                                                        (2,042,103)
    Liquidating distributions to plan
     participants                                                               (18,375)

 Obligation at December 31                        $    201,637  $  167,930  $
 Reconciliation of fair value of plan assets:
    Fair value of plan assets at January 1                                  $ 1,855,500
    Return on plan assets, net of
    administrative expenses                                                       8,060
    Benefit payments                                                             (5,820)
    Liquidating distributions to qualified
      Retirement plans                                                       (1,857,740)

 Fair value of plan assets at December 31                                   $
</TABLE>
                                     -40-
                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 The following table provides the components of net periodic benefit cost
 (income) of the plans for the years ended December 31, 1999, 1998, and 1997:
<TABLE>
<CAPTION>
                                        Postretirement
                                          Health Care              Defined Benefit
                                         BENEFIT PLAN               PENSION PLAN
                                       1999       1998      1997       1998       1997
 <S>                            <C>           <C>       <C>       <C>          <C>
 Service cost                   $     13,134  $ 11,176  $  7,778  $            $
 Interest cost                        19,314    16,658    14,233      9,723       110,308
 Return on plan assets                                               (8,060)      (87,256)
 Net amortization transition
   and prior service costs (income)    7,396     7,396     7,396    (16,075)      (23,068)
 Net periodic pension cost
   (income)                           39,844    35,230    29,407    (14,412)          (16)
 Settlement loss                                                    405,891
 Net periodic benefit cost
   (income)after settlement     $     39,844  $ 35,230  $ 29,407  $ 391,479     $     (16)
</TABLE>
<PAGE>
 The assumptions used in the measurement of the Company's benefit
 obligations are shown in the following table:
<TABLE>
<CAPTION>
                                        Postretirement
                                          Health Care              Defined Benefit
                                          BENEFIT PLAN               PENSION PLAN
 <S>                                    <C>        <C>      <C>        <C>      <C>
                                        1999       1998      1997       1998     1997
 Discount rate                          7.50%      7.50%    7.50%      N/A      7.00%
 Expected return on plan assets          N/A        N/A      N/A       N/A      5.79%
 Health care cost trend rate            7.50%      7.25%    7.50%      N/A       N/A
 Rate of compensation increases          N/A        N/A      N/A       N/A      0.00%
</TABLE>

 The health care cost trend rate is anticipated to be 7.50% in 2000,
 grading down 0.25% per year to 5.0%.

 Assumed health care cost trend rates have a significant effect on the
 amounts reported for the health care benefit plan.  A 1% increase in
 assumed health care cost trend rates would have the following effects:
<TABLE>
<CAPTION>
                                                               1999     1998     1997
 <S>                                                     <C>          <C>     <C>
 Effect on service and interest cost                     $      8,011 $ 5,681 $  847
 Effect on accumulated benefit obligation at December 31       59,971  43,082  8,362
</TABLE>
                                     -41-

 NOTE 11 -SELF-FUNDED HEALTH INSURANCE PLAN

 The Company has established an employee medical benefit plan to
 self-insure claims up to $10,000 per year for each individual with a
 $281,097 stop-loss per year for participants in the aggregate.  The
 Company and its covered employees contribute to the fund to pay the
 claims and stop-loss premiums.  Medical benefit plan costs are expensed
 as incurred.  As of December 31, 1999, management believes adequate
 provision to expense has been made for claims incurred but not yet
 reported that are not covered by the stop-loss.  Health insurance
 expense recorded in 1999, 1998, and 1997 was $168,564, $143,969, and
 $126,237, respectively.

 NOTE 12 - INCOME TAXES
<PAGE>
 The components of the income tax provision are as follows:
<TABLE>
<CAPTION>
                                                      1999       1998         1997
 <S>                                            <C>            <C>        <C>
 Current income tax provision:
   Federal                                      $  1,016,000   $ 991,400  $  965,900
   State                                             121,500     106,500     114,000

 Total current                                     1,137,500   1,097,900   1,079,900
 Deferred income tax benefit:

   Federal                                           (60,000)   (142,400)    (85,900)
   State                                             (10,000)    (27,500)    (23,000)

 Total deferred                                      (70,000)   (169,900)   (108,900)

 Total provision for income taxes               $  1,067,500   $ 928,000  $  971,000
</TABLE>
                                     -42-

                             PSB HOLDINGS, INC.
                               AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 Deferred income taxes are provided for the temporary differences
 between the financial reporting basis and the tax basis of the
 Company's assets and liabilities.  The major components of the net
 deferred tax assets are as follows:
<TABLE>
<CAPTION>
                                                                   1999      1998
 <S>                                                        <C>           <C>
 Deferred tax assets:
   Allowance for loan losses                                $    708,800  $ 653,800
   Deferred compensation                                          68,800     69,300
   State net operating loss                                       13,000      9,500
   Post-retirement health care benefits                           73,500     64,300
   Employee pension plan                                          41,000     42,800
   Unrealized loss on securities available for sale              560,774
   Other                                                                      2,600
   Less - Valuation allowance                                   (113,000)    (9,500)

 Gross deferred tax assets                                      1,352,874   832,800

 Deferred tax liabilities:
   Unrealized gain on securities available for sale                          92,992
   Premises and equipment                                        138,500    155,000
   Employee pension plan                                           5,800

 Gross deferred tax liabilities                                  144,300    247,992

 Net deferred tax assets                                    $  1,208,574  $ 584,808
</TABLE>
<PAGE>
 The Company, and its subsidiary, pay state income taxes on individual,
 unconsolidated net earnings.  At December 31, 1999, tax net operating
 loss carryforwards at the parent company of approximately $250,000
 existed to offset future state taxable income.  These net operating
 losses will begin to expire in 2012.  A valuation allowance has been
 recognized to adjust deferred tax assets to the amount of tax ne
t operating losses expected to be utilized to offset future income.  A
 valuation allowance of $100,000 has also been recognized to offset
 deferred tax assets related to unrealized capital losses of
 approximately $295,000.  If realized, the tax benefit for these items
 will reduce current tax expense for the period in which they are
 realized.
                                  -43-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 A summary of the source of differences between income taxes at the
 federal statutory rate and the provision for income taxes for the years
 ended December 31, follows:
<TABLE>
<CAPTION>
                                              1999                 1998                 1997
                                                 Percent of          Percent of          Percent of
                                                 Pretax              Pretax              Pretax
                                        AMOUNT   INCOME     AMOUNT   INCOME   AMOUNT     INCOME
 <S>                                 <C>          <C>   <C>           <C>    <C>           <C>
 Tax expense at statutory rate       $ 1,243,000  34.0% $ 1,026,000   34.0%  $ 1,045,000   34.0%
 Increase (decrease) in taxes
   resulting from:
   Tax-exempt interest                  (221,900) (6.1)    (194,000)  (6.4)     (174,500)  (5.7)
   State income tax                       73,600   2.0       52,000    1.7        60,000    2.0
   Other                                 (27,200) (0.7)      44,000    1.5        40,500    1.3

 Provision for income taxes          $ 1,067,500  29.2%   $ 928,000   30.8%  $   971,000   31.6%
</TABLE>
 NOTE 13 - LEASES

 The Company leases various pieces of equipment under cancelable leases
 and space for a branch location under a noncancelable lease.  All
 leases are classified as operating.  Future minimum payments under the
 noncancelable lease are as follows:
<TABLE>
<CAPTION>
 <S>                                                                   <C>
 2000                                                                  $25,540
 2001                                                                   26,389
 2002                                                                   27,252
 2003                                                                    2,277

 Total                                                                 $81,458
</TABLE>
 Rental expense for all operating leases was $39,104, $32,462, and
 $12,735 for the years ended December 31, 1999, 1998, and 1997,
 respectively.
<PAGE>
 NOTE 14 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

 CREDIT RISK

 The Company is a party to financial instruments with off-balance sheet
 risk in the normal course of business to meet the financing needs of
 its customers.  These financial instruments include commitments to
 extend credit and standby letters of credit.  Those instruments
 involve, to varying degrees, elements of credit risk in excess of the
 amount recognized in the balance sheets.
                                     -44-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 The Company's exposure to credit loss in the event of nonperformance by
 the other party to the financial instrument for commitments to extend
 credit and standby letters of credit is represented by the contractual
 amount of those instruments. The Company uses the same credit policies
 in making commitments and conditional obligations as it does for
 on-balance sheet instruments.  These commitments at December 31 are
 as follows:
<TABLE>
<CAPTION>
                                                                 1999         1998
 <S>                                                       <C>            <C>
 Commitments to extend credit:
   Fixed rate                                              $  10,525,503  $  7,473,927
   Variable rate                                              15,915,386    11,301,151
 Letters of credit - variable rate                               845,952     1,470,887
 Credit card commitments - fixed rate                          2,667,512     2,278,144

 Totals                                                    $  29,954,353  $ 22,524,109
</TABLE>

 Commitments to extend credit are agreements to lend to a customer as
 long as there is no violation of any condition established in the
 contract.  Commitments generally have fixed expiration dates or other
 termination clauses.  Since many of the commitments are expected to
 expire without being drawn upon, the total commitment amounts do not
 necessarily represent future cash requirements.  The Company evaluates
 each customer's creditworthiness on a case-by-case basis. The amount of
 collateral obtained, if deemed necessary upon extension of credit, is
 based on management's credit evaluation of the party.  Collateral held
 varies but may include accounts receivable, inventory, property, plant,
 and equipment, and income-producing commercial properties.

 Letters of credit are conditional commitments issued to guarantee the
 performance of a customer to a third party.  Those guarantees are
 primarily issued to support public and private borrowing arrangements.
 The credit risk involved in issuing letters of credit is essentially
 the same as that involved in extending loan facilities to customers.
 Collateral held varies as specified above and is required in instances
 which the Company deems necessary.  The commitments are structured to
<PAGE>
 allow for 100% collateralization on all letters of credit.

 Credit card commitments are commitments on credit cards issued by the
 Company and serviced by Elan Financial Services.  These commitments are
 unsecured.

 CONCENTRATION OF CREDIT RISK

 The Company grants residential mortgage, commercial and consumer loans
 predominantly in the greater Wausau area, Marathon County, and
 Rhinelander, Wisconsin in Oneida County.  There are no significant
 concentrations of credit to any one debtor or industry group.  It is
 felt that the diversity of the local economy will prevent significant
 losses in the event of an economic downturn.
                                     -45-

                              PSB HOLDINGS, INC.
                               AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 CONTINGENCIES

 In the normal course of business, the Company is involved in various
 legal proceedings.  In the opinion of management, any liability
 resulting from such proceedings would not have a material adverse
 effect on the consolidated financial statements.

 Under the most recent provisions approved by the Company's Board of
 Directors, up to 45,000 shares may be repurchased from shareholders
 from time to time at the prevailing market price.  Prior to the
 issuance of the 1999 financial statements, various shareholders holding
 approximately 4,100 shares elected to have the Company repurchase their
 shares in transactions to be completed during 2000.

 INTEREST RATE RISK

 The Company originates and holds adjustable rate mortgage loans with
 variable rates of interest.  The rate of interest on these loans is
 capped over the life of the loan.  At December 31, 1999, none of the
 approximately $9,113,000 of variable rate loans had reached the
 interest rate cap.

 NOTE 15 - CAPITAL REQUIREMENTS

 The Company and the Bank are subject to various regulatory capital
 requirements administered by the federal banking agencies.  Failure to
 meet minimum capital requirements can initiate certain mandatory-and
 possibly additional discretionary-actions by regulators that, if
 undertaken, could have a direct material effect on the Company's
 financial statements.  Under capital adequacy guidelines and the
 regulatory framework for prompt corrective action, the bank must meet
 specific capital guidelines that involve quantitative measures of the
 bank's assets, liabilities, and certain off-balance sheet items as
 calculated under regulatory accounting practices.  The Bank's capital
 amounts and classification are also subject to qualitative judgments by
 the regulators about components, risk weightings, and other factors.
<PAGE>
 Quantitative measures established by regulation to ensure capital
 adequacy require the Bank to maintain minimum amounts and ratios (set
 forth in the table below) of total and Tier I capital (as defined in
 the regulations) to risk-weighted assets (as defined), and of Tier I
 capital (as defined) to average assets (as defined).  Management
 believes, as of December 31, 1999, that the Bank meets all capital
 adequacy requirements to which it is subject.

 As of December 31, 1999, the most recent notification from the Federal
 Deposit Insurance Corporation categorized the Bank as well capitalized
 under the regulatory framework for prompt corrective action.  To be
 categorized as well capitalized, the Bank must maintain minimum total
 risk-based, Tier I risk-based, and Tier I leverage ratios as set forth
 in the table.  There are no conditions or events since that
 notification that management believes have changed the Bank's category.
                                     -46-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 The Company's and the Bank's actual capital amounts and ratios are also
 presented in the table.
<PAGE>
<TABLE>
<CAPTION>
                                                                              To Be Well
                                                                           Capitalized Under
                                                           For Capital      Prompt Corrective
                                          ACTUAL         ADEQUACY PURPOSES  ACTION PROVISIONS
                                      AMOUNT          RATIO   AMOUNT       RATIO      AMOUNT      RATIO
 <S>                                 <C>             <C>   <C>             <C>  <C>             <C>
 As of December 31, 1999:
   Total capital (to risk
    weighted assets):
     Consolidated                    $ 24,189,000    13.4% $ 14,402,000    8.0%          N/A
     Subsidiary bank                 $ 23,965,000    13.3% $ 14,401,000    8.0% $ 18,001,000   10.0%

   Tier I capital (to risk
    weighted assets):
     Consolidated                    $ 22,090,000    12.3% $  7,201,000    4.0%          N/A
     Subsidiary bank                 $ 21,866,000    12.1% $  7,200,000    4.0% $ 10,800,000     6.0%

   Tier I capital (to average
    assets):
     Consolidated                    $ 22,090,000     8.7% $ 10,128,000    4.0%          N/A
     Subsidiary bank                 $ 21,866,000     8.6% $ 10,128,000    4.0% $ 12,660,000     5.0%

 As of December 31, 1998:
   Total capital (to risk
    weighted assets):
     Consolidated                    $ 22,304,000    14.5% $ 12,303,000    8.0%          N/A
     Subsidiary bank                 $ 22,059,000    14.4% $ 12,284,000    8.0% $ 15,355,000    10.0%

   Tier I capital (to risk
    weighted assets):
     Consolidated                    $ 20,384,000    13.3% $  6,152,000    4.0%         N/A
     Subsidiary bank                 $ 20,139,000    13.1% $  6,142,000    4.0% $ 9,213,000      6.0%

   Tier I capital (to average
    assets):
     Consolidated                    $ 20,384,000    8.9%  $  9,126,000    4.0%          N/A
     Subsidiary bank                 $ 20,139,000    8.8%  $  9,117,000    4.0% $ 11,396,000     5.0%
</TABLE>
                                     -47-
                             PSB HOLDINGS, INC.
                             AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 16 - RESTRICTIONS ON RETAINED EARNINGS

 The Bank is restricted by banking regulations from making dividend
 distributions above prescribed amounts and is limited in making loans
 and advances to the Company.  At December 31, 1999, the retained
 earnings of the subsidiary available for distribution as dividends
 without regulatory approval was approximately $8,301,000.

 NOTE 17 - FAIR VALUE OF FINANCIAL INSTRUMENTS

 SFAS No. 107, "Disclosures About Fair Value of Financial Instruments"
<PAGE>
 requires that the Company disclose estimated fair values for its
 financial instruments.  The fair value estimates, methods, and
 assumptions regarding the Company's financial instruments are shown
 below.

 The following methods and assumptions were used by the Company in
 estimating its fair value disclosures for financial statements:

 Cash and Short-term Investments:  The carrying amounts reported in the
 balance sheets for cash and due from banks, interest-bearing deposits
 and money market funds, and federal funds sold approximate the fair
 value of these assets.

 Securities:  Fair values for investment securities are based on quoted
 market prices.

 Loans:  For variable rate loans that reprice frequently and with no
 significant change in credit risk, fair values are based on carrying
 values.  The fair value for other loans is estimated using discounted
 cash flow analyses, using interest rates currently being offered for
 loans with similar terms to borrowers of similar credit quality.  In
 addition, for impaired loans, marketability and appraisal values were
 considered in the fair value determination.  The carrying amount of
 accrued interest approximates its fair value.

 Deposit Liabilities:  The fair value of deposits with no stated
 maturity, such as demand deposits, NOW accounts, savings and money
 market accounts, is equal to the amount payable on demand at the
 reporting date.  Fair value for fixed rate certificates of deposit is
 estimated using a discounted cash flow calculation that applies
 interest rates currently being offered on certificates to a schedule of
 aggregated expected maturities on time deposits.

 Short-Term Borrowings:  The fair value of short-term borrowings with no
 stated maturity, such as federal funds purchased, is equal to the
 amount payable on demand at the reporting date.  Fair value for fixed
 rate repurchase agreements is estimated using a discounted cash flow
 calculation that applies interest rates currently being offered on
 repurchase agreements to a schedule of aggregated expected maturities
 on the existing agreements.

 Long-Term Borrowings:  The fair value of the Company's long-term
 borrowings (other than deposits) is estimated using discounted cash
 flow analyses based on the Company's current incremental borrowing
 rates for similar types of borrowing arrangements.

 Off-Balance-Sheet Instruments:  The fair value of commitments would be
 estimated using the fees currently charged to enter into similar
 agreements, taking into account the remaining terms of the agreements,
 the current interest rates, and the present credit worthiness of the
 counter parties.  Since this amount is immaterial, no amounts for fair
 value are presented.

 The carrying amounts and fair values of the Company's financial
 instruments consisted of the following at December 31:
                                     -48-
<PAGE>
<TABLE>
<CAPTION>
                                                   1999                             1998
                                          Carrying   Estimated          Carrying Estimated
                                           AMOUNT    FAIR VALUE           AMOUNT FAIR VALUE
 <S>                                   <C>          <C>            <C>          <C>
 Financial assets:
   Cash and short-term investments     $ 11,987,763 $ 11,987,763   $ 13,426,756  $ 13,426,756
   Securities                            60,332,254   59,961,697     61,954,494    62,232,029
   Net loans                            180,524,112  180,032,781    151,702,241   152,613,525

 Financial liabilities:
   Deposits                             202,354,241  202,400,590    199,799,897   200,190,127
   Short-term borrowings                 21,214,890   21,200,651      4,549,508     4,549,508
   Long-term borrowings                  13,000,000   12,907,246      6,000,000     6,008,439
</TABLE>

 LIMITATIONS

 Fair value estimates are made at a specific point in time, based on
 relevant market information and information about the financial
 instrument.  These estimates do not reflect any premium or discount
 that could result from offering for sale at one time the Company's
 entire holdings of a particular financial instrument.  Because no
 market exists for a significant portion of the Company's financial
 instruments, fair value estimates are based on judgments regarding
 future expected loss experience, current economic conditions, risk
 characteristics of various financial instruments, and other factors.
 These estimates are subjective in nature and involve uncertainties
 and matters of significant judgement and therefore cannot be determined
 with precision.  Changes in assumptions could significantly affect the
 estimates. Fair value estimates are based on existing on- and
 off-balance sheet financial instruments without attempting to estimate
 the value of anticipated future business and the value of assets and
 liabilities that are not considered financial instruments.  Significant
 assets, and liabilities that are not considered financial assets or
 liabilities include premises and equipment, other assets, and other
 liabilities.  In addition, the tax ramifications related to the
 realization of the unrealized gains or losses can have a
 significant effect on fair value estimates and have not been considered
 in the estimates.
                                     -49-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 18 - SUBSEQUENT EVENTS

 Subsequent to December 31, 1999, the Company acquired an option to
 purchase real estate in the amount of $450,000 in Rhinelander,
 Wisconsin to be used as a branch bank location.

 Subsequent to December 31, 1999, the Company approved formation of
 an employee stock ownership plan (ESOP) subject to a feasibility study
<PAGE>
 of its benefits.  The Company anticipates ESOP shares will be purchased
 on the open market from existing shareholders at the prevailing market
 price to be funded with a portion of the Company's profit-sharing
 contributions.

 NOTE 19 - CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

 The following condensed balance sheets as of December 31, 1999 and
 1998, and condensed statements of income and cash flows for the years
 ended December 31, 1999, 1998, and 1997 for PSB Holdings, Inc. should
 be read in conjunction with the consolidated financial statements and
 footnotes.
<TABLE>
<CAPTION>
                                                 BALANCE SHEETS
                                           December 31, 1999 and 1998
                                                     ASSETS
                                                                  1999        1998
 <S>                                                       <C>           <C>
 Cash and due from banks                                   $    752,995  $    725,715
 Investment in subsidiary                                    20,823,276    20,311,399
 Other assets                                                    35,573        47,482

 Total assets                                              $ 21,611,844  $ 21,084,596

                      LIABILITIES AND STOCKHOLDERS' EQUITY

 Accrued dividends payable                                 $    565,427  $    528,381
 Total stockholders' equity                                  21,046,417    20,556,215

 Total liabilities and stockholders' equity                $  21,611,844 $ 21,084,596
</TABLE>
                                     -50-

                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
                                              STATEMENTS OF INCOME
                                  Years Ended December 31, 1999, 1998, and 1997

                                                        1999       1998        1997

 Income:
   <S>                                            <C>          <C>          <C>
   Dividends from subsidiary                      $    909,000 $   967,000  $ 1,311,000
   Interest                                              8,148       2,383        2,893

     Total income                                      917,148     969,383    1,313,893

 Expenses:
   Interest                                                                       6,782
   Other                                                77,589      54,418       58,360

     Total expenses                                     77,589      54,418       65,142

 Income before income taxes and equity in
   undistributed net income of subsidiary              839,559     914,965    1,248,751
 Income tax benefit                                     22,000      17,000       20,000

 Net income before equity in undistributed
   net income of subsidiary                            861,559     931,965    1,268,751
 Equity in undistributed net income of subsidiary    1,727,423   1,156,612      833,958

 Net income                                       $  2,588,982 $ 2,088,577  $ 2,102,709
</TABLE>
                                     -51-


                             PSB HOLDINGS, INC.
                              AND SUBSIDIARY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
                                            STATEMENTS OF CASH FLOWS
                                  Years Ended December 31, 1999, 1998, and 1997

                                                             1999         1998           1997
 <S>                                                    <C>           <C>           <C>
 Cash flows from operating activities:

  Net income                                            $ 2,588,982   $ 2,088,577   $ 2,102,709
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
     Equity in net income of subsidiary                  (2,636,423)   (2,123,612)   (2,144,958)
     Net amortization                                        21,517        21,517        21,517
     (Increase) decrease  in other assets                    (9,607)       28,002       (20,003)
     Increase in other liabilities                           37,046        30,157        19,393

  Net cash provided by (used in) operating activities         1,515        44,641       (21,342)

  Cash flows from investing activities -
    Dividends received from subsidiary                      909,000       967,000     1,311,000

  Cash flows from financing activities:
     Dividends paid                                        (883,235)     (821,411)     (795,944)
     Purchase of treasury stock                                                        (487,600)

  Net cash used in financing activities                    (883,235)     (821,411)   (1,283,544)

 Net increase in cash and due from banks                     27,280       190,230         6,114
 Cash and due from banks at beginning                       725,715       535,485       529,371
 Cash and due from banks at end                        $    752,995    $  725,715   $   535,485
</TABLE>


 ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE.

     None.
                                     -52-

                             PART III

 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

     Information relating to directors of the Company is incorporated
 into this Form 10-K by this reference to the material set forth in the
 table under the caption "Election of Directors", pages 2 through 4, of
 the Company's proxy statement dated March 31, 2000 (the "2000 Proxy
 Statement").  Information relating to executive officers is found in
 Part I of this Form 10-K, page 6.  Information required under Rule 405
 of Regulation S-K is incorporated into this Form 10-K by this reference
 to the material set forth under the caption "Section 16(a) Beneficial
 Ownership Reporting Compliance" on page 6 of the 2000 Proxy Statement.

 ITEM 11.   EXECUTIVE COMPENSATION.

     Information relating to director compensation is incorporated into
 this Form 10-K by this reference to the 2000 Proxy Statement under the
<PAGE>
 subcaption "Compensation of Directors", page 5.  Information relating
 to the compensation of executive officers is incorporated into this
 Form 10-K by this reference to (1) the material set forth under the
 subcaption "Summary Compensation Table," page 8, and (2) the material
 set forth under the subcaption "Compensation Committee and Board
 Interlocks and Insider Participation," page 8 in the 2000 Proxy
 Statement.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

     Information relating to security ownership of certain beneficial
 owners and management is incorporated into this Form 10-K by this
 reference to the material set forth under the caption "Beneficial
 Ownership of Common Stock," pages 5 and 6, in the 2000 Proxy Statement.

 ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Information relating to transactions with management is
 incorporated into this Form 10-K by this reference to the material
 set forth under the caption "Certain Relationships and Related
 Transactions," page 9, in the 2000 Proxy Statement.
                                     -53-

                              PART IV

 ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
           8-K.

 (a)  Documents filed as part of this report.

 (1)  The financial statements filed as part of this report are set
      forth on pages 24-52 herein.

 (2)  No financial statement schedules are required by Item 14(d).

 (3)  Exhibits.

 The following exhibits required by Item 601 of Regulation S-K are filed
 with the Securities and Exchange Commission as part of this report.

     Exhibit
     NUMBER                   DESCRIPTION

     3.1  Restated Articles of Incorporation, as amended (incorporated
          by reference to Exhibit 4(a) to the Company's Current Report
          on Form 8-K dated May 30, 1995)

     3.2  Bylaws (incorporated by reference to Exhibit 4(b) to the
          Company's Current Report on Form 8-K dated May 30, 1995)

     4.1  Articles of Incorporation and Bylaws (see Exhibits 3.1 and
          3.2)

     10.1 Bonus Plan of Directors of the Bank (incorporated by reference
          to Exhibit 10(a) to the Company's Annual Report on Form 10-K
          for the fiscal year ended December 31, 1995)*
<PAGE>
     10.2 Bonus Plan of Officers and Employees of the Bank*
          (incorporated by reference to Exhibit 10(b) to the Company's
          Annual Report on Form 10-K for the fiscal year ended December
          31, 1995)*

     10.3 Non-Qualified Retirement Plan for Directors of the Bank
          (incorporated by reference to Exhibit 10(c) to the Company's
          Annual Report on Form 10-K for the fiscal year ended December
          31, 1995)*

     21.1 Subsidiaries of the Company (incorporated by reference to
          Exhibit 22 to the Company's Annual Report on Form 10-K for the
          fiscal year ended December 31, 1995)
                                     -54-
     27.1 Financial Data Schedule (filed electronically only)

               *Denotes Executive Compensation Plans and Arrangements.

 (b) Reports on Form 8-K.

     None.
                                     -55-

                            SIGNATURES

     Pursuant to the requirements of Section 13 of the Securities
 Exchange Act of 1934, the Company has duly caused this report to be
 signed on its behalf by the undersigned, thereunto duly authorized.

     PSB Holdings, Inc.

     By    DAVID K. KOPPERUD                March 30, 2000
           David K. Kopperued, President

        Pursuant to the requirement of the Securities Exchange Act of
 1934, this report has been signed below by the following persons on
 behalf of the registrant and in the capacities indicated on this 30th
 day of March, 2000.

              SIGNATURE AND TITLE           SIGNATURE AND TITLE

 DAVID K. KOPPERUD                       TODD R. TOPPEN
 David K. Kopperud, President            Todd R. Toppen, Treasurer
 Chief Executive Officer                 (Chief Financial and
                                         Principal Accounting Officer)
 DIRECTORS:

 LEONARD C. BRITTEN                      GORDON P. CONNOR
 Leonard C. Britten                      Gordon P. Connor

 PATRICK L. CROOKS                       WILLIAM J. FISH
 Patrick L. Crooks                       William J. Fish

 CHARLES A. GHIDORZI                     GEORGE L. GEISLER
 Charles A. Ghidorzi                     George L. Geisler
<PAGE>
 GORDON P. GULLICKSON                    LAWRENCE HANZ, JR.
 Gordon P. Gullickson                    Lawrence Hanz, Jr.

 THOMAS R. POLZER                        THOMAS A. RIISER
 Thomas A. Polzer                        Thomas A. Riiser

 WILLIAM M. REIF                         EUGENE WITTER
 William M. Reif                         Eugene Witter
                                     -56-
                              EXHIBIT INDEX<dagger>
                                    TO
                                 FORM 10-K
                                    OF
                            PSB HOLDINGS, INC.
                   FOR THE PERIOD ENDED DECEMBER 31, 1999
               Pursuant to Section 102(d) of Regulation S-T
                        (17 C.F.R. <section>232.102(d))

EXHIBIT 27.1 - FINANCIAL DATA SCHEDULE

                <dagger>Exhibits required by Item 601 of Regulation S-K
                which have been previously filed and are incorporated by
                reference are set forth in Part IV, Item 14(c) of the
                Form 10-K to which this Exhibit Index relates.