<PAGE>

                                                                      EXHIBIT 13

To Our Shareholders and Friends:

The year 2005 completes our second full year of operating as PSB Group, Inc. As
we wrote in our letter to shareholders in the 2004 annual report, our intent is
to employ the powers vested in a holding company only when it is prudent and in
the best interests of the company, both financially and competitively.
Accordingly, no acquisitions or new business start-ups were consummated in 2005.
Nevertheless, we remain receptive to consideration of worthwhile opportunities
that may arise in the future.

As noted elsewhere in this report, Peoples State Bank opened two new
full-service banking centers in 2005, while laying the groundwork for a third,
and Universal Mortgage Corporation completed their acquisition of Nations One,
another, established mortgage loan origination company.

Financial results reveal that net income for the fourth quarter of 2005 was
$790,000, or $.26 per average outstanding share, compared to $1,185,000, or $.39
per average outstanding share in the fourth quarter of 2004. Full year earnings
for 2005 totaled $4,005,000 or $1.32 per average outstanding share, compared to
$4,218,000 or $1.39 per average outstanding share in 2004.

Total assets as of December 31, 2005 were $495,011,000 compared to $461,342,000
on December 31, 2004. The lending portfolio totaled $365,093,000 as of December
31, 2004 compared to $338,674,000 at December 31, 2004, representing a 7.8%
increase in total loans. Deposits totaled $424,658,000 on December 31, 2005
compared to $411,132,000 at the same time in 2004, representing a 3.3% increase.

Commenting on these results, Robert L. Cole, president, and chief executive
officer of PSB Group, Inc., stated, "Opening new, full service banking offices
in Sterling Heights and Fenton were among the opportunities and challenges we
faced in 2005. The costs associated with building and opening these two new
offices were anticipated, but uncontrollable factors, including Michigan's
besieged economy, contributed to making it a difficult year for earnings."

Mr. Cole added, "While earnings are less than we had anticipated, I am pleased
with the overall direction of the Bank, especially the growth of our loan
portfolio." Cole also noted, "Our dedicated team of associates continues to
overcome obstacles, including intense competition, a struggling economy and an
environment of rising interest rates, to attract additional, new customers to
the bank."

Sincerely,

/s/ David L. Wood                       /s/ Robert L. Cole

David L. Wood                           Robert L. Cole
CHAIRMAN OF THE BOARD                   PRESIDENT & CEO

<PAGE>

                                 PSB GROUP, INC.

                          CONSOLIDATED FINANCIAL REPORT

                                DECEMBER 31, 2005

<PAGE>

PSB GROUP, INC.

<TABLE>
<CAPTION>
                                                                        CONTENTS
<S>                                                                     <C>
REPORT LETTER                                                               1

CONSOLIDATED FINANCIAL STATEMENTS

      Balance Sheet                                                         2

      Statement of Operations                                               3

      Statement of Stockholders' Equity                                     4

      Statement of Cash Flows                                               5

      Notes to Consolidated Financial Statements                           6-34
</TABLE>

<PAGE>

             Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
PSB Group, Inc.

We have audited the accompanying consolidated balance sheet of PSB Group, Inc.
as of December 31, 2005 and 2004 and the related consolidated statements of
operations, stockholders' equity, and cash flows for each year in the three-year
period ended December 31, 2005. These consolidated financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated 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 consolidated financial position of PSB
Group, Inc. as of December 31, 2005 and 2004 and the consolidated results of
their operations and cash flows for each year in the three-year period ended
December 31, 2005, in conformity with accounting principles generally accepted
in the United States of America.

Auburn Hills, Michigan
March 3, 2006

<PAGE>

PSB GROUP, INC.

                                                      CONSOLIDATED BALANCE SHEET
                                           (000s OMITTED, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                           December 31
                                                                       ----------------------
                                                                         2005         2004
                                                                       ---------    ---------
<S>                                                                    <C>          <C>
                                       ASSETS

Cash and due from banks                                                $  12,261    $  14,253
Securities - Available for sale (Note 3)                                  93,645       91,125
Loans (Note 4)                                                           365,093      338,674
Less allowance for possible loan losses (Note 4)                          (3,670)      (3,394)
                                                                       ---------    ---------
   Net loans                                                             361,423      335,280
Loans held for sale                                                        6,235        2,388
Bank premises and equipment (Note 5)                                      12,663       10,618
Accrued interest receivable                                                2,406        2,144
Goodwill (Note 1)                                                          4,458        4,100
Other assets (Note 9)                                                      1,920        1,434
                                                                       ---------    ---------
   Total assets                                                        $ 495,011    $ 461,342
                                                                       =========    =========

                           LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
 Deposits:
  Noninterest-bearing                                                  $  54,445    $  57,479
  Interest-bearing (Note 6)                                              370,213      353,653
                                                                       ---------    ---------
   Total deposits                                                        424,658      411,132
 Short-term borrowings (Note 7)                                           20,440            -
 Long-term debt (Note 7)                                                   5,770        5,000
 Accrued taxes, interest, and other liabilities (Note 9)                     963        2,229
                                                                       ---------    ---------
   Total liabilities                                                     451,831      418,361

STOCKHOLDERS' EQUITY (Notes 10, 11, 14, and 17)
 Common stock:
  Authorized - 5,000,000 shares, no par value
  Issued and outstanding - 3,029,152 shares in 2005
   and 2,885,073 shares in 2004                                           20,406       17,560
 Unearned ESOP benefits (Note 8)                                            (770)           -
 Common stock held in trust (Note 8)                                        (230)           -
 Deferred compensation obligation (Note 8)                                   230            -
 Retained earnings                                                        24,357       25,331
 Accumulated other comprehensive income (Note 1)                            (813)          90
                                                                       ---------    ---------
   Total stockholders' equity                                             43,180       42,981
                                                                       ---------    ---------
   Total liabilities and stockholders' equity                          $ 495,011    $ 461,342
                                                                       =========    =========
</TABLE>

See Notes to Consolidated Financial Statements.

                                       2
<PAGE>

PSB GROUP, INC.

                                            CONSOLIDATED STATEMENT OF OPERATIONS
                                           (000s OMITTED, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                    Year Ended December 31
                                                           ----------------------------------------
                                                              2005           2004          2003
                                                           -----------    -----------   -----------
<S>                                                        <C>            <C>           <C>
INTEREST INCOME
  Loans, including fees                                    $    23,942    $    20,780   $    19,762
  Securities:
    Taxable                                                      2,676          1,183         1,433
    Tax-exempt                                                     872            619           873
Federal funds sold                                                  28             51            28
                                                           -----------    -----------   -----------
      Total interest income                                     27,518         22,633        22,096

INTEREST EXPENSE
  Deposits                                                       8,777          5,546         5,214
  Short-term borrowings                                            368             61            25
  Long-term debt                                                   224            224           224
                                                           -----------    -----------   -----------
      Total interest expense                                     9,369          5,831         5,463
                                                           -----------    -----------   -----------
NET INTEREST INCOME - Before provision for loan losses          18,149         16,802        16,633

PROVISION FOR LOAN LOSSES (Note 4)                               1,554          1,200             -
                                                           -----------    -----------   -----------
NET INTEREST INCOME - After provision for loan losses           16,595         15,602        16,633

OTHER OPERATING INCOME
  Service charges on deposit accounts                            2,399          2,477         2,356
  Gain on sale of mortgages                                      1,411          1,216         1,463
  Gain (loss) on sale of available-for-sale securities             (16)             9           163
  Other income                                                   2,495          2,124         2,053
                                                           -----------    -----------   -----------

      Total other operating income                               6,289          5,826         6,035

OTHER OPERATING EXPENSES
  Salaries and employee benefits (Note 8)                        9,276          8,267         9,550
  Occupancy costs (Note 5)                                       3,580          3,065         2,769
  Legal and professional                                         1,036          1,145         1,428
  Other operating expenses                                       3,480          3,170         3,251
                                                           -----------    -----------   -----------
      Total other operating expenses                            17,372         15,647        16,998
                                                           -----------    -----------   -----------

INCOME - Before federal income taxes                             5,512          5,781         5,670

FEDERAL INCOME TAXES (Note 9)                                    1,507          1,563         1,457
                                                           -----------    -----------   -----------
NET INCOME                                                 $     4,005    $     4,218   $     4,213
                                                           ===========    ===========   ===========
PER SHARE DATA
  Weighted average shares outstanding                        3,025,727      3,029,152     3,258,672
  Basic earnings                                           $      1.32    $      1.39   $      1.29
</TABLE>

See Notes to Consolidated Financial Statements.

                                       3
<PAGE>

PSB GROUP, INC.

                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                           (000s OMITTED, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                        Unearned     Common
                                                  Number of   Common      ESOP    Stock Held in
                                                   Shares      Stock    Benefits      Trust
                                                  ---------  ---------  --------  -------------
<S>                                               <C>        <C>        <C>       <C>
BALANCE - January 1, 2003                         3,148,191  $  23,694  $      -     $    -

Comprehensive income (Note 1):
 Net income
 Change in unrealized gain on securities
  available for sale

    Total comprehensive income

Repurchase of common stock (Note 10)              (263,118)     (6,134)

Cash dividends - $0.61 per share

BALANCE - December 31, 2003                       2,885,073     17,560         -          -

Comprehensive income (Note 1):

  Net income

  Change in unrealized gain on securities
   available for sale

    Total comprehensive income

Cash dividends - $0.66 per share

BALANCE - December 31, 2004                       2,885,073     17,560         -          -

Comprehensive income (Note 1):

  Net income

  Change in unrealized gain on securities
   available for sale

    Total comprehensive income

Stock dividend (5%) (Note 10)                       144,079      2,846
Cash dividends - $0.70 per share
Establish unearned ESOP benefit (Note 8)                                    (770)
Purchase of common stock by trust (Note 8)                                             (230)
Deferred compensation (Note 8)
                                                  ---------  ---------  --------     ------
BALANCE - December 31, 2005                       3,029,152  $  20,406  $   (770)    $ (230)
                                                  =========  =========  ========     ======
<CAPTION>
                                                                                 Accumulated
                                                    Deferred                        Other                Total
                                                  Compensation   Retained       Comprehensive        Stockholders'
                                                   Obligation    Earnings       Income (Loss)            Equity
                                                  ------------   --------       -------------        -------------
<S>                                               <C>            <C>            <C>                  <C>
BALANCE - January 1, 2003                            $   -       $ 20,861         $    918             $  45,473

Comprehensive income (Note 1):
 Net income                                                         4,213                                  4,213
 Change in unrealized gain on securities
  available for sale                                                                  (571)                 (571)
                                                                                                       ---------

    Total comprehensive income                                                                             3,642

Repurchase of common stock (Note 10)                                                                      (6,134)

Cash dividends - $0.61 per share                                   (1,970)                                (1,970)
                                                                                                       ---------

BALANCE - December 31, 2003                              -         23,104              347                41,011

Comprehensive income (Note 1):

  Net income                                                        4,218                                  4,218

  Change in unrealized gain on securities
   available for sale                                                                 (257)                 (257)
                                                                                                       ---------

    Total comprehensive income                                                                             3,961

Cash dividends - $0.66 per share                                   (1,991)                                (1,991)
                                                                 --------                              ---------

BALANCE - December 31, 2004                              -         25,331               90                42,981

Comprehensive income (Note 1):

  Net income                                                        4,005                                  4,005

  Change in unrealized gain on securities
   available for sale                                                                 (903)                 (903)
                                                                                                       ---------

    Total comprehensive income                                                                             3,102

Stock dividend (5%) (Note 10)                                      (2,846)                                     -
Cash dividends - $0.70 per share                                   (2,133)                                (2,133)
Establish unearned ESOP benefit (Note 8)                                                                    (770)
Purchase of common stock by trust (Note 8)                                                                  (230)
Deferred compensation (Note 8)                         230                                                   230
                                                     -----       --------         --------             ---------
BALANCE - December 31, 2005                          $ 230       $ 24,357         $   (813)            $  43,180
                                                     =====       ========         ========             =========
</TABLE>

Book value per share is $14.25, $14.19, and $13.54 at December 31, 2005, 2004,
and 2003, respectively.

See Notes to Consolidated Financial Statements.

                                       4
<PAGE>

PSB GROUP, INC.

                                            CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                  (000s OMITTED)

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31
                                                                               --------------------------------
                                                                                 2005        2004        2003
                                                                               --------    --------    --------
<S>                                                                            <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                                   $  4,005    $  4,218    $  4,213
  Adjustments to reconcile net income to net cash from operating activities:
    Depreciation and amortization                                                 1,320       1,238       1,136
    Provision for loan loss                                                       1,554       1,200           -
    Accretion and amortization of securities                                        358         116         802
    Deferred income taxes                                                           101           -          75
    (Gain) loss on sale of available-for-sale securities                             16          (9)       (163)
    Origination and purchase of loans held for sale                             (75,474)    (67,721)    (70,357)
    Sale of loans held for sale                                                  71,627      65,960      73,356
    (Increase) decrease in accrued interest receivable                             (262)       (619)        536
    (Increase) decrease in other assets                                            (579)        442        (776)
    Increase (decrease) in accrued interest payable and other liabilities          (822)        137         (34)
                                                                               --------    --------    --------

        Net cash provided by operating activities                                 1,844       4,962       8,788

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of securities available for sale                                     (50,011)    (73,555)    (15,558)
  Proceeds from maturities of securities available for sale                      25,104      29,107      41,705
  Proceeds from sale of securities available for sale                            20,644         446      12,228
  Net increase in loans                                                         (27,697)    (14,105)    (41,405)
  Capital expenditures                                                           (3,479)     (2,643)       (956)
  Proceeds from sale of fixed assets                                                  -           -          34
                                                                               --------    --------    --------

        Net cash used in investing activities                                   (35,439)    (60,750)     (3,952)

  CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in time deposits                                                  18,304       3,854       1,141
  Net increase (decrease) in other deposits                                      (4,778)     56,290       9,067
  Net increase (decrease) in short-term borrowings                               20,440      (2,420)     (6,790)
  Purchase of common stock to be held in trust                                     (230)          -      (6,134)
  Cash dividends                                                                 (2,133)     (1,991)     (1,970)
                                                                               --------    --------    --------
        Net cash provided by (used in) financing activities                      31,603      55,733      (4,686)
                                                                               --------    --------    --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             (1,992)        (55)        150

CASH AND CASH EQUIVALENTS - Beginning of year                                    14,253      14,308      14,158
                                                                               --------    --------    --------
CASH AND CASH EQUIVALENTS - End of year                                        $ 12,261    $ 14,253    $ 14,308
                                                                               ========    ========    ========
SUPPLEMENTAL INFORMATION - Cash paid for
  Interest                                                                     $  9,322    $  5,809    $  5,297
  Income taxes                                                                    2,640       1,190       1,393
</TABLE>

See Notes to Consolidated Financial Statements.

                                       5
<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION AND CONSOLIDATION - The consolidated financial
      statements include the accounts of PSB Group, Inc. (the "Corporation") and
      its wholly owned subsidiaries, Peoples State Bank, Inc. (the "Bank") and
      PSB Capital, Inc. (Capital). PSB Title Insurance Agency, Inc. (PSB) and
      Universal Mortgage Company (UMC) are wholly owned subsidiaries of Peoples
      State Bank, Inc. All significant intercompany transactions are eliminated
      in consolidation.

      PSB Group, Inc. was formed on February 28, 2003 as a bank holding company
      for the purpose of owning Peoples State Bank, Inc. pursuant to a plan of
      reorganization adopted by the Bank and its stockholders. Pursuant to the
      reorganization, each share of Peoples State Bank, Inc. stock held by
      existing stockholders of the Bank was exchanged for three shares of common
      stock of PSB Group, Inc. The reorganization had no consolidated financial
      statement impact. Share amounts for all prior periods presented have been
      restated to reflect the reorganization.

      USE OF ESTIMATES - The accounting and reporting policies of PSB Group,
      Inc. conform to accounting principles generally accepted in the United
      States of America. Management is required to make significant estimates
      (such as the allowance for possible loan losses, deferred taxes,
      foreclosed assets, valuation of intangible assets, and goodwill) and
      assumptions that affect the amounts reported in the consolidated financial
      statements and accompanying notes. Actual results could differ from these
      estimates and assumptions.

      NATURE OF OPERATIONS - The Corporation provides full-service banking
      through 12 branch offices and eight loan origination offices to the
      Michigan communities of Wayne, Oakland, Macomb, and Genesee counties.

      SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK - Most of the
      Corporation's activities are with customers located within Michigan. Note
      3 discusses the types of securities in which the Corporation invests. Note
      4 discusses the types of lending in which the Corporation engages. The
      Corporation does not have any significant concentrations to any one
      customer, but does have a significant concentration of lending to
      non-residential commercial real estate entities.

      CASH AND CASH EQUIVALENTS - For purposes of the consolidated statement of
      cash flows, cash and cash equivalents include cash and balances due from
      banks, federal funds sold, and securities purchased under agreements to
      resell, all of which had original maturities of 90 days or less.

                                       6
<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      SECURITIES - Debt securities that management has the positive intent and
      the ability to hold to maturity are classified as "held to maturity" and
      recorded at amortized cost. Securities not classified as held to maturity
      or trading, including equity securities with readily determinable fair
      values, are classified as "available for sale" and are recorded at fair
      value, with unrealized gains and losses, net of related deferred income
      taxes, excluded from earnings and reported in other comprehensive income.

      Purchase premiums and discounts are recognized in interest income using
      the interest method over the terms of the securities. Declines in the fair
      values of held-to-maturity and available-for-sale securities below their
      cost that are deemed to be other than temporary are reflected in earnings
      as realized losses. Gains and losses on the sale of securities are
      recorded on the trade date and are determined using the specific
      identification method.

      LOANS - The Corporation grants mortgage, commercial, and consumer loans to
      customers. Loans are reported at their outstanding unpaid principal
      balances, adjusted for charge offs, the allowance for loan losses, and any
      deferred fees or costs on originated loans. Interest income is accrued on
      the unpaid principal balance. Loan origination fees, net of certain direct
      origination costs, are recognized as an adjustment of the related loan
      yield using the interest method.

      The accrual of interest on loans is discontinued at the time the loan is
      90 days delinquent unless the credit is well-secured and in the process of
      collection. In all cases, loans are placed on nonaccrual or charged off at
      an earlier date if principal or interest is considered doubtful.

      All interest accrued but not collected for loans that are placed on
      nonaccrual or charged off is reversed against interest income. The
      interest on these loans is accounted for on the cash basis or cost
      recovery method, until qualifying for return to accrual. Loans are
      returned to accrual status when all the principal and interest amounts
      contractually due are brought current and future payments are reasonably
      assured.

      LOANS HELD FOR SALE - Loans originated and intended for sale in the
      secondary market are carried at the lower of cost or estimated fair value
      in the aggregate. Net unrealized losses, if any, are recognized in a
      valuation allowance by charges to income.

                                       7
<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses is established
      as losses are estimated to have occurred through a provision for loan
      losses charged to earnings. Loan losses are charged against the allowance
      when management believes the uncollectibility of a loan balance is
      confirmed. Subsequent recoveries, if any, are credited to the allowance.

      The allowance for loan losses is evaluated on a regular basis by
      management and is based on management's periodic review of the
      collectibility of the loans in light of historical experience, the nature
      and volume of the loan portfolio, adverse situations that may affect the
      borrower's ability to repay, estimated value of any underlying collateral,
      and prevailing economic conditions. This evaluation is inherently
      subjective as it requires estimates that are susceptible to significant
      revision as more information becomes available.

      The allowance consists of specific, general, and unallocated components.
      The specific components relate to loans that are classified as either
      doubtful, substandard, or special mention. For such loans that are also
      classified as impaired, an allowance is established when the discounted
      cash flows (or collateral value or observable market price) of the
      impaired loan is lower than the carrying value of that loan. The general
      component covers nonclassified loans and is based on historical loss
      experience adjusted for qualitative factors. An unallocated component is
      maintained to cover uncertainties that could affect management's estimate
      of probable losses. The unallocated component of the allowance reflects
      the margin of imprecision inherent in the underlying assumptions used in
      the methodologies for estimating specific and general losses in the
      portfolio.

      A loan is considered impaired when, based on current information and
      events, it is probable that the Corporation will be unable to collect the
      scheduled payments of principal and interest when due according to the
      contractual terms of the loan agreement. Factors considered by management
      in determining impairment include payment status, collateral value, and
      the probability of collecting scheduled principal and interest payments
      when due. Loans that experience insignificant payment delays and payment
      shortfalls generally are not classified as impaired. Management determines
      the significance of payment delays and payment shortfalls on a
      case-by-case basis, taking into consideration all of the circumstances
      surrounding the loan and the borrower, including length of the delay, the
      reasons for the delay, the borrower's prior payment record, and the amount
      of the shortfall in relation to the principal and interest owed.

                                       8
<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Impairment is measured on a loan-by-loan basis for commercial and
      construction loans by either the present value of expected future cash
      flows discounted at the loan's effective interest rate, the loan's
      obtainable market price, or the fair value of the collateral if the loan
      is collateral dependent.

      Large groups of homogenous loans are collectively evaluated for
      impairment. Accordingly, the Corporation does not separately identify
      individual consumer and residential loans for impairment disclosures.

      OFF-BALANCE-SHEET INSTRUMENTS - In the ordinary course of business, the
      Corporation has entered into commitments to extend credit, including
      commitments under credit card arrangements, commercial letters of credit,
      and standby letters of credit.

      FORECLOSED ASSETS - Assets acquired through, or in lieu of, loan
      foreclosure are held for sale and are initially recorded at fair value at
      the date of the foreclosure, establishing a new cost basis. Subsequent to
      foreclosure, valuations are periodically performed by management and the
      assets are carried at the lower of carrying amount or fair value less cost
      to sell. Revenue and expenses from operations and changes in the valuation
      allowance are included in net expenses from foreclosed assets.

      BANK PREMISES AND EQUIPMENT - Land is carried at cost. Premises and
      equipment are stated at cost, less accumulated depreciation and
      amortization. Depreciation, computed on the straight-line method, is
      charged to operations over the estimated useful lives of the properties.
      Leasehold improvements are amortized over the terms of their respective
      leases or the estimated useful lives of the improvements, whichever is
      shorter.

      INCOME TAXES - Deferred income tax assets and liabilities are determined
      using the liability (or balance sheet) method. Under this method, the net
      deferred tax asset or liability is determined based on the tax effects of
      the various temporary differences between the book and tax bases of the
      various balance sheet assets and liabilities and gives current recognition
      to changes in tax rates and laws.

                                       9
<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      STOCK COMPENSATION PLANS - The Corporation applies intrinsic value method
      of accounting under the provisions of APB Opinion No. 25, "Accounting for
      Stock-Based Compensation," for all employee stock opinion grants.
      Disclosure of pro forma net income and earnings per share amounts as if
      the fair-value based method has been applied in measuring compensation
      costs is presented in the following table for the years ended December 31
      (000s omitted, except per share data):

<TABLE>
<CAPTION>
                                                     2005     2004     2003
                                                    -------  -------  -------
<S>                                                 <C>      <C>      <C>
As reported - Net income available to common
  shareholders                                      $ 4,005  $ 4,218  $ 4,213

Less stock-based compensation expense
  determined under fair value method - Net of tax         5        -        -
                                                    -------  -------  -------

     Pro forma net income                           $ 4,000  $ 4,218  $ 4,213
                                                    =======  =======  =======
As reported earnings per share                      $  1.32  $  1.39  $  1.29
Proforma earnings per share                         $  1.32  $  1.39  $  1.29
As reported earnings per diluted share              $  1.32  $  1.39  $  1.29
Pro forma earnings per diluted share                $  1.32  $  1.39  $  1.29
</TABLE>

      Compensation expense in the pro forma disclosures is not indicative of
      future amounts, as options vest over several years and additional grants
      are generally made each year.

      The weighted average fair value of options granted was $1.59 for December
      31, 2005. The fair value of each option grant is estimated on the date of
      grant using the Black-Scholes option-pricing model with the following
      assumptions used for the grants in 2005:

<TABLE>
<CAPTION>
                                                     2005
                                                    -------
<S>                                                 <C>
Dividend yield                                        3.50%
Expected average life (years)                         7.00
Volatility                                           16.21%
Risk-free interest rate                               4.12%
</TABLE>

                                       10
<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            EARNINGS PER COMMON SHARE - Basic earnings per share represents
            income available to common stockholders divided by the
            weighted-average number of common shares outstanding during the
            period. Diluted earnings per share reflects additional common shares
            that would have been outstanding if dilutive potential common shares
            had been issued, as well as any adjustment to income that would
            result from the assumed issuance. Potential common shares that may
            be issued by the Corporation relate solely to outstanding stock
            options, and are determined using the treasury stock method. As of
            December 31, 2005, the outstanding stock options would have an
            anti-dilutive effect and therefore have not been included in the
            calculation of diluted earnings per share.

            EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) -- Compensation expense is
            recognized as ESOP shares are committed to be released. Allocated
            and committed to be released ESOP shares are considered outstanding
            for earnings per share calculation based on debt service payments.
            Other ESOP shares are excluded from earnings per share calculation.
            Dividends declared on allocated ESOP shares are charged to retained
            earnings. Dividends declared on unallocated ESOP shares are used to
            satisfy debt service. The value of unearned shares to be allocated
            to ESOP participants for future services not yet performed is
            reflected as a reduction of stockholders' equity.

            COMPREHENSIVE INCOME - Accounting principles generally require that
            revenue, expenses, gains, and losses be included in net income.
            Certain changes in assets and liabilities, however, such as
            unrealized gains and losses on available-for-sale securities, are
            reported as a separate component of the equity section of the
            balance sheet. Such items, along with net income, are components of
            comprehensive income.

            The components of accumulated other comprehensive income and related
            tax effects are as follows (000s omitted):

<TABLE>
<CAPTION>

                                           2005         2004         2003
                                         --------      -------      -------
<S>                                      <C>           <C>          <C>
Unrealized holding gains(losses) on
  available-for-sale securities          $(1,232)      $   137      $   526
Tax effect                                  (419)           47          179
                                         -------       -------      -------
Accumulated other comprehensive
  income                                 $  (813)      $    90      $   347
                                         =======       =======      =======
</TABLE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            DERIVATIVE FINANCIAL INSTRUMENTS - In April 2003, the FASB issued
            SFAS No. 149 (SFAS 149), Amendment of Statement 133 on Derivative
            Instruments and Hedging Activities. This statement amends and
            clarifies financial accounting and reporting for derivative

                                       11

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

            instruments, including certain embedded derivatives, and for hedging
            activities under SFAS 133. SFAS 149, as with SFAS 133, requires that
            all derivative instruments be recorded on the balance sheet at their
            fair value. Changes in the fair value of derivatives are recorded
            each period in current earnings or other comprehensive income,
            depending on whether a derivative is designated as part of a hedge
            transaction and, if it is, the type of hedge transaction. SFAS 149
            is effective for contracts entered into or modified after June 30,
            2003, and for hedging relationships designated after June 30, 2003.
            Adoption of this standard did not have a material effect on the
            Corporation's consolidated financial statements.

            GOODWILL - Goodwill results from business acquisitions and
            represents the excess of the purchase price over the fair value of
            acquired tangible assets and liabilities and identifiable intangible
            assets. Goodwill is not amortized but it is assessed at least
            annually for impairment, and any such impairment will be recognized
            in the period identified. Goodwill totaling approximately $358,000
            was recorded during the year ended December 31, 2005 bringing the
            total to $4,458,000.

            STOCK-BASED COMPENSATION - In December 2004, the Financial
            Accounting Standards Board ("FASB") issued SFAS No. 123(R),
            Accounting for Stock-Based Compensation ("SFAS 123R"). SFAS 123R
            requires all share-based payments to employees, including grants of
            employee stock options, to be recognized as expense in the income
            statement based on their fair values. Prior to SFAS 123R, only
            certain pro forma disclosures of fair value were required. The
            amount of compensation is measured at the fair value of the options
            when granted, and this cost is expensed over the required service
            period, which is normally the vesting period of the options. SFAS
            123R will apply to awards granted or modified after January 1, 2006.
            Compensation cost will also be recorded for prior option grants that
            vest after the date of adoption. The future effect of the adoption
            of the new accounting principle on results of operations will depend
            on the level of future option grants, the vesting period for those
            grants, and the fair value of the options granted at such future
            date. Existing options that are scheduled to vest after the adoption
            date are expected to result in additional compensation expense of
            approximately $17,000 in 2006. The total compensation expense
            resulting from options issued in prior years that will be recognized
            over the future vesting period is approximately $43,000.

                                       12

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 2 - RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS

            The Corporation is required to maintain average balances on hand or
            with the Federal Reserve Bank. At December 31, 2005 and 2004, these
            reserve balances amounted to $2,986,000 and $3,433,000,
            respectively.

NOTE 3 - SECURITIES

            The amortized cost and estimated market value of securities are as
            follows (000s omitted):

<TABLE>
<CAPTION>

                                                                                       2005
                                                           -------------------------------------------------------------
                                                                               Gross            Gross         Estimated
                                                           Amortized        Unrealized       Unrealized         Market
                                                              Cost             Gains           Losses           Value
                                                           ----------       ----------       ----------       ----------
<S>                                                        <C>              <C>              <C>              <C>
Available-for-sale securities:
    U.S. Treasury securities and obligations of U.S.
      government corporations and agencies                 $  60,428        $        3       $  (1,186)       $  59,245
    Obligations of state and political
       subdivisions                                           31,714                96            (130)          31,680
    Corporate debt securities                                  1,000                 -             (15)             985
    Other                                                      1,735                 -               -            1,735
                                                           ---------        ----------       ---------        ---------

            Total available-for-sale securities            $  94,877        $       99       $  (1,331)       $  93,645
                                                           =========        ==========       =========        =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                       2004
                                                           -------------------------------------------------------------
                                                                               Gross            Gross         Estimated
                                                           Amortized        Unrealized       Unrealized         Market
                                                              Cost             Gains           Losses           Value
                                                           ----------       ----------       ----------       ----------
<S>                                                        <C>              <C>              <C>              <C>
Available-for-sale securities:
    U.S. Treasury securities and obligations of U.S.
       government corporations and agencies                $   68,619       $       54       $   (185)        $  68,488
    Obligations of state and political
       subdivisions                                            19,670              261             (1)           19,930
    Corporate debt securities                                   1,000                8              -             1,008
    Other                                                       1,699                -              -             1,699
                                                           ----------       ----------       --------         ---------
            Total available-for-sale securities            $   90,988       $      323       $   (186)        $  91,125
                                                           ==========       ==========       ========         =========
</TABLE>

                                       13

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 3 - SECURITIES (CONTINUED)

            The amortized cost and estimated market value of securities at
            December 31, 2005, by contractual maturity, are shown below.
            Expected maturities will differ from contractual maturities because
            issuers may have the right to call or prepay obligations with or
            without call or prepayment penalties (000s omitted):

<TABLE>
<CAPTION>
                                                   Available for Sale
                                                ------------------------
                                                Amortized        Market
                                                   Cost           Value
                                                ---------        -------
<S>                                             <C>              <C>
Due in one year or less                          $27,025         $26,790
Due in one through five years                     23,846          23,325
Due after five years through ten years            15,784          15,744
Due after ten years                                9,485           9,445
                                                 -------         -------
          Total                                   76,140          75,304

Federal agency pools                              17,002          16,606
Other                                              1,735           1,735
                                                 -------         -------
          Total                                  $94,877         $93,645
                                                 =======         =======
</TABLE>

Proceeds from the sale of available-for-sale securities during 2005, 2004, and
2003 were $20,644,000, $446,000, and $12,228,000, respectively.

                                       14

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 3 - SECURITIES (CONTINUED)

            Information pertaining to securities with gross unrealized losses at
            December 31, 2005 and 2004, aggregated by investment category and
            length of time that individual securities have been in a continuous
            loss position, follows (000s omitted):

<TABLE>
<CAPTION>
                                                                                2005
                                                        -------------------------------------------------------
                                                         Less Than Twelve Months         Over Twelve Months
                                                        -------------------------     -------------------------
                                                           Gross                        Gross
                                                        Unrealized                    Unrealized
                                                          Losses       Fair Value       Losses       Fair Value
                                                        ----------     ----------     ----------     ----------
<S>                                                     <C>            <C>            <C>            <C>
Available-for-sale securities:
    U.S. Treasury securities and obligations
      of U.S. government corporations and agencies       $    446       $ 23,032        $  740        $ 35,713

    Obligations of state and political subdivisions           130         14,379             -               -

    Corporate debt securities                                  15            985             -               -

    Other                                                       -              -             -               -
                                                         --------       --------        ------        --------
                Total available-for-sale securities      $    591       $ 38,396        $  740        $ 35,713
                                                         ========       ========        ======        ========
</TABLE>

<TABLE>
<CAPTION>

                                                                                2004
                                                        -------------------------------------------------------
                                                         Less Than Twelve Months         Over Twelve Months
                                                        -------------------------     -------------------------
                                                           Gross                        Gross
                                                        Unrealized                    Unrealized
                                                          Losses       Fair Value       Losses       Fair Value
                                                        ----------     ----------     ----------     ----------
<S>                                                     <C>            <C>            <C>            <C>
Available-for-sale securities:
    U.S. Treasury securities and obligations
      of U.S. government corporations and agencies       $    185       $ 52,301        $    -        $      -

    Obligations of state and political subdivisions             1          1,288             -               -

    Corporate debt securities                                   -              -             -               -

    Other                                                       -              -             -               -
                                                         --------       --------        ------        --------
                Total available-for-sale securities      $    186       $ 53,589        $    -        $      -
                                                         ========       ========        ======        ========
</TABLE>

NOTE 3 - SECURITIES (CONTINUED)

                                       15

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

            At December 31, 2005 and 2004, securities having a carrying value of
            $2,500,000 and $2,067,913 (market value of $2,418,750 and
            $2,058,125), respectively, were pledged to secure public deposits,
            repurchase agreements, and for other purposes required by law.

NOTE 4 - LOANS

            A summary of the balances of loans at December 31, 2005 and 2004 is
            as follows (000s omitted):

<TABLE>
<CAPTION>
                                             2005                2004
                                          ----------          ----------
<S>                                       <C>                 <C>
Mortgage loans on real estate:
    Residential 1-4 family                $  88,733           $  94,898
    Commercial                              170,445             141,845
    Construction                             26,611              17,573
    Second mortgages                          8,920               7,666
    Equity lines of credit                   12,380              11,011
                                          ---------           ---------
            Total mortgage loans            307,089             272,993
Commercial loans                             46,409              48,046
Consumer installment loans                   12,213              18,312
                                          ---------           ---------
            Subtotal                        365,711             339,351
Less allowances for loan losses              (3,670)             (3,394)
Net deferred loan fees                         (618)               (677)
                                          ---------           ---------
            Loans - Net                   $ 361,423           $ 335,280
                                          =========           =========
</TABLE>

                                       16

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 4 - LOANS (CONTINUED)

            An analysis of the allowance for loan losses is as follows (000s
            omitted):

<TABLE>
<CAPTION>

                                          2005            2004              2003
                                        --------         --------          --------
<S>                                     <C>              <C>               <C>
Balance - Beginning of year             $ 3,394          $ 3,887           $ 4,632
Loan loss provision                       1,554            1,200                 -
Loan losses                               1,880)          (2,318)           (1,553)
Loan loss recoveries                        602              625               808
                                        -------          -------           -------
Balance - End of year                   $ 3,670          $ 3,394           $ 3,887
                                        =======          =======           =======
As a percentage of total loans             1.01             1.00              1.19
                                        =======          =======           =======
</TABLE>

            The following is a summary of information pertaining to impaired
            loans (000s omitted):

<TABLE>
<CAPTION>

                                                                  2005            2004
                                                                 ------          ------
<S>                                                              <C>             <C>
Impaired loans without a valuation allowance                     $  449          $  901

Impaired loans with a valuation allowance                         3,953           1,396
                                                                 ------          ------

            Total impaired loans                                 $4,402          $2,297
                                                                 ======          ======

Valuation allowance related to impaired loans                    $  556          $  632
                                                                 ======          ======

Total non-accrual loans                                          $1,651          $2,297
                                                                 ======          ======

Total loans past due 90 days or more and still accruing          $2,044          $  376
                                                                 ======          ======
</TABLE>

<TABLE>
<CAPTION>

                                                                       2005            2004            2003
                                                                      ------          ------          ------
<S>                                                                   <C>             <C>             <C>
Average investment in impaired loans                                  $1,945          $1,363          $1,300
                                                                      ======          ======          ======
Interest income recognized on impaired loans                          $  218          $   11          $   16
                                                                      ======          ======          ======
Interest income recognized on a cash basis on impaired loans          $  201          $   13          $   15
                                                                      ======          ======          ======
</TABLE>

            No additional funds are committed to be advanced in connection with
            impaired loans.

                                       17

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 5 - BANK PREMISES AND EQUIPMENT

            Bank premises and equipment at December 31, 2005 and 2004 consisted
            of the following (000s omitted):
<TABLE>
<CAPTION>
                                                          2005             2004
                                                        -------          -------
<S>                                                     <C>              <C>
Land                                                    $ 2,323          $ 2,323
Buildings and improvements                               10,819            8,265
Construction in process                                     105            1,307
Furniture, fixtures, and equipment                       10,679            9,343
                                                        -------          -------

            Total bank premises and equipment            23,926           21,238

Less accumulated depreciation and amortization           11,263           10,620
                                                        -------          -------

            Net carrying amount                         $12,663          $10,618
                                                        =======          =======
</TABLE>

            Depreciation expense totaled $1,320,000, $1,238,000, and $1,136,000
            during 2005, 2004, and 2003, respectively.

            Pursuant to the terms of non-cancelable lease agreements in effect
            at December 31, 2005 pertaining to banking premises and equipment,
            future minimum rent commitments under various operating leases are
            as follows (000s omitted):
<TABLE>
<CAPTION>
<S>                               <C>
   2006                           $  657
   2007                              315
   2008                              265
   2009                              265
   2010                              265
Thereafter                           923
                                  ------
            Total                 $2,690
                                  ======
</TABLE>

            Total rent expense for the years ended December 31, 2005, 2004, and
            2003 amounted to $556,000, $450,000, and $348,000, respectively.

                                       18

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 6 - DEPOSITS

            Interest-bearing deposits at December 31, 2005 and 2004 consisted of
            the following (000s omitted):

<TABLE>
<CAPTION>

                                                           2005              2004
                                                         --------          --------
<S>                                                      <C>               <C>
NOW accounts                                             $ 33,143          $ 34,868
Savings                                                   145,753           122,947
Money market demand                                        34,073            56,898
Time:
    $100,000 and over                                      66,918            63,859
    Under $100,000                                         90,326            75,081
                                                         --------          --------

                Total interest-bearing deposits          $370,213          $353,653
                                                         ========          ========
</TABLE>

            The remaining maturities of certificates of deposit outstanding at
            December 31, 2005 are as follows (000s omitted):

<TABLE>
<CAPTION>

                                          Under           $100,000
                                        $100,000          and Over
                                        --------          --------
<S>                                     <C>               <C>
2006                                    $ 51,850          $ 43,072
2007                                      26,302            16,599
2008                                       4,729             2,964
2009                                       2,678             2,753
2010                                       2,938               135
Thereafter                                 1,829             1,395
                                        --------          --------

            Total                       $ 90,326          $ 66,918
                                        ========          ========
</TABLE>

                                       19

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 7 - BORROWING ARRANGEMENTS

            The Corporation has an agreement with the Federal Home Loan Bank of
            Indianapolis under which the Corporation may obtain advances up to
            an aggregate amount of $26,000,000. The interest rates on
            outstanding advances as of December 31, 2005 ranged from 4.38% to
            4.59%. The Corporation has provided a blanket pledge of all of the
            Corporation's residential mortgage loans as collateral on advances
            under this agreement. The Corporation also borrows Federal Funds on
            an overnight basis to meet short-term liquidity needs. Short-term
            borrowings outstanding as of December 31, 2005 are as follows (000s
            omitted):
<TABLE>
<CAPTION>
<S>                               <C>
Short-term FHLB advances          $12,500
Federal Funds Purchased             7,940
                                  -------
    Total                         $20,440
</TABLE>

            In addition to the short-term advances from the Federal Home Loan
            Bank of Indianapolis under the agreement described above, the
            Corporation also has a long-term advance outstanding. This advance
            was taken in 2001 and matures on January 22, 2011 with principal due
            at that time. Interest-only payments are due monthly at a rate of
            4.43% as of December 31, 2005.

NOTE 8 - BENEFIT PLANS

            The Corporation has a defined contribution 401(k), employee
            profit-sharing, and Employee Stock Ownership (ESOP) plan covering
            substantially all employees. Employer matching contributions are
            discretionary. The Corporation typically matches 100 percent of the
            first 3 percent of employee contributions and 50 percent of the next
            3 percent of employee contributions to the 401(k) plan. Employer
            401(k) matching contributions and profit-sharing contributions are
            at the discretion of the Corporation's Board of Directors. Employer
            401(k) matching contributions to the plan were approximately
            $217,000, $224,000, and $245,000 during 2005, 2004, and 2003,
            respectively. Employer profit-sharing contributions made to the ESOP
            were approximately $100,000, $100,000, and $181,000 during 2005,
            2004, and 2003, respectively.

                                       20

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 8 - BENEFIT PLANS (CONTINUED)

            The ESOP has entered into a 6 year note payable with an outside
            financial institution. The terms of the note include a variable rate
            payable, due in annual installments to 2011, floating at LIBOR plus
            1.75 which was 6.20% at December 31, 2005. The Corporation has
            guaranteed the loan, with the ESOP stock pledged as collateral.
            Since ESOP debt is guaranteed by the Corporation, it is reflected on
            the consolidated balance sheet as a liability with a related amount
            shown as a reduction in stockholders' equity.

            As of December 31, 2005, scheduled maturities of the ESOP note
            payable are as follows (000s omitted):

<TABLE>
<CAPTION>
<S>                                     <C>
2006                                    $ 26
2007                                     154
2008                                     154
2009                                     154
Subsequent years                         282
                                        ----
            Total                       $770
                                        ====
</TABLE>

            The shares held by the ESOP are held in a suspense account for
            allocation amongst the participants as the loan is repaid. Shares
            held by the ESOP include the following at December 31, 2005 and had
            a fair value of approximately $1,397,000:

<TABLE>
<CAPTION>
<S>                                <C>
Allocated                          41,318
Committed to be allocated               -
Unallocated                        38,501
                                   ------
            Total                  79,819
</TABLE>

            The Corporation also has entered into deferred compensation
            arrangements with certain of its directors. Amounts deferred under
            the arrangements are invested in Corporation common stock and are
            maintained in a rabbi trust. The Corporation has 11,499 shares of
            common stock reserved for the various plans with a related
            obligation of $230,000 established within stockholders' equity as of
            December 31, 2005. The arrangements are accounted for in accordance
            with EITF Issue No. 97-14, Accounting for Deferred Compensation
            Arrangements Where Amounts Earned Are Held in a Rabbi Trust and
            Invested. Assets of the rabbi trust are consolidated with the
            Corporation, and the value of the Corporation's stock held in the
            rabbi trust is classified in stockholders' equity and generally
            accounted for in a manner similar to treasury stock.

NOTE 8 - BENEFIT PLANS (CONTINUED)

            The Corporation recognizes the original amount of deferred
            compensation as the basis for recognition in the rabbi trust.
            Changes in fair value owed to directors are not

                                       21

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

            recognized as the arrangements do not permit diversification and
            must be settled by the delivery of a fixed number of shares of the
            Corporation's common stock. Shares purchased by the rabbi trust
            totaled 11,499 for the year ended December 31, 2005. The shares were
            purchased at a price of $20 per share. There were no transactions
            involving the rabbi trust prior to the year ended December 31, 2005.

NOTE 9 - FEDERAL INCOME TAXES

            The provision for federal income taxes reflected in the consolidated
            statement of operations for the years ended December 31, 2005, 2004,
            and 2003 consisted of the following (000s omitted):

<TABLE>
<CAPTION>

                                               2005            2004            2003
                                              ------          ------          ------
<S>                                           <C>             <C>             <C>
Current expense                               $1,406          $1,563          $1,382
Deferred expense                                 101               -              75
                                              ------          ------          ------
            Total income tax expense          $1,507          $1,563          $1,457
                                              ======          ======          ======
</TABLE>

            A reconciliation of the difference between total federal income tax
            expense and the amount computed by applying the statutory tax rates
            to income before income taxes follows:

<TABLE>
<CAPTION>
                                               Percent of Pretax Income
                                          ----------------------------------
                                           2005          2004          2003
                                          ------        ------        ------
<S>                                        <C>           <C>           <C>
Amount computed at statutory rates           34            34            34
Decrease resulting from:
    Tax-exempt municipal interest            (5)           (9)           (5)
    Other                                    (2)            2            (3)
                                           ----          ----          ----
            Reported tax expense             27            27            26
                                           ====          ====          ====
</TABLE>

                                       22

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 9 - FEDERAL INCOME TAXES (CONTINUED)

            The details of the net deferred tax asset (liability) at December
            31, 2005 and 2004 are as follows (000s omitted):

<TABLE>
<CAPTION>

                                                         2005            2004
                                                        ------          ------
<S>                                                     <C>             <C>
Deferred tax assets:
    Provision for loan losses                           $  737          $  768
    Net deferred loan fees                                 204             225
    Accrued employee benefits                               46              42
    Deferred compensation                                  196             164
    Unrealized losses on investment securities
        available for sale                                 419               -
    Other                                                   35               6
                                                        ------          ------

                Total deferred tax assets                1,637           1,205

Deferred tax liabilities:
    Property and equipment                                 674             741
    Original issue discount                                351             199
    Unrealized gains on investment securities
        available for sale                                   -              47
    Other                                                  160             131
                                                        ------          ------

                Total deferred tax liabilities           1,185           1,118
                                                        ------          ------

                Net deferred tax asset                  $  452          $   87
                                                        ======          ======
</TABLE>

                                       23

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 10 - STOCK TRANSACTIONS

            On October 31, 2003, the Corporation repurchased and retired 263,118
            shares of common stock for $6,134,000 from a director of the
            Corporation. On April 21, 2005, the Board approved a 5 percent stock
            dividend to holders of record of common stock of the Corporation on
            June 1, 2005. Earnings per share and cash dividends per share for
            all years presented have been adjusted in the accompanying
            consolidated financial statements to reflect the stock dividend.

NOTE 11 - STOCK-BASED COMPENSATION

            During 2004, the Corporation adopted the PSB Group, Inc. 2004 Stock
            Compensation Plan and has reserved 450,000 shares of common stock
            for issuance under the plan. Vesting is to be specified at the time
            of grant and options will expire 10 years after the grant date. The
            exercise price of each option granted will not be below the fair
            market value of the Corporation's common stock on the date of the
            grant.

            A summary of the Corporation's option activity for the year ended
            December 31, 2005 is as follows:

<TABLE>
<CAPTION>
                                                          2005
                                                 ------------------------
                                                                 Weighted
                                                 Number          Average
                                                   of            Exercise
                                                 Shares           Price
                                                 ------          --------
<S>                                              <C>             <C>
Options outstanding - Beginning of year               -           $    -

Options granted                                  31,100            24.42
Options exercised                                     -                -
Options forfeited                                     -                -
                                                 ------

Options outstanding - End of year                31,100           $24.42
                                                 ======

Exercisable at end of year                            -                -
</TABLE>

                                       24

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 11 - STOCK-BASED COMPENSATION (CONTINUED)

            Information pertaining to options outstanding at December 31, 2005
            is as follows:

<TABLE>
<CAPTION>
                                                     Options
                     Options Outstanding           Exercisable
              --------------------------------     -----------
                                   Weighted
                                   Average
Exercise         Number           Remaining           Number
 Price        Outstanding     Contractual Life     Outstanding
---------     -----------     ----------------     -----------
<S>           <C>             <C>                  <C>
$   24.42          31,100                  9.5               -
</TABLE>

NOTE 12 - OFF-BALANCE-SHEET ACTIVITIES

            CREDIT-RELATED FINANCIAL INSTRUMENTS - The Corporation is a party to
            credit-related 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, standby letters of credit, and commercial letters of credit.
            Such commitments involve, to varying degrees, elements of credit and
            interest rate risk in excess of the amount recognized in the
            consolidated balance sheet.

            The Corporation's exposure to credit loss is represented by the
            contractual amount of these commitments. The Corporation follows the
            same credit policies in making commitments as it does for
            on-balance-sheet instruments.

            At December 31, 2005 and 2004, the following financial instruments
            were outstanding whose contract amounts represent credit risk (000s
            omitted):

<TABLE>
<CAPTION>
                                                    2005        2004
                                                  --------    --------
<S>                                               <C>         <C>
Commitments to grant loans                        $ 19,389    $ 16,583
Unfunded commitments under lines of credit          47,206      18,538
Commercial and standby letters of credit             3,064       4,801
</TABLE>

                                       25

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 12 - OFF-BALANCE-SHEET ACTIVITIES (CONTINUED)

            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 and may require payment of a fee. The
            commitments for equity lines of credit may expire without being
            drawn upon. Therefore, the total commitment amounts do not
            necessarily represent future cash requirements. The amount of
            collateral obtained, if it is deemed necessary by the Corporation,
            is based on management's credit evaluation of the customer.

            Unfunded commitments under commercial lines of credit, revolving
            credit lines, and overdraft protection agreements are commitments
            for possible future extensions of credit to existing customers.
            These lines of credit are generally collateralized and usually do
            not contain a specified maturity date and may not be drawn upon to
            the total extent to which the Corporation is committed.

            Commercial and standby letters of credit are conditional commitments
            issued by the Corporation to guarantee the performance of a customer
            to a third party. These letters of credit are primarily used to
            support public and private borrowing arrangements. Essentially all
            letters of credit issued have expiration dates within one year.

            Almost all of the standby letters of credit are secured and, in the
            event of nonperformance by the customers, the Corporation has rights
            to the underlying collateral provided including commercial real
            estate, physical plant and property, inventory, receivables, cash,
            and marketable securities.

            COLLATERAL REQUIREMENTS - To reduce credit risk related to the use
            of credit-related financial instruments, the Corporation might deem
            it necessary to obtain collateral. The amount and nature of the
            collateral obtained are based on the Bank's credit evaluation of the
            customer. Collateral held varies, but may include cash, securities,
            accounts receivable, inventory, property, plant, and equipment, and
            real estate.

NOTE 13 - LEGAL CONTINGENCIES

            Various legal claims also arise from time to time in the normal
            course of business which, in the opinion of management, will have no
            material effect on the Corporation's consolidated financial
            statements.

                                       26

<PAGE>

PSB GROUP, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 14 - RESTRICTIONS ON DIVIDENDS, LOANS, AND ADVANCES

            Federal and state banking regulations place certain restrictions on
            dividends paid and loans or advances made by the Bank. The total
            amount of dividends that may be paid at any date is generally
            limited to the retained earnings of the Bank, and loans or advances
            are limited to 10 percent of the Bank's capital stock and surplus on
            a secured basis.

            At December 31, 2005, the Bank's retained earnings available for the
            payment of dividends was $12,972,000. Accordingly, $30,236,000 of
            the Corporation's equity in the net assets of the Bank was
            restricted at December 31, 2005. Funds available for loans or
            advances by the Bank to the Corporation amounted to $4,326,000.

            In addition, dividends paid by the Bank would be prohibited if the
            effect thereof would cause the Bank's capital to be reduced below
            applicable minimum capital requirements.

NOTE 15 - RELATED PARTY TRANSACTIONS

            In the ordinary course of business, the Corporation has granted
            loans to principal officers and directors and their affiliates
            amounting to $1,317,000 at December 31, 2005 and $1,397,000 at
            December 31, 2004. During the year ended December 31, 2005, total
            principal additions were $38,000 and total principal payments were
            $118,000.

            Deposits from related parties held by the Corporation at December
            31, 2005 and 2004 amounted to $1,702,000 and $1,969,000,
            respectively.

NOTE 16 - FAIR VALUE OF FINANCIAL INSTRUMENTS

            The fair value of a financial instrument is the current amount that
            would be exchanged between willing parties, other than in a forced
            liquidation. Fair value is best determined based on quoted market
            prices. However, in many instances, there are no quoted market
            prices for the Corporation's various financial instruments. In cases
            where quoted market prices are not available, fair values are based
            on estimates using present value or other valuation techniques.
            Those techniques are significantly affected by the assumptions used,
            including the discount rate and estimates of future cash flows.
            Accordingly, the fair value estimates may not be realized in an
            immediate settlement of the instrument. SFAS 107 excludes certain
            financial instruments and all nonfinancial instruments from its
            disclosure requirements. Accordingly, the aggregate fair value
            amounts presented may not necessarily represent the underlying fair
            value of the Corporation.

                                       27
<PAGE>
PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 16 - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

            The following methods and assumptions were used by the Corporation
            in estimating fair value disclosures for financial instruments:

            CASH AND CASH EQUIVALENTS - The carrying amounts of cash and
            short-term instruments approximate fair values.

            SECURITIES - Fair values for securities are based on quoted market
            prices.

            LOANS HELD FOR SALE - Fair values for loans held for sale are based
            on commitments on hand from investors or prevailing market prices.

            LOANS RECEIVABLE - For variable-rate loans that reprice frequently
            and with no significant change in credit risk, fair values are based
            on carrying values. Fair values for certain mortgage loans (e.g.,
            one- to four-family residential), credit card loans, and other
            consumer loans are based on quoted market prices of similar loans
            sold in conjunction with securitization transactions, adjusted for
            differences in loan characteristics. Fair values for other loans
            (e.g., commercial real estate and investment property mortgage
            loans, commercial, and industrial loans) are estimated using
            discounted cash flow analyses, using interest rates currently being
            offered for loans with similar terms to borrowers of similar credit
            quality. Fair values for nonperforming loans are estimated using
            discounted cash flow analyses or underlying collateral values, where
            applicable.

            DEPOSIT LIABILITIES - The fair values disclosed for demand deposits
            (e.g., interest and noninterest checking, passbook savings, and
            certain types of money market accounts) are, by definition, equal to
            the amount payable on demand at the reporting date (i.e., their
            carrying amounts). The carrying amounts of variable-rate, fixed-term
            money market accounts and certificates of deposit approximate their
            fair values at the reporting date. Fair values for fixed-rate
            certificates of deposit are estimated using a discounted cash flow
            calculation that applies interest rates currently being offered on
            certificates to a schedule of aggregated expected monthly maturities
            on time deposits.

            LONG-TERM BORROWINGS - The fair values of the Corporation's
            long-term borrowings are estimated using discounted cash flow
            analyses based on the Bank's current incremental borrowing rates for
            similar types of borrowing arrangements.

                                       28

<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 16 - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

            SHORT-TERM BORROWINGS - The carrying amounts of federal funds
            purchased, borrowings under repurchase agreements, and other
            short-term borrowings maturing within 90 days approximate their fair
            values. Fair values of other short-term borrowings are estimated
            using discounted cash flow analyses based on the Corporation's
            current incremental borrowing rates for similar types of borrowing
            arrangements.

            ACCRUED INTEREST - The carrying amounts of accrued interest
            approximate fair value.

            OTHER INSTRUMENTS - The fair values of other financial instruments,
            including loan commitments and unfunded letters of credit, based on
            a discounted cash flow analyses, are not material.

            The estimated fair values and related carrying or notional amounts
            of the Corporation's financial instruments are as follows (000s
            omitted):

<TABLE>
<CAPTION>
                                                2005                      2004
                                       -----------------------    ----------------------
                                       Carrying     Estimated     Carrying    Estimated
                                        Amount      Fair Value     Amount     Fair Value
                                       ---------    ----------    ---------   ----------
<S>                                    <C>          <C>           <C>         <C>
Assets:
       Cash and short-term
           investments                 $  12,261    $   12,261    $  14,253   $  14,253
        Securities                        93,645        93,645       91,125      91,125
        Loans                            361,423       361,140      335,280     334,793
        Loans held for sale                6,235         6,235        2,388       2,388
        Accrued interest receivable        2,406         2,406        2,144       2,144

Liabilities:
       Noninterest-bearing deposits       54,445        54,445       57,479      57,479
       Interest-bearing deposits         370,213       370,030      353,653     354,235
       Short-term borrowings              20,440        20,440            -           -
       Long-term debt                      5,770         5,689        5,000       4,998
       Accrued interest payable              296           296          220         220
</TABLE>


                                       29

<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 17 - REGULATORY MATTERS

            The Corporation (on a consolidated basis) and the Bank are subject
            to various regulatory capital requirements administered by federal
            banking agencies. Failure to meet minimum capital requirements can
            initiate certain mandatory and discretionary actions by regulators
            that could have a direct material effect on the Corporation's and
            the Bank's consolidated financial statements. Under capital adequacy
            guidelines and the regulatory framework for prompt corrective
            action, the Corporation and the Bank must meet specific capital
            guidelines that involve quantitative measures of their assets,
            liabilities, and certain off-balance-sheet items as calculated under
            regulatory accounting practices. The capital amounts and
            classification are also subject to qualitative judgments by the
            regulators about components, risk weightings, and other factors.
            Prompt corrective action provisions are not applicable to bank
            holding companies.

            Quantitative measures established by regulation to ensure capital
            adequacy require the Corporation and the Bank to maintain minimum
            amounts and ratios (set forth in the following table) of total Tier
            I capital (as defined in the regulations) to risk-weighted assets
            (as defined) and Tier I capital (as defined) to average assets (as
            defined). Management believes, as of December 31, 2005 and 2004,
            that the Corporation and the Bank met all capital adequacy
            requirements to which they are subject.

                                       30

<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 17 - REGULATORY MATTERS (CONTINUED)

            As of December 31, 2005, the most recent notification from the
            Bank's primary regulator categorized the Bank as well-capitalized
            under the regulatory framework for prompt corrective action. To be
            categorized as well-capitalized, an institution must maintain
            minimum total risk-based, Tier I risked-based, and Tier I leverage
            ratios as set forth in the following tables. There are no conditions
            or events since the notification that management believes have
            changed the Bank's category. The Corporation's and the Bank's actual
            capital amounts and ratios as of December 31, 2005 and 2004 are also
            presented in the table.

<TABLE>
<CAPTION>
                                                                        For Capital              To Be Well-
                                                       Actual        Adequacy Purposes           capitalized
                                                  --------------   ----------------------   ----------------------
                                                 Amount    Ratio   Amount           Ratio   Amount           Ratio
                                                 -------   -----   -------          -----   -------          -----
<S>                                              <C>       <C>     <C>       <C>    <C>     <C>       <C>    <C>
As of December 31, 2005:
      Total capital
            (to risk-weighted assets)
                   PSB Group, Inc.               $43,001   11.74%  $29,300   > or =   8.0%      N/A   > or =  N/A
                   Peoples State Bank, Inc.      $43,259   11.81%  $29,300   > or =   8.0%  $36,600   > or = 10.0%
      Tier I capital
            (to risk-weighted assets)
                   PSB Group, Inc.               $39,305   10.73%  $14,700   > or =   4.0%      N/A   > or =  N/A
                   Peoples State Bank, Inc.      $39,563   10.80%  $14,700   > or =   4.0%  $22,000   > or =  6.0%
      Tier I capital
            (to average assets)
                   PSB Group, Inc.               $39,305    8.07%  $19,500   > or =   4.0%      N/A   > or =  N/A
                   Peoples State Bank, Inc.      $39,563    8.13%  $19,500   > or =   4.0%  $24,300   > or =  5.0%
As of December 31, 2004:
      Total capital
            (to risk-weighted assets)
                   PSB Group, Inc.               $42,184   12.54%  $26,900   > or =   8.0%      N/A   > or =  N/A
                   Peoples State Bank, Inc.      $41,459   12.33%  $26,900   > or =   8.0%  $33,600   > or = 10.0%
      Tier I capital
            (to risk-weighted assets)
                   PSB Group, Inc.               $38,790   11.54%  $13,500   > or =   4.0%      N/A   > or =  N/A
                   Peoples State Bank, Inc.      $38,065   11.32%  $13,500   > or =   4.0%  $20,200   > or =  6.0%
      Tier I capital
            (to average assets)
                   PSB Group, Inc.               $35,790    8.62%  $18,000   > or =   4.0%      N/A   > or =  N/A
                   Peoples State Bank, Inc.      $38,065    8.46%  $18,000   > or =   4.0%  $22,500   > or =  5.0%
</TABLE>

                                       31

<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 18 - CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY

            The following represents the condensed financial statements of PSB
            Group, Inc. (the "Parent") only. The Parent-only financial
            information should be read in conjunction with the Corporation's
            consolidated financial statements.

            The condensed balance sheet at December 31 is as follows (000s
            omitted):

<TABLE>
<CAPTION>
                                              2005     2004
                                            -------   -------
<S>                                         <C>       <C>
ASSETS
            Cash at subsidiary bank         $   816   $   580
            Investment in subsidiaries       43,258    42,256
            Other                               222       145
                                            -------   -------

                     Total assets           $44,296   $42,981
                                            =======   =======

LIABILITIES
            Borrowings - ESOP               $   770   $     -
            Deferred Compensation               346         -
                                            -------   -------

                     Total liabilities      $ 1,116   $     -

STOCKHOLDERS' EQUITY                        $43,180   $42,981
                                            -------   -------

LIABILITIES AND STOCKHOLDERS' EQUITY        $44,296   $42,981
                                            =======   =======
</TABLE>


                                       32

<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 18 - CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY (CONTINUED)

            The condensed statement of operations for the years ended December
            31, 2005, 2004 and 2003 is as follows (000s omitted):

<TABLE>
<CAPTION>
                                                    2005        2004       2003
                                                   --------   --------   -------
<S>                                                <C>        <C>        <C>
Operating income - dividends from subsidiaries     $  2,300   $  1,050   $ 10,044
Operating expense                                      (230)      (234)      (181)
                                                   --------   --------   --------

    Income - Before income taxes and equity in
       undistributed income of subsidiaries           2,070        816      9,863

Income tax benefit                                       78         80         62
                                                   --------   --------   --------

    Income - Before equity in undistributed
       income of subsidiaries                         2,148        896      9,925

Equity in undistributed (dividends in excess of)
  income of subsidiaries                              1,857      3,322     (5,712)
                                                   --------   --------   --------

       Net income                                  $  4,005   $  4,218   $  4,213
                                                   ========   ========   ========
</TABLE>


                                       33

<PAGE>

PSB GROUP, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                               DECEMBER 31, 2005, 2004, AND 2003

NOTE 18 - CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY (CONTINUED)

            The condensed statement of cash flows for the years ended December
            31, 2005, 2004 and 2003 is as follows (000s omitted):

<TABLE>
<CAPTION>
                                                                  2005      2004     2003
                                                                -------   -------   ------
<S>                                                             <C>       <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
      Net income                                                $ 4,005   $ 4,218   $4,213
      Adjustments to reconcile net income to net cash
         from operating activities:
              Depreciation and amortization                           2         -        -
             (Equity in undistributed) dividends in
                      excess of income of subsidiaries           (1,857)   (3,323)   5,712
              Net change in other assets                            (77)      (78)     (67)
              Net change in other liabilities                       346         -        -
                                                                -------   -------   ------

                    Net cash provided by operating
                       activities                                 2,419       817    9,858

CASH FLOWS FROM INVESTING ACTIVITIES -
      Investment in subsidiaries                                    (50)        -        -

CASH FLOWS FROM FINANCING ACTIVITIES
      Repurchase of common stock                                     --         -   (6,134)
      Cash dividends                                             (2,133)   (1,991)  (1,970)
                                                                -------   -------   ------

                    Net cash used in financing activities        (2,133)   (1,991)  (8,104)
                                                                -------   -------   ------

NET INCREASE (DECREASE) IN CASH AND
       CASH EQUIVALENTS                                             236    (1,174)   1,754

CASH AND CASH EQUIVALENTS - Beginning of year                       580     1,754        -
                                                                -------   -------   ------

CASH AND CASH EQUIVALENTS - End of year                         $   816   $   580   $1,754
                                                                =======   =======   ======
</TABLE>


                                       34

<PAGE>

                                 PSB GROUP, INC.

                       ==================================

                           MANAGEMENT FINANCIAL REPORT

                                DECEMBER 31, 2005

                      PSB Group, Inc. / 2005 Annual Report

                                       35

<PAGE>

TABLE OF CONTENTS

Quarterly Results of Operations ....   37

Selected Financial Information .....   38

Management's Discussion and Analysis   39-50

Market Information .................   51

                INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

      Statements contained in this report which are not historical facts are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. these
statements involve important known and unknown risk, uncertainties and other
factors and can be identified by phrases using "estimate," "anticipate,"
"believe," "project," "expect," "intend," "predict," "potential," "future,"
"may," "should" and similar expressions or words. Such forward-looking
statements are subject to risk and uncertainties, which could cause actual
results to differ materially from those projected. Such risks and uncertainties
include potential changes in interest rates, competitive factors in the
financial services industry, general economic conditions, the effect of new
legislation and other risks detailed in documents filed by the Company with the
Securities and Exchange Commission from time to time.

                      PSB Group, Inc. / 2005 Annual Report

                                       36


<PAGE>

PSB GROUP, INC.

                                                 QUARTERLY RESULTS OF OPERATIONS
                                                                     (UNAUDITED)

      The following table sets forth certain unaudited income and expense and
per share data on a quarterly basis for the three-month periods indicated:

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31, 2005
                                                        -------------------------------------
                                                        1ST QTR   2ND QTR   3RD QTR   4TH QTR
                                                        -------   -------   -------   -------
<S>                                                     <C>       <C>       <C>       <C>
Interest income                                         $ 6,292   $ 6,680   $ 7,106   $ 7,440
Interest expense                                          1,901     2,185     2,488     2,795
                                                        -------   -------   -------   -------

Net interest income                                       4,391     4,495     4,618     4,645
Provision for loan losses                                   404       145       644       361
                                                        -------   -------   -------   -------

Net interest income after
     provision for loan losses                            3,987     4,350     3,974     4,284

Non-interest income                                       1,449     1,612     1,692     1,536
Non-interest expense                                      4,186     4,120     4,200     4,866
                                                        -------   -------   -------   -------

Income before income taxes                                1,250     1,842     1,466       954
Income Tax                                                  363       560       420       164
                                                        -------   -------   -------   -------

Net Income                                              $   887   $ 1,282   $ 1,046   $   790
                                                        =======   =======   =======   =======

Earnings per share:

                          Basic                         $  0.29   $  0.42   $  0.35   $  0.26
                          Diluted                       $  0.29   $  0.42   $  0.35   $  0.26

Cash dividends declared per share                       $  0.17   $  0.17   $  0.18   $  0.18

</TABLE>


<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31, 2004
                                                        -------------------------------------
                                                        1ST QTR   2ND QTR   3RD QTR   4TH QTR
                                                        -------   -------   -------   -------
<S>                                                     <C>       <C>       <C>       <C>
Interest income                                         $ 5,342   $ 5,503   $ 5,735   $ 6,053
Interest expense                                          1,355     1,361     1,425     1,690
                                                        -------   -------   -------   -------

Net interest income                                       3,987     4,142     4,310     4,363
Provision for loan losses                                    90       380       350       380
                                                        -------   -------   -------   -------

Net interest income after
     provision for loan losses                            3,897     3,762     3,960     3,983

Non-interest income                                       1,424     1,326     1,492     1,584
Non-interest expense                                      4,112     3,730     3,727     4,078
                                                        -------   -------   -------   -------

Income before income taxes                                1,209     1,358     1,725     1,489
Income Tax                                                  351       399       509       304
                                                        -------   -------   -------   -------

Net Income                                              $   858   $   959   $ 1,216   $ 1,185
                                                        =======   =======   =======   =======

Earnings per share:

                          Basic                         $  0.28   $  0.32   $  0.40   $  0.39
                          Diluted                       $  0.28   $  0.32   $  0.40   $  0.39

Cash dividends declared per share                       $  0.16   $  0.16   $  0.17   $  0.17
</TABLE>

                                       37

<PAGE>

PSB GROUP, INC.

                                                  SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                                         FOR THE YEARS ENDED DECEMBER 31
                                                         ----------------------------------------------------------
                                                                                  (Dollars in Thousands)
                                                           2005        2004        2003         2002        2001
                                                         ---------   ---------   ---------   ----------   ---------
<S>                                                      <C>         <C>         <C>         <C>          <C>
SUMMARY OF INCOME
     Interest income                                        27,518      22,633      22,096       24,421      28,649
     Interest expense                                        9,369       5,831       5,463        6,816      11,592
                                                         ---------   ---------   ---------   ----------   ---------

          Net Interest income                               18,149      16,802      16,633       17,605      17,057
     Provision (credit) for possible loan losses             1,554       1,200           -         (800)     (1,500)
                                                         ---------   ---------   ---------   ----------   ---------

     Net interest income after provision for
          possible loan losses                              16,595      15,602      16,633       18,405      18,557
     Non-interest income                                     6,289       5,826       6,035        4,668       5,705
     Non-interest expense                                   17,372      15,647      16,998       15,734      16,190
                                                         ---------   ---------   ---------   ----------   ---------

     Income before income tax expense                        5,512       5,781       5,670        7,339       8,072
     Income tax expense                                      1,507       1,563       1,457        2,050       2,252
                                                         ---------   ---------   ---------   ----------   ---------

     Net income                                              4,005       4,218       4,213        5,289       5,820
                                                         =========   =========   =========   ==========   =========

PER SHARE DATA
     Basic earnings per common share                          1.32        1.39        1.29         1.60        1.76
     Diluted earnings per common share                        1.32        1.39        1.29         1.60        1.76
     Cash dividends                                           0.70        0.66        0.61         0.67        0.65
     Period end book value per common share                  14.25       14.19       13.54        13.75       12.77
     Weighted average number of common
          shares outstanding                             3,025,727   3,029,152   3,258,672    3,305,601   3,305,601

SELECTED BALANCES (AT PERIOD END)
     Securities                                             93,645      91,125      47,619       87,498      69,262
     Loans, net                                            361,423     335,280     322,375      280,970     265,614
     Total assets                                          495,011     461,342     401,511      402,589     394,995
     Total deposits                                        424,658     411,132     350,988      340,780     345,555
     Borrowings                                             26,210       5,000       7,420       14,210       5,000
     Total stockholders' equity                             42,950      42,981      41,011       45,473      42,222

SELECTED RATIOS
     Return on average assets                                 0.83%       0.99%       1.04%        1.33%       1.45%
     Return on average total stockholders' equity             9.22%      10.08%       9.30%       12.06%      14.80%
     Avereage equity to average assets                        8.97%       9.79%      11.23%       11.05%       9.79%
     Net interest margin (1)                                  3.99%       4.19%       4.41%        4.74%       4.50%
     Efficiency ratio (2)                                    71.09%      69.15%      74.99%       70.64%      71.13%
     Dividend payout ratio (3)                                  53%         47%         47%          41%         37%

ASSET QUALITY RATIOS
     Allowance for possible loan losses to:
          Ending total loans                                  1.00%       1.00%       1.19%        1.62%       2.06%
          Non-performing assets                              81.27%      84.62%      87.11%      110.73%     226.30%
     Non-performing assets to ending total loans              1.24%       1.18%       1.37%        1.46%       0.91%
     Net loan charge-offs to average loans                    0.36%       0.49%       0.24%        0.06%       1.38%

CAPITAL RATIOS
     Total capital to risk-weighted assets                   11.74%      12.54%      13.27%       15.58%      14.93%
     Tier 1 capital to risk-weighted assets                  10.73%      11.54%      12.02%       14.32%      13.67%
     Tier 1 capital to average assets                         8.07%       8.62%       9.13%       10.20%       9.31%

</TABLE>


(1) Net interest margin is net interest income divided by average earning
    assets.

(2) Efficiency ratio is calculated by dividing non-interest expense by the sum
    of net interest income plus non-interest income.

(3) Dividend payout ratio is calculated by dividing dividends paid during the
    period by net income for the period.

                                       38
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

      OVERVIEW. PSB Group, Inc. (the "Corporation") was formed on February 28,
2003 as a bank holding company for the purpose of owning Peoples State Bank (the
"Bank") pursuant to a plan of reorganization adopted by the Bank and its
stockholders. Pursuant to the reorganization, each share of Peoples State Bank
stock held by existing stockholders of the Bank was exchanged for three shares
of common stock of PSB Group, Inc. The reorganization had no consolidated
financial statement impact. Share amounts for all prior periods presented have
been restated to reflect the reorganization.

      The consolidated financial statements include the accounts of PSB Group,
Inc. and its wholly owned subsidiaries, Peoples State Bank and PSB Capital, Inc.
PSB Insurance Agency, Inc. and Universal Mortgage Company are wholly owned
subsidiaries of Peoples State Bank. PSB Capital, Inc. was formed in October,
2004. Through December 31, 2005, there had been no business transacted by PSB
Capital, Inc. All significant inter-company transactions are eliminated in
consolidation.

      Net income is derived primarily from net interest income, which is the
difference between interest earned on the Bank's loan and investment portfolios
and its cost of funds, primarily interest paid on deposits and borrowings. The
volume of, and yields earned, on loans and investments and the volume of, and
rates paid, on deposits determine net interest income.

      FINANCIAL CONDITION. Assets consist of loans, investment securities, bank
premises and equipment, cash and other operating assets. At December 31, 2005,
the Corporation had assets totaling $495 million compared to $461 million at
December 31, 2004. Total assets increased $34 million, or 7.4% during 2005.
Investment securities increased $2.5 million and net loans increased by $26.1
million. In addition, loans held for sale increased $3.8 million and bank
premises and equipment increased $2 million. The increase in premises and
equipment reflected the construction of two new branch offices that were opened
in 2005. The increase in assets was funded primarily by a $13.5 million increase
in deposits and a $20.4 million increase in short-term borrowings. Our savings
balances increased $22.8 million during 2005. This was the result of a $30
million increase in our very successful Prime Savings Plus product, partially
offset by a $7.2 million decrease in other savings products. Certificate of
deposit balances increased $18.3 million during 2005. The increases in savings
and certificate of deposit balances were partially offset by a $27.6 million
decrease in checking, money market and NOW balances. In addition to the growth
in deposits, we increased short-term borrowings (federal funds and short-term
FHLB advances) to help fund the growth in assets.

      Loans - Loans consist of commercial, residential mortgage, and consumer
products offered in the communities served by the Bank. Total loans, net of the
allowance for loan losses, at December 31, 2005, increased to $361.4 million, up
$26.1 million, or 7.8% for the year.

      Commercial and construction loans increased from $207.5 million to $243.5
million, an increase of $36 million or 17.3% during 2005. During 2004,
commercial and construction loans increased $21.5 million or 12.8% from $168.4
million at December 31, 2003. The continued increase in 2005 was primarily the
result of aggressive marketing, the continued presence of the Bank in its market
areas and the desire of customers to deal with a community bank.

      1-4 family residential mortgage loan balances totaled $88.7 and $94.9
million as of December 31, 2005 and 2004, respectively. Residential mortgage
loan balances decreased $6.2 million or 6.5% during 2005. 1-4 family residential
loans decreased $9 million or 8.7% during 2004. The decrease over the past two
years was primarily the result of management's decision to allow fixed rate
mortgages to run-off and replace them with adjustable rate loans. The volume of
the new adjustable rate loans only partially offset the run-off of the fixed
rate loans.

                                       39
<PAGE>

      Consumer loans decreased $6.1 million or 33.3% in 2005 from $18.3 million
to $12.2 million. This decrease was partly the result of management's decision
to let a portion of our indirect loan portfolio run off during 2005.

      The following table shows the details of the Bank's loan portfolio as of
the dates indicated. Mortgages on real estate include 1-4 family residential,
commercial real estate, construction loans, second mortgages and equity lines of
credit (see Note 4 to the financial statements). Loan balances are shown net of
unearned income.

<TABLE>
<CAPTION>
                                                 December 31,
                             -----------------------------------------------------
                             2005         2004       2003         2002        2001
                             ----         ----       ----         ----        ----
                                                (in thousands)
<S>                        <C>         <C>         <C>         <C>         <C>
Mortgages on real estate   $ 306,586   $ 272,756   $ 245,520   $ 197,540   $ 159,022
Commercial                    46,294      47,608      53,725      63,330      81,020
Consumer                      12,213      18,310      27,017      24,732      31,157
                           ---------   ---------   ---------   ---------   ---------
  Total Loans              $ 365,093   $ 338,674   $ 326,262   $ 285,602   $ 271,199
                           =========   =========   =========   =========   =========
</TABLE>

      The following table shows the loans by category as of December 31, 2005
and the period in which they mature. Loan balances are shown net of unearned
income.

<TABLE>
<CAPTION>
                                                                           Loans maturing
                                      One year                           More than one year
                           One year   to five   After five             ---------------------
                            or less    years      years       Total       Fixed    Variable
                           ------------------------------------------  --------------------
                                                   (in thousands)
<S>                        <C>        <C>       <C>         <C>        <C>        <C>
Mortgages on real estate   $ 28,888  $ 190,640  $ 87,058    $ 306,586  $ 148,724  $ 128,974
Commercial                   15,126     26,201     4,967       46,294    15,594      15,574
Consumer                        714      7,766     3,733       12,213    11,473          26
                           --------  ---------  ----------  ---------  ---------  ---------
  Total Loans              $ 44,728  $ 224,607  $ 95,758    $ 365,093  $ 175,791  $ 144,574
                           ========  =========  ==========  =========  =========  =========
</TABLE>

      In 2005, as a result of a $26.4 million increase in total loans and net
charge-offs of $1.3 million, management recorded a $1.6 million loan loss
provision in order to keep the allowance at an appropriate level. This compares
to a $12.4 million increase in loans, $1.7 million in net charge-offs and a $1.2
million provision in 2004. The Bank's investment in impaired loans was $4.4
million at December 31, 2005 compared to $2.3 million at December 31, 2004. The
Bank's allowance for possible loan losses to impaired loans was at a ratio of
83% and 148% as of December 31, 2005 and 2004, respectively. At December 31,
2005, the allowance for possible loan losses totaled $3.7 million, or 1.0% of
total outstanding loans.

                                       40
<PAGE>

The following table shows the detail of non-performing loans as of the dates
indicated.

<TABLE>
<CAPTION>
                                               2005     2004     2003     2002     2001
                                               ----     ----     ----     ----     ----
                                                           (in thousands)
<S>                                          <C>      <C>      <C>      <C>      <C>
Nonaccrual loans                             $ 1,651  $ 2,297  $ 1,496  $ 2,746  $   281
Loans past due 90 or more days                 2,044      717    1,189      306      602
Renegotiated loans                               515      586      808      907    1,585
                                             -------  -------  -------  -------  -------
Total non-performing loans                     4,210    3,600    3,493    3,959    2,468
Other real estate owned                          306      411      969      224        -
                                             -------  -------  -------  -------  -------
  Total non-performing assets                $ 4,516  $ 4,011  $ 4,462  $ 4,183  $ 2,468
                                             =======  =======  =======  =======  =======

Total non-performing loans to total loans       1.15%    1.06%    1.07%    1.39%    0.91%
Total non-performing assets to total assets     0.91%    0.87%    1.11%    1.03%    0.62%
</TABLE>

      The Bank places loans in non-accrual status when, in the opinion of
management, uncertainty exists as to the ultimate collection of principal and
interest. The Bank has no foreign loans. Management knows of no loans which have
not been disclosed above which cause it to have doubts as to the ability of such
borrowers to comply with the contractual loan terms, or which may have a
material effect on the Bank's balance sheet or results from operations. Total
non-performing loans increased $610 thousand in 2005 to $4.2 million. Other real
estate decreased $105 thousand in 2005. As of December 31, 2005, other real
estate consists of three properties. Other real estate is carried on the books
at the lower of, fair value less the estimated cost to sell, or, the carrying
amount of the loan at the date of foreclosure.

      The following table shows the allocation of the allowance for loan losses
by specific category as of the dates indicated.

<TABLE>
<CAPTION>
                                                               December 31,
             ------------------------------------------------------------------------------------------------------------------
                     2005                   2004                   2003                   2002                    2001
             ---------------------  ---------------------  ---------------------  ---------------------  ----------------------
                                                              (in thousands)
                        Percent of             Percent of             Percent of             Percent of              Percent of
                         Loans in               Loans in               Loans in               Loans in                Loans in
                           Each                   Each                   Each                   Each                    Each
                         Category               Category               Category               Category                Category
             Allocated   to Total   Allocated   to Total   Allocated   to Total   Allocated   to Total    Allocated   to Total
              Amount      Loans      Amount      Loans      Amount      Loans      Amount      Loans       Amount      Loans
             --------   ----------  ---------  ----------  ---------  ----------  ---------  ----------  ----------  ----------
<S>          <C>        <C>         <C>        <C>         <C>        <C>         <C>        <C>         <C>         <C>
Mortgages    $   609         84.09% $     839       80.50% $     121       75.30% $     396       69.60% $      270       59.50%
Commercial     2,221         12.56%     1,478       14.10%     1,971       16.50%     2,476       21.90%      3,609       29.30%
Consumer         690          3.35%       551        5.40%     1,134        8.20%     1,345        8.50%      1,456       11.20%
Unallocated      150           n/a        526         n/a        661         n/a        415         n/a         250         n/a
             -------   -----------  ---------   ---------  ---------  ----------  ---------  ----------  ----------  ----------
  Total      $ 3,670        100.00% $   3,394      100.00% $   3,887      100.00% $   4,632      100.00% $    5,585      100.00%
</TABLE>

      Investment securities - Investment securities totaled $93.6 million as of
December 31, 2005 versus $91.1 million as of December 31, 2004, an increase of
$2.5 million. Each of these figures includes adjustments for fluctuations in
market values on available for sale securities (see Note 3 to the financial
statements). During 2005, the Bank sold certain securities that generated $16
thousand in securities losses. This compares to $9 thousand gained on the sale
of securities in 2004.

                                       41
<PAGE>

      The following table shows the amortized cost and the fair market value of
the Bank's security portfolio as of the dates indicated.

<TABLE>
<CAPTION>
                                                           December 31,
                                ------------------------------------------------------------
                                        2005                 2004              2003
                                -------------------  ------------------  -------------------
                                Amortized   Fair     Amortized   Fair     Amortized   Fair
                                  Cost      Value       Cost     Value      Cost      Value
                                ---------  --------  ---------  -------  ---------  --------
                                                          (in thousands)
<S>                             <C>        <C>       <C>        <C>      <C>        <C>
Available-for-sale securities:
U. S. treasury securities and
    obligations of other U.S.
    government agencies         $  60,428  $ 59,245  $  68,619   68,488  $  27,195  $ 27,359
Obligations of states and
   political subdivisions          31,714    31,680     19,670   19,930     17,274    17,627
Mortgage-backed securities

                                        -         -          -        -          -         -
Corporate debt securities           1,000       985      1,000    1,008      1,000     1,009
Equities                            1,735     1,735      1,699    1,699      1,624     1,624
                                ---------  --------  ---------  -------  ---------  --------

   Total available-for-sale
       securities                  94,877    93,645     90,988   91,125     47,093    47,619
                                =========  ========  =========  =======  =========  ========
</TABLE>

      Maturity of the investment securities (at par value) and the weighted
average yield for each range of maturities as of December 31, 2005 are shown in
the table below. The yields on municipal securities have not been adjusted for
tax equivalence.

<TABLE>
<CAPTION>
                                                From one to      From five to      After ten
                            One year or less    five years         ten years          years           Equity          Total
                            ----------------  ---------------  ----------------  --------------  ---------------  ---------------
                             Dollar    Yield   Dollar   Yield    Dollar   Yield  Dollar   Yield   Dollar   Yield   Dollar    Yield
                             ------    -----   ------   -----    ------   -----  ------   -----   ------   -----   ------    -----
                                                                          (in thousands)
<S>                         <C>       <C>     <C>       <C>    <C>       <C>     <C>      <C>    <C>      <C>     <C>       <C>
Obligations of U.S.
   government agencies      $ 20,823   2.99%  $ 37,797  3.94%  $  1,743   5.08%  $     -     -   $     -      -   $ 60,363  3.65%
Obligations of states and
  political subdivisions       6,175   6.28%     1,250  6.22%    15,550   5.69%    8,625  5.88%        -      -     31,600  5.88%
Mortgage-backed securities         -      -          -     -          -      -         -     -         -      -          -     -
Corporate debt securities          -      -          -     -          -      -     1,000  7.57%        -      -      1,000  7.57%
Equity securities & others         -      -          -     -          -      -         -     -     1,735   4.32%     1,735  4.32%
                            --------  -----   --------  ----   --------  -----   -------  ----   -------  -----   --------  ----
  Total                     $ 26,998   3.74%  $ 39,047  4.01%  $ 17,293   5.63%  $ 9,625  6.06%  $ 1,735   4.32%  $ 94,698  4.44%
                            --------  -----   --------  ----   --------  -----   -------  ----   -------  -----   --------  ----
</TABLE>

      Deposits - The Bank depends primarily upon customer deposits and
short-term borrowing for funds with which to conduct its business. Bank deposits
consist primarily of retail deposit products including checking and savings
accounts from individuals and businesses, NOW accounts, money market demand
accounts and time deposit accounts (CDs). Deposits totaled $424.7 million and
$411.1 million at December 31, 2005 and 2004, respectively, an increase of $13.5
million, or 3.3%. Savings deposits increased the most ($22.8 million) in 2005
followed by certificates of deposit ($18.3 million). These increases were
partially offset by a $22.8 million decrease in money market balances, a $3
million decrease in non-interest bearing demand and a $1.7 million decrease in
NOW balances. During 2004, deposits increased $60.1 million to $411.1 million at
year end. Savings deposits increased the most in 2004 ($60.5) with the
introduction of our very successful Prime Savings Plus product, followed by
non-interest bearing demand ($4.1) million certificates of deposit ($3.9
million) and NOW accounts ($2.1 million). The 2004 increases were partially
offset by a $10.4 million decrease in money market balances.

      Management relies on lower-interest bearing demand and savings deposit
accounts to fund significant portions of the Bank's operations. These accounts
greatly improve net interest margins because of

                                       42
<PAGE>

the lower interest rates expected by the customers. Non-interest bearing demand
deposits plus the lower rate savings balances (excludes Prime Savings Plus)
totaled $104.5 million at December 31, 2005.

      The following table shows the details of the Bank's deposit balances as of
the dates indicated.

<TABLE>
<CAPTION>
                                December 31,
                     -------------------------------
                        2005       2004      2003
                     ---------  ---------  ---------
                              (in thousands)
<S>                  <C>        <C>        <C>
Noninterest bearing
   demand deposits   $  54,445  $  57,479  $  53,412
NOW accounts            33,143     34,868     32,736
Savings                145,753    122,947     62,443
Money market demand     34,073     56,898     67,312
Time under $100,000     90,326     75,081     73,055
Time over $100,000      66,918     63,859     62,030
                     ---------  ---------  ---------
   Total deposits    $ 424,658  $ 411,132  $ 350,988
                     =========  =========  =========
</TABLE>

      The following table shows the maturity breakdown of the Bank's time
deposits over $100,000 as of December 31, 2005.

<TABLE>
<CAPTION>
                             December 31, 2005
                             -----------------
                              (in thousands)
<S>                          <C>
Time Deposits Over $100,000
  Maturing in:
Less than three months       $          17,971
Three through six months                11,675
Six months through one year             13,426
Over one year                           23,846
                             -----------------
   Total deposits            $          66,918
                             =================
</TABLE>

      Borrowings - At December 31, 2005 and December 31, 2004 the Bank had
$5,000,000 in borrowings outstanding from the Federal Home Loan Bank of
Indianapolis (see Note 7 to the financial statements). This advance matures on
January 22, 2011. The Bank also had overnight federal funds borrowings and three
short-term (less than 90 days) advances from the Federal Home Loan Bank of
Indianapolis outstanding as of December 31, 2005.

                                       43
<PAGE>

      The following table shows the balance, term and interest rate of the
Bank's borrowings: Outstanding as of

<TABLE>
<CAPTION>
                                                                    Outstanding as of
                                                                 ----------------------
                                                12/31/2005              12/31/2004
                                            ------------------   ----------------------
                                 Year                            (dollars in thousands)
        Type                   Matures       Dollar      Yield    Dollar          Yield      Dollar     Yield
-------------------------     ---------     --------     -----   -------          -----     -------     -----
<S>                           <C>           <C>          <C>     <C>              <C>       <C>         <C>
  Federal Funds Purchased     overnight     $  7,940      4.25%  $     -           0.00%    $     -      0.00%
FHLB Advance                  1/30/2006     $  5,000      4.38%  $     -           0.00%    $     -      0.00%
FHLB Advance                  2/28/2006     $  5,000      4.52%  $     -           0.00%    $     -      0.00%
FHLB Advance                  3/30/2006     $  2,500      4.59%  $     -           0.00%    $     -      0.00%
                                            --------             -------                    -------
    Total Short-term                        $ 20,440             $     -                    $     -
                                            ========             =======                    =======

FHLB Advance                       2011     $  5,000      4.43%  $ 5,000           4.43%    $ 5,000      4.43%
ESOP Note Payable                  2011     $    770      6.20%  $     -           0.00%    $     -      0.00%
                                            --------             -------                    -------
  Total long-term                           $  5,770             $ 5,000           0.00%    $ 5,000      4.43%
                                            ========             =======                    =======
</TABLE>

      Contractual Obligations - The Corporation is party to certain contractual
financial obligations, including the repayment of debt and operating lease
payments. These future financial obligations are presented below:

<TABLE>
<CAPTION>
                              Payments due - as of December 31, 2005
                   ----------------------------------------------------------
                                            (in thousands)
                   0-12 Months  1-3 Years  4-5 Years  After 5 Years  Total
                   -----------  ---------  ---------  -------------  --------
<S>                <C>          <C>        <C>        <C>            <C>
Operating Leases   $       657  $     580  $     530  $         923  $  2,690
Federal Funds      $     7,940  $       -  $       -  $           -  $  7,940
ESOP Note Payable  $        26  $     308  $     308  $         128  $    770
FHLB Advances      $    12,500  $       -  $       -  $       5,000  $ 17,500
                   -----------  ---------  ---------  -------------  --------
    Total          $    21,123  $     888  $     838  $       6,051  $ 28,900
                   -----------  ---------  ---------  -------------  --------
</TABLE>

      Off Balance Sheet Obligations - At December 31, 2005, the Corporation also
had commitments to extend credit of $66.6 million and a $3.1 million obligation
under a stand-by letter of credit.

      RESULTS OF OPERATIONS. Net income for the year ended December 31, 2005 was
$4 million, compared to $4.2 million earned in 2004. Net interest income
increased $1.3 million in 2005 and non-interest income increased $463 thousand.
The $1.6 million provision for loan losses compares to a $1.2 million provision
in 2004. In addition to the increased provision, 2005 net income was hurt by a
$1.7 million increase in non-interest expense.

      Interest and fee income on loans increased approximately $3.2 million in
2005. This increase was the result of a $9.8 million increase in average loans
in 2005, plus rising interest rates during the year.

      Interest income on investments increased $1.7 million in 2005. This
increase was due to a large extent to a $44 million increase in average
investments in 2005. As interest rates began to rise and more funds were being
raised through our Prime Savings Plus accounts, more funds were invested in
securities. This increase began in the fourth quarter of 2004. At December 31,
2005, our investment portfolio totaled $93.6 million compared to $91.1 million
at December 31, 2004.

      Interest expense increased $3.5 million in 2005. Of this increase,
approximately $2.7 million is due to increased balances and rising rates on our
Prime Savings Plus product. Interest expense on certificates of deposit
increased $767 thousand in 2005 as average CD balances increased $7.5 million
and rates increased. These increases, were partially offset by a $259 thousand
decrease in interest on money market and NOW

                                       44
<PAGE>

balances. In addition, average short-term borrowings increased $4.5 in 2005 and
the rates on the borrowings also increased during the year, resulting in a $307
thousand increase in the related interest expense.

      The following table presents the Bank's consolidated balance of earning
assets, interest bearing liabilities, the amount of interest income or interest
expense attributable to each category, the average yield or rate for each
category and the net interest margin for the periods indicated. Interest income
is stated on a non-tax equivalent basis. Non-accrual loan balances are included
in the loan totals.

<TABLE>
<CAPTION>
                                                                 Year ended December 31,
                                    -------------------------------------------------------------------------------
                                            2005                       2004                       2003
                                    -------------------        -------------------        ------------------
                                     Average                    Average                    Average
                                     Balance   Interest  Rate   Balance   Interest  Rate   Balance   Interest  Rate
                                    ---------  --------  ----  ---------  --------  ----  ---------  --------  ----
                                                                 (dollars in thousands)
<S>                                 <C>        <C>       <C>   <C>        <C>       <C>   <C>        <C>       <C>
Federal funds sold                  $   1,107  $     28  2.53% $   2,845  $     51  1.79% $   2,342  $     28  1.20%
Investment securities - taxable     $  78,193  $  2,676  3.42% $  37,955  $  1,183  3.12% $  42,566  $  1,433  3.37%
Investment securities - tax-exempt  $  23,319  $    872  3.74% $  17,866  $    619  3.46% $  25,366  $    873  3.44%
Loans, net of unearned income       $ 352,643  $ 23,942  6.79% $ 342,809  $ 20,780  6.06% $ 306,511  $ 19,762  6.45%
                                    ---------  --------        ---------  --------        ---------  --------
Total earning assets                $ 455,262  $ 27,518  6.04% $ 401,475  $ 22,633  5.64% $ 376,785  $ 22,096  5.86%
                                    =========  ========        =========  ========        =========  ========
Interest bearing deposits           $ 363,812  $  8,777  2.41% $ 314,120  $  5,546  1.77% $ 295,119  $  5,214  1.77%
Funds borrowed                      $  14,346  $    592  4.13% $   9,503  $    285  3.00% $   6,886  $    249  3.62%
                                    ---------  --------        ---------  --------        ---------  --------
Total interest bearing liabilities  $ 378,158  $  9,369  2.48% $ 323,623  $  5,831  1.80% $ 302,005  $  5,463  1.81%
                                    =========  --------        =========  --------        =========  --------
Net interest income                            $ 18,149                   $ 16,802                   $ 16,633
                                               ========                   ========                   ========
Net interest spread                                      3.56%                      3.84%                      4.05%
Net interest margin                                      3.99%                      4.19%                      4.41%
</TABLE>

      The following table shows the dollar amount of changes in interest income
for each major category of interest earning asset, interest expense for each
major category of interest bearing liability and the amount of the change
attributable to changes in average balances (volume) or average interest rates
for the periods shown.

<TABLE>
<CAPTION>
                                            2005 compared to 2004               2004 compared to 2003
                                    ----------------------------------  ----------------------------------
                                    Change   Change    Change            Change   Change   Change
                                    due to   due to    due to   Total    due to   due to   due to  Total
                                     Rate    Volume     Mix    Change     Rate    Volume     Mix   Change
                                    -------  -------  -------  -------  --------  -------  ------  -------
                                                                  (in thousands)
<S>                                 <C>      <C>      <C>      <C>      <C>       <C>      <C>     <C>
Federal funds sold                  $    21  $   (31) $   (13) $   (23) $     14  $     6  $    3  $    23
Investment securities - taxable     $   113  $ 1,255  $   125  $ 1,493  $   (106) $  (155) $   11  $  (250)
Investment securities - tax-exempt  $    50  $   189  $    14  $   253  $      5  $  (258) $   (1) $  (254)
Loans, net of unearned income       $ 2,503  $   596  $    63  $ 3,162  $ (1,195) $ 2,341  $ (128) $ 1,018
                                    -------  -------  -------  -------  --------  -------  ------  -------
Total interest income               $ 2,687  $ 2,009  $   189  $ 4,885  $ (1,282) $ 1,934  $ (115) $   537
                                    -------  -------  -------  -------  --------  -------  ------  -------
Interest bearing deposits           $ 2,010  $   880  $   341  $ 3,231  $      -  $   336  $   (4) $   332
Funds borrowed                      $   107  $   145  $    55  $   307  $    (43) $    95  $  (16) $    36
                                    -------  -------  -------  -------  --------  -------  ------  -------
Total interest expense              $ 2,117  $ 1,025  $   396  $ 3,538  $    (43) $   431  $  (20) $   368
                                    -------  -------  -------  -------  --------  -------  ------  -------
Net interest income                 $   570  $   984  $  (207) $ 1,347  $ (1,239) $ 1,503  $  (95) $   169
                                    =======  =======  =======  =======  ========  =======  ======  =======
</TABLE>

      Management expects market interest rates to continue to rise during the
first quarter of 2006, then, level off for the remainder of the year. Rising
interest rates should have a positive impact on the Bank's net interest income.
The Bank's Asset/Liability Committee meets regularly to, among other things,
monitor interest rate fluctuations and to change product mix and pricing in an
effort to provide steady growth in net interest income.

                                       45
<PAGE>

      The following table presents the changes in the allowance for loan losses
during the periods indicated.

<TABLE>
<CAPTION>
                                               2005     2004       2003      2002      2001
                                             -------  --------   --------  --------  --------
                                                               (in thousands)
<S>                                          <C>      <C>        <C>       <C>       <C>
Balance - Beginning of year                  $ 3,394  $  3,887   $  4,632  $  5,585  $ 10,891

Loans charged off:

Mortgages on real estate                        (536)     (287)      (175)      (32)       (4)
Commercial                                      (702)   (1,089)      (145)     (782)   (3,863)
Consumer                                        (642)     (942)    (1,233)   (1,348)   (1,104)
                                             -------  --------   --------  --------  --------
  Total Charge offs                           (1,880)   (2,318)    (1,553)   (2,162)   (4,971)

Recoveries on loans previously charged off:

Mortgages on real estate                          80         1          5         -         1
Commercial                                       225       315        474     1,541       854
Consumer                                         297       309        329       468       310
                                             -------  --------   --------  --------  --------
  Total Recoveries                               602       625        808     2,009     1,165

Provision for loan losses                      1,554     1,200                 (800)   (1,500)
                                             -------  --------   --------  --------  --------

Balance - End of year                        $ 3,670  $  3,394   $  3,887  $  4,632  $  5,585
                                             -------  --------   --------  --------  --------
</TABLE>

      Non-performing loans increased $610 thousand to $4.2 million at December
31, 2005 (see page 5). Net charge-offs decreased $415 thousand in 2005 to $1.3
million. After analysis of the allowance for loan losses, management determined
that a $1.6 million provision was necessary to keep the allowance for loan
losses at an adequate level. This compares to a $1.2 million provision in 2004
and no provision in 2003.

      Non-interest income, which consists of service charges and other fees of
$6,289,000, $5,826,000 and $6,035,000 was recorded for the years ended December
31, 2005, 2004 and 2003, respectively. This represents an increase of 8% in 2005
compared to a decrease of 3% in 2004. The increase in non-interest income in
2005 is due primarily to a $195 thousand increase in the gain on the sale of
mortgages and a $245 thousand increase in commercial loan broker fees, which is
included in other income. The increase in the gain on the sale of mortgage loans
was partly due to the acquisition of three new mortgage origination offices by
Universal Mortgage Company when it acquired Nations One, an independent mortgage
originator in June, 2005. During 2004, we realized a decrease in non-interest
income of $209 thousand, as the gains on the sale of mortgages dropped $247
thousand from 2003 and we realized a $154 thousand decrease in the gain on the
sale of securities. We did however, realize a $121 thousand increase in deposit
service charges, as our service charges were reviewed and revised in 2004.

      Non-interest expense, which includes salaries and benefits, occupancy and
other operating expenses, increased to $17.4 million in 2005 from $15.6 million
in 2004, an increase of $1.8 million or 11.5%. Salary and benefits expense
increased $1 million, or 12.2 % in 2005. This increase was mainly due to
increased staffing brought about by the opening of two new bank branches and the
acquisition of the three new mortgage loan production offices in 2005. A portion
of this increase was also due to the increased cost of employee benefits. During
2004, salary and benefits expense actually decreased $1.3 million, mainly the
result of a workforce reduction plan that was put in effect in the second half
of 2003. Occupancy expense increased $515 thousand in 2005, due mainly to the
opening of the two new bank branches and the acquisition of the three new
mortgage production offices. The new offices accounted for approximately $400
thousand of this increase. Another $114 thousand was the result of the
write-down in the value of a branch facility that is no longer in use, and in
the process of being sold. Legal and professional fees decreased $109 thousand
during 2005 as accounting fees dropped $48 thousand and consulting fees were
reduced by $65 thousand. Other operating expenses increased $310 thousand during
2005. This increase includes a $45

                                       46
<PAGE>

thousand increase in stationery and supplies, a $43 thousand increase in
telephone expense, an $84 thousand increase in Michigan Single Business Tax and
a $73 thousand increase in miscellaneous losses.

      LIQUIDITY AND CAPITAL RESOURCES. Liquidity is the measurement of the
Bank's ability to have adequate cash or access to cash to meet financial
obligations when due, as well as to fund corporate expansion or other
activities. The Bank expects to meet its liquidity requirements through a
combination of working capital provided by operating activities, attracting
customer deposits, advances under Federal Home Loan Bank credit facilities, and
possible future periodic sales of mortgages into secondary markets. Management
believes that the Bank's cash flow will be sufficient to support its existing
operations for the foreseeable future.

      Net income and depreciation and amortization continue to be the primary
sources of cash from operating activities. During 2005, net income provided $4
million of cash compared to $4.2 million during 2004 and $4.2 million during
2003. Depreciation and amortization was a non-cash expense totaling $1.3 million
for the year ended December 31, 2005, $1.2 million in 2004 and $1.1 million in
2003. These non-cash items had been included in net income for purposes of
calculating the results of operations during the respective years, and therefore
are added to or subtracted from net income in determining cash flow from
operating activities.

      The primary uses of cash for the Bank are the funding of customer loans,
purchase of investment securities and the repayment of customer deposits. The
Bank's primary sources of cash are customer deposits, proceeds from the maturity
or sale of investment securities, repayment of loans, and advances on borrowings
from the Federal Home Loan Bank, of which the Bank cannot exceed $26 million.
During 2005, the Bank had a net cash outlay of $27.7 million from the increase
in the loan portfolio. This compares to a net cash outlay of $14.1 million in
2004 and $41.4 million in 2003.

      The Bank purchased $50 million, $74 million and $16 million in securities
during 2005, 2004, and 2003, respectively. Securities sales or maturities
totaled $45.7 million, $29.6 million and $53.9 million respectively, for each of
those periods.

      The Bank experienced a net increase in deposits of $13.5 million in 2005
compared to a net increase in customer deposits of $60.1 million in 2004 and a
net increase of $10.2 million in 2003. The Bank generated $21.2 million through
increased borrowings in 2005 compared to $2.4 million in net pay-downs in 2004,
and $6.8 million in net pay-downs in 2003.

      The Corporation had capital of approximately $43 million at December 31,
2005 and December 31, 2004. Our $4 million in net income in 2005 was offset by
$2.1 million in cash dividends, a $900 thousand decrease in the unrealized
gains/losses on available for sale securities and a $1 million repurchase of
common stock. $770 thousand of the stock repurchase is related to the guaranty
of the ESOP loan and the remaining $230 thousand is held as deferred directors'
compensation. In 2004, capital increased $2 million as the result of $4.2
million in net income, offset by $2 million in dividends and a $257 decrease in
the unrealized gains/losses on securities. At December 31, 2005, the ratio of
stockholders' equity to total assets was 8.7% compared to 9.3% at December 31,
2004. The capital levels of the Bank and the Corporation exceed the minimum
guidelines for being considered well capitalized (see note 17 to the financial
statements). Management believes the capital levels will be adequate to, among
other things, fund banking activities for the foreseeable future.

                                       47
<PAGE>

      At December 31, 2005, the Bank held cash and cash equivalents of
approximately $12 million and the entire investment portfolio of $93.6 million
was classified as available-for-sale. The amortized cost of the
available-for-sale securities exceeded the estimated market value by
approximately $1.2 million at December 31, 2005.

      The primary impact of inflation on the Corporation's operations is
increased asset yields, deposit costs and operating overhead. Unlike most
industrial companies, virtually all of the assets and liabilities of a financial
institution are monetary in nature. As a result, interest rates generally have a
more significant impact on a financial institution's performance than they would
on non-financial companies. Although interest rates do not necessarily move in
the same direction, or to the same extent, as the prices of goods and services,
increases in inflation generally have resulted in increased interest rates. The
effects of inflation can magnify the growth of assets and if significant,
require that equity capital increase at a faster rate than would otherwise be
necessary.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      To a great extent, the Corporation's operating strategies focus on
asset/liability management. The purpose of its Asset/Liability Management Policy
is to provide stable net interest income growth while both maintaining adequate
liquidity and protecting the Bank's earnings from undue interest rate risk. The
Bank follows its Asset/Liability Management Policy for controlling exposure to
interest rate risk. The Asset/Liability Management Policy is established by
Management and is approved by the Board of Directors. In order to control risk
in a rising interest rate environment, Management's strategy is generally to
shorten the average maturity of the investment portfolio, thereby making the
portfolio more liability sensitive. Because of loan repayments, the investment
securities due to mature in 2006 and available lines of credit, management
believes the Bank is sufficiently liquid.

      The Asset/Liability Management Policy also is designed to maintain an
appropriate balance between rate-sensitive assets and liabilities in order to
maximize interest rate spreads. The Bank monitors the sensitivity of its assets
and liabilities with respect to changes in interest rates and maturities and
directs the allocation of its funds accordingly. The strategy of the Bank has
been to maintain, to the extent possible, a balanced position between assets and
liabilities and to place appropriate emphasis on the sensitivity of its assets.

                                       48
<PAGE>

      The following table sets forth the estimated maturity or re-pricing and
the resulting interest sensitivity gap, of the Bank's interest-earning assets
and interest-bearing liabilities at December 31, 2005 and the cumulative
interest sensitivity gap at December 31, 2005. The amounts in the table are
derived from internal data of the Bank and could be significantly affected by
external factors such as changes in prepayment assumptions, early withdrawals of
deposits and competition.

<TABLE>
<CAPTION>
                                            Less than three    Three months to   One to five  Due after five
                                                months       less than one year     years          years       Total
                                            ---------------  ------------------  -----------  --------------  ---------
<S>                                         <C>              <C>                 <C>          <C>             <C>
Interest earning assets:

Securities (1) (2)                          $         2,081  $           27,894  $    24,405  $       39,265  $  93,645
Loans                                               139,776              16,510      156,981          51,826    365,093
                                            ---------------  ------------------  -----------  --------------  ---------

Total interest earning assets               $       141,857  $           44,404  $   181,386  $       91,091  $ 458,738
                                            ===============  ==================  ===========  ==============  =========

Interest bearing liabilities:
  Savings and interest bearing
  demand deposits                           $       212,969  $                -  $         -  $            -  $ 212,969
  Time deposits                                      31,491              63,701       62,052               -    157,244
  Short term borrowings                              20,440                   -            -               -     20,440
  Long term borrowings                                   26                   -          616           5,128      5,770
                                            ---------------  ------------------  -----------  --------------  ---------
    Total interest bearing liabilites       $       264,926  $           63,701  $    62,668  $        5,128  $ 396,423
                                            ===============  ==================  ===========  ==============  =========

Interest rate sensitivity gap - current     $      (123,069) $          (19,297) $   118,718  $       85,963  $  62,315
                                            ===============  ==================  ===========  ==============  =========
Interest rate sensitivity gap - cumulative  $      (123,069) $         (142,366) $   (23,648) $       62,315
                                            ===============  ==================  ===========  ==============
Cumulative interest rate sensitivity
  gap as a percent of total assets                   -24.86%             -28.76%       -4.78%          12.59%
                                            ===============  ==================  ===========  ==============
</TABLE>

(1) Equity investments have been placed in the 0-3 month category.

(2) Re-pricing is based on anticipated call dates, and may vary from contractual
    maturities.

      Certain shortcomings are inherent in the method of analysis presented in
the foregoing table. For example, although certain assets and liabilities may
have similar maturities and periods to re-pricing, they may react differently to
changes in market interest rates. Also, interest rates on assets and liabilities
may fluctuate in advance of changes in market interest rates, while interest
rates on other assets and liabilities may follow changes in market interest
rates. Additionally, certain assets have features that restrict changes in the
interest rates of such assets, both on a short-term basis and over the lives of
such assets. The gap table presented above is based on stated maturities and
next re-pricing dates and does not take into account prepayment or withdrawal
assumptions. In the event of a change in market interest rates, prepayments and
early withdrawals could cause significant deviation from the stated maturities
and re-pricings.

      According to the traditional banking industry static gap table set forth
above, the Bank was liability sensitive with a negative cumulative one-year gap
of $142.4 million or 31% of interest-earning assets at December 31, 2005. In
general, based upon this analysis, and the Bank's mix of deposits, loan and
investments, increases in interest rates would be expected to result in a
decrease in the Bank's net interest margin. However, a different tool, an
interest sensitivity model, is the primary tool used in assessing interest rate
risk, by estimating the effect that specific upward and downward changes in
interest rates would have on pre-tax net interest income. Key assumptions used
in the model include prepayment speeds on mortgage related assets; changes in
market conditions, loan volumes and pricing; and management's determination of
core deposit sensitivity. These assumptions are inherently uncertain and, as a
result, the model can not precisely predict the impact of higher or lower
interest rates on net interest income. Actual results will differ from simulated
results due to timing, magnitude and frequency of interest rate changes and
changes in other market conditions.

                                       49
<PAGE>

      Based on the December 31, 2005 simulation, the Company is in a position to
benefit from the rising interest rates that are anticipated. Based on the
position of the balance sheet and management's assumptions concerning core
deposit sensitivity and other assumptions, net interest income is forecasted to
increase as interest rates rise.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

      ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses is calculated
with the objective of maintaining a reserve sufficient to absorb estimated
probable loan losses. Loan losses are charged against the allowance when
management believes loan balances are uncollectible. Subsequent recoveries, if
any, are credited to the allowance. Management's determination of the adequacy
of the allowance is based on periodic evaluations of the loan portfolio and
other relevant factors. This evaluation is inherently subjective as it requires
an estimate of the loss content for each risk rating and for each impaired loan,
an estimate of the amounts and timing of expected future cash flows and an
estimate of the value of collateral.

      A loan is considered impaired when, based on current information and
events, it is probable that the Bank will be unable to collect the scheduled
payments of principal and interest when due, according to the contractual terms
of the loan agreement. Factors considered by management in determining
impairment include payment status, collateral value and the probability of
collecting principal and interest payments when due. Impairment is measured on a
loan-by-loan basis for commercial and construction loans by either the present
value of expected future cash flows discounted at the loan's effective interest
rate, the loan's obtainable market price, or the fair value of the collateral if
the loan is collateral dependent. Large groups of homogeneous loans are
collectively evaluated for impairment. Accordingly, the Bank does not separately
identify individual consumer and residential loans for impairment disclosures.

      ACCOUNTING FOR GOODWILL - Effective January 1, 2002, the Corporation
adopted Statement of Financial Standard No. 142, "Goodwill and Other Intangible
Assets" (SFAS 142), which changes the Corporation's accounting for goodwill and
other intangible assets. Generally, intangible assets that meet certain criteria
are recognized and subsequently amortized over their estimated useful lives.
Goodwill and intangible assets with indefinite lives are not amortized. However,
such assets are tested for impairment at adoption of SFAS 142 and at least
annually thereafter. No impairment loss was recorded upon the adoption of SFAS
142 in 2002, nor has any impairment loss been recorded since.

                                       50
<PAGE>

MARKET INFORMATION

The table below shows, for the periods indicated, the high and low prices for
common stock in the over-the-counter market of which PSB Group, Inc. is aware.
This information was obtained from a third-party reporting service and while we
believe the information is correct, we do not warrant its accuracy. These
quotations may represent inter-dealer prices without retail mark-ups, mark-downs
or commissions and do not necessarily represent actual stock transactions. There
is not an active market for the common stock of PSB Group, Inc.

<TABLE>
<CAPTION>
     2005            HIGH         LOW       DIVIDEND DECLARED
--------------      -------     -------     -----------------
<S>                 <C>         <C>         <C>
FIRST QUARTER       $ 23.02     $ 21.50           $0.17
SECOND QUARTER      $ 22.50     $ 18.52           $0.17
THIRD QUARTER       $ 19.83     $ 18.56           $0.18
FOURTH QUARTER      $ 19.15     $ 17.25           $0.18
</TABLE>

<TABLE>
<CAPTION>
    2004              HIGH        LOW       DIVIDEND DECLARED
--------------      -------     -------     -----------------
<S>                 <C>         <C>         <C>
FIRST QUARTER       $ 23.75     $ 20.85           $0.17
SECOND QUARTER      $ 22.50     $ 18.10           $0.17
THIRD QUARTER       $ 21.00     $ 17.65           $0.17
FOURTH QUARTER      $ 22.50     $ 18.75           $0.18
</TABLE>

On December 31, 2005, PSB Group, Inc. had 432 holders of record of its common
stock. The stock is quoted on the OTC Bulletin Board under the symbol "PSBG.OB".
Howe Barnes Investments, Inc. and Monroe Securities, Inc. are market makers in
the stock.

Contact Information:

Nick Bach, Vice President               Russel Feltes
Howe Barnes Investments, Inc.           Monroe Securities, Inc.
222 Riverside Plaza                     343 West Erie Street, Suite 410
Chicago, IL 60606                       Chicago, IL  60610
(800) 800-4693                          (800) 766-5560
www.howebarnes.com                      www.monroesecurities.com

      ANNUAL MEETING OF SHAREHOLDERS

THE ANNUAL MEETING OF THE SHAREHOLDERS OF PSB GROUP, INC. WILL BE HELD AT 2:00
PM, TUESDAY, APRIL 25, 2006 AT THE FOLLOWING LOCATION:

UKRAINIAN CULTURAL CENTER
26601 RYAN ROAD
WARREN, MI  48091

SHAREHOLDERS ARE INVITED TO ATTEND.

                                       51