UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002



OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______



Commission file number 0-21554



DENMARK BANCSHARES, INC.

(Exact name of registrant as specified in its charter)





|Wisconsin                                                      | 39-1472124                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of
incorporation or organization) | (I.R.S. Employer Identification No.)

103 East Main Street, Denmark, Wisconsin 54208-0130

(Address of principal executive offices)



(920) 863-2161

(Registrants telephone number, including area code)





---

(Former name, address and former fiscal year, if changed since last report)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yes [X]  No [  ]



APPLICABLE ONLY TO CORPORATE ISSUERS:



As of October 21, 2002, there were 108,191 shares of the registrant's Common Stock (no par value) issued and outstanding.

















DENMARK BANCSHARES, INC.

TABLE OF CONTENTS

Quarterly Report On Form 10-Q

For The Quarter Ended September 30, 2002



|                                                                                                | Page No.
|----------------------------------------------------------------------------------------------- | --------
|                                                                                                |         
|PART I.Financial Information                                                                    |         
|                                                                                                |         
|Item 1.    Financial Statements                                                                 |         
|                                                                                                |         
|Consolidated Statements of Financial Condition                                                  | 3       
|                                                                                                |         
|Consolidated Statements of Income                                                               | 4       
|                                                                                                |         
|Consolidated Statements of Cash Flows                                                           | 5       
|                                                                                                |         
|Notes to Consolidated Financial Statements                                                      | 6       
|                                                                                                |         
|Item 2.    Managements Discussion and Analysis of Financial Condition
and Results of Operations | 8       
|                                                                                                |         
|Item 3.    Quantitative and Qualitative Disclosures About Market Risk                           | 11      
|                                                                                                |         
|Item 4.    Controls and Procedures                                                              | 11      
|                                                                                                |         
|                                                                                                |         
|                                                                                                |         
|                                                                                                |         
|Signatures                                                                                      | 12      
|                                                                                                |         
|Certifications                                                                                  | 13      































































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Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations



Net income for the quarter ended September 30, 2002, was $1,211,078 or $11.15 per share, an increase of $1,288,561, compared to a net loss of $77,483, or $.71 per share, for the corresponding period in 2001.  This increase was primarily the result of a substantial decrease in the provision for loan losses. In addition, higher net interest income, increased noninterest income and lower noninterest expenses positively impacted the results.  Income tax expense increased by $815,818 as a result of the improved operating results.







This increase was primarily attributable to an improved net interest income spread, which increased from 3.33% during the third quarter of 2001 to 3.85% during the quarter ended September

30, 2002.  The yield on earning assets decreased by 114 basis points while the cost of funds decreased by 166 basis points.  Average earning assets decreased by $3.3 million and average interest-bearing liabilities decreased by $8.1 million during the third quarter of 2002 compared to the third quarter of 2001.

In the third quarter of 2002 the Company's provision for credit losses was $186,000 compared to $1,811,000 for the third quarter of 2001.  Net charge-offs were $204,797 in the third quarter of 2002 compared to net charge-offs of $2,959,745 during the third quarter of 2001.



Noninterest income increased by $182,133 during the third quarter of 2002 compared to the corresponding period in 2001.  This increase was primarily the result of increased gains from the sale of assets, which were $122,164 higher than the corresponding period in the prior year.  Gains from the sale of acquired properties increased $61,961 and gains from the sale of fixed rate mortgages increased $55,308 during the quarter ended September 30, 2002.  Service charges on deposit accounts, including overdraft fees, increased $23,361 during the third quarter of 2002.  Appraisal fees were $7,175 higher during the quarter ended September 30, 2002, compared to the third quarter of 2001.

Noninterest expense decreased by $67,238 or 3% during the three months ended September 30, 2002, compared to the corresponding period in 2001.  Salaries and benefits expense increased $72,784 or 6% over the corresponding period in 2001.  This increase is attributed to higher salaries and wages, which increased by $41,468 as a result of regular salary increases, and higher group health insurance expenses, which increased by $26,868 or 13%.  Other operating expenses decreased by $137,148 primarily as a result of a $142,857 decrease in expenditures related to acquired properties.  During the third quarter of 2001 the bank incurred costs totaling $146,693 to repair properties held as other real estate.

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Return on average assets was 1.42% during the third quarter compared to (.09%) for the corresponding period in 2001.  Return on average equity in the third quarter of 2002 was 13.7% compared to (0.93%) for the corresponding period in the prior year.



Financial Condition







Demand deposits increased $12,701,634 or 42.1% during the first nine months of 2002.  The increase in demand deposits is attributable to a large commercial depositor whose balance as of September 30, 2002, was $15.2 million higher than at December 31, 2001.  Exclusive of this depositor, demand deposits were $2.5 million lower than at year-end.   Management attributes this decrease to a normal seasonal fluctuation.  Interest bearing deposits increased by $990,769 or .5% between December 31, 2001, and September 30, 2002.

Other borrowed funds decreased by $3,462,870 or 5.9% during the first nine months of 2002.  The Bank utilized the proceeds from the sale of fixed rate mortgages to reduce debt.

Stockholders' equity increased by $1,942,432 to $35,313,794 as of September 30, 2002.  As of September 30, 2002, the Company's leverage ratio was 9.8%, the risk-based core capital ratio was 12.8% and the risk-based total capital ratio was 14.0%.

Liquidity



10

In addition to on-balance sheet sources of funds the Company also has off-balance sheet sources available to meet liquidity needs.  The Company has unused lines of credit of $47.8 million as of September 30, 2002.  The Company has commitments to extend credit of $27.9 million as of September 30, 2002.  Management believes the Company's liquidity position as of September 30, 2002, is adequate under current economic conditions.



Item 3.  Quantitative and Qualitative Disclosures About Market Risk



Item 4.  Controls and Procedures



The Company's management,under the supervision and with the participation of the Company's principalexecutive officer and principal financial officer, has evaluated theCompany's disclosure controls and procedures within 90 days prior to thefiling date of this report.  Based on that evaluation, managementbelieves that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time period specified by the Securities and Exchange Commission's rules and forms.

There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of management's evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



























































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SIGNATURES





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











|                        | DENMARK BANCSHARES, INC.



/s/ Darrell R. Lemmens
|----------------------- | --------------------------------------------------
|Date:  October 21, 2002 | Darrell R. Lemmens,                               
|                        | Principal Executive Officer,                      
|                        | Chairman of the Board,                            
|                        | and President



/s/ Dennis J. Heim               
|Date:  October 21, 2002 | Dennis J. Heim                                    
|                        | Vice President and Treasurer,                     
|                        | Principal Financial and                           
|                        | Accounting Officer                                















































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CERTIFICATIONS



I, Dennis J. Heim, Vice President and Treasurer of Denmark Bancshares, Inc., certify that:



1. I have reviewed this quarterly report on Form 10-Q of Denmark Bancshares, Inc.;



2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;



3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;



4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;



b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and



c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):



a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and



6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





|                        | /s/ Dennis J. Heim           
|----------------------- | -----------------------------
|Date:  October 21, 2002 | Dennis J. Heim               
|                        | Vice President and Treasurer,
|                        | Principal Financial and      
|                        | Accounting Officer           





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CERTIFICATIONS



I, Darrell R. Lemmens, Chairman of the Board and President of Denmark Bancshares, Inc., certify that:



1. I have reviewed this quarterly report on Form 10-Q of Denmark Bancshares, Inc.;



2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;



3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;



4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;



b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and



c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):



a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and



6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





|                        | /s/ Darrell R. Lemmens              
|----------------------- | ------------------------------------
|Date:  October 21, 2002 | Darrell R. Lemmens,                 
|                        | Principal Executive Officer,        
|                        | Chairman of the Board, and President





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