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, 2001



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

(Registrant's 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 29, 2001, there were 54,636 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, 2001





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|PART I.Financial Information                                                                     |         
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|Item 1.    Financial Statements                                                                  |         
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|Consolidated Statements of Financial Condition                                                   | 3       
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|Consolidated Statements of Income                                                                | 4       
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|Consolidated Statements of Cash Flows                                                            | 5       
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|Notes to Consolidated Financial Statements                                                       | 6       
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|Item 2.    Management's Discussion and Analysis of Financial Condition
and Results of Operations | 8       
|                                                                                                 |         
|Item 3.    Quantitative and Qualitative Disclosures About Market Risk                            | 11      
|Signatures                                                                                       | 12      
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|Denmark Bancshares, Inc. and Subsidiaries                                 
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|Consolidated Statements of Financial Condition                            
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|Assets                                                                    
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|Liabilities                                                               
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|Stockholders' Equity                                                      
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|The accompanying notes are an integral part of these financial statements.
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|3                                                                         





|Denmark Bancshares, Inc. and Subsidiaries                                 
|--------------------------------------------------------------------------
|Consolidated Statements of Income                                         
|(Unaudited)                                                               
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|Interest Income                                                           
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|Interest Expense                                                          
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|Provision for Credit Losses                                               
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|Other Income                                                              
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|Other Expense                                                             
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|The accompanying notes are an integral part of these financial statements.
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|4                                                                         

|Denmark Bancshares, Inc. and Subsidiaries
|-----------------------------------------
|Consolidated Statements of Cash Flows    
|(Unaudited)                              
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|Cash Flows from Operating Activities:    
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|Cash Flows from Investing Activities:    
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|Cash Flows from Financing Activities:    
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|Noncash Investing Activities:            
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|5                                        



|Denmark Bancshares, Inc. and Subsidiaries                                                    
|---------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                   
|(Unaudited)                                                                                  
|                                                                                             
|NOTE 1 - FINANCIAL STATEMENTS                                                                
|The consolidated financial statements included herein are unaudited.  In the opinion         
|of management, these statements contain all adjustments necessary to present fairly the      
|financial position of Denmark Bancshares, Inc. (the "Company"), the results of               
|operations and cash flows for the periods presented.  All adjustments necessary for the      
|fair presentation of the financial statements are of a normal recurring nature.  These       
|consolidated financial statements should be read in conjunction with the consolidated        
|financial statements and the notes thereto included in the Company's latest annual           
|report on Form 10-K.                                                                         
|                                                                                             
|NOTE 2 - INVESTMENT SECURITIES                                                               
|The amortized cost and estimated fair value of securities available-for-sale were as follows:
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|The amortized cost and estimated fair value of securities held-to-maturity were as follows:  
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|6                                                                                            



|                                                                                                               |                                       |             |                               |            |                             |            |              |  |            
|-------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ----------- | ----------------------------- | ---------- | --------------------------- | ---------- | ------------ |  | -----------
|Denmark Bancshares, Inc. and Subsidiaries                                                                     
|Notes to Consolidated Financial Statements                                                                    
|(Unaudited)                                                                                                   
|                                                                                                               |                                       |             |                               |            |                             |            |              |  |            
|                                                                                                               |                                       |             |                               |            |                             |            |              |  |            
|The amortized cost and estimated fair values of securities at September 30, 2001, by maturity were as follows:
|                                                                                                               |                                       |             |                               |            |                             |            |              |  |            
|                                                                                                               |                                       |             | Securities Available-for-Sale |            | Securities Held-to-Maturity
|                                                                                                               |                                       |             |                               |            | Estimated                   |            |              |  | Estimated  
|                                                                                                               |                                       |             | Amortized                     |            | Fair                        |            | Amortized    |  | Fair       
|                                                                                                               | Amounts Maturing                      |             | Cost                          |            | Value                       |            | Cost         |  | Value      
|                                                                                                               | Within one year                       |             | $0                            |            | $0                          |            | $355,906     |  | $362,216   
|                                                                                                               | From one through five years           |             | 1,736,039                     |            | 1,757,727                   |            | 4,033,606    |  | 4,229,890  
|                                                                                                               | From five through ten years           |             | 609,059                       |            | 615,318                     |            | 7,684,262    |  | 8,350,876  
|                                                                                                               | After ten years                       |             | 0                             |            | 0                           |            | 23,322,329   |  | 24,207,927 
|                                                                                                               | Other securities (no stated maturity) |             | 84,198                        |            | 84,198                      |            | 0            |  | 0          
|                                                                                                               |                                       |             | $2,429,296                    |            | $2,457,243                  |            | $35,396,103  |  | $37,150,909
|                                                                                                               |                                       |             |                               |            |                             |            |              |  |            
|NOTE 3 - ALLOWANCE FOR LOAN LOSSES                                                                             |                                       |             |                               |           
|Changes in the allowance for loan losses were as follows:                                                      |                                       |             |                               |            |                             |           
|                                                                                                               |                                       |             |                               |            |                             |            | For the Year |  |            
|                                                                                                               |                                       |             | For the Nine Months Ended     |            | Ended                       |            |             
|                                                                                                               |                                       |             | September 30,                 |            | December 31,                |            |             
|                                                                                                               |                                       |             | 2001                          |            | 2000                        |            | 2000         |  |            
|Balance, beginning of period                                                                                   |                                       | $3,471,561  |                               | $3,282,812 |                             | $3,282,812 |              | 
|Provision charged to operations                                                                                |                                       | 4,196,500   |                               | 247,500    |                             | 463,535    |              | 
|Recoveries                                                                                                     |                                       | 36,359      |                               | 25,596     |                             | 28,549     |              | 
|Charge-offs                                                                                                    |                                       | (3,206,831) |                               | (164,547)  |                             | (303,335)  |              | 
|Balance, end of period                                                                                         |                                       | $4,497,589  |                               | $3,391,361 |                             | $3,471,561 |              | 
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|                                                                                                               |                                       |             | 7                             |            |                             |            |              |  |            

































|Denmark Bancshares, Inc. and Subsidiaries                                            
|-------------------------------------------------------------------------------------
|Management's Discussion and Analysis of Financial Condition and Results of Operations
|(Unaudited)                                                                          
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|Financial Highlights                                                                 
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|(In thousands)                                                                       
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|Operating Results                                                                    
|Interest income                                                                      
|Interest expense                                                                     
|Net interest income                                                                  
|Provision for credit losses                                                          
|Noninterest income                                                                   
|Noninterest expense                                                                  
|Net (loss) income                                                                    
|                                                                                     
|Per Share Data                                                                       
|Net (loss) income per share                                                          
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|(In thousands)                                                                       
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|Financial Condition (1)                                                              
|Loans                                                                                
|Allowance for credit losses                                                          
|Investment securities                                                                
|Assets                                                                               
|Deposits                                                                             
|Other borrowed funds                                                                 
|Stockholders' equity                                                                 
|                                                                                     
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|Financial Ratios                                                                     
|Return on average equity                                                             
|Return on average assets                                                             
|Interest rate spread                                                                 
|Average equity to average assets                                                     
|Allowance for credit losses                                                          
|to total loans (1)                                                                   
|                                                                                     
|                                                                                     
|(1)  As of the period ending.                                                        
|                                                                                     

8

















Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations



Net loss for the quarter ended September 30, 2001, was $1,350,703 or $24.70 per share, a decrease of $1,899,964, compared to net income of $549,261, or $10.01 per share, for the corresponding period in 2000.  This decrease was primarily the result of a substantial increase in the provision for loan losses, which more than offset higher net interest income and increased noninterest income.  In addition, higher noninterest expenses negatively impacted the results.







|                    | Increase (Decrease) Due to Change In
|------------------- | ------------------------------------
|(In thousands)      | Average
Balance                     
|Interest Income     | $(13)                               
|Interest Expense    | (89)                                
|Net interest income | $76                                 



This increase was primarily attributable to the lower cost of funds, which fell from 5.92% during the third quarter of 2000 to 4.52% during the quarter ended September 30, 2001.  The Company's average interest rate spread was 3.40% during the third quarter of 2001 compared to 2.13% during the quarter ended September 30, 2000.  The yield on earning assets fell by thirteen basis points while the cost of funds decreased by 140 basis points.



Noninterest income increased by $18,480 during the third quarter of 2001 compared to the corresponding period in 2000.  This increase was primarily the result of an increase in overdraft fees, which were $20,576 higher than the corresponding period in the prior year.   A fee increase was implemented during the third quarter of 2001.  Commissions from the sales of mutual funds and equity securities fell by $16,698 during the most recent quarter.  Appraisal fees were $7,300 higher during the quarter ended September 30, 2001, compared to the third quarter of 2000.

Noninterest expense increased by $261,582 or 14% during the three months ended September 30, 2001, compared to the corresponding period in 2000.  Salaries and benefits expense increased $93,908 or 8% over the corresponding period in 2000.  This increase is attributed to higher salaries and wages, which increased by $59,893 as a result of regular salary increases and higher group health insurance expenses, which increased by $29,760 or 18%.     Occupancy expenses increased by $39,689 primarily as a result of higher depreciation expense, which increased by $17,634.  Other operating expenses increased by $145,707 primarily as a result of expenditures totaling $146,693 to repair properties held as other real estate.

9



Financial Condition







Demand deposits decreased $5,321,298 or 15.80% during the first nine months of 2001.  Management attributes the decrease in demand deposits to a normal seasonal fluctuation.  Interest bearing deposits increased by $9,971,071 or 4.7% between December 31, 2000, and September 30, 2001.

Other borrowed funds decreased by $6,271,600 or 9.6% during the first nine months of 2001.  The Bank utilized the proceeds from the sale of fixed rate mortgages to reduce debt.

Stockholders' equity decreased by $977,632 to $32,774,098 as of September 30, 2001.  As of September 30, 2001, the Company's leverage ratio was 8.9%, the risk-based core capital ratio was 12.4% and the risk-based total capital ratio was 13.6%.  The Company and the Bank continue to maintain capital levels well above the regulatory minimum levels.

Liquidity



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 $40.6 million as of September 30, 2001.  The Company has commitments to extend credit of $27.9 million as of September 30, 2001.  Management believes the Company's liquidity position as of September 30, 2001, is adequate under current economic conditions.





10



Item 3.  Quantitative and Qualitative Disclosures About Market Risk



































































































11









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/s Darrell R. Lemmens
|------------------------ | --------------------------------------------------
|Date:  November 14, 2001 | Darrell R. Lemmens,                               
|                         | Principal Executive Officer,                      
|                         | Chairman of the Board, and                        
|                         | President



s/s Dennis J. Heim                   
|Date:  November 14, 2001 | Dennis J. Heim                                    
|                         | Vice President and Treasurer,                     
|                         | Principal Financial and                           
|                         | Accounting Officer                                



























12