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 June 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 July 27, 2001, there were 54,699 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 June 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      
|PART II.OtherInformation                                                                         |         
|                                                                                                 |         
|Item 4.    Submission of Matters to a Vote of Security Holders


Signatures                      | 11
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 June 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                          |            | $1,567,722   |  | $1,586,097 
|                                                                                                          | From one through five years           |            | 2,998,037                     |            | 3,008,863                   |            | 3,817,822    |  | 3,998,507  
|                                                                                                          | From five through ten years           |            | 619,186                       |            | 616,814                     |            | 7,734,160    |  | 8,291,269  
|                                                                                                          | After ten years                       |            | 124,912                       |            | 126,923                     |            | 21,887,132   |  | 22,289,258 
|                                                                                                          | Other securities (no stated maturity) |            | 39,306                        |            | 39,306                      |            | 0            |  | 0          
|                                                                                                          |                                       |            | $3,781,441                    |            | $3,791,906                  |            | $35,006,836  |  | $36,165,131
|                                                                                                          |                                       |            |                               |            |                             |            |              |  |            
|NOTE 3 - ALLOWANCE FOR LOAN LOSSES                                                                        |                                       |            |                               |           
|Changes in the allowance for loan losses were as follows:                                                 |                                       |            |                               |            |                             |           
|                                                                                                          |                                       |            |                               |            |                             |            | For the Year |  |            
|                                                                                                          |                                       |            | For the Six Months Ended      |            | Ended                       |            |             
|                                                                                                          |                                       |            | June 30,                      |            | December 31,                |            |             
|                                                                                                          |                                       |            | 2001                          |            | 2000                        |            | 2000         |  |            
|Balance, beginning of period                                                                              |                                       | $3,471,561 |                               | $3,282,812 |                             | $3,282,812 |              | 
|Provision charged to operations                                                                           |                                       | 285,500    |                               | 165,000    |                             | 463,535    |              | 
|Recoveries                                                                                                |                                       | 23,288     |                               | 7,418      |                             | 28,549     |              | 
|Charge-offs                                                                                               |                                       | (234,014)  |                               | (96,051)   |                             | (303,335)  |              | 
|Balance, end of period                                                                                    |                                       | $3,546,335 |                               | $3,359,179 |                             | $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 income                                                                           
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|Per Share Data                                                                       
|Net 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 income for the quarter ended June 30, 2001, was $829,694, or $15.14 per share, an increase of $165,236 or 25%, compared to $664,458, or $12.10 per share, for the corresponding period in 2000.  This increase was the result of higher net interest income, which more than offset an increase in the provision for loan losses, lower noninterest income and higher noninterest expenses.







|                    | Increase (Decrease) Due to Change In
|------------------- | ------------------------------------
|(In thousands)      | Average
Balance                     
|Interest Income     | $295                                
|Interest Expense    | 183                                 
|Net interest income | $112                                





This increase was primarily attributable to the lower cost of funds, which fell from 5.42% during the second quarter of 2000 to 5.08% during the quarter ended June 30, 2001.  The Company's average interest rate spread was 2.94% during the second quarter of 2001 compared to 2.56% during the quarter ended June 30, 2000.  The yield on earning assets increased by four basis points while the cost of funds decreased by thirty-four basis points.  Average earning assets increased by $14.3 million and average interest-bearing liabilities increased by $12.5 million during the second quarter of 2001 compared to the second quarter of 2000.

In the second quarter of 2001 the Company's provision for credit losses was $174,500 compared to $82,500 for the second quarter of 2000.  Net charge-offs were $125,504 in the second quarter of 2001 compared to net charge-offs of $49,622 during the second quarter of 2000.

Noninterest income decreased by $13,660 during the second quarter of 2001 compared to the corresponding period in 2000.  This decrease was primarily the  result of a decrease in gains from the sale of other assets which were $18,794 lower than the corresponding period in the prior year.   Appraisal fees were $7,575 higher during the quarter ended June 30, 2001, compared to the second quarter of 2000.

Noninterest expense increased by $65,624 or 3% during the three months ended June 30, 2001, compared to the corresponding period in 2000.  Salaries and benefits expense increased $91,918 or 8% over the corresponding period in 2000.  This increase is the result of higher salaries and wages, which increased by $51,176 as a result of regular salary increases and the hiring of additional employees, and higher group health insurance expenses, which increased by $33,549 or 20%.     Occupancy expenses increased by $24,282 primarily as a result of higher depreciation expense, which increased by $26,831. Data processing expenses decreased by $23,296 compared to the quarter ended June 30, 2000.  Second quarter 2000 data processing expenses included $12,500 paid to a consulting firm for network security.



Return on average assets was .96% during the second quarter compared to .80% for the corresponding period in 2000.  Return on average equity in the second quarter of 2001 was 9.6%, compared to 8.1% for the corresponding period in the prior year.





9















Financial Condition







Demand deposits decreased $6,065,298 or 18.0% during the first six months of 2001.  Management attributes the decrease in demand deposits to a normal seasonal fluctuation.  Interest bearing deposits increased by $7,145,250 or 3.4% between December 31, 2000, and June 30, 2001.

Other borrowed funds decreased by $6,721,045 or 10.3 during the first six months of 2001.  The Bank utilized the proceeds from the sale of fixed rate mortgages to reduce debt.

Stockholders' equity increased by $1,117,463 to $34,869,193 as of June 30, 2001.  As of June 30, 2001, the Company's leverage ratio was 10.2%, the risk-based core capital ratio was 13.0% and the risk-based total capital ratio was 14.2%.  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 $41.1 million as of June 30, 2001.  The Company has commitments to extend credit of $30.8 million as of June 30, 2001.  Management believes the Company's liquidity position as of June 30, 2001, is adequate under current economic conditions.

10









Item 3.  Quantitative and Qualitative Disclosures About Market Risk







Part II.  Other Information

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



|(a) |     | The Company held its Annual Meeting of Shareholders on April 24, 2001.                                                                                                                                                                                                   
|--- | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |     | Directors elected at the Annual Meeting were Terese M. Deprey, Mark E. Looker and B.E. Mleziva, D.V.M.  Directors whose term of office continued after the meeting were Darrell R. Lemmens, Edward Q. Opichka, D.D.S., C.J. Stodola, Norman F. Tauber and Thomas F. Wall.
|(c) |     | The matters voted upon and the results of the voting were as follows:                                                                                                                                                                                                    
|    | (1) | The shareholders elected the following nominees to the Board of Directors to serve a three year term expiring in 2004:                                                                                                                                                   
|    |     | Nominees                                                                                                                                                                                                                                                                 
|    |     | Terese M. Deprey                                                                                                                                                                                                                                                         
|    |     | Mark E. Looker                                                                                                                                                                                                                                                           
|    |     | B.E. Mleziva, D.V.M.                                                                                                                                                                                                                                                     
|    |     |                                                                                                                                                                                                                                                                          
|    | (2) | The ratification of the appointment of Williams Young, LLC as independent public accountants for the year ending December 31, 2001.                                                                                                                                      
|    |     | For                                                                                                                                                                                                                                                                      
|    |     | 47,001                                                                                                                                                                                                                                                                   







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:  July 30, 2001 | Darrell R. Lemmens,                               
|                     | Principal Executive Officer,                      
|                     | Chairman of the Board,                            
|                     | and President



s/s Dennis J. Heim               
|Date:  July 30, 2001 | Dennis J. Heim                                    
|                     | Vice President and Treasurer,                     
|                     | Principal Financial and                           
|                     | Accounting Officer                                









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