WAUSAU, Wis., April 24, 2023 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported first quarter earnings ending March 31, 2023 of $0.67 per common share on net income of $2.9 million, compared to $0.80 per common share on net income of $3.5 million during the fourth quarter ending December 31, 2022, and $0.75 per common share on net income of $3.3 million during the first quarter ending March 31, 2022.
PSB’s first quarter 2023 operating results reflected the following changes from the fourth quarter of 2022: (1) lower net interest income due to rising deposit and FHLB advance costs; (2) higher mortgage loan servicing income offset by higher salary and benefit costs; (3) lower accumulated other comprehensive loss due to a decline in intermediate interest rates; (4) annualized loan growth of 4.7%; and (5) increased borrowings to fund seasonal business customer and municipal deposit outflows, promote increased on-balance sheet liquidity, and to fund net loan growth.
“Though the first quarter presented challenges with a rapid rise in interest rates, persistent forecasts of a pending recession and highly publicized bank failures, PSB continued its strong performance with a 12.5% return on shareholders’ equity during the first quarter. The combination of an efficient operation and a strong local economy has contributed to solid returns. Because of our balance sheet strength, we have immediate access to nearly $600 million in funds to support our depositors if needed,” stated Scott Cattanach, President and CEO.
March 31, 2023 Highlights:
- Net interest income decreased to $9.9 million for the quarter ended March 31, 2023, compared to $10.6 million for the quarter ended December 31, 2022, but increased from $9.6 million for the quarter ended March 31, 2022.
- Provision for loan losses increased to $100,000 for the quarter ended March 31, 2023 after recording no loan loss provision since the first quarter of 2021. The March 31, 2023 provision was related to loan growth of $11.4 million. The impact of the CECL adoption in the quarter was insignificant.
- Nonninterest income increased to $2.0 million for the quarter ended March 31, 2023 from $1.8 million the previous quarter. The increase largely reflected increased mortgage loan servicing income from recapture of the mortgage servicing right valuation allowance.
- Noninterest expenses increased $118,000, or 1.5% for the first quarter of 2023 to $7.8 million from $7.7 million the prior quarter. The increase was primarily related to higher salary and benefit costs.
- Asset quality continued to improve and remained strong. At March 31, 2023, non-performing assets declined to 0.45% of total assets from 1.03% one year earlier.
- Tangible book value per common share increased 4.7% to $22.43 at March 31, 2023 from $21.37 one quarter earlier. Tangible book value benefited from improved interest rate marks on available for sale securities which reduced the other comprehensive loss by $1.7 million. Return on tangible common equity was 12.51% for the quarter ended March 31, 2023 compared to 15.12% the prior quarter.
- During the first quarter, PSB repurchased 60,376 shares of its common stock.
Balance Sheet and Asset Quality Review
Total assets increased slightly to $1.36 billion at March 31, 2023, from $1.34 billion at December 31, 2022. Cash and cash equivalents totaled $39.6 million at March 31, 2023 compared to $29.4 million the previous quarter. Investment securities available for sale decreased $1.5 million from maturities and paydowns to $190.7 million at March 31, 2023 from $192.2 million one quarter earlier. Total collateralized liquidity available to meet cash demands was approximately $583 million at March 31, 2023 with an additional $294 million that could be raised in a short timeframe from the brokered CDs market.
Total loans receivable increased $11.4 million to $973.3 million at March 31, 2023, from $961.9 million at December 31, 2022. One-to-four family adjustable rate mortgage loans were added to the portfolio as well as commercial real estate and non-owner occupied construction and land loans. The majority of the Company’s lending activity for the quarter consists of lending on commercial real estate properties. As of March 31, 2023, 13.0% of the total loan portfolio and commitments consisted of multi-family loans followed by 8.5% on industrial production and warehousing real estate loans. Retail sales real estate loans totaled 3.7% of total loans and commitments, hotels totaled 3.3%, and office rental property loans totaled 0.9%. Though the lending pipeline for real estate projects slowed through the winter season, the economic environment in our markets remains healthy and moderate loan origination activity is expected to continue through 2023.
The allowance for loan losses declined slightly to 1.25% of gross loans at March 31, 2023 from 1.26% the prior quarter and included the recovery of reserves related to the adoption of CECL. On January 1, 2023, PSB adopted CECL for determining expected credit losses. At adoption, there was an $87,000 recovery adjustment (reduction) to the allowance for loan losses resulting in an increase to retained earnings as permitted by the adoption accounting rules. Annualized net recoveries to average loans were 0.02% for the first quarter ended March 31, 2023. Non-performing assets declined to 0.45% of total assets at March 31, 2023, compared to 0.48% at December 31, 2022, and 1.03% at March 31, 2022. During the first quarter of 2023, the remaining foreclosed asset was sold.
Total deposits declined 3.6% during the quarter. With the recent rise in interest rates, some depositors shifted existing low cost funds into other higher yield bank products, increasing the cost of funds. Local customers (deposits excluding brokered and national time deposit CDs) declined 3.1% during the March 2023 quarter. However, withdrawals were not a result of customers concerned about FDIC insurance limits in light of recent high profile bank failures. “We carefully examined large customers with deposit outflows and recognized only 6% of large customer outflows related to chasing higher rates at another bank, while approximately 25% of the decline related to seasonal municipal real estate tax activity, and 50% were related to normal business operations, owner distributions, or income tax payments. The manufacturing and health care sector had a strong year in 2022 with business owners making large distributions based on performance, which resulted in some deposit outflow as they shifted commercial deposits to individual deposits,” said Jessica Brown, Senior Vice President and Chief Financial Officer.
The composition of deposits changed during the March 2023 quarter as customers looked for higher deposit rates. At March 31, 2023, money market deposits and retail time deposits increased to 36.6% of deposits, compared to 32.3% at December 31, 2022. The lower-yield demand and savings deposits declined to 56.2% of deposits compared to 59.9% at December 31, 2022. Broker and national time deposits declined to 7.2% of total deposits at March 31, 2023 from 7.8% one quarter earlier. Uninsured and uncollateralized deposits represented 19.0% of total deposits at March 31, 2023 compared to 20.4% at December 31, 2022.
FHLB advances increased to $113.0 million at March 31, 2023, compared to $43.0 million at December 31, 2022, while other borrowings decreased to $5.0 million at March 31, 2023 compared to $13.0 million at December 31, 2022. New FHLB advances were added to support deposit outflows during the quarter as well as to fund loan growth and increase cash on hand for liquidity contingency plans. During the quarter, FHLB funding options carried lower interest rates than brokered CD alternatives.
Tangible stockholder equity as a percent of total tangible assets increased to 7.54% at March 31, 2023, from 7.42% at December 31, 2022.
Tangible net book value per common share was $22.43 at March 31, 2023, compared to $21.37 per common share one quarter earlier. Relative to the prior quarter, accumulated other comprehensive loss declined $1.7 million, which contributed to the book value per share increase. At March 31, 2023, the fair value on all securities (available for sale and held to maturity) was 10.4% less than amortized purchase cost, compared to 11.6% of the amortized purchase cost at December 31, 2022.
Operations Review
Net interest income decreased to $9.9 million (on a net margin of 3.21%) for the first quarter of 2023, compared to $10.6 million (on a net margin of 3.41%) for the fourth quarter of 2022, and $9.6 million (on a net margin of 3.24%) for the first quarter of 2022. Earning asset yields increased 24 basis points to 4.45% during the first quarter of 2023 from 4.21% during the fourth quarter of 2022, while deposit and borrowing costs increased 57 basis points to 1.68% compared to 1.11% during the fourth quarter of 2022.
The increase in earning asset yields was partially due to higher yields on investment securities during the quarter ended March 31, 2023. Taxable security yields increased to 2.70% for the quarter ended March 31, 2023, from 2.45% in the quarter ended December 31, 2022. Loan yields also increased during the first quarter to 4.90% from 4.67% for the fourth quarter of 2022 as loans repriced to higher indices from Federal Reserve and market rate increases and new loans were added to the portfolio.
As interest rates have increased, deposit customers have become more sensitive to deposit products with higher returns. As such, non-interest bearing deposit accounts declined $24.5 million during the quarter to $267.8 million at March 31, 2023 while money market deposits increased $22.3 million to $238.5 million. The overall cost of deposits was 1.06% for the quarter ended March 31, 2023 compared to 0.72% the prior quarter.
Total noninterest income increased for the first quarter of 2023 to $2.0 million from $1.8 million for the fourth quarter of 2022, due primarily to an increase in mortgage loan servicing partially offset by a reduction in investment sales commissions. At March 31, 2023, the Bank serviced $377.6 million in secondary market residential mortgage loans for others.
Noninterest expenses increased slightly to $7.8 million for the first quarter of 2023, compared to $7.7 million for the fourth quarter of 2022. The first quarter of 2023 included higher salaries and employee benefit expenses. Salary and employee benefit expenses were $5.0 million for the first quarter of 2023, compared to $4.7 million for the fourth quarter of 2022.
About PSB Holdings, Inc.
PSB Holdings, Inc. is the parent company of Peoples State Bank. Peoples is a community bank headquartered in Wausau, Wisconsin, serving northcentral and southeastern Wisconsin from ten full-service banking locations in Marathon, Oneida, Vilas, Milwaukee and Waukesha counties and a loan production office in Stevens Point, Wisconsin. Peoples also provides investment and insurance products, along with retirement planning services, through Peoples Wealth Management, a division of Peoples. PSB Holdings, Inc. is traded under the stock symbol PSBQ on the OTCQX Market. More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about PSB’s business based, in part, on assumptions made by management and include, without limitation, statements with respect to the potential growth of PSB, its future profits, expected stock repurchase levels, future dividend rates, future interest rates, and the adequacy of its capital position. Forward-looking statements can be affected by known and unknown risks, uncertainties, and other factors, including, but not limited to, strength of the economy, the effects of government policies, including interest rate policies, risks associated with the execution of PSB’s vision and growth strategy, including with respect to current and future M&A activity, and risks associated with global economic instability relating to the COVID-19 pandemic and its effect on PSB and Peoples, and their customers, and other risks. The forward-looking statements in this press release speak only as of the date on which they are made and PSB does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
| PSB Holdings, Inc. | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| March 31, 2023, September 30, June 30, and March 31, 2022, unaudited, December 31, 2022 derived from audited financial statements | |||||||||||||||
| Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | |||||||||||
| (dollars in thousands, except per share data) | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 13,336 | $ | 28,561 | $ | 16,659 | $ | 19,149 | $ | 18,322 | |||||
| Interest-bearing deposits | 538 | 758 | 3,267 | 3,545 | 5,158 | ||||||||||
| Federal funds sold | 25,766 | 90 | 20,751 | 16,689 | 14,356 | ||||||||||
| Cash and cash equivalents | 39,640 | 29,409 | 40,677 | 39,383 | 37,836 | ||||||||||
| Securities available for sale (at fair value) | 190,738 | 192,197 | 188,425 | 190,478 | 289,704 | ||||||||||
| Securities held to maturity (fair values of $82,610, $80,926, $77,467, $82,567 and | |||||||||||||||
| $0 respectively) | 87,889 | 87,816 | 87,993 | 88,216 | - | ||||||||||
| Equity securities | 2,070 | 2,032 | 1,870 | 1,781 | 1,720 | ||||||||||
| Bank certificates of deposit (at cost) | - | - | - | 245 | 245 | ||||||||||
| Loans held for sale | - | - | - | 270 | - | ||||||||||
| Loans receivable, net | 973,270 | 961,865 | 936,686 | 925,260 | 875,588 | ||||||||||
| Accrued interest receivable | 4,062 | 4,006 | 3,493 | 3,285 | 3,219 | ||||||||||
| Foreclosed assets | - | 160 | 160 | 160 | 1,103 | ||||||||||
| Premises and equipment, net | 13,406 | 13,164 | 13,129 | 12,981 | 12,906 | ||||||||||
| Mortgage servicing rights, net | 1,682 | 1,610 | 1,651 | 1,711 | 1,770 | ||||||||||
| Federal Home Loan Bank stock (at cost) | 4,620 | 2,516 | 2,516 | 2,646 | 2,646 | ||||||||||
| Cash surrender value of bank-owned life insurance | 25,078 | 24,922 | 24,765 | 24,608 | 24,455 | ||||||||||
| Core deposit intangible | 348 | 382 | 415 | 449 | 487 | ||||||||||
| Goodwill | 2,541 | 2,541 | 2,541 | 2,541 | 2,541 | ||||||||||
| Other assets | 14,444 | 15,069 | 15,248 | 13,550 | 11,725 | ||||||||||
| TOTAL ASSETS | $ | 1,359,788 | $ | 1,337,689 | $ | 1,319,569 | $ | 1,307,564 | $ | 1,265,945 | |||||
| Liabilities | |||||||||||||||
| Non-interest-bearing deposits | $ | 267,836 | $ | 292,338 | $ | 298,335 | $ | 283,592 | $ | 272,611 | |||||
| Interest-bearing deposits | 839,757 | 856,417 | 850,483 | 829,867 | 816,794 | ||||||||||
| Total deposits | 1,107,593 | 1,148,755 | 1,148,818 | 1,113,459 | 1,089,405 | ||||||||||
| Federal Home Loan Bank advances | 113,000 | 43,000 | 40,000 | 67,000 | 47,000 | ||||||||||
| Other borrowings | 5,033 | 12,985 | 10,449 | 4,601 | 4,304 | ||||||||||
| Senior subordinated notes | 4,769 | 5,549 | 2,500 | 2,500 | 2,500 | ||||||||||
| Junior subordinated debentures | 12,844 | 12,819 | 12,793 | 12,768 | 12,742 | ||||||||||
| Accrued expenses and other liabilities | 11,338 | 12,639 | 10,114 | 10,938 | 10,208 | ||||||||||
| Total liabilities | 1,254,577 | 1,235,747 | 1,224,674 | 1,211,266 | 1,166,159 | ||||||||||
| Stockholders' equity | |||||||||||||||
| Preferred stock - no par value: | |||||||||||||||
| Authorized - 30,000 shares; Issued - 7,200 shares | |||||||||||||||
| Outstanding - 7,200, 7,200, 0, 0, and 0 shares, respectively | 7,200 | 7,200 | - | - | - | ||||||||||
| Common stock - no par value with a stated value of $1.00 per share: | |||||||||||||||
| Authorized - 18,000,000 shares; Issued - 5,490,798 shares | |||||||||||||||
| Outstanding - 4,241,501, 4,297,279, 4,414,651, 4,423,037 and | |||||||||||||||
| 4,434,840 shares, respectively | 1,830 | 1,830 | 1,830 | 1,830 | 1,830 | ||||||||||
| Additional paid-in capital | 8,311 | 8,300 | 8,294 | 8,238 | 8,183 | ||||||||||
| Retained earnings | 128,968 | 126,003 | 123,559 | 120,043 | 117,957 | ||||||||||
| Accumulated other comprehensive income (loss), net of tax | (22,515 | ) | (24,220 | ) | (24,200 | ) | (19,423 | ) | (14,097 | ) | |||||
| Treasury stock, at cost - 1,249,297, 1,193,519, 1,076,147, 1,067,761 and | |||||||||||||||
| 1,055,958 shares, respectively | (18,583 | ) | (17,171 | ) | (14,588 | ) | (14,390 | ) | (14,087 | ) | |||||
| Total stockholders' equity | 105,211 | 101,942 | 94,895 | 96,298 | 99,786 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,359,788 | $ | 1,337,689 | $ | 1,319,569 | $ | 1,307,564 | $ | 1,265,945 | |||||
| PSB Holdings, Inc. | ||||||||||||
| Consolidated Statements of Income | ||||||||||||
| Quarter Ended | ||||||||||||
| (dollars in thousands, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | |||||||
| except per share data - unaudited) | 2023 | 2022 | 2022 | 2022 | 2022 | |||||||
| Interest and dividend income: | ||||||||||||
| Loans, including fees | $ | 11,773 | $ | 11,251 | $ | 10,225 | $ | 9,295 | $ | 9,054 | ||
| Securities: | ||||||||||||
| Taxable | 1,331 | 1,218 | 978 | 859 | 762 | |||||||
| Tax-exempt | 537 | 539 | 540 | 537 | 533 | |||||||
| Other interest and dividends | 148 | 141 | 163 | 52 | 42 | |||||||
| Total interest and dividend income | 13,789 | 13,149 | 11,906 | 10,743 | 10,391 | |||||||
| Interest expense: | ||||||||||||
| Deposits | 2,989 | 2,060 | 1,341 | 595 | 443 | |||||||
| FHLB advances | 547 | 167 | 209 | 234 | 169 | |||||||
| Other borrowings | 62 | 38 | 14 | 4 | 2 | |||||||
| Senior subordinated notes | 62 | 55 | 28 | 28 | 28 | |||||||
| Junior subordinated debentures | 234 | 224 | 202 | 179 | 166 | |||||||
| Total interest expense | 3,894 | 2,544 | 1,794 | 1,040 | 808 | |||||||
| Net interest income | 9,895 | 10,605 | 10,112 | 9,703 | 9,583 | |||||||
| Provision for loan losses | 100 | - | - | - | - | |||||||
| Net interest income after provision for loan losses | 9,795 | 10,605 | 10,112 | 9,703 | 9,583 | |||||||
| Noninterest income: | ||||||||||||
| Service fees | 361 | 381 | 409 | 392 | 388 | |||||||
| Gain on sale of mortgage loans | 27 | 56 | 98 | 182 | 277 | |||||||
| Mortgage loan servicing, net | 298 | 179 | 130 | 117 | 176 | |||||||
| Investment and insurance sales commissions | 365 | 498 | 357 | 404 | 456 | |||||||
| Increase in cash surrender value of life insurance | 157 | 157 | 157 | 152 | 150 | |||||||
| Other noninterest income | 742 | 553 | 558 | 686 | 531 | |||||||
| Total noninterest income | 1,950 | 1,824 | 1,709 | 1,933 | 1,978 | |||||||
| Noninterest expense: | ||||||||||||
| Salaries and employee benefits | 5,006 | 4,700 | 4,302 | 4,548 | 4,390 | |||||||
| Occupancy and facilities | 699 | 641 | 687 | 629 | 665 | |||||||
| Loss (gain) on foreclosed assets | (50 | ) | 2 | 4 | - | (6 | ) | |||||
| Data processing and other office operations | 880 | 910 | 906 | 912 | 861 | |||||||
| Advertising and promotion | 162 | 180 | 185 | 173 | 152 | |||||||
| Core deposit intangible amortization | 34 | 34 | 34 | 38 | 47 | |||||||
| Other noninterest expenses | 1,073 | 1,219 | 1,069 | 1,151 | 1,083 | |||||||
| Total noninterest expense | 7,804 | 7,686 | 7,187 | 7,451 | 7,192 | |||||||
| Income before provision for income taxes | 3,941 | 4,743 | 4,634 | 4,185 | 4,369 | |||||||
| Provision for income taxes | 941 | 1,143 | 1,119 | 993 | 1,039 | |||||||
| Net income | $ | 3,000 | $ | 3,600 | $ | 3,515 | $ | 3,192 | $ | 3,330 | ||
| Preferred stock dividends declared | $ | 122 | $ | 81 | $ | - | $ | - | $ | - | ||
| Net income available to common shareholders | $ | 2,878 | $ | 3,519 | $ | 3,515 | $ | 3,192 | $ | 3,330 | ||
| Basic earnings per common share | $ | 0.67 | $ | 0.80 | $ | 0.80 | $ | 0.72 | $ | 0.75 | ||
| Diluted earnings per common share | $ | 0.67 | $ | 0.80 | $ | 0.80 | $ | 0.72 | $ | 0.75 | ||
| PSB Holdings, Inc. | ||||||||||||||||
| Quarterly Financial Summary | ||||||||||||||||
| (dollars in thousands, except per share data) | Quarter ended | |||||||||||||||
| Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | ||||||||||||
| Earnings and dividends: | 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||
| Interest income | $ | 13,789 | $ | 13,149 | $ | 11,906 | $ | 10,743 | $ | 10,391 | ||||||
| Interest expense | $ | 3,894 | $ | 2,544 | $ | 1,794 | $ | 1,040 | $ | 808 | ||||||
| Net interest income | $ | 9,895 | $ | 10,605 | $ | 10,112 | $ | 9,703 | $ | 9,583 | ||||||
| Provision for loan losses | $ | 100 | $ | - | $ | - | $ | - | $ | - | ||||||
| Other noninterest income | $ | 1,950 | $ | 1,824 | $ | 1,709 | $ | 1,933 | $ | 1,978 | ||||||
| Other noninterest expense | $ | 7,804 | $ | 7,686 | $ | 7,187 | $ | 7,451 | $ | 7,192 | ||||||
| Net income available to common shareholders | $ | 2,878 | $ | 3,519 | $ | 3,515 | $ | 3,192 | $ | 3,330 | ||||||
| Basic earnings per common share (3) | $ | 0.67 | $ | 0.80 | $ | 0.80 | $ | 0.72 | $ | 0.75 | ||||||
| Diluted earnings per common share (3) | $ | 0.67 | $ | 0.80 | $ | 0.80 | $ | 0.72 | $ | 0.75 | ||||||
| Dividends declared per common share (3) | $ | - | $ | 0.25 | $ | - | $ | 0.25 | $ | - | ||||||
| Tangible net book value per common share (4) | $ | 22.43 | $ | 21.37 | $ | 20.83 | $ | 21.10 | $ | 21.82 | ||||||
| Semi-annual dividend payout ratio | n/a | 15.27 | % | n/a | 16.96 | % | n/a | |||||||||
| Average common shares outstanding | 4,275,160 | 4,377,330 | 4,419,421 | 4,428,939 | 4,433,375 | |||||||||||
| Balance sheet - average balances: | ||||||||||||||||
| Loans receivable, net of allowances for loss | $ | 964,030 | $ | 945,551 | $ | 931,344 | $ | 904,710 | $ | 878,979 | ||||||
| Assets | $ | 1,336,512 | $ | 1,321,776 | $ | 1,323,400 | $ | 1,290,906 | $ | 1,278,565 | ||||||
| Deposits | $ | 1,124,091 | $ | 1,146,066 | $ | 1,141,784 | $ | 1,099,314 | $ | 1,084,814 | ||||||
| Stockholders' equity | $ | 103,364 | $ | 100,037 | $ | 98,630 | $ | 98,261 | $ | 108,803 | ||||||
| Performance ratios: | ||||||||||||||||
| Return on average assets (1) | 0.87 | % | 1.06 | % | 1.05 | % | 0.99 | % | 1.06 | % | ||||||
| Return on average stockholders' equity (1) | 11.29 | % | 13.96 | % | 14.14 | % | 13.03 | % | 12.41 | % | ||||||
| Return on average tangible common | ||||||||||||||||
| stockholders' equity (1) (4) | 12.51 | % | 15.12 | % | 14.58 | % | 13.29 | % | 12.49 | % | ||||||
| Net loan charge-offs to average loans (1) | -0.02 | % | 0.03 | % | 0.01 | % | -0.02 | % | -0.05 | % | ||||||
| Nonperforming loans to gross loans | 0.62 | % | 0.64 | % | 1.16 | % | 1.21 | % | 1.34 | % | ||||||
| Nonperforming assets to total assets | 0.45 | % | 0.48 | % | 0.85 | % | 0.88 | % | 1.03 | % | ||||||
| Allowances for loan losses to gross loans | 1.25 | % | 1.26 | % | 1.30 | % | 1.32 | % | 1.39 | % | ||||||
| Nonperforming assets to tangible equity | ||||||||||||||||
| plus the allowance for loan losses (4) | 5.80 | % | 6.22 | % | 10.89 | % | 11.04 | % | 12.10 | % | ||||||
| Net interest rate margin (1)(2) | 3.21 | % | 3.41 | % | 3.24 | % | 3.23 | % | 3.24 | % | ||||||
| Net interest rate spread (1)(2) | 2.77 | % | 3.10 | % | 3.04 | % | 3.11 | % | 3.14 | % | ||||||
| Service fee revenue as a percent of | ||||||||||||||||
| average demand deposits (1) | 0.52 | % | 0.50 | % | 0.56 | % | 0.57 | % | 0.58 | % | ||||||
| Noninterest income as a percent | ||||||||||||||||
| of gross revenue | 12.39 | % | 12.18 | % | 12.55 | % | 15.25 | % | 15.99 | % | ||||||
| Efficiency ratio (2) | 65.02 | % | 61.06 | % | 60.02 | % | 63.20 | % | 61.40 | % | ||||||
| Noninterest expenses to average assets (1) | 2.37 | % | 2.31 | % | 2.15 | % | 2.32 | % | 2.28 | % | ||||||
| Average stockholders' equity less accumulated | ||||||||||||||||
| other comprehensive income (loss) to | ||||||||||||||||
| average assets | 9.32 | % | 9.23 | % | 8.95 | % | 8.80 | % | 8.99 | % | ||||||
| Tangible equity to tangible assets (4) | 7.54 | % | 7.42 | % | 6.98 | % | 7.15 | % | 7.66 | % | ||||||
| Stock price information: | ||||||||||||||||
| High | $ | 25.75 | $ | 22.74 | $ | 23.94 | $ | 26.35 | $ | 26.45 | ||||||
| Low | $ | 20.00 | $ | 21.50 | $ | 22.50 | $ | 22.82 | $ | 25.80 | ||||||
| Last trade value at quarter-end | $ | 21.15 | $ | 21.90 | $ | 22.50 | $ | 23.50 | $ | 26.00 | ||||||
| (1) Annualized | ||||||||||||||||
| (2) The yield on tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21% | ||||||||||||||||
| (3) Due to rounding, cumulative quarterly per share performance may not equal annual per share totals. | ||||||||||||||||
| (4) Tangible stockholders' equity excludes intangible assets. | ||||||||||||||||
| PSB Holdings, Inc. | |||||||||||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||||||||
| Quarter Ended | |||||||||||||||||
| Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | |||||||||||||
| (dollars in thousands - unaudited) | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||||
| Net income | $ | 3,000 | $ | 3,600 | $ | 3,515 | $ | 3,192 | $ | 3,330 | |||||||
| Other comprehensive income, net of tax: | |||||||||||||||||
| Unrealized gain (loss) on securities available | |||||||||||||||||
| for sale | 1,601 | (116 | ) | (4,915 | ) | (5,573 | ) | (14,847 | ) | ||||||||
| Amortization of unrealized loss included in net | |||||||||||||||||
| income on securities available for sale | |||||||||||||||||
| transferred to securities held to maturity | 129 | 93 | 92 | 176 | - | ||||||||||||
| Unrealized gain (loss) on interest rate swap | (1 | ) | 11 | 32 | 43 | 85 | |||||||||||
| Reclassification adjustment of interest rate | |||||||||||||||||
| swap settlements included in earnings | (24 | ) | (8 | ) | 13 | 28 | 37 | ||||||||||
| Other comprehensive income (loss) | 1,705 | (20 | ) | (4,778 | ) | (5,326 | ) | (14,725 | ) | ||||||||
| Comprehensive income (loss) | $ | 4,705 | $ | 3,580 | $ | (1,263 | ) | $ | (2,134 | ) | $ | (11,395 | ) | ||||
| PSB Holdings, Inc. | |||||||||||||||
| Nonperforming Assets as of: | |||||||||||||||
| Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
| Nonaccrual loans (excluding restructured loans) | $ | 5,773 | $ | 5,879 | $ | 6,048 | $ | 6,036 | $ | 6,537 | |||||
| Nonaccrual restructured loans | 57 | 62 | 70 | 146 | 170 | ||||||||||
| Restructured loans not on nonaccrual | 265 | 270 | 4,904 | 5,137 | 5,172 | ||||||||||
| Accruing loans past due 90 days or more | - | - | - | - | - | ||||||||||
| Total nonperforming loans | 6,095 | 6,211 | 11,022 | 11,319 | 11,879 | ||||||||||
| Other real estate owned | - | 160 | 160 | 160 | 1,103 | ||||||||||
| Total nonperforming assets | $ | 6,095 | $ | 6,371 | $ | 11,182 | $ | 11,479 | $ | 12,982 | |||||
| Nonperforming loans as a % of gross loans receivable | 0.62 | % | 0.64 | % | 1.16 | % | 1.21 | % | 1.34 | % | |||||
| Total nonperforming assets as a % of total assets | 0.45 | % | 0.48 | % | 0.85 | % | 0.88 | % | 1.03 | % | |||||
| Allowance for loan losses as a % of nonperforming loans | 190.21 | % | 197.92 | % | 112.28 | % | 109.48 | % | 103.89 | % | |||||
| PSB Holdings, Inc. | |||||||
| Nonperforming Assets >= $500,000 net book value before specific reserves | |||||||
| At March 31, 2023 | |||||||
| (dollars in thousands) | |||||||
| Gross | Specific | ||||||
| Collateral Description | Asset Type | Principal | Reserves | ||||
| Real estate - Buffet Style Restaurant | Nonaccrual | $ | 2,873 | $ | 1,123 | ||
| Real estate - Independent Auto Repair | Nonaccrual | 762 | 71 | ||||
| Total listed nonperforming assets | $ | 3,635 | $ | 1,194 | |||
| Total bank wide nonperforming assets | $ | 6,095 | $ | 1,472 | |||
| Listed assets as a % of total nonperforming assets | 60 | % | 81 | % | |||
| PSB Holding, Inc. | |||||||||||||||
| Loan Composition by Purpose | |||||||||||||||
| Quarter-ended (dollars in thousands) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||||||
| Residential real estate: | |||||||||||||||
| One to four family | $ | 187,325 | $ | 182,688 | $ | 172,913 | $ | 169,437 | $ | 168,083 | |||||
| HELOC loans | 18,141 | 17,625 | 18,423 | 17,776 | 16,709 | ||||||||||
| Residential construction & development | 22,014 | 20,698 | 22,313 | 22,462 | 21,590 | ||||||||||
| Residential vacant land | 1,223 | 1,414 | 3,069 | 1,599 | 1,697 | ||||||||||
| Total Residential real estate | 228,703 | 222,425 | 216,718 | 211,274 | 208,079 | ||||||||||
| Commercial/Agricultural real estate: | |||||||||||||||
| Owner occupied | |||||||||||||||
| Commercial real estate | 237,217 | 220,374 | 211,008 | 205,976 | 208,271 | ||||||||||
| SBA commercial real estate | 2,112 | 2,514 | 2,616 | 2,458 | 2,530 | ||||||||||
| Agriculture real estate | 3,681 | 3,835 | 3,902 | 3,583 | 3,651 | ||||||||||
| Construction and land development | 2,825 | 22,330 | 32,158 | 31,465 | 26,111 | ||||||||||
| Commercial vacant land | 6,712 | 7,291 | 5,214 | 5,351 | 5,194 | ||||||||||
| Total Owner occupied | 252,547 | 256,344 | 254,898 | 248,833 | 245,757 | ||||||||||
| Non-owner occupied | |||||||||||||||
| Commercial real estate | 226,280 | 228,761 | 225,823 | 227,400 | 212,407 | ||||||||||
| One to four family residential rental | 65,673 | 64,764 | 66,224 | 61,749 | 56,305 | ||||||||||
| Construction and land development | 41,272 | 27,253 | 25,543 | 25,086 | 23,080 | ||||||||||
| Commercial vacant land | 3,928 | 3,862 | 4,010 | 4,287 | 4,191 | ||||||||||
| Total Non-owner occupied | 337,153 | 324,640 | 321,600 | 318,522 | 295,983 | ||||||||||
| Commercial/Agricultural non-real estate: | |||||||||||||||
| Municipal non-real estate | 6,430 | 9,915 | 7,133 | 6,352 | 6,403 | ||||||||||
| Commercial line | 57,727 | 63,173 | 56,154 | 65,728 | 54,626 | ||||||||||
| Other commercial non-real estate | 92,419 | 87,535 | 82,430 | 76,065 | 64,260 | ||||||||||
| SBA commercial non-real estate | 3,997 | 3,533 | 3,378 | 3,926 | 6,068 | ||||||||||
| Agricultural non-real estate | 1,250 | 1,290 | 1,491 | 1,409 | 1,340 | ||||||||||
| Total Commercial/Agr. non-real estate | 161,823 | 165,446 | 150,586 | 153,480 | 132,697 | ||||||||||
| Consumer non-real estate: | |||||||||||||||
| Consumer installment | 3,357 | 4,072 | 4,005 | 4,305 | 4,201 | ||||||||||
| Consumer line | 529 | 382 | 494 | 493 | 486 | ||||||||||
| Other consumer | 108 | 115 | 116 | 123 | 118 | ||||||||||
| Total Consumer non-real estate | 3,994 | 4,569 | 4,615 | 4,921 | 4,805 | ||||||||||
| Gross loans | 984,220 | 973,424 | 948,417 | 937,030 | 887,321 | ||||||||||
| Net deferred loan costs (fees) | 542 | 573 | 537 | 503 | 423 | ||||||||||
| Overdrafts | 101 | 160 | 107 | 119 | 185 | ||||||||||
| Allowance for loan losses | (11,593 | ) | (12,293 | ) | (12,375 | ) | (12,392 | ) | (12,341 | ) | |||||
| Total loans receivable | $ | 973,270 | $ | 961,864 | $ | 936,686 | $ | 925,260 | $ | 875,588 | |||||
| PSB Holding, Inc. | ||||||||||||||
| Commercial Real Estate Loans by Purpose | ||||||||||||||
| Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | |||||
| Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | |||||
| Multi Family | $121,559 | 13.0% | $120,232 | 13.1% | $141,414 | 15.6% | $143,074 | 15.7% | $122,169 | 14.6% | ||||
| Industrial and Warehousing | $78,934 | 8.5% | $76,536 | 8.3% | $83,033 | 9.1% | $79,073 | 8.7% | $74,228 | 8.9% | ||||
| Retail | $34,427 | 3.7% | $32,587 | 3.5% | $39,279 | 4.3% | $39,013 | 4.3% | $36,069 | 4.3% | ||||
| Hotels | $31,069 | 3.3% | $32,940 | 3.6% | $26,958 | 3.0% | $26,948 | 3.0% | $29,281 | 3.5% | ||||
| Office | $8,544 | 0.9% | $8,652 | 0.9% | $8,758 | 1.0% | $8,862 | 1.0% | $8,964 | 1.1% | ||||
| (1) Percentage of portfolio and commitments. | ||||||||||||||
| PSB Holdings, Inc. | |||||||||||||||
| Deposit Composition - Insured and Collateralized Deposits | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | ||||||
| Non-interest bearing demand | $ | 205,350 | 18.5% | $ | 203,115 | 17.7% | $ | 216,117 | 18.8% | $ | 207,852 | 18.7% | $ | 209,115 | 19.2% |
| Interest-bearing demand and savings | 329,364 | 29.7% | 345,854 | 30.1% | 348,989 | 30.4% | 331,034 | 29.7% | 347,652 | 31.9% | |||||
| Money market deposits | 128,575 | 11.6% | 131,400 | 11.4% | 130,125 | 11.3% | 132,374 | 11.9% | 133,202 | 12.2% | |||||
| Retail and local time deposits <= $250 | 136,090 | 12.3% | 130,205 | 11.3% | 132,095 | 11.5% | 136,230 | 12.2% | 138,821 | 12.7% | |||||
| Total core deposits | 799,379 | 72.2% | 810,574 | 70.6% | 827,326 | 72.0% | 807,490 | 72.5% | 828,790 | 76.1% | |||||
| Retail and local time deposits > $250 | 17,000 | 1.5% | 14,500 | 1.3% | 12,250 | 1.1% | 13,000 | 1.2% | 13,250 | 1.2% | |||||
| Broker & national time deposits <= $250 | 5,953 | 0.5% | 6,451 | 0.6% | 6,700 | 0.6% | 7,443 | 0.7% | 7,443 | 0.7% | |||||
| Broker & national time deposits > $250 | 74,485 | 6.7% | 82,439 | 7.2% | 82,439 | 7.2% | 56,255 | 5.1% | 36,965 | 3.4% | |||||
| Totals | $ | 896,817 | 81.0% | $ | 913,964 | 79.6% | $ | 928,715 | 80.8% | $ | 884,188 | 79.4% | $ | 886,448 | 81.4% |
| PSB Holdings, Inc. | |||||||||||||||
| Deposit Composition - Uninsured and Uncollateralized Deposits | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | ||||||
| Non-interest bearing demand | $ | 62,487 | 5.6% | $ | 89,223 | 7.8% | $ | 82,219 | 7.2% | $ | 75,740 | 6.8% | $ | 63,496 | 5.8% |
| Interest-bearing demand and savings | 24,854 | 2.2% | 49,917 | 4.3% | 28,842 | 2.5% | 45,116 | 4.1% | 35,177 | 3.2% | |||||
| Money market deposits | 109,894 | 9.9% | 84,673 | 7.4% | 98,493 | 8.6% | 94,533 | 8.5% | 88,780 | 8.1% | |||||
| Retail and local time deposits <= $250 | 0 | 0.0% | 0 | 0.0% | - | 0.0% | - | 0.0% | - | 0.0% | |||||
| Total core deposits | 197,235 | 17.8% | 223,813 | 19.5% | 209,554 | 18.2% | 215,389 | 19.3% | 187,453 | 17.2% | |||||
| Retail and local time deposits > $250 | 13,541 | 1.2% | 10,978 | 1.0% | 10,549 | 0.9% | 13,882 | 1.2% | 15,504 | 1.4% | |||||
| Broker & national time deposits <= $250 | 0 | 0.0% | 0 | 0.0% | - | 0.0% | - | 0.0% | - | 0.0% | |||||
| Broker & national time deposits > $250 | 0 | 0.0% | 0 | 0.0% | - | 0.0% | - | 0.0% | - | 0.0% | |||||
| Totals | $ | 210,776 | 19.0% | $ | 234,791 | 20.4% | $ | 220,103 | 19.2% | $ | 229,271 | 20.6% | $ | 202,957 | 18.6% |
| PSB Holdings, Inc. | |||||||||||||||
| Deposit Composition - Total Deposits | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands) | 2023 | 2022 | 2022 | 2022 | 2022 | ||||||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | ||||||
| Non-interest bearing demand | $ | 267,836 | 24.2% | $ | 292,338 | 25.4% | $ | 298,335 | 26.0% | $ | 283,592 | 25.5% | $ | 272,611 | 25.0% |
| Interest-bearing demand and savings | 354,218 | 32.0% | 395,771 | 34.5% | 377,831 | 32.9% | 376,150 | 33.8% | 382,829 | 35.1% | |||||
| Money market deposits | 238,470 | 21.5% | 216,073 | 18.8% | 228,619 | 19.9% | 226,907 | 20.4% | 221,982 | 20.4% | |||||
| Retail and local time deposits <= $250 | 136,090 | 12.3% | 130,205 | 11.3% | 132,095 | 11.5% | 136,230 | 12.2% | 138,821 | 12.7% | |||||
| Total core deposits | 996,614 | 90.0% | 1,034,387 | 90.0% | 1,036,880 | 90.3% | 1,022,879 | 91.9% | 1,016,243 | 93.3% | |||||
| Retail and local time deposits > $250 | 30,541 | 2.8% | 25,478 | 2.2% | 22,799 | 2.0% | 26,882 | 2.4% | 28,754 | 2.6% | |||||
| Broker & national time deposits <= $250 | 5,953 | 0.5% | 6,451 | 0.6% | 6,700 | 0.6% | 7,443 | 0.7% | 7,443 | 0.7% | |||||
| Broker & national time deposits > $250 | 74,485 | 6.7% | 82,439 | 7.2% | 82,439 | 7.2% | 56,255 | 5.1% | 36,965 | 3.4% | |||||
| Totals | $ | 1,107,593 | 100.0% | $ | 1,148,755 | 100.0% | $ | 1,148,818 | 100.0% | $ | 1,113,459 | 100.0% | $ | 1,089,405 | 100.0% |
| PSB Holdings, Inc. | |||||||||||||||||||||
| Average Balances ($000) and Interest Rates | |||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||
| Quarter ended March 31, 2023 | Quarter ended December 31, 2022 | Quarter ended March 31, 2022 | |||||||||||||||||||
| Average | Yield / | Average | Yield / | Average | Yield / | ||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||
| Assets | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Loans (1)(2) | $ | 976,395 | $ | 11,788 | 4.90% | $ | 957,926 | $ | 11,266 | 4.67% | $ | 891,257 | $ | 9,065 | 4.12% | ||||||
| Taxable securities | 199,705 | 1,331 | 2.70% | 197,070 | 1,218 | 2.45% | 216,965 | 762 | 1.42% | ||||||||||||
| Tax-exempt securities (2) | 81,932 | 680 | 3.37% | 82,074 | 682 | 3.30% | 87,719 | 675 | 3.12% | ||||||||||||
| FHLB stock | 3,059 | 50 | 6.63% | 2,516 | 32 | 5.05% | 2,646 | 34 | 5.21% | ||||||||||||
| Other | 9,024 | 98 | 4.40% | 14,131 | 109 | 3.06% | 20,448 | 8 | 0.16% | ||||||||||||
| Total (2) | 1,270,115 | 13,947 | 4.45% | 1,253,717 | 13,307 | 4.21% | 1,219,035 | 10,544 | 3.51% | ||||||||||||
| Non-interest-earning assets: | |||||||||||||||||||||
| Cash and due from banks | 17,255 | 18,941 | 17,996 | ||||||||||||||||||
| Premises and equipment, | |||||||||||||||||||||
| net | 13,332 | 13,123 | 12,732 | ||||||||||||||||||
| Cash surrender value ins | 24,982 | 24,822 | 24,361 | ||||||||||||||||||
| Other assets | 23,193 | 23,548 | 16,719 | ||||||||||||||||||
| Allowance for loan | |||||||||||||||||||||
| losses | (12,366 | ) | (12,375 | ) | (12,278 | ) | |||||||||||||||
| Total | $ | 1,336,511 | $ | 1,321,776 | $ | 1,278,565 | |||||||||||||||
| Liabilities & stockholders' equity | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Savings and demand | |||||||||||||||||||||
| deposits | $ | 373,557 | $ | 1,053 | 1.14% | $ | 376,075 | $ | 690 | 0.73% | $ | 396,261 | $ | 69 | 0.07% | ||||||
| Money market deposits | 225,624 | 830 | 1.49% | 224,701 | 601 | 1.06% | 218,367 | 89 | 0.17% | ||||||||||||
| Time deposits | 245,562 | 1,106 | 1.83% | 241,290 | 769 | 1.26% | 198,431 | 285 | 0.58% | ||||||||||||
| FHLB borrowings | 68,833 | 547 | 3.22% | 35,522 | 167 | 1.87% | 51,200 | 169 | 1.34% | ||||||||||||
| Other borrowings | 10,025 | 62 | 2.51% | 11,307 | 38 | 1.33% | 6,452 | 2 | 0.13% | ||||||||||||
| Senior sub. notes | 5,159 | 62 | 4.87% | 4,522 | 55 | 4.83% | 2,500 | 28 | 4.54% | ||||||||||||
| Junior sub. debentures | 12,832 | 234 | 7.40% | 12,806 | 224 | 6.94% | 12,730 | 166 | 5.29% | ||||||||||||
| Total | 941,592 | 3,894 | 1.68% | 906,223 | 2,544 | 1.11% | 885,941 | 808 | 0.37% | ||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||
| Demand deposits | 279,348 | 304,000 | 271,755 | ||||||||||||||||||
| Other liabilities | 12,208 | 11,516 | 12,066 | ||||||||||||||||||
| Stockholders' equity | 103,363 | 100,037 | 108,803 | ||||||||||||||||||
| Total | $ | 1,336,511 | $ | 1,321,776 | $ | 1,278,565 | |||||||||||||||
| Net interest income | $ | 10,053 | $ | 10,763 | $ | 9,736 | |||||||||||||||
| Rate spread | 2.77% | 3.10% | 3.14% | ||||||||||||||||||
| Net yield on interest-earning assets | 3.21% | 3.41% | 3.24% | ||||||||||||||||||
| (1) Nonaccrual loans are included in the daily average loan balances outstanding. | |||||||||||||||||||||
| (2) The yield on tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%. | |||||||||||||||||||||
