WAUSAU, Wis., Jan. 27, 2020 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank serving North Central Wisconsin, reported fourth quarter earnings ending December 31, 2019 of $0.63 per share on net income of $2.81 million, compared to earnings of $0.70 per share on net income of $3.13 million during the September 2019 quarter, and $0.56 per share one year earlier on earnings of $2.53 million. The fourth quarter earnings reflected slightly higher net interest income and higher levels of non-interest expense. Loan production remained strong, with net loans receivable expanding 2.3% from the previous quarter and 7.5% relative to one year earlier.
For the year ended December 31, 2019, earnings increased 9.1% to $11.2 million, or $2.51 per share compared to $10.3 million, or $2.29 per share for the year ended December 31, 2018.
“PSB achieved record earnings in 2019 as strong lending activity has fueled asset growth and a streamlined branch network added efficiencies. As we begin 2020, we will convert our loan production office in Milwaukee into a full-service branch office in the first quarter. We anticipate the move into this economically vibrant market will continue to fuel loan and deposit growth in years ahead,” stated Scott Cattanach, President and CEO.
Financial Highlights (at or for the periods ended December 31, 2019, compared to September 30, 2019 and /or December 31, 2018, as applicable):
- Return on shareholders’ equity was 11.98% for the quarter compared to 13.94% one quarter earlier and 12.62% for the fourth quarter one year earlier. Return on average assets was 1.17% for the fourth quarter of 2019, compared to 1.34% the previous quarter and 1.14% for the fourth quarter one year earlier. For the year ended December 31, 2019, the return on shareholders’ equity was 12.77% and the return on average assets was 1.22%.
- Total assets grew 2.7% to $974.9 million at December 31, 2019 from $949.7 million one quarter earlier and 6.4% from $916.0 million one year earlier. Net loan growth of $49.2 million and core deposit growth of $74.0 million supported balance expansion over the past year.
- The net interest margin decreased to 3.53% for the quarter ended December 31, 2019, compared to 3.60% the previous quarter and 3.58% for the fourth quarter one year earlier. The net interest margin for the fourth quarter was affected by a larger balance of investments relative to prior periods.
- The efficiency ratio was 59.90% for the fourth quarter compared to 55.14% one quarter earlier and 62.54% in the year ago quarter.
- Tangible net book value was $20.72 per share at December 31, 2019, compared to $20.24 per share as of September 30, 2019 and $17.98 per share at December 31, 2018. Over the past year, tangible book value has grown 15.24%.
Balance Sheet and Asset Quality Review
Total assets were $974.9 million as of December 31, 2019, compared to $949.7 million as of September 30, 2019, an increase of $25.2 million, or 2.7%. Total loans receivable increased $16.4 million with much of the new loans consisting of loans secured by commercial real estate. The commercial/agricultural real estate loan portfolio increased to $401.4 million at December 31, 2019 from $385.5 million three months earlier. Non-owner occupied commercial real estate loans represented the largest component of the loan portfolio at 31.4% of gross loans at December 31, 2019, followed by owner occupied commercial real estate loans at 24.8%, residential real estate at 23.9%, commercial/agricultural loans at 19.0% and consumer loans at 0.7%. Total agricultural related loans represent 1.16% of the total loan portfolio. The non-owner occupied commercial real estate portfolio represents the largest portion of loan growth over the past year as the balance grew 14.0% from $196.8 million at December 31, 2018 to $224.3 million at December 31, 2019. Meanwhile, over the past year, the commercial/agricultural non-real estate loans decreased 7.6% from $147.2 million at December 31, 2018 to $136.0 million at December 31, 2019.
The allowance for loan losses remained at 0.97% of gross loans at December 31, 2019. The annualized net charge-offs to average loans was unchanged at 0.01% for the quarter ended December 31, 2019, compared to the previous quarter and 0.07% one year earlier. Non-performing assets decreased to 0.55% of total assets at December 31, 2019, compared to 0.57% at September 30, 2019, and 0.67% at December 31, 2018. At December 31, 2019, non-performing assets consisted of $3.7 million in non-accrual loans, $499,000 in non-accrual restructured loans, $676,000 in restructured loans not on non-accrual, and $460,000 in other real estate owned.
At December 31, 2019, cash and investments totaled $228.5 million compared to $219.8 million at September 30, 2019. During the course of the quarter, cash and investments increased due to deposit growth, a portion of which was used to support loan origination activity.
Total deposits increased 6.2% to $781.8 million at December 31, 2019 compared to $736.2 million at September 30, 2019. At December 31, 2019, interest-bearing demand and savings deposits accounted for 32.9% of total deposits, followed by money market deposits at 23.5%, noninterest-bearing demand deposits at 22.6% and retail and local time deposits at 16.7%. Broker and national time deposits accounted for 4.3% of total deposits at December 31, 2019 versus 4.9% the prior quarter and 7.6% one year earlier.
FHLB advances decreased to $73.5 million at December 31, 2019 compared to $85.5 million at September 30, 2019 and other borrowings decreased to $6.1 million from $17.4 million over the same time period.
For the quarter ended December 31, 2019, stockholders’ equity increased $2.1 million, or 2.28%, to $92.7 million, compared to $90.6 million at September 30, 2019. Tangible net book value per share increased 2.37%, to $20.72 per share, at December 31, 2019, compared to $20.24 per share at September 30, 2019. PSB’s tangible equity to total assets was 9.50% at December 31, 2019, compared to 9.53% at September 30, 2019.
Operations Review
Net interest income totaled $8.0 million (on a net margin of 3.53%) for the fourth quarter of 2019, compared to $7.9 million (on net margin of 3.60%) for the third quarter of 2019 and $7.5 million (on a net margin of 3.58%) for the fourth quarter of 2018. Compared to the preceding quarter, loans and investment yields decreased 16 basis points to 4.41% during the fourth quarter of 2019 from 4.57% one quarter earlier while deposit and borrowing costs declined 9 basis points to 1.17% from 1.26% over the same time period. The decline in loan and investment yields were partially due to a larger average balance of cash and cash equivalents held during the quarter and a decrease in the prime lending rate due to actions by the Federal Reserve. Loan yields decreased to 4.88% from 5.04% during the fourth quarter of 2019, as many loans repriced lower as the prime rate declined, and market competition intensified.
The cost of interest-bearing liabilities decreased during the quarter, reflecting lower rates associated with savings and demand deposits partially offset by higher rates on money market accounts. Towards the end of the quarter, the bank received a large balance of public funds deposited into money market accounts.
Additionally, the bank offered attractive rates on money market accounts to customers who met specific criteria designed to enhance the customers’ banking relationship with the bank. These funds were used to replace higher costing certificates of deposit and borrowed funds. Deposit costs decreased to $1.54 million for the fourth quarter of 2019 from $1.65 million the previous quarter. Interest costs on borrowings declined $25,000 for the fourth quarter of 2019 to $475,000 from $500,000 the previous quarter.
“Our deposit costs declined less than the yield on earning assets during the fourth quarter, as we have sought to attract new deposits in anticipation of repaying higher costing brokered deposits of approximately $8.5 million and continue to fund anticipated balance sheet growth in the first quarter of 2020,” said Mark C. Oldenberg, Chief Financial Officer.
For the year ended December 31, 2019, net interest income increased 8.5% to $31.3 million compared to $28.8 million for the previous fiscal year.
The provision for loan losses totaled $150,000 during the fourth quarter of 2019 compared to the same provision level for the prior linked quarter. The provision primarily relates to new loan originations and an expanding loan portfolio.
Total noninterest income for the fourth quarter of 2019 compared similarly to the prior quarter at $1.8 million and higher than the $1.7 million for the fourth quarter of 2018. Service fees in the fourth quarter were $411,000 compared to $348,000 during the third quarter of 2019. Gains on sale of mortgage loans decreased slightly to $452,000 for the fourth quarter from $463,000 in the third quarter of 2019 but remained strong as falling long-term U.S. Treasury rates have spurred mortgage refinance activity. Commissions on investment and insurance sales increased to $301,000 from $276,000 the prior quarter. At December 31, 2019, the bank had wealth assets under management totaling $248.5 million compared to $240.6 million at September 30, 2019 and $211.9 million at December 31, 2018. The year over year growth of assets under management was 17.3%.
For the year ended December 31, 2019, total noninterest income increased 18.3% to $7.7 million from $6.5 million one year earlier.
Noninterest expense was $5.9 million for the fourth quarter of 2019, compared to $5.4 million for the third quarter. For the fourth quarter of 2019, noninterest expense increased due to a slight increase in health insurance claims, software charges related to upgrades to product and operational features, an increase in advertising and promotion, losses on the sale of foreclosed property and professional fees largely related to audits of deposit and loan operation processes, to identify cost efficiencies. Similar to the prior quarter, the fourth quarter 2019 results reflect the elimination of FDIC insurance premiums as the FDIC insurance fund reached its targeted level.
For the year ended December 31, 2019, total noninterest expense increased 4.7% to $22.7 million from $21.7 million one year earlier, adjusted for our Rhinelander branch write down, recorded in the June 2019 quarter.
In the first quarter of 2020, we anticipate higher personnel expenses, office expenses, depreciation and advertising costs associated with the opening of our new branch in Milwaukee.
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 north central Wisconsin from eight full-service banking locations in Marathon, Oneida, and Vilas counties and loan production offices in Milwaukee and 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
Certain matters discussed in this news release, including without limitation those relating to potential loan and deposit growth, future profits, changes in noninterest income and expenses, pro-forma impacts to income from non-recurring or unusual income and expense items, and future interest rates, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in this release. Among other things, these risks and uncertainties include the strength of the economy, the effects of government policies, including, in particular, interest rate policies, and other risks and assumptions. PSB Holdings, Inc. assumes no obligation to update or supplement forward-looking statements that become untrue because of events subsequent to this press release.
Investor Relations Contact
PSB Holdings, Inc.
1905 Stewart Avenue
Wausau, WI 54401
888.929.9902
InvestorRelations@bankpeoples.com
| PSB Holdings, Inc. | ||||||||||||||||||
| Quarterly Financial Summary | ||||||||||||||||||
| (dollars in thousands, except per share data) | Quarter ended | |||||||||||||||||
| Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||||||||||
| Earnings and dividends: | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||
| Interest income | $ | 9,988 | $ | 10,098 | $ | 9,839 | $ | 9,604 | $ | 9,365 | ||||||||
| Interest expense | $ | 2,019 | $ | 2,154 | $ | 2,041 | $ | 2,032 | $ | 1,888 | ||||||||
| Net interest income | $ | 7,969 | $ | 7,944 | $ | 7,798 | $ | 7,572 | $ | 7,477 | ||||||||
| Provision for loan losses | $ | 150 | $ | 150 | $ | 150 | $ | 400 | $ | 60 | ||||||||
| Other noninterest income | $ | 1,839 | $ | 1,802 | $ | 1,903 | $ | 2,117 | $ | 1,718 | ||||||||
| Other noninterest expense | $ | 5,947 | $ | 5,437 | $ | 6,167 | $ | 5,745 | $ | 5,829 | ||||||||
| Net income | $ | 2,813 | $ | 3,131 | $ | 2,572 | $ | 2,731 | $ | 2,529 | ||||||||
| Basic earnings per share (3) | $ | 0.63 | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | ||||||||
| Diluted earnings per share (3) | $ | 0.63 | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | ||||||||
| Dividends declared per share (3) | $ | 0.20 | $ | - | $ | 0.20 | $ | - | $ | 0.18 | ||||||||
| Tangible net book value per share (4) | $ | 20.72 | $ | 20.24 | $ | 19.41 | $ | 18.89 | $ | 17.98 | ||||||||
| Semi-annual dividend payout ratio | 15.04 | % | n/a | 16.95 | % | n/a | 15.65 | % | ||||||||||
| Average common shares outstanding | 4,471,173 | 4,473,583 | 4,486,022 | 4,494,568 | 4,488,397 | |||||||||||||
| Balance sheet - average balances: | ||||||||||||||||||
| Loans receivable, net of allowances for loss | $ | 700,469 | $ | 689,057 | $ | 666,008 | $ | 658,586 | $ | 646,063 | ||||||||
| Assets | $ | 951,409 | $ | 928,282 | $ | 893,998 | $ | 899,263 | $ | 883,373 | ||||||||
| Deposits | $ | 745,455 | $ | 721,788 | $ | 713,910 | $ | 713,257 | $ | 708,318 | ||||||||
| Stockholders' equity | $ | 93,189 | $ | 89,139 | $ | 86,656 | $ | 82,516 | $ | 79,525 | ||||||||
| Performance ratios: | ||||||||||||||||||
| Return on average assets (1) | 1.17 | % | 1.34 | % | 1.15 | % | 1.23 | % | 1.14 | % | ||||||||
| Return on average stockholders' equity (1) | 11.98 | % | 13.94 | % | 11.90 | % | 13.42 | % | 12.62 | % | ||||||||
| Average stockholders' equity less accumulated | ||||||||||||||||||
| other comprehensive income (loss) to | ||||||||||||||||||
| average assets | 9.68 | % | 9.52 | % | 9.68 | % | 9.27 | % | 9.22 | % | ||||||||
| Net loan charge-offs to average loans (1) | 0.01 | % | 0.01 | % | 0.00 | % | 0.08 | % | 0.07 | % | ||||||||
| Nonperforming loans to gross loans | 0.68 | % | 0.70 | % | 0.53 | % | 1.11 | % | 0.91 | % | ||||||||
| Nonperforming assets to total assets | 0.55 | % | 0.57 | % | 0.42 | % | 0.84 | % | 0.67 | % | ||||||||
| Allowance for loan losses to gross loans | 0.97 | % | 0.97 | % | 0.97 | % | 0.98 | % | 0.94 | % | ||||||||
| Nonperforming assets to tangible equity | ||||||||||||||||||
| plus the allowance for loan losses (4) | 5.45 | % | 5.69 | % | 4.13 | % | 8.40 | % | 7.20 | % | ||||||||
| Net interest rate margin (1)(2) | 3.53 | % | 3.60 | % | 3.72 | % | 3.63 | % | 3.58 | % | ||||||||
| Net interest rate spread (1)(2) | 3.24 | % | 3.31 | % | 3.42 | % | 3.36 | % | 3.32 | % | ||||||||
| Service fee revenue as a percent of | ||||||||||||||||||
| average demand deposits (1) | 1.00 | % | 0.90 | % | 1.14 | % | 1.12 | % | 1.15 | % | ||||||||
| Noninterest income as a percent | ||||||||||||||||||
| of gross revenue | 15.55 | % | 15.14 | % | 16.21 | % | 18.06 | % | 15.50 | % | ||||||||
| Efficiency ratio (2) | 59.90 | % | 55.14 | % | 62.83 | % | 58.59 | % | 62.54 | % | ||||||||
| Noninterest expenses to average assets (1) | 2.48 | % | 2.32 | % | 2.77 | % | 2.59 | % | 2.62 | % | ||||||||
| Tangible equity to actual assets | 9.50 | % | 9.53 | % | 9.65 | % | 9.50 | % | 8.81 | % | ||||||||
| Stock price information: | ||||||||||||||||||
| High | $ | 28.25 | $ | 27.50 | $ | 24.75 | $ | 23.45 | $ | 27.50 | ||||||||
| Low | $ | 26.00 | $ | 23.55 | $ | 22.00 | $ | 21.25 | $ | 21.10 | ||||||||
| Last trade value at quarter-end | $ | 27.50 | $ | 26.49 | $ | 24.00 | $ | 22.75 | $ | 22.50 | ||||||||
| (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 Income | ||||||||||||||
| Quarter Ended | ||||||||||||||
| (dollars in thousands, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | |||||||||
| except per share data - unaudited) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||
| Interest and dividend income: | ||||||||||||||
| Loans, including fees | $ | 8,691 | $ | 8,823 | $ | 8,629 | $ | 8,334 | $ | 8,125 | ||||
| Securities: | ||||||||||||||
| Taxable | 768 | 769 | 730 | 713 | 714 | |||||||||
| Tax-exempt | 387 | 378 | 389 | 396 | 424 | |||||||||
| Other interest and dividends | 142 | 128 | 91 | 161 | 102 | |||||||||
| Total interest and dividend income | 9,988 | 10,098 | 9,839 | 9,604 | 9,365 | |||||||||
| Interest expense: | ||||||||||||||
| Deposits | 1,544 | 1,654 | 1,634 | 1,553 | 1,435 | |||||||||
| FHLB advances | 328 | 323 | 230 | 309 | 315 | |||||||||
| Other borrowings | 26 | 58 | 57 | 51 | 18 | |||||||||
| Senior subordinated notes | 29 | 28 | 28 | 28 | 28 | |||||||||
| Junior subordinated debentures | 92 | 91 | 92 | 91 | 92 | |||||||||
| Total interest expense | 2,019 | 2,154 | 2,041 | 2,032 | 1,888 | |||||||||
| Net interest income | 7,969 | 7,944 | 7,798 | 7,572 | 7,477 | |||||||||
| Provision for loan losses | 150 | 150 | 150 | 400 | 60 | |||||||||
| Net interest income after provision for loan losses | 7,819 | 7,794 | 7,648 | 7,172 | 7,417 | |||||||||
| Noninterest income: | ||||||||||||||
| Service fees | 411 | 348 | 403 | 381 | 419 | |||||||||
| Gain on sale of mortgage loans | 452 | 463 | 432 | 175 | 227 | |||||||||
| Mortgage loan servicing, net | 57 | 89 | 84 | 125 | 129 | |||||||||
| Investment and insurance sales commissions | 301 | 276 | 310 | 333 | 430 | |||||||||
| Net gain on sale of securities | 71 | - | 121 | 18 | - | |||||||||
| Increase in cash surrender value of life insurance | 104 | 105 | 101 | 98 | 96 | |||||||||
| Other noninterest income | 443 | 521 | 452 | 987 | 417 | |||||||||
| Total noninterest income | 1,839 | 1,802 | 1,903 | 2,117 | 1,718 | |||||||||
| Noninterest expense: | ||||||||||||||
| Salaries and employee benefits | 3,523 | 3,372 | 3,322 | 3,428 | 3,566 | |||||||||
| Occupancy and facilities | 506 | 510 | 591 | 601 | 526 | |||||||||
| Loss (gain) on foreclosed assets | 69 | 4 | 3 | 4 | (17 | ) | ||||||||
| Data processing and other office operations | 739 | 654 | 646 | 577 | 654 | |||||||||
| Advertising and promotion | 182 | 107 | 120 | 100 | 163 | |||||||||
| FDIC insurance premiums | - | - | 63 | 59 | 61 | |||||||||
| Other noninterest expenses | 928 | 790 | 1,422 | 976 | 876 | |||||||||
| Total noninterest expense | 5,947 | 5,437 | 6,167 | 5,745 | 5,829 | |||||||||
| Income before provision for income taxes | 3,711 | 4,159 | 3,384 | 3,544 | 3,306 | |||||||||
| Provision for income taxes | 898 | 1,028 | 812 | 813 | 777 | |||||||||
| Net income | $ | 2,813 | $ | 3,131 | $ | 2,572 | $ | 2,731 | $ | 2,529 | ||||
| Basic earnings per share | $ | 0.63 | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | ||||
| Diluted earnings per share | $ | 0.63 | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | ||||
| PSB Holdings, Inc. | ||||||||||||||
| Consolidated Statements of Income | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| (dollars in thousands, | December | December | ||||||||||||
| except per share data - unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Interest and dividend income: | ||||||||||||||
| Loans, including fees | $ | 8,691 | $ | 8,125 | $ | 34,477 | $ | 30,489 | ||||||
| Securities: | ||||||||||||||
| Taxable | 768 | 714 | 2,980 | 2,799 | ||||||||||
| Tax-exempt | 387 | 424 | 1,550 | 1,517 | ||||||||||
| Other interest and dividends | 142 | 102 | 522 | 384 | ||||||||||
| Total interest and dividend income | 9,988 | 9,365 | 39,529 | 35,189 | ||||||||||
| Interest expense: | ||||||||||||||
| Deposits | 1,544 | 1,435 | 6,385 | 4,815 | ||||||||||
| FHLB advances | 328 | 315 | 1,190 | 1,085 | ||||||||||
| Other borrowings | 26 | 18 | 192 | 24 | ||||||||||
| Senior subordinated notes | 29 | 28 | 113 | 111 | ||||||||||
| Junior subordinated debentures | 92 | 92 | 366 | 326 | ||||||||||
| Total interest expense | 2,019 | 1,888 | 8,246 | 6,361 | ||||||||||
| Net interest income | 7,969 | 7,477 | 31,283 | 28,828 | ||||||||||
| Provision for loan losses | 150 | 60 | 850 | 130 | ||||||||||
| Net interest income after provision for loan losses | 7,819 | 7,417 | 30,433 | 28,698 | ||||||||||
| Noninterest income: | ||||||||||||||
| Service fees | 411 | 419 | 1,543 | 1,611 | ||||||||||
| Gain on sale of mortgage loans | - | - | - | - | ||||||||||
| Mortgage banking income | 509 | 356 | 1,877 | 1,528 | ||||||||||
| Investment and insurance sales commissions | 301 | 430 | 1,220 | 1,307 | ||||||||||
| Net gain on sale of securities | 71 | - | 210 | - | ||||||||||
| Increase in cash surrender value of life insurance | 104 | 96 | 408 | 373 | ||||||||||
| Other noninterest income | 443 | 417 | 2,403 | 1,657 | ||||||||||
| Total noninterest income | 1,839 | 1,718 | 7,661 | 6,476 | ||||||||||
| Noninterest expense: | ||||||||||||||
| Salaries and employee benefits | 3,523 | 3,566 | 13,645 | 13,194 | ||||||||||
| Occupancy and facilities | 506 | 526 | 2,208 | 2,115 | ||||||||||
| Loss (gain) on foreclosed assets | 69 | (17 | ) | 80 | (34 | ) | ||||||||
| Data processing and other office operations | 739 | 654 | 2,616 | 2,563 | ||||||||||
| Advertising and promotion | 182 | 163 | 509 | 420 | ||||||||||
| FDIC insurance premiums | - | 61 | 122 | 247 | ||||||||||
| Other noninterest expenses | 928 | 876 | 4,116 | 3,208 | ||||||||||
| Total noninterest expense | 5,947 | 5,829 | 23,296 | 21,713 | ||||||||||
| Income before provision for income taxes | 3,711 | 3,306 | 14,798 | 13,461 | ||||||||||
| Provision for income taxes | 898 | 777 | 3,551 | 3,149 | ||||||||||
| Net income | $ | 2,813 | $ | 2,529 | $ | 11,247 | $ | 10,312 | ||||||
| Basic earnings per share | $ | 0.63 | $ | 0.56 | $ | 2.51 | $ | 2.29 | ||||||
| Diluted earnings per share | $ | 0.63 | $ | 0.56 | $ | 2.51 | $ | 2.29 | ||||||
| PSB Holdings, Inc. | ||||||||||||||||
| Consolidated Statements of Comprehensive Income | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (dollars in thousands - unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net income | $ | 2,813 | $ | 2,529 | $ | 11,247 | $ | 10,312 | ||||||||
| Other comprehensive income, net of tax: | ||||||||||||||||
| Unrealized gain (loss) on securities available | ||||||||||||||||
| for sale | 179 | 1,153 | 3,288 | (766 | ) | |||||||||||
| Reclassification adjustment for security | ||||||||||||||||
| gain included in net income | (51 | ) | - | (152 | ) | - | ||||||||||
| Amortization of unrealized loss (gain) included in net | ||||||||||||||||
| income on securities available for sale | ||||||||||||||||
| transferred to securities held to maturity | 3 | (6 | ) | (3 | ) | (39 | ) | |||||||||
| Unrealized gain (loss) on interest rate swap | 55 | (157 | ) | (211 | ) | (158 | ) | |||||||||
| Reclassification adjustment of interest rate | ||||||||||||||||
| swap settlements included in earnings | 13 | 8 | 31 | 9 | ||||||||||||
| Other comprehensive income (loss) | 199 | 998 | 2,953 | (954 | ) | |||||||||||
| Comprehensive income | $ | 3,012 | $ | 3,527 | $ | 14,200 | $ | 9,358 | ||||||||
| PSB Holdings, Inc. | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| December 31, September 30, June 30, and March 31, 2019, unaudited, December 31, 2018 derived from audited financial statements | |||||||||||||||
| Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | |||||||||||
| (dollars in thousands, except per share data) | 2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 23,005 | $ | 17,954 | $ | 11,825 | $ | 8,917 | $ | 18,923 | |||||
| Interest-bearing deposits | 839 | 1,059 | 2,306 | 349 | 501 | ||||||||||
| Federal funds sold | 25,184 | 30,415 | 4,552 | 12,989 | 24,554 | ||||||||||
| Cash and cash equivalents | 49,028 | 49,428 | 18,683 | 22,255 | 43,978 | ||||||||||
| Securities available for sale (at fair value) | 174,448 | 127,587 | 123,586 | 127,368 | 113,821 | ||||||||||
| Securities held to maturity (fair values of $0, $41,311, $42,511, $53,338 and | |||||||||||||||
| $57,607 respectively) | - | 40,791 | 42,074 | 43,061 | 58,311 | ||||||||||
| Bank certificates of deposit (at cost) | 4,983 | 1,984 | 1,984 | 2,976 | 2,976 | ||||||||||
| Loans held for sale | 545 | 335 | 50 | 245 | 358 | ||||||||||
| Loans receivable, net | 707,651 | 691,289 | 678,247 | 660,756 | 658,481 | ||||||||||
| Accrued interest receivable | 2,776 | 2,803 | 2,844 | 2,826 | 2,777 | ||||||||||
| Foreclosed assets | 460 | 572 | 172 | 113 | 113 | ||||||||||
| Premises and equipment, net | 10,457 | 10,212 | 9,749 | 10,426 | 10,209 | ||||||||||
| Mortgage servicing rights, net | 1,747 | 1,720 | 1,738 | 1,781 | 1,805 | ||||||||||
| Federal Home Loan Bank stock (at cost) | 2,073 | 2,173 | 1,662 | 1,657 | 2,330 | ||||||||||
| Cash surrender value of bank-owned life insurance | 16,773 | 16,668 | 16,564 | 16,463 | 16,365 | ||||||||||
| Other assets | 3,952 | 4,101 | 3,961 | 3,836 | 4,474 | ||||||||||
| TOTAL ASSETS | $ | 974,893 | $ | 949,663 | $ | 901,314 | $ | 893,763 | $ | 915,998 | |||||
| Liabilities | |||||||||||||||
| Non-interest-bearing deposits | $ | 177,002 | $ | 159,897 | $ | 143,423 | $ | 138,124 | $ | 148,611 | |||||
| Interest-bearing deposits | 604,788 | 576,288 | 571,794 | 577,263 | 577,215 | ||||||||||
| Total deposits | 781,790 | 736,185 | 715,217 | 715,387 | 725,826 | ||||||||||
| Federal Home Loan Bank advances | 73,496 | 85,496 | 59,915 | 51,165 | 81,071 | ||||||||||
| Other borrowings | 6,131 | 17,411 | 19,179 | 22,870 | 8,379 | ||||||||||
| Senior subordinated notes | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | ||||||||||
| Junior subordinated debentures | 7,732 | 7,732 | 7,732 | 7,732 | 7,732 | ||||||||||
| Accrued expenses and other liabilities | 10,553 | 9,715 | 9,668 | 9,047 | 9,650 | ||||||||||
| Total liabilities | 882,202 | 859,039 | 814,211 | 808,701 | 835,158 | ||||||||||
| Stockholders' equity | |||||||||||||||
| Preferred stock - no par value: | |||||||||||||||
| Authorized - 30,000 shares; no shares issued or outstanding | - | - | - | - | - | ||||||||||
| Common stock - no par value with a stated value of $1.00 per share: | |||||||||||||||
| Authorized - 6,000,000 shares; Issued - 5,490,798 shares | |||||||||||||||
| Outstanding - 4,467,217, 4,471,216, 4,480,585, 4,495,110 and | |||||||||||||||
| 4,487,895 shares, respectively | 1,830 | 1,830 | 1,830 | 1,830 | 1,830 | ||||||||||
| Additional paid-in capital | 7,597 | 7,543 | 7,490 | 7,497 | 7,430 | ||||||||||
| Retained earnings | 95,037 | 93,117 | 89,986 | 88,314 | 85,583 | ||||||||||
| Accumulated other comprehensive income (loss), net of tax | 1,302 | 1,103 | 543 | (227 | ) | (1,651 | ) | ||||||||
| Treasury stock, at cost - 1,023,581, 1,019,582, 1,010,213, 995,688 and | |||||||||||||||
| 1,002,903 shares, respectively | (13,075 | ) | (12,969 | ) | (12,746 | ) | (12,352 | ) | (12,352 | ) | |||||
| Total stockholders' equity | 92,691 | 90,624 | 87,103 | 85,062 | 80,840 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 974,893 | $ | 949,663 | $ | 901,314 | $ | 893,763 | $ | 915,998 | |||||
| PSB Holding, Inc. | |||||||||||
| Loan Composition by Purpose | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||
| Quarter-ended (dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | ||||||
| Total Loans | |||||||||||
| Residential real estate | |||||||||||
| One to four family | 121,548 | 119,620 | 117,093 | 116,393 | 117,970 | ||||||
| HELOC loans | 21,668 | 22,855 | 22,158 | 23,631 | 24,746 | ||||||
| Residential construction & development | 23,633 | 21,273 | 20,937 | 18,893 | 16,413 | ||||||
| Residential vacant land | 3,908 | 4,299 | 4,680 | 5,052 | 5,370 | ||||||
| Total Residential real estate | 170,757 | 168,047 | 164,868 | 163,969 | 164,499 | ||||||
| Commercial/Agricultural real estate | |||||||||||
| Owner occupied | |||||||||||
| Commercial real estate | 156,275 | 158,423 | 149,507 | 147,435 | 145,480 | ||||||
| SBA commercial real estate | 1,647 | 1,367 | 1,386 | 1,741 | 1,769 | ||||||
| Agriculture real estate | 5,901 | 5,139 | 5,764 | 5,078 | 4,968 | ||||||
| Construction and land development | 13,228 | 12,742 | 7,832 | 6,523 | 350 | ||||||
| Commercial vacant land | 929 | - | - | - | - | ||||||
| Total Owner occupied | 177,051 | 177,671 | 164,489 | 160,777 | 152,567 | ||||||
| Non-owner occupied | |||||||||||
| Commercial real estate | 192,160 | 179,136 | 168,809 | 161,647 | 147,246 | ||||||
| SBA commercial real estate | 844 | 863 | 141 | 146 | 151 | ||||||
| Agricultural real estate | - | - | - | - | 315 | ||||||
| Construction and land development | 17,061 | 13,301 | 22,159 | 22,014 | 35,288 | ||||||
| Commercial vacant land | 14,280 | 14,532 | 14,702 | 15,404 | 13,800 | ||||||
| Total Non-owner occupied | 224,345 | 207,832 | 205,811 | 199,211 | 196,800 | ||||||
| Commercial/Agricultural non-real estate | |||||||||||
| Municipal non-real estate | 11,601 | 6,384 | 9,017 | 6,353 | 6,806 | ||||||
| Commercial line | 54,538 | 62,991 | 65,252 | 58,117 | 68,300 | ||||||
| Other commercial non-real estate | 65,690 | 64,418 | 65,500 | 69,073 | 65,829 | ||||||
| SBA commercial non-real estate | 1,733 | 1,819 | 2,252 | 2,169 | 2,278 | ||||||
| Agricultural non-real estate | 2,402 | 3,606 | 3,491 | 3,699 | 3,994 | ||||||
| Total Commercial/Agricultural non-real estate | 135,964 | 139,218 | 145,512 | 139,411 | 147,207 | ||||||
| Consumer non-real estate | |||||||||||
| Consumer installment | 3,454 | 3,319 | 3,093 | 2,793 | 2,755 | ||||||
| Consumer line | 1,354 | 1,343 | 304 | 344 | 243 | ||||||
| Other consumer | 189 | 197 | 195 | 190 | 218 | ||||||
| Total Consumer non-real estate | 4,997 | 4,859 | 3,592 | 3,327 | 3,216 | ||||||
| Gross loans | 714,043 | 697,627 | 684,272 | 666,695 | 664,289 | ||||||
| Net deferred loan costs | 326 | 295 | 300 | 272 | 213 | ||||||
| Overdrafts | 221 | 168 | 339 | 296 | 211 | ||||||
| Allowance for loan losses | (6,939 | ) | (6,801 | ) | (6,664 | ) | (6,507 | ) | (6,232 | ) | |
| Total loans receivable | 707,651 | 691,289 | 678,247 | 660,756 | 658,481 | ||||||
| PSB Holdings, Inc. | ||||||||||
| Deposit Composition | ||||||||||
| December 31, | ||||||||||
| (dollars in thousands) | 2019 | 2018 | ||||||||
| $ | % | $ | % | |||||||
| Non-interest bearing demand | $ | 177,002 | 22.60 | % | $ | 148,611 | 20.50 | % | ||
| Interest-bearing demand and savings | 257,486 | 32.90 | % | 254,857 | 35.10 | % | ||||
| Money market deposits | 183,370 | 23.50 | % | 145,300 | 20.00 | % | ||||
| Retail and local time deposits <= $250 | 104,455 | 13.40 | % | 99,584 | 13.80 | % | ||||
| Total core deposits | 722,313 | 92.40 | % | 648,352 | 89.40 | % | ||||
| Wholesale interest-bearing demand | - | 0.0 | % | - | 0.0 | % | ||||
| Retail and local time deposits > $250 | 25,431 | 3.30 | % | 22,131 | 3.00 | % | ||||
| Broker & national time deposits <= $250 | 5,457 | 0.70 | % | 2,483 | 0.30 | % | ||||
| Broker & national time deposits > $250 | 28,589 | 3.60 | % | 52,860 | 7.30 | % | ||||
| Totals | $ | 781,790 | 100.00 | % | $ | 725,826 | 100.0 | % | ||
| Nonperforming Assets as of: | December | ||||||
| (dollars in thousands) | 2019 | 2018 | |||||
| Nonaccrual loans (excluding restructured loans) | $ | 3,697 | $ | 3,422 | |||
| Nonaccrual restructured loans | 499 | 313 | |||||
| Restructured loans not on nonaccrual | 676 | 2,284 | |||||
| Accruing loans past due 90 days or more | - | - | |||||
| Total nonperforming loans | 4,872 | 6,019 | |||||
| Other Real Estate Owned | 460 | 113 | |||||
| Total nonperforming assets | $ | 5,332 | $ | 6,132 | |||
| Nonperforming loans as a % of gross loans receivable | 0.68 | % | 0.91 | % | |||
| Total nonperforming assets as a % of total assets | 0.55 | % | 0.67 | % | |||
| Allowance for loan losses as a % of nonperforming loans | 142.43 | % | 103.54 | % | |||
| PSB Holdings, Inc. | |||||||||||||||||||||||||
| Average Balances ($000) and Interest Rates | |||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||
| Quarter ended December 31, 2019 | Quarter ended September 30, 2019 | Quarter ended December 31, 2018 | |||||||||||||||||||||||
| Average | Yield / | Average | Yield / | Average | Yield / | ||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||
| Loans (1)(2) | $ | 707,336 | $ | 8,709 | 4.88 | % | $ | 695,776 | $ | 8,838 | 5.04 | % | $ | 652,342 | $ | 8,137 | 4.95 | % | |||||||
| Taxable securities | 111,697 | 768 | 2.73 | % | 107,801 | 769 | 2.83 | % | 105,269 | 714 | 2.69 | % | |||||||||||||
| Tax-exempt securities (2) | 59,511 | 490 | 3.27 | % | 59,537 | 478 | 3.19 | % | 68,576 | 537 | 3.11 | % | |||||||||||||
| FHLB stock | 2,091 | 25 | 4.74 | % | 1,970 | 20 | 4.03 | % | 2,004 | 25 | 4.95 | % | |||||||||||||
| Other | 29,443 | 117 | 1.58 | % | 22,493 | 108 | 1.90 | % | 13,748 | 77 | 2.22 | % | |||||||||||||
| Total (2) | 910,078 | 10,109 | 4.41 | % | 887,577 | 10,213 | 4.57 | % | 841,939 | 9,490 | 4.47 | % | |||||||||||||
| Non-interest-earning assets: | |||||||||||||||||||||||||
| Cash and due from banks | 12,284 | 12,113 | 11,855 | ||||||||||||||||||||||
| Premises and equipment, | |||||||||||||||||||||||||
| net | 10,333 | 10,136 | 10,311 | ||||||||||||||||||||||
| Cash surrender value ins | 16,713 | 16,606 | 15,751 | ||||||||||||||||||||||
| Other assets | 8,868 | 8,569 | 9,796 | ||||||||||||||||||||||
| Allowance for loan | |||||||||||||||||||||||||
| losses | (6,867 | ) | (6,719 | ) | (6,279 | ) | |||||||||||||||||||
| Total | $ | 951,409 | $ | 928,282 | $ | 883,373 | |||||||||||||||||||
| Liabilities & stockholders' equity | |||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||
| Savings and demand | |||||||||||||||||||||||||
| deposits (3) | $ | 239,613 | $ | 307 | 0.51 | % | $ | 239,490 | $ | 392 | 0.65 | % | $ | 235,839 | $ | 370 | 0.62 | % | |||||||
| Money market deposits (3) | 180,262 | 418 | 0.92 | % | 164,801 | 432 | 1.04 | % | 143,618 | 280 | 0.77 | % | |||||||||||||
| Time deposits | 162,726 | 819 | 2.00 | % | 164,899 | 830 | 2.00 | % | 184,178 | 785 | 1.69 | % | |||||||||||||
| FHLB borrowings | 77,920 | 328 | 1.67 | % | 75,325 | 323 | 1.70 | % | 64,833 | 315 | 1.93 | % | |||||||||||||
| Other borrowings | 14,374 | 26 | 0.72 | % | 22,079 | 58 | 1.04 | % | 11,139 | 18 | 0.64 | % | |||||||||||||
| Senior sub. notes | 2,500 | 29 | 4.60 | % | 2,500 | 28 | 4.44 | % | 2,500 | 28 | 4.44 | % | |||||||||||||
| Junior sub. debentures | 7,732 | 92 | 4.72 | % | 7,732 | 91 | 4.67 | % | 7,732 | 92 | 4.72 | % | |||||||||||||
| Total | 685,127 | 2,019 | 1.17 | % | 676,826 | 2,154 | 1.26 | % | 649,839 | 1,888 | 1.15 | % | |||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||||
| Demand deposits | 162,854 | 152,598 | 144,683 | ||||||||||||||||||||||
| Other liabilities | 10,239 | 9,719 | 9,326 | ||||||||||||||||||||||
| Stockholders' equity | 93,189 | 89,139 | 79,525 | ||||||||||||||||||||||
| Total | $ | 951,409 | $ | 928,282 | $ | 883,373 | |||||||||||||||||||
| Net interest income | $ | 8,090 | $ | 8,059 | $ | 7,602 | |||||||||||||||||||
| Rate spread | 3.24 | % | 3.31 | % | 3.32 | % | |||||||||||||||||||
| Net yield on interest-earning assets | 3.53 | % | 3.60 | % | 3.58 | % | |||||||||||||||||||
| (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%. | |||||||||||||||||||||||||
| (3) Reflects changes in categorization from the third quarter earnings release. | |||||||||||||||||||||||||
| PSB Holdings, Inc. | |||||||||||||||||
| Average Balances ($000) and Interest Rates | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Year ended December 31, 2019 | Year ended December 31, 2018 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||
| Assets | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Loans (1)(2) | $ | 685,279 | $ | 34,533 | 5.04 | % | $ | 633,406 | $ | 30,538 | 4.82 | % | |||||
| Taxable securities | 107,801 | 2,980 | 2.76 | % | 108,944 | 2,799 | 2.57 | % | |||||||||
| Tax-exempt securities (2) | 61,482 | 1,962 | 3.19 | % | 62,611 | 1,920 | 3.07 | % | |||||||||
| FHLB stock | 1,918 | 104 | 5.42 | % | 2,004 | 86 | 4.29 | % | |||||||||
| Other | 21,253 | 418 | 1.97 | % | 16,272 | 298 | 1.83 | % | |||||||||
| Total (2) | 877,733 | 39,997 | 4.56 | % | 823,237 | 35,641 | 4.33 | % | |||||||||
| Non-interest-earning assets: | |||||||||||||||||
| Cash and due from banks | 11,644 | 10,966 | |||||||||||||||
| Premises and equipment, | |||||||||||||||||
| net | 10,318 | 10,469 | |||||||||||||||
| Cash surrender value ins | 16,558 | 15,384 | |||||||||||||||
| Other assets | 8,738 | 9,393 | |||||||||||||||
| Allowance for loan | |||||||||||||||||
| losses | (6,605 | ) | (6,286 | ) | |||||||||||||
| Total | $ | 918,386 | $ | 863,163 | |||||||||||||
| Liabilities & stockholders' equity | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Savings and demand | |||||||||||||||||
| deposits | $ | 243,035 | $ | 1,588 | 0.65 | % | $ | 240,119 | $ | 1,320 | 0.55 | % | |||||
| Money market deposits | 163,061 | 1,541 | 0.95 | % | 138,220 | 770 | 0.56 | % | |||||||||
| Time deposits | 168,624 | 3,256 | 1.93 | % | 180,950 | 2,725 | 1.51 | % | |||||||||
| FHLB borrowings | 67,207 | 1,190 | 1.77 | % | 61,553 | 1,085 | 1.76 | % | |||||||||
| Other borrowings | 19,628 | 192 | 0.98 | % | 5,617 | 24 | 0.43 | % | |||||||||
| Senior sub. notes | 2,500 | 113 | 4.52 | % | 2,500 | 111 | 4.44 | % | |||||||||
| Junior sub. debentures | 7,732 | 366 | 4.73 | % | 7,732 | 326 | 4.22 | % | |||||||||
| Total | 671,787 | 8,246 | 1.23 | % | 636,691 | 6,361 | 1.00 | % | |||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||
| Demand deposits | 148,746 | 140,561 | |||||||||||||||
| Other liabilities | 9,810 | 9,040 | |||||||||||||||
| Stockholders' equity | 88,043 | 76,870 | |||||||||||||||
| Total | $ | 918,386 | $ | 863,162 | |||||||||||||
| Net interest income | $ | 31,751 | $ | 29,280 | |||||||||||||
| Rate spread | 3.33 | % | 3.33 | % | |||||||||||||
| Net yield on interest-earning assets | 3.62 | % | 3.56 | % | |||||||||||||
| (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 tax rate of 21%. | |||||||||||||||||