PSB Reports Record 1st Quarter Earnings of $3.9 Million, or $0.87 Per Share; Income Supported by PPP Fee Recognition and Continued Mortgage Gains

Wausau, Wisconsin, UNITED STATES


WAUSAU, Wis., April 26, 2021 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank serving Northcentral and Southeastern Wisconsin, reported first quarter earnings ending March 31, 2021 of $0.87 per share on net income of $3.9 million, compared to earnings of $0.73 per share on net income of $3.3 million, during the December 31, 2020 quarter, and $0.36 per share on net income of $1.6 million, during the first quarter a year ago. Relative to the prior quarter, first quarter earnings benefitted from stronger net interest income supported by first round SBA Paycheck Protection Program (“PPP”) fee accretion, continued elevated mortgage banking fee income, and lower noninterest expense due to deferred loan origination costs on second round SBA PPP loan originations.  

“Our southeastern Wisconsin growth continued with the closing of our acquisition of Waukesha Bankshares, Inc. on April 16, 2021. The improved economic clarity, vaccine rollout and our further expansion in the Milwaukee market should serve to continue to enhance shareholder value in 2021. To support our expanded presence in Milwaukee, we recently secured a local 20-year commercial banking veteran with deep ties to the business community to lead our Waukesha location,” stated Scott Cattanach, President and CEO. “Before considering loan repayments from ongoing PPP loan forgiveness, we are optimistic annualized loan growth will normalize in the four to five percent range as we leverage our operations in and around Milwaukee and businesses activity returns to pre-pandemic levels.”

Net Interest Margin Impact: PSB’s net interest margin increased to 3.62% for the quarter ended March 31, 2021 from 3.22% the prior quarter due to the accretion of net PPP origination fees of $1.3 million as $45.1 million PPP loans were repaid by the SBA during the quarter. In addition, the cost of time deposits declined 22 basis points, to 1.06% in the March 31, 2021 quarter lowering our cost of interest-bearing funds by 7 bps. Loan yield and net interest margin excluding the PPP loans would have been 4.17% and 3.24%, respectively during the March 2021 quarter compared to 4.26% and 3.26% in the December 2020 quarter. Loan originations in the most recent quarter were below our current loan yield and are expected to trend similarly during the June 2021 quarter.

Capital Management:   At March 31, 2021, PSB’s tangible equity to tangible asset ratio was 9.32% and the bank’s capital was well in-excess of all regulatory requirements. Management expects capital ratios to decline slightly with the closing of the Waukesha Bancshares, Inc. acquisition. PSB did not repurchase any shares during the quarter ending March 31, 2021, although the company announced resumption of its repurchase plan beginning January 2021.

Loan Loss Reserves:   For the quarter ended March 31, 2021, the bank added provisions for loan losses totaling $1.0 million, an increase from $675,000 in the previous quarter and down from $1.8 million in the first quarter of 2020. Allowance for loan losses were $11.8 million at March 31, 2021 which includes $4.9 million of allowances for loans with risk weightings at 5 to 7 (“Watch, Substandard, and Impaired”) and $6.9 million for loans with risk weightings at 1 to 4 (“Acceptable and Average”). At March 31, 2021, allowance for loan losses totaled 1.40% of gross loans, and was 1.59% of proforma gross loans net of PPP loans totaling $87.4 million and purchased USDA guaranteed loans totaling $10.5 million.

Loan Accommodations: Loan modifications decreased from 48 loan accommodations with a balance of $22.3 million at December 31, 2020 to 27 loans with a balance of $21.9 million, or 2.6% of gross loans, at March 31, 2021. In the first quarter, the bank added a grocery store loan with a balance of $2.0 million to modified accommodation loans.

As shown in the table below during the March 2021 quarter, “impaired loans” increased $3.0 million and the “substandard risk” loans increased $10.5 million while “watch risk” loans decreased $5.5 million.   The increase in impaired loans consists of a commercial real estate loan for $3.4 million leased to an operator of a national restaurant chain that has remained closed throughout the pandemic. This loan was moved from watch risk to the impaired loan category during the March 2021 quarter. The increase in substandard risk loans was associated with two borrowers. The first is a group of collateral dependent commercial real estate loans totaling $2.4 million to one borrower that was moved from the watch list to the substandard risk category. These properties are in the process of being sold and are scheduled to close in the second quarter of 2021 with proceeds adequate to repay the debts. The second is a $8.4 million hotel construction loan moved from “acceptable risk” to “substandard risk” during the quarter. A junior lien loan under the SBA 504 program for this project has been approved by the SBA and $3.4 million will be sold to the SBA in the June 2021 quarter.

Commercial, Commercial Real Estate, Construction & Development, Agricultural and Government Loans
($000) 
Risk Rating 12/2017 12/2018 12/2019 03/2020 06/2020 09/2020 12/2020 03/2021 
Rating 1"High Quality"$-$-$-$71$55$-$-$- 
Rating 2"Minimal Risk" 76,710 85,382 57,904 59,101 72,601 56,337 61,223 62,626 
Rating 3"Average Risk" 292,496 323,627 349,002 324,378 374,709 391,195 390,191 348,102 
Rating 4"Acceptable Risk" 65,024 79,271 128,932 123,296 154,302 155,738 175,400 209,407 
Rating 5"Watch Risk" 18,049 15,551 15,933 33,999 54,522 46,603 36,379 30,891 
Rating 6"Substandard Risk" 500 489 2,568 2,732 4,545 2,162 7,617 18,134 
Rating 7"Impaired Loans" 9,952 8,707 5,518 7,811 6,130 10,164 13,153 16,162 
  $ 462,731$ 513,027$ 559,857$ 551,388$ 666,864$ 662,199$ 683,963$ 685,322 
Includes undisbursed Construction & Development lines of credit. PPP loan balances are assigned a risk-weighting of "3".     
          

March 31, 2021 Quarterly Financial Highlights (at or for the periods ended March 31, 2021, compared to December 31, 2020 and / or March 31, 2020, as applicable):

  • Record earnings of $3.9 million for the quarter ended March 31, 2021 resulted in strong annualized return on average assets of 1.39% and return on average shareholders’ equity of 14.92%. The record earnings for the quarter were despite continued elevated provision for loan losses related to one impaired loan.

  • Tangible net book value increased to $23.69 per share, a 13.4% over the most recent twelve-month period. Dividends of $0.42 per share were paid to shareholders during 2020, continuing a 5-year, 8.0% cumulative annual growth rate.

  • Total net loans increased $23.6 million, excluding PPP paydowns and originations, during a typically seasonally slow winter period, up 3.2% during the quarter. SBA PPP loans declined $14.6 million to $87.4 million, from $45.1 million in first round forgiveness paydowns but increased $30.5 million from PPP second round new originations.

Balance Sheet and Asset Quality Review

Total assets remained mostly unchanged at March 31, 2021 relative to the prior quarter ended December 31, 2020, though there were some minor changes in the composition of assets. At March 31, 2021, and the prior quarter ended December 31, 2020, total assets were $1.13 billion. Total loans receivable increased by $9.0 million, or 1.1%, to $830.0 million at March 31, 2021 from $821.0 million one quarter earlier. Offsetting this growth, net SBA PPP loans decreased $14.6 million to $87.4 million at March 31, 2021, as $45.1 million of borrower loans were forgiven and repaid by the SBA PPP guarantee program and $30.5 million of new second round PPP loans were originated. At March 31, 2021, the bank had net unrealized PPP origination fees totaling $2.1 million of which $1.1 million are related to first round PPP loans and $1.0 million are related to second round PPP loans. The first round deferred origination fees are expected to be recognized as income during the remainder of 2021 when these loans are forgiven or paid off.   Excluding the impact of PPP loan activity, loans grew $24.3 million, or 3.3%, and were driven by residential first mortgages, owner occupied commercial real estate, and non-owner occupied commercial real estate.  

The allowance for loan losses increased to 1.40% of gross loans at March 31, 2021 (1.59% of gross loans net of PPP guaranteed loans and USDA guaranteed loans) compared to 1.30% of gross loans (1.50% of gross loans net of PPP loans and USDA guaranteed loans) one quarter earlier. Annualized net charge-offs to average loans were 0.01% for the quarter ended March 31, 2021. Non-performing assets increased to 1.13% of total assets at March 31, 2021, compared to 0.90% at December 31, 2020, and 0.54% at March 31, 2020. The increase in non-performing assets at March 31, 2021, primarily relates to the addition of a $3.4 million loan on real estate leased to a restaurant that has been closed throughout the pandemic. Though the borrower continues to make regularly scheduled payments, the loan was put on non-accrual status until such time clarity is provided to the operations of the restaurant chain or other building use. At March 31, 2021, non-performing assets consisted of $5.4 million in non-accrual loans, $1.1 million in non-accrual restructured loans, $5.2 million in restructured loans not on non-accrual and $1.1 million in other real estate owned.

At March 31, 2021, cash and cash equivalents totaled $29.9 million compared to $38.5 million at December 31, 2020, and $48.1 million one year earlier. Cash levels were reduced in the current quarter with the funds reinvested into lending products. Investment securities totaled $227.8 million at March 31, 2021, compared to $228.3 million at December 31, 2020, and $171.1 million one year earlier. All investment securities are considered available for sale and carried at market value.  

Foreclosed assets decreased to $1.1 million at March 31, 2021, from $1.6 million at December 31, 2020, due to the sale of a former bank branch office in Rhinelander, WI, made vacant following consolidation into a nearby Peoples State Bank branch. Foreclosed assets were $425,000 one year earlier.   

Total deposits decreased slightly to $925.9 million at March 31, 2021, compared to $932.1 million at December 31, 2020. At March 31, 2021, interest-bearing demand and savings deposits accounted for 35.6% of total deposits, followed by noninterest-bearing demand deposits at 26.2%, money market deposits at 23.3%, and retail and local time deposits at 13.6%. Broker and national time deposits accounted for 1.3% of total deposits at March 31, 2021, versus 1.5% the prior quarter. As a result of the ongoing pandemic, the bank has experienced larger average deposits per account and increased mobile banking enrollment and active mobile deposit product usage.

FHLB advances remained at $62.0 million at March 31, 2021, and other borrowings increased to $18.6 million, from $12.2 million the prior period.

For the quarter ended March 31, 2021, stockholders’ equity increased $1.2 million to $105.6 million, compared to $104.4 million at December 31, 2020. Stockholders’ equity was impacted by earnings, and other comprehensive income adjustments, including a decrease in unrealized gains on securities available for sale of $2.8 million during the current quarter as market interest rates increased. Tangible net book value per share increased to $23.69 per share, at March 31, 2021, compared to $23.43 per share at December 31, 2020. The bank’s tangible equity to total tangible assets was 9.32% at March 31, 2021 compared to 9.22% at December 31, 2020.

Operations Review

Net interest income totaled $9.6 million (on a net margin of 3.62%) for the first quarter of 2021, compared to $8.4 million (on net margin of 3.22%) for the fourth quarter of 2020 and $7.8 million (on a net margin of 3.45%) for the first quarter of 2020. Compared to the preceding quarter, loans and investment yields increased 35 basis points from 3.60% to 3.95% during the first quarter of 2021, while deposit and borrowing costs declined 7 basis points to 0.46% from 0.53% over the same period.

The increase in loan and investment yields was largely due to net accretion of loan fees of $1.6 million related to PPP loans that have been repaid compared to net accretion of $492,000 during the December 2020 quarter. Loan yields increased to 4.57% during the quarter from 4.08% during the fourth quarter of 2020. Loan yields excluding the impacts of PPP loans, were 4.17 % and 4.26% during the March 2021 and December 2020 quarters respectively. Net interest margin excluding the impacts of PPP loans, was 3.24% and 3.26% in the March 2021and December 2020 quarters, respectively. Continued recognition of PPP loan fee income is expected to elevate reported net interest margin for the remainder of 2021 as the first round PPP program fees are recognized throughout 2021 and second round PPP program fees begin to be recognized later in 2021.

The cost of interest-bearing liabilities decreased during the quarter, largely reflecting lower rates associated with time deposits. Deposit costs decreased to $547,000 for the first quarter of 2021, from $657,000 the previous quarter. Interest costs on borrowings declined $15,000 to $339,000 for the first quarter of 2021, from $354,000 the previous quarter.   The prepayment of some FHLB advances, during the fourth quarter of 2020, contributed to lower borrowing cost in the March 2021 quarter. “By successfully lowering our cost of funds during the past year, we have been able to limit the negative impact of lower asset yields on our net interest margin,” said Mark Oldenberg, Chief Financial Officer.

The provision for loan losses totaled $1.0 million during the first quarter of 2021 compared to $675,000 for the prior linked quarter. The provision relates to reserves taken against the previously discussed real estate loan leased to a national chain restaurant loan. Currently, it is uncertain whether the borrower will continue making loan payments and whether an alternative restaurant tenant can be found to operate the building. Loan loss provisions in 2021 are expected to be lower than provisions recorded during 2020 due to an improved economic outlook and expected favorable resolution to several large problem loans.

Total noninterest income for the first quarter of 2021 decreased to $2.7 million from $3.0 million for the fourth quarter of 2020, due in part to lower gains on the sale of mortgage loans and lower security gains. Gains on sale of mortgage loans decreased to $1.2 million for the first quarter from $1.4 million in the fourth quarter of 2020, due in part to management actions to invest significant on balance sheet liquidity into first lien residential mortgage loans rather than purchasing lower yielding investment securities. Adding these mortgages to the balance sheet rather than selling them for a gain into the secondary market reduced March 2021 noninterest income. In addition, slightly higher long-term U.S. Treasury rates slowed mortgage refinance activity by borrowers. However, mortgage origination activity remains high relative to historical levels. Mortgage originations are anticipated to remain at elevated levels in the second quarter of 2021 as the 10-year Treasury Notes remain low and housing demand remains strong.   Mortgage loan servicing income was $79,000 for the first quarter compared to $104,000 the previous quarter.

Deposit and service fee income in the first quarter declined to $332,000 for the three months ended March 31, 2021, compared to $352,000 for the prior three-month period. Net gains on the sale of securities were $21,000 for the first quarter of 2021, compared to $149,000 for the fourth quarter of 2020, and $123,000 for the quarter one year earlier. Commissions on customer investment and insurance sales increased to $595,000, from $391,000 the prior quarter as sales activity increased by adding a sales advisor to the Milwaukee market and advisory fees tied to rising market values. At March 31, 2021, the bank had wealth assets under management totaling $283.6 million compared to $269.0 million at December 31, 2020, and $217.5 million at March 31, 2020. For the first quarter ended March 31, 2021, other noninterest income was $462,000 compared to $488,000 the prior quarter.

Noninterest expense was $6.2 million for the first quarter of 2021, compared to $6.5 million for the fourth quarter of 2020. For the first quarter of 2021, noninterest expense was lower due to lower salaries and employee benefits driven by deferral of $377,000 in second round PPP loan origination costs. Salary and employee benefit expenses were $3.3 million for the first quarter compared to $4.1 million in the fourth quarter of 2020. The fourth quarter of 2020 benefited from a net gain on foreclosed assets of $218,000 compared to a net loss of $130,000 in the first quarter of 2021.   Data processing and other office expenses increased to $694,000 for the quarter ended March 31, 2021 from $568,000 for the prior quarter. Included in other noninterest expense was approximately $73,000 of Waukesha Bankshares, Inc. merger related expenses. Due to closing of the purchase on April 16, 2021, it is expected there will be significant additional noninterest and nonrecurring expenses related to the acquisition of Waukesha Bankshares, Inc. incurred during the second quarter of 2021. Cost savings from efficiencies gained in the merger are expected to be fully realized by the end of 2021.

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

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, merger and acquisition activity, 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, the benefits and risks associated with acquisition activities, and other risks and assumptions. Risk and uncertainties also include the effect of the COVID-19 pandemic, including the bank’s credit quality and business operations, as well as its impact on general economic and financial market conditions. PSB Holdings, Inc. assumes no obligation to update or supplement forward-looking statements that become untrue because of events subsequent to this press release.


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:   2021  2020  2020  2020  2020 
         
 Interest income  $10,482 $9,442 $9,155 $9,291 $9,726 
 Interest expense  $886 $1,011 $1,261 $1,528 $1,935 
 Net interest income  $9,596 $8,431 $7,894 $7,763 $7,791 
 Provision for loan losses  $1,000 $675 $1,300 $1,800 $1,800 
 Other noninterest income $2,749 $2,991 $2,929 $3,138 $2,355 
 Other noninterest expense $6,200 $6,461 $6,074 $4,879 $6,330 
 Net income  $3,896 $3,252 $2,637 $3,190 $1,610 
         
 Basic earnings per share (3) $0.88 $0.73 $0.59 $0.72 $0.36 
 Diluted earnings per share (3) $0.87 $0.73 $0.59 $0.72 $0.36 
 Dividends declared per share (3) $- $0.21 $- $0.21 $- 
 Tangible net book value per share (4) $23.69 $23.43 $22.73 $21.97 $20.89 
         
 Semi-annual dividend payout ratio n/a  15.88%n/a  14.50%n/a 
 Average common shares outstanding  4,454,334  4,452,287  4,452,287  4,453,225  4,464,956 
         
Balance sheet - average balances:      
         
 Loans receivable, net of allowances for loss$827,595 $807,182 $800,611 $786,785 $705,333 
 Assets  $1,132,905 $1,100,064 $1,099,402 $1,067,466 $963,191 
 Deposits  $925,689 $896,427 $882,682 $855,155 $761,268 
 Stockholders' equity  $105,868 $102,790 $100,436 $95,909 $94,735 
         
Performance ratios:       
         
 Return on average assets (1)  1.39% 1.18% 0.95% 1.20% 0.67%
 Return on average stockholders' equity (1) 14.92% 12.59% 10.45% 13.38% 6.84%
 Average stockholders' equity less accumulated other comprehensive income (loss) to average assets   9.10% 9.00% 8.85% 8.83% 9.75%
 Net loan charge-offs to average loans (1) 0.01% 0.16% 0.00% 0.25% 0.49%
 Nonperforming loans to gross loans  1.39% 1.03% 0.98% 0.47% 0.67%
 Nonperforming assets to total assets  1.13% 0.90% 0.85% 0.49% 0.54%
 Allowance for loan losses to gross loans 1.40% 1.30% 1.31% 1.13% 1.10%
 Nonperforming assets to tangible equity plus the allowance for loan losses (4) 11.06% 8.96% 8.50% 5.11% 5.24%
 Net interest rate margin (1)(2)  3.62% 3.22% 3.03% 3.09% 3.45%
 Net interest rate spread (1)(2)  3.49% 3.07% 2.84% 2.85% 3.20%
 Service fee revenue as a percent of average demand deposits (1)  0.57% 0.59% 0.59% 0.49% 1.04%
 Noninterest income as a percent of gross revenue   20.78% 24.06% 24.24% 25.25% 19.49%
 Efficiency ratio (2)   49.64% 55.87% 55.41% 44.23% 61.59%
 Noninterest expenses to average assets (1) 2.22% 2.34% 2.20% 1.84% 2.64%
 Tangible equity to tangible assets  9.32% 9.22% 9.17% 8.95% 9.59%
         
Stock price information:       
         
 High  $25.94 $23.00 $18.80 $24.75 $28.25 
 Low  $20.45 $17.20 $17.36 $18.55 $19.50 
 Last trade value at quarter-end $25.25 $20.57 $18.00 $18.55 $24.75 
         
(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,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Mar. 31,
except per share data - unaudited) 2021 2020  2020  2020  2020 
         
Interest and dividend income:     
   Loans, including fees$9,442$8,371 $8,068 $8,175 $8,445 
   Securities:     
      Taxable 507 542  564  622  733 
      Tax-exempt 502 489  474  446  431 
   Other interest and dividends 31 40  49  48  117 
         
         Total interest and dividend income 10,482 9,442  9,155  9,291  9,726 
         
Interest expense:     
   Deposits 547 657  833  1,080  1,482 
   FHLB advances 215 228  304  323  320 
   Other borrowings 7 6  5  6  14 
   Senior subordinated notes 28 29  28  28  28 
   Junior subordinated debentures 89 91  91  91  91 
         
         Total interest expense 886 1,011  1,261  1,528  1,935 
         
Net interest income 9,596 8,431  7,894  7,763  7,791 
Provision for loan losses 1,000 675  1,300  1,800  1,800 
         
Net interest income after provision for loan losses    8,596 7,756  6,594  5,963  5,991 
         
Noninterest income:     
   Service fees 332 352  344  278  391 
   Gain on sale of mortgage loans 1,152 1,401  1,752  1,747  987 
   Mortgage loan servicing, net 79 104  (79) (165) (23)
   Investment and insurance sales commissions 595 391  301  259  349 
   Net gain on sale of securities 21 149  38  194  123 
   Increase in cash surrender value of life insurance    108 106  108  104  104 
   Other noninterest income 462 488  465  721  424 
         
         Total noninterest income 2,749 2,991  2,929  3,138  2,355 
         
Noninterest expense:     
   Salaries and employee benefits 3,310 4,084  3,526  2,583  3,819 
   Occupancy and facilities 569 511  566  508  544 
   Loss (gain) on foreclosed assets 130 (218) 36  23  71 
   Data processing and other office operations 694 568  743  675  644 
   Advertising and promotion 79 172  77  94  141 
   FDIC insurance premiums 83 82  87  23  - 
   Other noninterest expenses 1,335 1,262  1,039  973  1,111 
         
        Total noninterest expense 6,200 6,461  6,074  4,879  6,330 
         
Income before provision for income taxes 5,145 4,286  3,449  4,222  2,016 
Provision for income taxes 1,249 1,034  812  1,032  406 
         
Net income$3,896$3,252 $2,637 $3,190 $1,610 
Basic earnings per share$0.88$0.73 $0.59 $0.72 $0.36 
Diluted earnings per share$0.87$0.73 $0.59 $0.72 $0.36 
         



PSB Holdings, Inc.     
Consolidated Balance Sheets     
March 31, 2021, September 30, June 30, and March 31, 2020, unaudited, December 31, 2020 derived from audited financial statements     
 Mar. 31,Dec. 31,Sep. 30,Jun. 30,Mar. 31,
(dollars in thousands, except per share data) 2021  2020  2020  2020  2020 
Assets     
      
Cash and due from banks$12,921 $15,723 $13,652 $13,016 $9,665 
Interest-bearing deposits 985  1,056  1,750  1,483  1,349 
Federal funds sold 16,027  21,749  61,383  45,796  37,071 
      
Cash and cash equivalents 29,933  38,528  76,785  60,295  48,085 
Securities available for sale (at fair value) 227,824  228,296  193,179  178,635  171,054 
Bank certificates of deposit (at cost) 1,231  1,231  496  1,738  3,234 
Loans held for sale 622  954  903  3,755  1,394 
Loans receivable, net 829,964  820,956  791,951  805,243  706,584 
Accrued interest receivable 3,335  3,527  3,629  3,590  2,847 
Foreclosed assets 1,105  1,619  1,485  1,525  425 
Premises and equipment, net 11,077  10,920  11,061  11,067  11,098 
Mortgage servicing rights, net 1,732  1,657  1,638  1,623  1,668 
Federal Home Loan Bank stock (at cost) 2,283  2,283  2,283  2,283  2,283 
Cash surrender value of bank-owned life insurance 17,902  17,795  17,089  16,981  16,877 
Other assets 5,215  4,189  3,784  6,611  4,330 
      
TOTAL ASSETS$1,132,223 $1,131,955 $1,104,283 $1,093,346 $969,879 
      
Liabilities     
      
Non-interest-bearing deposits$242,974 $236,981 $241,947 $241,914 $158,505 
Interest-bearing deposits 682,877  695,156  658,667  640,307  606,781 
      
   Total deposits 925,851  932,137  900,614  882,221  765,286 
      
Federal Home Loan Bank advances 62,000  62,000  67,000  87,000  88,682 
Other borrowings 18,582  12,239  16,216  3,941  3,504 
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 9,918  10,920  8,871  11,998  9,024 
      
   Total liabilities 1,026,583  1,027,528  1,002,933  995,392  876,728 
      
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 - 4,454,922, 4,452,287, 4,452,287, 4,452,287 and     
     4,453,472 shares, respectively 1,830  1,830  1,830  1,830  1,830 
Additional paid-in capital 7,890  7,818  7,765  7,712  7,632 
Retained earnings 107,751  103,855  101,538  98,901  96,646 
Accumulated other comprehensive income (loss), net of tax 1,691  4,458  3,751  3,045  550 
Treasury stock, at cost - 1,035,876, 1,038,511, 1,038,511, 1,038,511 and     
  1,037,326 shares, respectively (13,522) (13,534) (13,534) (13,534) (13,507)
      
   Total stockholders' equity 105,640  104,427  101,350  97,954  93,151 
      
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,132,223 $1,131,955 $1,104,283 $1,093,346 $969,879 
      



PSB Holdings, Inc.   
Consolidated Statements of Comprehensive Income  
       
    Three Months Ended 
    March 31, 
(dollars in thousands - unaudited) 2021  2020  
       
Net income$3,896 $1,610  
       
Other comprehensive income, net of tax:   
       
  Unrealized loss on securities available for sale (2,803) (342) 
       
  Reclassification adjustment for security gain included in net income (15) (89) 
       
  Unrealized gain (loss) on interest rate swap  13  (339) 
       
  Reclassification adjustment of interest rate swap settlements included in earnings 38  18  
       
       
Other comprehensive loss (2,767) (752) 
       
Comprehensive income$1,129 $858  
       



PSB Holding, Inc.     
Loan Composition by Purpose     
Quarter-ended (dollars in thousands)Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
       
  Residential real estate     
       
 One to four family$136,242 $125,530 $114,226 $118,049 $122,276 
 HELOC loans 16,908  18,312  19,747  19,550  20,795 
 Residential construction & development 25,628  25,519  22,529  23,129  22,963 
 Residential vacant land 2,524  3,305  3,147  3,417  3,745 
       
 Total Residential real estate 181,302  172,666  159,649  164,145  169,779 
       
  Commercial/Agricultural real estate     
       
 Owner occupied     
       
         Commercial real estate 194,514  187,059  164,073  164,483  164,851 
         SBA commercial real estate 1,445  1,483  1,506  1,539  1,571 
         Agriculture real estate 4,787  4,429  4,677  4,885  5,041 
         Construction and land development 4,121  5,468  13,557  7,294  8,297 
         Commercial vacant land 2,998  2,835  2,819  2,241  1,560 
       
 Total Owner occupied 207,865  201,274  186,632  180,442  181,320 
       
 Non-owner occupied     
       
         Commercial real estate 183,365  173,953  170,847  165,099  158,634 
         One to four family residential rental 31,914  31,363  30,159  28,451  29,891 
         SBA commercial real estate 718  749  771  793  824 
         Construction and land development 31,362  29,846  18,600  11,927  16,406 
         Commercial vacant land 7,970  8,402  8,907  10,135  13,965 
       
 Total Non-owner occupied 255,329  244,313  229,284  216,405  219,720 
       
  Commercial/Agricultural non-real estate     
       
 Municipal non-real estate 7,165  11,422  5,687  7,826  5,933 
 Commercial line 46,833  41,619  40,067  55,317  59,266 
 Other commercial non-real estate 49,246  52,723  58,718  69,267  70,467 
 SBA commercial non-real estate 89,603  103,871  118,668  117,436  1,453 
 Agricultural non-real estate 1,730  1,986  2,150  2,148  2,075 
       
 Total Commercial/Agricultural non-real estate 194,577  211,621  225,290  251,994  139,194 
       
  Consumer non-real estate     
       
 Consumer installment 3,191  3,400  3,358  3,512  3,344 
 Consumer line 498  353  366  243  328 
 Other consumer 123  143  163  160  183 
       
 Total Consumer non-real estate 3,812  3,896  3,887  3,915  3,855 
       
Gross loans 842,885  833,770  804,742  816,901  713,868 
       
 Net deferred loan costs (fees) (1,627) (2,140) (2,627) (2,617) 388 
 Overdrafts 528  161  317  133  199 
 Allowance for loan losses (11,822) (10,835) (10,481) (9,174) (7,871)
       
Total loans receivable$ 829,964 $ 820,956 $ 791,951 $ 805,243 $ 706,584 
       



PSB Holdings, Inc.     
Nonperforming Assets as of:     
 Mar 31,Dec 31,Sept 30,June 30,Mar 31,
(dollars in thousands) 2021  2020  2020  2020  2020 
      
Nonaccrual loans (excluding restructured loans)$5,346 $2,071 $2,129 $2,964 $3,868 
Nonaccrual restructured loans 1,090  1,064  233  244  232 
Restructured loans not on nonaccrual 5,242  5,414  5,508  650  672 
Accruing loans past due 90 days or more -  -  -  -  - 
      
Total nonperforming loans 11,678  8,549  7,870  3,858  4,772 
Other real estate owned 1,105  1,619  1,485  1,525  425 
      
Total nonperforming assets$12,783 $10,168 $9,355 $5,383 $5,197 
      
Nonperforming loans as a % of gross loans receivable 1.39% 1.03% 0.98% 0.47% 0.67%
Total nonperforming assets as a % of total assets 1.13% 0.90% 0.85% 0.49% 0.54%
Allowance for loan losses as a % of nonperforming loans 101.23% 126.74% 133.18% 237.79% 164.94%
      



PSB Holdings, Inc.   
Nonperforming Assets >= $500,000 net book value before specific reserves  
At March 31, 2021   
(dollars in thousands)   
  GrossSpecific
Collateral DescriptionAsset TypePrincipalReserves
    
Leased retail sales outletORE$1,100 - 
Real estate - HotelRestructured 4,861 194 
Real estate - Buffet Style RestaurantRestructured/Nonaccrual 876 115 
Real estate - Buffet Style RestaurantNonaccrual 3,396 1,274 
    
Total listed nonperforming assets  10,233 1,583 
Total bank wide nonperforming assets  12,783 1,936 
Listed assets as a % of total nonperforming assets  80%82%
    
Largest Performing, but Impaired Loans at March 31, 2021 ($000s)  
  GrossSpecific
Collateral DescriptionAsset TypePrincipalReserves
    
Real estate - 4 Hotel GroupImpaired 4,336 530 
    
    
Total listed performing, but impaired loans  4,336 530 
Total performing, but impaired loans  5,793 628 
Listed assets as a % of total performing, but impaired loans  75%84%
    



PSB Holdings, Inc.        
Deposit Composition        
  March 31,             December 31,
(dollars in thousands) 2021   2020   2020 
 $% $% $%
         
Non-interest bearing demand$242,97426.20% $158,50520.70% $236,98125.40%
Interest-bearing demand and savings 329,10035.60%  254,76233.30%  332,67735.70%
Money market deposits 215,59023.30%  192,93325.20%  222,15623.80%
Retail and local time deposits <= $250 101,86611.00%  104,93013.70%  103,06411.10%
         
Total core deposits 889,53096.10%  711,13092.90%  894,87896.00%
Retail and local time deposits > $250 23,9042.60%  24,4233.20%  23,1122.50%
Broker & national time deposits <= $250 10,4231.10%  7,6821.00%  12,1531.30%
Broker & national time deposits > $250 1,9940.20%  22,0512.90%  1,9940.20%
Totals$925,851100.00% $765,286100.00% $932,137100.00%
         



PSB Holdings, Inc.           
Average Balances ($000) and Interest Rates         
(dollars in thousands)           
              
              
   Quarter ended March 31, 2021 Quarter ended December 31, 2020 Quarter ended March 31, 2020
   Average Yield / Average Yield / Average Yield /
   BalanceInterestRate BalanceInterestRate BalanceInterestRate
Assets            
Interest-earning assets:           
   Loans (1)(2)$838,781 $9,4544.57% $817,875 $8,3834.08% $712,402 $8,4614.78%
   Taxable securities 142,539  5071.44%  129,832  5421.66%  110,980  7332.66%
   Tax-exempt securities (2) 84,219  6353.06%  80,619  6193.05%  66,958  5463.28%
   FHLB stock 2,283  213.73%  2,283  274.70%  2,121  264.93%
   Other  22,390  100.18%  27,336  130.19%  30,253  911.21%
              
   Total (2)  1,090,212  10,6273.95%  1,057,945  9,5843.60%  922,714  9,8574.30%
              
Non-interest-earning assets:           
   Cash and due from banks 14,248     14,011     11,621   
   Premises and equipment,           
      net  11,009     11,023     10,779   
   Cash surrender value ins 17,840     17,206     16,811   
   Other assets 10,782     10,572     8,335   
   Allowance for loan           
      losses  (11,186)    (10,693)    (7,069)  
              
   Total $1,132,905     $1,100,064     $963,191   
              
Liabilities & stockholders' equity          
Interest-bearing liabilities:           
   Savings and demand           
      deposits $333,340 $650.08% $298,696 $650.09% $261,704 $3300.51%
   Money market deposits 217,618  1180.22%  218,455  1280.23%  188,507  3730.80%
   Time deposits 138,773  3641.06%  143,714  4641.28%  159,294  7791.97%
   FHLB borrowings 62,000  2151.41%  64,283  2281.41%  80,486  3201.60%
   Other borrowings 18,964  70.15%  16,638  60.14%  6,394  140.88%
   Senior sub. notes 2,500  284.54%  2,500  294.61%  2,500  284.50%
   Junior sub. debentures 7,732  894.67%  7,732  914.68%  7,732  914.73%
              
   Total  780,927  8860.46%  752,018  1,0110.53%  706,617  1,9351.10%
              
Non-interest-bearing liabilities:          
   Demand deposits 235,958     235,562     151,763   
   Other liabilities 10,152     9,694     10,076   
   Stockholders' equity 105,868     102,790     94,735   
              
   Total $1,132,905     $1,100,064     $963,191   
              
Net interest income $9,741   $8,573   $7,922 
Rate spread   3.49%   3.07%   3.20%
Net yield on interest-earning assets 3.62%   3.22%   3.45%
              
(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%.