PSB Holdings, Inc. Reports 2nd Quarter Earnings of $2.1 Million, or $0.48 Per Share; Earnings before Merger Adjustments Totaled $4.2 Million, or $0.93 Per Share

Wausau, Wisconsin, UNITED STATES


WAUSAU, Wis., July 26, 2021 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank serving Northcentral and Southeastern Wisconsin, reported second quarter earnings ending June 30, 2021 of $0.48 per share on net income of $2.1 million, compared to earnings of $0.87 per share on net income of $3.9 million, during the March 31, 2021 quarter, and $0.72 per share on net income of $3.2 million, during the second quarter a year ago. June 2021 quarterly earnings included $2.7 million of merger related expenses associated with professional fees, data conversions, contract terminations and severance payments before tax benefits of $0.7 million. Excluding merger related expenses, June 2021 quarterly earnings were $0.93 per share on net income of $4.2 million.

“Integration of the Waukesha Bankshares, Inc. acquisition has met expectations while our overall banking platform continues to provide robust core earnings. The local communities we operate in appear to be returning to pre-pandemic levels as unemployment levels decline, businesses are open and consumer spending is strong. Our deposit balances remain elevated as individuals and businesses remain flush with liquidity and lending needs are currently muted,” stated Scott Cattanach, President and CEO. “However, we remain committed to our business community and expect to see organic loan growth expand as we move through the remainder of 2021.”

Net Interest Margin Impact: PSB’s net interest margin decreased to 3.48% for the quarter ended June 30, 2021 from 3.62% the prior quarter. During the quarter, net interest margin was impacted by lower accretion of net PPP origination fee income totaling $1.0 million for the current quarter versus $1.6 million during the prior quarter. In addition, higher yielding loans acquired with the Waukesha Bankshares, Inc. (WBI) acquisition were offset by a larger balance of lower yielding investment securities. Loan yield and net interest margin excluding PPP loans would have been 4.20% and 3.25%, respectively during the June 2021 quarter compared to 4.18% and 3.24% in the March 2021 quarter. “Net interest margin was positively influenced by the acquisition of WBI’s loans and deposits and additional SBA PPP loan forgiveness. Based on current interest rates and the competitive environment of our local markets, we expect continued downward pressure on loans yields and net interest margin in the near term,” said Mark Oldenberg, Chief Financial Officer.

Capital Management: At June 30, 2021, PSB’s tangible equity to tangible asset ratio was 8.38% compared to 9.22% at December 31, 2020. Peoples State Bank capital was well in-excess of all regulatory requirements.   Tangible net book value per share decreased $0.16 during the quarter to $23.53 per share at June 30, 2021 from $23.69 per share at March 31, 2021 due to $3.1 million of intangible assets recognized with the acquisition of WBI. PSB did not repurchase any shares during the quarter ending June 30, 2021.

Loan Loss Reserves: For the quarter ended June 30, 2021, the bank did not add any provisions for loan losses compared to $1.0 million in the first quarter of 2021. Allowance for loan losses remained at $11.8 million at June 30, 2021. At June 30, 2021, allowance for loan losses totaled 1.35% of gross loans, but rises to 1.44% of proforma gross loans excluding $41.3 million of PPP loans and $12.7 million of purchased USDA guaranteed loans.  Loan loss provisions in 2021 are expected to continue to be lower than provisions recorded during 2020 due to an improved economic outlook and expected favorable resolution to several large problem loans.

Loan Accommodations: Loan modifications related to COVID decreased from 27 loan accommodations with a balance of $21.9 million at March 31, 2021 to 9 loans with a balance of $1.4 million, or 0.2% of gross loans, at June 30, 2021.

As shown in the table below during the June 2021 quarter, “impaired loans” decreased $0.6 million and the “substandard risk” loans decreased $11.8 million while “watch risk” loans increased $8.7 million.   The primary increase in “watch risk” loans relates to certain loans added from the acquisition of WBI. Loans acquired with WBI totaling $86.7 million were recorded at fair value at acquisition net of $725,000 of purchase discounts related to potential credit losses and higher than market loan coupon rates that will be accreted to income over the life of the purchased loans.

Commercial, Commercial Real Estate, Construction & Development, Agricultural and Government Loans 
($000)
Risk Rating 12/2018  12/2019
  03/2020
  06/2020
  9/2020  12/2020  03/2021
  06/2021
Rating 1"High Quality"$- $- $71 $55 $- $- $- $-
Rating 2"Minimal Risk" 85,382  57,904  59,101  72,601  56,337  61,223  62,626  60,155
Rating 3"Average Risk" 323,627  349,002  324,378  374,709  391,195  390,191  348,102  345,929
Rating 4"Acceptable Risk" 79,271  128,932  123,296  154,302  155,738  175,400  209,407  209,728
Rating 5"Watch Risk" 15,551  15,933  33,999  54,522  46,603  36,379  30,891  39,577
Rating 6"Substandard Risk" 489  2,568  2,732  4,545  2,162  7,617  18,134  6,377
Rating 7"Impaired Loans" 8,707  5,518  7,811  6,130  10,164  13,153  16,162  15,522
  $ 513,027 $ 559,857 $ 551,388 $ 666,864 $ 662,199 $ 683,963 $ 685,322 $ 677,288
Includes undisbursed Construction & Development lines of credit. PPP loan balances are assigned a risk-weighting of "3".      
          

Balance Sheet and Asset Quality Review

Total assets increased to $1.25 billion at June 30, 2021 from $1.13 billion at December 31, 2020 due primarily to the acquisition of WBI.   Total loans receivable increased by $42.3 million, or 5.2%, to $863.3 million at June 30, 2021 from $821.0 million as of December 31, 2020. Net loan growth was due primarily to the addition of WBI’s $86.7 million portfolio.   Offsetting this growth was the net reduction in SBA Paycheck Protection Program (PPP) loans of $60.7 million as loans were forgiven and repaid by the SBA PPP guarantee program. At June 30, 2021, $41.3 million of PPP loan principal remained and unrealized net PPP origination fees totaled $1.2 million. Year to date loan growth was also impacted by the addition of $10.2 million of residential fixed rate first mortgages traditionally sold into the secondary market and a $8.2 million increase in organic other commercial related loans.  

The allowance for loan losses decreased to 1.35% of gross loans at June 30, 2021 (1.44% of gross loans net of PPP guaranteed loans and USDA guaranteed loans) compared to 1.40% of gross loans (1.59% of gross loans net of PPP loans and USDA guaranteed loans) one quarter earlier. Annualized net charge-offs to average loans were zero for the quarter ended June 30, 2021. Non-performing assets were 1.07% of total assets at June 30, 2021, compared to 1.13% at March 31, 2021, and 0.90% at December 31, 2020. At June 30, 2021, non-performing assets consisted of $5.2 million in non-accrual loans, $1.1 million in non-accrual restructured loans, $5.2 million in restructured loans not on non-accrual and $2.0 million in other real estate owned.

At June 30, 2021, cash and cash equivalents were elevated following the merger related addition of cash and sale of securities held by WBI and repayment of forgiveness received on SBA PPP loans and totaled $72.1 million at June 30, 2021 compared to $29.9 million at March 31, 2021, and $38.5 million at the start of the fiscal year. Investment securities totaled $261.7 million at June 30, 2021, compared to $227.8 million at March 31, 2021, and $228.3 million as of December 31, 2020 as cash was deployed to purchase securities with a higher yield than available with overnight cash. All investment securities are considered available for sale and carried at market value.  

As a result of the merger, intangible assets including core deposit intangibles and goodwill were recorded and totaled $629,000 and $2.5 million, respectively at June 30, 2021. The initial core deposit intangible of $660,000 represented approximately 0.92% of core deposits and will be amortized on a double-declining basis over 7 years. Amortization of core deposit intangibles of $31,000 was recognized in the June 2021 quarter.

Foreclosed assets increased to $2.0 million at June 30, 2021, from $1.1 million at March 31, 2021, due to including $0.9 million of foreclosed assets held by WBI.   Foreclosed assets were $1.6 million at the beginning of the fiscal year.   

Total deposits increased to $1.03 billion at June 30, 2021, compared to $932.1 million at December 31, 2020, with the acquisition of WBI adding $121.1 million in deposit growth.   Merger related time deposit premiums totaled $352,000, or 0.72% of time deposits, at the acquisition and were $264,000 at June 30, 2021. At June 30, 2021, interest-bearing demand and savings deposits accounted for 35.4% of total deposits, followed by noninterest-bearing demand deposits at 26.5%, money market deposits at 20.6%, and retail and local time deposits at 16.2%. Broker and national time deposits accounted for 1.3% of total deposits at June 30, 2021, versus 1.5% at December 31, 2020. As a result of the pandemic, the bank has continued to experience larger average deposits per account and increased mobile banking enrollment and active mobile deposit product usage.

FHLB advances increased to $67.0 million at June 30, 2021 from $62.0 million at March 31, 2021 and December 31, 2020, while other borrowings increased to $21.8 million compared to $18.6 million the prior period and $12.2 million at December 31, 2020. Junior subordinated debentures increased to $12.7 million at June 30, 2021 from $7.7 million at the beginning of the fiscal year due to addition of WBI’s junior subordinated par notes of $6.2 million before an acquisition discount of $1.3 million to be amortized to expense until the instrument’s September 2033 final maturity.

Operations Review

Net interest income totaled $10.2 million (on a net margin of 3.48%) for the second quarter of 2021, compared to $9.6 million (on net margin of 3.62%) for the first quarter of 2021 and $7.8 million (on a net margin of 3.09%) for the second quarter of 2020. Compared to the preceding quarter, earning asset yields decreased 17 basis points from 3.95% to 3.78% during the second quarter of 2021, while deposit and borrowing costs declined 4 basis points to 0.42% from 0.46% over the same period. The decrease in earning asset yields was largely due to lower net accretion of loan fees of $1.0 million related to PPP loans that have been repaid compared to net accretion of $1.6 million during the March 31, 2021 quarter. Loan yields decreased to 4.42% during the quarter from 4.57% during the first quarter of 2021. Loan yields excluding the impacts of PPP loans, were 4.20 % and 4.18% during the June 2021 and March 2021 quarters respectively. Net interest margin excluding the impacts of PPP loans, was 3.25% and 3.24% in the June 2021 and March 2021 quarters, respectively.   Recognition of PPP loan fee income is expected to decline for the remainder of 2021 as balances are forgiven.

The cost of interest-bearing liabilities decreased during the quarter, largely reflecting lower rates associated with time deposits and the impact of mark-to-market premiums related to the merger on WBI’s time deposits. Deposit costs decreased $62,000 despite the addition of deposits acquired in the merger to $485,000 for the second quarter of 2021, from $547,000 the previous quarter. Time deposit purchase premium amortization totaled $88,000 for the quarter ended June 30, 2021, lowering interest expense, with the remaining unamortized balance of $264,000 expected to be fully realized by the end of 2021. Interest costs on borrowings increased $83,000, to $422,000, for the second quarter of 2021, from $339,000 the previous quarter.   The increase in borrowing costs largely relate to the additional junior subordinated debentures acquired with WBI.  

Total noninterest income for the second quarter of 2021 decreased to $2.3 million from $2.7 million for the first quarter of 2021, due in part to lower gains on the sale of mortgage loans and lower investment and insurance sales commissions. Gains on sale of mortgage loans decreased to $663,000 for the second quarter from $1.2 million in the first quarter of 2021, 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 June 2021 noninterest income by approximately $257,000. In addition, slightly higher long-term mortgage rates and rising home prices during the quarter slowed mortgage demand by borrowers.

Deposit and service fee income in the second quarter increased to $347,000 for the three months ended June 30, 2021, compared to $332,000 for the prior three-month period. Net gains on the sale of securities were $113,000 for the second quarter of 2021, compared to $21,000 for the first quarter of 2021, and $194,000 for the quarter one year earlier. Commissions on customer investment and insurance sales decreased to $465,000, from $595,000 the prior quarter as new customer sales activity decreased. At June 30, 2021, the bank had wealth assets under management totaling $300.0 million compared to $283.6 million at March 31, 2021, and $234.4 million at June 30, 2020. For the second quarter ended June 30, 2021, other noninterest income was $554,000 compared to $462,000 the prior quarter.

Noninterest expense was $9.6 million for the second quarter of 2021, compared to $6.2 million for the first quarter of 2021. For the second quarter of 2021, noninterest expense included $2.7 million of non-recurring merger related expenses. In addition, salary and employee benefit expenses were $3.9 million for the second quarter compared to $3.5 million in the first quarter of 2021 as the bank added 15.5 full time equivalent employees associated with the merger. Similarly, occupancy and facilities costs increased due to the merger to $647,000 for the second quarter from $569,000 in the prior quarter.

Data processing and other office operations costs increased to $1.5 million for the quarter ended June 30, 2021 from $694,000 the previous quarter. During the quarter, the bank incurred contract termination costs and data conversion fees of approximately $700,000. Advertising and promotion expenses were $322,000 for the most recent quarter compared to $79,000 last quarter due to a local multi-year sponsorship commitment and merger related communication. Other noninterest expenses increased to $3.1 million for the second quarter ended June 30, 2021 from $1.2 million the previous quarter. Included in other noninterest expense was approximately $1.9 million in non-recurring professional fees and other merger related expenses. 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

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 Holdings’ business based, in part, on assumptions made by management and include, without limitation, statements with respect to the potential growth of PSB Holdings, 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 Holdings’ 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 Holdings, 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 Holdings 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.       
Quarterly Financial Summary      
(dollars in thousands, except per share data)Quarter ended
    Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,
Earnings and dividends:  20212021202020202020
         
 Interest income  $11,070 $10,482 $9,442 $9,155 $9,291 
 Interest expense  $907 $886 $1,011 $1,261 $1,528 
 Net interest income  $10,163 $9,596 $8,431 $7,894 $7,763 
 Provision for loan losses  $- $1,000 $675 $1,300 $1,800 
 Other noninterest income $2,299 $2,749 $2,991 $2,929 $3,138 
 Other noninterest expense $9,607 $6,200 $6,461 $6,074 $4,879 
 Net income  $2,137 $3,896 $3,252 $2,637 $3,190 
         
 Basic earnings per share (3) $0.48 $0.88 $0.73 $0.59 $0.72 
 Diluted earnings per share (3) $0.48 $0.87 $0.73 $0.59 $0.72 
 Dividends declared per share (3) $0.23 $- $0.21 $- $0.21 
 Tangible net book value per share (4) $23.53 $23.69 $23.43 $22.73 $21.97 
         
 Semi-annual dividend payout ratio  17.04% n/a  15.88% n/a  19.48%
 Average common shares outstanding  4,454,922  4,454,334  4,452,287  4,452,287  4,453,225 
         
Balance sheet - average balances:      
         
 Loans receivable, net of allowances for loss$891,886 $827,595 $807,182 $800,611 $786,785 
 Assets  $1,251,738 $1,132,905 $1,100,064 $1,099,402 $1,067,466 
 Deposits  $1,023,229 $925,689 $896,427 $882,682 $855,155 
 Stockholders' equity  $105,932 $105,868 $102,790 $100,436 $95,909 
         
Performance ratios:       
         
 Return on average assets (1)  0.68% 1.39% 1.18% 0.95% 1.20%
 Return on average stockholders' equity (1) 8.09% 14.92% 12.59% 10.45% 13.38%
 Average stockholders' equity less accumulated    
   other comprehensive income (loss) to     
   average assets   8.27% 9.10% 9.00% 8.85% 8.83%
 Net loan charge-offs to average loans (1) 0.00% 0.01% 0.16% 0.00% 0.25%
 Nonperforming loans to gross loans  1.31% 1.39% 1.03% 0.98% 0.47%
 Nonperforming assets to total assets  1.07% 1.13% 0.90% 0.85% 0.49%
 Allowance for loan losses to gross loans 1.35% 1.40% 1.30% 1.31% 1.13%
 Nonperforming assets to tangible equity     
   plus the allowance for loan losses (4) 11.71% 11.06% 8.96% 8.50% 5.11%
 Net interest rate margin (1)(2)  3.48% 3.62% 3.22% 3.03% 3.09%
 Net interest rate spread (1)(2)  3.37% 3.49% 3.07% 2.84% 2.85%
 Service fee revenue as a percent of      
   average demand deposits (1)  0.51% 0.57% 0.59% 0.59% 0.49%
 Noninterest income as a percent      
   of gross revenue   17.20% 20.78% 24.06% 24.24% 25.25%
 Efficiency ratio (2)   76.20% 49.64% 55.87% 55.41% 44.23%
 Noninterest expenses to average assets (1) 3.08% 2.22% 2.34% 2.20% 1.84%
 Tangible equity to tangible assets  8.38% 9.32% 9.22% 9.17% 8.95%
         
Stock price information:       
         
 High  $26.50 $25.94 $23.00 $18.80 $24.75 
 Low  $25.00 $20.45 $17.20 $17.36 $18.55 
 Last trade value at quarter-end $26.25 $25.25 $20.57 $18.00 $18.55 
         
(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,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,
except per share data - unaudited)20212021202020202020
         
Interest and dividend income:     
   Loans, including fees$9,972$9,442$8,371 $8,068 $8,175 
   Securities:     
      Taxable 553 507 542  564  622 
      Tax-exempt 505 502 489  474  446 
   Other interest and dividends 40 31 40  49  48 
         
         Total interest and dividend income 11,070 10,482 9,442  9,155  9,291 
         
Interest expense:     
   Deposits 485 547 657  833  1,080 
   FHLB advances 221 215 228  304  323 
   Other borrowings 8 7 6  5  6 
   Senior subordinated notes 28 28 29  28  28 
   Junior subordinated debentures 165 89 91  91  91 
         
         Total interest expense 907 886 1,011  1,261  1,528 
         
Net interest income 10,163 9,596 8,431  7,894  7,763 
Provision for loan losses - 1,000 675  1,300  1,800 
         
Net interest income after provision for loan losses    10,163 8,596 7,756  6,594  5,963 
         
Noninterest income:     
   Service fees 347 332 352  344  278 
   Gain on sale of mortgage loans 663 1,152 1,401  1,752  1,747 
   Mortgage loan servicing, net 9 79 104  (79) (165)
   Investment and insurance sales commissions 465 595 391  301  259 
   Net gain on sale of securities 113 21 149  38  194 
   Increase in cash surrender value of life insurance    148 108 106  108  104 
   Other noninterest income 554 462 488  465  721 
         
         Total noninterest income 2,299 2,749 2,991  2,929  3,138 
         
Noninterest expense:     
   Salaries and employee benefits 3,915 3,460 4,084  3,526  2,583 
   Occupancy and facilities 647 569 511  566  508 
   Loss (gain) on foreclosed assets 23 130 (218) 36  23 
   Data processing and other office operations 1,499 694 568  743  675 
   Advertising and promotion 322 79 172  77  94 
   FDIC insurance premiums 58 83 82  87  23 
   Other noninterest expenses 3,143 1,185 1,262  1,039  973 
         
        Total noninterest expense 9,607 6,200 6,461  6,074  4,879 
         
Income before provision for income taxes 2,855 5,145 4,286  3,449  4,222 
Provision for income taxes 718 1,249 1,034  812  1,032 
         
Net income$2,137$3,896$3,252 $2,637 $3,190 
Basic earnings per share$0.48$0.88$0.73 $0.59 $0.72 
Diluted earnings per share$0.48$0.87$0.73 $0.59 $0.72 
         



PSB Holdings, Inc.     
Consolidated Statements of Income     
    Three Months Ended Six Months Ended
(dollars in thousands,June June
except per share data - unaudited)20212020 20212020
         
Interest and dividend income:     
   Loans, including fees$9,972$8,175  $19,414$16,620 
   Securities:     
      Taxable 553 622   1,060 1,355 
      Tax-exempt 505 446   1,007 877 
   Other interest and dividends 40 48   71 165 
         
         Total interest and dividend income 11,070 9,291   21,552 19,017 
         
Interest expense:     
   Deposits 485 1,080   1,032 2,562 
   FHLB advances 221 323   436 643 
   Other borrowings 8 6   15 20 
   Senior subordinated notes 28 28   56 56 
   Junior subordinated debentures 165 91   254 182 
         
         Total interest expense 907 1,528   1,793 3,463 
         
Net interest income 10,163 7,763   19,759 15,554 
Provision for loan losses - 1,800   1,000 3,600 
         
Net interest income after provision for loan losses    10,163 5,963   18,759 11,954 
         
Noninterest income:     
   Service fees 347 278   679 669 
   Gain on sale of mortgage loans 663 1,747   1,815 2,734 
   Mortgage loan servicing, net 9 (165)  88 (188)
   Investment and insurance sales commissions 465 259   1,060 608 
   Net gain on sale of securities 113 194   134 317 
   Increase in cash surrender value of life insurance    148 104   256 208 
   Other noninterest income 554 721   1,016 1,145 
         
         Total noninterest income 2,299 3,138   5,048 5,493 
         
Noninterest expense:     
   Salaries and employee benefits 3,915 2,583   7,375 6,402 
   Occupancy and facilities 647 508   1,216 1,052 
   Loss (gain) on foreclosed assets 23 23   153 94 
   Data processing and other office operations 1,499 675   2,193 1,319 
   Advertising and promotion 322 94   401 235 
   FDIC insurance premiums 58 23   141 23 
   Other noninterest expenses 3,143 973   4,328 2,084 
         
        Total noninterest expense 9,607 4,879   15,807 11,209 
         
Income before provision for income taxes 2,855 4,222   8,000 6,238 
Provision for income taxes 718 1,032   1,967 1,438 
         
Net income$2,137$3,190  $6,033$4,800 
Basic earnings per share$0.48$0.72  $1.35$1.08 
Diluted earnings per share$0.48$0.72  $1.35$1.08 
         



PSB Holdings, Inc.     
Consolidated Balance Sheets     
June 30, and March 31, 2021, September 30, and June 30, 2020, unaudited,
December 31, 2020 derived from audited financial statements
     
 Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,
(dollars in thousands, except per share data)20212021202020202020
Assets     
      
Cash and due from banks$18,589 $12,921 $15,723 $13,652 $13,016 
Interest-bearing deposits 906  985  1,056  1,750  1,483 
Federal funds sold 52,643  16,027  21,749  61,383  45,796 
      
Cash and cash equivalents 72,138  29,933  38,528  76,785  60,295 
Securities available for sale (at fair value) 261,685  227,824  228,296  193,179  178,635 
Bank certificates of deposit (at cost) 245  1,231  1,231  496  1,738 
Loans held for sale 1,756  622  954  903  3,755 
Loans receivable, net 863,254  829,964  820,956  791,951  805,243 
Accrued interest receivable 3,299  3,335  3,527  3,629  3,590 
Foreclosed assets 1,984  1,105  1,619  1,485  1,525 
Premises and equipment, net 13,241  11,077  10,920  11,061  11,067 
Mortgage servicing rights, net 1,696  1,732  1,657  1,638  1,623 
Federal Home Loan Bank stock (at cost) 2,646  2,283  2,283  2,283  2,283 
Cash surrender value of bank-owned life insurance 24,001  17,902  17,795  17,089  16,981 
Core deposit intangible 629  -  2  4  7 
Goodwill 2,541  113  113  113  113 
Other assets 5,523  5,102  4,074  3,667  6,491 
      
TOTAL ASSETS$1,254,638 $1,132,223 $1,131,955 $1,104,283 $1,093,346 
      
Liabilities     
      
Non-interest-bearing deposits$273,181 $242,974 $236,981 $241,947 $241,914 
Interest-bearing deposits 758,445  682,877  695,156  658,667  640,307 
      
   Total deposits 1,031,626  925,851  932,137  900,614  882,221 
      
Federal Home Loan Bank advances 67,000  62,000  62,000  67,000  87,000 
Other borrowings 21,757  18,582  12,239  16,216  3,941 
Senior subordinated notes 2,500  2,500  2,500  2,500  2,500 
Junior subordinated debentures 12,666  7,732  7,732  7,732  7,732 
Accrued expenses and other liabilities 11,103  9,918  10,920  8,871  11,998 
      
   Total liabilities 1,146,652  1,026,583  1,027,528  1,002,933  995,392 
      
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, 4,454,922, 4,452,287, 4,452,287 and     
     4,452,287 shares, respectively 1,830  1,830  1,830  1,830  1,830 
Additional paid-in capital 7,946  7,890  7,818  7,765  7,712 
Retained earnings 108,863  107,751  103,855  101,538  98,901 
Accumulated other comprehensive income (loss), net of tax 2,869  1,691  4,458  3,751  3,045 
Treasury stock, at cost - 1,035,876, 1,035,876, 1,038,511, 1,038,511 and     
  1,038,511 shares, respectively (13,522) (13,522) (13,534) (13,534) (13,534)
      
   Total stockholders' equity 107,986  105,640  104,427  101,350  97,954 
      
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,254,638 $1,132,223 $1,131,955 $1,104,283 $1,093,346 
      



PSB Holdings, Inc.     
Consolidated Statements of Comprehensive Income    
         
    Three Months Ended Six Months Ended
    June 30, June 30,
(dollars in thousands - unaudited)20212020 20212020
         
Net income$2,137 $3,190  $6,033 $4,800 
         
Other comprehensive income, net of tax:     
         
 Unrealized gain (loss) on securities available    
  for sale 1,224  2,608   (1,580) 2,266 
         
 Reclassification adjustment for security     
  gain included in net income (83) (141)  (97) (230)
         
 Unrealized gain (loss) on interest rate swap (4) (3)  11  (343)
         
 Reclassification adjustment of interest rate     
  swap settlements included in earnings 39  32   77  50 
         
         
Other comprehensive income (loss) 1,176  2,496   (1,589) 1,743 
         
Comprehensive income$3,313 $5,686  $4,444 $6,543 
         



PSB Holding, Inc.     
Loan Composition by Purpose     
Quarter-ended (dollars in thousands)Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
       
  Residential real estate     
       
 One to four family$169,456 $136,242 $125,530 $114,226 $118,049 
 HELOC loans 18,263  16,908  18,312  19,747  19,550 
 Residential construction & development 24,385  25,628  25,519  22,529  23,129 
 Residential vacant land 2,172  2,524  3,305  3,147  3,417 
       
 Total Residential real estate 214,276  181,302  172,666  159,649  164,145 
       
  Commercial/Agricultural real estate     
       
 Owner occupied     
       
         Commercial real estate 202,767  194,514  187,059  164,073  164,483 
         SBA commercial real estate 1,164  1,445  1,483  1,506  1,539 
         Agriculture real estate 4,188  4,787  4,429  4,677  4,885 
         Construction and land development 6,460  4,121  5,468  13,557  7,294 
         Commercial vacant land 6,490  2,998  2,835  2,819  2,241 
       
 Total Owner occupied 221,069  207,865  201,274  186,632  180,442 
       
 Non-owner occupied     
       
         Commercial real estate 196,011  183,365  173,953  170,847  165,099 
         One to four family residential rental 47,097  31,914  31,363  30,159  28,451 
         SBA commercial real estate 703  718  749  771  793 
         Construction and land development 30,057  31,362  29,846  18,600  11,927 
         Commercial vacant land 5,203  7,970  8,402  8,907  10,135 
       
 Total Non-owner occupied 279,071  255,329  244,313  229,284  216,405 
       
  Commercial/Agricultural non-real estate     
       
 Municipal non-real estate 7,014  7,165  11,422  5,687  7,826 
 Commercial line 45,386  46,833  41,619  40,067  55,317 
 Other commercial non-real estate 55,002  49,246  52,723  58,718  69,267 
 SBA commercial non-real estate 47,245  89,603  103,871  118,668  117,436 
 Agricultural non-real estate 1,656  1,730  1,986  2,150  2,148 
       
 Total Commercial/Agricultural non-real estate 156,303  194,577  211,621  225,290  251,994 
       
  Consumer non-real estate     
       
 Consumer installment 4,399  3,191  3,400  3,358  3,512 
 Consumer line 436  498  353  366  243 
 Other consumer 130  123  143  163  160 
       
 Total Consumer non-real estate 4,965  3,812  3,896  3,887  3,915 
       
Gross loans 875,684  842,885  833,770  804,742  816,901 
       
 Net deferred loan costs (fees) (738) (1,627) (2,140) (2,627) (2,617)
 Overdrafts 134  528  161  317  133 
 Allowance for loan losses (11,826) (11,822) (10,835) (10,481) (9,174)
       
Total loans receivable$ 863,254 $ 829,964 $ 820,956 $ 791,951 $ 805,243 
       



PSB Holdings, Inc.     
Nonperforming Assets as of:     
 Jun 30,Mar 31,Dec 31,Sept 30,June 30,
(dollars in thousands)20212021202020202020
      
Nonaccrual loans (excluding restructured loans)$5,208 $5,346 $2,071 $2,129 $2,964 
Nonaccrual restructured loans 1,062  1,090  1,064  233  244 
Restructured loans not on nonaccrual 5,205  5,242  5,414  5,508  650 
Accruing loans past due 90 days or more -  -  -  -  - 
      
Total nonperforming loans 11,475  11,678  8,549  7,870  3,858 
Other real estate owned 1,984  1,105  1,619  1,485  1,525 
      
Total nonperforming assets$13,459 $12,783 $10,168 $9,355 $5,383 
      
Nonperforming loans as a % of gross loans receivable 1.31% 1.39% 1.03% 0.98% 0.47%
Total nonperforming assets as a % of total assets 1.07% 1.13% 0.90% 0.85% 0.49%
Allowance for loan losses as a % of nonperforming loans 103.06% 101.23% 126.74% 133.18% 237.79%
      



PSB Holdings, Inc.   
Nonperforming Assets >= $500,000 net book value before specific reserves  
At June 30, 2021   
(dollars in thousands)   
  GrossSpecific
Collateral DescriptionAsset TypePrincipalReserves
    
Leased retail sales outletORE$1,100 - 
Real estate - HotelRestructured 4,826 158 
Real estate - Buffet Style RestaurantRestructured/Nonaccrual 860 99 
Real estate - Buffet Style RestaurantNonaccrual 3,330 1,208 
    
Total listed nonperforming assets  10,116 1,465 
Total bank wide nonperforming assets  13,459 1,894 
Listed assets as a % of total nonperforming assets  75%77%
    
Largest Performing, but Impaired Loans at June 30, 2021 ($000s)  
  GrossSpecific
Collateral DescriptionAsset TypePrincipalReserves
    
Real estate - 4 Hotel GroupImpaired 4,327 529 
    
    
Total listed performing, but impaired loans  4,327 529 
Total performing, but impaired loans  5,794 665 
Listed assets as a % of total performing, but impaired loans  75%80%
    



PSB Holdings, Inc.        
Deposit Composition        
 June 30, March 31, June 30,
(dollars in thousands)2021 2021 2020
 $% $% $%
         
Non-interest bearing demand$273,18126.50% $242,97426.20% $241,91427.40%
Interest-bearing demand and savings 366,56335.40%  329,10035.60%  267,87430.40%
Money market deposits 212,28520.60%  215,59023.30%  202,70823.00%
Retail and local time deposits <= $250 140,89513.70%  101,86611.00%  103,91711.80%
         
Total core deposits 992,92496.20%  889,53096.10%  816,41392.60%
Retail and local time deposits > $250 25,8342.50%  23,9042.60%  24,3992.80%
Broker & national time deposits <= $250 10,8741.10%  10,4231.10%  15,3761.70%
Broker & national time deposits > $250 1,9940.20%  1,9940.20%  26,0332.90%
Totals$1,031,626100.00% $925,851100.00% $882,221100.00%
         



PSB Holdings, Inc.           
Average Balances ($000) and Interest Rates         
(dollars in thousands)           
              
              
   Quarter ended June 30, 2021 Quarter ended March 31, 2021 Quarter ended June 30, 2020
   Average Yield / Average Yield / Average Yield /
   BalanceInterestRate BalanceInterestRate BalanceInterestRate
Assets            
Interest-earning assets:           
   Loans (1)(2)$906,233 $9,9834.42% $838,781 $9,4544.57% $795,337 $8,1864.14%
   Taxable securities 153,960  5531.44%  142,539  5071.44%  99,621  6222.51%
   Tax-exempt securities (2)   84,593  6393.03%  84,219  6353.06%  70,105  5653.24%
   FHLB stock 2,625  233.51%  2,283  213.73%  2,283  254.40%
   Other  42,253  170.16%  22,390  100.18%  58,776  230.16%
              
   Total (2)  1,189,664  11,2153.78%  1,090,212  10,6273.95%  1,026,122  9,4213.69%
              
Non-interest-earning assets:          
   Cash and due from banks   25,422     14,248     10,760   
   Premises and equipment,          
      net  11,640     11,009     11,116   
   Cash surrender value ins   23,906     17,840     16,918   
   Other assets 16,004     10,782     11,102   
   Allowance for loan           
      losses  (11,816)    (11,186)    (8,552)  
              
   Total $1,254,820     $1,132,905     $1,067,466    
              
Liabilities & stockholders' equity          
Interest-bearing liabilities:          
   Savings and demand           
      deposits$352,572 $650.07% $333,340 $650.08% $261,942 $1270.20%
   Money market deposits 213,122  960.18%  217,618  1180.22%  197,571  2130.43%
   Time deposits 182,758  3240.71%  138,773  3641.06%  169,398  7401.76%
   FHLB borrowings 71,846  2211.23%  62,000  2151.41%  90,623  3231.43%
   Other borrowings 25,525  80.13%  18,964  70.15%  5,857  60.41%
   Senior sub. notes 2,500  284.49%  2,500  284.54%  2,500  284.50%
   Junior sub. debentures 11,827  1655.60%  7,732  894.67%  7,732  914.73%
              
   Total  860,150  9070.42%  780,927  8860.46%  735,623  1,5280.84%
              
Non-interest-bearing liabilities:          
   Demand deposits 274,777     235,958     226,244   
   Other liabilities 11,430     10,152     9,690   
   Stockholders' equity 108,463     105,868     95,909   
              
   Total $1,254,820     $1,132,905     $1,067,466    
              
Net interest income $10,308   $9,741   $7,893 
Rate spread  3.36%   3.49%   2.85%
Net yield on interest-earning assets 3.48%   3.62%   3.09%
              
(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%.         



PSB Holdings, Inc.       
Average Balances ($000) and Interest Rates     
(dollars in thousands)       
   Six months ended June 30, 2021 Six months ended June 30, 2020
   Average Yield/ Average Yield/
   BalanceInterestRate BalanceInterestRate
Assets        
Interest-earning assets:       
   Loans (1)(2)$872,694 $19,4384.49% $753,869 $16,6474.44%
   Taxable securities 148,280  1,0601.44%  105,300  1,3552.59%
   Tax-exempt securities (2) 84,407  1,2753.05%  68,532  1,1103.26%
   FHLB stock 2,455  443.61%  2,202  514.66%
   Other  32,702  270.17%  45,051  1140.51%
          
   Total (2)  1,140,538  21,8443.86%  974,954  19,2773.98%
          
Non-interest-earning assets:       
   Cash and due from banks 19,866     11,190   
   Premises and equipment,       
      net  11,338     10,948   
   Cash surrender value ins 20,890     16,864   
   Other assets 13,401     9,717   
   Allowance for loan       
      losses  (11,507)    (7,810)  
          
   Total $1,194,526     $1,015,863    
          
Liabilities & stockholders' equity      
Interest-bearing liabilities:       
   Savings and demand       
      deposits $343,009 $1300.08% $261,823 $4570.35%
   Money market deposits 215,254  2140.20%  193,329  5860.61%
   Time deposits 160,887  6880.86%  164,346  1,5191.86%
   FHLB borrowings 66,950  4361.31%  85,555  6431.51%
   Other borrowings 22,263  150.14%  6,125  200.66%
   Senior sub. notes 2,500  564.52%  2,500  564.50%
   Junior sub. debentures 10,199  2545.02%  7,732  1824.73%
          
   Total  821,062  1,7930.44%  721,410  3,4630.97%
          
Non-interest-bearing liabilities:      
   Demand deposits 255,455     189,004   
   Other liabilities 11,108     10,008   
   Stockholders' equity 106,901     95,441   
          
   Total $1,194,526     $1,015,863    
          
Net interest income $20,051   $15,814 
Rate spread   3.42%   3.01%
Net yield on interest-earning assets 3.55%   3.26%
          
(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%.      

Investor Relations Contact
PSB Holdings, Inc.
1905 Stewart Avenue
Wausau, WI 54401
888.929.9902
InvestorRelations@bankpeoples.com