PSB Holdings, Inc. Reports 3rd Quarter Earnings of $3.6 Million, or $0.82 Per Share; Robust Loan Origination Activity During the Quarter

Wausau, Wisconsin, UNITED STATES


WAUSAU, Wis., Oct. 27, 2021 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank serving Northcentral and Southeastern Wisconsin, reported third quarter earnings ending September 30, 2021 of $0.82 per share on net income of $3.6 million, compared to earnings of $0.48 per share on net income of $2.1 million, during the June 30, 2021 quarter, and $0.59 per share on net income of $2.6 million, during the third quarter a year ago. June 30, 2021 quarterly earnings would have been $4.2 million, or $0.93 per share before merger related expenses associated with the purchase of Waukesha Bankshares, Inc.

“Loan demand has increased across the bank’s footprint led primarily by commercial real estate growth as commercial bankers have been busy originating loans for new and existing borrowers. In addition, quarterly deposit growth and SBA PPP loan paydowns continue to elevate cash and overnight investments. Income was driven by earning asset growth and lower operating ratios despite lower net interest margin as loan yields continue to decline in this low rate environment. The bank recently invested in a new residential mortgage origination system with capacity for growth and operating efficiencies to support non-interest income moving ahead,” stated Scott Cattanach, President and CEO.

Net Interest Margin Impact: PSB’s net interest margin decreased to 3.15% for the quarter ended September 30, 2021 from 3.48% the prior quarter. During the quarter, net interest margin was impacted by lower accretion of net PPP origination fee income totaling $559,000 for the current quarter versus $1.0 million during the prior quarter. Loan yield and net interest margin excluding PPP loan origination fee income would have been 3.98% and 2.97%, respectively during the September 2021 quarter compared to 3.95% and 3.12% in the June 2021 quarter. “We continue to see pressure on net interest margin due to larger balances of lower yielding liquid investments, existing loans repricing downward and competition for new loans at rates below our current weighted average yield,” said Mark Oldenberg, Chief Financial Officer.

Capital Management: At September 30, 2021, PSB’s tangible equity to tangible asset ratio was 8.27% compared to 8.38% at June 30, 2021. Peoples State Bank capital was well in-excess of all regulatory requirements. Tangible net book value per share increased $0.54 during the quarter to $24.07 per share at September 30, 2021 from $23.53 per share at June 30, 2021. PSB repurchased 7,896 shares during the quarter ending September 30, 2021.

Loan Loss Reserves: PSB did not add to its provisions for loan losses during the third quarter of 2021 or during the second quarter of 2021. This compared to a $1.3 million provision in the third quarter of 2020. Allowance for loan losses increased by $179,000 to $12.0 million at September 30, 2021 due to net recoveries during the quarter. At September 30, 2021, allowance for loan losses totaled 1.35% of gross loans, but rises to 1.42% of adjusted gross loans excluding $24.3 million of PPP loans and $14.9 million of purchased USDA guaranteed loans. Loan loss provisions for the remainder of 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-19 increased from $1.4 million at June 30, 2021 to $5.9 million, or 0.67% of gross loans, at September 30, 2021. One hotel operator with a loan balance of $4.9 million was granted a three-month deferral in July 2021 in connection with closing of a SBA 504 program loan and is scheduled to return to regular payments in October 2021.

As shown in the table below during the September 2021 quarter, “impaired loans” increased $1.3 million and “substandard risk” loans increased $3.8 million, while “watch risk” loans decreased $6.3 million. The primary increase in “substandard risk” loans relates to financing provided for a new grocery operation that has yet to stabilize after opening during 2020.

Commercial, Commercial Real Estate, Construction & Development, Agricultural and Government Loans
($000)
Risk Rating 12/201903/202006/202009/202012/202003/202106/202109/2021
Rating 1"High Quality" $- $71 $55 $- $- $- $- $77
Rating 2"Minimal Risk"  57,904  59,101  72,601  56,337  61,223  62,626  60,155  71,304
Rating 3"Average Risk"  349,002  324,378  374,709  391,195  390,191  348,102  345,929  347,735
Rating 4"Acceptable Risk"  128,932  123,296  154,302  155,738  175,400  209,407  209,728  226,501
Rating 5"Watch Risk"  15,933  33,999  54,522  46,603  36,379  30,891  39,577  33,284
Rating 6"Substandard Risk"  2,568  2,732  4,545  2,162  7,617  18,134  6,377  10,148
Rating 7"Impaired Loans"  5,518  7,811  6,130  10,164  13,153  16,162  15,522  16,790
   $ 559,857  $ 551,388  $ 666,864  $ 662,199  $ 683,963  $ 685,322  $ 677,288  $ 705,839
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 $1.30 billion at September 30, 2021 from $1.25 billion at June 30, 2021 due primarily to securities and loan growth funded by $51.4 million in deposit growth. Securities available for sale increased $40.2 million to $301.9 million at September 30, 2021 from $261.7 million one quarter earlier. Total loans receivable increased by $11.2 million to $874.5 million at September 30, 2021 from $863.3 million as of June 30, 2021. Organic loan origination of $28.2 million, up 3.3% during the quarter, was offset by a $17.0 million reduction in SBA Paycheck Protection Program (PPP) loans as loans were forgiven and repaid by the SBA. At September 30, 2021, $24.3 million of PPP loan principal remained outstanding and unrealized net PPP origination fee income totaled $650,000.

The allowance for loan losses remained at 1.35% of gross loans at September 30, 2021 relative to the prior quarter (1.42% of gross loans net of PPP guaranteed loans and USDA guaranteed loans) and compared to 1.31% of gross loans one year earlier. Annualized net charge-offs to average loans reflected a net recovery at 0.08% for the quarter ended September 30, 2021. Non-performing assets were 1.16% of total assets at September 30, 2021, compared to 1.07% at June 30, 2021, and 0.85% at September 30, 2020. At September 30, 2021, non-performing assets consisted of $6.0 million in non-accrual loans, $1.5 million in non-accrual restructured loans, $5.2 million in restructured loans not on non-accrual and $2.4 million in other real estate owned.

At September 30, 2021, cash and cash equivalents remained elevated following the merger related addition of cash and securities held by Waukesha Bankshares, Inc. (“WBI”) and repayment of forgiveness received on SBA PPP loans and totaled $65.5 million at September 30, 2021 compared to $72.1 million at June 30, 2021, and $38.5 million at December 31, 2020. Investment securities totaled $301.9 million at September 30, 2021, compared to $261.7 million at June 30, 2021, and $228.3 million as of December 31, 2020 as cash was deployed to purchase securities with a higher yield than available on overnight cash. All investment securities are considered available for sale and carried at estimated market value.

Foreclosed assets increased to $2.4 million at September 30, 2021, from $2.0 million at June 30, 2021, as a closed branch office related to the acquisition of WBI was moved to foreclosed assets. Foreclosed assets were $1.6 million at the beginning of the fiscal year.

Total deposits increased to $1.08 billion at September 30, 2021, compared to $1.03 billion at June 30, 2021. At September 30, 2021, interest-bearing demand and savings deposits accounted for 35.9% of total deposits, followed by noninterest-bearing demand deposits at 26.9%, money market deposits at 19.9%, and retail and local time deposits at 15.5%. Broker and national time deposits accounted for 1.8% of total deposits at September 30, 2021, versus 1.5% at December 31, 2020. The bank has continued to experience larger average deposit balances, increased mobile banking enrollment and product usage as customers continue to adapt new banking habits accelerated by the pandemic.

FHLB advances decreased to $62.0 million at September 30, 2021 from $67.0 million at June 30, 2021 and were unchanged compared to December 31, 2020, while other borrowings decreased to $17.1 million compared to $21.8 million the prior period and $12.2 million at December 31, 2020.

Operations Review

Net interest income totaled $9.6 million (on a net margin of 3.15%) for the third quarter of 2021, compared to $10.2 million (on net margin of 3.48%) for the second quarter of 2021 and $7.9 million (on a net margin of 3.03%) for the third quarter of 2020. Earning asset yields decreased 37 basis points from 3.78% to 3.41% during the third quarter of 2021, while deposit and borrowing costs declined 5 basis points to 0.37% from 0.42% over the same period. The decrease in earning asset yields was partially due to lower net accretion of loan fees of $559,000 related to PPP loans that were repaid compared to net accretion of $1.0 million during the June 30, 2021 quarter. Additionally, a larger balance of lower yielding investment securities contributed to the decrease in earning asset yields. Taxable security yields decreased from 1.44% in the quarter ended June 30, 2021 to 1.18% for the quarter ended September 30, 2021. Loan yields decreased to 4.23% during the quarter from 4.42% during the second quarter of 2021. Loan yields excluding the impacts of PPP loan origination fee income, were 3.98% and 3.95% during the September 2021 and June 2021 quarters respectively. Net interest margin excluding the impacts of PPP loan origination fee income, was 2.97% and 3.12% in the September 30, 2021 and June 30, 2021 quarters, respectively. Recognition of PPP loan fee income is expected to decline for fourth quarter 2021 as fewer PPP loans remain outstanding.

The cost of interest-bearing liabilities decreased during the quarter, largely reflecting lower rates associated with time deposits. The cost of deposits decreased to 0.15% for the quarter ended September 30, 2021 from 0.19% the prior quarter. “As a commercial bank with significant noninterest-bearing account balances, our ability to continue reducing the overall cost of deposits will likely be limited in the current interest rate environment,” continued Oldenberg. Deposit costs decreased $81,000 to $404,000 for the third quarter of 2021, from $485,000 the previous quarter. Interest costs on borrowings remained at $422,000, for the third quarter of 2021.

Total noninterest income for the third quarter of 2021 decreased to $2.1 million from $2.3 million for the second quarter of 2021, due in part to lower gains on the sale of mortgage loans and lower gains on sale of securities. Gains on sale of mortgage loans decreased to $494,000 for the third quarter from $663,000 in the second quarter of 2021, due to lower refinancing and mortgage origination activity and the decision to hold more first lien residential mortgage loans onto the balance sheet to utilize low yielding overnight funds.

Deposit and service fee income in the third quarter increased to $379,000 for the three months ended September 30, 2021, compared to $347,000 for the prior three-month period. Net gains on the sale of securities were zero for the third quarter of 2021, compared to $113,000 for the second quarter of 2021, and $38,000 for the quarter one year earlier. Commissions on customer investment and insurance sales decreased to $426,000, from $465,000 the prior quarter. At September 30, 2021, the bank had wealth assets under management totaling $301.6 million compared to $300.0 million at June 30, 2021, and $244.5 million at September 30, 2020. For the third quarter ended September 30, 2021, other noninterest income was $563,000 compared to $554,000 the prior quarter.

Noninterest expense declined to $6.9 million for the third quarter of 2021, compared to $9.6 million for the second quarter of 2021. The second quarter of 2021 included $2.7 million of non-recurring merger related expenses. Salary and employee benefit expenses were $4.1 million for the third quarter of 2021 compared to $3.9 million in the second quarter of 2021.

Data processing and other office operations costs decreased to $828,000 for the quarter ended September 30, 2021 from $1.5 million the previous quarter which included contract termination and data conversion expenses of approximately $700,000. Advertising and promotion expenses were $199,000 for the most recent quarter compared to $322,000 last quarter which included a local multi-year sponsorship commitment and merger related communication. Other noninterest expenses decreased to $1.1 million for the third quarter ended September 30, 2021 from $3.1 million the previous quarter which included approximately $1.9 million in non-recurring professional fees and other merger related expenses.

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
  Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,
Earnings and dividends:  2021  2021  2021  2020  2020 
       
Interest income $10,449 $11,070 $10,482 $9,442 $9,155 
Interest expense $826 $907 $886 $1,011 $1,261 
Net interest income $9,623 $10,163 $9,596 $8,431 $7,894 
Provision for loan losses $- $- $1,000 $675 $1,300 
Other noninterest income $2,126 $2,299 $2,749 $2,991 $2,929 
Other noninterest expense $6,946 $9,607 $6,200 $6,461 $6,074 
Net income $3,638 $2,137 $3,896 $3,252 $2,637 
       
Basic earnings per share (3) $0.82 $0.48 $0.88 $0.73 $0.59 
Diluted earnings per share (3) $0.82 $0.48 $0.87 $0.73 $0.59 
Dividends declared per share (3) $- $0.23 $- $0.21 $- 
Tangible net book value per share (4) $24.07 $23.53 $23.69 $23.43 $22.73 
       
Semi-annual dividend payout ratio n/a 17.04%n/a 15.88%n/a
Average common shares outstanding  4,450,755  4,454,922  4,454,334  4,452,287  4,452,287 
       
Balance sheet - average balances:      
       
Loans receivable, net of allowances for loss$862,555 $891,886 $827,595 $807,182 $800,611 
Assets $1,292,369 $1,251,738 $1,132,905 $1,100,064 $1,099,402 
Deposits $1,064,553 $1,023,229 $925,689 $896,427 $882,682 
Stockholders' equity $110,388 $105,932 $105,868 $102,790 $100,436 
       
Performance ratios:      
       
Return on average assets (1)  1.12% 0.68% 1.39% 1.18% 0.95%
Return on average stockholders' equity (1) 13.08% 8.09% 14.92% 12.59% 10.45%
Average stockholders' equity less accumulated     
other comprehensive income (loss) to      
average assets  8.39% 8.27% 9.10% 9.00% 8.85%
Net loan charge-offs to average loans (1) -0.08% 0.00% 0.01% 0.16% 0.00%
Nonperforming loans to gross loans  1.43% 1.31% 1.39% 1.03% 0.98%
Nonperforming assets to total assets  1.16% 1.07% 1.13% 0.90% 0.85%
Allowance for loan losses to gross loans 1.35% 1.35% 1.40% 1.30% 1.31%
Nonperforming assets to tangible equity     
plus the allowance for loan losses (4)  12.87% 11.71% 11.06% 8.96% 8.50%
Net interest rate margin (1)(2)  3.15% 3.48% 3.62% 3.22% 3.03%
Net interest rate spread (1)(2)  3.04% 3.37% 3.49% 3.07% 2.84%
Service fee revenue as a percent of      
average demand deposits (1)  0.53% 0.51% 0.57% 0.59% 0.59%
Noninterest income as a percent      
of gross revenue  16.91% 17.20% 20.78% 24.06% 24.24%
Efficiency ratio (2)  58.40% 76.20% 49.64% 55.87% 55.41%
Noninterest expenses to average assets (1) 2.13% 3.08% 2.22% 2.34% 2.20%
Tangible equity to tangible assets  8.27% 8.38% 9.32% 9.22% 9.17%
       
Stock price information:      
       
High $26.50 $26.50 $25.94 $23.00 $18.80 
Low $24.52 $25.00 $20.45 $17.20 $17.36 
Last trade value at quarter-end $24.95 $26.25 $25.25 $20.57 $18.00 
       
(1) Annualized      
(2) The yield on tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.
(3) Due to rounding, cumulative quarterly per share performance may not equal annual per share totals. 
(4) Tangible stockholders' equity excludes intangible assets.    
     


PSB Holdings, Inc.     
Consolidated Statements of Income     
    Quarter Ended
(dollars in thousands,Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,
except per share data - unaudited) 2021  2021  2021  2020  2020 
         
Interest and dividend income:     
Loans, including fees$9,323 $9,972 $9,442 $8,371 $8,068 
Securities:     
Taxable 581  553  507  542  564 
Tax-exempt 500  505  502  489  474 
Other interest and dividends 45  40  31  40  49 
         
Total interest and dividend income 10,449  11,070  10,482  9,442  9,155 
         
Interest expense:     
Deposits 404  485  547  657  833 
FHLB advances 220  221  215  228  304 
Other borrowings 9  8  7  6  5 
Senior subordinated notes 28  28  28  29  28 
Junior subordinated debentures 165  165  89  91  91 
         
Total interest expense 826  907  886  1,011  1,261 
         
Net interest income 9,623  10,163  9,596  8,431  7,894 
Provision for loan losses -  -  1,000  675  1,300 
         
Net interest income after provision for loan losses 9,623  10,163  8,596  7,756  6,594 
         
Noninterest income:     
Service fees 379  347  332  352  344 
Gain on sale of mortgage loans 494  663  1,152  1,401  1,752 
Mortgage loan servicing, net 111  9  79  104  (79)
Investment and insurance sales commissions 426  465  595  391  301 
Net gain on sale of securities -  113  21  149  38 
Increase in cash surrender value of life insurance 153  148  108  106  108 
Other noninterest income 563  554  462  488  465 
         
Total noninterest income 2,126  2,299  2,749  2,991  2,929 
         
Noninterest expense:     
Salaries and employee benefits 4,099  3,915  3,460  4,084  3,526 
Occupancy and facilities 614  647  569  511  566 
Loss (gain) on foreclosed assets 28  23  130  (218) 36 
Data processing and other office operations 828  1,499  694  568  743 
Advertising and promotion 199  322  79  172  77 
FDIC insurance premiums 121  58  83  82  87 
Other noninterest expenses 1,057  3,143  1,185  1,262  1,039 
         
Total noninterest expense 6,946  9,607  6,200  6,461  6,074 
         
Income before provision for income taxes 4,803  2,855  5,145  4,286  3,449 
Provision for income taxes 1,165  718  1,249  1,034  812 
         
Net income$3,638 $2,137 $3,896 $3,252 $2,637 
Basic earnings per share$0.82 $0.48 $0.88 $0.73 $0.59 
Diluted earnings per share$0.82 $0.48 $0.87 $0.73 $0.59 
         

 

PSB Holdings, Inc.     
Consolidated Statements of Income     
    Three Months Ended Nine Months Ended
(dollars in thousands,September September
except per share data - unaudited) 2021  2020   2021  2020 
         
Interest and dividend income:     
Loans, including fees$9,323 $8,068  $28,737 $24,688 
Securities:     
Taxable 581  564   1,641  1,919 
Tax-exempt 500  474   1,507  1,351 
Other interest and dividends 45  49   116  214 
         
Total interest and dividend income 10,449  9,155   32,001  28,172 
         
Interest expense:     
Deposits 404  833   1,436  3,395 
FHLB advances 220  304   656  947 
Other borrowings 9  5   24  25 
Senior subordinated notes 28  28   84  84 
Junior subordinated debentures 165  91   419  273 
         
Total interest expense 826  1,261   2,619  4,724 
         
Net interest income 9,623  7,894   29,382  23,448 
Provision for loan losses -  1,300   1,000  4,900 
         
Net interest income after provision for loan losses 9,623  6,594   28,382  18,548 
         
Noninterest income:     
Service fees 379  344   1,058  1,013 
Gain on sale of mortgage loans 494  1,752   2,309  4,486 
Mortgage loan servicing, net 111  (79)  199  (267)
Investment and insurance sales commissions 426  301   1,486  909 
Net gain on sale of securities -  38   134  355 
Increase in cash surrender value of life insurance 153  108   409  316 
Other noninterest income 563  465   1,579  1,610 
         
Total noninterest income 2,126  2,929   7,174  8,422 
         
Noninterest expense:     
Salaries and employee benefits 4,099  3,526   11,474  9,928 
Occupancy and facilities 614  566   1,830  1,618 
Loss (gain) on foreclosed assets 28  36   181  130 
Data processing and other office operations 828  743   3,021  2,062 
Advertising and promotion 199  77   600  312 
FDIC insurance premiums 121  87   262  110 
Other noninterest expenses 1,057  1,039   5,385  3,123 
         
Total noninterest expense 6,946  6,074   22,753  17,283 
         
Income before provision for income taxes 4,803  3,449   12,803  9,687 
Provision for income taxes 1,165  812   3,132  2,250 
         
Net income$3,638 $2,637  $9,671 $7,437 
Basic earnings per share$0.82 $0.59  $2.17 $1.67 
Diluted earnings per share$0.82 $0.59  $2.17 $1.67 
         

 

PSB Holdings, Inc.     
Consolidated Balance Sheets     
September 30, June 30, and March 31, 2021, and September 30, 2020, unaudited, December 31, 2020 derived from audited financial statements     
 Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,
(dollars in thousands, except per share data) 2021  2021  2021  2020  2020 
Assets     
      
Cash and due from banks$20,813 $18,589 $12,921 $15,723 $13,652 
Interest-bearing deposits 1,044  906  985  1,056  1,750 
Federal funds sold 43,637  52,643  16,027  21,749  61,383 
      
Cash and cash equivalents 65,494  72,138  29,933  38,528  76,785 
Securities available for sale (at fair value) 301,853  261,685  227,824  228,296  193,179 
Bank certificates of deposit (at cost) 245  245  1,231  1,231  496 
Loans held for sale 214  1,756  622  954  903 
Loans receivable, net 874,524  863,254  829,964  820,956  791,951 
Accrued interest receivable 3,273  3,299  3,335  3,527  3,629 
Foreclosed assets 2,398  1,984  1,105  1,619  1,485 
Premises and equipment, net 12,725  13,241  11,077  10,920  11,061 
Mortgage servicing rights, net 1,702  1,696  1,732  1,657  1,638 
Federal Home Loan Bank stock (at cost) 2,646  2,646  2,283  2,283  2,283 
Cash surrender value of bank-owned life insurance 24,154  24,001  17,902  17,795  17,089 
Core deposit intangible 581  629  -  2  4 
Goodwill 2,541  2,541  113  113  113 
Other assets 5,313  5,523  5,102  4,074  3,667 
      
TOTAL ASSETS$1,297,663 $1,254,638 $1,132,223 $1,131,955 $1,104,283 
      
Liabilities     
      
Non-interest-bearing deposits$291,440 $273,181 $242,974 $236,981 $241,947 
Interest-bearing deposits 791,601  758,445  682,877  695,156  658,667 
      
Total deposits 1,083,041  1,031,626  925,851  932,137  900,614 
      
Federal Home Loan Bank advances 62,000  67,000  62,000  62,000  67,000 
Other borrowings 17,129  21,757  18,582  12,239  16,216 
Senior subordinated notes 2,500  2,500  2,500  2,500  2,500 
Junior subordinated debentures 12,691  12,666  7,732  7,732  7,732 
Accrued expenses and other liabilities 10,143  11,103  9,918  10,920  8,871 
      
Total liabilities 1,187,504  1,146,652  1,026,583  1,027,528  1,002,933 
      
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 - 4,447,026,  4,454,922,  4,454,922,  4,452,287  and     
4,452,287 shares, respectively 1,830  1,830  1,830  1,830  1,830 
Additional paid-in capital 8,003  7,946  7,890  7,818  7,765 
Retained earnings 112,502  108,863  107,751  103,855  101,538 
Accumulated other comprehensive income (loss), net of tax 1,530  2,869  1,691  4,458  3,751 
Treasury stock, at cost - 1,043,772,  1,035,876,  1,035,876,  1,038,511  and     
1,038,511  shares, respectively (13,706) (13,522) (13,522) (13,534) (13,534)
      
Total stockholders' equity 110,159  107,986  105,640  104,427  101,350 
      
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,297,663 $1,254,638 $1,132,223 $1,131,955 $1,104,283 
      

 

PSB Holdings, Inc.     
Consolidated Statements of Comprehensive Income    
       
  Three Months Ended Nine Months Ended
  September 30, September 30,
(dollars in thousands - unaudited) 2021  2020   2021  2020 
       
Net income$3,638 $2,637  $9,671 $7,437 
       
Other comprehensive income, net of tax:     
       
Unrealized gain (loss) on securities available     
for sale (1,374) 670   (2,954) 2,936 
       
Reclassification adjustment for security     
gain included in net income -  (28)  (97) (258)
       
Unrealized gain (loss) on interest rate swap (5) 26   6  (316)
       
Reclassification adjustment of interest rate     
swap settlements included in earnings 40  38   117  87 
       
       
Other comprehensive income (loss) (1,339) 706   (2,928) 2,449 
       
Comprehensive income$2,299 $3,343  $6,743 $9,886 
       

 

PSB Holding, Inc.     
Loan Composition by Purpose     
Quarter-ended (dollars in thousands)Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
       
Residential real estate:     
       
 One to four family$166,728 $169,456 $136,242 $125,530 $114,226 
 HELOC loans 18,011  18,263  16,908  18,312  19,747 
 Residential construction & development 25,162  24,385  25,628  25,519  22,529 
 Residential vacant land 6,629  2,172  2,524  3,305  3,147 
       
 Total Residential real estate 216,530  214,276  181,302  172,666  159,649 
       
Commercial/Agricultural real estate:     
       
 Owner occupied     
 Commercial real estate 203,509  202,767  194,514  187,059  164,073 
 SBA commercial real estate 1,140  1,164  1,445  1,483  1,506 
 Agriculture real estate 4,046  4,188  4,787  4,429  4,677 
 Construction and land development 17,705  6,460  4,121  5,468  13,557 
 Commercial vacant land 3,572  6,490  2,998  2,835  2,819 
       
 Total Owner occupied 229,972  221,069  207,865  201,274  186,632 
       
 Non-owner occupied     
 Commercial real estate 212,868  196,011  183,365  173,953  170,847 
 One to four family residential rental 49,542  47,097  31,914  31,363  30,159 
 SBA commercial real estate 682  703  718  749  771 
 Agricultural real estate -  -  -  -  - 
 Construction and land development 29,618  30,057  31,362  29,846  18,600 
 Commercial vacant land 4,851  5,203  7,970  8,402  8,907 
       
 Total Non-owner occupied 297,561  279,071  255,329  244,313  229,284 
       
Commercial/Agricultural non-real estate:     
       
 Municipal non-real estate 7,623  7,014  7,165  11,422  5,687 
 Commercial line 47,646  45,386  46,833  41,619  40,067 
 Other commercial non-real estate 54,481  55,002  49,246  52,723  58,718 
 SBA commercial non-real estate 25,933  47,245  89,603  103,871  118,668 
 Agricultural non-real estate 1,325  1,656  1,730  1,986  2,150 
       
 Total Commercial/Agr. non-real estate 137,008  156,303  194,577  211,621  225,290 
       
Consumer non-real estate:     
       
 Consumer installment 4,369  4,399  3,191  3,400  3,358 
 Consumer line 477  436  498  353  366 
 Other consumer 125  130  123  143  163 
       
 Total Consumer non-real estate 4,971  4,965  3,812  3,896  3,887 
       
Gross loans 886,042  875,684  842,885  833,770  804,742 
       
 Net deferred loan costs (fees) (167) (738) (1,627) (2,140) (2,627)
 Overdrafts 654  134  528  161  317 
 Allowance for loan losses (12,005) (11,826) (11,822) (10,835) (10,481)
       
Total loans receivable$874,524 $863,254 $829,964 $820,956 $791,951 
       

 

PSB Holdings, Inc.     
Nonperforming Assets as of:     
 Sep 30,Jun 30,Mar 31,Dec 31,Sept 30,
(dollars in thousands) 2021  2021  2021  2020  2020 
    
Nonaccrual loans (excluding restructured loans)$6,018 $5,208 $5,346 $2,071 $2,129 
Nonaccrual restructured loans 1,526  1,062  1,090  1,064  233 
Restructured loans not on nonaccrual 5,159  5,205  5,242  5,414  5,508 
Accruing loans past due 90 days or more -  -  -  -  - 
      
Total nonperforming loans 12,703  11,475  11,678  8,549  7,870 
Other real estate owned 2,398  1,984  1,105  1,619  1,485 
      
Total nonperforming assets$15,101 $13,459 $12,783 $10,168 $9,355 
      
Nonperforming loans as a % of gross loans receivable 1.43% 1.31% 1.39% 1.03% 0.98%
Total nonperforming assets as a % of total assets 1.16% 1.07% 1.13% 0.90% 0.85%
Allowance for loan losses as a % of nonperforming loans 94.51% 103.06% 101.23% 126.74% 133.18%
      

 

PSB Holdings, Inc.   
Nonperforming Assets >= $500,000 net book value before specific reserves  
At September 30, 2021   
(dollars in thousands)   
  GrossSpecific
Collateral DescriptionAsset TypePrincipalReserves
    
Real estate - Retail Sales OutletORE$1,100 - 
Real estate - HotelRestructured 4,781 135 
Real estate - Buffet Style RestaurantRestructured/Nonaccrual 840 78 
Real estate - Buffet Style RestaurantNonaccrual 3,265 1,143 
Real estate - HotelNonaccrual 808 169 
    
Total listed nonperforming assets  10,794 1,525 
Total bank wide nonperforming assets  15,101 2,107 
Listed assets as a % of total nonperforming assets  71%72%
    
Largest Performing, but Impaired Loans at September 30, 2021 ($000s)  
  GrossSpecific
Collateral DescriptionAsset TypePrincipalReserves
    
Real estate (4 Hotel Group)Impaired 4,265 509 
    
    
Total listed performing, but impaired loans  4,265 509 
Total performing, but impaired loans  5,794 614 
Listed assets as a % of total performing, but impaired loans  74%83%
    

 

PSB Holdings, Inc.        
Deposit Composition        
 September 30, June 30, September 30,
(dollars in thousands)2021 2021 2020
 $% $% $%
         
Non-interest bearing demand$291,44026.9% $273,18126.5% $241,94726.9%
Interest-bearing demand and savings 388,72535.9%  366,56335.4%  291,27532.3%
Money market deposits 215,77219.9%  212,28520.6%  213,05723.7%
Retail and local time deposits <= $250 142,43913.2%  140,89513.7%  103,28811.5%
         
Total core deposits 1,038,37695.9%  992,92496.2%  849,56794.4%
Retail and local time deposits > $250 24,8242.3%  25,8342.5%  24,6692.7%
Broker & national time deposits <= $250 8,6400.8%  10,8741.1%  14,3841.6%
Broker & national time deposits > $250 11,2011.0%  1,9940.2%  11,9941.3%
Totals$1,083,041100.0% $1,031,626100.0% $900,614100.0%
         

 

PSB Holdings, Inc.           
Average Balances ($000) and Interest Rates         
(dollars in thousands)           
             
             
  Quarter ended September 30, 2021 Quarter ended June 30, 2021 Quarter ended September 30, 2020
  Average Yield / Average Yield / Average Yield /
  BalanceInterestRate BalanceInterestRate BalanceInterestRate
Assets            
Interest-earning assets:           
Loans (1)(2)$874,429 $9,3344.23% $906,233 $9,9834.42% $810,232 $8,0803.97%
Taxable securities 195,160  5811.18%  153,960  5531.44%  108,241  5642.07%
Tax-exempt securities (2) 84,241  6332.98%  84,593  6393.03%  76,168  6003.13%
FHLB stock 2,646  274.05%  2,625  233.51%  2,283  284.88%
Other  75,119  180.10%  42,253  170.16%  58,081  210.14%
             
Total (2)  1,231,595  10,5933.41%  1,189,664  11,2153.78%  1,055,005  9,2933.50%
             
Non-interest-earning assets:           
Cash and due from banks 20,310     25,422     13,945   
Premises and equipment,           
net  12,962     11,640     11,135   
Cash surrender value ins 24,059     23,906     17,021   
Other assets 15,317     16,004     11,917   
Allowance for loan           
losses  (11,874)    (11,816)    (9,621)  
             
Total $1,292,369    $1,254,820    $1,099,402   
             
Liabilities & stockholders' equity          
Interest-bearing liabilities:           
Savings and demand           
deposits $383,136 $730.08% $352,572 $650.07% $285,384 $720.10%
Money market deposits 213,584  900.17%  213,122  960.18%  206,881  1460.28%
Time deposits 185,502  2410.52%  182,758  3240.71%  159,851  6151.53%
FHLB borrowings 66,239  2201.32%  71,846  2211.23%  86,565  3041.40%
Other borrowings 24,993  90.14%  25,525  80.13%  9,445  50.21%
Senior sub. notes 2,500  284.44%  2,500  284.49%  2,500  284.46%
Junior sub. debentures 12,679  1655.16%  11,827  1655.60%  7,732  914.68%
             
Total  888,633  8260.37%  860,150  9070.42%  758,358  1,2610.66%
             
Non-interest-bearing liabilities:          
Demand deposits 282,331     274,777     230,566   
Other liabilities 11,017     11,430     10,042   
Stockholders' equity 110,388     108,463     100,436   
             
Total $1,292,369    $1,254,820    $1,099,402   
             
Net interest income $9,767   $10,308   $8,032 
Rate spread   3.04%   3.36%   2.84%
Net yield on interest-earning assets 3.15%   3.48%   3.03%
             
(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)       
  Nine months ended September 30, 2021 Nine months ended September 30, 2020
  Average Yield/ Average Yield/
  BalanceInterestRate BalanceInterestRate
Assets        
Interest-earning assets:       
Loans (1)(2)$873,352 $28,7724.40% $772,794 $24,7284.27%
Taxable securities 164,075  1,6411.34%  106,283  1,9192.41%
Tax-exempt securities (2) 84,351  1,9083.02%  71,096  1,7103.21%
FHLB stock 2,519  713.77%  2,229  794.73%
Other  46,590  450.13%  49,060  1350.37%
         
Total (2)  1,170,887  32,4373.70%  1,001,462  28,5713.81%
         
Non-interest-earning assets:       
Cash and due from banks 20,015     12,115   
Premises and equipment,       
net  12,600     11,010   
Cash surrender value ins 21,958     16,917   
Other assets 13,956     10,444   
Allowance for loan       
losses  (11,687)    (8,418)  
         
Total $1,227,729    $1,043,530   
         
Liabilities & stockholders' equity      
Interest-bearing liabilities:       
Savings and demand       
deposits $356,532 $2030.08% $269,734 $5290.26%
Money market deposits 214,751  3040.19%  197,630  7320.49%
Time deposits 169,182  9290.73%  162,837  2,1341.75%
FHLB borrowings 66,711  6561.31%  85,894  9471.47%
Other borrowings 23,183  240.14%  7,240  250.46%
Senior sub. notes  2,500  844.49%  2,500  844.49%
Junior sub. debentures 10,205  4195.49%  7,732  2734.72%
         
Total  843,064  2,6190.42%  733,567  4,7240.86%
         
Non-interest-bearing liabilities:      
Demand deposits 264,536     202,958   
Other liabilities 10,796     9,892   
Stockholders' equity 109,333     97,113   
         
Total $1,227,729    $1,043,530   
         
Net interest income $29,818   $23,847 
Rate spread   3.28%   2.95%
Net yield on interest-earning assets 3.40%   3.18%
         
(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%.