WAUSAU, Wis., April 22, 2024 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported first quarter earnings ending March 31, 2024 of $0.39 per common share on net income of $1.6 million, compared to $0.55 per common share on net income of $2.3 million during the fourth quarter ending December 31, 2023, and $0.67 per common share on net income of $2.9 million during the first quarter ending March 31, 2023.
PSB’s first quarter 2024 operating results reflected the following changes from the fourth quarter of 2023: (1) lower net interest income as deposit and FHLB borrowing costs rose faster than interest income on loans; (2) lower non-interest income due primarily to the sale of investment securities at a loss with the proceeds reinvested into higher yielding investments; (3) higher non-interest expense related to annual salary increases in the first quarter and a reduction in vesting of incentives and benefits recorded in the prior quarter; (4) stronger capital ratios supported by additional earnings and slightly lower total assets; and (6) an increase in non-performing assets related to one borrower in the timber industry impacted by weather conditions and economic stress in that industry.
“We continue to focus on building shareholder value in a challenging environment, with common tangible book value increasing to $24.21 per share and stronger than expected loan growth prospects looking forward. However, rising funding costs remain a challenge. While new loan origination coupons have risen in the first quarter, the cost of new FHLB borrowings and continued rate increases in our existing deposits rose faster than asset yields as a whole,” stated Scott Cattanach, President and CEO.
March 31, 2024, Highlights:
- Net interest income declined to $9.3 million for the quarter ended March 31, 2024, from $9.6 million for the quarter ended December 31, 2023, as increases in asset and loan yields were offset by increases in funding costs.
- Tangible book value per common share increased to $24.21 at March 31, 2024, compared to $23.84 one quarter earlier and $22.43 at March 31, 2023. During the first quarter ended March 31, 2024, tangible book value per share was positively influenced by net income, intangible asset amortization, and stock repurchase activity.
- Loans increased $2.9 million in the first quarter ended March 31, 2024, to $1.08 billion. Allowance for credit losses increased to 1.14% of gross loans.
- Return on tangible common equity was 6.57% for the quarter ended March 31, 2024, compared to 9.64% the prior quarter and 12.63% one year earlier.
- Noninterest income was $1.0 million for the quarter ended March 31, 2024, compared to $1.1 million the prior quarter. The current quarter reflected a slightly larger loss on the sale of investment securities as the Company continues to reposition the investment portfolio into higher yielding investments.
- Noninterest expenses increased $967,000 in the first quarter of 2024, to $8.3 million from $7.4 million the prior quarter. The increase reflected scheduled salary increases and costs associated with vesting of other benefits. December 2023 quarterly salary costs were lowered by adjustments to post retirement and incentive accruals. March 2024 quarterly salaries and employee benefits expense was 2.3% greater than March 2023 quarterly salaries and employee benefits.
Balance Sheet and Asset Quality Review
Total assets decreased $5.5 million to $1.42 billion at March 31, 2024. Cash and cash equivalents decreased $11.9 million, to $15.9 million at March 31, 2024, compared to $27.8 million the previous quarter. The lower cash and cash equivalent level primarily reflects proceeds used to fund higher yielding loans and investments. Investment securities available for sale increased $1.5 million to $165.6 million at March 31, 2024, from $164.0 million one quarter earlier. During the first quarter, $6.3 million available for sale securities were sold with the proceeds reinvested into higher yielding investments. Total collateralized liquidity available to meet cash demands was approximately $396 million at March 31, 2024, with an additional $317 million that could be raised in a short time frame from the brokered CDs market.
Total loans receivable increased $2.9 million to $1.08 billion at March 31, 2024 due primarily to draw downs of prior quarter loans in process, although gross loans outstanding declined $7.4 million. Commercial real estate loans decreased $8.2 million to $609.6 million at March 31, 2024, from $617.9 million the prior quarter. Commercial non-real estate loans decreased $1.3 million to $159.7 million at March 31, 2024, from $161.0 million one quarter earlier. Residential real estate loans increased $1.6 million from the prior quarter to $339.8 million from $338.2 million. The loan portfolio remains well diversified with commercial real estate loans totaling 54.7% of gross loans followed by residential real estate loans at 30.5% of gross loans, commercial non-real estate loans at 14.3% and consumer loans at 0.4%.
The allowance for credit losses increased slightly to 1.14% of gross loans at March 31, 2024, from 1.13% the prior quarter. Annualized net charge-offs to average loans were zero for the last three quarters ending March 31, 2024, compared to net recoveries of 0.02% one year earlier. Non-performing assets increased to 0.83% of total assets at March 31, 2024, due primarily to the addition of a $5.1 million loan to a borrower in the timber industry. Specific reserves have been established on the loan relationship for potential losses. For the fifth consecutive quarter, the Bank did not own any foreclosed real estate.
Total deposits decreased $28.5 million to $1.11 billion at March 31, 2024, from $1.14 billion at December 31, 2023. The decline in deposits reflects a pay down of $9.5 million in maturing brokered deposits and national CDs and a $22.2 million decline in uninsured deposits. Insured core and time deposits increased $3.2 million during the first quarter.
The composition of deposits continued to change during the first quarter of 2024 as customers seek higher deposit rates. At March 31, 2024, money market deposits and retail time deposits increased to 41.6% of deposits, compared to 40.6% at December 31, 2023. Uninsured and uncollateralized deposits declined to 19.3% of total deposits at March 31, 2024, from 20.9% of total deposits at December 31, 2023.
FHLB advances increased to $158.3 million at March 31, 2024, compared to $134.0 million at December 31, 2023. FHLB advances were used to fund repayment of certain brokered deposit maturities and supplement local deposit changes.
Tangible stockholder equity as a percent of total tangible assets was 7.60% at March 31, 2024, compared to 7.49% at December 31, 2023, and 7.54% at March 31, 2023.
Tangible net book value per common share increased $1.78, to $24.21, at March 31, 2024, compared to $22.43 one year earlier, an increase of 7.9%. Relative to the prior quarter, tangible net book value per common share increased $0.37 due to continued earnings. New security purchases with higher yields helped offset an increase in national market interest rates that lowered the value of the securities portfolio during the first quarter. The accumulated other comprehensive loss on the investment portfolio was $20.8 million at March 31, 2024, compared to $20.7 million one quarter earlier.
Operations Review
Net interest income declined to $9.3 million (on a net margin of 2.80%) for the first quarter of 2024 from $9.6 million (on a net margin of 2.88%) for the fourth quarter of 2023, and $9.9 million (on a net margin of 3.21%) for the first quarter of 2023. Earning asset yields increased 13 basis points to 5.12% during the first quarter of 2024 from 4.99% during the fourth quarter of 2023, while interest bearing deposit and borrowing costs increased 21 basis points to 3.00% compared to 2.79% during the fourth quarter of 2023.
The increase in earning asset yields was primarily due to higher yields on loan originations and renewals during the quarter. Partially offsetting the increased yield on earning assets during the quarter was the loss of interest income of approximately $114,000 on a newly classified non-performing loan. Taxable security yields were 2.80% for the quarter ended March 31, 2024, compared to 2.72% for the quarter ended December 31, 2023, up 8 basis points. Loan yields increased during the first quarter to 5.59% from 5.43% for the fourth quarter of 2023, up 16 basis points as loans repriced to higher market rates and increased credit spreads.
Rising deposit costs for savings and demand deposits, money market deposits, time deposits and FHLB advances were responsible for the rise in the Bank’s cost of funds. Additionally, the Company accepted an increase in $26.0 million of additional seasonal high yield municipal average deposits during the first quarter, which accelerated the overall rising cost of deposits during the quarter. The municipal deposits are expected to be drawn down during the second quarter. The overall cost of all deposits was 2.14% for the quarter ended March 31, 2024, compared to 1.91% the prior quarter, up 23 basis points. FHLB advance costs rose to 4.08% during the first quarter ended March 31, 2024, from 4.01% the prior quarter, and greater use of FHLB advance funding lowered net interest margin.
Total noninterest income decreased slightly for the first quarter of 2024 to $1.04 million, from $1.10 million for the fourth quarter of 2023, due primarily to investment restructuring activity with a loss on the sale of investment securities during the first quarter of $495,000 compared to a loss of $297,000 in the fourth quarter of 2023. Mortgage banking income increased by $61,000, or 24.6%, to $308,000 in the March 2024 quarter. At March 31, 2024, the Bank serviced $366.6 million in secondary market residential mortgage loans for others which provides fee income.
Noninterest expenses increased to $8.3 million for the first quarter of 2024, compared to $7.4 million for the fourth quarter of 2023. The fourth quarter of 2023 included lower salary and benefit expenses due to a recovery of post-retirement benefits and incentive accruals. The first quarter ended March 31, 2024, also reflected higher salary and benefit expenses due to annual salary increases and costs associated with various benefits.
Taxes decreased $709,000 during the first quarter to $169,000 from $878,000 one quarter earlier. The decrease reflects lower pre-tax income, the relative value of tax exempt income assets, and the benefit related to a Wisconsin state tax change that exempts certain loan interest income effectively eliminating Wisconsin tax expense.
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 eleven full-service banking locations in Marathon, Oneida, Vilas, Portage, Milwaukee and Waukesha counties and a loan production office in Dane County. Peoples also provides investment and insurance products, along with retirement planning services, through Peoples Wealth Management, a division of Peoples. PSB Holdings, Inc. is traded under the stock symbol PSBQ on the OTCQX Market. More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about PSB’s business based, in part, on assumptions made by management and include, without limitation, statements with respect to the potential growth of PSB, its future profits, expected stock repurchase levels, future dividend rates, future interest rates, and the adequacy of its capital position. Forward-looking statements can be affected by known and unknown risks, uncertainties, and other factors, including, but not limited to, strength of the economy, the effects of government policies, including interest rate policies, risks associated with the execution of PSB’s vision and growth strategy, including with respect to current and future M&A activity, and risks associated with global economic instability. The forward-looking statements in this press release speak only as of the date on which they are made and PSB does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
| PSB Holdings, Inc. | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| March 31, 2024, September 30, June 30, and March 31, 2023, unaudited, December 31, 2023 derived from audited financial statements | |||||||||||||||
| Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | |||||||||||
| (dollars in thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 13,340 | $ | 20,887 | $ | 12,881 | $ | 27,409 | $ | 13,336 | |||||
| Interest-bearing deposits | 105 | 1,431 | 668 | 892 | 538 | ||||||||||
| Federal funds sold | 2,439 | 5,462 | 7,764 | 16,138 | 25,766 | ||||||||||
| Cash and cash equivalents | 15,884 | 27,780 | 21,313 | 44,439 | 39,640 | ||||||||||
| Securities available for sale (at fair value) | 165,566 | 164,024 | 160,883 | 167,382 | 190,738 | ||||||||||
| Securities held to maturity (fair values of $81,234, $82,514, $75,236, $81,489 and | |||||||||||||||
| $82,610, respectively | 87,104 | 87,081 | 86,908 | 87,335 | 87,889 | ||||||||||
| Equity securities | 1,474 | 1,474 | 2,273 | 2,178 | 2,070 | ||||||||||
| Loans held for sale | 865 | 230 | 971 | 151 | - | ||||||||||
| Loans receivable, net (allowance for credit losses of $12,494, $12,302, $12,267, | |||||||||||||||
| $11,922 and $11,593, respectively | 1,081,394 | 1,078,475 | 1,098,019 | 1,048,322 | 973,270 | ||||||||||
| Accrued interest receivable | 5,467 | 5,136 | 4,716 | 4,274 | 4,062 | ||||||||||
| Foreclosed assets | - | - | - | - | - | ||||||||||
| Premises and equipment, net | 13,427 | 13,098 | 13,242 | 13,256 | 13,406 | ||||||||||
| Mortgage servicing rights, net | 1,657 | 1,664 | 1,684 | 1,666 | 1,682 | ||||||||||
| Federal Home Loan Bank stock (at cost) | 7,006 | 6,373 | 6,373 | 6,359 | 4,620 | ||||||||||
| Cash surrender value of bank-owned life insurance | 24,242 | 24,085 | 23,931 | 23,776 | 25,078 | ||||||||||
| Core deposit intangible | 249 | 273 | 297 | 321 | 348 | ||||||||||
| Goodwill | 2,541 | 2,541 | 2,541 | 2,541 | 2,541 | ||||||||||
| Other assets | 11,682 | 11,866 | 14,094 | 14,933 | 14,444 | ||||||||||
| TOTAL ASSETS | $ | 1,418,558 | $ | 1,424,100 | $ | 1,437,245 | $ | 1,416,933 | $ | 1,359,788 | |||||
| Liabilities | |||||||||||||||
| Non-interest-bearing deposits | $ | 247,608 | $ | 266,829 | $ | 288,765 | $ | 282,153 | $ | 267,836 | |||||
| Interest-bearing deposits | 865,744 | 874,973 | 883,474 | 860,981 | 839,757 | ||||||||||
| Total deposits | 1,113,352 | 1,141,802 | 1,172,239 | 1,143,134 | 1,107,593 | ||||||||||
| Federal Home Loan Bank advances | 158,250 | 134,000 | 128,000 | 133,000 | 113,000 | ||||||||||
| Other borrowings | 8,096 | 8,058 | 5,660 | 5,730 | 5,033 | ||||||||||
| Senior subordinated notes | 4,776 | 4,774 | 4,772 | 4,771 | 4,769 | ||||||||||
| Junior subordinated debentures | 12,947 | 12,921 | 12,896 | 12,870 | 12,844 | ||||||||||
| Allowance for credit losses on unfunded commitments | 477 | 577 | 512 | 712 | 762 | ||||||||||
| Accrued expenses and other liabilities | 10,247 | 12,681 | 10,258 | 11,783 | 10,576 | ||||||||||
| Total liabilities | 1,308,145 | 1,314,813 | 1,334,337 | 1,312,000 | 1,254,577 | ||||||||||
| Stockholders' equity | |||||||||||||||
| Preferred stock - no par value: | |||||||||||||||
| Authorized - 30,000 shares; no shares issued or outstanding | |||||||||||||||
| Outstanding - 7,200 shares, respectively | 7,200 | 7,200 | 7,200 | 7,200 | 7,200 | ||||||||||
| Common stock - no par value with a stated value of $1.00 per share: | |||||||||||||||
| Authorized - 18,000,000 shares; Issued - 5,490,798 shares | |||||||||||||||
| Outstanding - 4,147,649, 4,164,735, 4,174,197, 4,190,252 and | |||||||||||||||
| 4,241,501 shares, respectively | 1,830 | 1,830 | 1,830 | 1,830 | 1,830 | ||||||||||
| Additional paid-in capital | 8,466 | 8,460 | 8,421 | 8,382 | 8,311 | ||||||||||
| Retained earnings | 134,271 | 132,666 | 131,624 | 130,396 | 128,968 | ||||||||||
| Accumulated other comprehensive income (loss), net of tax | (20,775 | ) | (20,689 | ) | (26,190 | ) | (23,240 | ) | (22,515 | ) | |||||
| Treasury stock, at cost - 1,343,149, 1,326,063, 1,316,601, 1,300,546 and | |||||||||||||||
| 1,249,297 shares, respectively | (20,579 | ) | (20,180 | ) | (19,977 | ) | (19,635 | ) | (18,583 | ) | |||||
| Total stockholders' equity | 110,413 | 109,287 | 102,908 | 104,933 | 105,211 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,418,558 | $ | 1,424,100 | $ | 1,437,245 | $ | 1,416,933 | $ | 1,359,788 | |||||
| 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) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||
| Interest and dividend income: | ||||||||||||||||||
| Loans, including fees | $ | 15,109 | $ | 14,888 | $ | 14,263 | $ | 12,709 | $ | 11,773 | ||||||||
| Securities: | ||||||||||||||||||
| Taxable | 1,197 | 1,147 | 1,114 | 1,327 | 1,331 | |||||||||||||
| Tax-exempt | 526 | 532 | 533 | 535 | 537 | |||||||||||||
| Other interest and dividends | 343 | 320 | 238 | 145 | 148 | |||||||||||||
| Total interest and dividend income | 17,175 | 16,887 | 16,148 | 14,716 | 13,789 | |||||||||||||
| Interest expense: | ||||||||||||||||||
| Deposits | 6,082 | 5,526 | 4,817 | 3,661 | 2,989 | |||||||||||||
| FHLB advances | 1,450 | 1,349 | 1,321 | 1,200 | 547 | |||||||||||||
| Other borrowings | 60 | 54 | 51 | 48 | 62 | |||||||||||||
| Senior subordinated notes | 59 | 59 | 59 | 58 | 62 | |||||||||||||
| Junior subordinated debentures | 251 | 254 | 255 | 242 | 234 | |||||||||||||
| Total interest expense | 7,902 | 7,242 | 6,503 | 5,209 | 3,894 | |||||||||||||
| Net interest income | 9,273 | 9,645 | 9,645 | 9,507 | 9,895 | |||||||||||||
| Provision for credit losses | 95 | 100 | 150 | 100 | 100 | |||||||||||||
| Net interest income after provision for credit losses | 9,178 | 9,545 | 9,495 | 9,407 | 9,795 | |||||||||||||
| Noninterest income: | ||||||||||||||||||
| Service fees | 336 | 360 | 349 | 378 | 361 | |||||||||||||
| Mortgage banking income | 308 | 247 | 345 | 311 | 325 | |||||||||||||
| Investment and insurance sales commissions | 121 | 100 | 158 | 287 | 365 | |||||||||||||
| Net loss on sale of securities | (495 | ) | (297 | ) | - | (279 | ) | - | ||||||||||
| Increase in cash surrender value of life insurance | 157 | 154 | 155 | 149 | 157 | |||||||||||||
| Life insurance death benefit | - | - | - | 533 | - | |||||||||||||
| Other noninterest income | 617 | 540 | 675 | 605 | 742 | |||||||||||||
| Total noninterest income | 1,044 | 1,104 | 1,682 | 1,984 | 1,950 | |||||||||||||
| Noninterest expense: | ||||||||||||||||||
| Salaries and employee benefits | 5,123 | 4,244 | 4,514 | 4,884 | 5,006 | |||||||||||||
| Occupancy and facilities | 721 | 675 | 689 | 698 | 699 | |||||||||||||
| Loss (gain) on foreclosed assets | - | 1 | - | 4 | (50 | ) | ||||||||||||
| Data processing and other office operations | 1,022 | 1,001 | 953 | 951 | 880 | |||||||||||||
| Advertising and promotion | 129 | 244 | 161 | 166 | 162 | |||||||||||||
| Core deposit intangible amortization | 24 | 24 | 24 | 27 | 34 | |||||||||||||
| Other noninterest expenses | 1,306 | 1,169 | 1,113 | 1,202 | 1,073 | |||||||||||||
| Total noninterest expense | 8,325 | 7,358 | 7,454 | 7,932 | 7,804 | |||||||||||||
| Income before provision for income taxes | 1,897 | 3,291 | 3,723 | 3,459 | 3,941 | |||||||||||||
| Provision for income taxes | 169 | 878 | 2,374 | 652 | 941 | |||||||||||||
| Net income | $ | 1,728 | $ | 2,413 | $ | 1,349 | $ | 2,807 | $ | 3,000 | ||||||||
| Preferred stock dividends declared | $ | 122 | $ | 122 | $ | 122 | $ | 122 | $ | 122 | ||||||||
| Net income available to common shareholders | $ | 1,606 | $ | 2,291 | $ | 1,227 | $ | 2,685 | $ | 2,878 | ||||||||
| Basic earnings per common share | $ | 0.39 | $ | 0.55 | $ | 0.29 | $ | 0.64 | $ | 0.67 | ||||||||
| Diluted earnings per common share | $ | 0.39 | $ | 0.55 | $ | 0.29 | $ | 0.64 | $ | 0.67 | ||||||||
| 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: | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||
| Interest income | $ | 17,175 | $ | 16,887 | $ | 16,148 | $ | 14,716 | $ | 13,789 | ||||||||
| Interest expense | $ | 7,902 | $ | 7,242 | $ | 6,503 | $ | 5,209 | $ | 3,894 | ||||||||
| Net interest income | $ | 9,273 | $ | 9,645 | $ | 9,645 | $ | 9,507 | $ | 9,895 | ||||||||
| Provision for credit losses | $ | 95 | $ | 100 | $ | 150 | $ | 100 | $ | 100 | ||||||||
| Other noninterest income | $ | 1,044 | $ | 1,104 | $ | 1,682 | $ | 1,984 | $ | 1,950 | ||||||||
| Other noninterest expense | $ | 8,325 | $ | 7,358 | $ | 7,454 | $ | 7,932 | $ | 7,804 | ||||||||
| Net income available to common shareholders | $ | 1,606 | $ | 2,291 | $ | 1,227 | $ | 2,685 | $ | 2,878 | ||||||||
| Basic earnings per common share (3) | $ | 0.39 | $ | 0.55 | $ | 0.29 | $ | 0.64 | $ | 0.67 | ||||||||
| Diluted earnings per common share (3) | $ | 0.39 | $ | 0.55 | $ | 0.29 | $ | 0.64 | $ | 0.67 | ||||||||
| Dividends declared per common share (3) | $ | - | $ | 0.30 | $ | - | $ | 0.30 | $ | - | ||||||||
| Tangible net book value per common share (4) | $ | 24.21 | $ | 23.84 | $ | 22.25 | $ | 22.64 | $ | 22.43 | ||||||||
| Semi-annual dividend payout ratio | n/a | 38.14 | % | n/a | 27.38 | % | n/a | |||||||||||
| Average common shares outstanding | 4,154,702 | 4,168,924 | 4,186,940 | 4,218,226 | 4,275,160 | |||||||||||||
| Balance sheet - average balances: | ||||||||||||||||||
| Loans receivable, net of allowances for credit loss | $ | 1,081,936 | $ | 1,081,851 | $ | 1,076,158 | $ | 1,000,349 | $ | 964,029 | ||||||||
| Assets | $ | 1,429,437 | $ | 1,424,240 | $ | 1,425,522 | $ | 1,367,363 | $ | 1,336,511 | ||||||||
| Deposits | $ | 1,138,010 | $ | 1,148,399 | $ | 1,149,624 | $ | 1,098,039 | $ | 1,124,091 | ||||||||
| Stockholders' equity | $ | 109,473 | $ | 105,060 | $ | 105,745 | $ | 106,762 | $ | 103,406 | ||||||||
| Performance ratios: | ||||||||||||||||||
| Return on average assets (1) | 0.49 | % | 0.67 | % | 0.38 | % | 0.82 | % | 0.91 | % | ||||||||
| Return on average common stockholders' equity (1) | 6.32 | % | 9.29 | % | 4.94 | % | 10.82 | % | 12.13 | % | ||||||||
| Return on average tangible common | ||||||||||||||||||
| stockholders' equity (1)(4) | 6.57 | % | 9.64 | % | 5.17 | % | 11.23 | % | 12.63 | % | ||||||||
| Net loan charge-offs to average loans (1) | 0.00 | % | 0.00 | % | 0.00 | % | -0.07 | % | -0.02 | % | ||||||||
| Nonperforming loans to gross loans | 1.08 | % | 0.54 | % | 0.55 | % | 0.60 | % | 0.62 | % | ||||||||
| Nonperforming assets to total assets | 0.83 | % | 0.42 | % | 0.42 | % | 0.45 | % | 0.45 | % | ||||||||
| Allowance for credit losses to gross loans | 1.14 | % | 1.13 | % | 1.10 | % | 1.12 | % | 1.18 | % | ||||||||
| Nonperforming assets to tangible equity | ||||||||||||||||||
| plus the allowance for credit losses (4) | 10.59 | % | 5.38 | % | 5.87 | % | 5.96 | % | 5.76 | % | ||||||||
| Net interest rate margin (1)(2) | 2.80 | % | 2.88 | % | 2.88 | % | 2.98 | % | 3.21 | % | ||||||||
| Net interest rate spread (1)(2) | 2.12 | % | 2.20 | % | 2.27 | % | 2.46 | % | 2.77 | % | ||||||||
| Service fee revenue as a percent of | ||||||||||||||||||
| average demand deposits (1) | 0.54 | % | 0.52 | % | 0.50 | % | 0.58 | % | 0.52 | % | ||||||||
| Noninterest income as a percent | ||||||||||||||||||
| of gross revenue | 5.73 | % | 6.14 | % | 9.43 | % | 11.88 | % | 12.39 | % | ||||||||
| Efficiency ratio (2) | 78.93 | % | 67.04 | % | 64.58 | % | 68.09 | % | 65.02 | % | ||||||||
| Noninterest expenses to average assets (1) | 2.34 | % | 2.05 | % | 2.07 | % | 2.33 | % | 2.37 | % | ||||||||
| Average stockholders' equity less accumulated | ||||||||||||||||||
| other comprehensive income (loss) to | ||||||||||||||||||
| average assets | 8.98 | % | 8.88 | % | 9.00 | % | 9.33 | % | 9.32 | % | ||||||||
| Tangible equity to tangible assets (4) | 7.60 | % | 7.49 | % | 6.98 | % | 7.22 | % | 7.54 | % | ||||||||
| Stock price information: | ||||||||||||||||||
| High | $ | 22.50 | $ | 22.30 | $ | 22.50 | $ | 21.38 | $ | 25.75 | ||||||||
| Low | $ | 20.05 | $ | 20.10 | $ | 20.35 | $ | 19.75 | $ | 20.00 | ||||||||
| Last trade value at quarter-end | $ | 21.25 | $ | 22.11 | $ | 21.15 | $ | 20.35 | $ | 21.15 | ||||||||
| (1) Annualized | ||||||||||||||||||
| (2) The yield on federally 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 goodwill and core deposit intangibles. | ||||||||||||||||||
| PSB Holdings, Inc. | ||||||||||||||||||
| Consolidated Statements of Comprehensive Income | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||
| Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | ||||||||||||||
| (dollars in thousands - unaudited) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||
| Net income | $ | 1,728 | $ | 2,413 | $ | 1,349 | $ | 2,807 | $ | 3,000 | ||||||||
| Other comprehensive income, net of tax: | ||||||||||||||||||
| Unrealized gain (loss) on securities available | ||||||||||||||||||
| for sale | (615 | ) | 5,278 | (3,085 | ) | (1,186 | ) | 1,601 | ||||||||||
| Reclassification adjustment for security | ||||||||||||||||||
| loss included in net income | 391 | 280 | - | 220 | - | |||||||||||||
| Accretion of unrealized loss included in net | ||||||||||||||||||
| income on securties available for sale | ||||||||||||||||||
| deferred tax adjustment for Wisconsin | ||||||||||||||||||
| Act 19 | (35 | ) | - | - | - | - | ||||||||||||
| Amortization of unrealized loss included in net | ||||||||||||||||||
| income on securities available for sale | ||||||||||||||||||
| transferred to securities held to maturity | 91 | 91 | 91 | 107 | 129 | |||||||||||||
| Unrealized gain (loss) on interest rate swap | 123 | (109 | ) | 79 | 172 | (1 | ) | |||||||||||
| Reclassification adjustment of interest rate | ||||||||||||||||||
| swap settlements included in earnings | (41 | ) | (39 | ) | (35 | ) | (38 | ) | (24 | ) | ||||||||
| Other comprehensive income (loss) | (86 | ) | 5,501 | (2,950 | ) | (725 | ) | 1,705 | ||||||||||
| Comprehensive income (loss) | $ | 1,642 | $ | 7,914 | $ | (1,601 | ) | $ | 2,082 | $ | 4,705 | |||||||
| PSB Holdings, Inc. | |||||||||||||||
| Nonperforming Assets as of: | |||||||||||||||
| Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |||||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||
| Nonaccrual loans (excluding restructured loans) | $ | 11,498 | $ | 5,596 | $ | 5,807 | $ | 6,000 | $ | 5,773 | |||||
| Nonaccrual restructured loans | 30 | 34 | 42 | 50 | 57 | ||||||||||
| Restructured loans not on nonaccrual | 304 | 310 | 256 | 261 | 265 | ||||||||||
| Accruing loans past due 90 days or more | - | - | - | - | - | ||||||||||
| Total nonperforming loans | 11,832 | 5,940 | 6,105 | 6,311 | 6,095 | ||||||||||
| Other real estate owned | - | - | - | - | - | ||||||||||
| Total nonperforming assets | $ | 11,832 | $ | 5,940 | $ | 6,105 | $ | 6,311 | $ | 6,095 | |||||
| Nonperforming loans as a % of gross loans receivable | 1.08 | % | 0.54 | % | 0.55 | % | 0.60 | % | 0.62 | % | |||||
| Total nonperforming assets as a % of total assets | 0.83 | % | 0.42 | % | 0.42 | % | 0.45 | % | 0.45 | % | |||||
| Allowance for credit losses as a % of nonperforming loans | 105.59 | % | 207.10 | % | 200.93 | % | 188.91 | % | 190.21 | % | |||||
| PSB Holdings, Inc. | ||||
| Nonperforming Assets >= $500,000 net book value before specific reserves | ||||
| At March 31, 2024 | ||||
| (dollars in thousands) | ||||
| Gross | ||||
| Collateral Description | Asset Type | Principal | ||
| Real estate - Buffet Style Restaurant | Nonaccrual | $ | 2,611 | |
| Real estate - Independent Auto Repair | Nonaccrual | 611 | ||
| Real estate - Dealership | Nonaccrual | 5,053 | ||
| Total listed nonperforming assets | $ | 8,275 | ||
| Total bank wide nonperforming assets | $ | 11,832 | ||
| Listed assets as a % of total nonperforming assets | 70 | % | ||
| PSB Holding, Inc. | ||||||||||||||||
| Loan Composition by Collateral Type | ||||||||||||||||
| Quarter-ended (dollars in thousands) | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |||||||||||
| Commercial: | ||||||||||||||||
| Commercial and instrustrial | $ | 118,821 | $ | 117,207 | $ | 138,299 | $ | 145,434 | $ | 133,427 | ||||||
| Agriculture | 12,081 | 12,304 | 12,464 | 13,326 | 12,434 | |||||||||||
| Municipal | 28,842 | 31,530 | 27,186 | 25,222 | 6,430 | |||||||||||
| Total Commercial | 159,744 | 161,041 | 177,949 | 183,982 | 152,291 | |||||||||||
| Commercial Real Estate: | ||||||||||||||||
| Commercial real estate | 546,257 | 536,209 | 539,488 | 490,657 | 469,395 | |||||||||||
| Construction and development | 63,375 | 81,701 | 86,456 | 99,769 | 103,108 | |||||||||||
| Total Commercial Real Estate | 609,632 | 617,910 | 625,944 | 590,426 | 572,503 | |||||||||||
| Residential real estate: | ||||||||||||||||
| Residential | 274,300 | 274,453 | 274,632 | 274,692 | 261,415 | |||||||||||
| Construction and development | 34,158 | 33,960 | 33,141 | 41,485 | 26,480 | |||||||||||
| HELOC | 31,357 | 29,766 | 29,044 | 26,220 | 25,001 | |||||||||||
| Total Residential Real Estate | 339,815 | 338,179 | 336,817 | 342,397 | 312,896 | |||||||||||
| Consumer installment | 4,867 | 4,357 | 4,350 | 4,142 | 4,079 | |||||||||||
| Subtotals - Gross loans | 1,114,058 | 1,121,487 | 1,145,060 | 1,120,947 | 1,041,769 | |||||||||||
| Loans in process of disbursement | (20,839 | ) | (31,359 | ) | (35,404 | ) | (61,308 | ) | (57,448 | ) | ||||||
| Subtotals - Disbursed loans | 1,093,219 | 1,090,128 | 1,109,656 | 1,059,639 | 984,321 | |||||||||||
| Net deferred loan costs | 669 | 649 | 630 | 605 | 542 | |||||||||||
| Allowance for credit losses | (12,494 | ) | (12,302 | ) | (12,267 | ) | (11,922 | ) | (11,593 | ) | ||||||
| Total loans receivable | $ | 1,081,394 | $ | 1,078,475 | $ | 1,098,019 | $ | 1,048,322 | $ | 973,270 | ||||||
| PSB Holding, Inc. | ||||||||||||||||||||||||
| Selected Commercial Real Estate Loans by Purpose | ||||||||||||||||||||||||
| Mar 31, | Dec 31, | Sept 30, | June 30, | Mar 31, | ||||||||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||||||
| Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | Total Exposure | % of Portfolio (1) | |||||||||||||||
| Multi Family | $ | 142,001 | 14.4 | % | $ | 132,386 | 13.2 | % | $ | 133,466 | 13.3 | % | $ | 119,573 | 12.4 | % | $ | 121,559 | 13.0 | % | ||||
| Industrial and Warehousing | 85,409 | 8.6 | 83,817 | 8.3 | 88,906 | 8.9 | 84,049 | 8.7 | 78,934 | 8.5 | ||||||||||||||
| Retail | 33,177 | 3.4 | 35,419 | 3.5 | 35,281 | 3.5 | 34,004 | 3.5 | 34,427 | 3.7 | ||||||||||||||
| Hotels | 35,105 | 3.6 | 36,100 | 3.6 | 31,819 | 3.2 | 33,329 | 3.5 | 31,069 | 3.3 | ||||||||||||||
| Office | 6,655 | 0.7 | 6,701 | 0.7 | 6,746 | 0.7 | 8,395 | 0.9 | 8,544 | 0.9 | ||||||||||||||
| (1) Percentage of commercial and commercial real estate portfolio and commitments. | ||||||||||||||||||||||||
| PSB Holdings, Inc. | ||||||||||||||||||||
| Deposit Composition | ||||||||||||||||||||
| Insured and Collateralized Deposits | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||
| Non-interest bearing demand | $ | 199,077 | 17.8 | % | $ | 197,571 | 17.3 | % | $ | 209,133 | 17.8 | % | $ | 201,351 | 17.6 | % | $ | 205,350 | 18.6 | % |
| Interest-bearing demand and savings | 318,672 | 28.7 | % | 317,984 | 27.8 | % | 307,620 | 26.3 | % | 310,006 | 27.1 | % | 329,364 | 29.7 | % | |||||
| Money market deposits | 143,167 | 12.9 | % | 142,887 | 12.5 | % | 135,910 | 11.6 | % | 126,851 | 11.1 | % | 128,576 | 11.6 | % | |||||
| Retail and local time deposits <= $250 | 148,404 | 13.3 | % | 149,145 | 13.1 | % | 144,733 | 12.3 | % | 140,572 | 12.3 | % | 136,090 | 12.3 | % | |||||
| Total core deposits | 809,320 | 72.7 | % | 807,587 | 70.7 | % | 797,396 | 68.0 | % | 778,780 | 68.1 | % | 799,380 | 72.2 | % | |||||
| Retail and local time deposits > $250 | 24,508 | 2.3 | % | 23,000 | 2.0 | % | 22,750 | 1.9 | % | 20,250 | 1.8 | % | 17,000 | 1.5 | % | |||||
| Broker & national time deposits <= $250 | 2,229 | 0.2 | % | 3,470 | 0.3 | % | 3,222 | 0.3 | % | 3,965 | 0.3 | % | 5,953 | 0.5 | % | |||||
| Broker & national time deposits > $250 | 61,752 | 5.5 | % | 70,020 | 6.1 | % | 88,614 | 7.6 | % | 93,956 | 8.2 | % | 74,485 | 6.8 | % | |||||
| Totals | $ | 897,809 | 80.7 | % | $ | 904,077 | 79.1 | % | $ | 911,982 | 77.8 | % | $ | 896,951 | 78.4 | % | $ | 896,818 | 81.0 | % |
| PSB Holdings, Inc. | ||||||||||||||||||||
| Deposit Composition | ||||||||||||||||||||
| Uninsured Deposits | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||
| Non-interest bearing demand | $ | 48,532 | 4.4 | % | $ | 69,258 | 6.1 | % | $ | 79,632 | 6.8 | % | $ | 80,802 | 7.1 | % | $ | 62,486 | 5.6 | % |
| Interest-bearing demand and savings | 20,535 | 1.8 | % | 20,316 | 1.8 | % | 22,847 | 1.9 | % | 22,604 | 2.0 | % | 24,854 | 2.2 | % | |||||
| Money market deposits | 124,766 | 11.2 | % | 124,518 | 10.9 | % | 133,653 | 11.4 | % | 127,871 | 11.2 | % | 109,894 | 10.0 | % | |||||
| Retail and local time deposits <= $250 | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||
| Total core deposits | 193,833 | 17.4 | % | 214,092 | 18.8 | % | 236,132 | 20.1 | % | 231,277 | 20.3 | % | 197,234 | 17.8 | % | |||||
| Retail and local time deposits > $250 | 21,710 | 1.9 | % | 23,633 | 2.1 | % | 24,120 | 2.1 | % | 14,906 | 1.3 | % | 13,541 | 1.2 | % | |||||
| Broker & national time deposits <= $250 | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||
| Broker & national time deposits > $250 | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||
| Totals | $ | 215,543 | 19.3 | % | $ | 237,725 | 20.9 | % | $ | 260,252 | 22.2 | % | $ | 246,183 | 21.6 | % | $ | 210,775 | 19.0 | % |
| PSB Holdings, Inc. | ||||||||||||||||||||
| Deposit Composition | ||||||||||||||||||||
| Total Deposits | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| $ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||
| Non-interest bearing demand | $ | 247,609 | 22.2 | % | $ | 266,829 | 23.4 | % | $ | 288,765 | 24.7 | % | $ | 282,153 | 24.7 | % | $ | 267,836 | 24.2 | % |
| Interest-bearing demand and savings | 339,207 | 30.5 | % | 338,300 | 29.6 | % | 330,467 | 28.2 | % | 332,610 | 29.1 | % | 354,218 | 32.0 | % | |||||
| Money market deposits | 267,933 | 24.1 | % | 267,405 | 23.4 | % | 269,563 | 22.8 | % | 254,722 | 22.3 | % | 238,470 | 21.5 | % | |||||
| Retail and local time deposits <= $250 | 148,404 | 13.3 | % | 149,145 | 13.1 | % | 144,738 | 12.4 | % | 140,572 | 12.3 | % | 136,090 | 12.3 | % | |||||
| Total core deposits | 1,003,153 | 90.1 | % | 1,021,679 | 89.5 | % | 1,033,533 | 88.1 | % | 1,010,057 | 88.4 | % | 996,614 | 90.0 | % | |||||
| Retail and local time deposits > $250 | 46,218 | 4.2 | % | 46,633 | 4.1 | % | 46,870 | 4.0 | % | 35,156 | 3.1 | % | 30,541 | 2.8 | % | |||||
| Broker & national time deposits <= $250 | 2,229 | 0.2 | % | 3,470 | 0.3 | % | 3,222 | 0.3 | % | 3,965 | 0.3 | % | 5,953 | 0.5 | % | |||||
| Broker & national time deposits > $250 | 61,752 | 5.5 | % | 70,020 | 6.1 | % | 88,614 | 7.6 | % | 93,956 | 8.2 | % | 74,485 | 6.7 | % | |||||
| Totals | $ | 1,113,352 | 100.0 | % | $ | 1,141,802 | 100.0 | % | $ | 1,172,239 | 100.0 | % | $ | 1,143,134 | 100.0 | % | $ | 1,107,593 | 100.0 | % |
| PSB Holdings, Inc. | |||||||||||||||||||||||||
| Average Balances ($000) and Interest Rates | |||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||
| Quarter ended March 31, 2024 | Quarter ended December 31, 2023 | Quarter ended March 31, 2023 | |||||||||||||||||||||||
| Average | Yield / | Average | Yield / | Average | Yield / | ||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||
| Loans (1)(2) | $ | 1,094,321 | $ | 15,199 | 5.59 | % | $ | 1,094,152 | $ | 14,974 | 5.43 | % | $ | 976,395 | $ | 11,788 | 4.90 | % | |||||||
| Taxable securities | 171,788 | 1,197 | 2.80 | % | 167,366 | 1,147 | 2.72 | % | 199,705 | 1,331 | 2.70 | % | |||||||||||||
| Tax-exempt securities (2) | 80,434 | 666 | 3.33 | % | 80,922 | 673 | 3.30 | % | 81,932 | 680 | 3.37 | % | |||||||||||||
| FHLB stock | 6,499 | 165 | 10.21 | % | 6,373 | 158 | 9.84 | % | 3,059 | 50 | 6.63 | % | |||||||||||||
| Other | 12,885 | 178 | 5.56 | % | 11,846 | 162 | 5.43 | % | 9,024 | 98 | 4.40 | % | |||||||||||||
| Total (2) | 1,365,927 | 17,405 | 5.12 | % | 1,360,659 | 17,114 | 4.99 | % | 1,270,115 | 13,947 | 4.45 | % | |||||||||||||
| Non-interest-earning assets: | |||||||||||||||||||||||||
| Cash and due from banks | 17,367 | 16,243 | 17,255 | ||||||||||||||||||||||
| Premises and equipment, | |||||||||||||||||||||||||
| net | 13,183 | 13,243 | 13,332 | ||||||||||||||||||||||
| Cash surrender value ins | 24,144 | 23,990 | 24,982 | ||||||||||||||||||||||
| Other assets | 21,201 | 22,406 | 23,193 | ||||||||||||||||||||||
| Allowance for credit | |||||||||||||||||||||||||
| losses | (12,385 | ) | (12,301 | ) | (12,366 | ) | |||||||||||||||||||
| Total | $ | 1,429,437 | $ | 1,424,240 | $ | 1,336,511 | |||||||||||||||||||
| Liabilities & stockholders' equity | |||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||
| Savings and demand | |||||||||||||||||||||||||
| deposits | $ | 350,497 | $ | 1,672 | 1.92 | % | $ | 327,036 | $ | 1,296 | 1.57 | % | $ | 373,557 | $ | 1,053 | 1.14 | % | |||||||
| Money market deposits | 274,186 | 1,897 | 2.78 | % | 272,087 | 1,820 | 2.65 | % | 225,624 | 830 | 1.49 | % | |||||||||||||
| Time deposits | 264,657 | 2,513 | 3.82 | % | 273,332 | 2,410 | 3.50 | % | 245,562 | 1,106 | 1.83 | % | |||||||||||||
| FHLB borrowings | 142,926 | 1,450 | 4.08 | % | 133,560 | 1,349 | 4.01 | % | 68,833 | 547 | 3.22 | % | |||||||||||||
| Other borrowings | 8,554 | 60 | 2.82 | % | 6,999 | 54 | 3.06 | % | 10,025 | 62 | 2.51 | % | |||||||||||||
| Senior sub. notes | 4,775 | 59 | 4.97 | % | 4,773 | 59 | 4.90 | % | 5,159 | 62 | 4.87 | % | |||||||||||||
| Junior sub. debentures | 12,934 | 251 | 7.81 | % | 12,909 | 254 | 7.81 | % | 12,832 | 234 | 7.40 | % | |||||||||||||
| Total | 1,058,529 | 7,902 | 3.00 | % | 1,030,696 | 7,242 | 2.79 | % | 941,592 | 3,894 | 1.68 | % | |||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||||
| Demand deposits | 248,670 | 275,944 | 279,348 | ||||||||||||||||||||||
| Other liabilities | 12,765 | 12,540 | 12,208 | ||||||||||||||||||||||
| Stockholders' equity | 109,473 | 105,060 | 103,363 | ||||||||||||||||||||||
| Total | $ | 1,429,437 | $ | 1,424,240 | $ | 1,336,511 | |||||||||||||||||||
| Net interest income | $ | 9,503 | $ | 9,872 | $ | 10,053 | |||||||||||||||||||
| Rate spread | 2.12 | % | 2.20 | % | 2.77 | % | |||||||||||||||||||
| Net yield on interest-earning assets | 2.80 | % | 2.88 | % | 3.21 | % | |||||||||||||||||||
| (1) Nonaccrual loans are included in the daily average loan balances outstanding. | |||||||||||||||||||||||||
| (2) The yield on federally tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%. | |||||||||||||||||||||||||
