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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

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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:

2021

2021

2020

2020

2020

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)

2021

2021

2020

2020

2020

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)

2021

2020

2021

2020

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)

2021

2021

2020

2020

2020

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)

2021

2020

2021

2020

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)

2021

2021

2020

2020

2020

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)

Gross

Specific

Collateral Description

Asset Type

Principal

Reserves

Leased retail sales outlet

ORE

$

1,100

-

Real estate - Hotel

Restructured

4,826

158

Real estate - Buffet Style Restaurant

Restructured/Nonaccrual

860

99

Real estate - Buffet Style Restaurant

Nonaccrual

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)

Gross

Specific

Collateral Description

Asset Type

Principal

Reserves

Real estate - 4 Hotel Group

Impaired

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

$

273,181

26.50

%

$

242,974

26.20

%

$

241,914

27.40

%

Interest-bearing demand and savings

366,563

35.40

%

329,100

35.60

%

267,874

30.40

%

Money market deposits

212,285

20.60

%

215,590

23.30

%

202,708

23.00

%

Retail and local time deposits <= $250

140,895

13.70

%

101,866

11.00

%

103,917

11.80

%

Total core deposits

992,924

96.20

%

889,530

96.10

%

816,413

92.60

%

Retail and local time deposits > $250

25,834

2.50

%

23,904

2.60

%

24,399

2.80

%

Broker & national time deposits <= $250

10,874

1.10

%

10,423

1.10

%

15,376

1.70

%

Broker & national time deposits > $250

1,994

0.20

%

1,994

0.20

%

26,033

2.90

%

Totals

$

1,031,626

100.00

%

$

925,851

100.00

%

$

882,221

100.00

%



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 /

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Interest-earning assets:

Loans (1)(2)

$

906,233

$

9,983

4.42

%

$

838,781

$

9,454

4.57

%

$

795,337

$

8,186

4.14

%

Taxable securities

153,960

553

1.44

%

142,539

507

1.44

%

99,621

622

2.51

%

Tax-exempt securities (2)

84,593

639

3.03

%

84,219

635

3.06

%

70,105

565

3.24

%

FHLB stock

2,625

23

3.51

%

2,283

21

3.73

%

2,283

25

4.40

%

Other

42,253

17

0.16

%

22,390

10

0.18

%

58,776

23

0.16

%

Total (2)

1,189,664

11,215

3.78

%

1,090,212

10,627

3.95

%

1,026,122

9,421

3.69

%

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

$

65

0.07

%

$

333,340

$

65

0.08

%

$

261,942

$

127

0.20

%

Money market deposits

213,122

96

0.18

%

217,618

118

0.22

%

197,571

213

0.43

%

Time deposits

182,758

324

0.71

%

138,773

364

1.06

%

169,398

740

1.76

%

FHLB borrowings

71,846

221

1.23

%

62,000

215

1.41

%

90,623

323

1.43

%

Other borrowings

25,525

8

0.13

%

18,964

7

0.15

%

5,857

6

0.41

%

Senior sub. notes

2,500

28

4.49

%

2,500

28

4.54

%

2,500

28

4.50

%

Junior sub. debentures

11,827

165

5.60

%

7,732

89

4.67

%

7,732

91

4.73

%

Total

860,150

907

0.42

%

780,927

886

0.46

%

735,623

1,528

0.84

%

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/

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Interest-earning assets:

Loans (1)(2)

$

872,694

$

19,438

4.49

%

$

753,869

$

16,647

4.44

%

Taxable securities

148,280

1,060

1.44

%

105,300

1,355

2.59

%

Tax-exempt securities (2)

84,407

1,275

3.05

%

68,532

1,110

3.26

%

FHLB stock

2,455

44

3.61

%

2,202

51

4.66

%

Other

32,702

27

0.17

%

45,051

114

0.51

%

Total (2)

1,140,538

21,844

3.86

%

974,954

19,277

3.98

%

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

$

130

0.08

%

$

261,823

$

457

0.35

%

Money market deposits

215,254

214

0.20

%

193,329

586

0.61

%

Time deposits

160,887

688

0.86

%

164,346

1,519

1.86

%

FHLB borrowings

66,950

436

1.31

%

85,555

643

1.51

%

Other borrowings

22,263

15

0.14

%

6,125

20

0.66

%

Senior sub. notes

2,500

56

4.52

%

2,500

56

4.50

%

Junior sub. debentures

10,199

254

5.02

%

7,732

182

4.73

%

Total

821,062

1,793

0.44

%

721,410

3,463

0.97

%

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


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