WAUSAU, Wis., July 29, 2019 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank serving North Central Wisconsin, reported second quarter earnings ending June 30, 2019 of $2.57 million, or $0.57 per share, compared to earnings of $0.61 per share on net income of $2.73 million during the March 2019 quarter and $0.62 per share one year earlier on earnings of $2.77 million. The second quarter earnings included expenses associated with the planned consolidation of a branch office partially offset by an increase in gains on the sale of mortgage loans and security gains. Loan production remained strong, with net loans receivable expanding 2.6% from the previous quarter and 7.4% relative to one year earlier.
“During the past quarter, the bank decided to consolidate its two Rhinelander, WI branch locations following a branch remodeling to be completed in the September 2019 quarter. The branch to be closed was purchased in 2014 from Baraboo State Bank. Due to current real estate market conditions, we recorded a write-down of the branch to be closed, which negatively impacted net income during the June 2019 quarter by $428,000 or $0.10 per share, after income tax benefits. The consolidation combines our retail and commercial lending activities resulting in easier access and full-service for customers from one Rhinelander location, where we continue to be the leader in deposit market share. The change is also expected to improve operating efficiency, which should result in improved branch profitability,” stated Scott Cattanach, President and CEO.
Financial Highlights (at or for the periods ended June 30, 2019, compared to March 31, 2019 and /or June 30, 2018, as applicable):
- The net interest margin increased to 3.72% for the quarter ended June 30, 2019, compared to 3.63% the previous quarter and 3.67% for the second quarter one year earlier. The net interest margin for the second quarter of 2019 reflects a problem loan interest recovery of $109,000 versus an interest recovery of $205,000 for the second quarter of 2018. Excluding the interest recovery for the second quarter of 2019, the net interest margin would have been 3.66%, compared to the interest recovery adjusted margin for the quarter ended June 2018 of 3.57%.
- Return on shareholders’ equity was 11.90% for the quarter compared to 13.42% one quarter earlier and 14.57% for the second quarter one year earlier. Return on average assets was 1.15% for the second quarter of 2019 compared to 1.23% the previous quarter and 1.31% for the second quarter one year earlier. Excluding the expenses associated with consolidating the Rhinelander office, the return on shareholders’ equity was 13.89% for the quarter ended June 30, 2019 and the return on average assets was 1.35% for the same period.
- The efficiency ratio was 62.83% for the second quarter compared to 58.59% one quarter earlier and 57.56% in the year ago quarter. Excluding the expenses associated with closing the Rhinelander office, the efficiency ratio would have been 58.47%.
- Tangible net book value was $19.41 per share at June 30, 2019, an increase of 2.75% from $18.89 per share as of March 31, 2019 and 14.85% from $16.90 per share at June 30, 2018.
Balance Sheet and Asset Quality Review
Total assets were $901.3 million as of June 30, 2019, compared to $893.8 million as of March 31, 2019. Relative to the prior quarter, total assets increased $7.6 million. Meanwhile, total loans receivable increased $17.5 million, partially fueled by origination activity in our Milwaukee loan production office, which grew net loans $6.3 million during the quarter to $61.0 million. Most of the loan growth was in the commercial/agricultural real estate loan portfolio, which increased to $370.3 million at June 30, 2019 from $360.0 million three months earlier. The remainder of the loan growth consisted of commercial/agricultural non-real estate loans which increased to $145.5 million at June 30, 2019 from $139.4 million at March 31, 2019. Non-owner occupied commercial/agricultural real estate loans represented the largest component of the loan portfolio at 30.1% of gross loans at June 30, 2019, followed by residential real estate loans at 24.1%, owner occupied commercial/agricultural real estate loans at 24.0%, commercial loans at 21.3% and consumer loans at 0.5%. The allowance for loan losses was 0.97% of gross loans at June 30, 2019, compared to 0.98% at the end of the previous quarter and 0.97% one year earlier. The annualized net charge-offs to average loans was 0.00% for the quarter ended June 30, 2019 compared to 0.08% at the end of the previous quarter and 0.16% one year earlier.
Non-performing assets declined to 0.42% of total assets at June 30, 2019, compared to 0.84% at March 31, 2019, and 0.67% at June 30, 2018. The decrease in non-performing assets largely relates to a return to accrual status of a commercial real estate credit that leased property to the retailer Shopko. The borrower has secured a replacement tenant for the former Shopko property and loan payments have continued uninterrupted. We continue to work towards a positive resolution with another borrower affected by the Shopko bankruptcy that is on our Watch List with a balance of $2.2 million At June 30, 2019, non-performing assets consisted of $2.3 million in non-accruing loans, $1.0 million in restructured loans not on non-accrual, $270,000 in non-accrual restructured loans and $172,000 in foreclosed assets.
At June 30, 2019, cash and investments totaled $186.3 million compared to $195.7 million at March 31, 2019. During the course of the quarter, cash and investments were reduced in order to fund loan growth and reduce wholesale funding.
Total deposits were $715.2 million at June 30, 2019 compared to $715.4 million at March 31, 2019. At June 30, 2019, interest-bearing demand and savings deposits accounted for 33.30% of total deposits, followed by money market deposits at 23.2%, noninterest-bearing demand deposits at 20.1% and retail and local time deposits at 14.0%. Broker and national time deposits accounted for 5.9% of total deposits at June 30, 2019 versus 6.8% the prior quarter and 9.8% one year earlier. “We have made a concerted effort to reduce our reliance on wholesale deposits and build a stronger base of core deposits to support our lending operations,” stated Mark C. Oldenberg, Chief Financial Officer.
FHLB advances were $59.9 million at June 30, 2019 compared to $51.2 million at March 31, 2019 while other borrowings decreased to $19.2 million from $22.9 million over the same time period.
For the quarter ended June 30, 2019, stockholders’ equity increased $2.0 million, or 2.40%, to $87.1 million, compared to $85.1 million at March 31, 2019. Tangible net book value per share increased 2.75% to $19.41 per share, at June 30, 2019, compared to $18.89 per share at March 31, 2019. PSB’s tangible equity to total assets increased to 9.65% at June 30, 2019, compared to 9.50% at March 31, 2019.
In the first six months of fiscal 2019, PSB repurchased 19,876 shares at an average cost of $23.37 per share versus 34,956 shares repurchased at an average cost of $23.18 for the first six months of fiscal 2018.
Operations Review
Net interest income totaled $7.8 million (on a net margin of 3.72%) for the second quarter of 2019, compared to $7.6 million (on net margin of 3.63%) for the first quarter of 2019 and $7.3 million (on a net margin of 3.67%) for the second quarter of 2018. Net interest income growth from the prior quarter was partially due to a $109,000 interest recapture related to the return of a non-accruing loan to accrual status. Compared to the March 31, 2019 quarter, loans and investment yields increased 8 bps to 4.67% during the quarter ended June 30, 2019 while deposit and borrowing costs rose only 2 bps to 1.25%. Loan yields increased to 5.15%, 5.09% adjusted for interest recapture, from 5.09% during the quarter ended June 30, 2019.
The cost of interest-bearing liabilities increased during the quarter but at a slower rate than the yield on interest-earning assets as fewer wholesale funding sources were utilized and lower costing core deposits were used to fund a larger portion of loans and investments. Deposit costs increased to $1.63 million for the quarter ended June 30, 2019 from $1.55 million the previous quarter. Meanwhile, FHLB advances costs declined to $230,000 from $309,000 due to lower advance utilization.
The provision for loan losses totaled $150,000 during the second quarter of 2019 compared to a provision of $400,000 for the prior linked quarter. The provision primarily relates to new loan originations and an expanding loan portfolio. The prior quarter reflected provisions taken related to a borrower impacted by the Shopko bankruptcy.
Total noninterest income for the second quarter of 2019 was $1.9 million compared to $2.1 million during the preceding quarter and $1.6 million for the second quarter of 2018. The previous quarter included a gain realized on an equity investment of approximately $534,000, due to a change in accounting principle. Service fees and gains on the sale of mortgage loans in the second quarter were $403,000 and $432,000, respectively, compared to $381,000 and $175,000 during the first quarter of 2019. Commissions on investment and insurance sales declined to $310,000 from $333,000 the prior quarter. At June 30, 2019, the bank had wealth assets under management totaling $236.6 million compared to $229.8 million at March 31, 2019 and $219.5 million at June 30, 2018. The year over year growth of assets under management was 7.80%.
Noninterest expense was $6.2 million for the second quarter of 2019 compared to $5.7 million for the first quarter. For the second quarter of 2019, noninterest expense increased due to $589,000 in expenses associated with writing down assets associated with the closing of the Rhinelander office. Meanwhile salaries and benefit expenses and occupancy and facilities declined over the quarter, offset in part by increased data processing 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 north central Wisconsin from nine full-service banking locations in Marathon, Oneida, and Vilas counties and loan production offices in Milwaukee and Stevens Point, Wisconsin. Peoples also provides investment and insurance products, along with retirement planning services, through Peoples Wealth Management, a division of Peoples. PSB Holdings, Inc. is traded under the stock symbol PSBQ on the OTCQX Market. More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.
Forward-Looking Statements
Certain matters discussed in this news release, including without limitation those relating to potential loan and deposit growth, future profits, changes in noninterest income and expenses, pro-forma impacts to income from non-recurring or unusual income and expense items, and future interest rates, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in this release. Among other things, these risks and uncertainties include the strength of the economy, the effects of government policies, including, in particular, interest rate policies, and other risks and assumptions. PSB Holdings, Inc. assumes no obligation to update or supplement forward-looking statements that become untrue because of events subsequent to this press release.
| PSB Holdings, Inc. | ||||||||||||||||||
| Quarterly Financial Summary | ||||||||||||||||||
| (dollars in thousands, except per share data) | Quarter ended | |||||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||||
| Earnings and dividends: | 2019 | 2019 | 2018 | 2018 | 2018 | |||||||||||||
| Interest income | $ | 9,839 | $ | 9,604 | $ | 9,365 | $ | 9,063 | $ | 8,685 | ||||||||
| Interest expense | $ | 2,041 | $ | 2,032 | $ | 1,888 | $ | 1,805 | $ | 1,406 | ||||||||
| Net interest income | $ | 7,798 | $ | 7,572 | $ | 7,477 | $ | 7,258 | $ | 7,279 | ||||||||
| Provision for loan losses | $ | 150 | $ | 400 | $ | 60 | $ | 10 | $ | 30 | ||||||||
| Other noninterest income | $ | 1,903 | $ | 2,117 | $ | 1,718 | $ | 1,615 | $ | 1,553 | ||||||||
| Other noninterest expense | $ | 6,167 | $ | 5,745 | $ | 5,829 | $ | 5,373 | $ | 5,145 | ||||||||
| Net income | $ | 2,572 | $ | 2,731 | $ | 2,529 | $ | 2,661 | $ | 2,767 | ||||||||
| Basic earnings per share (3) | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | $ | 0.62 | ||||||||
| Diluted earnings per share (3) | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | $ | 0.62 | ||||||||
| Dividends declared per share (3) | $ | 0.20 | $ | - | $ | 0.18 | $ | - | $ | 0.18 | ||||||||
| Tangible net book value per share (4) | $ | 19.41 | $ | 18.89 | $ | 17.98 | $ | 17.37 | $ | 16.90 | ||||||||
| Semi-annual dividend payout ratio | 16.95 | % | n/a | 15.65 | % | n/a | 15.49 | % | ||||||||||
| Average common shares outstanding | 4,486,022 | 4,494,568 | 4,488,397 | 4,490,621 | 4,492,059 | |||||||||||||
| Balance sheet - average balances: | ||||||||||||||||||
| Loans receivable, net of allowances for loss | $ | 666,008 | $ | 658,586 | $ | 646,063 | $ | 634,469 | $ | 619,251 | ||||||||
| Assets | $ | 893,998 | $ | 899,263 | $ | 883,373 | $ | 881,518 | $ | 845,816 | ||||||||
| Deposits | $ | 713,910 | $ | 713,257 | $ | 708,318 | $ | 708,521 | $ | 691,706 | ||||||||
| Stockholders' equity | $ | 86,656 | $ | 82,516 | $ | 79,525 | $ | 77,390 | $ | 76,150 | ||||||||
| Performance ratios: | ||||||||||||||||||
| Return on average assets (1) | 1.15 | % | 1.23 | % | 1.14 | % | 1.20 | % | 1.31 | % | ||||||||
| Return on average stockholders' equity (1) | 11.90 | % | 13.42 | % | 12.62 | % | 13.64 | % | 14.57 | % | ||||||||
| Average stockholders' equity less accumulated | ||||||||||||||||||
| other comprehensive income (loss) to | ||||||||||||||||||
| average assets | 9.68 | % | 9.27 | % | 9.22 | % | 9.02 | % | 9.21 | % | ||||||||
| Net loan charge-offs to average loans (1) | 0.00 | % | 0.08 | % | 0.07 | % | -0.06 | % | 0.16 | % | ||||||||
| Nonperforming loans to gross loans | 0.53 | % | 1.11 | % | 0.91 | % | 0.84 | % | 0.81 | % | ||||||||
| Nonperforming assets to total assets | 0.42 | % | 0.84 | % | 0.67 | % | 0.67 | % | 0.67 | % | ||||||||
| Allowance for loan losses to gross loans | 0.97 | % | 0.98 | % | 0.94 | % | 0.98 | % | 0.97 | % | ||||||||
| Nonperforming assets to tangible equity | ||||||||||||||||||
| plus the allowance for loan losses (4) | 4.13 | % | 8.40 | % | 7.20 | % | 7.14 | % | 7.37 | % | ||||||||
| Net interest rate margin (1)(2) | 3.72 | % | 3.63 | % | 3.58 | % | 3.48 | % | 3.67 | % | ||||||||
| Net interest rate spread (1)(2) | 3.42 | % | 3.36 | % | 3.32 | % | 3.23 | % | 3.46 | % | ||||||||
| Service fee revenue as a percent of | ||||||||||||||||||
| average demand deposits (1) | 1.14 | % | 1.12 | % | 1.15 | % | 1.16 | % | 1.13 | % | ||||||||
| Noninterest income as a percent | ||||||||||||||||||
| of gross revenue | 16.21 | % | 18.06 | % | 15.50 | % | 15.12 | % | 15.17 | % | ||||||||
| Efficiency ratio (2) | 62.83 | % | 58.59 | % | 62.54 | % | 59.75 | % | 57.56 | % | ||||||||
| Noninterest expenses to average assets (1) | 2.77 | % | 2.59 | % | 2.62 | % | 2.42 | % | 2.44 | % | ||||||||
| Tangible equity to actual assets | 9.65 | % | 9.50 | % | 8.81 | % | 8.83 | % | 8.61 | % | ||||||||
| Stock price information: | ||||||||||||||||||
| High | $ | 24.75 | $ | 23.45 | $ | 27.50 | $ | 27.45 | $ | 24.67 | ||||||||
| Low | $ | 22.00 | $ | 21.25 | $ | 21.10 | $ | 24.08 | $ | 23.08 | ||||||||
| Last trade value at quarter-end | $ | 24.00 | $ | 22.75 | $ | 22.50 | $ | 27.20 | $ | 24.67 | ||||||||
| (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 and any preferred stock capital elements. | ||||||||||||||||||
| 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) | 2019 | 2019 | 2018 | 2018 | 2018 | |||||||||||
| Interest and dividend income: | ||||||||||||||||
| Loans, including fees | $ | 8,629 | $ | 8,334 | $ | 8,125 | $ | 7,814 | $ | 7,579 | ||||||
| Securities: | ||||||||||||||||
| Taxable | 730 | 713 | 714 | 732 | 677 | |||||||||||
| Tax-exempt | 389 | 396 | 424 | 394 | 364 | |||||||||||
| Other interest and dividends | 91 | 161 | 102 | 123 | 65 | |||||||||||
| Total interest and dividend income | 9,839 | 9,604 | 9,365 | 9,063 | 8,685 | |||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 1,634 | 1,553 | 1,435 | 1,324 | 1,078 | |||||||||||
| FHLB advances | 230 | 309 | 315 | 359 | 221 | |||||||||||
| Other borrowings | 57 | 51 | 18 | 1 | 3 | |||||||||||
| Senior subordinated notes | 28 | 28 | 28 | 28 | 29 | |||||||||||
| Junior subordinated debentures | 92 | 91 | 92 | 93 | 75 | |||||||||||
| Total interest expense | 2,041 | 2,032 | 1,888 | 1,805 | 1,406 | |||||||||||
| Net interest income | 7,798 | 7,572 | 7,477 | 7,258 | 7,279 | |||||||||||
| Provision for loan losses | 150 | 400 | 60 | 10 | 30 | |||||||||||
| Net interest income after provision for loan losses | 7,648 | 7,172 | 7,417 | 7,248 | 7,249 | |||||||||||
| Noninterest income: | ||||||||||||||||
| Service fees | 403 | 381 | 419 | 415 | 389 | |||||||||||
| Gain on sale of mortgage loans | 432 | 175 | 227 | 286 | 258 | |||||||||||
| Mortgage loan servicing, net | 84 | 125 | 129 | 115 | 131 | |||||||||||
| Investment and insurance sales commissions | 310 | 333 | 430 | 299 | 274 | |||||||||||
| Net gain on sale of securities | 121 | 18 | - | - | - | |||||||||||
| Increase in cash surrender value of life insurance | 101 | 98 | 96 | 95 | 93 | |||||||||||
| Other noninterest income | 452 | 987 | 417 | 405 | 408 | |||||||||||
| Total noninterest income | 1,903 | 2,117 | 1,718 | 1,615 | 1,553 | |||||||||||
| Noninterest expense: | ||||||||||||||||
| Salaries and employee benefits | 3,322 | 3,428 | 3,566 | 3,244 | 3,101 | |||||||||||
| Occupancy and facilities | 591 | 601 | 526 | 499 | 534 | |||||||||||
| Loss (gain) on foreclosed assets | 3 | 4 | (17 | ) | (7 | ) | (18 | ) | ||||||||
| Data processing and other office operations | 646 | 577 | 654 | 649 | 625 | |||||||||||
| Advertising and promotion | 120 | 100 | 163 | 98 | 74 | |||||||||||
| FDIC insurance premiums | 63 | 59 | 61 | 63 | 65 | |||||||||||
| Other noninterest expenses | 1,422 | 976 | 876 | 827 | 764 | |||||||||||
| Total noninterest expense | 6,167 | 5,745 | 5,829 | 5,373 | 5,145 | |||||||||||
| Income before provision for income taxes | 3,384 | 3,544 | 3,306 | 3,490 | 3,657 | |||||||||||
| Provision for income taxes | 812 | 813 | 777 | 829 | 890 | |||||||||||
| Net income | $ | 2,572 | $ | 2,731 | $ | 2,529 | $ | 2,661 | $ | 2,767 | ||||||
| Basic earnings per share | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | $ | 0.62 | ||||||
| Diluted earnings per share | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | $ | 0.62 | ||||||
| PSB Holdings, Inc. | ||||||||||||||
| Consolidated Statements of Income | ||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| (dollars in thousands, | June | June | ||||||||||||
| except per share data - unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Interest and dividend income: | ||||||||||||||
| Loans, including fees | $ | 8,629 | $ | 7,579 | $ | 16,963 | $ | 14,550 | ||||||
| Securities: | ||||||||||||||
| Taxable | 730 | 677 | 1,443 | 1,353 | ||||||||||
| Tax-exempt | 389 | 364 | 785 | 699 | ||||||||||
| Other interest and dividends | 91 | 65 | 252 | 159 | ||||||||||
| Total interest and dividend income | 9,839 | 8,685 | 19,443 | 16,761 | ||||||||||
| Interest expense: | ||||||||||||||
| Deposits | 1,634 | 1,078 | 3,187 | 2,056 | ||||||||||
| FHLB advances | 230 | 221 | 539 | 411 | ||||||||||
| Other borrowings | 57 | 3 | 108 | 5 | ||||||||||
| Senior subordinated notes | 28 | 29 | 56 | 55 | ||||||||||
| Junior subordinated debentures | 92 | 75 | 183 | 141 | ||||||||||
| Total interest expense | 2,041 | 1,406 | 4,073 | 2,668 | ||||||||||
| Net interest income | 7,798 | 7,279 | 15,370 | 14,093 | ||||||||||
| Provision for loan losses | 150 | 30 | 550 | 60 | ||||||||||
| Net interest income after provision for loan losses | 7,648 | 7,249 | 14,820 | 14,033 | ||||||||||
| Noninterest income: | ||||||||||||||
| Service fees | 403 | 389 | 784 | 777 | ||||||||||
| Gain on sale of mortgage loans | - | - | - | - | ||||||||||
| Mortgage banking income | 516 | 389 | 816 | 771 | ||||||||||
| Investment and insurance sales commissions | 310 | 274 | 643 | 578 | ||||||||||
| Net gain on sale of securities | 121 | - | 139 | - | ||||||||||
| Increase in cash surrender value of life insurance | 101 | 93 | 199 | 182 | ||||||||||
| Other noninterest income | 452 | 408 | 1,439 | 835 | ||||||||||
| Total noninterest income | 1,903 | 1,553 | 4,020 | 3,143 | ||||||||||
| Noninterest expense: | ||||||||||||||
| Salaries and employee benefits | 3,322 | 3,101 | 6,750 | 6,384 | ||||||||||
| Occupancy and facilities | 591 | 534 | 1,192 | 1,090 | ||||||||||
| Loss (gain) on foreclosed assets | 3 | (18 | ) | 7 | (10 | ) | ||||||||
| Data processing and other office operations | 646 | 625 | 1,223 | 1,260 | ||||||||||
| Advertising and promotion | 120 | 74 | 220 | 159 | ||||||||||
| FDIC insurance premiums | 63 | 65 | 122 | 123 | ||||||||||
| Other noninterest expenses | 1,422 | 764 | 2,398 | 1,505 | ||||||||||
| Total noninterest expense | 6,167 | 5,145 | 11,912 | 10,511 | ||||||||||
| Income before provision for income taxes | 3,384 | 3,657 | 6,928 | 6,665 | ||||||||||
| Provision for income taxes | 812 | 890 | 1,625 | 1,543 | ||||||||||
| Net income | $ | 2,572 | $ | 2,767 | $ | 5,303 | $ | 5,122 | ||||||
| Basic earnings per share | $ | 0.57 | $ | 0.62 | $ | 1.18 | $ | 1.14 | ||||||
| Diluted earnings per share | $ | 0.57 | $ | 0.62 | $ | 1.18 | $ | 1.14 | ||||||
| PSB Holdings, Inc. | ||||||||||||||||
| Consolidated Statements of Comprehensive Income | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| (dollars in thousands - unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net income | $ | 2,572 | $ | 2,767 | $ | 5,303 | $ | 5,122 | ||||||||
| Other comprehensive income, net of tax: | ||||||||||||||||
| Unrealized gain (loss) on securities available | ||||||||||||||||
| for sale | 995 | (232 | ) | 2,510 | (1,280 | ) | ||||||||||
| Reclassification adjustment for security | ||||||||||||||||
| gain included in net income | (88 | ) | - | (101 | ) | - | ||||||||||
| Amortization of unrealized gain included in net | ||||||||||||||||
| income on securities available for sale | ||||||||||||||||
| transferred to securities held to maturity | (1 | ) | (10 | ) | (6 | ) | (25 | ) | ||||||||
| Unrealized loss on interest rate swap | (142 | ) | (60 | ) | (218 | ) | (59 | ) | ||||||||
| Reclassification adjustment of interest rate | ||||||||||||||||
| swap settlements included in earnings | 6 | 2 | 9 | 2 | ||||||||||||
| Other comprehensive income (loss) | 770 | (300 | ) | 2,194 | (1,362 | ) | ||||||||||
| Comprehensive income | $ | 3,342 | $ | 2,467 | $ | 7,497 | $ | 3,760 | ||||||||
| PSB Holdings, Inc. | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| June 30, 2019, March 31, 2019, September 30, and June 30, 2018 unaudited, December 31, 2018 derived from audited financial statements | |||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | |||||||||||
| (dollars in thousands, except per share data) | 2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 11,825 | $ | 8,917 | $ | 18,923 | $ | 15,348 | $ | 11,876 | |||||
| Interest-bearing deposits | 2,306 | 349 | 501 | 930 | 453 | ||||||||||
| Federal funds sold | 4,552 | 12,989 | 24,554 | 14,246 | 19,493 | ||||||||||
| Cash and cash equivalents | 18,683 | 22,255 | 43,978 | 30,524 | 31,822 | ||||||||||
| Securities available for sale (at fair value) | 123,586 | 127,368 | 113,821 | 114,997 | 114,939 | ||||||||||
| Securities held to maturity (fair values of $42,511, $43,338, $57,607, $59,341 and | |||||||||||||||
| $61,487 respectively) | 42,074 | 43,061 | 58,311 | 60,421 | 62,299 | ||||||||||
| Bank certificates of deposit (at cost) | 1,984 | 2,976 | 2,976 | 2,976 | 2,976 | ||||||||||
| Loans held for sale | 50 | 245 | 358 | - | 405 | ||||||||||
| Loans receivable, net | 678,247 | 660,756 | 658,481 | 636,712 | 631,620 | ||||||||||
| Accrued interest receivable | 2,844 | 2,826 | 2,777 | 2,709 | 2,544 | ||||||||||
| Foreclosed assets | 172 | 113 | 113 | 483 | 736 | ||||||||||
| Premises and equipment, net | 9,749 | 10,426 | 10,209 | 10,339 | 10,524 | ||||||||||
| Mortgage servicing rights, net | 1,738 | 1,781 | 1,805 | 1,805 | 1,817 | ||||||||||
| Federal Home Loan Bank stock (at cost) | 1,662 | 1,657 | 2,330 | 2,011 | 2,297 | ||||||||||
| Cash surrender value of bank-owned life insurance | 16,564 | 16,463 | 16,365 | 15,407 | 15,312 | ||||||||||
| Other assets | 3,961 | 3,836 | 4,474 | 4,893 | 4,655 | ||||||||||
| TOTAL ASSETS | $ | 901,314 | $ | 893,763 | $ | 915,998 | $ | 883,277 | $ | 881,946 | |||||
| Liabilities | |||||||||||||||
| Non-interest-bearing deposits | $ | 143,423 | $ | 138,124 | $ | 148,611 | $ | 151,484 | $ | 138,079 | |||||
| Interest-bearing deposits | 571,794 | 577,263 | 577,215 | 565,799 | 571,512 | ||||||||||
| Total deposits | 715,217 | 715,387 | 725,826 | 717,283 | 709,591 | ||||||||||
| Federal Home Loan Bank advances | 59,915 | 51,165 | 81,071 | 64,660 | 71,523 | ||||||||||
| Other borrowings | 19,179 | 22,870 | 8,379 | 4,864 | 1,140 | ||||||||||
| Senior subordinated notes | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | ||||||||||
| Junior subordinated debentures | 7,732 | 7,732 | 7,732 | 7,732 | 7,732 | ||||||||||
| Accrued expenses and other liabilities | 9,668 | 9,047 | 9,650 | 8,144 | 13,412 | ||||||||||
| Total liabilities | 814,211 | 808,701 | 835,158 | 805,183 | 805,898 | ||||||||||
| 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 - 4,480,585, 4,495,110, 4,487,895, 4,488,720 and | |||||||||||||||
| 4,491,789 shares, respectively | 1,830 | 1,830 | 1,830 | 1,830 | 1,830 | ||||||||||
| Additional paid-in capital | 7,490 | 7,497 | 7,430 | 7,384 | 7,339 | ||||||||||
| Retained earnings | 89,986 | 88,314 | 85,583 | 83,861 | 81,200 | ||||||||||
| Accumulated other comprehensive income (loss), net of tax | 543 | (227 | ) | (1,651 | ) | (2,649 | ) | (2,059 | ) | ||||||
| Treasury stock, at cost - 1,010,213, 995,688, 1,002,903, 1,002,078 and | |||||||||||||||
| 999,009 shares, respectively | (12,746 | ) | (12,352 | ) | (12,352 | ) | (12,332 | ) | (12,262 | ) | |||||
| Total stockholders' equity | 87,103 | 85,062 | 80,840 | 78,094 | 76,048 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 901,314 | $ | 893,763 | $ | 915,998 | $ | 883,277 | $ | 881,946 | |||||
| PSB Holding, Inc. | ||||||||||||||||
| Loan Composition by Purpose | ||||||||||||||||
| Quarter-ended (dollars in thousands) | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||
| Total Loans | ||||||||||||||||
| Residential real estate | ||||||||||||||||
| One to four family | $ | 117,093 | $ | 116,393 | $ | 117,970 | $ | 120,130 | $ | 119,736 | ||||||
| HELOC loans | 22,158 | 23,631 | 24,746 | 25,880 | 25,529 | |||||||||||
| Residential construction & development | 20,937 | 18,893 | 16,413 | 13,483 | 12,464 | |||||||||||
| Residential vacant land | 4,680 | 5,052 | 5,370 | 5,507 | 7,017 | |||||||||||
| Total Residential real estate | 164,868 | 163,969 | 164,499 | 165,000 | 164,746 | |||||||||||
| Commercial/Agricultural real estate | ||||||||||||||||
| Owner occupied | ||||||||||||||||
| Commercial real estate | 149,507 | 147,435 | 145,480 | 141,043 | 136,248 | |||||||||||
| SBA commercial real estate | 1,386 | 1,741 | 1,769 | 1,888 | 1,560 | |||||||||||
| Agriculture real estate | 5,764 | 5,078 | 4,968 | 4,895 | 4,547 | |||||||||||
| Construction and land development | 7,832 | 6,523 | 350 | - | - | |||||||||||
| Total Owner occupied | 164,489 | 160,777 | 152,567 | 147,826 | 142,355 | |||||||||||
| Non-owner occupied | ||||||||||||||||
| Commercial real estate | 168,809 | 161,647 | 147,246 | 134,860 | 135,162 | |||||||||||
| SBA commercial real estate | 141 | 146 | 151 | 156 | 160 | |||||||||||
| Agricultural real estate | - | - | 315 | 321 | 331 | |||||||||||
| Construction and land development | 22,159 | 22,014 | 35,288 | 32,481 | 31,377 | |||||||||||
| Commercial vacant land | 14,702 | 15,404 | 13,800 | 14,414 | 11,535 | |||||||||||
| Total Non-owner occupied | 205,811 | 199,211 | 196,800 | 182,232 | 178,565 | |||||||||||
| Commercial/Agricultural non-real estate | ||||||||||||||||
| Municipal non-real estate | 9,017 | 6,353 | 6,806 | 6,661 | 8,532 | |||||||||||
| Commercial line | 65,252 | 58,117 | 68,300 | 62,357 | 64,652 | |||||||||||
| Other commercial non-real estate | 65,500 | 69,073 | 65,829 | 68,446 | 69,474 | |||||||||||
| SBA commercial non-real estate | 2,252 | 2,169 | 2,278 | 2,557 | 2,785 | |||||||||||
| Agricultural non-real estate | 3,491 | 3,699 | 3,994 | 4,366 | 3,396 | |||||||||||
| Total Commercial/Agricultural non-real estate | 145,512 | 139,411 | 147,207 | 144,387 | 148,839 | |||||||||||
| Consumer non-real estate | ||||||||||||||||
| Consumer installment | 3,093 | 2,793 | 2,755 | 2,629 | 2,415 | |||||||||||
| Consumer line | 304 | 344 | 243 | 216 | 220 | |||||||||||
| Other consumer | 195 | 190 | 218 | 212 | 199 | |||||||||||
| Total Consumer non-real estate | 3,592 | 3,327 | 3,216 | 3,057 | 2,834 | |||||||||||
| Gross loans | 684,272 | 666,695 | 664,289 | 642,502 | 637,339 | |||||||||||
| Net deferred loan costs | 300 | 272 | 213 | 212 | 237 | |||||||||||
| Overdrafts | 339 | 296 | 211 | 278 | 217 | |||||||||||
| Allowance for loan losses | (6,664 | ) | (6,507 | ) | (6,232 | ) | (6,280 | ) | (6,173 | ) | ||||||
| Total loans receivable | $ | 678,247 | $ | 660,756 | $ | 658,481 | $ | 636,712 | $ | 631,620 | ||||||
| PSB Holdings, Inc. | ||||||||||||||
| Deposit Composition | ||||||||||||||
| June 30, | December 31, | |||||||||||||
| (dollars in thousands) | 2019 | 2018 | 2018 | |||||||||||
| $ | % | $ | % | $ | % | |||||||||
| Non-interest bearing demand | $ | 143,423 | 20.1 | % | $ | 138,079 | 19.5 | % | $ | 148,611 | 20.5 | % | ||
| Interest-bearing demand and savings | 237,922 | 33.3 | % | 245,734 | 34.6 | % | 254,857 | 35.1 | % | |||||
| Money market deposits | 165,918 | 23.2 | % | 138,807 | 19.6 | % | 145,300 | 20.0 | % | |||||
| Retail and local time deposits <= $250 | 100,560 | 14.0 | % | 98,066 | 13.8 | % | 99,584 | 13.8 | % | |||||
| Total core deposits | 647,823 | 90.6 | % | 620,686 | 87.5 | % | 648,352 | 89.4 | % | |||||
| Wholesale interest-bearing demand | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||
| Retail and local time deposits > $250 | 25,077 | 3.5 | % | 18,952 | 2.7 | % | 22,131 | 3.0 | % | |||||
| Broker & national time deposits <= $250 | 3,470 | 0.5 | % | 4,369 | 0.6 | % | 2,483 | 0.3 | % | |||||
| Broker & national time deposits > $250 | 38,847 | 5.4 | % | 65,584 | 9.2 | % | 52,860 | 7.3 | % | |||||
| Totals | $ | 715,217 | 100.0 | % | $ | 709,591 | 100.0 | % | $ | 725,826 | 100.0 | % | ||
| Nonperforming Assets as of: | June | December 31, | |||||||||
| (dollars in thousands) | 2019 | 2018 | 2018 | ||||||||
| Nonaccrual loans (excluding restructured loans) | $ | 2,306 | $ | 2,856 | $ | 3,422 | |||||
| Nonaccrual restructured loans | 270 | 327 | 313 | ||||||||
| Restructured loans not on nonaccrual | 1,048 | 1,998 | 2,284 | ||||||||
| Accruing loans past due 90 days or more | - | - | - | ||||||||
| Total nonperforming loans | 3,624 | 5,181 | 6,019 | ||||||||
| Foreclosed assets | 172 | 736 | 113 | ||||||||
| Total nonperforming assets | $ | 3,796 | $ | 5,917 | $ | 6,132 | |||||
| Nonperforming loans as a % of gross loans receivable | 0.53 | % | 0.81 | % | 0.91 | % | |||||
| Total nonperforming assets as a % of total assets | 0.42 | % | 0.67 | % | 0.67 | % | |||||
| Allowance for loan losses as a % of nonperforming loans | 183.89 | % | 119.15 | % | 103.54 | % | |||||
| PSB Holdings, Inc. | |||||||||||||||||
| Average Balances ($000) and Interest Rates | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Quarter ended June 30, 2019 | Quarter ended June 30, 2018 | ||||||||||||||||
| Average | Yield / | Average | Yield / | ||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||
| Assets | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Loans (1)(2) | $ | 672,576 | $ | 8,641 | 5.15 | % | $ | 625,518 | $ | 7,589 | 4.87 | % | |||||
| Taxable securities | 106,737 | 730 | 2.74 | % | 107,976 | 677 | 2.51 | % | |||||||||
| Tax-exempt securities (2) | 61,851 | 492 | 3.19 | % | 60,746 | 461 | 3.04 | % | |||||||||
| FHLB stock | 1,593 | 24 | 6.04 | % | 1,875 | 18 | 3.85 | % | |||||||||
| Other | 11,470 | 67 | 2.34 | % | 11,291 | 47 | 1.67 | % | |||||||||
| Total (2) | 854,227 | 9,954 | 4.67 | % | 807,406 | 8,792 | 4.37 | % | |||||||||
| Non-interest-earning assets: | |||||||||||||||||
| Cash and due from banks | 10,837 | 9,575 | |||||||||||||||
| Premises and equipment, | |||||||||||||||||
| net | 10,422 | 10,568 | |||||||||||||||
| Cash surrender value ins | 16,506 | 15,261 | |||||||||||||||
| Other assets | 8,574 | 9,273 | |||||||||||||||
| Allowance for loan | |||||||||||||||||
| losses | (6,568 | ) | (6,267 | ) | |||||||||||||
| Total | $ | 893,998 | $ | 845,816 | |||||||||||||
| Liabilities & stockholders' equity | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Savings and demand | |||||||||||||||||
| deposits | $ | 239,929 | $ | 417 | 0.70 | % | $ | 237,466 | $ | 289 | 0.49 | % | |||||
| Money market deposits | 161,070 | 392 | 0.98 | % | 138,464 | 159 | 0.46 | % | |||||||||
| Time deposits | 171,501 | 825 | 1.93 | % | 177,366 | 630 | 1.42 | % | |||||||||
| FHLB borrowings | 51,014 | 230 | 1.81 | % | 54,748 | 221 | 1.62 | % | |||||||||
| Other borrowings | 22,302 | 57 | 1.03 | % | 4,450 | 3 | 0.27 | % | |||||||||
| Senior sub. notes | 2,500 | 28 | 4.49 | % | 2,500 | 29 | 4.65 | % | |||||||||
| Junior sub. debentures | 7,732 | 92 | 4.77 | % | 7,732 | 75 | 3.89 | % | |||||||||
| Total | 656,048 | 2,041 | 1.25 | % | 622,726 | 1,406 | 0.91 | % | |||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||
| Demand deposits | 141,410 | 138,410 | |||||||||||||||
| Other liabilities | 9,884 | 8,530 | |||||||||||||||
| Stockholders' equity | 86,656 | 76,150 | |||||||||||||||
| Total | $ | 893,998 | $ | 845,816 | |||||||||||||
| Net interest income | $ | 7,913 | $ | 7,386 | |||||||||||||
| Rate spread | 3.42 | % | 3.46 | % | |||||||||||||
| Net yield on interest-earning assets | 3.72 | % | 3.67 | % | |||||||||||||
| (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, 2019 | Six months ended June 30, 2018 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||
| Assets | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Loans (1)(2) | $ | 668,732 | $ | 16,986 | 5.12 | % | $ | 620,098 | $ | 14,573 | 4.74 | % | |||||
| Taxable securities | 105,933 | 1,443 | 2.75 | % | 109,539 | 1,353 | 2.49 | % | |||||||||
| Tax-exempt securities (2) | 63,472 | 994 | 3.16 | % | 58,601 | 885 | 3.05 | % | |||||||||
| FHLB stock | 1,803 | 59 | 6.60 | % | 1,873 | 41 | 4.41 | % | |||||||||
| Other | 16,701 | 193 | 2.33 | % | 15,118 | 118 | 1.57 | % | |||||||||
| Total (2) | 856,641 | 19,675 | 4.63 | % | 805,229 | 16,970 | 4.25 | % | |||||||||
| Non-interest-earning assets: | |||||||||||||||||
| Cash and due from banks | 11,080 | 10,140 | |||||||||||||||
| Premises and equipment, | |||||||||||||||||
| net | 10,402 | 10,554 | |||||||||||||||
| Cash surrender value ins | 16,456 | 15,214 | |||||||||||||||
| Other assets | 8,782 | 9,064 | |||||||||||||||
| Allowance for loan | |||||||||||||||||
| losses | (6,415 | ) | (6,340 | ) | |||||||||||||
| Total | $ | 896,946 | $ | 843,861 | |||||||||||||
| Liabilities & stockholders' equity | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Savings and demand | |||||||||||||||||
| deposits | $ | 246,577 | $ | 889 | 0.73 | % | $ | 239,003 | $ | 557 | 0.47 | % | |||||
| Money market deposits | 153,988 | 691 | 0.90 | % | 138,031 | 304 | 0.44 | % | |||||||||
| Time deposits | 173,515 | 1,607 | 1.87 | % | 176,669 | 1,195 | 1.36 | % | |||||||||
| FHLB borrowings | 57,635 | 539 | 1.89 | % | 53,536 | 411 | 1.55 | % | |||||||||
| Other borrowings | 21,052 | 108 | 1.03 | % | 4,639 | 5 | 0.22 | % | |||||||||
| Senior sub. notes | 2,500 | 56 | 4.52 | % | 2,500 | 55 | 4.44 | % | |||||||||
| Junior sub. debentures | 7,732 | 183 | 4.77 | % | 7,732 | 141 | 3.68 | % | |||||||||
| Total | 662,999 | 4,073 | 1.24 | % | 622,110 | 2,668 | 0.86 | % | |||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||
| Demand deposits | 139,623 | 137,777 | |||||||||||||||
| Other liabilities | 9,670 | 8,731 | |||||||||||||||
| Stockholders' equity | 84,654 | 75,243 | |||||||||||||||
| Total | $ | 896,946 | $ | 843,861 | |||||||||||||
| Net interest income | $ | 15,602 | $ | 14,302 | |||||||||||||
| Rate spread | 3.39 | % | 3.39 | % | |||||||||||||
| Net yield on interest-earning assets | 3.67 | % | 3.58 | % | |||||||||||||
| (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