PSB Holdings, Inc. Reports Record 2021 Earnings; 4th Quarter Earnings Total $3.1 Million, or $0.71 Per Share

Rhea-AI Summary

PSB Holdings, Inc. (OTCQX: PSBQ) reported a record net income of $12.8 million or $2.88 per share for 2021, up from $10.7 million or $2.40 per share in 2020. Q4 earnings were $0.71 per share, slightly down from $0.82 in Q3. Key drivers included growth in earning assets and lower loan loss provisions, despite lower net interest income due to reduced loan yields and increased operating expenses. Nonperforming assets decreased to 1.06% of total assets. Total deposits rose by $22.2 million to $1.11 billion. The company anticipates benefiting from rising short-term interest rates.

Positive

• Record earnings for 2021 of $12.8 million, or $2.88 per share.
• Total deposits increased by $22.2 million to $1.11 billion.
• Nonperforming assets declined to 1.06% of total assets.
• Loan growth continued; new originations exceeded payoffs.

Negative

• Q4 earnings per share decreased from $0.82 in Q3 to $0.71.
• Lower net interest income due to reduced loan yields.
• Increased operating expenses attributed to severance and incentive compensation.

WAUSAU, Wis., Jan. 28, 2022 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin, reported record earnings for the year ended December 31, 2021 of $12.8 million, or $2.88 per share, compared to $10.7 million, or $2.40 per share, for the year ended December 31, 2020. Fourth quarter earnings ending December 31, 2021 were $0.71 per share on net income of $3.1 million, compared to earnings of $0.82 per share on net income of $3.6 million, during the September 30, 2021 quarter, and $0.73 per share on net income of $3.3 million, during the fourth quarter a year ago.

The Company’s fourth quarter 2021 operating results reflected the following changes from the third quarter of 2021: (1) lower net interest income due to lower yields on loans and investment securities; (2) lower SBA Paycheck Protection Program (“PPP”) origination fee income accretion; and (3) an increase in compensation expense largely due to incentive benefit plans funded later in the year.

“We enjoyed strong organic and acquisition growth during 2021 driving both total assets and earnings to record highs.  Earnings growth was driven by the addition of new earning assets, the recognition of PPP origination fee income and much lower provision for loan losses, which offset a decline in mortgage banking income and higher operating expenses related to the expanded asset base from the acquisition of Waukesha Bankshares, Inc. in April 2021.  Our pipeline for new loan originations looks solid heading into the first quarter of 2022 and we are well positioned to benefit from expected increases in short-term interest rates as net interest margin moves higher,” stated Scott Cattanach, President and CEO.

December 31, 2021 Highlights:

• Net interest income was $9.2 million for the quarter ended December 31, 2021, compared to $9.6 million for the quarter ended September 30, 2021, and $8.4 million for the quarter ended December 31, 2020. PPP related fee income realized during the respective quarters was $287,000, $559,000 and $464,000.
• Loan loss provisions remained at zero for the quarter ended December 31, 2021, relative to the prior quarter and $675,000 for the quarter ended December 31, 2020.
• Noninterest expense increased $411,000 for the quarter ended December 31, 2021, to $7.4 million from $6.9 million the prior quarter. The increase primarily related to increased severance and incentive compensation plan expense from 2021 activities.
• Loan growth continued with new originations outpacing the payoff of PPP related loans. Loans receivable increased to $876 million at December 31, 2021, from $874 million one quarter earlier and $821 million at December 31, 2020. Meanwhile, PPP loans declined $9.5 million from $24.3 million at September 30, 2021, to $14.8 million at December 31, 2021.

As shown in the table below during the December 31, 2021 quarter, “impaired loans” increased $4.5 million and “substandard risk” loans decreased $6.0 million, while “watch risk” loans increased $3.9 million. The primary decrease in “substandard risk” loans and increase in “impaired loans” relates to an equipment dealer loan relationship that was downgraded during the quarter but continues to accrue interest as a performing loan.

Commercial, Commercial Real Estate, Construction & Development, Agricultural and Government Loans ($000s)
Risk Rating			12/2019		12/2020		03/2021		06/2021		09/2021		12/2021
Rating 1	"High Quality"	$	-	$	-	$	-	$	-	$	77	$	-
Rating 2	"Minimal Risk"		57,904		61,223		62,626		60,155		71,304		70,886
Rating 3	"Average Risk"		349,002		390,191		348,102		345,929		347,735		383,951
Rating 4	"Acceptable Risk"		128,932		175,400		209,407		209,728		226,501		222,641
Rating 5	"Watch Risk"		15,933		36,379		30,891		39,577		33,284		37,194
Rating 6	"Substandard Risk"		2,568		7,617		18,134		6,377		10,148		4,182
Rating 7	"Impaired Loans"		5,518		13,153		16,162		15,522		16,790		21,322
Totals		$	559,857	$	683,963	$	685,322	$	677,288	$	705,839	$	740,176
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 remained at $1.30 billion at December 31, 2021.   Cash and cash equivalents have continued to trend down, post acquisition of Waukesha Bankshares, Inc. in April, declining $12.0 million to $53.5 million from $65.5 million one quarter earlier. Meanwhile, securities available for sale increased $8.6 million to $310.4 million at December 31, 2021, from $301.9 million one quarter earlier. The increased balance of investment securities from cash and equivalents helped improve returns from the investment portfolio.

Total loans receivable increased by $1.8 million to $876.3 million at December 31, 2021, from $874.5 million at September 30, 2021. PPP loans declined from $24.3 million at September 30, 2021, to $14.8 million at December 31, 2021. At December 31, 2021, unrealized net PPP origination fee income totaled $360,000.   

The allowance for loan losses increased to 1.38% of gross loans at December 31, 2021, from 1.35% the prior quarter and 1.30% of gross loans one year earlier. Annualized net charge-offs to average loans reflected a net recovery at 0.10% for the quarter ended December 31, 2021. Non-performing assets were 1.06% of total assets at December 31, 2021, compared to 1.16% at September 30, 2021, and 0.90% at December 30, 2020. At December 31, 2021, non-performing assets consisted of $6.4 million in non-accrual loans, $1.0 million in non-accrual restructured loans, $5.2 million in restructured loans not on non-accrual and $1.1 million in foreclosed assets.

Foreclosed assets decreased to $1.1 million at December 31, 2021, from $2.4 million at September 30, 2021, as several properties were sold at a gain. Foreclosed assets were $1.6 million at the beginning of the fiscal year.

Total deposits increased $22.2 million to $1.11 billion at December 31, 2021, compared to $1.08 billion at September 30, 2021. Deposits continued to be withdrawn from retail time deposits while demand deposit accounts increased. At December 31, 2021, interest-bearing demand and savings deposits accounted for 37.4% of total deposits, followed by noninterest-bearing demand deposits at 25.7%, money market deposits at 19.8%, and retail and local time deposits at 15.3%. Broker and national time deposits accounted for 1.7% of total deposits at December 31, 2021, versus 1.5% at December 31, 2020.

FHLB advances decreased to $47.0 million at December 31, 2021, from $62.0 million at September 30, 2021, and $62.0 million at December 31, 2020, while other borrowings decreased $10.5 million to $6.7 million compared to $17.1 million the prior period and $12.2 million at December 31, 2020.

Operations Review

Net interest income totaled $9.2 million (on a net margin of 3.01%) for the fourth quarter of 2021, compared to $9.6 million (on a net margin of 3.15%) for the third quarter of 2021, and $8.4 million (on a net margin of 3.22%) for the fourth quarter of 2020. Earning asset yields decreased 13 basis points from 3.41% to 3.28% during the fourth quarter of 2021, while deposit and borrowing costs increased 2 basis points on a smaller average balance to 0.39% from 0.37% over the same period. The decrease in earning asset yields was partially due to lower net accretion of loan fees of $287,000 related to PPP loans that were repaid compared to net accretion of $559,000 during the September 30, 2021 quarter. Additionally, a large balance of lower yielding investment securities contributed to the decrease in earning asset yields. Taxable security yields decreased from 1.18% in the quarter ended September 30, 2021, to 1.17% for the quarter ended December 31, 2021. Loan yields decreased to 4.02% during the quarter from 4.23% during the third quarter of 2021. Loan yields excluding the impacts of PPP loan origination fee income, were 3.89% and 3.98% during the December 31, 2021 and September 30, 2021 quarters respectively. Net interest margin excluding the impacts of PPP loan origination fee income, was 2.91% and 2.97% in the December 31, 2021 and September 30, 2021 quarters, respectively.   Recognition of PPP loan fee income is expected to decline for first quarter 2022 as fewer PPP loans remain outstanding.

The cost of interest-bearing liabilities increased during the quarter, largely reflecting slightly higher rates associated with time deposits. The cost of deposits was 0.17% for the quarter ended December 31, 2021, compared to 0.15% the prior quarter. Interest costs on borrowings declined $32,000 for the fourth quarter of 2021 as $15.0 million of FHLB advances were repaid.

Total noninterest income increased slightly for the fourth quarter of 2021 to $2.2 million from $2.1 million for the third quarter of 2021, due in part to higher investment and insurance sales commissions which increased from $426,000 in the third quarter to $500,000 in the fourth quarter. At December 31, 2021, the bank had wealth assets under management totaling $321.2 million compared to $301.6 million at September 30, 2021. Gains on sale of mortgage loans decreased slightly to $451,000 for the fourth quarter from $494,000 in the third quarter of 2021, due primarily to lower spreads on sale of loans to the secondary market.

Deposit and service fee income in the fourth quarter remained near the prior quarter levels at $382,000 for the three months ended December 31, 2021, compared to $379,000 for the prior three-month period. For the fourth quarter ended December 31, 2021, other noninterest income was $646,000 compared to $563,000 the prior quarter.

Noninterest expense increased to $7.4 million for the fourth quarter of 2021, compared to $6.9 million for the third quarter of 2021. The fourth quarter of 2021 included increased salaries and employee benefit expenses related to severance expense and higher performance-based incentive expenses. Salary and employee benefit expenses were $4.7 million for the fourth quarter of 2021 compared to $4.1 million in the third quarter of 2021. These expenses were partially offset by gains of $347,000 realized on the sale of two foreclosed real estate properties in the fourth quarter.

Data processing and other office operations costs increased slightly to $855,000 for the quarter ended December 31, 2021, from $828,000 the previous quarter. Meanwhile, advertising and promotion expenses decreased slightly to $155,000 for the most recent quarter compared to $199,000 last quarter. Other noninterest expenses increased to $1.3 million for the fourth quarter ended December 31, 2021, from $1.2 million the previous quarter.

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’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 relating to the COVID-19 pandemic and its effect on PSB 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 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
				Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,
Earnings and dividends:				2021			2021			2021			2021			2020
	Interest income			$	10,085		$	10,449		$	11,070		$	10,482		$	9,442
	Interest expense			$	866		$	826		$	907		$	886		$	1,011
	Net interest income			$	9,219		$	9,623		$	10,163		$	9,596		$	8,431
	Provision for loan losses			$	-		$	-		$	-		$	1,000		$	675
	Other noninterest income			$	2,244		$	2,126		$	2,299		$	2,749		$	2,991
	Other noninterest expense			$	7,357		$	6,946		$	9,607		$	6,200		$	6,461
	Net income			$	3,146		$	3,638		$	2,137		$	3,896		$	3,252
	Basic earnings per share (3)			$	0.71		$	0.82		$	0.48		$	0.88		$	0.73
	Diluted earnings per share (3)			$	0.71		$	0.82		$	0.48		$	0.87		$	0.73
	Dividends declared per share (3)			$	0.23		$	-		$	0.23		$	-		$	0.21
	Tangible net book value per share (4)			$	24.36		$	24.07		$	23.53		$	23.69		$	23.43
	Semi-annual dividend payout ratio				15.05%		n/a				17.04%		n/a				15.88%
	Average common shares outstanding				4,445,465			4,450,755			4,454,922			4,454,334			4,452,287
Balance sheet - average balances:
	Loans receivable, net of allowances for loss			$	870,151		$	862,555		$	891,886		$	827,595		$	807,182
	Assets			$	1,295,780		$	1,292,369		$	1,251,738		$	1,132,905		$	1,100,064
	Deposits			$	1,092,872		$	1,064,553		$	1,023,229		$	925,689		$	896,427
	Stockholders' equity			$	112,089		$	110,388		$	105,932		$	105,868		$	102,790
Performance ratios:
	Return on average assets (1)				0.96%			1.12%			0.68%			1.39%			1.18%
	Return on average stockholders' equity (1)				11.14%			13.08%			8.09%			14.92%			12.59%
	Average stockholders' equity less accumulated
	other comprehensive income (loss) to
	average assets				8.57%			8.39%			8.27%			9.10%			9.00%
	Net loan charge-offs to average loans (1)				-0.10%			-0.08%			0.00%			0.01%			0.16%
	Nonperforming loans to gross loans				1.42%			1.43%			1.31%			1.39%			1.03%
	Nonperforming assets to total assets				1.06%			1.16%			1.07%			1.13%			0.90%
	Allowance for loan losses to gross loans				1.38%			1.35%			1.35%			1.40%			1.30%
	Nonperforming assets to tangible equity
	plus the allowance for loan losses (4)				11.58%			12.87%			11.71%			11.06%			8.96%
	Net interest rate margin (1)(2)				3.01%			3.15%			3.48%			3.62%			3.22%
	Net interest rate spread (1)(2)				2.89%			3.04%			3.37%			3.49%			3.07%
	Service fee revenue as a percent of
	average demand deposits (1)				0.52%			0.53%			0.51%			0.57%			0.59%
	Noninterest income as a percent
	of gross revenue				18.20%			16.91%			17.20%			20.78%			24.06%
	Efficiency ratio (2)				63.37%			58.40%			76.20%			49.64%			55.87%
	Noninterest expenses to average assets (1)				2.25%			2.13%			3.08%			2.22%			2.34%
	Tangible equity to tangible assets				8.35%			8.27%			8.38%			9.32%			9.22%
Stock price information:
	High			$	27.00		$	26.50		$	26.50		$	25.94		$	23.00
	Low			$	24.60		$	24.52		$	25.00		$	20.45		$	17.20
	Last trade value at quarter-end			$	26.05		$	24.95		$	26.25		$	25.25		$	20.57
(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,				Dec. 31,			Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
except per share data - unaudited)				2021			2021		2021		2021		2020
Interest and dividend income:
Loans, including fees				$	8,918		$	9,323	$	9,972	$	9,442	$	8,371
Securities:
Taxable					631			581		553		507		542
Tax-exempt					505			500		505		502		489
Other interest and dividends					31			45		40		31		40
Total interest and dividend income					10,085			10,449		11,070		10,482		9,442
Interest expense:
Deposits					476			404		485		547		657
FHLB advances					192			220		221		215		228
Other borrowings					4			9		8		7		6
Senior subordinated notes					29			28		28		28		29
Junior subordinated debentures					165			165		165		89		91
Total interest expense					866			826		907		886		1,011
Net interest income					9,219			9,623		10,163		9,596		8,431
Provision for loan losses					-			-		-		1,000		675
Net interest income after provision for loan losses					9,219			9,623		10,163		8,596		7,756
Noninterest income:
Service fees					382			379		347		332		352
Gain on sale of mortgage loans					451			494		663		1,152		1,401
Mortgage loan servicing, net					114			111		9		79		104
Investment and insurance sales commissions					500			426		465		595		391
Net gain on sale of securities					-			-		113		21		149
Increase in cash surrender value of life insurance					151			153		148		108		106
Other noninterest income					646			563		554		462		488
Total noninterest income					2,244			2,126		2,299		2,749		2,991
Noninterest expense:
Salaries and employee benefits					4,669			4,099		3,915		3,460		4,084
Occupancy and facilities					596			614		647		569		511
Loss (gain) on foreclosed assets					(347	)		28		23		130		(218	)
Data processing and other office operations					855			828		1,499		694		568
Advertising and promotion					155			199		322		79		172
FDIC insurance premiums					116			121		58		83		82
Other noninterest expenses					1,313			1,057		3,143		1,185		1,262
Total noninterest expense					7,357			6,946		9,607		6,200		6,461
Income before provision for income taxes					4,106			4,803		2,855		5,145		4,286
Provision for income taxes					960			1,165		718		1,249		1,034
Net income				$	3,146		$	3,638	$	2,137	$	3,896	$	3,252
Basic earnings per share				$	0.71		$	0.82	$	0.48	$	0.88	$	0.73
Diluted earnings per share				$	0.71		$	0.82	$	0.48	$	0.87	$	0.73

PSB Holdings, Inc.
Consolidated Statements of Income
				Three Months Ended							Year Ended
(dollars in thousands,				December							December
except per share data - unaudited)					2021			2020				2021			2020
Interest and dividend income:
Loans, including fees				$	8,918		$	8,371			$	37,655		$	33,059
Securities:
Taxable					631			542				2,272			2,461
Tax-exempt					505			489				2,012			1,840
Other interest and dividends					31			40				147			254
Total interest and dividend income					10,085			9,442				42,086			37,614
Interest expense:
Deposits					476			657				1,912			4,052
FHLB advances					192			228				848			1,175
Other borrowings					4			6				28			31
Senior subordinated notes					29			29				113			113
Junior subordinated debentures					165			91				584			364
Total interest expense					866			1,011				3,485			5,735
Net interest income					9,219			8,431				38,601			31,879
Provision for loan losses					-			675				1,000			5,575
Net interest income after provision for loan losses					9,219			7,756				37,601			26,304
Noninterest income:
Service fees					382			352				1,440			1,365
Gain on sale of mortgage loans					451			1,401				2,760			5,887
Mortgage loan servicing, net					114			104				313			(163	)
Investment and insurance sales commissions					500			391				1,986			1,300
Net gain on sale of securities					-			149				134			504
Increase in cash surrender value of life insurance					151			106				560			422
Other noninterest income					646			488				2,225			2,098
Total noninterest income					2,244			2,991				9,418			11,413
Noninterest expense:
Salaries and employee benefits					4,669			4,084				16,143			14,012
Occupancy and facilities					596			511				2,426			2,129
Loss (gain) on foreclosed assets					(347	)		(218	)			(166	)		(88	)
Data processing and other office operations					855			568				3,876			2,630
Advertising and promotion					155			172				755			484
FDIC insurance premiums					116			82				378			192
Other noninterest expenses					1,313			1,262				6,698			4,385
Total noninterest expense					7,357			6,461				30,110			23,744
Income before provision for income taxes					4,106			4,286				16,909			13,973
Provision for income taxes					960			1,034				4,092			3,284
Net income				$	3,146		$	3,252			$	12,817		$	10,689
Basic earnings per share				$	0.71		$	0.73			$	2.88		$	2.40
Diluted earnings per share				$	0.71		$	0.73			$	2.88		$	2.40

PSB Holdings, Inc.
Consolidated Balance Sheets
December 31, September 30, June 30, and March 31, 2021, unaudited, December 31, 2020 derived from audited financial statements
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,
(dollars in thousands, except per share data)	2021			2021			2021			2021			2020
Assets
Cash and due from banks	$	16,896		$	20,813		$	18,589		$	12,921		$	15,723
Interest-bearing deposits		6,579			1,044			906			985			1,056
Federal funds sold		30,068			43,637			52,643			16,027			21,749
Cash and cash equivalents		53,543			65,494			72,138			29,933			38,528
Securities available for sale (at fair value)		310,445			301,853			261,685			227,824			228,296
Bank certificates of deposit (at cost)		245			245			245			1,231			1,231
Loans held for sale		3,061			214			1,756			622			954
Loans receivable, net		876,337			874,524			863,254			829,964			820,956
Accrued interest receivable		3,256			3,273			3,299			3,335			3,527
Foreclosed assets		1,103			2,398			1,984			1,105			1,619
Premises and equipment, net		12,695			12,725			13,241			11,077			10,920
Mortgage servicing rights, net		1,714			1,702			1,696			1,732			1,657
Federal Home Loan Bank stock (at cost)		2,646			2,646			2,646			2,283			2,283
Cash surrender value of bank-owned life insurance		24,305			24,154			24,001			17,902			17,795
Core deposit intangible		534			581			629			-			2
Goodwill		2,541			2,541			2,541			113			113
Other assets		6,286			5,313			5,523			5,102			4,074
TOTAL ASSETS	$	1,298,711		$	1,297,663		$	1,254,638		$	1,132,223		$	1,131,955
Liabilities
Non-interest-bearing deposits	$	284,477		$	291,440		$	273,181		$	242,974		$	236,981
Interest-bearing deposits		820,763			791,601			758,445			682,877			695,156
Total deposits		1,105,240			1,083,041			1,031,626			925,851			932,137
Federal Home Loan Bank advances		47,000			62,000			67,000			62,000			62,000
Other borrowings		6,677			17,129			21,757			18,582			12,239
Senior subordinated notes		2,500			2,500			2,500			2,500			2,500
Junior subordinated debentures		12,717			12,691			12,666			7,732			7,732
Accrued expenses and other liabilities		13,315			10,143			11,103			9,918			10,920
Total liabilities		1,187,449			1,187,504			1,146,652			1,026,583			1,027,528
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 - 4,440,329, 4,447,026, 4,454,922, 4,454,922 and
4,452,287 shares, respectively		1,830			1,830			1,830			1,830			1,830
Additional paid-in capital		8,059			8,003			7,946			7,890			7,818
Retained earnings		114,627			112,502			108,863			107,751			103,855
Accumulated other comprehensive income (loss), net of tax		628			1,530			2,869			1,691			4,458
Treasury stock, at cost - 1,050,469, 1,043,772, 1,035,876, 1,035,876 and
1,038,511 shares, respectively		(13,882	)		(13,706	)		(13,522	)		(13,522	)		(13,534	)
Total stockholders' equity		111,262			110,159			107,986			105,640			104,427
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,298,711		$	1,297,663		$	1,254,638		$	1,132,223		$	1,131,955

PSB Holdings, Inc.
Consolidated Statements of Comprehensive Income
				Three Months Ended							Year Ended
				December 31,							December 31,
(dollars in thousands - unaudited)					2021			2020				2021			2020
Net income				$	3,146		$	3,252			$	12,817		$	10,689
Other comprehensive income, net of tax:
	Unrealized gain (loss) on securities available
		for sale			(973	)		641				(3,927	)		3,577
	Reclassification adjustment for security
		gain included in net income			-			(108	)			(97	)		(366	)
	Unrealized gain (loss) on interest rate swap				31			135				154			(181	)
	Reclassification adjustment of interest rate
		swap settlements included in earnings			40			38				40			126
Other comprehensive income (loss)					(902	)		706				(3,830	)		3,156
Comprehensive income				$	2,244		$	3,958			$	8,987		$	13,845

PSB Holding, Inc.
Loan Composition by Purpose
Quarter-ended (dollars in thousands)	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Residential real estate:
One to four family	$	168,584		$	166,728		$	169,456		$	136,242		$	125,530
HELOC loans		17,198			18,011			18,263			16,908			18,312
Residential construction & development		23,093			25,162			24,385			25,628			25,519
Residential vacant land		1,763			6,629			2,172			2,524			3,305
Total Residential real estate		210,638			216,530			214,276			181,302			172,666
Commercial/Agricultural real estate:
Owner occupied
Commercial real estate		202,416			203,509			202,767			194,514			187,059
SBA commercial real estate		1,568			1,140			1,164			1,445			1,483
Agriculture real estate		3,716			4,046			4,188			4,787			4,429
Construction and land development		22,380			17,705			6,460			4,121			5,468
Commercial vacant land		3,529			3,572			6,490			2,998			2,835
Total Owner occupied		233,609			229,972			221,069			207,865			198,439
Non-owner occupied
Commercial real estate		211,688			212,868			196,011			183,365			173,953
One to four family residential rental		52,437			49,542			47,097			31,914			31,363
SBA commercial real estate		1,010			682			703			718			749
Agricultural real estate		-			-			-			-			-
Construction and land development		25,899			29,618			30,057			31,362			29,846
Commercial vacant land		4,534			4,851			5,203			7,970			8,402
Total Non-owner occupied		295,568			297,561			279,071			255,329			244,313
Commercial/Agricultural non-real estate:
Municipal non-real estate		11,858			7,623			7,014			7,165			11,422
Commercial line		52,151			47,646			45,386			46,833			41,619
Other commercial non-real estate		61,115			54,481			55,002			49,246			52,723
SBA commercial non-real estate		17,527			25,933			47,245			89,603			103,871
Agricultural non-real estate		1,130			1,325			1,656			1,730			1,986
Total Commercial/Agr. non-real estate		143,781			137,008			156,303			194,577			211,621
Consumer non-real estate:
Consumer installment		4,054			4,369			4,399			3,191			3,400
Consumer line		480			477			436			498			353
Other consumer		117			125			130			123			143
Total Consumer non-real estate		4,651			4,971			4,965			3,812			3,896
Gross loans		888,247			886,042			875,684			842,885			833,770
Net deferred loan costs (fees)		107			(167	)		(738	)		(1,627	)		(2,140	)
Overdrafts		205			654			134			528			161
Allowance for loan losses		(12,222	)		(12,005	)		(11,826	)		(11,822	)		(10,835	)
Total loans receivable	$	876,337		$	874,524		$	863,254		$	829,964		$	820,956

PSB Holdings, Inc.
Nonperforming Assets as of:
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(dollars in thousands)	2021			2021			2021			2021			2020
Nonaccrual loans (excluding restructured loans)	$	6,425		$	6,018		$	5,208		$	5,346		$	2,071
Nonaccrual restructured loans		1,000			1,526			1,062			1,090			1,064
Restructured loans not on nonaccrual		5,213			5,159			5,205			5,242			5,414
Accruing loans past due 90 days or more		-			-			-			-			-
Total nonperforming loans		12,638			12,703			11,475			11,678			8,549
Other real estate owned		1,103			2,398			1,984			1,105			1,619
Total nonperforming assets	$	13,741		$	15,101		$	13,459		$	12,783		$	10,168
Nonperforming loans as a % of gross loans receivable		1.42%			1.43%			1.31%			1.39%			1.03%
Total nonperforming assets as a % of total assets		1.06%			1.16%			1.07%			1.13%			0.90%
Allowance for loan losses as a % of nonperforming loans		96.71%			94.51%			103.06%			101.23%			126.74%

PSB Holdings, Inc.
Nonperforming Assets >= $500,000 net book value before specific reserves
At December 31, 2021
(dollars in thousands)
		Gross			Specific
Collateral Description	Asset Type	Principal			Reserves
Real estate - Hotel	Restructured	$	4,744		$	76
Real estate - Buffet Style Restaurant	Nonaccrual		3,200			1,077
Real estate - Hotel	Nonaccrual		941			153
Real estate - Buffet Style Restaurant	Restructured/Nonaccrual		819			21
Total listed nonperforming assets		$	9,704		$	1,327
Total bank wide nonperforming assets		$	13,741		$	1,582
Listed assets as a % of total nonperforming assets			71%			84%
Largest Performing, but Impaired Loans at December 31, 2021 ($000s)
		Gross			Specific
Collateral Description	Asset Type	Principal			Reserves
Real estate - Equipment dealer	Impaired	$	4,677		$	285
Real estate - Hotel	Impaired		3,809			352
Total listed performing, but impaired loans		$	8,486		$	637
Total performing, but impaired loans		$	10,274		$	932
Listed assets as a % of total performing, but impaired loans			83%			68%

PSB Holdings, Inc.
Deposit Composition
	December 31,						September 30,					December 31,
(dollars in thousands)	2021						2021					2020
	$		%				$		%			$		%
Non-interest bearing demand	$	284,477	25.7	%			$	291,440	26.9	%		$	236,981	25.4	%
Interest-bearing demand and savings		413,522	37.4	%				388,725	35.9	%			332,677	35.7	%
Money market deposits		219,145	19.8	%				215,772	19.9	%			222,156	23.8	%
Retail and local time deposits <= $250		140,443	12.8	%				142,439	13.2	%			103,064	11.1	%
Total core deposits		1,057,587	95.7	%				1,038,376	95.9	%			894,878	96.0	%
Retail and local time deposits > $250		28,659	2.6	%				24,824	2.3	%			23,112	2.5	%
Broker & national time deposits <= $250		7,793	0.7	%				8,640	0.8	%			12,153	1.3	%
Broker & national time deposits > $250		11,201	1.0	%				11,201	1.0	%			1,994	0.2	%
Totals	$	1,105,240	100.0	%			$	1,083,041	100.0	%		$	932,137	100.0	%

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)
			Quarter ended December 31, 2021								Quarter ended September 30, 2021								Quarter ended December 31, 2020
			Average					Yield /			Average					Yield /			Average					Yield /
			Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)			$	882,157		$	8,930	4.02	%		$	874,429		$	9,334	4.23	%		$	817,875		$	8,383	4.08	%
Taxable securities				214,626			631	1.17	%			195,160			581	1.18	%			129,832			542	1.66	%
Tax-exempt securities (2)				83,518			639	3.04	%			84,241			633	2.98	%			80,619			619	3.05	%
FHLB stock				2,646			18	2.70	%			2,646			27	4.05	%			2,283			27	4.70	%
Other				53,098			13	0.10	%			75,119			18	0.10	%			27,336			13	0.19	%
Total (2)				1,236,045			10,231	3.28	%			1,231,595			10,593	3.41	%			1,057,945			9,584	3.60	%
Non-interest-earning assets:
Cash and due from banks				19,967								20,310								14,011
Premises and equipment,
net				12,699								12,962								11,023
Cash surrender value ins				24,216								24,059								17,206
Other assets				14,859								15,317								10,572
Allowance for loan
losses				(12,006	)							(11,874	)							(10,693	)
Total			$	1,295,780							$	1,292,369							$	1,100,064
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits			$	388,549		$	76	0.08	%		$	383,136		$	73	0.08	%		$	298,696		$	65	0.09	%
Money market deposits				222,399			93	0.17	%			213,584			90	0.17	%			218,455			128	0.23	%
Time deposits				188,301			307	0.65	%			185,502			241	0.52	%			143,714			464	1.28	%
FHLB borrowings				52,705			192	1.45	%			66,239			220	1.32	%			64,283			228	1.41	%
Other borrowings				11,585			4	0.14	%			24,993			9	0.14	%			16,638			6	0.14	%
Senior sub. notes				2,500			29	4.60	%			2,500			28	4.44	%			2,500			29	4.61	%
Junior sub. debentures				12,704			165	5.15	%			12,679			165	5.16	%			7,732			91	4.68	%
Total				878,743			866	0.39	%			888,633			826	0.37	%			752,018			1,011	0.53	%
Non-interest-bearing liabilities:
Demand deposits				293,623								282,331								235,562
Other liabilities				11,325								11,017								9,694
Stockholders' equity				112,089								110,388								102,790
Total			$	1,295,780							$	1,292,369							$	1,100,064
Net interest income						$	9,365							$	9,767							$	8,573
Rate spread								2.89	%							3.04	%							3.07	%
Net yield on interest-earning assets								3.01	%							3.15	%							3.22	%
(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)
			Year ended December 31, 2021								Year ended December 31, 2020
			Average					Yield/			Average					Yield/
			Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)			$	875,571		$	37,702	4.31	%		$	784,126		$	33,111	4.22	%
Taxable securities				176,816			2,272	1.28	%			112,200			2,461	2.19	%
Tax-exempt securities (2)				84,141			2,547	3.03	%			73,490			2,329	3.17	%
FHLB stock				2,551			89	3.49	%			2,243			106	4.73	%
Other				48,616			58	0.12	%			43,593			148	0.34	%
Total (2)				1,187,695			42,668	3.59	%			1,015,652			38,155	3.76	%
Non-interest-earning assets:
Cash and due from banks				20,003								12,592
Premises and equipment,
net				12,625								11,013
Cash surrender value ins				22,527								16,990
Other assets				14,184								10,484
Allowance for loan
losses				(11,767	)							(8,990	)
Total			$	1,245,267							$	1,057,741
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits			$	364,602		$	279	0.08	%		$	277,014		$	594	0.21	%
Money market deposits				216,888			397	0.18	%			202,666			860	0.42	%
Time deposits				174,001			1,236	0.71	%			158,030			2,598	1.64	%
FHLB borrowings				63,180			848	1.34	%			80,462			1,175	1.46	%
Other borrowings				20,259			28	0.14	%			9,602			31	0.32	%
Senior sub. notes				2,500			113	4.52	%			2,500			113	4.52	%
Junior sub. debentures				10,708			584	5.45	%			7,732			364	4.71	%
Total				852,138			3,485	0.41	%			738,006			5,735	0.78	%
Non-interest-bearing liabilities:
Demand deposits				271,866								211,155
Other liabilities				11,032								9,925
Stockholders' equity				110,231								98,655
Total			$	1,245,267							$	1,057,741
Net interest income						$	39,183							$	32,420
Rate spread								3.18	%							2.98	%
Net yield on interest-earning assets								3.30	%							3.19	%
(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

FAQ

What were PSBQ's earnings for the year ended December 31, 2021?

PSBQ reported record earnings of $12.8 million, or $2.88 per share for the year ended December 31, 2021.

How did PSBQ perform in the fourth quarter of 2021?

In Q4 2021, PSBQ earned $0.71 per share on net income of $3.1 million.

What was the net interest income for PSBQ in Q4 2021?

Net interest income for PSBQ in Q4 2021 was $9.2 million.

What changes occurred in PSBQ's total deposits by December 31, 2021?

Total deposits increased by $22.2 million to $1.11 billion at December 31, 2021.

What is the outlook for PSBQ amid rising interest rates?

PSBQ is well positioned to benefit from expected increases in short-term interest rates.