PSB Holdings, Inc. Reports Second Quarter 2022 Earnings of $3.2 Million, or $0.72 Per Share; Loans Expand 5.7% in Quarter

Rhea-AI Summary

PSB Holdings, Inc. (OTCQX: PSBQ) reported Q2 2022 earnings of $0.72 per share, net income at $3.2 million, down from $0.75 per share and $3.3 million in Q1 2022. Loan growth increased by 5.7% to $925 million, driven by seasonal demand. Net interest income slightly rose to $9.7 million, while noninterest income fell to $1.9 million. Expenses increased by $259,000 to $7.5 million, predominantly due to higher employee costs. The tangible book value decreased to $21.10 per share, influenced by unrealized losses on securities due to rising interest rates.

Positive

• Loan receivables grew by 5.7% to $925 million, indicating strong demand.
• Net interest income increased to $9.7 million, reflecting a stable net interest margin.

Negative

• Earnings decreased to $0.72 per share from $0.75 in Q1 2022.
• Noninterest income declined to $1.9 million from $2.0 million in Q1 2022 due to lower gains on mortgage loan sales.
• Tangible book value dropped to $21.10 per share on unrealized losses from securities.

WAUSAU, Wis., July 25, 2022 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported second quarter earnings ending June 30, 2022 of $0.72 per share on net income of $3.2 million, compared to earnings of $0.75 per share on net income of $3.3 million during the first quarter ending March 31, 2022, and $0.48 per share on net income of $2.1 million during the second quarter ending June 30, 2021. Prior year June 2021 quarterly net income was reduced $2.0 million by costs related to the acquisition of Sunset Bank & Savings, Waukesha, Wisconsin.

The Company’s second quarter 2022 operating results reflected the following changes from the first quarter of 2022: (1) higher net interest income due to increased allocation to higher yielding loans with stable net interest margin; (2) higher salary and employee benefit expenses; and (3) lower noninterest income primarily due to lower gains on the sale of mortgage loans.   Loans grew 5.7% during the quarter ending June 30, 2022, reflecting increased seasonal lending demand and construction project draws with increased commercial customer line of credit usage and commercial real estate loan originations.

“During 2022, we expect to see continued net interest income growth from both recent loan demand and incrementally improving net interest margin. Our lending teams have done an excellent job growing the loan portfolio with a combination of existing customers as well as new customers being brought into the Bank. Additionally, credit quality continues to improve, and operating expenses are expected to remain well-controlled. We believe we will be able to continue to deliver above average returns on tangible equity through the remainder of 2022,” stated Scott Cattanach, President and CEO.

June 30, 2022 Highlights:

• Net interest income increased to $9.7 million for the quarter ended June 30, 2022, compared to $9.6 million for the quarter ended March 31, 2022, and less than the $10.2 million for the quarter ended June 30, 2021. PPP loan fee accretion of $41,000, $313,000, and $1.0 million was recognized during the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively.
  
  
• Noninterest income declined slightly to $1.9 million for the quarter ended June 30, 2022, from $2.0 million the previous quarter. The decline largely reflected a decline in the gain on sale of mortgage loans due to slower refinance origination activity in the rising interest rate environment.
  
  
• Noninterest expense increased $259,000 for the second quarter of 2022, to $7.5 million from $7.2 million the prior quarter. The increase primarily related to increased salary and benefit costs associated with higher health benefit claims.
  
  
• Loans receivable increased $50 million, or 5.7%, to $925 million at June 30, 2022 from $876 million one quarter earlier. At June 30, 2022, there were $1.0 million of PPP related loans yet outstanding. No loss losses provisions have yet been made during 2022.
  
  
• Tangible book value declined to $21.10 per share at June 30, 2022, due primarily to the recording of unrealized losses on securities available for sale driven by actions taken by the Federal Reserve to increase short-term interest rates and market expectations of future rate increases.
  

Balance Sheet and Asset Quality Review

Total assets increased to $1.31 billion at June 30, 2022, from $1.27 billion at March 31, 2022.   Cash and cash equivalents increased to $39.4 million from $37.8 million one quarter earlier. Investment securities decreased $11.0 million to $278.7 million at June 30, 2022 from $289.7 million one quarter earlier. The decreased balance of investment securities reflects their lower fair value in today’s rising rate market and the use of available security liquidity to fund loan originations. At the beginning of the second quarter, the balance of the entire municipal investment portfolio was reclassified as held to maturity. It is expected the reclassification will limit future tangible book value impacts from changes in fair value of securities.

Total loans receivable increased to $925.3 million at June 30, 2022, from $875.6 million at March 31, 2022.   Origination activity was robust during the quarter as seasonal loans increased during the warmer months. In addition to construction loan and commercial lines of credit draws during the quarter, loan growth reflected strong commercial real estate lending originations. PPP loans declined from $3.2 million at March 31, 2022, to $1.0 million at June 30, 2022. Heading into the third quarter, loan growth is expected to slow from the robust year to date pace and return toward historical levels with lower customer demand as economic uncertainty increases.

The allowance for loan losses decreased to 1.32% of gross loans at June 30, 2022, from 1.39% the prior quarter and 1.35% of gross loans one year earlier. Annualized net charge-offs to average loans reflected a net recovery at 0.02% for the quarter ended June 30, 2022. Non-performing assets declined to 0.88% of total assets at June 30, 2022, compared to 1.03% at March 31, 2022, and 1.07% at June 30, 2021. At June 30, 2022, non-performing assets consisted of $6.0 million in non-accrual loans, $146,000 in non-accrual restructured loans, $5.1 million in restructured loans not on non-accrual and $160,000 in foreclosed assets. A former branch location and other real estate owned related to the Sunset Bank acquisition were sold during the June 2022 quarter, reducing foreclosed assets.

Total deposits increased $24.1 million to $1.11 billion at June 30, 2022, compared to $1.09 billion at March 31, 2022, led by growth in non-interest bearing demand, money market and jumbo brokered deposits. At June 30, 2022, interest-bearing demand and savings deposits accounted for 33.8% of total deposits, followed by noninterest-bearing demand deposits at 25.5%, money market deposits at 20.4%, and retail and local time deposits at 14.5%. Broker and national time deposits accounted for 5.8% of total deposits at June 30, 2022, versus 4.1% at March 31, 2022. Brokered deposits have increased to support loan growth and to replace largely seasonal local deposit contraction.

FHLB advances increased to $67.0 million at June 30, 2022, compared to $47.0 million at March 31, 2022, while other borrowings increased to $4.6 million at June 30, 2022, compared to $4.3 million at March 31, 2022.

Operations Review

Net interest income increased to $9.7 million (on a net margin of 3.23%) for the second quarter of 2022, compared to $9.6 million (on a net margin of 3.24%) for the first quarter of 2022, and $10.2 million (on a net margin of 3.48%) for the second quarter of 2021. Earning asset yields increased 6 basis points to 3.57% during the second quarter of 2022, from 3.51% during the first quarter of 2022, while deposit and borrowing costs increased 9 basis points to 0.46% compared to 0.37% during the first quarter of 2022.

The increase in earning asset yields was due to higher yields on investment securities during the quarter ended June 30, 2022.   Taxable security yields increased to 1.68% for the quarter ended June 30, 2022, from 1.42% in the quarter ended March 31, 2022. Loan yields decreased to 4.07% for the second quarter of 2022, from 4.12% for the first quarter of 2022.   However, excluding SBA PPP loan origination income, loan yields were 4.05% in June 2022 compared to 3.98% in March 2022. Interest-bearing liabilities increased during the quarter from modest increases in core deposits along with greater use of brokered deposits at current market rates. Along with a further increase in asset yields, cost of deposits is expected to increase during 2022 as short-term market rates move higher.

Total noninterest income decreased for the second quarter of 2022, to $1.9 million from $2.0 million for the first quarter of 2022, due primarily to a decrease from gains on sale of mortgage loans. While mortgage loan originations have been negatively influenced by the rise in interest rates with less mortgage refinancing activity, mortgage loan servicing income has increased over the past year due in part to greater aggregate income association with the longer than previously expected servicing life. At June 30, 2022, the bank was servicing $391 million in secondary market mortgage loans for others.

Noninterest expense increased to $7.5 million for the second quarter of 2022, compared to $7.2 million for the first quarter of 2022. The second quarter of 2022 included increased salaries and employee benefit expenses related to higher health care benefit plan claims. Salary and employee benefit expenses were $4.5 million for the second quarter of 2022, compared to $4.4 million for the first quarter of 2022.

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.
Consolidated Balance Sheets
June 30, and March 31, 2022, September 30, and June 30, 2021, unaudited, December 31, 2021 derived from audited financial statements
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(dollars in thousands, except per share data)	2022			2022			2021			2021			2021
Assets
Cash and due from banks	$	19,149		$	18,322		$	16,896		$	20,813		$	18,589
Interest-bearing deposits		3,545			5,158			6,579			1,044			906
Federal funds sold		16,689			14,356			30,068			43,637			52,643
Cash and cash equivalents		39,383			37,836			53,543			65,494			72,138
Securities available for sale (at fair value)		190,478			289,704			308,744			300,192			260,062
Securities held to maturity (fair values of $82,567, $0, $0, $0 and
$0 respectively		88,216			-			-			-			-
Equity securities		1,781			1,720			1,701			1,661			1,623
Bank certificates of deposit (at cost)		245			245			245			245			245
Loans held for sale		270			-			3,061			214			1,756
Loans receivable, net		925,260			875,588			876,337			874,524			863,254
Accrued interest receivable		3,285			3,219			3,256			3,273			3,299
Foreclosed assets		160			1,103			1,103			2,398			1,984
Premises and equipment, net		12,981			12,906			12,695			12,725			13,241
Mortgage servicing rights, net		1,711			1,770			1,714			1,702			1,696
Federal Home Loan Bank stock (at cost)		2,646			2,646			2,646			2,646			2,646
Cash surrender value of bank-owned life insurance		24,608			24,455			24,305			24,154			24,001
Core deposit intangible		449			487			534			581			629
Goodwill		2,541			2,541			2,541			2,541			2,541
Other assets		13,550			11,725			6,286			5,313			5,523
TOTAL ASSETS	$	1,307,564		$	1,265,945		$	1,298,711		$	1,297,663		$	1,254,638
Liabilities
Non-interest-bearing deposits	$	283,592		$	272,611		$	284,477		$	291,440		$	273,181
Interest-bearing deposits		829,867			816,794			820,763			791,601			758,445
Total deposits		1,113,459			1,089,405			1,105,240			1,083,041			1,031,626
Federal Home Loan Bank advances		67,000			47,000			47,000			62,000			67,000
Other borrowings		4,601			4,304			6,677			17,129			21,757
Senior subordinated notes		2,500			2,500			2,500			2,500			2,500
Junior subordinated debentures		12,768			12,742			12,717			12,691			12,666
Accrued expenses and other liabilities		10,938			10,208			13,315			10,143			11,103
Total liabilities		1,211,266			1,166,159			1,187,449			1,187,504			1,146,652
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 - 4,423,037, 4,434,840, 4,440,329, 4,447,026 and
4,454,922 shares, respectively		1,830			1,830			1,830			1,830			1,830
Additional paid-in capital		8,238			8,183			8,059			8,003			7,946
Retained earnings		120,043			117,957			114,627			112,502			108,863
Accumulated other comprehensive income (loss), net of tax		(19,423	)		(14,097	)		628			1,530			2,869
Treasury stock, at cost - 1,067,761, 1,055,958, 1,050,469, 1,043,772 and
1,035,876 shares, respectively		(14,390	)		(14,087	)		(13,882	)		(13,706	)		(13,522	)
Total stockholders' equity		96,298			99,786			111,262			110,159			107,986
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,307,564		$	1,265,945		$	1,298,711		$	1,297,663		$	1,254,638

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)	2022			2022			2021			2021			2021
Interest and dividend income:
Loans, including fees	$	9,295		$	9,054		$	8,918		$	9,323		$	9,972
Securities:
Taxable		859			762			631			581			553
Tax-exempt		537			533			505			500			505
Other interest and dividends		52			42			31			45			40
Total interest and dividend income		10,743			10,391			10,085			10,449			11,070
Interest expense:
Deposits		595			443			476			404			485
FHLB advances		234			169			192			220			221
Other borrowings		4			2			4			9			8
Senior subordinated notes		28			28			29			28			28
Junior subordinated debentures		179			166			165			165			165
Total interest expense		1,040			808			866			826			907
Net interest income		9,703			9,583			9,219			9,623			10,163
Provision for loan losses		-			-			-			-			-
Net interest income after provision for loan losses		9,703			9,583			9,219			9,623			10,163
Noninterest income:
Service fees		392			388			382			379			347
Gain on sale of mortgage loans		182			277			451			494			663
Mortgage loan servicing, net		117			176			114			111			9
Investment and insurance sales commissions		404			456			500			426			465
Net gain on sale of securities		-			-			-			-			113
Increase in cash surrender value of life insurance		152			150			151			153			148
Other noninterest income		686			531			646			563			554
Total noninterest income		1,933			1,978			2,244			2,126			2,299
Noninterest expense:
Salaries and employee benefits		4,548			4,390			4,669			4,099			3,915
Occupancy and facilities		629			665			596			614			647
Loss (gain) on foreclosed assets		-			(6	)		(347	)		28			23
Data processing and other office operations		912			861			855			828			1,499
Advertising and promotion		173			152			155			199			322
Core deposit intangible amortization		38			47			47			47			31
Other noninterest expenses		1,151			1,083			1,382			1,131			3,170
Total noninterest expense		7,451			7,192			7,357			6,946			9,607
Income before provision for income taxes		4,185			4,369			4,106			4,803			2,855
Provision for income taxes		993			1,039			960			1,165			718
Net income	$	3,192		$	3,330		$	3,146		$	3,638		$	2,137
Basic earnings per share	$	0.72		$	0.75		$	0.71		$	0.82		$	0.48
Diluted earnings per share	$	0.72		$	0.75		$	0.71		$	0.82		$	0.48

PSB Holdings, Inc.
Consolidated Statements of Income
	Three Months Ended							Six Months Ended
(dollars in thousands,	June							June
except per share data - unaudited)	2022			2021				2022			2021
Interest and dividend income:
Loans, including fees	$	9,295		$	9,972			$	18,349		$	19,414
Securities:
Taxable		859			553				1,621			1,060
Tax-exempt		537			505				1,070			1,007
Other interest and dividends		52			40				94			71
Total interest and dividend income		10,743			11,070				21,134			21,552
Interest expense:
Deposits		595			485				1,038			1,032
FHLB advances		234			221				403			436
Other borrowings		4			8				6			15
Senior subordinated notes		28			28				56			56
Junior subordinated debentures		179			165				345			254
Total interest expense		1,040			907				1,848			1,793
Net interest income		9,703			10,163				19,286			19,759
Provision for loan losses		-			-				-			1,000
Net interest income after provision for loan losses		9,703			10,163				19,286			18,759
Noninterest income:
Service fees		392			347				780			679
Gain on sale of mortgage loans		182			663				459			1,815
Mortgage loan servicing, net		117			9				293			88
Investment and insurance sales commissions		404			465				860			1,060
Net gain on sale of securities		-			113				-			134
Increase in cash surrender value of life insurance		152			148				302			256
Other noninterest income		686			554				1,217			1,016
Total noninterest income		1,933			2,299				3,911			5,048
Noninterest expense:
Salaries and employee benefits		4,548			3,915				8,938			7,375
Occupancy and facilities		629			647				1,294			1,216
Loss (gain) on foreclosed assets		-			23				(6	)		153
Data processing and other office operations		912			1,499				1,773			2,193
Advertising and promotion		173			322				325			401
Core deposit intangible amortization		38			31				85			34
Other noninterest expenses		1,151			3,170				2,234			4,435
Total noninterest expense		7,451			9,607				14,643			15,807
Income before provision for income taxes		4,185			2,855				8,554			8,000
Provision for income taxes		993			718				2,032			1,967
Net income	$	3,192		$	2,137			$	6,522		$	6,033
Basic earnings per share	$	0.72		$	0.48			$	1.47		$	1.35
Diluted earnings per share	$	0.72		$	0.48			$	1.47		$	1.35

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:		2022			2022			2021			2021			2021
	Interest income	$	10,743		$	10,391		$	10,085		$	10,449		$	11,070
	Interest expense	$	1,040		$	808		$	866		$	826		$	907
	Net interest income	$	9,703		$	9,583		$	9,219		$	9,623		$	10,163
	Provision for loan losses	$	-		$	-		$	-		$	-		$	-
	Other noninterest income	$	1,933		$	1,978		$	2,244		$	2,126		$	2,299
	Other noninterest expense	$	7,451		$	7,192		$	7,357		$	6,946		$	9,607
	Net income	$	3,192		$	3,330		$	3,146		$	3,638		$	2,137
	Basic earnings per share (3)	$	0.72		$	0.75		$	0.71		$	0.82		$	0.48
	Diluted earnings per share (3)	$	0.72		$	0.75		$	0.71		$	0.82		$	0.48
	Dividends declared per share (3)	$	0.25		$	-		$	0.23		$	-		$	0.23
	Tangible net book value per share (4)	$	21.10		$	21.82		$	24.36		$	24.07		$	23.53
	Semi-annual dividend payout ratio		16.96	%	n/a				15.05	%	n/a				17.04	%
	Average common shares outstanding		4,428,939			4,433,375			4,445,465			4,450,755			4,454,922
Balance sheet - average balances:
	Loans receivable, net of allowances for loss	$	904,710		$	878,979		$	870,151		$	862,555		$	891,886
	Assets	$	1,290,906		$	1,278,565		$	1,295,780		$	1,292,369		$	1,251,738
	Deposits	$	1,099,314		$	1,084,814		$	1,092,872		$	1,064,553		$	1,023,229
	Stockholders' equity	$	98,261		$	108,803		$	112,089		$	110,388		$	105,932
Performance ratios:
	Return on average assets (1)		0.99	%		1.06	%		0.96	%		1.12	%		0.68	%
	Return on average stockholders' equity (1)		13.03	%		12.41	%		11.14	%		13.08	%		8.09	%
	Average stockholders' equity less accumulated
	other comprehensive income (loss) to
	average assets		8.80	%		8.99	%		8.57	%		8.39	%		8.27	%
	Net loan charge-offs (recoveries) to average loans (1)		-0.02	%		-0.05	%		-0.10	%		-0.08	%		0.00	%
	Nonperforming loans to gross loans		1.21	%		1.34	%		1.42	%		1.43	%		1.31	%
	Nonperforming assets to total assets		0.88	%		1.03	%		1.06	%		1.16	%		1.07	%
	Allowance for loan losses to gross loans		1.32	%		1.39	%		1.38	%		1.35	%		1.35	%
	Nonperforming assets to tangible equity
	plus the allowance for loan losses (4)		11.04	%		12.10	%		11.58	%		12.87	%		11.71	%
	Net interest rate margin (1)(2)		3.23	%		3.24	%		3.01	%		3.15	%		3.48	%
	Net interest rate spread (1)(2)		3.11	%		3.14	%		2.89	%		3.04	%		3.37	%
	Service fee revenue as a percent of
	average demand deposits (1)		0.57	%		0.58	%		0.52	%		0.53	%		0.51	%
	Noninterest income as a percent
	of gross revenue		15.25	%		15.99	%		18.20	%		16.91	%		17.20	%
	Efficiency ratio (2)		63.20	%		61.40	%		63.37	%		58.40	%		76.20	%
	Noninterest expenses to average assets (1)		2.32	%		2.28	%		2.25	%		2.13	%		3.08	%
	Tangible equity to tangible assets (4)		7.15	%		7.66	%		8.35	%		8.27	%		8.38	%
Stock price information:
	High	$	26.35		$	26.45		$	27.00		$	26.50		$	26.50
	Low	$	22.82		$	25.80		$	24.60		$	24.52		$	25.00
	Last trade value at quarter-end	$	23.50		$	26.00		$	26.05		$	24.95		$	26.25
(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 Comprehensive Income
			Quarter Ended
			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(dollars in thousands - unaudited)			2022			2022			2021			2021			2021
Net income			$	3,192		$	3,330		$	3,146		$	3,638		$	2,137
Other comprehensive income, net of tax:
	Unrealized gain (loss) on securities available
		for sale		(5,573	)		(14,847	)		(973	)		(1,374	)		1,224
	Reclassification adjustment for security
		gain included in net income		-			-			-			-			(83	)
	Amortization of unrealized loss included in net
		income on securities available for sale
		transferred to securities held to maturity		176			-			-			-			-
	Unrealized gain (loss) on interest rate swap			43			85			31			(5	)		(4	)
	Reclassification adjustment of interest rate
		swap settlements included in earnings		28			37			40			40			39
Other comprehensive income (loss)				(5,326	)		(14,725	)		(902	)		(1,339	)		1,176
Comprehensive income (loss)			$	(2,134	)	$	(11,395	)	$	2,244		$	2,299		$	3,313

PSB Holdings, Inc.
Nonperforming Assets as of:
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
(dollars in thousands)	2022			2022			2021			2021			2021
Nonaccrual loans (excluding restructured loans)	$	6,036		$	6,537		$	6,425		$	6,018		$	5,208
Nonaccrual restructured loans		146			170			1,000			1,526			1,062
Restructured loans not on nonaccrual		5,137			5,172			5,213			5,159			5,205
Accruing loans past due 90 days or more		-			-			-			-			-
Total nonperforming loans		11,319			11,879			12,638			12,703			11,475
Other real estate owned		160			1,103			1,103			2,398			1,984
Total nonperforming assets	$	11,479		$	12,982		$	13,741		$	15,101		$	13,459
Nonperforming loans as a % of gross loans receivable		1.21	%		1.34	%		1.42	%		1.43	%		1.31	%
Total nonperforming assets as a % of total assets		0.88	%		1.03	%		1.06	%		1.16	%		1.07	%
Allowance for loan losses as a % of nonperforming loans		109.48	%		103.89	%		96.71	%		94.51	%		103.06	%

PSB Holdings, Inc.
Nonperforming Assets >= $500,000 net book value before specific reserves
At June 30, 2022
(dollars in thousands)
		Gross			Specific
Collateral Description	Asset Type	Principal			Reserves
Real estate - Hotel	Restructured	$	4,668		$	1
Real estate - Buffet Style Restaurant	Nonaccrual		3,069			1,327
Real estate - Independent Auto Repair	Nonaccrual		870			120
Total listed nonperforming assets		$	8,607		$	1,448
Total bank wide nonperforming assets		$	11,479		$	1,707
Listed assets as a % of total nonperforming assets			75	%		85	%

PSB Holding, Inc.
Loan Composition by Purpose
Quarter-ended (dollars in thousands)	Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Residential real estate:
One to four family	$	169,437		$	168,083		$	168,584		$	166,728		$	169,456
HELOC loans		17,776			16,709			17,198			18,011			18,263
Residential construction & development		22,462			21,590			23,093			25,162			24,385
Residential vacant land		1,599			1,697			1,763			6,629			2,172
Total Residential real estate		211,274			208,079			210,638			216,530			214,276
Commercial/Agricultural real estate:
Owner occupied
Commercial real estate		205,976			208,271			202,416			203,509			202,767
SBA commercial real estate		2,458			2,530			1,568			1,140			1,164
Agriculture real estate		3,583			3,651			3,716			4,046			4,188
Construction and land development		31,465			26,111			22,380			17,705			6,460
Commercial vacant land		5,351			5,194			3,529			3,572			6,490
Total Owner occupied		248,833			245,757			233,609			229,972			221,069
Non-owner occupied
Commercial real estate		227,400			212,407			211,688			212,868			196,011
One to four family residential rental		61,749			56,305			52,437			49,542			47,097
SBA commercial real estate		-			-			1,010			682			703
Agricultural real estate		-			-			-			-			-
Construction and land development		25,086			23,080			25,899			29,618			30,057
Commercial vacant land		4,287			4,191			4,534			4,851			5,203
Total Non-owner occupied		318,522			295,983			295,568			297,561			279,071
Commercial/Agricultural non-real estate:
Municipal non-real estate		6,352			6,403			11,858			7,623			7,014
Commercial line		65,728			54,626			52,151			47,646			45,386
Other commercial non-real estate		76,065			64,260			61,115			54,481			55,002
SBA commercial non-real estate		3,926			6,068			17,527			25,933			47,245
Agricultural non-real estate		1,409			1,340			1,130			1,325			1,656
Total Commercial/Agr. non-real estate		153,480			132,697			143,781			137,008			156,303
Consumer non-real estate:
Consumer installment		4,305			4,201			4,054			4,369			4,399
Consumer line		493			486			480			477			436
Other consumer		123			118			117			125			130
Total Consumer non-real estate		4,921			4,805			4,651			4,971			4,965
Gross loans		937,030			887,321			888,247			886,042			875,684
Net deferred loan costs (fees)		503			423			107			(167	)		(738	)
Overdrafts		119			185			205			654			134
Allowance for loan losses		(12,392	)		(12,341	)		(12,222	)		(12,005	)		(11,826	)
Total loans receivable	$	925,260		$	875,588		$	876,337		$	874,524		$	863,254

PSB Holdings, Inc.
Deposit Composition
	June 30,					March 31,					December 31,					September 30,					June 30,
(dollars in thousands)	2022					2022					2021					2021					2021
	$		%			$		%			$		%			$		%			$		%
Non-interest bearing demand	$	283,592	25.5	%		$	272,611	25.0	%		$	284,477	25.7	%		$	291,440	26.9	%		$	273,181	26.5	%
Interest-bearing demand and savings		376,150	33.8	%			382,829	35.1	%			413,522	37.4	%			388,725	35.9	%			366,563	35.4	%
Money market deposits		226,907	20.4	%			221,982	20.4	%			219,145	19.8	%			215,772	19.9	%			212,285	20.6	%
Retail and local time deposits <= $250		136,230	12.1	%			138,821	12.8	%			140,443	12.8	%			142,439	13.2	%			140,895	13.7	%
Total core deposits		1,022,879	91.8	%			1,016,243	93.3	%			1,057,587	95.7	%			1,038,376	95.9	%			992,924	96.2	%
Retail and local time deposits > $250		26,882	2.4	%			28,754	2.6	%			28,659	2.6	%			24,824	2.3	%			25,834	2.5	%
Broker & national time deposits <= $250		7,443	0.7	%			7,443	0.7	%			7,793	0.7	%			8,640	0.8	%			10,874	1.1	%
Broker & national time deposits > $250		56,255	5.1	%			36,965	3.4	%			11,201	1.0	%			11,201	1.0	%			1,994	0.2	%
Totals	$	1,113,459	100.0	%		$	1,089,405	100.0	%		$	1,105,240	100.0	%		$	1,083,041	100.0	%		$	1,031,626	100.0	%

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)
	Quarter ended June 30, 2022									Quarter ended March 31, 2022									Quarter ended June 30, 2021
	Average						Yield /			Average						Yield /			Average						Yield /
	Balance			Interest			Rate			Balance			Interest			Rate			Balance			Interest			Rate
Assets
Interest-earning assets:
Loans (1)(2)	$	917,065		$	9,305		4.07	%		$	891,257		$	9,065		4.12	%		$	906,233		$	9,983		4.42	%
Taxable securities		205,040			859		1.68	%			216,965			762		1.42	%			153,960			553		1.44	%
Tax-exempt securities (2)		79,936			680		3.41	%			87,719			675		3.12	%			84,593			639		3.03	%
FHLB stock		2,650			16		2.42	%			2,646			34		5.21	%			2,625			23		3.51	%
Other		20,651			36		0.70	%			20,448			8		0.16	%			42,253			17		0.16	%
Total (2)		1,225,342			10,896		3.57	%			1,219,035			10,544		3.51	%			1,189,664			11,215		3.78	%
Non-interest-earning assets:
Cash and due from banks		18,731									17,996									25,422
Premises and equipment,
net		13,039									12,732									11,640
Cash surrender value ins		24,510									24,361									23,906
Other assets		21,639									16,719									16,004
Allowance for loan
losses		(12,355	)								(12,278	)								(11,816	)
Total	$	1,290,906								$	1,278,565								$	1,254,820
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits	$	379,734		$	122		0.13	%		$	396,261		$	69		0.07	%		$	352,572		$	65		0.07	%
Money market deposits		217,639			121		0.22	%			218,367			89		0.17	%			213,122			96		0.18	%
Time deposits		224,539			352		0.63	%			198,431			285		0.58	%			182,758			324		0.71	%
FHLB borrowings		62,659			234		1.50	%			51,200			169		1.34	%			71,846			221		1.23	%
Other borrowings		5,028			4		0.32	%			6,452			2		0.13	%			25,525			8		0.13	%
Senior sub. notes		2,500			28		4.49	%			2,500			28		4.54	%			2,500			28		4.49	%
Junior sub. debentures		12,755			179		5.63	%			12,730			166		5.29	%			11,827			165		5.60	%
Total		904,854			1,040		0.46	%			885,941			808		0.37	%			860,150			907		0.42	%
Non-interest-bearing liabilities:
Demand deposits		277,402									271,755									274,777
Other liabilities		10,389									12,066									11,430
Stockholders' equity		98,261									108,803									108,463
Total	$	1,290,906								$	1,278,565								$	1,254,820
Net interest income				$	9,856								$	9,736								$	10,308
Rate spread							3.11	%								3.14	%								3.36	%
Net yield on interest-earning assets							3.23	%								3.24	%								3.48	%
(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, 2022									Six months ended June 30, 2021
	Average						Yield/			Average						Yield/
	Balance			Interest			Rate			Balance			Interest			Rate
Assets
Interest-earning assets:
Loans (1)(2)	$	904,232		$	18,370		4.10	%		$	872,694		$	19,438		4.49	%
Taxable securities		210,968			1,621		1.55	%			148,280			1,060		1.44	%
Tax-exempt securities (2)		83,808			1,354		3.26	%			84,407			1,275		3.05	%
FHLB stock		2,648			50		3.81	%			2,455			44		3.61	%
Other		20,326			44		0.44	%			32,702			27		0.17	%
Total (2)		1,221,982			21,439		3.54	%			1,140,538			21,844		3.86	%
Non-interest-earning assets:
Cash and due from banks		18,366									19,866
Premises and equipment,
net		12,886									11,338
Cash surrender value ins		24,436									20,890
Other assets		19,192									13,401
Allowance for loan
losses		(12,316	)								(11,507	)
Total	$	1,284,546								$	1,194,526
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits	$	387,952		$	191		0.10	%		$	343,009		$	130		0.08	%
Money market deposits		217,529			210		0.19	%			215,254			214		0.20	%
Time deposits		211,557			637		0.61	%			160,887			688		0.86	%
FHLB borrowings		56,961			403		1.43	%			66,950			436		1.31	%
Other borrowings		5,736			6		0.21	%			22,263			15		0.14	%
Senior sub. notes		2,500			56		4.52	%			2,500			56		4.52	%
Junior sub. debentures		12,742			345		5.46	%			10,199			254		5.02	%
Total		894,977			1,848		0.42	%			821,062			1,793		0.44	%
Non-interest-bearing liabilities:
Demand deposits		274,598									255,455
Other liabilities		11,400									11,108
Stockholders' equity		103,571									106,901
Total	$	1,284,546								$	1,194,526
Net interest income				$	19,591								$	20,051
Rate spread							3.12	%								3.42	%
Net yield on interest-earning assets							3.23	%								3.55	%
(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 Q2 2022?

PSBQ reported earnings of $0.72 per share for Q2 2022.

How did PSBQ's net income in Q2 2022 compare to Q1 2022?

Net income decreased to $3.2 million in Q2 2022 from $3.3 million in Q1 2022.

What factors contributed to the decline in noninterest income for PSBQ?

The decline in noninterest income to $1.9 million was primarily due to lower gains on the sale of mortgage loans.

How much did PSBQ's loans grow in Q2 2022?

Loans grew by 5.7% to $925 million in Q2 2022.

What is the current tangible book value of PSBQ?

The tangible book value of PSBQ is $21.10 per share as of June 30, 2022.