PSB Holdings, Inc. Third Quarter 2022 Earnings of $0.80 Per Share Up 11% Over Prior Quarter; Nine-Month Earnings Reach $10.0 Million, or $2.27 Per Share

Rhea-AI Summary

PSB Holdings, Inc. (OTCQX: PSBQ) reported third quarter 2022 earnings of $0.80 per share, with net income of $3.5 million, an increase from $3.2 million in Q2 2022 but a slight decrease from $3.6 million in Q3 2021. Net interest income rose to $10.1 million, largely driven by a 1.2% increase in loans. Noninterest income fell to $1.7 million due to declining mortgage loan sales. The company's asset quality remained high, with non-performing assets at 0.85%. Deposit growth was strong, increasing to $1.15 billion. Management anticipates challenges in loan growth due to economic policies.

Positive

• Earnings per share increased to $0.80 from $0.72 in Q2 2022.
• Net interest income rose to $10.1 million, up from $9.7 million in Q2 2022.
• Loans increased by 1.2% to $937 million.
• Non-performing assets decreased to 0.85% of total assets.

Negative

• Noninterest income declined to $1.7 million from $1.9 million in Q2 2022.
• Tangible book value decreased to $20.83 per share from $21.10 in Q2 2022.
• Loan origination growth is expected to face challenges due to economic conditions.

WAUSAU, Wis., Oct. 24, 2022 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported third quarter earnings ending September 30, 2022 of $0.80 per share on net income of $3.5 million, compared to earnings of $0.72 per share on net income of $3.2 million during the second quarter ending June 30, 2022, and $0.82 per share on net income of $3.6 million during the third quarter ending September 30, 2021. Prior year September 2021 quarterly net income reflected higher gains on sale of mortgage loans. Nine-month earnings increased to $2.27 per share for the period ended September 30, 2022 from $2.17 per share for the same nine-month period in 2021.

The Company’s third quarter 2022 operating results reflected the following changes from the second quarter of 2022: (1) higher net interest income due to increased allocation to higher yielding loans and investments; (2) lower noninterest income primarily due to fewer gains on the sale of mortgage loans; and (3) lower salary and employee benefit expenses. Loans grew 1.2% during the quarter ending September 30, 2022, reflecting the addition of adjustable-rate mortgage loans and owner-occupied commercial real estate loans.

“We are pleased with the results for the third quarter. Net income increased despite continued declines in mortgage banking fee income while our net interest margin remained near the previous quarter. We undertook initiatives in the third quarter on deposit pricing that we believe will contribute to a stronger net interest margin in coming quarters. As we look forward to the fourth quarter and 2023, we anticipate loan growth will be challenging due to national economic policies, but we remain well prepared to continue to deliver strong returns to our shareholders,” stated Scott Cattanach, President and CEO.

September 30, 2022 Highlights:

• Net interest income increased to $10.1 million for the quarter ended September 30, 2022, compared to $9.7 million for the quarter ended June 30, 2022, and $9.6 million for the quarter ended September 30, 2021. The third quarter 2022 did not reflect material levels of PPP loan fee accretion when compared to prior quarters.
  
  
• Noninterest income declined to $1.7 million for the quarter ended September 30, 2022, from $1.9 million the previous quarter. The decrease 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 decreased $264,000 for the third quarter of 2022, to $7.2 million from $7.5 million the prior quarter. The decrease primarily related to lower salary and benefit costs.
  
  
• Loans receivable increased $11 million, or 1.2%, to $937 million at September 30, 2022 from $925 million one quarter earlier.
  
  
• Asset quality continued to remain high. At September 30, 2022, non-performing assets declined to 0.85% of total assets from 1.16% one year earlier. No loan loss provisions have yet been made during 2022 due to strong credit quality.
  
  
• While September 2022 quarterly return on average equity reached 14.14%, tangible book value declined to $20.83 per share at September 30, 2022, due to recognition of additional 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 $1.32 billion at September 30, 2022, from $1.31 billion at June 30, 2022. Cash and cash equivalents increased to $40.7 million from $39.4 million during the quarter while investment securities decreased $2.3 million, to $276.4 million at September 30, 2022, from $278.7 million one quarter earlier. The lower balance of investment securities reflects their fair value in today’s rising rate market and the use of available security liquidity to fund loan originations.

Total loans receivable increased to $936.7 million at September 30, 2022, from $925.3 million at June 30, 2022. Origination activity slowed relative to the second quarter but remained active with new owner-occupied commercial real estate and other non-real estate commercial loans portfolios expanding. In addition, the one-to-four family mortgage portfolio increased as consumers migrate to adjustable-rate products. Management expects loan originations to slow in coming quarters as a result of actions taken by the Federal Reserve to slow inflation.

The allowance for loan losses decreased slightly to 1.30% of gross loans at September 30, 2022, from 1.32% the prior quarter and 1.35% of gross loans one year earlier. Annualized net charge-offs to average loans were minimal for the quarter ended September 30, 2022 at 0.01%. Non-performing assets declined to 0.85% of total assets at September 30, 2022, compared to 0.88% at June 30, 2022, and 1.16% at September 30, 2021. At September 30, 2022, non-performing assets consisted of $6.0 million in non-accrual loans, $70,000 in non-accrual restructured loans, $4.9 million in restructured loans not on non-accrual and $160,000 in foreclosed assets.

Total deposits increased $35.4 million to $1.15 billion at September 30, 2022, compared to $1.11 billion at June 30, 2022, led by growth in non-interest bearing demand, money market and jumbo brokered deposits. At September 30, 2022, interest-bearing demand and savings deposits accounted for 32.9% of total deposits, followed by noninterest-bearing demand deposits at 26.0%, money market deposits at 19.9%, and retail and local time deposits at 13.4%. Broker and national time deposits accounted for 7.8% of total deposits at September 30, 2022, compared to 5.8% at June 30, 2022. During the third quarter, brokered deposits increased to support loan growth and as an alternative to higher-costing external borrowings including Federal Home Loan Bank advances.

FHLB advances decreased to $40.0 million at September 30, 2022, compared to $67.0 million at June 30, 2022, while other borrowings increased to $10.4 million at September 30, 2022, compared to $4.6 million at June 30, 2022.

Tangible stockholder equity as a percent of total tangible assets was 6.98% at September 30, 2022 compared to 7.15% one quarter earlier. On a per share basis, tangible book value was $20.83 at September 30, 2022 compared to $21.10 per share one quarter earlier. Tangible stockholder equity has been negatively impacted by rising interest rates where the valuation of investment securities available for sale have reflected negative marks relative to market rates at the end of the quarter.

Operations Review

Net interest income increased to $10.1 million (on a net margin of 3.24%) for the third quarter of 2022, compared to $9.7 million (on a net margin of 3.23%) for the second quarter of 2022, and $9.6 million (on a net margin of 3.15%) for the third quarter of 2021. Earning asset yields increased 24 basis points to 3.81% during the third quarter of 2022, from 3.57% during the second quarter of 2022, while deposit and borrowing costs increased 31 basis points to 0.77% compared to 0.46% during the second quarter of 2022. In anticipation of rising interest rates associated with the Federal Reserve’s aggressive policy to fight inflation and the rising cost of wholesale funding alternatives, management raised deposit rates more aggressively than peers, including core depositors. In upcoming quarters, deposit rates for core deposit customers are expected to mirror rates offered by local competition. These more aggressive deposit rate increases limited margin expansion during the September 2022 quarter, but margin is expected to expand in coming quarters as deposit rates increases are more targeted.

The increase in earning asset yields was due to higher yields on investment securities during the quarter ended September 30, 2022. Taxable security yields increased to 1.94% for the quarter ended September 30, 2022, from 1.68% in the quarter ended June 30, 2022. Loan yields increased to 4.30% for the third quarter of 2022, from 4.07% for the second quarter of 2022 as loans repriced to higher indices, new loans were added to the portfolio and nearly all low yielding SBA PPP loans were repaid. Interest-bearing liabilities increased during the quarter from increases in core deposits along with greater use of brokered deposits at current market rates. Along with a further increase in asset yields, deposit costs are expected to increase during the Federal Reserve’s increasing interest rate posture as short-term market rates move higher.

Total noninterest income decreased for the third quarter of 2022, to $1.7 million from $1.9 million for the second 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 to reduced amortization charges appropriate for management’s expectation of an extended portfolio servicing life. At September 30, 2022, the bank was servicing $387.4 million in secondary market mortgage loans for others.

Noninterest expense decreased to $7.2 million for the third quarter of 2022, compared to $7.5 million for the second quarter of 2022. The third quarter of 2022 included lower salaries and employee benefit expenses. Salary and employee benefit expenses were $4.3 million for the third quarter of 2022, compared to $4.5 million for the second 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
September 30, June 30, and March 31, 2022, and September 30, 2021, unaudited, December 31, 2021 derived from audited financial statements
	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(dollars in thousands, except per share data)		2022			2022			2022			2021			2021
Assets
Cash and due from banks	$	16,659		$	19,149		$	18,322		$	16,896		$	20,813
Interest-bearing deposits		3,267			3,545			5,158			6,579			1,044
Federal funds sold		20,751			16,689			14,356			30,068			43,637
Cash and cash equivalents		40,677			39,383			37,836			53,543			65,494
Securities available for sale (at fair value)		188,425			190,478			289,704			308,744			300,192
Securities held to maturity		87,993			88,216			-			-			-
Equity securities		1,870			1,781			1,720			1,701			1,661
Bank certificates of deposit (at cost)		-			245			245			245			245
Loans held for sale		-			270			-			3,061			214
Loans receivable, net		936,686			925,260			875,588			876,337			874,524
Accrued interest receivable		3,493			3,285			3,219			3,256			3,273
Foreclosed assets		160			160			1,103			1,103			2,398
Premises and equipment, net		13,129			12,981			12,906			12,695			12,725
Mortgage servicing rights, net		1,651			1,711			1,770			1,714			1,702
Federal Home Loan Bank stock (at cost)		2,516			2,646			2,646			2,646			2,646
Cash surrender value of bank-owned life insurance		24,765			24,608			24,455			24,305			24,154
Core deposit intangible		415			449			487			534			581
Goodwill		2,541			2,541			2,541			2,541			2,541
Other assets		15,248			13,550			11,725			6,286			5,313
TOTAL ASSETS	$	1,319,569		$	1,307,564		$	1,265,945		$	1,298,711		$	1,297,663
Liabilities
Non-interest-bearing deposits	$	298,335		$	283,592		$	272,611		$	284,477		$	291,440
Interest-bearing deposits		850,483			829,867			816,794			820,763			791,601
Total deposits		1,148,818			1,113,459			1,089,405			1,105,240			1,083,041
Federal Home Loan Bank advances		40,000			67,000			47,000			47,000			62,000
Other borrowings		10,449			4,601			4,304			6,677			17,129
Senior subordinated notes		2,500			2,500			2,500			2,500			2,500
Junior subordinated debentures		12,793			12,768			12,742			12,717			12,691
Accrued expenses and other liabilities		10,114			10,938			10,208			13,315			10,143
Total liabilities		1,224,674			1,211,266			1,166,159			1,187,449			1,187,504
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 - 4,414,651, 4,423,037, 4,434,840, 4,440,329 and
4,447,026 shares, respectively		1,830			1,830			1,830			1,830			1,830
Additional paid-in capital		8,294			8,238			8,183			8,059			8,003
Retained earnings		123,559			120,043			117,957			114,627			112,502
Accumulated other comprehensive income (loss), net of tax		(24,200	)		(19,423	)		(14,097	)		628			1,530
Treasury stock, at cost - 1,076,147, 1,067,761, 1,055,958, 1,050,469 and
1,043,772 shares, respectively		(14,588	)		(14,390	)		(14,087	)		(13,882	)		(13,706	)
Total stockholders' equity		94,895			96,298			99,786			111,262			110,159
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,319,569		$	1,307,564		$	1,265,945		$	1,298,711		$	1,297,663

PSB Holdings, Inc.
Consolidated Statements of Income
				Quarter Ended
(dollars in thousands,				Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
except per share data - unaudited)				2022			2022			2022			2021			2021
Interest and dividend income:
Loans, including fees				$	10,225		$	9,295		$	9,054		$	8,918		$	9,323
Securities:
Taxable					978			859			762			631			581
Tax-exempt					540			537			533			505			500
Other interest and dividends					163			52			42			31			45
Total interest and dividend income					11,906			10,743			10,391			10,085			10,449
Interest expense:
Deposits					1,341			595			443			476			404
FHLB advances					209			234			169			192			220
Other borrowings					14			4			2			4			9
Senior subordinated notes					28			28			28			29			28
Junior subordinated debentures					202			179			166			165			165
Total interest expense					1,794			1,040			808			866			826
Net interest income					10,112			9,703			9,583			9,219			9,623
Provision for loan losses					-			-			-			-			-
Net interest income after provision for loan losses					10,112			9,703			9,583			9,219			9,623
Noninterest income:
Service fees					409			392			388			382			379
Gain on sale of mortgage loans					98			182			277			451			494
Mortgage loan servicing, net					130			117			176			114			111
Investment and insurance sales commissions					357			404			456			500			426
Increase in cash surrender value of life insurance					157			152			150			151			153
Other noninterest income					558			686			531			646			563
Total noninterest income					1,709			1,933			1,978			2,244			2,126
Noninterest expense:
Salaries and employee benefits					4,302			4,548			4,390			4,669			4,099
Occupancy and facilities					687			629			665			596			614
Loss (gain) on foreclosed assets					4			-			(6	)		(347	)		28
Data processing and other office operations					906			912			861			855			828
Advertising and promotion					185			173			152			155			199
Core deposit intangible amortization					34			38			47			47			47
Other noninterest expenses					1,069			1,151			1,083			1,382			1,131
Total noninterest expense					7,187			7,451			7,192			7,357			6,946
Income before provision for income taxes					4,634			4,185			4,369			4,106			4,803
Provision for income taxes					1,119			993			1,039			960			1,165
Net income				$	3,515		$	3,192		$	3,330		$	3,146		$	3,638
Basic earnings per share				$	0.80		$	0.72		$	0.75		$	0.71		$	0.82
Diluted earnings per share				$	0.80		$	0.72		$	0.75		$	0.71		$	0.82

PSB Holdings, Inc.
Consolidated Statements of Income
				Three Months Ended							Nine Months Ended
(dollars in thousands,				September							September
except per share data - unaudited)					2022			2021				2022			2021
Interest and dividend income:
Loans, including fees				$	10,225		$	9,323			$	28,574		$	28,737
Securities:
Taxable					978			581				2,599			1,641
Tax-exempt					540			500				1,610			1,507
Other interest and dividends					163			45				257			116
Total interest and dividend income					11,906			10,449				33,040			32,001
Interest expense:
Deposits					1,341			404				2,379			1,436
FHLB advances					209			220				612			656
Other borrowings					14			9				20			24
Senior subordinated notes					28			28				84			84
Junior subordinated debentures					202			165				547			419
Total interest expense					1,794			826				3,642			2,619
Net interest income					10,112			9,623				29,398			29,382
Provision for loan losses					-			-				-			1,000
Net interest income after provision for loan losses					10,112			9,623				29,398			28,382
Noninterest income:
Service fees					409			379				1,189			1,058
Gain on sale of mortgage loans					98			494				557			2,309
Mortgage loan servicing, net					130			111				423			199
Investment and insurance sales commissions					357			426				1,217			1,486
Net gain on sale of securities					-			-				-			134
Increase in cash surrender value of life insurance					157			153				459			409
Other noninterest income					558			563				1,775			1,579
Total noninterest income					1,709			2,126				5,620			7,174
Noninterest expense:
Salaries and employee benefits					4,302			4,099				13,240			11,474
Occupancy and facilities					687			614				1,981			1,830
Loss (gain) on foreclosed assets					4			28				(2	)		181
Data processing and other office operations					906			828				2,679			3,021
Advertising and promotion					185			199				510			600
Core deposit intangible amortization					34			47				119			81
Other noninterest expenses					1,069			1,131				3,303			5,566
Total noninterest expense					7,187			6,946				21,830			22,753
Income before provision for income taxes					4,634			4,803				13,188			12,803
Provision for income taxes					1,119			1,165				3,151			3,132
Net income				$	3,515		$	3,638			$	10,037		$	9,671
Basic earnings per share				$	0.80		$	0.82			$	2.27		$	2.17
Diluted earnings per share				$	0.80		$	0.82			$	2.27		$	2.17

PSB Holdings, Inc.
Quarterly Financial Summary
(dollars in thousands, except per share data)				Quarter ended
				Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
Earnings and dividends:					2022			2022			2022			2021			2021
Interest income				$	11,906		$	10,743		$	10,391		$	10,085		$	10,449
Interest expense				$	1,794		$	1,040		$	808		$	866		$	826
Net interest income				$	10,112		$	9,703		$	9,583		$	9,219		$	9,623
Provision for loan losses				$	-		$	-		$	-		$	-		$	-
Other noninterest income				$	1,709		$	1,933		$	1,978		$	2,244		$	2,126
Other noninterest expense				$	7,187		$	7,451		$	7,192		$	7,357		$	6,946
Net income				$	3,515		$	3,192		$	3,330		$	3,146		$	3,638
Basic earnings per share (3)				$	0.80		$	0.72		$	0.75		$	0.71		$	0.82
Diluted earnings per share (3)				$	0.80		$	0.72		$	0.75		$	0.71		$	0.82
Dividends declared per share (3)				$	-		$	0.25		$	-		$	0.23		$	-
Tangible net book value per share (4)				$	20.83		$	21.10		$	21.82		$	24.36		$	24.07
Semi-annual dividend payout ratio				n/a				16.96	%	n/a				15.05	%	n/a
Average common shares outstanding					4,419,421			4,428,939			4,433,375			4,445,465			4,450,755
Balance sheet - average balances:
Loans receivable, net of allowances for loss				$	931,344		$	904,710		$	878,979		$	870,151		$	862,555
Assets				$	1,323,400		$	1,290,906		$	1,278,565		$	1,295,780		$	1,292,369
Deposits				$	1,141,784		$	1,099,314		$	1,084,814		$	1,092,872		$	1,064,553
Stockholders' equity				$	98,630		$	98,261		$	108,803		$	112,089		$	110,388
Performance ratios:
Return on average assets (1)					1.05	%		0.99	%		1.06	%		0.96	%		1.12	%
Return on average stockholders' equity (1)					14.14	%		13.03	%		12.41	%		11.14	%		13.08	%
Average stockholders' equity less accumulated
other comprehensive income (loss) to
average assets					8.95	%		8.80	%		8.99	%		8.57	%		8.39	%
Net loan charge-offs to average loans (1)					0.01	%		-0.02	%		-0.05	%		-0.10	%		-0.08	%
Nonperforming loans to gross loans					1.16	%		1.21	%		1.34	%		1.42	%		1.43	%
Nonperforming assets to total assets					0.85	%		0.88	%		1.03	%		1.06	%		1.16	%
Allowance for loan losses to gross loans					1.30	%		1.32	%		1.39	%		1.38	%		1.35	%
Nonperforming assets to tangible equity
plus the allowance for loan losses (4)					10.89	%		11.04	%		12.10	%		11.58	%		12.87	%
Net interest rate margin (1)(2)					3.24	%		3.23	%		3.24	%		3.01	%		3.15	%
Net interest rate spread (1)(2)					3.04	%		3.11	%		3.14	%		2.89	%		3.04	%
Service fee revenue as a percent of
average demand deposits (1)					0.56	%		0.57	%		0.58	%		0.52	%		0.53	%
Noninterest income as a percent
of gross revenue					12.55	%		15.25	%		15.99	%		18.20	%		16.91	%
Efficiency ratio (2)					60.02	%		63.20	%		61.40	%		63.37	%		58.40	%
Noninterest expenses to average assets (1)					2.15	%		2.32	%		2.28	%		2.25	%		2.13	%
Tangible equity to tangible assets (4)					6.98	%		7.15	%		7.66	%		8.35	%		8.27	%
Stock price information:
High				$	23.94		$	26.35		$	26.45		$	27.00		$	26.50
Low				$	22.50		$	22.82		$	25.80		$	24.60		$	24.52
Last trade value at quarter-end				$	22.50		$	23.50		$	26.00		$	26.05		$	24.95
(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
				Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(dollars in thousands - unaudited)					2022			2022			2022			2021			2021
Net income				$	3,515		$	3,192		$	3,330		$	3,146		$	3,638
Other comprehensive income, net of tax:
	Unrealized gain (loss) on securities available
		for sale			(4,915	)		(5,485	)		(14,847	)		(973	)		(1,374	)
	Amortization of unrealized loss included in net
		income on securities available for sale
		transferred to securities held to maturity			92			88			-			-			-
	Unrealized gain (loss) on interest rate swap				32			43			85			31			(5	)
	Reclassification adjustment of interest rate
		swap settlements included in earnings			13			28			37			40			40
Other comprehensive income (loss)					(4,778	)		(5,326	)		(14,725	)		(902	)		(1,339	)
Comprehensive income (loss)				$	(1,263	)	$	(2,134	)	$	(11,395	)	$	2,244		$	2,299

PSB Holdings, Inc.
Nonperforming Assets as of:
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(dollars in thousands)		2022			2022			2022			2021			2021
Nonaccrual loans (excluding restructured loans)	$	6,048		$	6,036		$	6,537		$	6,425		$	6,018
Nonaccrual restructured loans		70			146			170			1,000			1,526
Restructured loans not on nonaccrual		4,904			5,137			5,172			5,213			5,159
Accruing loans past due 90 days or more		-			-			-			-			-
Total nonperforming loans		11,022			11,319			11,879			12,638			12,703
Other real estate owned		160			160			1,103			1,103			2,398
Total nonperforming assets	$	11,182		$	11,479		$	12,982		$	13,741		$	15,101
Nonperforming loans as a % of gross loans receivable		1.16	%		1.21	%		1.34	%		1.42	%		1.43	%
Total nonperforming assets as a % of total assets		0.85	%		0.88	%		1.03	%		1.06	%		1.16	%
Allowance for loan losses as a % of nonperforming loans		112.28	%		109.48	%		103.89	%		96.71	%		94.51	%

PSB Holdings, Inc.
Nonperforming Assets >= $500,000 net book value before specific reserves
At September 30, 2022
(dollars in thousands)
		Gross			Specific
Collateral Description	Asset Type	Principal			Reserves
Real estate - Hotel	Restructured	$	4,630		$	-
Real estate - Buffet Style Restaurant	Nonaccrual		3,003			1,262
Real estate - Independent Auto Repair	Nonaccrual		834			104
Total listed nonperforming assets		$	8,467		$	1,366
Total bank wide nonperforming assets		$	11,182		$	1,620
Listed assets as a % of total nonperforming assets			76	%		84	%

PSB Holding, Inc.
Loan Composition by Purpose
Quarter-ended (dollars in thousands)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
Residential real estate:
One to four family	$	172,913		$	169,437		$	168,083		$	168,584		$	166,728
HELOC loans		18,423			17,776			16,709			17,198			18,011
Residential construction & development		22,313			22,462			21,590			23,093			25,162
Residential vacant land		3,069			1,599			1,697			1,763			6,629
Total Residential real estate		216,718			211,274			208,079			210,638			216,530
Commercial/Agricultural real estate:
Owner occupied
Commercial real estate		211,008			205,976			208,271			202,416			203,509
SBA commercial real estate		2,616			2,458			2,530			1,568			1,140
Agriculture real estate		3,902			3,583			3,651			3,716			4,046
Construction and land development		32,158			31,465			26,111			22,380			17,705
Commercial vacant land		5,214			5,351			5,194			3,529			3,572
Total Owner occupied		254,898			248,833			245,757			233,609			229,972
Non-owner occupied
Commercial real estate		225,823			227,400			212,407			211,688			212,868
One to four family residential rental		66,224			61,749			56,305			52,437			49,542
SBA commercial real estate		-			-			-			1,010			682
Agricultural real estate		-			-			-			-			-
Construction and land development		25,543			25,086			23,080			25,899			29,618
Commercial vacant land		4,010			4,287			4,191			4,534			4,851
Total Non-owner occupied		321,600			318,522			295,983			295,568			297,561
Commercial/Agricultural non-real estate:
Municipal non-real estate		7,133			6,352			6,403			11,858			7,623
Commercial line		56,154			65,728			54,626			52,151			47,646
Other commercial non-real estate		82,430			76,065			64,260			61,115			54,481
SBA commercial non-real estate		3,378			3,926			6,068			17,527			25,933
Agricultural non-real estate		1,491			1,409			1,340			1,130			1,325
Total Commercial/Agr. non-real estate		150,586			153,480			132,697			143,781			137,008
Consumer non-real estate:
Consumer installment		4,005			4,305			4,201			4,054			4,369
Consumer line		494			493			486			480			477
Other consumer		116			123			118			117			125
Total Consumer non-real estate		4,615			4,921			4,805			4,651			4,971
Gross loans		948,417			937,030			887,321			888,247			886,042
Net deferred loan costs (fees)		537			503			423			107			(167	)
Overdrafts		107			119			185			205			654
Allowance for loan losses		(12,375	)		(12,392	)		(12,341	)		(12,222	)		(12,005	)
Total loans receivable	$	936,686		$	925,260		$	875,588		$	876,337		$	874,524

PSB Holdings, Inc.
Deposit Composition
	September 30,						June 30,						March 31,					December 31,					September 30,
(dollars in thousands)		2022						2022						2022					2021					2021
	$		%				$		%				$		%			$		%			$		%
Non-interest bearing demand	$	298,335	26.0	%			$	283,592	25.5	%			$	272,611	25.0	%		$	284,477	25.7	%		$	291,440	26.9	%
Interest-bearing demand and savings		377,831	32.9	%				376,150	33.8	%				382,829	35.1	%			413,522	37.4	%			388,725	35.9	%
Money market deposits		228,619	19.9	%				226,907	20.4	%				221,982	20.4	%			219,145	19.8	%			215,772	19.9	%
Retail and local time deposits <= $250		132,095	11.4	%				136,230	12.1	%				138,821	12.8	%			140,443	12.8	%			142,439	13.2	%
Total core deposits		1,036,880	90.2	%				1,022,879	91.8	%				1,016,243	93.3	%			1,057,587	95.7	%			1,038,376	95.9	%
Retail and local time deposits > $250		22,799	2.0	%				26,882	2.4	%				28,754	2.6	%			28,659	2.6	%			24,824	2.3	%
Broker & national time deposits <= $250		6,700	0.6	%				7,443	0.7	%				7,443	0.7	%			7,793	0.7	%			8,640	0.8	%
Broker & national time deposits > $250		82,439	7.2	%				56,255	5.1	%				36,965	3.4	%			11,201	1.0	%			11,201	1.0	%
Totals	$	1,148,818	100.0	%			$	1,113,459	100.0	%			$	1,089,405	100.0	%		$	1,105,240	100.0	%		$	1,083,041	100.0	%

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)
			Quarter ended September 30, 2022								Quarter ended June 30, 2022								Quarter ended September 30, 2021
			Average					Yield /			Average					Yield /			Average					Yield /
			Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)			$	943,724		$	10,235	4.30	%		$	917,065		$	9,305	4.07	%		$	874,429		$	9,334	4.23	%
Taxable securities				199,727			978	1.94	%			205,040			859	1.68	%			195,160			581	1.18	%
Tax-exempt securities (2)				82,242			684	3.30	%			79,936			680	3.41	%			84,241			633	2.98	%
FHLB stock				2,579			32	4.92	%			2,650			16	2.42	%			2,646			27	4.05	%
Other				28,823			131	1.80	%			20,651			36	0.70	%			75,119			18	0.10	%
Total (2)				1,257,095			12,060	3.81	%			1,225,342			10,896	3.57	%			1,231,595			10,593	3.41	%
Non-interest-earning assets:
Cash and due from banks				19,400								18,731								20,310
Premises and equipment,
net				13,052								13,039								12,962
Cash surrender value ins				24,666								24,510								24,059
Other assets				21,567								21,639								15,317
Allowance for loan
losses				(12,380	)							(12,355	)							(11,874	)
Total			$	1,323,400							$	1,290,906							$	1,292,369
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits			$	375,617		$	370	0.39	%		$	379,734		$	122	0.13	%		$	383,136		$	73	0.08	%
Money market deposits				232,713			399	0.68	%			217,639			121	0.22	%			213,584			90	0.17	%
Time deposits				245,353			572	0.92	%			224,539			352	0.63	%			185,502			241	0.52	%
FHLB borrowings				49,924			209	1.66	%			62,659			234	1.50	%			66,239			220	1.32	%
Other borrowings				6,919			14	0.80	%			5,028			4	0.32	%			24,993			9	0.14	%
Senior sub. notes				2,500			28	4.44	%			2,500			28	4.49	%			2,500			28	4.44	%
Junior sub. debentures				12,781			202	6.27	%			12,755			179	5.63	%			12,679			165	5.16	%
Total				925,807			1,794	0.77	%			904,854			1,040	0.46	%			888,633			826	0.37	%
Non-interest-bearing liabilities:
Demand deposits				288,101								277,402								282,331
Other liabilities				10,862								10,389								11,017
Stockholders' equity				98,630								98,261								110,388
Total			$	1,323,400							$	1,290,906							$	1,292,369
Net interest income						$	10,266							$	9,856							$	9,767
Rate spread								3.04	%							3.11	%							3.04	%
Net yield on interest-earning assets								3.24	%							3.23	%							3.15	%
(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)
			Nine months ended September 30, 2022								Nine months ended September 30, 2021
			Average					Yield/			Average					Yield/
			Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)			$	917,541		$	28,605	4.17	%		$	873,352		$	28,772	4.40	%
Taxable securities				207,179			2,599	1.68	%			164,075			1,641	1.34	%
Tax-exempt securities (2)				83,281			2,038	3.27	%			84,351			1,908	3.02	%
FHLB stock				2,625			82	4.18	%			2,519			71	3.77	%
Other				23,327			175	1.00	%			46,590			45	0.13	%
Total (2)				1,233,953			33,499	3.63	%			1,170,887			32,437	3.70	%
Non-interest-earning assets:
Cash and due from banks				18,714								20,015
Premises and equipment,
net				12,942								12,600
Cash surrender value ins				24,513								21,958
Other assets				19,995								13,956
Allowance for loan
losses				(12,338	)							(11,687	)
Total			$	1,297,779							$	1,227,729
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits			$	383,795		$	561	0.20	%		$	356,532		$	203	0.08	%
Money market deposits				222,975			609	0.37	%			214,751			304	0.19	%
Time deposits				222,946			1,209	0.73	%			169,182			929	0.73	%
FHLB borrowings				54,590			612	1.50	%			66,711			656	1.31	%
Other borrowings				6,135			20	0.44	%			23,183			24	0.14	%
Senior sub. notes				2,500			84	4.49	%			2,500			84	4.49	%
Junior sub. debentures				12,755			547	5.73	%			10,205			419	5.49	%
Total				905,696			3,642	0.54	%			843,064			2,619	0.42	%
Non-interest-bearing liabilities:
Demand deposits				279,135								264,536
Other liabilities				11,093								10,796
Stockholders' equity				101,855								109,333
Total			$	1,297,779							$	1,227,729
Net interest income						$	29,857							$	29,818
Rate spread								3.09	%							3.28	%
Net yield on interest-earning assets								3.24	%							3.40	%
(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 PSB Holdings' earnings for Q3 2022?

PSB Holdings reported earnings of $0.80 per share for Q3 2022.

How did net income change in Q3 2022 for PSB Holdings?

Net income for PSB Holdings increased to $3.5 million in Q3 2022 from $3.2 million in Q2 2022.

What is the loan growth percentage for PSB Holdings in Q3 2022?

Loans grew by 1.2% during Q3 2022.

What was the non-performing assets ratio for PSB Holdings?

Non-performing assets were 0.85% of total assets as of September 30, 2022.

How did the tangible book value change in Q3 2022 for PSB Holdings?

The tangible book value declined to $20.83 per share in Q3 2022 from $21.10 per share in Q2 2022.