PSB Reports Record 1st Quarter Earnings of $3.9 Million, or $0.87 Per Share; Income Supported by PPP Fee Recognition and Continued Mortgage Gains
PSB Holdings, Inc. (OTCQX: PSBQ) reported strong first quarter earnings for the period ending March 31, 2021, with net income of $3.9 million, or $0.87 per share, exceeding last quarter's figures. Increased net interest income, driven by SBA Paycheck Protection Program fee accretion, and lower noninterest expenses contributed to this growth. The bank's net interest margin rose to 3.62%, up from 3.22%. Despite challenges, including increased loan loss provisions and a decline in noninterest income, management anticipates continued growth following its recent acquisition of Waukesha Bankshares.
- Record earnings of $3.9 million or $0.87 per share for Q1 2021, up from $0.73 per share in Q4 2020.
- Net interest margin increased to 3.62% from 3.22% due to PPP fee accretion.
- Tangible net book value per share rose to $23.69, a 13.4% increase year-over-year.
- Loan growth of 3.2% during a typically slow winter period, excluding PPP impacts.
- Successful acquisition of Waukesha Bankshares, enhancing market presence.
- Increased provisions for loan losses to $1.0 million from $675,000 in the prior quarter due to impaired loans.
- Non-performing assets increased to 1.13% of total assets from 0.90% the previous quarter.
- Lower noninterest income of $2.7 million compared to $3.0 million in Q4 2020.
WAUSAU, Wis., April 26, 2021 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank serving Northcentral and Southeastern Wisconsin, reported first quarter earnings ending March 31, 2021 of
“Our southeastern Wisconsin growth continued with the closing of our acquisition of Waukesha Bankshares, Inc. on April 16, 2021. The improved economic clarity, vaccine rollout and our further expansion in the Milwaukee market should serve to continue to enhance shareholder value in 2021. To support our expanded presence in Milwaukee, we recently secured a local 20-year commercial banking veteran with deep ties to the business community to lead our Waukesha location,” stated Scott Cattanach, President and CEO. “Before considering loan repayments from ongoing PPP loan forgiveness, we are optimistic annualized loan growth will normalize in the four to five percent range as we leverage our operations in and around Milwaukee and businesses activity returns to pre-pandemic levels.”
Net Interest Margin Impact: PSB’s net interest margin increased to
Capital Management: At March 31, 2021, PSB’s tangible equity to tangible asset ratio was
Loan Loss Reserves: For the quarter ended March 31, 2021, the bank added provisions for loan losses totaling
Loan Accommodations: Loan modifications decreased from 48 loan accommodations with a balance of
As shown in the table below during the March 2021 quarter, “impaired loans” increased
| Commercial, Commercial Real Estate, Construction & Development, Agricultural and Government Loans | |||||||||||||||||||
| ($000) | |||||||||||||||||||
| Risk Rating | 12/2017 | 12/2018 | 12/2019 | 03/2020 | 06/2020 | 09/2020 | 12/2020 | 03/2021 | |||||||||||
| Rating 1 | "High Quality" | $ | - | $ | - | $ | - | $ | 71 | $ | 55 | $ | - | $ | - | $ | - | ||
| Rating 2 | "Minimal Risk" | 76,710 | 85,382 | 57,904 | 59,101 | 72,601 | 56,337 | 61,223 | 62,626 | ||||||||||
| Rating 3 | "Average Risk" | 292,496 | 323,627 | 349,002 | 324,378 | 374,709 | 391,195 | 390,191 | 348,102 | ||||||||||
| Rating 4 | "Acceptable Risk" | 65,024 | 79,271 | 128,932 | 123,296 | 154,302 | 155,738 | 175,400 | 209,407 | ||||||||||
| Rating 5 | "Watch Risk" | 18,049 | 15,551 | 15,933 | 33,999 | 54,522 | 46,603 | 36,379 | 30,891 | ||||||||||
| Rating 6 | "Substandard Risk" | 500 | 489 | 2,568 | 2,732 | 4,545 | 2,162 | 7,617 | 18,134 | ||||||||||
| Rating 7 | "Impaired Loans" | 9,952 | 8,707 | 5,518 | 7,811 | 6,130 | 10,164 | 13,153 | 16,162 | ||||||||||
| $ | 462,731 | $ | 513,027 | $ | 559,857 | $ | 551,388 | $ | 666,864 | $ | 662,199 | $ | 683,963 | $ | 685,322 | ||||
| Includes undisbursed Construction & Development lines of credit. PPP loan balances are assigned a risk-weighting of "3". | |||||||||||||||||||
March 31, 2021 Quarterly Financial Highlights (at or for the periods ended March 31, 2021, compared to December 31, 2020 and / or March 31, 2020, as applicable):
- Record earnings of
$3.9 million for the quarter ended March 31, 2021 resulted in strong annualized return on average assets of1.39% and return on average shareholders’ equity of14.92% . The record earnings for the quarter were despite continued elevated provision for loan losses related to one impaired loan. - Tangible net book value increased to
$23.69 per share, a13.4% over the most recent twelve-month period. Dividends of$0.42 per share were paid to shareholders during 2020, continuing a 5-year,8.0% cumulative annual growth rate. - Total net loans increased
$23.6 million , excluding PPP paydowns and originations, during a typically seasonally slow winter period, up3.2% during the quarter. SBA PPP loans declined$14.6 million to$87.4 million , from$45.1 million in first round forgiveness paydowns but increased$30.5 million from PPP second round new originations.
Balance Sheet and Asset Quality Review
Total assets remained mostly unchanged at March 31, 2021 relative to the prior quarter ended December 31, 2020, though there were some minor changes in the composition of assets. At March 31, 2021, and the prior quarter ended December 31, 2020, total assets were
The allowance for loan losses increased to
At March 31, 2021, cash and cash equivalents totaled
Foreclosed assets decreased to
Total deposits decreased slightly to
FHLB advances remained at
For the quarter ended March 31, 2021, stockholders’ equity increased
Operations Review
Net interest income totaled
The increase in loan and investment yields was largely due to net accretion of loan fees of
The cost of interest-bearing liabilities decreased during the quarter, largely reflecting lower rates associated with time deposits. Deposit costs decreased to
The provision for loan losses totaled
Total noninterest income for the first quarter of 2021 decreased to
Deposit and service fee income in the first quarter declined to
Noninterest expense was
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
Certain matters discussed in this news release, including without limitation those relating to potential loan and deposit growth, future profits, changes in noninterest income and expenses, pro-forma impacts to income from non-recurring or unusual income and expense items, merger and acquisition activity, and future interest rates, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in this release. Among other things, these risks and uncertainties include the strength of the economy, the effects of government policies, including, in particular, interest rate policies, the benefits and risks associated with acquisition activities, and other risks and assumptions. Risk and uncertainties also include the effect of the COVID-19 pandemic, including the bank’s credit quality and business operations, as well as its impact on general economic and financial market conditions. PSB Holdings, Inc. assumes no obligation to update or supplement forward-looking statements that become untrue because of events subsequent to this press release.
| PSB Holdings, Inc. | ||||||||||||||||||
| Quarterly Financial Summary | ||||||||||||||||||
| (dollars in thousands, except per share data) | Quarter ended | |||||||||||||||||
| Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | ||||||||||||||
| Earnings and dividends: | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||
| Interest income | $ | 10,482 | $ | 9,442 | $ | 9,155 | $ | 9,291 | $ | 9,726 | ||||||||
| Interest expense | $ | 886 | $ | 1,011 | $ | 1,261 | $ | 1,528 | $ | 1,935 | ||||||||
| Net interest income | $ | 9,596 | $ | 8,431 | $ | 7,894 | $ | 7,763 | $ | 7,791 | ||||||||
| Provision for loan losses | $ | 1,000 | $ | 675 | $ | 1,300 | $ | 1,800 | $ | 1,800 | ||||||||
| Other noninterest income | $ | 2,749 | $ | 2,991 | $ | 2,929 | $ | 3,138 | $ | 2,355 | ||||||||
| Other noninterest expense | $ | 6,200 | $ | 6,461 | $ | 6,074 | $ | 4,879 | $ | 6,330 | ||||||||
| Net income | $ | 3,896 | $ | 3,252 | $ | 2,637 | $ | 3,190 | $ | 1,610 | ||||||||
| Basic earnings per share (3) | $ | 0.88 | $ | 0.73 | $ | 0.59 | $ | 0.72 | $ | 0.36 | ||||||||
| Diluted earnings per share (3) | $ | 0.87 | $ | 0.73 | $ | 0.59 | $ | 0.72 | $ | 0.36 | ||||||||
| Dividends declared per share (3) | $ | - | $ | 0.21 | $ | - | $ | 0.21 | $ | - | ||||||||
| Tangible net book value per share (4) | $ | 23.69 | $ | 23.43 | $ | 22.73 | $ | 21.97 | $ | 20.89 | ||||||||
| Semi-annual dividend payout ratio | n/a | 15.88 | % | n/a | 14.50 | % | n/a | |||||||||||
| Average common shares outstanding | 4,454,334 | 4,452,287 | 4,452,287 | 4,453,225 | 4,464,956 | |||||||||||||
| Balance sheet - average balances: | ||||||||||||||||||
| Loans receivable, net of allowances for loss | $ | 827,595 | $ | 807,182 | $ | 800,611 | $ | 786,785 | $ | 705,333 | ||||||||
| Assets | $ | 1,132,905 | $ | 1,100,064 | $ | 1,099,402 | $ | 1,067,466 | $ | 963,191 | ||||||||
| Deposits | $ | 925,689 | $ | 896,427 | $ | 882,682 | $ | 855,155 | $ | 761,268 | ||||||||
| Stockholders' equity | $ | 105,868 | $ | 102,790 | $ | 100,436 | $ | 95,909 | $ | 94,735 | ||||||||
| Performance ratios: | ||||||||||||||||||
| Return on average assets (1) | 1.39 | % | 1.18 | % | 0.95 | % | 1.20 | % | 0.67 | % | ||||||||
| Return on average stockholders' equity (1) | 14.92 | % | 12.59 | % | 10.45 | % | 13.38 | % | 6.84 | % | ||||||||
| Average stockholders' equity less accumulated other comprehensive income (loss) to average assets | 9.10 | % | 9.00 | % | 8.85 | % | 8.83 | % | 9.75 | % | ||||||||
| Net loan charge-offs to average loans (1) | 0.01 | % | 0.16 | % | 0.00 | % | 0.25 | % | 0.49 | % | ||||||||
| Nonperforming loans to gross loans | 1.39 | % | 1.03 | % | 0.98 | % | 0.47 | % | 0.67 | % | ||||||||
| Nonperforming assets to total assets | 1.13 | % | 0.90 | % | 0.85 | % | 0.49 | % | 0.54 | % | ||||||||
| Allowance for loan losses to gross loans | 1.40 | % | 1.30 | % | 1.31 | % | 1.13 | % | 1.10 | % | ||||||||
| Nonperforming assets to tangible equity plus the allowance for loan losses (4) | 11.06 | % | 8.96 | % | 8.50 | % | 5.11 | % | 5.24 | % | ||||||||
| Net interest rate margin (1)(2) | 3.62 | % | 3.22 | % | 3.03 | % | 3.09 | % | 3.45 | % | ||||||||
| Net interest rate spread (1)(2) | 3.49 | % | 3.07 | % | 2.84 | % | 2.85 | % | 3.20 | % | ||||||||
| Service fee revenue as a percent of average demand deposits (1) | 0.57 | % | 0.59 | % | 0.59 | % | 0.49 | % | 1.04 | % | ||||||||
| Noninterest income as a percent of gross revenue | 20.78 | % | 24.06 | % | 24.24 | % | 25.25 | % | 19.49 | % | ||||||||
| Efficiency ratio (2) | 49.64 | % | 55.87 | % | 55.41 | % | 44.23 | % | 61.59 | % | ||||||||
| Noninterest expenses to average assets (1) | 2.22 | % | 2.34 | % | 2.20 | % | 1.84 | % | 2.64 | % | ||||||||
| Tangible equity to tangible assets | 9.32 | % | 9.22 | % | 9.17 | % | 8.95 | % | 9.59 | % | ||||||||
| Stock price information: | ||||||||||||||||||
| High | $ | 25.94 | $ | 23.00 | $ | 18.80 | $ | 24.75 | $ | 28.25 | ||||||||
| Low | $ | 20.45 | $ | 17.20 | $ | 17.36 | $ | 18.55 | $ | 19.50 | ||||||||
| Last trade value at quarter-end | $ | 25.25 | $ | 20.57 | $ | 18.00 | $ | 18.55 | $ | 24.75 | ||||||||
| (1) Annualized | ||||||||||||||||||
| (2) The yield on tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of | ||||||||||||||||||
| (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, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | ||||||||||||
| except per share data - unaudited) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||
| Interest and dividend income: | |||||||||||||||||
| Loans, including fees | $ | 9,442 | $ | 8,371 | $ | 8,068 | $ | 8,175 | $ | 8,445 | |||||||
| Securities: | |||||||||||||||||
| Taxable | 507 | 542 | 564 | 622 | 733 | ||||||||||||
| Tax-exempt | 502 | 489 | 474 | 446 | 431 | ||||||||||||
| Other interest and dividends | 31 | 40 | 49 | 48 | 117 | ||||||||||||
| Total interest and dividend income | 10,482 | 9,442 | 9,155 | 9,291 | 9,726 | ||||||||||||
| Interest expense: | |||||||||||||||||
| Deposits | 547 | 657 | 833 | 1,080 | 1,482 | ||||||||||||
| FHLB advances | 215 | 228 | 304 | 323 | 320 | ||||||||||||
| Other borrowings | 7 | 6 | 5 | 6 | 14 | ||||||||||||
| Senior subordinated notes | 28 | 29 | 28 | 28 | 28 | ||||||||||||
| Junior subordinated debentures | 89 | 91 | 91 | 91 | 91 | ||||||||||||
| Total interest expense | 886 | 1,011 | 1,261 | 1,528 | 1,935 | ||||||||||||
| Net interest income | 9,596 | 8,431 | 7,894 | 7,763 | 7,791 | ||||||||||||
| Provision for loan losses | 1,000 | 675 | 1,300 | 1,800 | 1,800 | ||||||||||||
| Net interest income after provision for loan losses | 8,596 | 7,756 | 6,594 | 5,963 | 5,991 | ||||||||||||
| Noninterest income: | |||||||||||||||||
| Service fees | 332 | 352 | 344 | 278 | 391 | ||||||||||||
| Gain on sale of mortgage loans | 1,152 | 1,401 | 1,752 | 1,747 | 987 | ||||||||||||
| Mortgage loan servicing, net | 79 | 104 | (79 | ) | (165 | ) | (23 | ) | |||||||||
| Investment and insurance sales commissions | 595 | 391 | 301 | 259 | 349 | ||||||||||||
| Net gain on sale of securities | 21 | 149 | 38 | 194 | 123 | ||||||||||||
| Increase in cash surrender value of life insurance | 108 | 106 | 108 | 104 | 104 | ||||||||||||
| Other noninterest income | 462 | 488 | 465 | 721 | 424 | ||||||||||||
| Total noninterest income | 2,749 | 2,991 | 2,929 | 3,138 | 2,355 | ||||||||||||
| Noninterest expense: | |||||||||||||||||
| Salaries and employee benefits | 3,310 | 4,084 | 3,526 | 2,583 | 3,819 | ||||||||||||
| Occupancy and facilities | 569 | 511 | 566 | 508 | 544 | ||||||||||||
| Loss (gain) on foreclosed assets | 130 | (218 | ) | 36 | 23 | 71 | |||||||||||
| Data processing and other office operations | 694 | 568 | 743 | 675 | 644 | ||||||||||||
| Advertising and promotion | 79 | 172 | 77 | 94 | 141 | ||||||||||||
| FDIC insurance premiums | 83 | 82 | 87 | 23 | - | ||||||||||||
| Other noninterest expenses | 1,335 | 1,262 | 1,039 | 973 | 1,111 | ||||||||||||
| Total noninterest expense | 6,200 | 6,461 | 6,074 | 4,879 | 6,330 | ||||||||||||
| Income before provision for income taxes | 5,145 | 4,286 | 3,449 | 4,222 | 2,016 | ||||||||||||
| Provision for income taxes | 1,249 | 1,034 | 812 | 1,032 | 406 | ||||||||||||
| Net income | $ | 3,896 | $ | 3,252 | $ | 2,637 | $ | 3,190 | $ | 1,610 | |||||||
| Basic earnings per share | $ | 0.88 | $ | 0.73 | $ | 0.59 | $ | 0.72 | $ | 0.36 | |||||||
| Diluted earnings per share | $ | 0.87 | $ | 0.73 | $ | 0.59 |
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FAQ
What were PSB Holdings' earnings for the first quarter of 2021?
PSB Holdings reported earnings of $3.9 million, or $0.87 per share, for the first quarter of 2021.
How did PSB Holdings' net interest margin change in Q1 2021?
The net interest margin increased to 3.62% in Q1 2021 from 3.22% in the previous quarter.
What impacts did the acquisition of Waukesha Bankshares have on PSB Holdings?
The acquisition is expected to enhance PSB Holdings' market presence and shareholder value.
What are the loan loss provisions for PSB Holdings in Q1 2021?
Provisions for loan losses totaled $1.0 million in Q1 2021, an increase from $675,000 in the previous quarter.
What was the trend in non-interest income for PSB in Q1 2021?
Non-interest income decreased to $2.7 million in Q1 2021, compared to $3.0 million in Q4 2020.
PSB HOLDINGS INC (WI)
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