WAUSAU, Wis., Oct. 28, 2019 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. ("PSB") PSBQ, the holding company for Peoples State Bank serving North Central Wisconsin, reported third quarter earnings ending September 30, 2019 of $3.13 million, or $0.70 per share, compared to earnings of $0.57 per share on net income of $2.57 million during the June 2019 quarter, and $0.59 per share one year earlier on earnings of $2.66 million. The third quarter earnings growth reflected higher net interest income, and lower levels of non-interest expense partially offset by lower non-interest income compared to the June 2019 quarter. During the quarter, the Bank received an FDIC assessment credit on deposit premiums as the federal insurance fund reached a targeted reserve level. Loan production remained strong, with net loans receivable expanding 2.0% from the previous quarter and 8.6% relative to one year earlier.
"PSB achieved record earnings in the September 2019 quarter as continued commercial real estate loan growth was joined by increase mortgage banking income while reduced operating expenses from the consolidation of our Rhinelander branches and the effective elimination of our FDIC insurance premiums as FDIC reserves reached their targeted level. In the first quarter of 2020, we also expect to convert our Milwaukee area LPO office into a new branch office, adding a new market for deposit growth," stated Scott Cattanach, President and CEO.
Financial Highlights (at or for the periods ended September 30, 2019, compared to June 30, 2019 and /or September 30, 2018, as applicable):
- Return on shareholders' equity was 13.94% for the quarter compared to 11.90% one quarter earlier and 13.64% for the third quarter one year earlier. Return on average assets was 1.34% for the third quarter of 2019 compared to 1.15% the previous quarter and 1.20% for the third quarter one year earlier. Excluding a $428,000 write-down related to a branch consolidation, June 2019 return on equity was 13.89% and return on average assets was 1.35%.
- The efficiency ratio improved to 55.14% for the third quarter compared to 62.83% one quarter earlier and 59.75% in the year ago quarter. Excluding the branch consolidation write-down, June 2019 efficiency ratio was 58.47%.
- Total assets grew to $949.7 million at September 30, 2019 from $901.3 million one quarter earlier and $883.3 million one year earlier. Loan and deposit growth supported balance sheet expansion.
- The net interest margin decreased to 3.60% for the quarter ended September 30, 2019, compared to 3.72% the previous quarter and 3.48% for the third quarter one year earlier. The net interest margin for the second quarter of 2019 would have been 3.66% before reflecting a problem loan interest recovery of $109,000.
- Tangible net book value was $20.24 per share at September 30, 2019, an increase of 4.28% from $19.41 per share as of June 30, 2019 and 16.52% from $17.37 per share at September 30, 2018.
Balance Sheet and Asset Quality Review
Total assets were $949.7 million as of September 30, 2019, compared to $901.3 million as of June 30, 2019, an increase of $48.4 million, or 5.4%. Total loans receivable increased $13.3 million with much of the new loans consisting of loans secured by commercial real estate. The commercial/agricultural real estate loan portfolio increased to $385.5 million at September 30, 2019 from $370.3 million three months earlier. Non-owner occupied commercial real estate loans represented the largest component of the loan portfolio at 29.8% of gross loans at September 30, 2019, followed by owner occupied commercial real estate loans at 25.5%, residential real estate at 24.1%, commercial/agricultural loans at 20.0% and consumer loans at 0.7%. Total agricultural related loans represent 1.25% of the total loan portfolio. The allowance for loan losses remained at 0.97% of gross loans at September 30, 2019. The annualized net charge-offs to average loans was 0.01% for the quarter ended September 30, 2019 compared to 0.00% at the end of the previous quarter and a net recovery of 0.06% one year earlier.
Non-performing assets increased to 0.57% of total assets at September 30, 2019, compared to 0.42% at June 30, 2019, and 0.67% at September 30, 2018. Although a $1.5 million Shopko related loan was removed from non-accrual during the September 2019 quarter as the borrower acquired a replacement tenant, a separate $2.2 million Shopko loan was added to non-accrual status, although the borrower continues to make all scheduled payments while searching for a new tenant. At September 30, 2019, non-performing assets consisted of $3.6 million in non-accrual loans, $510,000 in non-accrual restructured loans, $747,000 in restructured loans not on non-accrual, and $572,000 in other real estate owned. The former Rhinelander branch office written down in connection with the June 2019 branch consolidation represents $400,000 of the other real estate owned.
At September 30, 2019, cash and investments totaled $219.8 million compared to $186.3 million at June 30, 2019. During the course of the quarter, cash and investments increased due to deposit growth and new Federal Home Loan Bank advances secured to support anticipated loan origination activity. FHLB advances were $85.5 million at September 30, 2019 compared to $59.9 million at June 30, 2019 while other borrowings decreased to $17.4 million from $19.2 million over the same time period.
Total deposits increased to $736.2 million at September 30, 2019 compared to $715.2 million at June 30, 2019, up 2.9%. At September 30, 2019, interest-bearing demand and savings deposits accounted for 33.0% of total deposits, followed by money market deposits at 23.1%, noninterest-bearing demand deposits at 21.7% and retail and local time deposits at 13.9%. Broker and national time deposits accounted for 4.9% of total deposits at September 30, 2019 versus 5.9% the prior quarter and 9.3% one year earlier.
For the quarter ended September 30, 2019, stockholders' equity increased $3.5 million, or 4.04%, to $90.6 million, compared to $87.1 million at June 30, 2019. Tangible net book value per share increased 4.28%, to $20.24 per share, at September 30, 2019, compared to $19.41 per share at June 30, 2019. PSB's tangible equity to total assets was 9.53% at September 30, 2019, compared to 9.65% at June 30, 2019.
Operations Review
Net interest income totaled $7.9 million (on a net margin of 3.60%) for the third quarter of 2019, compared to $7.8 million (on net margin of 3.72%) for the second quarter of 2019 and $7.3 million (on a net margin of 3.48%) for the third quarter of 2018. The second quarter net interest income included interest recapture associated with repayment of a problem loan of $109,000, which increased quarterly net margin by 0.06%. Compared to the June 30, 2019 quarter, loans and investment yields decreased 5 bps, excluding the June 2019 problem loan interest recapture, to 4.57% during the quarter ended September 30, 2019 while deposit and borrowing costs rose one bp to 1.26%. The decline in proforma loan and investment yields (excluding the loan interest recapture) were partially due to a larger average balance of cash and cash equivalents held during the quarter and a decrease in the prime lending rate due to actions by the Federal Reserve. Proforma loan yields decreased to 5.04% from 5.15% during the quarter ended June 30, 2019, as many loans repriced lower as the prime rate declined.
The cost of interest-bearing liabilities increased slightly during the quarter, reflecting higher rates associated with time deposits partially offset by lower rates on money market accounts and Federal Home Loan Bank borrowings as the Federal Reserve reduced their discount rate. Deposit costs increased to $1.65 million for the quarter ended September 30, 2019 from $1.63 million the previous quarter. While the balance of FHLB advances increased $25.6 million, the weighted average costs declined to 1.70% from 1.81% the previous quarter.
"The composition of the deposit portfolio continues to change as we rely less on brokered deposits as lower-cost core deposits have increased. Therefore, total deposits increased $21.0 million in the third quarter, while core deposits increased $28.3 million. Changes in our portfolio mix, along with short-term national market rates declining have created an expectation that our funding costs have peaked," said Mark C. Oldenberg, Chief Financial Officer.
The provision for loan losses totaled $150,000 during the third quarter of 2019 compared to the same provision level for the prior linked quarter. The provision primarily relates to new loan originations and an expanding loan portfolio.
Total noninterest income for the third quarter of 2019 was $1.8 million compared to $1.9 million during the preceding quarter and $1.6 million for the third quarter of 2018. Service fees in the third quarter were $348,000 compared to $403,000 during the second quarter of 2019. Service fees declined $55,000 for the third quarter after the Company elected to refund $73,000 to business checking account customers associated with a correction and change of a service charge first imposed during 2018. Gains on sale of mortgage loans increased to $463,000 for the third quarter from $432,000 in the second quarter of 2019 as falling long-term U.S. Treasury rates have spurred mortgage refinance activity. Commissions on investment and insurance sales declined to $276,000 from $310,000 the prior quarter. At September 30, 2019, the bank had wealth assets under management totaling $240.6 million compared to $236.6 million at June 30, 2019 and $227.8 million at September 30, 2018. The year over year growth of assets under management was 5.6%.
Noninterest expense was $5.4 million for the third quarter of 2019 compared to $6.2 million for the second quarter. For the second quarter of 2019, noninterest expense increased due to $589,000 in expenses associated with writing down assets associated with the closing of the Rhinelander office. Additionally, the third quarter 2019 results reflect the elimination of FDIC insurance premiums as the FDIC insurance fund reached its targeted level saving $63,000 compared to the second quarter 2019. The Bank will not record further FDIC insurance expense until further notice from the FDIC.
About PSB Holdings, Inc.
PSB Holdings, Inc. is the parent company of Peoples State Bank. Peoples is a community bank headquartered in Wausau, Wisconsin, serving north central Wisconsin from eight full-service banking locations in Marathon, Oneida, and Vilas counties and loan production offices in Milwaukee and Stevens Point, Wisconsin. Peoples also provides investment and insurance products, along with retirement planning services, through Peoples Wealth Management, a division of Peoples. PSB Holdings, Inc. is traded under the stock symbol PSBQ on the OTCQX Market. More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.
Forward-Looking Statements
Certain matters discussed in this news release, including without limitation those relating to potential loan and deposit growth, future profits, changes in noninterest income and expenses, pro-forma impacts to income from non-recurring or unusual income and expense items, and future interest rates, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in this release. Among other things, these risks and uncertainties include the strength of the economy, the effects of government policies, including, in particular, interest rate policies, and other risks and assumptions. PSB Holdings, Inc. assumes no obligation to update or supplement forward-looking statements that become untrue because of events subsequent to this press release.
| PSB Holdings, Inc. | |||||||||||||||
| Quarterly Financial Summary | |||||||||||||||
| (dollars in thousands, except per share data) | Quarter ended | ||||||||||||||
| Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | |||||||||||
| Earnings and dividends: | 2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||
| Interest income | $ | 10,098 | $ | 9,839 | $ | 9,604 | $ | 9,365 | $ | 9,063 | |||||
| Interest expense | $ | 2,154 | $ | 2,041 | $ | 2,032 | $ | 1,888 | $ | 1,805 | |||||
| Net interest income | $ | 7,944 | $ | 7,798 | $ | 7,572 | $ | 7,477 | $ | 7,258 | |||||
| Provision for loan losses | $ | 150 | $ | 150 | $ | 400 | $ | 60 | $ | 10 | |||||
| Other noninterest income | $ | 1,802 | $ | 1,903 | $ | 2,117 | $ | 1,718 | $ | 1,615 | |||||
| Other noninterest expense | $ | 5,437 | $ | 6,167 | $ | 5,745 | $ | 5,829 | $ | 5,373 | |||||
| Net income | $ | 3,131 | $ | 2,572 | $ | 2,731 | $ | 2,529 | $ | 2,661 | |||||
| Basic earnings per share (3) | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | |||||
| Diluted earnings per share (3) | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | |||||
| Dividends declared per share (3) | $ | - | $ | 0.20 | $ | - | $ | 0.18 | $ | - | |||||
| Tangible net book value per share (4) | $ | 20.24 | $ | 19.41 | $ | 18.89 | $ | 17.98 | $ | 17.37 | |||||
| Semi-annual dividend payout ratio | n/a | 16.95 | % | n/a | 15.65 | % | n/a | ||||||||
| Average common shares outstanding | 4,473,583 | 4,486,022 | 4,494,568 | 4,488,397 | 4,490,621 | ||||||||||
| Balance sheet - average balances: | |||||||||||||||
| Loans receivable, net of allowances for loss | $ | 689,057 | $ | 666,008 | $ | 658,586 | $ | 646,063 | $ | 634,469 | |||||
| Assets | $ | 928,282 | $ | 893,998 | $ | 899,263 | $ | 883,373 | $ | 881,518 | |||||
| Deposits | $ | 721,788 | $ | 713,910 | $ | 713,257 | $ | 708,318 | $ | 708,521 | |||||
| Stockholders' equity | $ | 89,139 | $ | 86,656 | $ | 82,516 | $ | 79,525 | $ | 77,390 | |||||
| Performance ratios: | |||||||||||||||
| Return on average assets (1) | 1.34 | % | 1.15 | % | 1.23 | % | 1.14 | % | 1.20 | % | |||||
| Return on average stockholders' equity (1) | 13.94 | % | 11.90 | % | 13.42 | % | 12.62 | % | 13.64 | % | |||||
| Average stockholders' equity less accumulated | |||||||||||||||
| other comprehensive income (loss) to | |||||||||||||||
| average assets | 9.52 | % | 9.68 | % | 9.27 | % | 9.22 | % | 9.02 | % | |||||
| Net loan charge-offs to average loans (1) | 0.01 | % | 0.00 | % | 0.08 | % | 0.07 | % | -0.06 | % | |||||
| Nonperforming loans to gross loans | 0.70 | % | 0.53 | % | 1.11 | % | 0.91 | % | 0.84 | % | |||||
| Nonperforming assets to total assets | 0.57 | % | 0.42 | % | 0.84 | % | 0.67 | % | 0.67 | % | |||||
| Allowance for loan losses to gross loans | 0.97 | % | 0.97 | % | 0.98 | % | 0.94 | % | 0.98 | % | |||||
| Nonperforming assets to tangible equity plus the allowance for loan losses (4) | 5.69 | % | 4.13 | % | 8.40 | % | 7.20 | % | 7.14 | % | |||||
| Net interest rate margin (1)(2) | 3.60 | % | 3.72 | % | 3.63 | % | 3.58 | % | 3.48 | % | |||||
| Net interest rate spread (1)(2) | 3.31 | % | 3.42 | % | 3.36 | % | 3.32 | % | 3.23 | % | |||||
| Service fee revenue as a percent of average demand deposits (1) | 0.90 | % | 1.14 | % | 1.12 | % | 1.15 | % | 1.16 | % | |||||
| Noninterest income as a percent of gross revenue | 15.14 | % | 16.21 | % | 18.06 | % | 15.50 | % | 15.12 | % | |||||
| Efficiency ratio (2) | 55.14 | % | 62.83 | % | 58.59 | % | 62.54 | % | 59.75 | % | |||||
| Noninterest expenses to average assets (1) | 2.32 | % | 2.77 | % | 2.59 | % | 2.62 | % | 2.42 | % | |||||
| Tangible equity to actual assets | 9.53 | % | 9.65 | % | 9.50 | % | 8.81 | % | 8.83 | % | |||||
| Stock price information: | |||||||||||||||
| High | $ | 27.50 | $ | 24.75 | $ | 23.45 | $ | 27.50 | $ | 27.45 | |||||
| Low | $ | 23.55 | $ | 22.00 | $ | 21.25 | $ | 21.10 | $ | 24.08 | |||||
| Last trade value at quarter-end | $ | 26.49 | $ | 24.00 | $ | 22.75 | $ | 22.50 | $ | 27.20 | |||||
| (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, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | |||||||
| except per share data - unaudited) | 2019 | 2019 | 2019 | 2018 | 2018 | |||||||
| Interest and dividend income: | ||||||||||||
| Loans, including fees | $ | 8,823 | $ | 8,629 | $ | 8,334 | $ | 8,125 | $ | 7,814 | ||
| Securities: | ||||||||||||
| Taxable | 769 | 730 | 713 | 714 | 732 | |||||||
| Tax-exempt | 378 | 389 | 396 | 424 | 394 | |||||||
| Other interest and dividends | 128 | 91 | 161 | 102 | 123 | |||||||
| Total interest and dividend income | 10,098 | 9,839 | 9,604 | 9,365 | 9,063 | |||||||
| Interest expense: | ||||||||||||
| Deposits | 1,654 | 1,634 | 1,553 | 1,435 | 1,324 | |||||||
| FHLB advances | 323 | 230 | 309 | 315 | 359 | |||||||
| Other borrowings | 58 | 57 | 51 | 18 | 1 | |||||||
| Senior subordinated notes | 28 | 28 | 28 | 28 | 28 | |||||||
| Junior subordinated debentures | 91 | 92 | 91 | 92 | 93 | |||||||
| Total interest expense | 2,154 | 2,041 | 2,032 | 1,888 | 1,805 | |||||||
| Net interest income | 7,944 | 7,798 | 7,572 | 7,477 | 7,258 | |||||||
| Provision for loan losses | 150 | 150 | 400 | 60 | 10 | |||||||
| Net interest income after provision for loan losses | 7,794 | 7,648 | 7,172 | 7,417 | 7,248 | |||||||
| Noninterest income: | ||||||||||||
| Service fees | 348 | 403 | 381 | 419 | 415 | |||||||
| Gain on sale of mortgage loans | 463 | 432 | 175 | 227 | 286 | |||||||
| Mortgage loan servicing, net | 89 | 84 | 125 | 129 | 115 | |||||||
| Investment and insurance sales commissions | 276 | 310 | 333 | 430 | 299 | |||||||
| Net gain on sale of securities | - | 121 | 18 | - | - | |||||||
| Increase in cash surrender value of life insurance | 105 | 101 | 98 | 96 | 95 | |||||||
| Other noninterest income | 521 | 452 | 987 | 417 | 405 | |||||||
| Total noninterest income | 1,802 | 1,903 | 2,117 | 1,718 | 1,615 | |||||||
| Noninterest expense: | ||||||||||||
| Salaries and employee benefits | 3,372 | 3,322 | 3,428 | 3,566 | 3,244 | |||||||
| Occupancy and facilities | 510 | 591 | 601 | 526 | 499 | |||||||
| Loss (gain) on foreclosed assets | 4 | 3 | 4 | (17 | ) | (7 | ) | |||||
| Data processing and other office operations | 654 | 646 | 577 | 654 | 649 | |||||||
| Advertising and promotion | 107 | 120 | 100 | 163 | 98 | |||||||
| FDIC insurance premiums | - | 63 | 59 | 61 | 63 | |||||||
| Other noninterest expenses | 790 | 1,422 | 976 | 876 | 827 | |||||||
| Total noninterest expense | 5,437 | 6,167 | 5,745 | 5,829 | 5,373 | |||||||
| Income before provision for income taxes | 4,159 | 3,384 | 3,544 | 3,306 | 3,490 | |||||||
| Provision for income taxes | 1,028 | 812 | 813 | 777 | 829 | |||||||
| Net income | $ | 3,131 | $ | 2,572 | $ | 2,731 | $ | 2,529 | $ | 2,661 | ||
| Basic earnings per share | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | ||
| Diluted earnings per share | $ | 0.70 | $ | 0.57 | $ | 0.61 | $ | 0.56 | $ | 0.59 | ||
| PSB Holdings, Inc. | |||||||||||
| Consolidated Statements of Income | |||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||
| (dollars in thousands, | September | September | |||||||||
| except per share data - unaudited) | 2019 | 2018 | 2019 | 2018 | |||||||
| Interest and dividend income: | |||||||||||
| Loans, including fees | $ | 8,823 | $ | 7,814 | $ | 25,786 | $ | 22,364 | |||
| Securities: | |||||||||||
| Taxable | 769 | 732 | 2,212 | 2,085 | |||||||
| Tax-exempt | 378 | 394 | 1,163 | 1,093 | |||||||
| Other interest and dividends | 128 | 123 | 380 | 282 | |||||||
| Total interest and dividend income | 10,098 | 9,063 | 29,541 | 25,824 | |||||||
| Interest expense: | |||||||||||
| Deposits | 1,654 | 1,324 | 4,841 | 3,380 | |||||||
| FHLB advances | 323 | 359 | 862 | 770 | |||||||
| Other borrowings | 58 | 1 | 166 | 6 | |||||||
| Senior subordinated notes | 28 | 28 | 84 | 83 | |||||||
| Junior subordinated debentures | 91 | 93 | 274 | 234 | |||||||
| Total interest expense | 2,154 | 1,805 | 6,227 | 4,473 | |||||||
| Net interest income | 7,944 | 7,258 | 23,314 | 21,351 | |||||||
| Provision for loan losses | 150 | 10 | 700 | 70 | |||||||
| Net interest income after provision for loan losses | 7,794 | 7,248 | 22,614 | 21,281 | |||||||
| Noninterest income: | |||||||||||
| Service fees | 348 | 415 | 1,132 | 1,192 | |||||||
| Gain on sale of mortgage loans | - | - | - | - | |||||||
| Mortgage banking income | 552 | 401 | 1,368 | 1,172 | |||||||
| Investment and insurance sales commissions | 276 | 299 | 919 | 877 | |||||||
| Net gain on sale of securities | - | - | 139 | - | |||||||
| Increase in cash surrender value of life insurance | 105 | 95 | 304 | 277 | |||||||
| Other noninterest income | 521 | 405 | 1,960 | 1,240 | |||||||
| Total noninterest income | 1,802 | 1,615 | 5,822 | 4,758 | |||||||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits | 3,372 | 3,244 | 10,122 | 9,628 | |||||||
| Occupancy and facilities | 510 | 499 | 1,702 | 1,589 | |||||||
| Loss (gain) on foreclosed assets | 4 | (7 | ) | 11 | (17 | ) | |||||
| Data processing and other office operations | 654 | 649 | 1,877 | 1,909 | |||||||
| Advertising and promotion | 107 | 98 | 327 | 257 | |||||||
| FDIC insurance premiums | - | 63 | 122 | 186 | |||||||
| Other noninterest expenses | 790 | 827 | 3,188 | 2,332 | |||||||
| Total noninterest expense | 5,437 | 5,373 | 17,349 | 15,884 | |||||||
| Income before provision for income taxes | 4,159 | 3,490 | 11,087 | 10,155 | |||||||
| Provision for income taxes | 1,028 | 829 | 2,653 | 2,372 | |||||||
| Net income | $ | 3,131 | $ | 2,661 | $ | 8,434 | $ | 7,783 | |||
| Basic earnings per share | $ | 0.70 | $ | 0.59 | $ | 1.88 | $ | 1.73 | |||
| Diluted earnings per share | $ | 0.70 | $ | 0.59 | $ | 1.88 | $ | 1.73 | |||
| PSB Holdings, Inc. | |||||||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| (dollars in thousands - unaudited) | 2019 | 2018 | 2019 | 2018 | |||||||||
| Net income | $ | 3,131 | $ | 2,661 | $ | 8,434 | $ | 7,783 | |||||
| Other comprehensive income, net of tax: | |||||||||||||
| Unrealized gain (loss) on securities available for sale | 599 | (639 | ) | 3,109 | (1,919 | ) | |||||||
| Reclassification adjustment for security gain included in net income | - | - | (101 | ) | - | ||||||||
| Amortization of unrealized gain included in net income on securities available for sale transferred to securities held to maturity | (2 | ) | (8 | ) | (8 | ) | (33 | ) | |||||
| Unrealized loss on interest rate swap | (46 | ) | 48 | (264 | ) | (11 | ) | ||||||
| Reclassification adjustment of interest rate swap settlements included in earnings | 9 | 9 | 18 | 11 | |||||||||
| Other comprehensive income (loss) | 560 | (590 | ) | 2,754 | (1,952 | ) | |||||||
| Comprehensive income | $ | 3,691 | $ | 2,071 | $ | 11,188 | $ | 5,831 | |||||
| PSB Holdings, Inc. | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| September 30, 2019, June 30, 2019, March 31, 2019, and September 30, 2018 unaudited, December 31, 2018 derived from audited financial statements | |||||||||||||||
| Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | |||||||||||
| (dollars in thousands, except per share data) | 2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 17,954 | $ | 11,825 | $ | 8,917 | $ | 18,923 | $ | 15,348 | |||||
| Interest-bearing deposits | 1,059 | 2,306 | 349 | 501 | 930 | ||||||||||
| Federal funds sold | 30,415 | 4,552 | 12,989 | 24,554 | 14,246 | ||||||||||
| Cash and cash equivalents | 49,428 | 18,683 | 22,255 | 43,978 | 30,524 | ||||||||||
| Securities available for sale (at fair value) | 127,587 | 123,586 | 127,368 | 113,821 | 114,997 | ||||||||||
| Securities held to maturity (fair values of $41,311, $42,511, $43,338, $57,607 and $59,341 respectively | 40,791 | 42,074 | 43,061 | 58,311 | 60,421 | ||||||||||
| Bank certificates of deposit (at cost) | 1,984 | 1,984 | 2,976 | 2,976 | 2,976 | ||||||||||
| Loans held for sale | 335 | 50 | 245 | 358 | - | ||||||||||
| Loans receivable, net | 691,289 | 678,247 | 660,756 | 658,481 | 636,712 | ||||||||||
| Accrued interest receivable | 2,803 | 2,844 | 2,826 | 2,777 | 2,709 | ||||||||||
| Foreclosed assets | 572 | 172 | 113 | 113 | 483 | ||||||||||
| Premises and equipment, net | 10,212 | 9,749 | 10,426 | 10,209 | 10,339 | ||||||||||
| Mortgage servicing rights, net | 1,720 | 1,738 | 1,781 | 1,805 | 1,805 | ||||||||||
| Federal Home Loan Bank stock (at cost) | 2,173 | 1,662 | 1,657 | 2,330 | 2,011 | ||||||||||
| Cash surrender value of bank-owned life insurance | 16,668 | 16,564 | 16,463 | 16,365 | 15,407 | ||||||||||
| Other assets | 4,101 | 3,961 | 3,836 | 4,474 | 4,893 | ||||||||||
| TOTAL ASSETS | $ | 949,663 | $ | 901,314 | $ | 893,763 | $ | 915,998 | $ | 883,277 | |||||
| Liabilities | |||||||||||||||
| Non-interest-bearing deposits | $ | 159,897 | $ | 143,423 | $ | 138,124 | $ | 148,611 | $ | 151,484 | |||||
| Interest-bearing deposits | 576,288 | 571,794 | 577,263 | 577,215 | 565,799 | ||||||||||
| Total deposits | 736,185 | 715,217 | 715,387 | 725,826 | 717,283 | ||||||||||
| Federal Home Loan Bank advances | 85,496 | 59,915 | 51,165 | 81,071 | 64,660 | ||||||||||
| Other borrowings | 17,411 | 19,179 | 22,870 | 8,379 | 4,864 | ||||||||||
| Senior subordinated notes | 2,500 | 2,500 | 2,500 | 2,500 | 2,500 | ||||||||||
| Junior subordinated debentures | 7,732 | 7,732 | 7,732 | 7,732 | 7,732 | ||||||||||
| Accrued expenses and other liabilities | 9,715 | 9,668 | 9,047 | 9,650 | 8,144 | ||||||||||
| Total liabilities | 859,039 | 814,211 | 808,701 | 835,158 | 805,183 | ||||||||||
| 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 - 4,471,216, 4,480,585, 4,495,110, 4,487,895 and | |||||||||||||||
| 4,488,720 shares, respectively | 1,830 | 1,830 | 1,830 | 1,830 | 1,830 | ||||||||||
| Additional paid-in capital | 7,543 | 7,490 | 7,497 | 7,430 | 7,384 | ||||||||||
| Retained earnings | 93,117 | 89,986 | 88,314 | 85,583 | 83,861 | ||||||||||
| Accumulated other comprehensive income (loss), net of tax | 1,103 | 543 | (227 | ) | (1,651 | ) | (2,649 | ) | |||||||
| Treasury stock, at cost - 1,019,582, 1,010,213, 995,688, 1,002,903 and | |||||||||||||||
| 1,002,078 shares, respectively | (12,969 | ) | (12,746 | ) | (12,352 | ) | (12,352 | ) | (12,332 | ) | |||||
| Total stockholders' equity | 90,624 | 87,103 | 85,062 | 80,840 | 78,094 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 949,663 | $ | 901,314 | $ | 893,763 | $ | 915,998 | $ | 883,277 | |||||
| PSB Holding, Inc. | |||||||||||||||
| Loan Composition by Purpose | |||||||||||||||
| Quarter-ended (dollars in thousands) | |||||||||||||||
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||||
| Total Loans | |||||||||||||||
| Residential real estate | |||||||||||||||
| One to four family | 119,620 | 117,093 | 116,393 | 117,970 | 120,130 | 119,736 | 120,542 | ||||||||
| HELOC loans | 22,855 | 22,158 | 23,631 | 24,746 | 25,880 | 25,529 | 24,730 | ||||||||
| Residential construction & development | 21,273 | 20,937 | 18,893 | 16,413 | 13,483 | 12,464 | 12,174 | ||||||||
| Residential vacant land | 4,299 | 4,680 | 5,052 | 5,370 | 5,507 | 7,017 | 6,451 | ||||||||
| Total Residential real estate | 168,047 | 164,868 | 163,969 | 164,499 | 165,000 | 164,746 | 163,897 | ||||||||
| Commercial/Agricultural real estate | |||||||||||||||
| Owner occupied | |||||||||||||||
| Commercial real estate | 158,423 | 149,507 | 147,435 | 145,480 | 141,043 | 136,248 | 135,170 | ||||||||
| SBA commercial real estate | 1,367 | 1,386 | 1,741 | 1,769 | 1,888 | 1,560 | 1,863 | ||||||||
| Agriculture real estate | 5,139 | 5,764 | 5,078 | 4,968 | 4,895 | 4,547 | 4,392 | ||||||||
| Construction and land development | 12,742 | 7,832 | 6,523 | 350 | - | - | - | ||||||||
| Total Owner occupied | 177,671 | 164,489 | 160,777 | 152,567 | 147,826 | 142,355 | 141,425 | ||||||||
| Non-owner occupied | |||||||||||||||
| Commercial real estate | 179,136 | 168,809 | 161,647 | 147,246 | 134,860 | 135,162 | 137,939 | ||||||||
| SBA commercial real estate | 863 | 141 | 146 | 151 | 156 | 160 | 161 | ||||||||
| Agricultural real estate | 0 | 0 | 0 | 315 | 321 | 331 | 338 | ||||||||
| Construction and land development | 13,301 | 22,159 | 22,014 | 35,288 | 32,481 | 31,377 | 26,014 | ||||||||
| Commercial vacant land | 14,532 | 14,702 | 15,404 | 13,800 | 14,414 | 11,535 | 10,809 | ||||||||
| Total Non-owner occupied | 207,832 | 205,811 | 199,211 | 196,800 | 182,232 | 178,565 | 175,261 | ||||||||
| Commercial/Agricultural non-real estate | |||||||||||||||
| Municipal non-real estate | 6,384 | 9,017 | 6,353 | 6,806 | 6,661 | 8,532 | 6,037 | ||||||||
| Commercial line | 62,991 | 65,252 | 58,117 | 68,300 | 62,357 | 64,652 | 51,684 | ||||||||
| Other commercial non-real estate | 64,418 | 65,500 | 69,073 | 65,829 | 68,446 | 69,474 | 65,845 | ||||||||
| SBA commercial non-real estate | 1,819 | 2,252 | 2,169 | 2,278 | 2,557 | 2,785 | 2,893 | ||||||||
| Agricultural non-real estate | 3,606 | 3,491 | 3,699 | 3,994 | 4,366 | 3,396 | 3,095 | ||||||||
| Total Commercial/Agricultural non-real estate | 139,218 | 145,512 | 139,411 | 147,207 | 144,387 | 148,839 | 129,554 | ||||||||
| Consumer non-real estate | |||||||||||||||
| Consumer installment | 3,319 | 3,093 | 2,793 | 2,755 | 2,629 | 2,415 | 2,183 | ||||||||
| Consumer line | 1,343 | 304 | 344 | 243 | 216 | 220 | 250 | ||||||||
| Other consumer | 197 | 195 | 190 | 218 | 212 | 199 | 204 | ||||||||
| Total Consumer non-real estate | 4,859 | 3,592 | 3,327 | 3,216 | 3,057 | 2,834 | 2,637 | ||||||||
| Gross loans | 697,627 | 684,272 | 666,695 | 664,289 | 642,502 | 637,339 | 612,774 | ||||||||
| Net deferred loan costs | 295 | 300 | 272 | 213 | 212 | 237 | 211 | ||||||||
| Overdrafts | 168 | 339 | 296 | 211 | 278 | 217 | 166 | ||||||||
| Allowance for loan losses | (6,801 | ) | (6,664 | ) | (6,507 | ) | (6,232 | ) | (6,280 | ) | (6,173 | ) | (6,387 | ) | |
| Total loans receivable | 691,289 | 678,247 | 660,756 | 658,481 | 636,712 | 631,620 | 606,764 | ||||||||
| PSB Holdings, Inc. | ||||||||||||||
| Deposit Composition | ||||||||||||||
| September 30, | December 31, | |||||||||||||
| (dollars in thousands) | 2019 | 2018 | 2018 | |||||||||||
| $ | % | $ | % | $ | % | |||||||||
| Non-interest bearing demand | $ | 159,897 | 21.70 | % | $ | 151,484 | 21.10 | % | $ | 148,611 | 20.50 | % | ||
| Interest-bearing demand and savings | 242,713 | 33.00 | % | 246,811 | 34.40 | % | 254,857 | 35.10 | % | |||||
| Money market deposits | 170,403 | 23.10 | % | 132,887 | 18.50 | % | 145,300 | 20.00 | % | |||||
| Retail and local time deposits <= $250 | 103,074 | 14.00 | % | 98,101 | 13.70 | % | 99,584 | 13.80 | % | |||||
| Total core deposits | 676,087 | 91.80 | % | 629,283 | 87.70 | % | 648,352 | 89.40 | % | |||||
| Retail and local time deposits > $250 | 24,549 | 3.30 | % | 21,194 | 3.00 | % | 22,131 | 3.00 | % | |||||
| Broker & national time deposits <= $250 | 4,960 | 0.70 | % | 3,225 | 0.40 | % | 2,483 | 0.30 | % | |||||
| Broker & national time deposits > $250 | 30,589 | 4.20 | % | 63,581 | 8.90 | % | 52,860 | 7.30 | % | |||||
| Totals | $ | 736,185 | 100.00 | % | $ | 717,283 | 100.0 | % | $ | 725,826 | 100.0 | % | ||
| Nonperforming Assets as of: | September | December 31, | ||||||||||
| (dollars in thousands) | 2019 | 2018 | 2018 | |||||||||
| Nonaccrual loans (excluding restructured loans) | $ | 3,609 | $ | 3,024 | $ | 3,422 | ||||||
| Nonaccrual restructured loans | 510 | 325 | 313 | |||||||||
| Restructured loans not on nonaccrual | 747 | 2,054 | 2,284 | |||||||||
| Accruing loans past due 90 days or more | - | - | - | |||||||||
| Total nonperforming loans | 4,866 | 5,403 | 6,019 | |||||||||
| Other real estate owned | 572 | 483 | 113 | |||||||||
| Total nonperforming assets | $ | 5,438 | $ | 5,886 | $ | 6,132 | ||||||
| Nonperforming loans as a % of gross loans receivable | 0.70 | % | 0.84 | % | 0.91 | % | ||||||
| Total nonperforming assets as a % of total assets | 0.57 | % | 0.67 | % | 0.67 | % | ||||||
| Allowance for loan losses as a % of nonperforming loans | 139.77 | % | 116.23 | % | 103.54 | % | ||||||
| PSB Holdings, Inc. | |||||||||||||||
| Average Balances ($000) and Interest Rates | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Quarter ended September 30, 2019 | Quarter ended September 30, 2018 | ||||||||||||||
| Average | Yield / | Average | Yield / | ||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||
| Assets | |||||||||||||||
| Interest-earning assets: | |||||||||||||||
| Loans (1)(2) | $ | 695,776 | $ | 8,838 | 5.04 | % | $ | 640,656 | $ | 7,828 | 4.85 | % | |||
| Taxable securities | 107,801 | 769 | 2.83 | % | 111,937 | 732 | 2.59 | % | |||||||
| Tax-exempt securities (2) | 59,537 | 478 | 3.19 | % | 64,535 | 499 | 3.07 | % | |||||||
| FHLB stock | 1,970 | 20 | 4.03 | % | 2,260 | 20 | 3.51 | % | |||||||
| Other | 22,493 | 108 | 1.90 | % | 21,145 | 103 | 1.93 | % | |||||||
| Total (2) | 887,577 | 10,213 | 4.57 | % | 840,533 | 9,182 | 4.33 | % | |||||||
| Non-interest-earning assets: | |||||||||||||||
| Cash and due from banks | 12,113 | 11,702 | |||||||||||||
| Premises and equipment, | |||||||||||||||
| net | 10,136 | 10,461 | |||||||||||||
| Cash surrender value ins | 16,606 | 15,351 | |||||||||||||
| Other assets | 8,569 | 9,658 | |||||||||||||
| Allowance for loan | |||||||||||||||
| losses | (6,719 | ) | (6,187 | ) | |||||||||||
| Total | $ | 928,282 | $ | 881,518 | |||||||||||
| Liabilities & stockholders' equity | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Savings and demand | |||||||||||||||
| deposits | $ | 239,490 | $ | 495 | 0.82 | % | $ | 246,596 | $ | 393 | 0.63 | % | |||
| Money market deposits | 164,801 | 329 | 0.79 | % | 133,873 | 186 | 0.55 | % | |||||||
| Time deposits | 164,899 | 830 | 2.00 | % | 186,146 | 745 | 1.59 | % | |||||||
| FHLB borrowings | 75,325 | 323 | 1.70 | % | 74,045 | 359 | 1.92 | % | |||||||
| Other borrowings | 22,079 | 58 | 1.04 | % | 2,020 | 1 | 0.20 | % | |||||||
| Senior sub. notes | 2,500 | 28 | 4.44 | % | 2,500 | 28 | 4.44 | % | |||||||
| Junior sub. debentures | 7,732 | 91 | 4.67 | % | 7,732 | 93 | 4.77 | % | |||||||
| Total | 676,826 | 2,154 | 1.26 | % | 652,912 | 1,805 | 1.10 | % | |||||||
| Non-interest-bearing liabilities: | |||||||||||||||
| Demand deposits | 152,598 | 141,906 | |||||||||||||
| Other liabilities | 9,719 | 9,310 | |||||||||||||
| Stockholders' equity | 89,139 | 77,390 | |||||||||||||
| Total | $ | 928,282 | $ | 881,518 | |||||||||||
| Net interest income | $ | 8,059 | $ | 7,377 | |||||||||||
| Rate spread | 3.31 | % | 3.23 | % | |||||||||||
| Net yield on interest-earning assets | 3.60 | % | 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) | |||||||||||||||
| Nine months ended September 30, 2019 | Nine months ended September 30, 2018 | ||||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||
| Assets | |||||||||||||||
| Interest-earning assets: | |||||||||||||||
| Loans (1)(2) | $ | 677,846 | $ | 25,824 | 5.09 | % | $ | 627,026 | $ | 22,401 | 4.78 | % | |||
| Taxable securities | 106,559 | 2,212 | 2.78 | % | 110,104 | 2,085 | 2.53 | % | |||||||
| Tax-exempt securities (2) | 62,146 | 1,472 | 3.17 | % | 60,601 | 1,384 | 3.05 | % | |||||||
| FHLB stock | 1,859 | 79 | 5.68 | % | 2,003 | 61 | 4.07 | % | |||||||
| Other | 18,660 | 301 | 2.16 | % | 17,591 | 221 | 1.68 | % | |||||||
| Total (2) | 867,070 | 29,888 | 4.61 | % | 817,325 | 26,152 | 4.28 | % | |||||||
| Non-interest-earning assets: | |||||||||||||||
| Cash and due from banks | 11,428 | 10,666 | |||||||||||||
| Premises and equipment, | |||||||||||||||
| net | 10,313 | 10,522 | |||||||||||||
| Cash surrender value ins | 16,506 | 15,260 | |||||||||||||
| Other assets | 8,705 | 9,260 | |||||||||||||
| Allowance for loan | |||||||||||||||
| losses | (6,517 | ) | (6,288 | ) | |||||||||||
| Total | $ | 907,505 | $ | 856,745 | |||||||||||
| Liabilities & stockholders' equity | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Savings and demand | |||||||||||||||
| deposits | $ | 244,189 | $ | 1,384 | 0.76 | % | $ | 241,562 | $ | 950 | 0.53 | % | |||
| Money market deposits | 157,800 | 1,020 | 0.86 | % | 136,967 | 490 | 0.48 | % | |||||||
| Time deposits | 170,611 | 2,437 | 1.91 | % | 179,863 | 1,940 | 1.44 | % | |||||||
| FHLB borrowings | 63,597 | 862 | 1.81 | % | 60,448 | 770 | 1.70 | % | |||||||
| Other borrowings | 21,398 | 166 | 1.04 | % | 3,757 | 6 | 0.21 | % | |||||||
| Senior sub. notes | 2,500 | 84 | 4.49 | % | 2,500 | 83 | 4.44 | % | |||||||
| Junior sub. debentures | 7,732 | 274 | 4.74 | % | 7,732 | 234 | 4.05 | % | |||||||
| Total | 667,827 | 6,227 | 1.25 | % | 632,829 | 4,473 | 0.95 | % | |||||||
| Non-interest-bearing liabilities: | |||||||||||||||
| Demand deposits | 143,990 | 139,167 | |||||||||||||
| Other liabilities | 9,573 | 8,821 | |||||||||||||
| Stockholders' equity | 86,115 | 75,928 | |||||||||||||
| Total | $ | 907,505 | $ | 856,745 | |||||||||||
| Net interest income | $ | 23,661 | $ | 21,679 | |||||||||||
| Rate spread | 3.36 | % | 3.33 | % | |||||||||||
| Net yield on interest-earning assets | 3.65 | % | 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
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