PSB Holdings, Inc. Reports Second Quarter 2024 Earnings of $0.56 Per Share, Net Interest Margin and Tangible Book Value Increase

PSB Holdings, Inc.

Mon, Jul 22, 2024, 6:30 AM 21 min read

WAUSAU, Wis., July 22, 2024 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported second quarter earnings ending June 30, 2024 of $0.56 per common share on net income of $2.3 million, compared to $0.39 per common share on net income of $1.6 million during the first quarter ending March 31, 2024, and $0.64 per common share on net income of $2.7 million during the second quarter ending June 30, 2023.

PSB’s second quarter 2024 operating results reflected the following changes from the first quarter of 2024: (1) higher net interest income as asset yields increased 9 basis points while funding costs increased only 6 basis points; (2) higher non-interest income due primarily to no losses on the sale of investment securities during the current quarter and higher mortgage banking income; and (3) an increase in the effective tax rate to 14.4% from 8.9% the previous quarter.

“During the second quarter of 2024, we started seeing some positive developments in our operation that should translate to improved profitability in future quarters. Our net interest margin has started to expand, operating expenses excluding severance charges declined, and we are hopeful to return some non-performing assets to performing assets by the end of 2024. Should interest rates remain stable or decline through the remainder of 2024, we expect to see continued growth in our tangible book value and increased earnings,” stated Scott Cattanach, President and CEO.

June 30, 2024, Highlights:

Net interest income increased to $9.4 million for the quarter ended June 30, 2024, from $9.3 million for the quarter ended March 31, 2024, as increases in asset and loan yields outpaced the increases in funding costs.
Noninterest income increased to $1.9 million for the quarter ended June 30, 2024, compared to $1.0 million the prior quarter. The prior quarter reflected a loss on the sale of investment securities as the Company repositioned the investment portfolio into higher yielding investments. The increase in non-interest income also reflected an increase in mortgage banking income and investment and insurance sales commissions.
Noninterest expenses increased nominally during the quarter ended June 30, 2024, reflecting slight increases in salary and benefit expenses. Included in salary and benefit expenses for the second quarter were severance expenses totaling approximately $404,000.
Tangible book value per common share increased to $24.55 at June 30, 2024, compared to $24.21 one quarter earlier and $22.64 at June 30, 2023. During the second quarter ended June 30, 2024, tangible book value per share was positively influenced by net income, intangible asset amortization, and stock repurchase activity offset by dividend payments.
Loans decreased $6.6 million in the second quarter ended June 30, 2024, to $1.07 billion largely due to the repayment of a $17 million, low yielding municipal loan. Allowance for credit losses increased to 1.16% of gross loans.
Total deposits increased $39.0 million during the quarter ended June 30, 2024, to $1.15 billion, though a large portion of the increase was attributable to an overnight deposit at June 30, 2024 by one depositor that has since drawn down the balance. Meanwhile, deposit expenses decreased $244,000 as the Bank increased the level of non-interest bearing deposits and replaced higher costing brokered deposits with money market deposits.
Return on tangible common equity was 9.34% for the quarter ended June 30, 2024, compared to 6.57% the prior quarter and 11.23% one year earlier.

Balance Sheet and Asset Quality Review

Total assets increased $67.1 million to $1.49 billion at June 30, 2024. Cash and cash equivalents increased $70.1 million, to $86.0 million at June 30, 2024, compared to $15.9 million the previous quarter. The higher cash and cash equivalent level primarily reflects a large customer overnight deposit of approximately $49 million at June 30, 2024, since withdrawn. Investment securities available for sale decreased $389,000 to $165.2 million at June 30, 2024, from $165.6 million one quarter earlier. Total collateralized liquidity available to meet cash demands was approximately $352 million at June 30, 2024, with an additional $328 million that could be raised in a short time frame from the brokered CDs market.

Total loans receivable decreased $6.6 million to $1.07 billion at June 30, 2024, due primarily to the repayment of a low yielding municipal commercial loan of approximately $17 million. Commercial non-real estate loans decreased $11.6 million to $148.2 million at June 30, 2024, from $159.7 million one quarter earlier. Meanwhile, commercial real estate loans increased $5.1 million to $614.7 million at June 30, 2024, from $609.6 million the prior quarter. Residential real estate loans increased slightly from the prior quarter to $340.9 million from $339.8 million. The loan portfolio remains well diversified with commercial real estate loans totaling 55.5% of gross loans followed by residential real estate loans at 30.7% of gross loans, commercial non-real estate loans at 13.4% and consumer loans at 0.4%.

The allowance for credit losses increased slightly to 1.16% of gross loans at June 30, 2024, from 1.14% the prior quarter. Annualized net charge-offs to average loans were zero for the last four quarters ending June 30, 2024, compared to net recoveries of 0.07% one year earlier. Non-performing assets totaled 0.84% of total assets at June 30, 2024, compared to 0.83% at March 31, 2024. For the sixth consecutive quarter, the Bank did not own any foreclosed real estate.

Total deposits increased $39.0 million to $1.15 billion at June 30, 2024, from $1.11 billion at March 31, 2024. The increase in deposits reflects a $47.7 million increase in money market deposits and a $2.8 million increase in non-interest bearing deposits partially offset by a $3.2 million decrease in retail and local time deposits, a $2.1 million decrease in interest bearing demand and savings deposits and a $6.2 million reduction in broker and national time deposits. The increase in money market deposits reflected a deposit of approximately $49 million towards the end of the second quarter of 2024 by an existing business customer. These deposits were drawn down in the third quarter of 2024.

The composition of funding sources changed during the second quarter of 2024 as management relied less on brokered and national time deposits. At June 30, 2024, money market deposits and retail time deposits increased to 44.1% of deposits, compared to 41.6% at March 31, 2024. Uninsured and uncollateralized deposits increased to 24.0% of total deposits at June 30, 2024, from 19.3% of total deposits at March 31, 2024. FHLB advances increased to $184.9 million at June 30, 2024, compared to $158.3 million at March 31, 2024. FHLB advances were used to fund repayment of certain brokered deposit maturities and supplement local deposit changes.

Tangible stockholder equity as a percent of total tangible assets was 7.32% at June 30, 2024, compared to 7.60% at March 31, 2024, and 7.22% at June 30, 2023.

Tangible net book value per common share increased $1.91, to $24.55, at June 30, 2024, compared to $22.64 one year earlier, an increase of 8.4%. Additionally, total dividends of $0.62 were paid to shareholders. Relative to the prior quarter, tangible net book value per common share increased $0.24 due to continued earnings. The accumulated other comprehensive loss on the investment portfolio was $20.5 million at June 30, 2024, compared to $20.8 million one quarter earlier.

Operations Review

Net interest income increased to $9.4 million (on a net margin of 2.84%) for the second quarter of 2024, from $9.3 million (on a net margin of 2.80%) for the first quarter of 2024, and decreased from $9.5 million (on a net margin of 2.98%) for the second quarter of 2023. Earning asset yields increased 9 basis points to 5.21% during the second quarter of 2024 from 5.12% during the first quarter of 2024, while interest bearing deposit and borrowing costs increased only 6 basis points to 3.06% compared to 3.00% during the first quarter of 2024.

The increase in earning asset yields was primarily due to higher yields on loan originations, renewals and the repayment of a low yielding municipal loan during the quarter. Loan yields increased during the second quarter of 2024 to 5.67% from 5.59% for the first quarter of 2024, up 8 basis points. Taxable security yields were 3.02% for the quarter ended June 30, 2024, compared to 2.80% for the quarter ended March 31, 2024, up 22 basis points.

The cost of all deposits was 2.11% for the quarter ended June 30, 2024, compared to 2.15% the prior quarter, down 4 basis points while the overall cost of funds increased 6 basis points from 3.00% to 3.06% during the same time period. Deposit costs for savings and demand deposits decreased during the quarter ended June 30, 2024, to 1.78% from 1.92% the prior quarter. During the prior quarter, the Company accepted seasonally high yield municipal deposits which have now been drawn down. The cost of money market deposits also declined during the second quarter to 2.72% from 2.78% the prior quarter. The cost of time deposits and FHLB advances continued to increase and were primarily responsible for the rise in the Bank’s cost of funds in the current quarter. The cost of time deposits increased to 3.97% for the second quarter ended June 30, 2024 from 3.82% the prior quarter. FHLB advance costs rose to 4.28% during the second quarter ended June 30, 2024, from 4.08% the prior quarter.

Total noninterest income increased for the second quarter of 2024 to $1.91 million, from $1.04 million for the first quarter of 2024. The first quarter reflected investment restructuring activity resulting in a loss on the sale of investment securities of $495,000. There were no restructuring activities in the second quarter that resulted in security losses. Mortgage banking income increased by $125,000 to $433,000 in the June 30, 2024 quarter. At June 30, 2024, the Bank serviced $369.4 million in secondary market residential mortgage loans for others which provides fee income.

Noninterest expenses increased slightly to $8.4 million for the second quarter of 2024, compared to $8.3 million for the first quarter of 2024. The second quarter ended June 30, 2024, reflected slightly higher salary and benefit expenses and higher advertising and promotion expenses. The salary and benefit expenses included approximately $404,000 in severance costs.

Taxes increased $241,000 during the second quarter to $410,000, from $169,000 one quarter earlier. The increase generally reflects higher pre-tax income. The effective tax rate for the quarter ended June 30, 2024, was 14.3% compared to 8.9% for the first quarter ended March 31, 2024, and 18.8% for the second quarter ended June 30, 2023.

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 twelve full-service banking locations in Marathon, Oneida, Vilas, Portage, Milwaukee and Waukesha counties and a loan production office in Dane County. 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. The forward-looking statements in this press release speak only as of the date on which they are made and PSB does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

PSB Holdings, Inc.
Consolidated Balance Sheets
June 30, and March 31, 2024, September 30, and June 30, 2023, unaudited, December 31, 2023 derived from audited financial statements

	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(dollars in thousands, except per share data)		2024			2024			2023			2023			2023

Assets

Cash and due from banks	$	16,475		$	13,340		$	20,887		$	12,881		$	27,409
Interest-bearing deposits		251			105			1,431			668			892
Federal funds sold		69,249			2,439			5,462			7,764			16,138

Cash and cash equivalents		85,975			15,884			27,780			21,313			44,439
Securities available for sale (at fair value)		165,177			165,566			164,024			160,883			167,382
Securities held to maturity (fair values of $79,993, $81,234, $82,514, $75,236 and $81,489 respectively)		86,825			87,104			87,081			86,908			87,335
Equity securities		1,661			1,474			1,474			2,273			2,178
Loans held for sale		2,268			865			230			971			151
Loans receivable, net (allowance for credit losses of $12,597, $12,494, $12,302, $12,267 and $11,922 respectively)		1,074,844			1,081,394			1,078,475			1,098,019			1,048,322
Accrued interest receivable		5,046			5,467			5,136			4,716			4,274
Foreclosed assets		-			-			-			-			-
Premises and equipment, net		14,048			13,427			13,098			13,242			13,256
Mortgage servicing rights, net		1,688			1,657			1,664			1,684			1,666
Federal Home Loan Bank stock (at cost)		8,825			7,006			6,373			6,373			6,359
Cash surrender value of bank-owned life insurance		24,401			24,242			24,085			23,931			23,776
Core deposit intangible		229			249			273			297			321
Goodwill		2,541			2,541			2,541			2,541			2,541
Other assets		12,111			11,682			11,866			14,094			14,933

TOTAL ASSETS	$	1,485,639		$	1,418,558		$	1,424,100		$	1,437,245		$	1,416,933

Liabilities

Non-interest-bearing deposits	$	250,435		$	247,608		$	266,829		$	288,765		$	282,153
Interest-bearing deposits		901,886			865,744			874,973			883,474			860,981

Total deposits		1,152,321			1,113,352			1,141,802			1,172,239			1,143,134

Federal Home Loan Bank advances		184,900			158,250			134,000			128,000			133,000
Other borrowings		5,775			8,096			8,058			5,660			5,730
Senior subordinated notes		4,778			4,776			4,774			4,772			4,771
Junior subordinated debentures		12,972			12,947			12,921			12,896			12,870
Allowance for credit losses on unfunded commitments		477			477			577			512			712
Accrued expenses and other liabilities		13,069			10,247			12,681			10,258			11,783

Total liabilities		1,374,292			1,308,145			1,314,813			1,334,337			1,312,000

Stockholders' equity

Preferred stock - no par value:
Authorized - 30,000 shares; no shares issued or outstanding
Outstanding - 7,200 shares, respectively		7,200			7,200			7,200			7,200			7,200
Common stock - no par value with a stated value of $1.00 per share:
Authorized - 18,000,000 shares; Issued - 5,490,798 shares
Outstanding - 4,128,382, 4,147,649, 4,164,735, 4,174,197 and 4,190,252 shares, respectively		1,830			1,830			1,830			1,830			1,830
Additional paid-in capital		8,527			8,466			8,460			8,421			8,382
Retained earnings		135,276			134,271			132,666			131,624			130,396
Accumulated other comprehensive income (loss), net of tax		(20,503	)		(20,775	)		(20,689	)		(26,190	)		(23,240	)
Treasury stock, at cost - 1,362,416, 1,343,149, 1,326,063, 1,316,601 and 1,300,546 shares, respectively		(20,983	)		(20,579	)		(20,180	)		(19,977	)		(19,635	)

Total stockholders' equity		111,347			110,413			109,287			102,908			104,933

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,485,639		$	1,418,558		$	1,424,100		$	1,437,245		$	1,416,933

PSB Holdings, Inc.
Consolidated Statements of Income
	Quarter Ended													Six Months Ended
(dollars in thousands,	Jun. 30,		Mar. 31,			Dec. 31,			Sep. 30,		Jun. 30,			June
except per share data - unaudited)		2024		2024			2023			2023		2023			2024			2023

Interest and dividend income:
Loans, including fees	$	15,433	$	15,109		$	14,888		$	14,263	$	12,709		$	30,542		$	24,482
Securities:
Taxable		1,295		1,197			1,147			1,114		1,327			2,492			2,658
Tax-exempt		521		526			532			533		535			1,047			1,072
Other interest and dividends		265		343			320			238		145			608			293

Total interest and dividend income		17,514		17,175			16,887			16,148		14,716			34,689			28,505

Interest expense:
Deposits		5,838		6,082			5,526			4,817		3,661			11,920			6,650
FHLB advances		1,860		1,450			1,349			1,321		1,200			3,310			1,747
Other borrowings		58		60			54			51		48			118			110
Senior subordinated notes		58		59			59			59		58			117			120
Junior subordinated debentures		255		251			254			255		242			506			476

Total interest expense		8,069		7,902			7,242			6,503		5,209			15,971			9,103

Net interest income		9,445		9,273			9,645			9,645		9,507			18,718			19,402
Provision for credit losses		100		95			100			150		100			195			200

Net interest income after provision for credit losses		9,345		9,178			9,545			9,495		9,407			18,523			19,202

Noninterest income:
Service fees		350		336			360			349		378			686			739
Mortgage banking income		433		308			247			345		311			741			636
Investment and insurance sales commissions		222		121			100			158		287			343			652
Net loss on sale of securities		-		(495	)		(297	)		-		(279	)		(495	)		(279	)
Increase in cash surrender value of life insurance		159		157			154			155		149			316			306
Life insurance death benefit		-		-			-			-		533			-			533
Other noninterest income		742		617			540			675		605			1,359			1,347

Total noninterest income		1,906		1,044			1,104			1,682		1,984			2,950			3,934

Noninterest expense:
Salaries and employee benefits		5,167		5,123			4,244			4,514		4,884			10,290			9,890
Occupancy and facilities		733		721			675			689		698			1,454			1,397
Loss (gain) on foreclosed assets		-		-			1			-		4			-			(46	)
Data processing and other office operations		1,047		1,022			1,001			953		951			2,069			1,831
Advertising and promotion		171		129			244			161		166			300			328
Core deposit intangible amortization		20		24			24			24		27			44			61
Other noninterest expenses		1,257		1,306			1,169			1,113		1,202			2,563			2,275

Total noninterest expense		8,395		8,325			7,358			7,454		7,932			16,720			15,736

Income before provision for income taxes		2,856		1,897			3,291			3,723		3,459			4,753			7,400
Provision for income taxes		410		169			878			2,374		652			579			1,593

Net income	$	2,446	$	1,728		$	2,413		$	1,349	$	2,807		$	4,174		$	5,807
Preferred stock dividends declared	$	122	$	122		$	122		$	122	$	122		$	244		$	244

Net income available to common shareholders	$	2,324	$	1,606		$	2,291		$	1,227	$	2,685		$	3,930		$	5,563
Basic earnings per common share	$	0.56	$	0.39		$	0.55		$	0.29	$	0.64		$	0.95		$	1.31
Diluted earnings per common share	$	0.56	$	0.39		$	0.55		$	0.29	$	0.64		$	0.95		$	1.31

PSB Holdings, Inc.
Quarterly Financial Summary
(dollars in thousands, except per share data)		Quarter ended
		Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
Earnings and dividends:			2024			2024			2023			2023			2023

	Interest income	$	17,514		$	17,175		$	16,887		$	16,148		$	14,716
	Interest expense	$	8,069		$	7,902		$	7,242		$	6,503		$	5,209
	Net interest income	$	9,445		$	9,273		$	9,645		$	9,645		$	9,507
	Provision for credit losses	$	100		$	95		$	100		$	150		$	100
	Other noninterest income	$	1,906		$	1,044		$	1,104		$	1,682		$	1,984
	Other noninterest expense	$	8,395		$	8,325		$	7,358		$	7,454		$	7,932
	Net income available to common shareholders	$	2,324		$	1,606		$	2,291		$	1,227		$	2,685

	Basic earnings per common share (3)	$	0.56		$	0.39		$	0.55		$	0.29		$	0.64
	Diluted earnings per common share (3)	$	0.56		$	0.39		$	0.55		$	0.29		$	0.64
	Dividends declared per common share (3)	$	0.32		$	-		$	0.30		$	-		$	0.30
	Tangible net book value per common share (4)	$	24.55		$	24.21		$	23.84		$	22.25		$	22.64

	Semi-annual dividend payout ratio		33.60	%		n/a			38.14	%		n/a			27.38	%
	Average common shares outstanding		4,139,456			4,154,702			4,168,924			4,186,940			4,218,226


Balance sheet - average balances:
	Loans receivable, net of allowances for credit loss	$	1,088,013		$	1,081,936		$	1,081,851		$	1,076,158		$	1,000,349
	Assets	$	1,433,749		$	1,429,437		$	1,424,240		$	1,425,522		$	1,367,363
	Deposits	$	1,111,240		$	1,138,010		$	1,148,399		$	1,149,624		$	1,098,039
	Stockholders' equity	$	110,726		$	109,473		$	105,060		$	105,745		$	106,762


Performance ratios:
	Return on average assets (1)		0.69	%		0.49	%		0.67	%		0.38	%		0.82	%
	Return on average common stockholders' equity (1)		9.03	%		6.32	%		9.29	%		4.94	%		10.82	%
	Return on average tangible common
	stockholders' equity (1)(4)		9.34	%		6.57	%		9.64	%		5.17	%		11.23	%
	Net loan charge-offs to average loans (1)		0.00	%		0.00	%		0.00	%		0.00	%		-0.07	%
	Nonperforming loans to gross loans		1.15	%		1.08	%		0.54	%		0.55	%		0.60	%
	Nonperforming assets to total assets		0.84	%		0.83	%		0.42	%		0.42	%		0.45	%
	Allowance for credit losses to gross loans		1.16	%		1.14	%		1.13	%		1.10	%		1.12	%
	Nonperforming assets to tangible equity
	plus the allowance for credit losses (4)		11.09	%		10.59	%		5.38	%		5.87	%		5.96	%
	Net interest rate margin (1)(2)		2.84	%		2.80	%		2.88	%		2.88	%		2.98	%
	Net interest rate spread (1)(2)		2.15	%		2.12	%		2.20	%		2.27	%		2.46	%
	Service fee revenue as a percent of
	average demand deposits (1)		0.56	%		0.54	%		0.52	%		0.50	%		0.58	%
	Noninterest income as a percent
	of gross revenue		9.81	%		5.73	%		6.14	%		9.43	%		11.88	%
	Efficiency ratio (2)		72.52	%		78.93	%		67.04	%		64.58	%		68.09	%
	Noninterest expenses to average assets (1)		2.35	%		2.34	%		2.05	%		2.07	%		2.33	%
	Average stockholders' equity less accumulated
	other comprehensive income (loss) to
	average assets		9.03	%		8.98	%		8.88	%		9.00	%		9.33	%
	Tangible equity to tangible assets (4)		7.32	%		7.60	%		7.49	%		6.98	%		7.22	%

Stock price information:

	High	$	21.40		$	22.50		$	22.30		$	22.50		$	21.38
	Low	$	19.75		$	20.05		$	20.10		$	20.35		$	19.75
	Last trade value at quarter-end	$	20.40		$	21.25		$	22.11		$	21.15		$	20.35

(1) Annualized
(2) The yield on federally 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 goodwill and core deposit intangibles.

PSB Holdings, Inc.
Consolidated Statements of Comprehensive Income

			Quarter Ended
			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(dollars in thousands - unaudited)				2024			2024			2023			2023			2023

Net income			$	2,446		$	1,728		$	2,413		$	1,349		$	2,807

Other comprehensive income, net of tax:

	Unrealized gain (loss) on securities available
		for sale		184			(615	)		5,278			(3,085	)		(1,186	)

	Reclassification adjustment for security
		loss included in net income		-			391			280			-			220

	Accretion of unrealized loss included in net
		income on securities available for sale
		deferred tax adjustment for Wisconsin
		Act 19		-			(35	)		-			-			-

	Amortization of unrealized loss included in net
		income on securities available for sale
		transferred to securities held to maturity		89			91			91			91			107

	Unrealized gain (loss) on interest rate swap			39			123			(109	)		79			172

	Reclassification adjustment of interest rate
		swap settlements included in earnings		(40	)		(41	)		(39	)		(35	)		(38	)


Other comprehensive income (loss)				272			(86	)		5,501			(2,950	)		(725	)

Comprehensive income (loss)			$	2,718		$	1,642		$	7,914		$	(1,601	)	$	2,082

PSB Holdings, Inc.
Nonperforming Assets as of:
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
(dollars in thousands)		2024			2024			2023			2023			2023

Nonaccrual loans (excluding restructured loans)	$	12,184		$	11,498		$	5,596		$	5,807		$	6,000
Nonaccrual restructured loans		28			30			34			42			50
Restructured loans not on nonaccrual		299			304			310			256			261
Accruing loans past due 90 days or more		-			-			-			-			-

Total nonperforming loans		12,511			11,832			5,940			6,105			6,311
Other real estate owned		-			-			-			-			-

Total nonperforming assets	$	12,511		$	11,832		$	5,940		$	6,105		$	6,311

Nonperforming loans as a % of gross loans receivable		1.15	%		1.08	%		0.54	%		0.55	%		0.60	%
Total nonperforming assets as a % of total assets		0.84	%		0.83	%		0.42	%		0.42	%		0.45	%
Allowance for credit losses as a % of nonperforming loans		100.69	%		105.59	%		207.10	%		200.93	%		188.91	%

PSB Holdings, Inc.
Nonperforming Assets >= $500,000 net book value before specific reserves
At June 30, 2024
(dollars in thousands)
		Gross			Specific
Collateral Description	Asset Type	Principal			Reserves

Real estate - Buffet Style Restaurant	Nonaccrual	$	2,545		$	804
Real estate - Independent Auto Repair	Nonaccrual		587			-
Real estate - Dealership	Nonaccrual		5,053			233


Total listed nonperforming assets		$	8,185		$	1,037
Total bank wide nonperforming assets		$	12,511		$	1,624
Listed assets as a % of total nonperforming assets			65	%		64	%

PSB Holdings, Inc.
Loan Composition by Collateral Type
Quarter-ended (dollars in thousands)	Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023

Commercial:
Commercial and industrial	$	125,508		$	118,821		$	117,207		$	138,299		$	145,434
Agriculture		11,480			12,081			12,304			12,464			13,326
Municipal		11,190			28,842			31,530			27,186			25,222

Total Commercial		148,178			159,744			161,041			177,949			183,982

Commercial Real Estate:
Commercial real estate		544,171			546,257			536,209			539,488			490,657
Construction and development		70,540			63,375			81,701			86,456			99,769

Total Commercial Real Estate		614,711			609,632			617,910			625,944			590,426

Residential real estate:
Residential		270,944			274,300			274,453			274,632			274,692
Construction and development		36,129			34,158			33,960			33,141			41,485
HELOC		33,838			31,357			29,766			29,044			26,220

Total Residential Real Estate		340,911			339,815			338,179			336,817			342,397

Consumer installment		4,423			4,867			4,357			4,350			4,142

Subtotals - Gross loans		1,108,223			1,114,058			1,121,487			1,145,060			1,120,947
Loans in process of disbursement		(21,484	)		(20,839	)		(31,359	)		(35,404	)		(61,308	)

Subtotals - Disbursed loans		1,086,739			1,093,219			1,090,128			1,109,656			1,059,639
Net deferred loan costs		702			669			649			630			605
Allowance for credit losses		(12,597	)		(12,494	)		(12,302	)		(12,267	)		(11,922	)

Total loans receivable	$	1,074,844		$	1,081,394		$	1,078,475		$	1,098,019		$	1,048,322

PSB Holdings, Inc.
Selected Commercial Real Estate Loans by Purpose
	June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
(dollars in thousands)	2024			2024			2023			2023			2023

	Total Exposure		% of Portfolio (1)	Total Exposure		% of Portfolio (1)	Total Exposure		% of Portfolio (1)	Total Exposure		% of Portfolio (1)	Total Exposure		% of Portfolio (1)
Multi Family	$	146,873	15.2%	$	142,001	14.4%	$	132,386	13.2%	$	133,466	13.3%	$	119,573	12.4%
Industrial and Warehousing		86,025	8.9		85,409	8.6		83,817	8.3		88,906	8.9		84,049	8.7
Retail		34,846	3.6		33,177	3.4		35,419	3.5		35,281	3.5		34,004	3.5
Hotels		34,613	3.6		35,105	3.6		36,100	3.6		31,819	3.2		33,329	3.5
Office		6,518	0.7		6,655	0.7		6,701	0.7		6,746	0.7		8,395	0.9

(1) Percentage of commercial and commercial real estate portfolio and commitments.

PSB Holdings, Inc.
Deposit Composition

Insured and Collateralized Deposits	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)		2024			2024			2023			2023			2023
	$		%	$		%	$		%	$		%	$		%

Non-interest bearing demand	$	202,342	17.5%	$	199,077	17.8%	$	197,571	17.3%	$	209,133	17.8%	$	201,351	17.6%
Interest-bearing demand and savings		304,393	26.5%		318,672	28.7%		317,984	27.8%		307,620	26.3%		310,006	27.1%
Money market deposits		137,637	12.0%		143,167	12.9%		142,887	12.5%		135,910	11.6%		126,851	11.1%
Retail and local time deposits <= $250		149,298	13.0%		148,404	13.3%		149,145	13.1%		144,733	12.3%		140,572	12.3%

Total core deposits		793,670	69.0%		809,320	72.7%		807,587	70.7%		797,396	68.0%		778,780	68.1%
Retail and local time deposits > $250		22,500	2.0%		24,508	2.3%		23,000	2.0%		22,750	1.9%		20,250	1.8%
Broker & national time deposits <= $250		1,490	0.1%		2,229	0.2%		3,470	0.3%		3,222	0.3%		3,965	0.3%
Broker & national time deposits > $250		56,328	4.9%		61,752	5.5%		70,020	6.1%		88,614	7.6%		93,956	8.2%

Totals	$	873,988	76.0%	$	897,809	80.7%	$	904,077	79.1%	$	911,982	77.8%	$	896,951	78.4%

PSB Holdings, Inc.
Deposit Composition

Uninsured Deposits	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)		2024			2024			2023			2023			2023
	$		%	$		%	$		%	$		%	$		%

Non-interest bearing demand	$	48,092	4.1%	$	48,532	4.4%	$	69,258	6.1%	$	79,632	6.8%	$	80,802	7.1%
Interest-bearing demand and savings		32,674	2.8%		20,535	1.8%		20,316	1.8%		22,847	1.9%		22,604	2.0%
Money market deposits		177,954	15.4%		124,766	11.2%		124,518	10.9%		133,653	11.4%		127,871	11.2%
Retail and local time deposits <= $250		-	0.0%		-	0.0%		-	0.0%		-	0.0%		-	0.0%

Total core deposits		258,720	22.3%		193,833	17.4%		214,092	18.8%		236,132	20.1%		231,277	20.3%
Retail and local time deposits > $250		19,613	1.7%		21,710	1.9%		23,633	2.1%		24,120	2.1%		14,906	1.3%
Broker & national time deposits <= $250		-	0.0%		-	0.0%		-	0.0%		-	0.0%		-	0.0%
Broker & national time deposits > $250		-	0.0%		-	0.0%		-	0.0%		-	0.0%		-	0.0%

Totals	$	278,333	24.0%	$	215,543	19.3%	$	237,725	20.9%	$	260,252	22.2%	$	246,183	21.6%


PSB Holdings, Inc.
Deposit Composition

Total Deposits	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)		2024			2024			2023			2023			2023
	$		%	$		%	$		%	$		%	$		%

Non-interest bearing demand	$	250,434	21.6%	$	247,609	22.2%	$	266,829	23.4%	$	288,765	24.7%	$	282,153	24.7%
Interest-bearing demand and savings		337,067	29.3%		339,207	30.5%		338,300	29.6%		330,467	28.2%		332,610	29.1%
Money market deposits		315,591	27.4%		267,933	24.1%		267,405	23.4%		269,563	22.8%		254,722	22.3%
Retail and local time deposits <= $250		149,298	13.0%		148,404	13.3%		149,145	13.1%		144,738	12.4%		140,572	12.3%

Total core deposits		1,052,390	91.3%		1,003,153	90.1%		1,021,679	89.5%		1,033,533	88.1%		1,010,057	88.4%
Retail and local time deposits > $250		42,113	3.7%		46,218	4.2%		46,633	4.1%		46,870	4.0%		35,156	3.1%
Broker & national time deposits <= $250		1,490	0.1%		2,229	0.2%		3,470	0.3%		3,222	0.3%		3,965	0.3%
Broker & national time deposits > $250		56,328	4.9%		61,752	5.5%		70,020	6.1%		88,614	7.6%		93,956	8.2%

Totals	$	1,152,321	100.0%	$	1,113,352	100.0%	$	1,141,802	100.0%	$	1,172,239	100.0%	$	1,143,134	100.0%

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)

	Quarter ended June 30, 2024						Quarter ended March 31, 2024						Quarter ended June 30, 2023
	Average					Yield /	Average					Yield /	Average					Yield /
	Balance			Interest		Rate	Balance			Interest		Rate	Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)	$	1,100,518		$	15,520	5.67%	$	1,094,321		$	15,199	5.59%	$	1,012,105		$	12,726	5.04%
Taxable securities		172,563			1,295	3.02%		171,788			1,197	2.80%		196,048			1,327	2.71%
Tax-exempt securities (2)		79,564			659	3.33%		80,434			666	3.33%		81,758			677	3.32%
FHLB stock		7,931			182	9.23%		6,499			165	10.21%		5,366			51	3.81%
Other		8,241			83	4.05%		12,885			178	5.56%		7,254			94	5.20%

Total (2)		1,368,817			17,739	5.21%		1,365,927			17,405	5.12%		1,302,531			14,875	4.58%

Non-interest-earning assets:
Cash and due from banks		17,345						17,367						15,632
Premises and equipment,
net		13,930						13,183						13,336
Cash surrender value ins		24,297						24,144						24,530
Other assets		21,865						21,201						23,090
Allowance for credit
losses		(12,505	)					(12,385	)					(11,756	)

Total	$	1,433,749					$	1,429,437					$	1,367,363

Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits	$	331,740		$	1,467	1.78%	$	350,497		$	1,672	1.92%	$	344,435		$	1,035	1.21%
Money market deposits		271,336			1,835	2.72%		274,186			1,897	2.78%		243,073			1,189	1.96%
Time deposits		257,006			2,536	3.97%		264,657			2,513	3.82%		247,007			1,437	2.33%
FHLB borrowings		174,596			1,860	4.28%		142,926			1,450	4.08%		127,441			1,200	3.78%
Other borrowings		6,870			58	3.40%		8,554			60	2.82%		5,588			48	3.45%
Senior sub. notes		4,777			58	4.88%		4,775			59	4.97%		4,770			58	4.88%
Junior sub. debentures		12,960			255	7.91%		12,934			251	7.81%		12,857			242	7.55%

Total		1,059,285			8,069	3.06%		1,058,529			7,902	3.00%		985,171			5,209	2.12%

Non-interest-bearing liabilities:
Demand deposits		251,158						248,670						263,524
Other liabilities		12,580						12,765						11,906
Stockholders' equity		110,726						109,473						106,762

Total	$	1,433,749					$	1,429,437					$	1,367,363

Net interest income				$	9,670					$	9,503					$	9,666
Rate spread						2.15%						2.12%						2.46%
Net yield on interest-earning assets						2.84%						2.80%						2.98%

(1) Nonaccrual loans are included in the daily average loan balances outstanding.
(2) The yield on federally tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)
	Six months ended June 30, 2024						Six months ended June 30, 2023
	Average					Yield/	Average					Yield/
	Balance			Interest		Rate	Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)	$	1,097,419		$	30,719	5.63%	$	994,349		$	24,514	4.97%
Taxable securities		172,176			2,492	2.91%		197,866			2,658	2.71%
Tax-exempt securities (2)		79,999			1,325	3.33%		81,844			1,357	3.34%
FHLB stock		7,215			347	9.67%		4,219			101	4.83%
Other		10,562			261	4.97%		8,143			192	4.75%

Total (2)		1,367,371			35,144	5.17%		1,286,421			28,822	4.52%

Non-interest-earning assets:
Cash and due from banks		17,356						16,439
Premises and equipment,
net		13,557						13,334
Cash surrender value ins		24,221						24,755
Other assets		21,534						23,139
Allowance for credit
losses		(12,445	)					(12,016	)

Total	$	1,431,594					$	1,352,072

Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits	$	341,119		$	3,139	1.85%	$	358,916		$	2,088	1.17%
Money market deposits		272,591			3,732	2.75%		234,044			2,019	1.74%
Time deposits		260,832			5,049	3.89%		246,289			2,543	2.08%
FHLB borrowings		158,761			3,310	4.19%		98,299			1,747	3.58%
Other borrowings		7,712			118	3.08%		7,794			110	2.85%
Senior sub. notes		4,776			117	4.93%		5,030			120	4.81%
Junior sub. debentures		12,947			506	7.86%		12,844			476	7.47%

Total		1,058,738			15,971	3.03%		963,216			9,103	1.91%

Non-interest-bearing liabilities:
Demand deposits		249,909						271,310
Other liabilities		12,881						12,231
Stockholders' equity		110,066						105,315

Total	$	1,431,594					$	1,352,072

Net interest income				$	19,173					$	19,719
Rate spread						2.14%						2.61%
Net yield on interest-earning assets						2.82%						3.09%

(1) Nonaccrual loans are included in the daily average loan balances outstanding.
(2) The yield on federally tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.

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