PSB Reports Fourth Quarter 2019 Earnings of $2.8 Million or $0.63 Per Share; Net Income Increased 9% to Record $11.2 Million in 2019

WAUSAU, Wis., Jan. 27, 2020 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank serving North Central Wisconsin, reported fourth quarter earnings ending December 31, 2019 of $0.63 per share on net income of $2.81 million, compared to earnings of $0.70 per share on net income of $3.13 million during the September 2019 quarter, and $0.56 per share one year earlier on earnings of $2.53 million.  The fourth quarter earnings reflected slightly higher net interest income and higher levels of non-interest expense.  Loan production remained strong, with net loans receivable expanding 2.3% from the previous quarter and 7.5% relative to one year earlier.

For the year ended December 31, 2019, earnings increased 9.1% to $11.2 million, or $2.51 per share compared to $10.3 million, or $2.29 per share for the year ended December 31, 2018. 

“PSB achieved record earnings in 2019 as strong lending activity has fueled asset growth and a streamlined branch network added efficiencies.  As we begin 2020, we will convert our loan production office in Milwaukee into a full-service branch office in the first quarter.  We anticipate the move into this economically vibrant market will continue to fuel loan and deposit growth in years ahead,” stated Scott Cattanach, President and CEO.

Financial Highlights (at or for the periods ended December 31, 2019, compared to September 30, 2019 and /or December 31, 2018, as applicable):

• Return on shareholders’ equity was 11.98% for the quarter compared to 13.94% one quarter earlier and 12.62% for the fourth quarter one year earlier.  Return on average assets was 1.17% for the fourth quarter of 2019, compared to 1.34% the previous quarter and 1.14% for the fourth quarter one year earlier.  For the year ended December 31, 2019, the return on shareholders’ equity was 12.77% and the return on average assets was 1.22%.
   
• Total assets grew 2.7% to $974.9 million at December 31, 2019 from $949.7 million one quarter earlier and 6.4% from $916.0 million one year earlier. Net loan growth of $49.2 million and core deposit growth of $74.0 million supported balance expansion over the past year.
   
• The net interest margin decreased to 3.53% for the quarter ended December 31, 2019, compared to 3.60% the previous quarter and 3.58% for the fourth quarter one year earlier.  The net interest margin for the fourth quarter was affected by a larger balance of investments relative to prior periods.
   
• The efficiency ratio was 59.90% for the fourth quarter compared to 55.14% one quarter earlier and 62.54% in the year ago quarter. 
   
• Tangible net book value was $20.72 per share at December 31, 2019, compared to $20.24 per share as of September 30, 2019 and $17.98 per share at December 31, 2018. Over the past year, tangible book value has grown 15.24%.

Balance Sheet and Asset Quality Review

Total assets were $974.9 million as of December 31, 2019, compared to $949.7 million as of September 30, 2019, an increase of $25.2 million, or 2.7%.  Total loans receivable increased $16.4 million with much of the new loans consisting of loans secured by commercial real estate. The commercial/agricultural real estate loan portfolio increased to $401.4 million at December 31, 2019 from $385.5 million three months earlier.  Non-owner occupied commercial real estate loans represented the largest component of the loan portfolio at 31.4% of gross loans at December 31, 2019, followed by owner occupied commercial real estate loans at 24.8%, residential real estate at 23.9%, commercial/agricultural loans at 19.0% and consumer loans at 0.7%.  Total agricultural related loans represent 1.16% of the total loan portfolio.  The non-owner occupied commercial real estate portfolio represents the largest portion of loan growth over the past year as the balance grew 14.0% from $196.8 million at December 31, 2018 to $224.3 million at December 31, 2019.  Meanwhile, over the past year, the commercial/agricultural non-real estate loans decreased 7.6% from $147.2 million at December 31, 2018 to $136.0 million at December 31, 2019. 

The allowance for loan losses remained at 0.97% of gross loans at December 31, 2019.  The annualized net charge-offs to average loans was unchanged at 0.01% for the quarter ended December 31, 2019, compared to the previous quarter and 0.07% one year earlier. Non-performing assets decreased to 0.55% of total assets at December 31, 2019, compared to 0.57% at September 30, 2019, and 0.67% at December 31, 2018.  At December 31, 2019, non-performing assets consisted of $3.7 million in non-accrual loans, $499,000 in non-accrual restructured loans, $676,000 in restructured loans not on non-accrual, and $460,000 in other real estate owned. 

At December 31, 2019, cash and investments totaled $228.5 million compared to $219.8 million at September 30, 2019.  During the course of the quarter, cash and investments increased due to deposit growth, a portion of which was used to support loan origination activity. 

Total deposits increased 6.2% to $781.8 million at December 31, 2019 compared to $736.2 million at September 30, 2019.  At December 31, 2019, interest-bearing demand and savings deposits accounted for 32.9% of total deposits, followed by money market deposits at 23.5%, noninterest-bearing demand deposits at 22.6% and retail and local time deposits at 16.7%.  Broker and national time deposits accounted for 4.3% of total deposits at December 31, 2019 versus 4.9% the prior quarter and 7.6% one year earlier.

FHLB advances decreased to $73.5 million at December 31, 2019 compared to $85.5 million at September 30, 2019 and other borrowings decreased to $6.1 million from $17.4 million over the same time period.       

For the quarter ended December 31, 2019, stockholders’ equity increased $2.1 million, or 2.28%, to $92.7 million, compared to $90.6 million at September 30, 2019.  Tangible net book value per share increased 2.37%, to $20.72 per share, at December 31, 2019, compared to $20.24 per share at September 30, 2019.  PSB’s tangible equity to total assets was 9.50% at December 31, 2019, compared to 9.53% at September 30, 2019. 

Operations Review

Net interest income totaled $8.0 million (on a net margin of 3.53%) for the fourth quarter of 2019, compared to $7.9 million (on net margin of 3.60%) for the third quarter of 2019 and $7.5 million (on a net margin of 3.58%) for the fourth quarter of 2018.  Compared to the preceding quarter, loans and investment yields decreased 16 basis points to 4.41% during the fourth quarter of 2019 from 4.57% one quarter earlier while deposit and borrowing costs declined 9 basis points to 1.17% from 1.26% over the same time period.  The decline in loan and investment yields 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.  Loan yields decreased to 4.88% from 5.04% during the fourth quarter of 2019, as many loans repriced lower as the prime rate declined, and market competition intensified. 

The cost of interest-bearing liabilities decreased during the quarter, reflecting lower rates associated with savings and demand deposits partially offset by higher rates on money market accounts.  Towards the end of the quarter, the bank received a large balance of public funds deposited into money market accounts. 

Additionally, the bank offered attractive rates on money market accounts to customers who met specific criteria designed to enhance the customers’ banking relationship with the bank.  These funds were used to replace higher costing certificates of deposit and borrowed funds.  Deposit costs decreased to $1.54 million for the fourth quarter of 2019 from $1.65 million the previous quarter.  Interest costs on borrowings declined $25,000 for the fourth quarter of 2019 to $475,000 from $500,000 the previous quarter.

“Our deposit costs declined less than the yield on earning assets during the fourth quarter, as we have sought to attract new deposits in anticipation of repaying higher costing brokered deposits of approximately $8.5 million and continue to fund anticipated balance sheet growth in the first quarter of 2020,” said Mark C. Oldenberg, Chief Financial Officer.

For the year ended December 31, 2019, net interest income increased 8.5% to $31.3 million compared to $28.8 million for the previous fiscal year.

The provision for loan losses totaled $150,000 during the fourth 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 fourth quarter of 2019 compared similarly to the prior quarter at $1.8 million and higher than the $1.7 million for the fourth quarter of 2018.  Service fees in the fourth quarter were $411,000 compared to $348,000 during the third quarter of 2019.  Gains on sale of mortgage loans decreased slightly to $452,000 for the fourth quarter from $463,000 in the third quarter of 2019 but remained strong as falling long-term U.S. Treasury rates have spurred mortgage refinance activity.  Commissions on investment and insurance sales increased to $301,000 from $276,000 the prior quarter.  At December 31, 2019, the bank had wealth assets under management totaling $248.5 million compared to $240.6 million at September 30, 2019 and $211.9 million at December 31, 2018.  The year over year growth of assets under management was 17.3%.

For the year ended December 31, 2019, total noninterest income increased 18.3% to $7.7 million from $6.5 million one year earlier.

Noninterest expense was $5.9 million for the fourth quarter of 2019, compared to $5.4 million for the third quarter.  For the fourth quarter of 2019, noninterest expense increased due to a slight increase in health insurance claims, software charges related to upgrades to product and operational features, an increase in advertising and promotion, losses on the sale of foreclosed property and professional fees largely related to audits of deposit and loan operation processes, to identify cost efficiencies.  Similar to the prior quarter, the fourth quarter 2019 results reflect the elimination of FDIC insurance premiums as the FDIC insurance fund reached its targeted level.

For the year ended December 31, 2019, total noninterest expense increased 4.7% to $22.7 million from $21.7 million one year earlier, adjusted for our Rhinelander branch write down, recorded in the June 2019 quarter. 

In the first quarter of 2020, we anticipate higher personnel expenses, office expenses, depreciation and advertising costs associated with the opening of our new branch in Milwaukee.

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.

Investor Relations Contact
PSB Holdings, Inc.
1905 Stewart Avenue
Wausau, WI 54401
888.929.9902
[e-mail] 

PSB Holdings, Inc.
Quarterly Financial Summary
(dollars in thousands, except per share data)				Quarter ended
				Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,
Earnings and dividends:					2019			2019			2019			2019			2018
	Interest income			$	9,988		$	10,098		$	9,839		$	9,604		$	9,365
	Interest expense			$	2,019		$	2,154		$	2,041		$	2,032		$	1,888
	Net interest income			$	7,969		$	7,944		$	7,798		$	7,572		$	7,477
	Provision for loan losses			$	150		$	150		$	150		$	400		$	60
	Other noninterest income			$	1,839		$	1,802		$	1,903		$	2,117		$	1,718
	Other noninterest expense			$	5,947		$	5,437		$	6,167		$	5,745		$	5,829
	Net income			$	2,813		$	3,131		$	2,572		$	2,731		$	2,529
	Basic earnings per share (3)			$	0.63		$	0.70		$	0.57		$	0.61		$	0.56
	Diluted earnings per share (3)			$	0.63		$	0.70		$	0.57		$	0.61		$	0.56
	Dividends declared per share (3)			$	0.20		$	-		$	0.20		$	-		$	0.18
	Tangible net book value per share (4)			$	20.72		$	20.24		$	19.41		$	18.89		$	17.98
	Semi-annual dividend payout ratio				15.04	%	n/a				16.95	%	n/a				15.65	%
	Average common shares outstanding				4,471,173			4,473,583			4,486,022			4,494,568			4,488,397
Balance sheet - average balances:
	Loans receivable, net of allowances for loss			$	700,469		$	689,057		$	666,008		$	658,586		$	646,063
	Assets			$	951,409		$	928,282		$	893,998		$	899,263		$	883,373
	Deposits			$	745,455		$	721,788		$	713,910		$	713,257		$	708,318
	Stockholders' equity			$	93,189		$	89,139		$	86,656		$	82,516		$	79,525
Performance ratios:
	Return on average assets (1)				1.17	%		1.34	%		1.15	%		1.23	%		1.14	%
	Return on average stockholders' equity (1)				11.98	%		13.94	%		11.90	%		13.42	%		12.62	%
	Average stockholders' equity less accumulated
	other comprehensive income (loss) to
	average assets				9.68	%		9.52	%		9.68	%		9.27	%		9.22	%
	Net loan charge-offs to average loans (1)				0.01	%		0.01	%		0.00	%		0.08	%		0.07	%
	Nonperforming loans to gross loans				0.68	%		0.70	%		0.53	%		1.11	%		0.91	%
	Nonperforming assets to total assets				0.55	%		0.57	%		0.42	%		0.84	%		0.67	%
	Allowance for loan losses to gross loans				0.97	%		0.97	%		0.97	%		0.98	%		0.94	%
	Nonperforming assets to tangible equity
	plus the allowance for loan losses (4)				5.45	%		5.69	%		4.13	%		8.40	%		7.20	%
	Net interest rate margin (1)(2)				3.53	%		3.60	%		3.72	%		3.63	%		3.58	%
	Net interest rate spread (1)(2)				3.24	%		3.31	%		3.42	%		3.36	%		3.32	%
	Service fee revenue as a percent of
	average demand deposits (1)				1.00	%		0.90	%		1.14	%		1.12	%		1.15	%
	Noninterest income as a percent
	of gross revenue				15.55	%		15.14	%		16.21	%		18.06	%		15.50	%
	Efficiency ratio (2)				59.90	%		55.14	%		62.83	%		58.59	%		62.54	%
	Noninterest expenses to average assets (1)				2.48	%		2.32	%		2.77	%		2.59	%		2.62	%
	Tangible equity to actual assets				9.50	%		9.53	%		9.65	%		9.50	%		8.81	%
Stock price information:
	High			$	28.25		$	27.50		$	24.75		$	23.45		$	27.50
	Low			$	26.00		$	23.55		$	22.00		$	21.25		$	21.10
	Last trade value at quarter-end			$	27.50		$	26.49		$	24.00		$	22.75		$	22.50
(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,				Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
except per share data - unaudited)					2019		2019		2019		2019		2018
Interest and dividend income:
Loans, including fees				$	8,691	$	8,823	$	8,629	$	8,334	$	8,125
Securities:
Taxable					768		769		730		713		714
Tax-exempt					387		378		389		396		424
Other interest and dividends					142		128		91		161		102
Total interest and dividend income					9,988		10,098		9,839		9,604		9,365
Interest expense:
Deposits					1,544		1,654		1,634		1,553		1,435
FHLB advances					328		323		230		309		315
Other borrowings					26		58		57		51		18
Senior subordinated notes					29		28		28		28		28
Junior subordinated debentures					92		91		92		91		92
Total interest expense					2,019		2,154		2,041		2,032		1,888
Net interest income					7,969		7,944		7,798		7,572		7,477
Provision for loan losses					150		150		150		400		60
Net interest income after provision for loan losses					7,819		7,794		7,648		7,172		7,417
Noninterest income:
Service fees					411		348		403		381		419
Gain on sale of mortgage loans					452		463		432		175		227
Mortgage loan servicing, net					57		89		84		125		129
Investment and insurance sales commissions					301		276		310		333		430
Net gain on sale of securities					71		-		121		18		-
Increase in cash surrender value of life insurance					104		105		101		98		96
Other noninterest income					443		521		452		987		417
Total noninterest income					1,839		1,802		1,903		2,117		1,718
Noninterest expense:
Salaries and employee benefits					3,523		3,372		3,322		3,428		3,566
Occupancy and facilities					506		510		591		601		526
Loss (gain) on foreclosed assets					69		4		3		4		(17	)
Data processing and other office operations					739		654		646		577		654
Advertising and promotion					182		107		120		100		163
FDIC insurance premiums					-		-		63		59		61
Other noninterest expenses					928		790		1,422		976		876
Total noninterest expense					5,947		5,437		6,167		5,745		5,829
Income before provision for income taxes					3,711		4,159		3,384		3,544		3,306
Provision for income taxes					898		1,028		812		813		777
Net income				$	2,813	$	3,131	$	2,572	$	2,731	$	2,529
Basic earnings per share				$	0.63	$	0.70	$	0.57	$	0.61	$	0.56
Diluted earnings per share				$	0.63	$	0.70	$	0.57	$	0.61	$	0.56

PSB Holdings, Inc.
Consolidated Statements of Income
				Three Months Ended						Year Ended
(dollars in thousands,				December						December
except per share data - unaudited)					2019		2018				2019		2018
Interest and dividend income:
Loans, including fees				$	8,691	$	8,125			$	34,477	$	30,489
Securities:
Taxable					768		714				2,980		2,799
Tax-exempt					387		424				1,550		1,517
Other interest and dividends					142		102				522		384
Total interest and dividend income					9,988		9,365				39,529		35,189
Interest expense:
Deposits					1,544		1,435				6,385		4,815
FHLB advances					328		315				1,190		1,085
Other borrowings					26		18				192		24
Senior subordinated notes					29		28				113		111
Junior subordinated debentures					92		92				366		326
Total interest expense					2,019		1,888				8,246		6,361
Net interest income					7,969		7,477				31,283		28,828
Provision for loan losses					150		60				850		130
Net interest income after provision for loan losses					7,819		7,417				30,433		28,698
Noninterest income:
Service fees					411		419				1,543		1,611
Gain on sale of mortgage loans					-		-				-		-
Mortgage banking income					509		356				1,877		1,528
Investment and insurance sales commissions					301		430				1,220		1,307
Net gain on sale of securities					71		-				210		-
Increase in cash surrender value of life insurance					104		96				408		373
Other noninterest income					443		417				2,403		1,657
Total noninterest income					1,839		1,718				7,661		6,476
Noninterest expense:
Salaries and employee benefits					3,523		3,566				13,645		13,194
Occupancy and facilities					506		526				2,208		2,115
Loss (gain) on foreclosed assets					69		(17	)			80		(34	)
Data processing and other office operations					739		654				2,616		2,563
Advertising and promotion					182		163				509		420
FDIC insurance premiums					-		61				122		247
Other noninterest expenses					928		876				4,116		3,208
Total noninterest expense					5,947		5,829				23,296		21,713
Income before provision for income taxes					3,711		3,306				14,798		13,461
Provision for income taxes					898		777				3,551		3,149
Net income				$	2,813	$	2,529			$	11,247	$	10,312
Basic earnings per share				$	0.63	$	0.56			$	2.51	$	2.29
Diluted earnings per share				$	0.63	$	0.56			$	2.51	$	2.29

PSB Holdings, Inc.
Consolidated Statements of Comprehensive Income
				Three Months Ended							Year Ended
				December 31,							December 31,
(dollars in thousands - unaudited)					2019			2018				2019			2018
Net income				$	2,813		$	2,529			$	11,247		$	10,312
Other comprehensive income, net of tax:
	Unrealized gain (loss) on securities available
		for sale			179			1,153				3,288			(766	)
	Reclassification adjustment for security
		gain included in net income			(51	)		-				(152	)		-
	Amortization of unrealized loss (gain) included in net
		income on securities available for sale
		transferred to securities held to maturity			3			(6	)			(3	)		(39	)
	Unrealized gain (loss) on interest rate swap				55			(157	)			(211	)		(158	)
	Reclassification adjustment of interest rate
		swap settlements included in earnings			13			8				31			9
Other comprehensive income (loss)					199			998				2,953			(954	)
Comprehensive income				$	3,012		$	3,527			$	14,200		$	9,358

PSB Holdings, Inc.
Consolidated Balance Sheets
December 31, September 30, June 30, and March 31, 2019, unaudited, December 31, 2018 derived from audited financial statements
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,
(dollars in thousands, except per share data)		2019			2019			2019			2018			2018
Assets
Cash and due from banks	$	23,005		$	17,954		$	11,825		$	8,917		$	18,923
Interest-bearing deposits		839			1,059			2,306			349			501
Federal funds sold		25,184			30,415			4,552			12,989			24,554
Cash and cash equivalents		49,028			49,428			18,683			22,255			43,978
Securities available for sale (at fair value)		174,448			127,587			123,586			127,368			113,821
Securities held to maturity (fair values of $0, $41,311, $42,511, $53,338 and
$57,607 respectively)		-			40,791			42,074			43,061			58,311
Bank certificates of deposit (at cost)		4,983			1,984			1,984			2,976			2,976
Loans held for sale		545			335			50			245			358
Loans receivable, net		707,651			691,289			678,247			660,756			658,481
Accrued interest receivable		2,776			2,803			2,844			2,826			2,777
Foreclosed assets		460			572			172			113			113
Premises and equipment, net		10,457			10,212			9,749			10,426			10,209
Mortgage servicing rights, net		1,747			1,720			1,738			1,781			1,805
Federal Home Loan Bank stock (at cost)		2,073			2,173			1,662			1,657			2,330
Cash surrender value of bank-owned life insurance		16,773			16,668			16,564			16,463			16,365
Other assets		3,952			4,101			3,961			3,836			4,474
TOTAL ASSETS	$	974,893		$	949,663		$	901,314		$	893,763		$	915,998
Liabilities
Non-interest-bearing deposits	$	177,002		$	159,897		$	143,423		$	138,124		$	148,611
Interest-bearing deposits		604,788			576,288			571,794			577,263			577,215
Total deposits		781,790			736,185			715,217			715,387			725,826
Federal Home Loan Bank advances		73,496			85,496			59,915			51,165			81,071
Other borrowings		6,131			17,411			19,179			22,870			8,379
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		10,553			9,715			9,668			9,047			9,650
Total liabilities		882,202			859,039			814,211			808,701			835,158
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 - 4,467,217, 4,471,216, 4,480,585, 4,495,110 and
4,487,895 shares, respectively		1,830			1,830			1,830			1,830			1,830
Additional paid-in capital		7,597			7,543			7,490			7,497			7,430
Retained earnings		95,037			93,117			89,986			88,314			85,583
Accumulated other comprehensive income (loss), net of tax		1,302			1,103			543			(227	)		(1,651	)
Treasury stock, at cost - 1,023,581, 1,019,582, 1,010,213, 995,688 and
1,002,903 shares, respectively		(13,075	)		(12,969	)		(12,746	)		(12,352	)		(12,352	)
Total stockholders' equity		92,691			90,624			87,103			85,062			80,840
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	974,893		$	949,663		$	901,314		$	893,763		$	915,998

PSB Holding, Inc.
Loan Composition by Purpose		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
Quarter-ended (dollars in thousands)		2019		2019		2019		2019		2018
Total Loans
Residential real estate
	One to four family	121,548		119,620		117,093		116,393		117,970
	HELOC loans	21,668		22,855		22,158		23,631		24,746
	Residential construction & development	23,633		21,273		20,937		18,893		16,413
	Residential vacant land	3,908		4,299		4,680		5,052		5,370
	Total Residential real estate	170,757		168,047		164,868		163,969		164,499
Commercial/Agricultural real estate
	Owner occupied
	Commercial real estate	156,275		158,423		149,507		147,435		145,480
	SBA commercial real estate	1,647		1,367		1,386		1,741		1,769
	Agriculture real estate	5,901		5,139		5,764		5,078		4,968
	Construction and land development	13,228		12,742		7,832		6,523		350
	Commercial vacant land	929		-		-		-		-
	Total Owner occupied	177,051		177,671		164,489		160,777		152,567
	Non-owner occupied
	Commercial real estate	192,160		179,136		168,809		161,647		147,246
	SBA commercial real estate	844		863		141		146		151
	Agricultural real estate	-		-		-		-		315
	Construction and land development	17,061		13,301		22,159		22,014		35,288
	Commercial vacant land	14,280		14,532		14,702		15,404		13,800
	Total Non-owner occupied	224,345		207,832		205,811		199,211		196,800
Commercial/Agricultural non-real estate
	Municipal non-real estate	11,601		6,384		9,017		6,353		6,806
	Commercial line	54,538		62,991		65,252		58,117		68,300
	Other commercial non-real estate	65,690		64,418		65,500		69,073		65,829
	SBA commercial non-real estate	1,733		1,819		2,252		2,169		2,278
	Agricultural non-real estate	2,402		3,606		3,491		3,699		3,994
	Total Commercial/Agricultural non-real estate	135,964		139,218		145,512		139,411		147,207
Consumer non-real estate
	Consumer installment	3,454		3,319		3,093		2,793		2,755
	Consumer line	1,354		1,343		304		344		243
	Other consumer	189		197		195		190		218
	Total Consumer non-real estate	4,997		4,859		3,592		3,327		3,216
Gross loans		714,043		697,627		684,272		666,695		664,289
	Net deferred loan costs	326		295		300		272		213
	Overdrafts	221		168		339		296		211
	Allowance for loan losses	(6,939	)	(6,801	)	(6,664	)	(6,507	)	(6,232	)
Total loans receivable		707,651		691,289		678,247		660,756		658,481

PSB Holdings, Inc.
Deposit Composition
			December 31,
(dollars in thousands)	2019						2018
	$		%				$		%
Non-interest bearing demand	$	177,002	22.60	%			$	148,611	20.50	%
Interest-bearing demand and savings		257,486	32.90	%				254,857	35.10	%
Money market deposits		183,370	23.50	%				145,300	20.00	%
Retail and local time deposits <= $250		104,455	13.40	%				99,584	13.80	%
Total core deposits		722,313	92.40	%				648,352	89.40	%
Wholesale interest-bearing demand		-	0.0	%				-	0.0	%
Retail and local time deposits > $250		25,431	3.30	%				22,131	3.00	%
Broker & national time deposits <= $250		5,457	0.70	%				2,483	0.30	%
Broker & national time deposits > $250		28,589	3.60	%				52,860	7.30	%
Totals	$	781,790	100.00	%			$	725,826	100.0	%

Nonperforming Assets as of:		December
(dollars in thousands)			2019			2018
Nonaccrual loans (excluding restructured loans)		$	3,697		$	3,422
Nonaccrual restructured loans			499			313
Restructured loans not on nonaccrual			676			2,284
Accruing loans past due 90 days or more			-			-
Total nonperforming loans			4,872			6,019
Other Real Estate Owned			460			113
Total nonperforming assets		$	5,332		$	6,132
Nonperforming loans as a % of gross loans receivable			0.68	%		0.91	%
Total nonperforming assets as a % of total assets			0.55	%		0.67	%
Allowance for loan losses as a % of nonperforming loans			142.43	%		103.54	%

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)
			Quarter ended December 31, 2019								Quarter ended September 30, 2019								Quarter ended December 31, 2018
			Average					Yield /			Average					Yield /			Average					Yield /
			Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)			$	707,336		$	8,709	4.88	%		$	695,776		$	8,838	5.04	%		$	652,342		$	8,137	4.95	%
Taxable securities				111,697			768	2.73	%			107,801			769	2.83	%			105,269			714	2.69	%
Tax-exempt securities (2)				59,511			490	3.27	%			59,537			478	3.19	%			68,576			537	3.11	%
FHLB stock				2,091			25	4.74	%			1,970			20	4.03	%			2,004			25	4.95	%
Other				29,443			117	1.58	%			22,493			108	1.90	%			13,748			77	2.22	%
Total (2)				910,078			10,109	4.41	%			887,577			10,213	4.57	%			841,939			9,490	4.47	%
Non-interest-earning assets:
Cash and due from banks				12,284								12,113								11,855
Premises and equipment,
net				10,333								10,136								10,311
Cash surrender value ins				16,713								16,606								15,751
Other assets				8,868								8,569								9,796
Allowance for loan
losses				(6,867	)							(6,719	)							(6,279	)
Total			$	951,409							$	928,282							$	883,373
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits (3)			$	239,613		$	307	0.51	%		$	239,490		$	392	0.65	%		$	235,839		$	370	0.62	%
Money market deposits (3)				180,262			418	0.92	%			164,801			432	1.04	%			143,618			280	0.77	%
Time deposits				162,726			819	2.00	%			164,899			830	2.00	%			184,178			785	1.69	%
FHLB borrowings				77,920			328	1.67	%			75,325			323	1.70	%			64,833			315	1.93	%
Other borrowings				14,374			26	0.72	%			22,079			58	1.04	%			11,139			18	0.64	%
	Senior sub. notes			2,500			29	4.60	%			2,500			28	4.44	%			2,500			28	4.44	%
Junior sub. debentures				7,732			92	4.72	%			7,732			91	4.67	%			7,732			92	4.72	%
Total				685,127			2,019	1.17	%			676,826			2,154	1.26	%			649,839			1,888	1.15	%
Non-interest-bearing liabilities:
Demand deposits				162,854								152,598								144,683
Other liabilities				10,239								9,719								9,326
Stockholders' equity				93,189								89,139								79,525
Total			$	951,409							$	928,282							$	883,373
Net interest income						$	8,090							$	8,059							$	7,602
Rate spread								3.24	%							3.31	%							3.32	%
Net yield on interest-earning assets								3.53	%							3.60	%							3.58	%
(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%.
(3) Reflects changes in categorization from the third quarter earnings release.

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)
			Year ended December 31, 2019								Year ended December 31, 2018
			Average					Yield/			Average					Yield/
			Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)			$	685,279		$	34,533	5.04	%		$	633,406		$	30,538	4.82	%
Taxable securities				107,801			2,980	2.76	%			108,944			2,799	2.57	%
Tax-exempt securities (2)				61,482			1,962	3.19	%			62,611			1,920	3.07	%
FHLB stock				1,918			104	5.42	%			2,004			86	4.29	%
Other				21,253			418	1.97	%			16,272			298	1.83	%
Total (2)				877,733			39,997	4.56	%			823,237			35,641	4.33	%
Non-interest-earning assets:
Cash and due from banks				11,644								10,966
Premises and equipment,
net				10,318								10,469
Cash surrender value ins				16,558								15,384
Other assets				8,738								9,393
Allowance for loan
losses				(6,605	)							(6,286	)
Total			$	918,386							$	863,163
Liabilities & stockholders' equity
Interest-bearing liabilities:
Savings and demand
deposits			$	243,035		$	1,588	0.65	%		$	240,119		$	1,320	0.55	%
Money market deposits				163,061			1,541	0.95	%			138,220			770	0.56	%
Time deposits				168,624			3,256	1.93	%			180,950			2,725	1.51	%
FHLB borrowings				67,207			1,190	1.77	%			61,553			1,085	1.76	%
Other borrowings				19,628			192	0.98	%			5,617			24	0.43	%
	Senior sub. notes			2,500			113	4.52	%			2,500			111	4.44	%
Junior sub. debentures				7,732			366	4.73	%			7,732			326	4.22	%
Total				671,787			8,246	1.23	%			636,691			6,361	1.00	%
Non-interest-bearing liabilities:
Demand deposits				148,746								140,561
Other liabilities				9,810								9,040
Stockholders' equity				88,043								76,870
Total			$	918,386							$	863,162
Net interest income						$	31,751							$	29,280
Rate spread								3.33	%							3.33	%
Net yield on interest-earning assets								3.62	%							3.56	%
(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%.