PSB HOLDING CORP. REPORTS FIRST QUARTER 2022 RESULTS

PRESTON, Md., April 27, 2022 /PRNewswire/ -- PSB Holding Corp. (OTCQX:PSBP) (the "Company"), the parent company of Provident State Bank, Inc. ("Provident" or the "Bank"), reported net income of $1.00 million ($.65 per diluted common share) for the three months ended March 31, 2022 compared to $1.21 million ($.80 per diluted common share) for the three months ended March 31, 2021, representing a decline of 17.5%.  The decline in net income was primarily attributable to a reduction in revenue associated with the Small Business Administration ("SBA") Payroll Protection Program ("PPP").

Performance Review

Small Business Administration's Payroll Protection Program

The Bank's participation in the SBA's PPP, established in April 2020, contributed more significantly to financial performance during the first quarter of 2021 as compared to the first quarter of 2022.  During the three months ended March 31, 2021, Provident originated PPP loans totaling $29.27 million and recognized fee income net of costs (amortized as a loan yield adjustment) of $667,000.  PPP loan principal forgiven by the SBA and principal payments received totaled $17.35 million during the first quarter 2021.  During the same period of 2022, no PPP loans were originated as the program was closed, $1.08 million in loans were forgiven and net fee income totaling $49,000 was recognized.  As of March 31, 2022, all PPP loans had been forgiven or repaid in full and all related fee income had been recognized. 

Net Interest Margin

The net interest margin ("NIM") was 3.05% during the first quarter 2022 compared to 3.45% during the same period in 2021.  The NIM benefited from higher PPP revenue as noted above during the first quarter 2021.

First Quarter 2022 Compared to First Quarter 2021

In addition to the reduced revenue associated with PPP lending activities previously noted, net income during the first quarter 2022 compared to the same period in 2021 was impacted by lower gain on sale of loans of $66,000 and higher salaries and benefits expense of $152,000, offset by lower interest expense of $260,000, lower loan loss provision expense of $65,000, higher deposit service charge income of $58,000 and lower occupancy expense of $51,000.   Gain on sale of loans totaled $194,000 during the three months ended March 31, 2022 compared to $260,000 during the same period in 2021.  The decline in mortgage banking activity was largely driven by rising interest rates.  The increase in salaries and benefits was largely driven by a reduction in salary deferrals associated with loan origination activity totaling $80,000 and an increase in deferred compensation expense of $33,000.  Lower interest expense reflected the continued benefit of the repricing of the Bank's time deposit portfolio to lower interest rates.  Higher deposit service charge income reflected increased transaction-based fee income including overdraft fees and ATM transaction fees.

Balance Sheet and Asset Quality

Assets totaled $576.1 million at March 31, 2022, increasing $4.4 million or .8% compared to March 31, 2021. Deposits and repurchase agreements totaled $510.5 million at March 31, 2022 compared to $485.6 million at March 31, 2021, representing growth of 5.1%.  Gross loans, exclusive of PPP loans, totaled $361.8 million at March 31, 2022, representing an increase of $27.1 million or 8.1% compared to March 31, 2021.   Stockholders' Equity totaled $44.9 million at March 31, 2022 compared to $51.6 million at December 31, 2021 and $48.6 million at March 31, 2021.  The decrease in stockholders' equity was driven by growth in unrealized losses associated with the Bank's investment portfolio held as available for sale ("AFS").  As of March 31, 2022, accumulated other comprehensive losses associated with the AFS portfolio totaled $8.5 million compared to $846,000 at December 31, 2021 and a gain of $39,000 at March 31, 2021.  The significant increase in unrealized losses at March 31, 2022 was largely driven by a dramatic jump in market rates during the month of March 2022 as the market attempted to digest commentary from the Federal Reserve regarding its plan to combat inflationary pressures.  These unrealized losses are not included in regulatory capital and the Bank remained well capitalized at March 31, 2022.  As of March 31, 2022, non-performing assets and past due loans 30 days or more were .54% of total assets compared to .38% at the end of 2021 and .34% at March 31, 2021. 

President and Chief Executive Officer Melissa Quirk commented on the Company's performance stating, "We are pleased with our performance during the first quarter of 2022 given the loss of revenue associated with PPP lending activities. While challenges lie ahead as inflation and increasing interest rates pressure the economy, our team will continue to work to grow the bank in a prudent and efficient manner."

PSB Holding Corp. is the holding company of Provident State Bank, Inc., a full-service financial institution serving the eastern shore of Maryland since 1904. Provident State Bank, Inc. has ten locations in Preston, Federalsburg, Ridgely, Denton, Easton-Elliot Road, Easton-Harrison Street, Secretary, Cambridge, Salisbury and Lewes (Delaware).  For more information on PSB Holding Corp. and Provident State Bank, Inc., visit www.providentstatebank.com.

Forward-Looking Statements

Forward-looking statements relating to PSB Holding Corp. and its subsidiary, Provident State Bank, Inc. may include plans, strategies, objectives, expectations, intentions and adequacy of resources.  All statements other than statements of historical fact, including, without limitation, statements regarding business strategy, future events, activities, performance, and plans and objectives for future operations, are forward-looking statements.  Therefore, the illustrative value of forward-looking statements made in or pursuant to this press release should not, under any circumstances, be considered a guaranty or promise that such future events, activities, occurrences or performances will take place.

 

CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
							Percent change from
	Mar 31, 2022		Dec 31, 2021		Mar 31, 2021		Dec 31, 2021		Mar 31, 2021
Assets
Cash and cash equivalents	$    18,460,176		$    36,100,150		$    44,956,382		-48.9%		-58.9%
Investment securities	170,059,221		167,167,082		122,078,560		1.7%		39.3%
Loans held for sale	551,333		1,879,591		1,414,221		-70.7%		-61.0%
Loans receivable	361,769,294		357,800,695		383,048,584		1.1%		-5.6%
Less allowance for loan losses	3,879,999		3,892,115		3,675,068		-0.3%		5.6%
Loans, net of allowance for loan losses	357,889,295		353,908,580		379,373,516		1.1%		-5.7%
Property and equipment	6,675,962		6,879,131		8,196,751		-3.0%		-18.6%
Bank-owned life insurance	11,992,749		11,918,526		8,712,098		0.6%		37.7%
Lease assets	2,618,952		2,720,578		2,443,106		-3.7%		7.2%
Accrued interest receivable	1,416,420		1,344,283		1,484,262		5.4%		-4.6%
Other assets	6,481,282		3,119,329		3,044,696		107.8%		112.9%
Total assets	$  576,145,390		$  585,037,250		$  571,703,592		-1.5%		0.8%
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing	$  184,102,127		$  191,144,058		$  210,026,953		-3.7%		-12.3%
Interest-bearing	309,335,115		303,379,512		263,682,755		2.0%		17.3%
Total deposits	493,437,242		494,523,570		473,709,708		-0.2%		4.2%
Repurchase agreements	17,098,195		16,104,671		11,891,020		6.2%		43.8%
FHLB advances and other borrowing	16,693,796		18,220,887		32,801,481		-8.4%		-49.1%
Lease liabilities	2,834,924		2,930,961		2,639,068		-3.3%		7.4%
Other liabilities	1,176,330		1,677,656		2,016,381		-29.9%		-41.7%
Total liabilities	531,240,487		533,457,745		523,057,658		-0.4%		1.6%
Stockholders' equity:
Common stock, additional paid-in capital
and retained earnings	53,444,088		52,425,553		48,607,166		1.9%		10.0%
Accumulated other comprehensive (loss)
income	(8,539,185)		(846,048)		38,768
Total stockholders' equity	44,904,903		51,579,505		48,645,934		-12.9%		-7.7%
Total liabilities and equity	$  576,145,390		$  585,037,250		$  571,703,592		-1.5%		0.8%
Book value per common share	$               29.48		$               33.86		$               31.93		-12.9%		-7.7%

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
	Three Months Ended
	March, 31
	2022		2021		% Change
Interest income
Loans, including fee income	$     3,916,572		$   4,763,112		-17.8%
Investment securities	659,878		423,879		55.7%
Other interest income	7,897		6,144		28.5%
Total interest income	4,584,347		5,193,135		-11.7%
Interest expense
Deposits	362,805		534,280		-32.1%
Repurchase agreements	1,293		1,079		19.8%
FHLB advances	91,688		175,472		-47.7%
Other borrowings	29,563		34,937		-15.4%
Total interest expense	485,349		745,768		-34.9%
Net interest income	4,098,998		4,447,367		-7.8%
Provision for loan losses	25,000		90,000		-72.2%
Net interest income after provision	4,073,998		4,357,367		-6.5%
Noninterest income
Service charges	475,093		417,139		13.9%
Gain on sale of loans	194,246		260,464		-25.4%
Gain on sale of securities	-		-		0.0%
Other noninterest income	82,262		53,264		54.4%
Total noninterest income	751,601		730,867		2.8%
Noninterest expense
Salaries and benefits	1,960,659		1,808,276		8.4%
Occupancy	462,526		513,208		-9.9%
Data processing and software	316,011		312,620		1.1%
Other noninterest expense	787,715		839,505		-6.2%
Total noninterest expense	3,526,911		3,473,609		1.5%
Net income before tax	1,298,688		1,614,625		-19.6%
Tax expense	297,753		401,375		-25.8%
Net income	$     1,000,935		$   1,213,250		-17.5%
Net income per diluted share	$               0.65		$             0.80		-17.9%

 

HISTORICAL TRENDS / QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL DATA
(unaudited)
	2022		2021
	Q1		Q4		Q3		Q2		Q1
Interest income
Loans, including fee income	$   3,916,572		$   4,361,123		$   5,200,935		$   4,967,402		$   4,763,112
Investment securities	659,878		566,608		502,460		485,823		423,879
Other interest income	7,897		13,907		13,540		6,688		6,144
Total interest income	4,584,347		4,941,638		5,716,935		5,459,913		5,193,135
Interest expense
Deposits	362,805		434,397		490,718		507,708		534,280
Repurchase agreements	1,293		1,375		1,466		891		1,079
FHLB advances	91,688		101,801		109,882		163,552		175,472
Other borrowings	29,563		31,250		32,967		34,341		34,937
Total interest expense	485,349		568,823		635,033		706,492		745,768
Net interest income	4,098,998		4,372,815		5,081,902		4,753,421		4,447,367
Provision for loan losses	25,000		230,000		120,000		120,000		90,000
Net interest income after provision	4,073,998		4,142,815		4,961,902		4,633,421		4,357,367
Noninterest income
Service charges	475,093		485,620		480,290		445,963		417,139
Gain on sale of loans	194,246		314,859		407,328		337,422		260,464
Gain on sale of securities	-		-		-		4,310		-
Other noninterest income	82,262		82,327		80,747		64,069		53,264
Total noninterest income	751,601		882,806		968,365		851,764		730,867
Noninterest expense
Salaries and benefits	1,960,659		1,977,495		2,063,437		1,820,550		1,808,276
Occupancy	462,526		590,861		512,155		508,652		513,208
Data processing and software	316,011		311,239		408,523		308,194		312,620
Other noninterest expense	787,715		883,182		893,689		790,844		839,505
Total noninterest expense	3,526,911		3,762,777		3,877,804		3,428,240		3,473,609
Net income before tax	1,298,688		1,262,844		2,052,463		2,056,945		1,614,625
Tax expense	297,753		247,113		528,699		525,953		401,375
Net income	$   1,000,935		$   1,015,731		$   1,523,764		$   1,530,992		$   1,213,250
Net income per diluted share	$             0.65		$             0.66		$             1.00		$             1.00		$             0.80
Supplemental Data
PPP loans - net fee income	$         49,492		$       418,004		$   1,207,559		$       832,733		$       667,482
PPP loans - balance at period end	$                    -		$   1,096,939		$ 11,536,310		$ 29,298,232		$ 48,411,520

 

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SOURCE PSB Holding Corp.