PSB Holdings, Inc. Reports Third Quarter 2023 Earnings of $0.29 Per Share; Loan Growth Up 4.7% From Prior Quarter and 17.2% From Prior Year
PSB Holdings, Inc. reports third quarter earnings of $0.29 per common share on net income of $1.2 million, compared to $0.64 per common share on net income of $2.7 million in the previous quarter. The company expects a 6% reduction in effective tax rate on future earnings due to a change in Wisconsin state tax law. Net interest income increased to $9.6 million for the quarter. Total loans receivable increased by $49.7 million to $1.1 billion. Total deposits increased by $29.1 million to $1.17 billion.
Positive
PSB Holdings, Inc. reports third quarter earnings of $0.29 per common share on net income of $1.2 million, compared to $0.64 per common share on net income of $2.7 million in the previous quarter. The company expects a 6% reduction in effective tax rate on future earnings due to a change in Wisconsin state tax law. Net interest income increased to $9.6 million for the quarter. Total loans receivable increased by $49.7 million to $1.1 billion. Total deposits increased by $29.1 million to $1.17 billion.
10/25/2023 - 08:30 AM
WAUSAU, Wis., Oct. 25, 2023 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ) , the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported third quarter earnings ending September 30, 2023 of $0.29 per common share on net income of $1.2 million , compared to $0.64 per common share on net income of $2.7 million during the second quarter ending June 30, 2023, and $0.80 per common share on net income of $3.5 million during the third quarter ending September 30, 2022.
On July 5th , Wisconsin signed into law, and effective January 1, 2023, an interest exemption for financial institutions that lend to Wisconsin commercial borrowers. The change is expected to reduce or eliminate PSB’s state tax expense going forward. However, the current quarter includes cumulative adjustments to deferred tax assets to reflect the new tax law. As a result of this tax regulation change, PSB reversed $1.2 million in income tax expense which had been recorded during the first two quarters of 2023, which increased net income. However, PSB also provided an allowance against Wisconsin deferred tax assets, including those assets related to accumulated other comprehensive income, which increased income tax expense $2.8 million , which lowered net income. Before the cumulative impacts of the Wisconsin income tax regulation change, proforma September 2023 quarterly net income would have been approximately $2.8 million , or $0.66 per common share.
Other impacts to PSB’s third quarter 2023 operating results reflected the following changes from the second quarter of 2023: (1) higher tax expense related to recognition of taxes deferred prior to a change in Wisconsin tax law that eliminated state taxes on certain qualified assets; (2) higher net interest income due to a larger loan balance and rising yields on loans; (3) lower non-interest income due to second quarter income from life insurance death benefit; (4) lower non-interest expense related to lower salary and benefit expenses; (5) higher accumulated other comprehensive loss due to an increase in intermediate interest rates; (6) strong loan growth of $50 million supported by core deposit growth of $24 million ; (7) an improved efficiency ratio; and (8) lower non-performing assets.
“Our net interest income continues to grow despite pressures from rising interest rates. Loan growth continued in the third quarter as the economic environment within our markets remains healthy. We have added new commercial borrowers to our portfolio which has helped attract lower costing deposit relationships, thereby reducing the need for higher costing borrowings and brokered deposits. Additionally, we have recently ramped up our internal capacity to deliver SBA 7(a) loans in an efficient manner which will allow us to fully leverage our SBA Preferred Lender status in markets that we serve,” stated Scott Cattanach, President and CEO. “Despite the quarter’s negative impacts related to deferred tax assets, Wisconsin’s state tax changes are expected to eliminate our state income tax, reducing our effective tax rate on future earnings by approximately 6% .”
September 30, 2023, Highlights:
Net interest income increased to $9.6 million for the quarter ended September 30, 2023, compared to $9.5 million for the quarter ended June 30, 2023, due to a larger loan portfolio with the addition of higher yielding loans and repricing of interest sensitive assets. Loans increased $49.7 million in the third quarter ended September 30, 2023 to $1.1 billion . The largest increase in the loan portfolio consisted of growth in non-owner occupied commercial real estate and one-to-four family residential rental loans. Tangible book value per common share was to $22.25 at September 30, 2023 compared to $22.64 one quarter earlier. For the third quarter ended September 30, 2023, tangible book value was positively influenced by net income and intangible asset amortization, offset by higher accumulated other comprehensive loss. The AOCI loss reflected adjustments on the available for sale securities portfolio due to higher interest rates and a lower tax rate. A lower state tax was associated with a change in Wisconsin state tax law which provides for no state tax on income from commercial loans with original balances less than $5.0 million to Wisconsin borrowers. Return on tangible common equity was 5.09% for the quarter ended September 30, 2023 compared to 11.14% the prior quarter. The lower return primarily related to higher tax expenses on adoption of Wisconsin state tax law changes. Provision for loan losses was $150,000 for the quarter ended September 30, 2023. The provision for the third quarter was largely related to new loan growth. Noninterest income was $1.7 million for the quarter ended September 30, 2023 compared to $2.0 million the prior quarter. The prior quarter included a life insurance benefit of $0.5 million . Noninterest expenses decreased $479,000 in the third quarter of 2023 to $7.5 million from $7.9 million the prior quarter. The decrease was primarily related to lower salary and benefit expenses. Balance Sheet and Asset Quality Review
Total assets increased slightly to $1.44 billion at September 30, 2023, from $1.42 billion at June 30, 2023. Cash and cash equivalents decreased $23.1 million , to $21.3 million at September 30, 2023 compared to $44.4 million the previous quarter. The lower cash and cash equivalent level reflects the use of funds to fund loan growth and reduce borrowings. Investment securities available for sale decreased $6.5 million from maturities and lower fair values to $160.9 million at September 30, 2023 from $167.4 million one quarter earlier. Total collateralized liquidity available to meet cash demands was approximately $350 million at September 30, 2023 with an additional $300 million that could be raised in a short timeframe from the brokered CDs market.
Total loans receivable increased $49.7 million to $1.10 billion at September 30, 2023, from $1.05 billion at June 30, 2023. Over the past year, total loans increased 17.2% . Non-owner occupied loans were the largest addition to the loan portfolio during the most recent quarter, which included commercial real estate, one-to-four family residential rentals and land loans. Total non-owner occupied commercial real estate loans increased $23.4 million , to $263.4 million at September 30, 2023, from $240.0 million the prior quarter. One-to-four family residential rental loans increased $19.0 million from the prior quarter to $86.8 million , while non-owner occupied land loans increased $10.0 million to $20.4 million . The loan portfolio remains well diversified with non-owner occupied commercial loans totaling 37.5% of gross loans followed by owner occupied commercial loans at 23.1% of gross loans. Residential real estate loans decreased to 21.7% of gross loans at September 30, 2023 from 22.5% one quarter earlier. Currently, the lending pipeline is expected to slow from the third quarter pace through the remainder of 2023.
The allowance for loan losses declined slightly to 1.15% of gross loans at September 30, 2023 from 1.19% the prior quarter. Annualized net charge-offs to average loans were zero for the third quarter ended September 30, 2023 compared to net recoveries of 0.07% the prior quarter. Non-performing assets declined to 0.42% of total assets at September 30, 2023 from 0.45% the previous quarter. For the third consecutive quarter, the Bank did not own any foreclosed real estate.
Total deposits increased $29.1 million , or 2.5% , to $1.17 billion at September 30, 2023. Much of the deposit increase was money market deposits (up $14.8 million ) and retail jumbo time deposits (up $11.7 million ). Meanwhile, brokered deposits decreased $6.1 million and represented 7.9% of total deposits at September 30, 2023 compared to 8.5% one quarter earlier.
The composition of deposits continued to change during the third quarter of 2023 as customers continue to seek higher deposit rates. At September 30, 2023, money market deposits and retail time deposits increased to 39.2% of deposits, compared to 37.7% at June 30, 2023. Lower-yield demand and savings deposits declined to 52.9% of deposits compared to 53.8% at June 30, 2023. Uninsured and uncollateralized deposits represented 22.2% of total deposits at September 30, 2023 compared to 21.6% at June 30, 2023.
FHLB advances decreased to $128.0 million at September 30, 2023 compared to $133.0 million at June 30, 2023. FHLB advances were reduced as liquidity contingency plans were relaxed from elevated levels surrounding multiple nationally publicized bank failures earlier in the year. Other borrowings remained at $5.7 million at September 30, 2023.
Tangible stockholder equity as a percent of total tangible assets was 6.98% at September 30, 2023, compared to 7.22% at June 30, 2023.
Tangible net book value per common share was $22.25 at September 30, 2023, compared to $22.64 per common share one quarter earlier. Relative to the prior quarter, accumulated other comprehensive loss increased $2.9 million . Higher interest rates decreased the market value on the available for sale securities portfolio.
Operations Review
Net interest income increased to $9.6 million (on a net margin of 2.88% ) for the third quarter of 2023, compared to $9.5 million (on a net margin of 2.98% ) for the second quarter of 2023, and $10.1 million (on a net margin of 3.24% ) for the third quarter of 2022. Earning asset yields increased 20 basis points to 4.78% during the third quarter of 2023 from 4.58% during the second quarter of 2023, while deposit and borrowing costs increased 39 basis points to 2.51% compared to 2.12% during the second quarter of 2023.
The increase in earning asset yields was primarily due to higher yields on loans during the quarter. Taxable security yields were 2.55% for the quarter ended September 30, 2023, compared to 2.71% for the quarter ended June 30, 2023. Loan yields increased during the second quarter to 5.23% from 5.04% for the second quarter of 2023 as new loans were added to the portfolio and existing loans repriced to higher indices from market rate increases. During the third quarter, the average yield of new money loans was 7.14% .
Rising deposit costs for savings and demand deposits, money market deposits, time deposits and FHLB advances were responsible for the rise in the Bank’s cost of funds. The overall cost of deposits was 1.66% for the quarter ended September 30, 2023 compared to 1.33% the prior quarter. FHLB advance costs rose to 3.90% during the third quarter ended September 30, 2023 from 3.78% the prior quarter.
Total noninterest income decreased for the third quarter of 2023 to $1.68 million , from $1.98 million for the second quarter of 2023, due primarily to the payment of a life insurance death benefit realized during the second quarter of $533,000. T he Bank is an SBA Preferred Lender. During the third quarter, the Bank realized $138,000 in gains on the sale of SBA 7(a) loans. At September 30, 2023, the Bank serviced $370.1 million in secondary market residential mortgage loans for others which provides fee income. Total mortgage banking income was $345,000 for the quarter ended September 30, 2023 compared to $311,000 for the quarter ended June 30, 2023. During the September 2023 quarter, we changed our Broker/Dealer platform for wealth management and added a senior advisor expected to lift commission revenue over the next several quarters.
Noninterest expenses decreased to $7.5 million for the third quarter of 2023, compared to $7.9 million for the second quarter of 2023. The third quarter of 2023 included lower salary and benefit expenses relative to the prior quarter, impacted by the right sizing of the residential mortgage banking business.
The current Wisconsin state budget, signed by Governor Evers on July 5, 2023, included a provision offering an income tax exclusion on income earned from commercial loans of $5 million or less, originated for business or agricultural purposes to borrowers who reside or are located in the state of Wisconsin. This exclusion is retroactive to January 1, 2023. A one-time tax expense of $1.6 million was realized during the third quarter due to the change in Wisconsin tax.
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 eleven full-service banking locations in Marathon, Oneida, Vilas, Portage, Milwaukee and Waukesha counties. 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 relating to the COVID-19 pandemic and its effect on PSB and Peoples, and their customers, and other risks. 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.
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PSB Holdings, Inc. Consolidated Balance Sheets September 30, June 30, and March 31, 2023, September 30, 2022, unaudited, December 31, 2022 derived from audited financial statements Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, (dollars in thousands, except per share data) 2023 2023 2023 2022 2022 Assets Cash and due from banks $ 12,881 $ 27,409 $ 13,336 $ 28,561 $ 16,659 Interest-bearing deposits 668 892 538 758 3,267 Federal funds sold 7,764 16,138 25,766 90 20,751 Cash and cash equivalents 21,313 44,439 39,640 29,409 40,677 Securities available for sale (at fair value) 160,883 167,382 190,738 192,197 188,425 Securities held to maturity (fair values of $75,236 , $81,489 , $82,610 , $80,926 and $77,467 respectively 86,908 87,335 87,889 87,816 87,993 Equity securities 2,273 2,178 2,070 2,032 1,870 Loans held for sale 971 151 - - - Loans receivable, net 1,098,019 1,048,322 973,270 961,865 936,686 Accrued interest receivable 4,716 4,274 4,062 4,006 3,493 Foreclosed assets - - - 160 160 Premises and equipment, net 13,242 13,256 13,406 13,164 13,129 Mortgage servicing rights, net 1,684 1,666 1,682 1,610 1,651 Federal Home Loan Bank stock (at cost) 6,373 6,359 4,620 2,516 2,516 Cash surrender value of bank-owned life insurance 23,931 23,776 25,078 24,922 24,765 Core deposit intangible 297 321 348 382 415 Goodwill 2,541 2,541 2,541 2,541 2,541 Other assets 14,094 14,933 14,444 15,069 15,248 TOTAL ASSETS $ 1,437,245 $ 1,416,933 $ 1,359,788 $ 1,337,689 $ 1,319,569 Liabilities Non-interest-bearing deposits $ 288,765 $ 282,153 $ 267,836 $ 292,338 $ 298,335 Interest-bearing deposits 883,474 860,981 839,757 856,417 850,483 Total deposits 1,172,239 1,143,134 1,107,593 1,148,755 1,148,818 Federal Home Loan Bank advances 128,000 133,000 113,000 43,000 40,000 Other borrowings 5,660 5,730 5,033 12,985 10,449 Senior subordinated notes 4,772 4,771 4,769 5,549 2,500 Junior subordinated debentures 12,896 12,870 12,844 12,819 12,793 Accrued expenses and other liabilities 10,770 12,495 11,338 12,639 10,114 Total liabilities 1,334,337 1,312,000 1,254,577 1,235,747 1,224,674 Stockholders' equity Preferred stock - no par value: Authorized - 30,000 shares; no shares issued or outstanding Outstanding - 7,200, 7,200, 7,200, 7,200, and 0 shares, respectively 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 - 4,174,197, 4,190,252, 4,241,501, 4,297,279 and 4,414,651 shares, respectively 1,830 1,830 1,830 1,830 1,830 Additional paid-in capital 8,421 8,382 8,311 8,300 8,294 Retained earnings 131,624 130,396 128,968 126,003 123,559 Accumulated other comprehensive income (loss), net of tax (26,190 ) (23,240 ) (22,515 ) (24,220 ) (24,200 ) Treasury stock, at cost - 1,316,601, 1,300,546, 1,249,297, 1,193,519 and 1,076,147 shares, respectively (19,977 ) (19,635 ) (18,583 ) (17,171 ) (14,588 ) Total stockholders' equity 102,908 104,933 105,211 101,942 94,895 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,437,245 $ 1,416,933 $ 1,359,788 $ 1,337,689 $ 1,319,569
PSB Holdings, Inc. Consolidated Statements of Income Quarter Ended Nine Months Ended (dollars in thousands, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, September except per share data - unaudited) 2023 2023 2023 2022 2022 2023 2022 Interest and dividend income: Loans, including fees $ 14,263 $ 12,709 $ 11,773 $ 11,251 $ 10,225 $ 38,745 $ 28,574 Securities: Taxable 1,114 1,327 1,331 1,218 978 3,772 2,599 Tax-exempt 533 535 537 539 540 1,605 1,610 Other interest and dividends 238 145 148 141 163 531 257 Total interest and dividend income 16,148 14,716 13,789 13,149 11,906 44,653 33,040 Interest expense: Deposits 4,817 3,661 2,989 2,060 1,341 11,467 2,379 FHLB advances 1,321 1,200 547 167 209 3,068 612 Other borrowings 51 48 62 38 14 161 20 Senior subordinated notes 59 58 62 55 28 179 84 Junior subordinated debentures 255 242 234 224 202 731 547 Total interest expense 6,503 5,209 3,894 2,544 1,794 15,606 3,642 Net interest income 9,645 9,507 9,895 10,605 10,112 29,047 29,398 Provision for loan losses 150 100 100 - - 350 - Net interest income after provision for loan losses 9,495 9,407 9,795 10,605 10,112 28,697 29,398 Noninterest income: Service fees 349 378 361 381 409 1,088 1,189 Mortgage banking income 345 311 325 235 228 981 980 Investment and insurance sales commissions 158 287 365 498 357 810 1,217 Net loss on sale of securities - (279 ) - - - (279 ) - Increase in cash surrender value of life insurance 155 149 157 157 157 461 459 Life insurance death benefit - 533 - - - 533 - Other noninterest income 675 605 742 553 558 2,022 1,775 Total noninterest income 1,682 1,984 1,950 1,824 1,709 5,616 5,620 Noninterest expense: Salaries and employee benefits 4,514 4,884 5,006 4,700 4,302 14,404 13,240 Occupancy and facilities 689 698 699 641 687 2,086 1,981 Loss (gain) on foreclosed assets - 4 (50 ) 2 4 (46 ) (2 ) Data processing and other office operations 953 951 880 910 906 2,784 2,679 Advertising and promotion 161 166 162 180 185 489 510 Core deposit intangible amortization 24 27 34 34 34 85 119 Other noninterest expenses 1,113 1,202 1,073 1,219 1,069 3,388 3,303 Total noninterest expense 7,454 7,932 7,804 7,686 7,187 23,190 21,830 Income before provision for income taxes 3,723 3,459 3,941 4,743 4,634 11,123 13,188 Provision for income taxes 2,374 652 941 1,143 1,119 3,967 3,151 Net income $ 1,349 $ 2,807 $ 3,000 $ 3,600 $ 3,515 $ 7,156 $ 10,037 Preferred stock dividends declared $ 122 $ 122 $ 122 $ 81 $ - $ 366 $ - Net income available to common shareholders $ 1,227 $ 2,685 $ 2,878 $ 3,519 $ 3,515 $ 6,790 $ 10,037 Basic earnings per common share $ 0.29 $ 0.64 $ 0.67 $ 0.80 $ 0.80 $ 1.61 $ 2.27 Diluted earnings per common share $ 0.29 $ 0.64 $ 0.67 $ 0.80 $ 0.80 $ 1.61 $ 2.27
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: 2023 2023 2023 2022 2022 Interest income $ 16,148 $ 14,716 $ 13,789 $ 13,149 $ 11,906 Interest expense $ 6,503 $ 5,209 $ 3,894 $ 2,544 $ 1,794 Net interest income $ 9,645 $ 9,507 $ 9,895 $ 10,605 $ 10,112 Provision for loan losses $ 150 $ 100 $ 100 $ - $ - Other noninterest income $ 1,682 $ 1,984 $ 1,950 $ 1,824 $ 1,709 Other noninterest expense $ 7,454 $ 7,932 $ 7,804 $ 7,686 $ 7,187 Net income available to common shareholders $ 1,227 $ 2,685 $ 2,878 $ 3,519 $ 3,515 Basic earnings per common share (3) $ 0.29 $ 0.64 $ 0.67 $ 0.80 $ 0.80 Diluted earnings per common share (3) $ 0.29 $ 0.64 $ 0.67 $ 0.80 $ 0.80 Dividends declared per common share (3) $ - $ 0.30 $ - $ 0.25 $ - Tangible net book value per common share (4) $ 22.25 $ 22.64 $ 22.43 $ 21.37 $ 20.83 Semi-annual dividend payout ratio n/a 27.38 % n/a 15.27 % n/a Average common shares outstanding 4,186,940 4,218,226 4,275,160 4,377,330 4,419,421 Balance sheet - average balances: Loans receivable, net of allowances for loss $ 1,076,158 $ 1,000,349 $ 964,029 $ 945,551 $ 931,344 Assets $ 1,425,522 $ 1,367,363 $ 1,336,511 $ 1,321,776 $ 1,323,400 Deposits $ 1,149,624 $ 1,098,039 $ 1,124,091 $ 1,146,066 $ 1,141,784 Stockholders' equity $ 105,745 $ 106,762 $ 103,406 $ 100,037 $ 98,630 Performance ratios: Return on average assets (1) 0.34 % 0.79 % 0.87 % 1.06 % 1.05 % Return on average stockholders' equity (1) 4.60 % 10.09 % 11.29 % 13.96 % 14.14 % Return on average tangible common stockholders' equity (1)(4) 5.09 % 11.14 % 12.51 % 15.12 % 14.58 % Net loan charge-offs to average loans (1) 0.00 % -0.07 % -0.02 % 0.03 % 0.01 % Nonperforming loans to gross loans 0.55 % 0.60 % 0.62 % 0.64 % 1.16 % Nonperforming assets to total assets 0.42 % 0.45 % 0.45 % 0.48 % 0.85 % Allowance for loan losses to gross loans 1.15 % 1.19 % 1.25 % 1.26 % 1.30 % Nonperforming assets to tangible equity plus the allowance for loan losses (4) 5.87 % 5.96 % 5.76 % 6.22 % 10.89 % Net interest rate margin (1)(2) 2.88 % 2.98 % 3.21 % 3.41 % 3.24 % Net interest rate spread (1)(2) 2.27 % 2.46 % 2.77 % 3.10 % 3.04 % Service fee revenue as a percent of average demand deposits (1) 0.50 % 0.58 % 0.52 % 0.50 % 0.56 % Noninterest income as a percent of gross revenue 9.43 % 11.88 % 12.39 % 12.18 % 12.55 % Efficiency ratio (2) 64.58 % 68.09 % 65.02 % 61.06 % 60.02 % Noninterest expenses to average assets (1) 2.07 % 2.33 % 2.37 % 2.31 % 2.15 % Average stockholders' equity less accumulated other comprehensive income (loss) to average assets 9.00 % 9.33 % 9.32 % 9.23 % 8.95 % Tangible equity to tangible assets (4) 6.98 % 7.22 % 7.54 % 7.42 % 6.98 % Stock price information: High $ 22.50 $ 21.38 $ 25.75 $ 22.74 $ 23.94 Low $ 20.35 $ 19.75 $ 20.00 $ 21.50 $ 22.50 Last trade value at quarter-end $ 21.15 $ 20.35 $ 21.15 $ 21.90 $ 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 Comprehensive Income Quarter Ended Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, (dollars in thousands - unaudited) 2023 2023 2023 2022 2022 Net income $ 1,349 $ 2,807 $ 3,000 $ 3,600 $ 3,515 Other comprehensive income, net of tax: Unrealized gain (loss) on securities available for sale (3,085 ) (1,168 ) 1,601 (116 ) (4,915 ) Reclassification adjustment for security loss included in net income - 202 - - - Amortization of unrealized loss included in net income on securities available for sale transferred to securities held to maturity 91 107 129 93 92 Unrealized gain (loss) on interest rate swap 79 161 (1 ) 11 32 Reclassification adjustment of interest rate swap settlements included in earnings (35 ) (27 ) (24 ) (8 ) 13 Other comprehensive income (loss) (2,950 ) (725 ) 1,705 (20 ) (4,778 ) Comprehensive income (loss) $ (1,601 ) $ 2,082 $ 4,705 $ 3,580 $ (1,263 )
PSB Holdings, Inc. Nonperforming Assets as of: Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, (dollars in thousands) 2023 2023 2023 2022 2022 Nonaccrual loans (excluding restructured loans) $ 5,807 $ 6,000 $ 5,773 $ 5,879 $ 6,048 Nonaccrual restructured loans 42 50 57 62 70 Restructured loans not on nonaccrual 256 261 265 270 4,904 Accruing loans past due 90 days or more - - - - - Total nonperforming loans 6,105 6,311 6,095 6,211 11,022 Other real estate owned - - - 160 160 Total nonperforming assets $ 6,105 $ 6,311 $ 6,095 $ 6,371 $ 11,182 Nonperforming loans as a % of gross loans receivable 0.55 % 0.60 % 0.62 % 0.64 % 1.16 % Total nonperforming assets as a % of total assets 0.42 % 0.45 % 0.45 % 0.48 % 0.85 % Allowance for loan losses as a % of nonperforming loans 192.55 % 177.63 % 191.63 % 197.92 % 112.28 %
PSB Holdings, Inc. Nonperforming Assets >= $500,000 net book value before specific reserves At September 30, 2023 (dollars in thousands) Asset Type Gross Specific Collateral Description Real estate - Buffet Style Restaurant Nonaccrual $ 2,742 $ 992 Real estate - Independent Auto Repair Nonaccrual 690 38 Total listed nonperforming assets $ 3,432 $ 1,030 Total bank wide nonperforming assets $ 6,105 $ 1,420 Listed assets as a % of total nonperforming assets 56 % 73 %
PSB Holding, Inc. Loan Composition by Purpose Quarter-ended (dollars in thousands) Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Residential real estate: One to four family $ 200,239 $ 199,100 $ 187,325 $ 182,688 $ 172,913 HELOC loans 19,127 19,498 18,141 17,625 18,423 Residential construction & development 20,571 18,634 22,014 20,698 22,313 Residential vacant land 1,155 1,111 1,223 1,414 3,069 Total Residential real estate 241,092 238,343 228,703 222,425 216,718 Commercial/Agricultural real estate: Owner occupied Commercial real estate 238,706 238,608 237,217 220,375 211,008 SBA commercial real estate 2,307 2,078 2,112 2,514 2,616 Agriculture real estate 3,482 3,563 3,681 3,835 3,902 Construction and land development 4,715 1,691 2,825 22,330 32,158 Commercial vacant land 7,281 7,223 6,712 7,291 5,214 Total Owner occupied 256,491 253,163 252,547 256,345 254,898 Non-owner occupied Commercial real estate 263,368 240,010 226,280 228,761 225,823 One to four family residential rental 86,838 67,854 65,673 64,764 66,224 Construction and land development 45,533 49,310 41,272 27,253 25,543 Commercial vacant land 20,401 10,424 3,928 3,862 4,010 Total Non-owner occupied 416,140 367,598 337,153 324,640 321,600 Commercial/Agricultural non-real estate: Municipal non-real estate 27,187 25,223 6,430 9,915 7,133 Commercial line 64,335 73,651 57,727 63,173 56,154 Other commercial non-real estate 95,024 92,519 92,419 87,535 82,430 SBA commercial non-real estate 3,795 3,787 3,997 3,533 3,378 Agricultural non-real estate 1,234 1,204 1,250 1,290 1,491 Total Commercial/Agr. non-real estate 191,575 196,384 161,823 165,446 150,586 Consumer non-real estate: Consumer installment 3,565 3,483 3,357 4,072 4,005 Consumer line 422 441 529 382 494 Other consumer 118 106 108 115 116 Total Consumer non-real estate 4,105 4,030 3,994 4,569 4,615 Gross loans 1,109,403 1,059,518 984,220 973,425 948,417 Net deferred loan costs (fees) 630 605 542 573 537 Overdrafts 253 121 101 160 107 Allowance for loan losses (12,267 ) (11,922 ) (11,593 ) (12,293 ) (12,375 ) Total loans receivable $ 1,098,019 $ 1,048,322 $ 973,270 $ 961,865 $ 936,686
PSB Holding, Inc. Selected Commercial Real Estate Loans by Purpose Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, (dollars in thousands) 2023 2023 2023 2022 2022 Total % of Total % of Total % of Total % of Total % of Multi Family $ 133,466 13.3 % $ 119,573 12.4 % $ 121,559 13.0 % $ 120,232 13.1 % $ 141,414 15.6 % Industrial and Warehousing 88,906 8.9 84,049 8.7 78,934 8.5 76,536 8.3 83,033 9.1 Retail 35,281 3.5 34,004 3.5 34,427 3.7 32,587 3.5 39,279 4.3 Hotels 31,819 3.2 33,329 3.5 31,069 3.3 32,940 3.6 26,958 3.0 Office 6,746 0.7 8,395 0.9 8,544 0.9 8,652 0.9 8,758 1.0 (1) Percentage of portfolio and commitments.
PSB Holdings, Inc. Deposit Composition Insured and Collateralized Deposits September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2023 2023 2023 2022 2022 $ % $ % $ % $ % $ % Non-interest bearing demand $ 209,133 17.8 % $ 201,351 17.6 % $ 205,350 18.6 % $ 203,115 17.7 % $ 216,116 18.7 % Interest-bearing demand and savings 307,620 26.3 % 310,006 27.1 % 329,364 29.7 % 345,854 30.1 % 348,989 30.4 % Money market deposits 135,910 11.6 % 126,851 11.1 % 128,576 11.6 % 131,400 11.4 % 130,126 11.3 % Retail and local time deposits <= $250 144,733 12.3 % 140,572 12.3 % 136,090 12.3 % 130,205 11.3 % 132,095 11.5 % Total core deposits 797,396 68.0 % 778,780 68.1 % 799,380 72.2 % 810,574 70.5 % 827,326 71.9 % Retail and local time deposits > $250 22,750 1.9 % 20,250 1.8 % 17,000 1.5 % 14,500 1.3 % 12,250 1.1 % Broker & national time deposits <= $250 3,222 0.3 % 3,965 0.3 % 5,953 0.5 % 6,451 0.6 % 6,700 0.6 % Broker & national time deposits > $250 88,614 7.6 % 93,956 8.2 % 74,485 6.8 % 82,439 7.2 % 82,439 7.2 % Totals $ 911,982 77.8 % $ 896,951 78.4 % $ 896,818 81.0 % $ 913,964 79.6 % $ 928,715 80.8 % PSB Holdings, Inc. Deposit Composition Uninsured Deposits September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2023 2023 2023 2022 2022 $ % $ % $ % $ % $ % Non-interest bearing demand $ 79,632 6.8 % $ 80,802 7.1 % $ 62,486 5.6 % $ 89,223 7.7 % $ 82,219 7.2 % Interest-bearing demand and savings 22,847 1.9 % 22,604 2.0 % 24,854 2.2 % 49,917 4.3 % 28,842 2.5 % Money market deposits 133,653 11.4 % 127,871 11.2 % 109,894 10.0 % 84,673 7.4 % 98,493 8.6 % Retail and local time deposits <= $250 - 0.0 % - 0.0 % - 0.0 % - 0.0 % - 0.0 % Total core deposits 236,132 20.1 % 231,277 20.3 % 197,234 17.8 % 223,813 19.4 % 209,554 18.3 % Retail and local time deposits > $250 24,120 2.1 % 14,906 1.3 % 13,541 1.2 % 10,978 1.0 % 10,549 0.9 % 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 $ 260,252 22.2 % $ 246,183 21.6 % $ 210,775 19.0 % $ 234,791 20.4 % $ 220,103 19.2 % PSB Holdings, Inc. Deposit Composition Total Deposits September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2023 2023 2023 2022 2022 $ % $ % $ % $ % $ % Non-interest bearing demand $ 288,765 24.7 % $ 282,153 24.7 % $ 267,836 24.2 % $ 292,338 25.4 % $ 298,335 26.0 % Interest-bearing demand and savings 330,467 28.2 % 332,610 29.1 % 354,218 32.0 % 395,771 34.5 % 377,831 32.9 % Money market deposits 269,563 22.8 % 254,722 22.3 % 238,470 21.5 % 216,073 18.8 % 228,619 19.9 % Retail and local time deposits <= $250 144,733 12.4 % 140,572 12.3 % 136,090 12.3 % 130,205 11.3 % 132,095 11.4 % Total core deposits 1,033,533 88.1 % 1,010,057 88.4 % 996,614 90.0 % 1,034,387 90.0 % 1,036,880 90.2 % Retail and local time deposits > $250 46,870 4.0 % 35,156 3.1 % 30,541 2.8 % 25,478 2.2 % 22,799 2.0 % Broker & national time deposits <= $250 3,222 0.3 % 3,965 0.3 % 5,953 0.5 % 6,451 0.6 % 6,700 0.6 % Broker & national time deposits > $250 88,614 7.6 % 93,956 8.2 % 74,485 6.7 % 82,439 7.2 % 82,439 7.2 % Totals $ 1,172,239 100.0 % $ 1,143,134 100.0 % $ 1,107,593 100.0 % $ 1,148,755 100.0 % $ 1,148,818 100.0 %
PSB Holdings, Inc. Average Balances ($000) and Interest Rates (dollars in thousands) Quarter ended September 30, 2023 Quarter ended June 30, 2023 Quarter ended September 30, 2022 Average Interest Yield / Average Interest Yield / Average Interest Yield / Assets Interest-earning assets: Loans (1)(2) $ 1,088,137 $ 14,337 5.23 % $ 1,012,105 $ 12,726 5.04 % $ 943,724 $ 10,235 4.30 % Taxable securities 173,287 1,114 2.55 % 196,048 1,327 2.71 % 199,727 978 1.94 % Tax-exempt securities (2) 81,327 675 3.29 % 81,758 677 3.32 % 82,242 684 3.30 % FHLB stock 6,368 127 7.91 % 5,366 51 3.81 % 2,579 32 4.92 % Other 8,195 111 5.37 % 7,254 94 5.20 % 28,823 131 1.80 % Total (2) 1,357,314 16,364 4.78 % 1,302,531 14,875 4.58 % 1,257,095 12,060 3.81 % Non-interest-earning assets: Cash and due from banks 19,299 15,632 19,400 Premises and equipment, net 13,266 13,336 13,052 Cash surrender value ins 23,840 24,530 24,666 Other assets 23,802 23,090 21,567 Allowance for loan losses (11,979 ) (11,756 ) (12,380 ) Total $ 1,425,542 $ 1,367,363 $ 1,323,400 Liabilities & stockholders' equity Interest-bearing liabilities: Savings and demand deposits $ 335,214 $ 1,198 1.42 % $ 344,435 $ 1,035 1.21 % $ 375,617 $ 370 0.39 % Money market deposits 255,823 1,489 2.31 % 243,073 1,189 1.96 % 232,713 399 0.68 % Time deposits 279,971 2,130 3.02 % 247,007 1,437 2.33 % 245,353 572 0.92 % FHLB borrowings 134,386 1,321 3.90 % 127,441 1,200 3.78 % 49,924 209 1.66 % Other borrowings 5,681 51 3.56 % 5,588 48 3.45 % 6,919 14 0.80 % Senior sub. notes 4,772 59 4.91 % 4,770 58 4.88 % 2,500 28 4.44 % Junior sub. debentures 12,883 255 7.85 % 12,857 242 7.55 % 12,781 202 6.27 % Total 1,028,730 6,503 2.51 % 985,171 5,209 2.12 % 925,807 1,794 0.77 % Non-interest-bearing liabilities: Demand deposits 278,616 263,524 288,101 Other liabilities 12,438 11,906 10,862 Stockholders' equity 105,758 106,762 98,630 Total $ 1,425,542 $ 1,367,363 $ 1,323,400 Net interest income $ 9,861 $ 9,666 $ 10,266 Rate spread 2.27 % 2.46 % 3.04 % Net yield on interest-earning assets 2.88 % 2.98 % 3.24 % (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, 2023 Nine months ended September 30, 2022 Average Interest Yield/ Average Interest Yield/ Assets Interest-earning assets: Loans (1)(2) $ 1,025,955 $ 38,851 5.06 % $ 917,541 $ 28,605 4.17 % Taxable securities 189,583 3,772 2.66 % 207,179 2,599 1.68 % Tax-exempt securities (2) 81,670 2,032 3.33 % 83,281 2,038 3.27 % FHLB stock 4,943 228 6.17 % 2,625 82 4.18 % Other 8,154 303 4.97 % 23,327 175 1.00 % Total (2) 1,310,305 45,186 4.61 % 1,233,953 33,499 3.63 % Non-interest-earning assets: Cash and due from banks 17,403 18,714 Premises and equipment, net 13,311 12,942 Cash surrender value ins 24,446 24,513 Other assets 23,352 19,995 Allowance for loan losses (12,004 ) (12,338 ) Total $ 1,376,813 $ 1,297,779 Liabilities & stockholders' equity Interest-bearing liabilities: Savings and demand deposits $ 350,928 $ 3,286 1.25 % $ 383,795 $ 561 0.20 % Money market deposits 241,594 3,508 1.94 % 222,975 609 0.37 % Time deposits 257,639 4,673 2.43 % 222,946 1,209 0.73 % FHLB borrowings 110,460 3,068 3.71 % 54,590 612 1.50 % Other borrowings 7,082 161 3.04 % 6,135 20 0.44 % Senior sub. notes 4,965 179 4.82 % 2,500 84 4.49 % Junior sub. debentures 12,857 731 7.60 % 12,755 547 5.73 % Total 985,525 15,606 2.12 % 905,696 3,642 0.54 % Non-interest-bearing liabilities: Demand deposits 273,699 279,135 Other liabilities 12,162 11,093 Stockholders' equity 105,427 101,855 Total $ 1,376,813 $ 1,297,779 Net interest income $ 29,580 $ 29,857 Rate spread 2.49 % 3.09 % Net yield on interest-earning assets 3.02 % 3.24 % (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% .
What were PSB Holdings, Inc.'s third quarter earnings?
PSB Holdings, Inc. reported earnings of $0.29 per common share on net income of $1.2 million for the third quarter.
What is the expected reduction in PSB Holdings, Inc.'s effective tax rate?
PSB Holdings, Inc. expects a 6% reduction in effective tax rate on future earnings due to a change in Wisconsin state tax law.
How much did total loans receivable increase by?
Total loans receivable increased by $49.7 million to $1.1 billion.
How much did total deposits increase by?
Total deposits increased by $29.1 million to $1.17 billion.
