PSB Holdings, Inc. Reports Record Quarterly Earnings of $0.89 Per Diluted Share; Net Interest Margin Improves For Fifth Consecutive Quarter
WAUSAU, Wis., July 22, 2025 (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, 2025 up 48% relative to the prior quarter to $0.89 per diluted common share on net income of $3.8 million, compared to $0.60 per diluted common share on net income of $2.6 million during the first quarter ending March 31, 2025, and $0.56 per diluted common share on net income of $2.4 million during the second quarter ending June 30, 2024.
PSB's second quarter 2025 operating results reflected the following changes from the first quarter of 2025: (1) a stronger net interest margin as asset yields rose; (2) higher non-interest income from higher mortgage banking income; and (3) lower non-interest expenses due to lower salaries and employee benefit expenses.
"We are proud to report record earnings for the second quarter, highlighted by an improving net interest margin and cost controls that have lowered our non-interest expenses and improved our efficiency ratio to 63%. Over the past year, we increased tangible book value per share by 13.1% while paying $0.64 per share in dividends to our shareholders. As loans continue to reprice at higher rates and new loans are originated at higher levels than current yields, we expect our net interest margin to continue to expand from current levels. While non-performing assets have grown, they represent a small number with special circumstances, and we expect favorable resolutions for certain significant non-performing assets by the end of the calendar year," stated Scott Cattanach, President and CEO.
June 30, 2025, Highlights:
Net interest income increased $470,000 to $10.7 million for the quarter ended June 30, 2025, from $10.3 million for the quarter ended March 31, 2025, due in part to higher yields on loans and one additional day during the quarter.
Noninterest income increased $230,000 to $2.1 million for the quarter ended June 30, 2025, compared to $1.9 million the prior quarter due primarily to higher mortgage banking revenues.
Noninterest expenses decreased $776,000 to $8.2 million during the quarter ended June 30, 2025 from $9.0 million for the quarter ended March 31, 2025, reflecting lower salary and benefit expenses.
Net loans increased $12.9 million, or 1% in the second quarter ended June 30, 2025, to $1.11 billion compared to March 31, 2025, largely due to increased commercial line usage. Allowance for credit losses remained at 1.12% of gross loans.
Non-performing assets increased $2.6 million to $15.6 million, or 1.04% of total assets at June 30, 2025 compared to the previous quarter. One existing non-performing loan relationship increased during the quarter as an additional loan in this relationship was moved to non-performing status. The underlying security of these loans is undergoing a sales process by the owner. Additionally, an unrelated new loan relationship was added to non-performing status.
Total deposits increased $47.5 million to $1.18 billion at June 30, 2025 from $1.13 billion at March 31, 2025, with the increase largely consisting of non-interest bearing demand deposits and time deposits with balances greater than $250,000. Core deposits increased $32.3 million while brokered deposits decreased $13.7 million. A portion of the overall deposit increase relates to an established customer making a large time deposit near the end of the quarter.
Return on average tangible common equity was 13.11% for the quarter ended June 30, 2025, compared to 9.21% the prior quarter and 9.34% in the year ago quarter.
Tangible book value per common share was up 13.1% over the past year to $27.77 at June 30, 2025, compared to $24.55 at June 30, 2024. Additionally, PSB paid dividends totaling $0.64 per share during the past year.
Balance Sheet and Asset Quality Review
Total assets increased $46.8 million during the second quarter to $1.51 billion at June 30, 2025, compared to $1.46 billion at March 31, 2025. Cash and cash equivalents increased $34.9 million to $57.5 million at June 30, 2025 from $22.7 million at March 31, 2025 as new deposits replenished reserves used to fund new loans. Investment securities available for sale increased $1.7 million to $184.3 million at June 30, 2025, from $182.6 million one quarter earlier.
Gross loans receivable increased $10.7 million to $1.15 billion at June 30, 2025, compared to one quarter earlier, due primarily to increased commercial & industrial lending. Commercial & industrial loans increased $11.2 million to $135.3 million at June 30, 2025, and commercial real estate loans increased $3.6 million to $566.5 million at June 30, 2025, compared to three months earlier. Commercial real estate construction and development loans decreased $9.2 million to $77.9 million at June 30, 2025, while residential real estate loans increased $3.3 million from the prior quarter to $337.1 million. Agricultural loans increased $1.6 million to $13.2 million at June 30, 2025 compared to three months earlier. The loan portfolio remains well diversified with commercial real estate and construction loans totaling 56.1% of gross loans, followed by residential real estate loans at 29.4% of gross loans, commercial non-real estate loans at 14.1% and consumer loans at 0.4%.
The allowance for credit losses remained at 1.12% of gross loans at June 30, 2025 while annualized net charge-offs to average loans were zero for the quarter ended June 30, 2025. Non-performing assets increased $2.6 million to $15.6 million, or 1.04% of total assets at June 30, 2025 up from 0.89% at March 31, 2025. The increase reflects a loan relationship that was non-performing in the prior quarter having an additional loan move to non-performing status in the second quarter and a separate loan relationship within the timber industry where the customer has experienced irregular cashflows. Approximately 80% of the non-performing assets consisted of five loan relationships.
Total deposits increased 4% quarter over quarter, with 23% of the deposit portfolio being uninsured at June 30th. Overall, core deposits increased $32.3 million during the quarter while brokered deposits decreased $13.7 million.
At June 30, 2025, non-interest bearing demand deposits increased to 23.6% of total deposits from 21.7% the prior quarter, while interest-bearing demand and savings deposits decreased to 27.4% at June 30, 2025 from 29.4% one quarter earlier. The additional deposit inflow helped to decrease FHLB advances during the quarter by $4.3 million and brokered deposits by $13.7 million.
Tangible stockholder equity as a percentage of total tangible assets decreased to 7.95% at June 30, 2025, compared to 8.05% at March 31, 2025, and 7.32% at June 30, 2024.
Tangible net book value per common share increased $3.22 during the quarter to $27.77, at June 30, 2025 compared to $24.55 one year earlier, an increase of 13.1% after dividends of $0.64 were paid to shareholders. Relative to the prior quarter's tangible book value per common share of $26.94, tangible net book value per common share increased primarily due to earnings and an increase in the fair market value of the investment portfolios. The accumulated other comprehensive loss on the investment portfolio was $15.8 million at June 30, 2025, compared to $16.7 million one quarter earlier.
Operations Review
Net interest income increased to $10.7 million (on a net margin of 3.09%) for the second quarter of 2025, from $10.3 million (on a net margin of 3.03%) for the first quarter of 2025, and increased from $9.4 million (on a net margin of 2.84%) for the second quarter of 2024. The higher net interest income in the current period primarily relates to higher loan yields during the quarter. Earning asset yields increased to 5.40% during the second quarter of 2025 from 5.35% the prior period and cost of funds increased four basis points to 3.06% compared to 3.02% during the first quarter of 2025. Relative to one year earlier, earning asset yields were up 19 basis points while the overall cost of funds was flat.
The increase in earning asset yields was due to higher yields on loan originations, loan renewals and security repricing. Loan yields increased during the second quarter of 2025 to 5.91% from 5.82% for the first quarter of 2025. Taxable security yields on a smaller average balance relative to the prior quarter were 3.24% for the quarter ended June 30, 2025, compared to 3.35% for the quarter ended March 31, 2025, while tax-exempt security yields remained at 3.35% for the quarter ended June 30, 2025.
Total noninterest income increased $230,000 during the second quarter of 2025 to $2.1 million. An increase of $161,000 in mortgage banking income during the quarter accounted for the majority of the change.
Noninterest expenses decreased $776,000 to $8.2 million for the second quarter of 2025, compared to $9.0 million for the first quarter of 2025, and decreased $202,000 from $8.4 million for the second quarter of 2024. On a linked quarter basis, salary and benefits expense decreased $474,000 as the first quarter results reflected an increase in variable commercial sales incentive expense. Occupancy and facilities costs decreased $67,000, data processing and other office operation expenses decreased $12,000, a gain on the sale of foreclosed real estate was $58,000 and various other noninterest expenses decreased $225,000 during the second quarter ended June 30, 2025. Partially offsetting the expense reductions was an increase in advertising and promotion expenses of $60,000.
Income taxes increased $279,000 during the second quarter to $752,000, from $473,000 one quarter earlier on higher income levels. The effective tax rate for the quarter ended June 30, 2025, was 16.6% compared to 15.6% for the first quarter ended March 31, 2025.
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. 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, 2025, September 30, and June 30, 2024, unaudited, December 31, 2024 derived from audited financial statements
Jun. 30,
Mar. 31,
Dec. 31,
Sep. 30,
Jun. 30,
(dollars in thousands, except per share data)
2025
2025
2024
2024
2024
Assets
Cash and due from banks
$
23,022
$
19,628
$
21,414
$
23,554
$
16,475
Interest-bearing deposits
2,890
702
3,724
5,126
251
Federal funds sold
31,624
2,351
15,360
58,434
69,249
Cash and cash equivalents
57,536
22,681
40,498
87,114
85,975
Securities available for sale (at fair value)
184,320
182,594
189,086
174,911
165,177
Securities held to maturity (fair values of $75,016, $77,375, $79,654, $82,389 and $79,993 respectively)
83,123
85,373
86,748
86,847
86,825
Equity securities
2,885
2,847
2,782
1,752
1,661
Loans held for sale
349
734
217
-
2,268
Loans receivable, net (allowance for credit losses of $12,553, $12,392, $12,342, $12,598 and $12,597 respectively)
1,109,296
1,096,422
1,078,204
1,057,974
1,074,844
Accrued interest receivable
5,006
5,184
5,042
4,837
5,046
Foreclosed assets
-
300
-
-
-
Premises and equipment, net
13,397
13,522
13,805
14,065
14,048
Mortgage servicing rights, net
1,684
1,717
1,742
1,727
1,688
Federal Home Loan Bank stock (at cost)
9,297
8,825
8,825
8,825
8,825
Cash surrender value of bank-owned life insurance
25,067
24,897
24,732
24,565
24,401
Core deposit intangible
330
353
195
212
229
Goodwill
3,495
3,495
2,541
2,541
2,541
Other assets
10,832
10,828
11,539
10,598
12,111
TOTAL ASSETS
$
1,506,617
$
1,459,772
$
1,465,956
$
1,475,968
$
1,485,639
Liabilities
Non-interest-bearing deposits
$
277,239
$
245,672
$
259,515
$
265,078
$
250,435
Interest-bearing deposits
900,303
884,364
887,834
874,035
901,886
Total deposits
1,177,542
1,130,036
1,147,349
1,139,113
1,152,321
Federal Home Loan Bank advances
165,950
170,250
162,250
181,250
184,900
Other borrowings
6,250
6,343
6,872
6,128
5,775
Senior subordinated notes
4,784
4,783
4,781
4,779
4,778
Junior subordinated debentures
13,075
13,049
13,023
12,998
12,972
Allowance for credit losses on unfunded commitments
622
672
672
477
477
Accrued expenses and other liabilities
15,118
13,554
14,723
12,850
13,069
Total liabilities
1,383,341
1,338,687
1,349,670
1,357,595
1,374,292
Stockholders' equity
Preferred stock - no par value:
Authorized - 30,000 shares; Issued - 7,200 shares
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 - 4,041,573, 4,084,708, 4,092,977, 4,105,594 and 4,128,382 shares, respectively
1,830
1,830
1,830
1,830
1,830
Additional paid-in capital
8,659
8,608
8,610
8,567
8,527
Retained earnings
144,548
142,277
139,838
138,142
135,276
Accumulated other comprehensive income (loss), net of tax
(15,764
)
(16,692
)
(19,314
)
(15,814
)
(20,503
)
Treasury stock, at cost - 1,449,225, 1,406,090, 1,397,821, 1,385,204 and 1,362,416 shares, respectively
(23,197
)
(22,138
)
(21,878
)
(21,552
)
(20,983
)
Total stockholders' equity
123,276
121,085
116,286
118,373
111,347
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,506,617
$
1,459,772
$
1,465,956
$
1,475,968
$
1,485,639
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)
2025
2025
2024
2024
2024
2025
2024
Interest and dividend income:
Loans, including fees
$
16,510
$
15,782
$
15,646
$
15,634
$
15,433
$
32,292
$
30,542
Securities:
Taxable
1,566
1,641
1,545
1,345
1,295
3,207
2,492
Tax-exempt
506
517
522
522
521
1,023
1,047
Other interest and dividends
332
345
948
699
265
677
608
Total interest and dividend income
18,914
18,285
18,661
18,200
17,514
37,199
34,689
Interest expense:
Deposits
5,934
5,884
6,027
5,905
5,838
11,818
11,920
FHLB advances
1,899
1,792
1,890
2,038
1,860
3,691
3,310
Other borrowings
48
47
57
57
58
95
118
Senior subordinated notes
58
59
59
59
58
117
117
Junior subordinated debentures
250
248
252
252
255
498
506
Total interest expense
8,189
8,030
8,285
8,311
8,069
16,219
15,971
Net interest income
10,725
10,255
10,376
9,889
9,445
20,980
18,718
Provision for credit losses
110
117
-
-
100
227
195
Net interest income after provision for credit losses
10,615
10,138
10,376
9,889
9,345
20,753
18,523
Noninterest income:
Service fees
366
358
362
367
350
724
686
Mortgage banking income
411
250
414
433
433
661
741
Investment and insurance sales commissions
335
326
226
230
222
799
343
Net loss on sale of securities
-
(1
)
(511
)
-
-
661
(495
)
Increase in cash surrender value of life insurance
170
163
166
165
159
(1
)
316
Other noninterest income
814
770
620
648
742
1,584
1,359
Total noninterest income
2,096
1,866
1,277
1,843
1,906
3,962
2,950
Noninterest expense:
Salaries and employee benefits
4,828
5,302
4,691
4,771
5,167
10,130
10,290
Occupancy and facilities
719
786
691
757
733
1,505
1,454
Loss (gain) on foreclosed assets
(58
)
-
-
1
-
(58
)
-
Data processing and other office operations
1,189
1,201
1,111
1,104
1,047
2,390
2,069
Advertising and promotion
189
129
141
164
171
318
300
Core deposit intangible amortization
23
23
17
17
20
46
44
Other noninterest expenses
1,303
1,528
1,351
1,337
1,257
2,831
2,563
Total noninterest expense
8,193
8,969
8,002
8,151
8,395
17,162
16,720
Income before provision for income taxes
4,518
3,035
3,651
3,581
2,856
7,553
4,753
Provision for income taxes
752
473
524
593
410
1,225
579
Net income
$
3,766
$
2,562
$
3,127
$
2,988
$
2,446
$
6,328
$
4,174
Preferred stock dividends declared
$
122
$
122
$
122
$
122
$
122
$
244
$
244
Net income available to common shareholders
$
3,644
$
2,440
$
3,005
$
2,866
$
2,324
$
