Exhibit 99.1

 

 

PSB ANNOUNCES RECORD 2011 ANNUAL EARNINGS OF $3.37 PER

SHARE AND DECEMBER QUARTERLY EARNINGS OF $.89 PER SHARE

 

Wausau, Wisconsin [OTCQB:PSBQ] – Peter W. Knitt, President and CEO of PSB Holdings, Inc. (“PSB”) and Peoples State Bank (“Peoples”) reported December 2011 quarterly earnings of $.89 per share on net income of $1,400,000 compared to earnings of $.88 per share on net income of $1,394,000 during the most recent September 2011 quarter and $.85 per share on net income of $1,334,000 during the prior year December 2010 quarter. Earnings for the year ended December 31, 2011 were $3.37 per share on net income of $5,305,000, up 11% over 2010 earnings of $3.04 per share on net income of $4,754,000.

 

President Knitt indicated, “PSB continues to enjoy steady profits and capital growth while working through historically high loan delinquencies. During turbulent economic times, we are proud to support our local customers and many local shareholders with our 7^th consecutive quarterly annualized return on equity above 10% and our 8^th consecutive quarter of increased tangible net book value per share. 2011 earnings benefited from a $386,000 increase in tax adjusted net interest income on a reduction in higher cost funding and a $495,000 reduction in operating expenses compared to 2010 while credit and foreclosure costs were stable, declining just $57,000. Loan growth in our local markets continues to be difficult as new commercial loan demand remains low and banks compete aggressively to refinance existing credit with high quality borrowers. During 2011, total assets increased just $1,774,000, or 0.3%, although net loans increased $5,756,000, or 1.3%, during the year.”

 

Knitt added, “Looking ahead, continued slow economic conditions and recently announced local manufacturing job losses could keep consumer credit demand low and pressure home mortgage delinquency rates. Continued actions by the Federal Reserve and European economic concern have combined to lower long-term interest rates and could pressure net interest margin lower as loans reprice during the coming year. Lower net interest margin and increased loan delinquencies combined with low loan growth could negatively impact net income during 2012.”

 

Financial Highlights:

 

v

Record December 2011 quarterly earnings of $.89 per share and year to date earnings of $3.37 per share, up 4.7% and 10.9% over the prior year periods, respectively.

 

v

Tangible net book value of $31.96 per share, up 7.1% over December 2010, and return on average stockholders’ equity of 10.78%.

 

v

Total loans and deposits of $438 million and $482 million at December 31, 2011, respectively, with loans up $5.8 million and deposits up $16.3 million during the year.

 

v

Stable nonperforming loan portfolio of $14.2 million, including restructured loans accruing interest, compared to $14.4 million at September 30, 2011. Foreclosed assets of $2.9 million at December 31, 2011, down 41% during the year.

 

v

Recently recognized by SNL Financial as one of only 35 public exchange banks in the United States that has increased its cash dividend at least 1.5% every year for the past 10 years.

 

Balance Sheet Changes

 

Total assets were $622.9 million at December 31, 2011 compared to $611.3 million at September 30, 2011 and $621.1 million at December 31, 2010. During the December 2011 quarter, 91% of the $11.6 million increase in total assets came from higher cash and overnight investments as seasonal government tax deposits and other year-end commercial deposits were invested in short term federal funds sold. During the year ended December 31, 2011, an increase in residential mortgage loans of $5.2 million was offset by declines in foreclosed assets of $2.0 million and in cash of $2.1 million.

 

As noted previously, local core deposits increased $23.0 million during the December 2011 quarter which allowed PSB to repay $9.3 million in wholesale borrowings and invest in federal funds sold. For all of 2011, local core deposits increased $14.9 million which were used to repay $11.4 million in wholesale borrowings. At December 31, 2011, wholesale funding including brokered and national deposits, FHLB advances, and other borrowings were $144.4 million, or 23.2% of total assets, compared to 25.1% of total assets at September 30, 2011 and December 31, 2010. Seasonal government tax deposits are typically withdrawn early in the calendar year and an increase in use of wholesale funds is likely if needed to fund 2012 loan growth.

 

Asset Quality, Credit Costs, and the Allowance for Loan Losses

 

PSB’s provision for loan losses was $240,000 in the December 2011 quarter compared to $360,000 in the September 2011 quarter and $240,000 in the prior year December 2010 quarter. However, loss on foreclosed assets, including partial write-downs, increased in the December 2011 quarter to $558,000 compared to $66,000 in the September 2011 quarter but similar to $544,000 in the December 2010 quarter. December 2011 quarterly foreclosure losses resulted from a $535,000 partial write-down of several foreclosed properties to estimated market value after selling costs based on new appraisals obtained during the quarter. Foreclosed asset losses during the December 2010 quarter were led by a $250,000 partial write-down of a property later sold during 2011.

 

During the years ended December 31, provision for loan losses was $1,390,000 and $1,795,000 during 2011 and 2010, respectively. However, 2011 loss on foreclosed assets increased to $1,197,000 compared to $849,000 in 2010. Taken together, provision and foreclosure costs were $2,587,000 during 2011 and $2,644,000 during 2010. Foreclosure costs include partial write-downs of existing properties due to declining fair values, which totaled $992,000 during 2011 and $405,000 during 2010.

 

Nonperforming assets are shown in the following table.

 

Non-Performing Assets as of		December 31,
(dollars in thousands)		2011				2010
Nonaccrual loans (excluding restructured loans)		$	5,893			$	7,127
Nonaccrual restructured loans			2,081				1,912
Restructured loans not on nonaccrual			6,220				2,383
Accruing loans past due 90 days or more			—				—
Total nonperforming loans			14,194				11,422
Nonaccrual trust preferred investment security			750				—
Foreclosed assets			2,939				4,967
Total nonperforming assets		$	17,883			$	16,389
Nonperforming loans as a % of gross loans			3.19	%			2.60	%
Total nonperforming assets as a % of total assets			2.87	%			2.64	%

 

Total nonperforming loans increased $2,772,000 since December 31, 2010 despite a $1,065,000 reduction in nonaccrual loans due to addition of $3,837,000 in troubled debt restructured loans maintained on accrual status but classified above as nonperforming loans. Restructured loans maintained on accrual status represented 75% of total restructured principal at December 31, 2011 and September 30, 2011. The decline in nonaccrual loans benefited from $1,409,000 in net charge-offs during 2011 compared to $1,446,000 during 2010. The most significant charge-off during 2011 included $700,000 related to a customer line of credit secured by building supply inventory and accounts receivable previously disclosed in the 2010 Annual Report on Form 10-K. This charge-off was previously provided for by a $700,000 charge against earnings during the December 2009 quarter. Annualized net loan charge-offs were 0.32% and 0.33% during the years ended December 31, 2011 and 2010, respectively. At December 31, 2011, the allowance for loan losses was $7,941,000, or 1.78% of total loans (56% of nonperforming loans), compared to $7,960,000, or 1.81% of total loans (70% of nonperforming loans) at December 31, 2010.

 

At December 31, 2011, all nonperforming assets aggregating to $500,000 or more measured by gross principal outstanding per credit relationship (nine relationships) totaled $9.3 million before $0.7 million in specific reserves, representing 52% of total nonperforming assets. At September 30, 2011, all nonperforming assets aggregating $500,000 or more (nine relationships) totaled $10.0 million before $1.0 million in specific reserves, representing 54% of all nonperforming assets. At December 31, 2010, all nonperforming assets aggregating $500,000 or more (seven relationships) totaled $7.5 million before $0.9 million in specific reserves, representing 46% of nonperforming assets.

 

While PSB believes the most significant declines in general credit quality and the economy in its local markets have occurred, some borrowers continue to manage fragile cash flows and debt servicing ability as the economy has yet to sustain a meaningful recovery. Such conditions are seen in the level of problem borrowers with restructured loan terms. The longer significant recovery is delayed, the more difficult it will be for some borrowers to continue scheduled debt payments as previously unencumbered collateral is pledged for new working capital and balance sheet equity is drawn down, potentially requiring increased future provisions for loan loss. In light of these conditions, PSB expects to see an increase in borrowers requiring restructured loan terms. In addition, foreclosed property may increase during the next several quarters as PSB works through ongoing collection and foreclosure actions. A continued slow local economy impacts the value of collateral and foreclosed assets, potentially increasing losses on foreclosed borrowers and properties during the coming quarters.

 

Nonaccrual loans and restructured loans maintained on accrual status remain classified as nonperforming loans until the uncertainty surrounding the credit is eliminated. In general, uncertainty surrounding the credit is eliminated when the borrower has displayed a history of regular loan payments using a market interest rate that is expected to continue as if a typical performing loan. Some borrowers continue to make loan payments while maintained on non-accrual status. PSB applies all payments received on nonaccrual loans to principal until the loan is returned to accrual status or repaid. Total nonperforming assets as a percentage of total tangible common equity including the allowance for loan losses (often referred to as the “Texas Ratio”) was 31.32% and 30.61% at December 31, 2011 and 2010, respectively. For the purpose of this measurement, tangible common equity is equal to total common stockholders’ equity less mortgage servicing right assets.

 

Capital and Liquidity

 

During the year ended December 31, 2011, stockholders’ equity increased $3,672,000 primarily from $5,305,000 in net income less $1,168,000 in dividends declared. Net book value per share at December 31, 2011 was $31.96 compared to $29.85 at December 31, 2010, an increase of 7.1%. Average common stockholders’ equity, excluding unrealized security gains and other comprehensive income was 7.76% of average assets during the year ended December 31, 2011 compared to 7.09% during 2010.

 

For regulatory purposes, the $7 million 8% senior subordinated notes maturing July 2019 and $7.7 million junior subordinated debentures maturing September 2035 reflected as debt on the Consolidated Balance Sheet are reclassified as Tier 2 and Tier 1 regulatory equity capital, respectively. The floating rate payments required by the junior subordinated debentures have been hedged with a fixed rate interest rate swap resulting in a total annual interest cost of 4.42% through September 2017. PSB was considered “well capitalized” under banking regulations at December 31, 2011.

 

PSB regularly maintains access to wholesale markets to fund loan originations and manage local depositor needs. At December 31, 2011, unused (but available) wholesale funding were approximately $237 million, or 38% of total assets, compared to $211 million, or 34% of total assets at December 31, 2010. Unused wholesale funding sources include federal funds purchased lines of credit, Federal Reserve Discount Window advances, FHLB advances, brokered and national certificates of deposit, and a holding company correspondent bank line of credit. PSB’s ability to borrow funds on a short-term basis from the Federal Reserve Discount Window is an important part of its liquidity analysis and represented 42% and 45% of unused but available liquidity at December 31, 2011 and 2010, respectively.

 

Net Interest Margin

 

Tax adjusted net interest income totaled $5,235,000 (on net margin of 3.64%) during the December 2011 quarter compared to $5,051,000 (3.53%) in the September 2011 quarter and $ 5,096,000 (3.53%) in the December 2010 quarter. Year to date, tax adjusted interest income was $20,297,000 in 2011 (on net margin of 3.55%) and $19,911,000 during 2010 (on net margin of 3.51%), an increase of $386,000. Since June 2010, quarterly net interest income has remained in a range from $4,960,000 to $5,235,000 and net interest margin has remained in a range from 3.45% to 3.65%. During this period, consistent declines in loan and investment yields have been offset by regular declines in time deposit costs.

 

Reinvestment yields for investment security cash flows remain very low and taxable securities yields are expected to continue to decline throughout 2012. In addition, loan yields may decline significantly due to competitive pressures as competitors seek to increase loan originations while quality credit demand remains weak in addition to domestic and global economic actions which have lowered long-term rates. While December 2011 quarterly net margin increased from a reduction in demand and savings rates, further reductions of these nominal core deposit rates may be difficult. PSB expects these factors to continue and may experience a decline in net interest income or net margin during upcoming quarters.

 

Noninterest and Fee Income

 

Total noninterest income for the quarter ended December 31, 2011 was $1,376,000, compared to $1,512,000 earned during the December 2010 quarter, a decrease of $136,000, or 9.0%. The decrease was led by a reduction in mortgage banking income of $162,000, or 29.4%. During the December 2010 quarter, mortgage rates fell to very low levels, prompting a wave of consumer refinancing activity greater than seen during the December 2011 quarter. Separately, the quarterly decline in noninterest income was offset $32,000 by a gain on sale of securities.

 

Noninterest income during the year ended December 31, 2011 totaled $5,337,000, down $26,000, or 0.5% compared to 2010. During the year, mortgage banking income declined $99,000, or 6.7%, to $1,373,000. A $154,000 reduction in service fees (down 8.6%) from lower overdraft fee income was offset by $207,000 of commissions earned on interest rate swaps sold to commercial loan customers during 2011, a new PSB product introduced during the year.

 

The provisions of the Dodd-Frank Wall Street Reform Act related to debit card interchange income, often referred to as the “Durbin Amendment,” become effective during the December 2011 quarter. These changes cap the amount of debit card interchange income that may be collected by large banks from merchants for processing card activity. While the new rules technically do not apply to PSB as a smaller bank, the impacts are expected to become uniform for the industry over time as merchants use their new authority and options to process customer card activity across a wider number of providers. In addition, changes made by PSB to eliminate the debit card usage requirement of its high yield Reward Checking account are expected to reduce customer debit card activity. In general, the banking industry has begun to respond to lower debit card fee revenue by reducing customer account reward programs and related costs and increasing account service fees. PSB continues to investigate the nature and timing of potential future retail checking account changes in response to the expected reduction of debit card income. PSB expects noninterest income during 2012 to decline from levels seen during 2011 as mortgage banking loan originations trend lower and the impacts of new debit card interchange regulation are felt.

 

Operating Expenses

 

Noninterest expenses totaled $4,121,000 during the December 2011 quarter compared to $4,305,000 during the December 2010 quarter, a decrease of $184,000, or 4.3%. The majority of the decline was due to $110,000 in debit card fraud losses incurred during the December 2010 quarter as PSB was subject to a concentrated fraud event. Other savings were seen in a $70,000 reduction in expense related to vendor costs of PSB’s Rewards Checking retail NOW account when sale of the product was discontinued. Increased data processing cost of $157,000, up 70.1%, was offset by a $98,000 decline in salaries and benefits and an $84,000 decrease in FDIC insurance premium expense. Data processing expense increased as special conversion contractual cost reductions associated with the June 2010 data system conversion were fully phased out during the September 2011 quarter. During 2011, certain Dodd-Frank Wall Street Reform Act rules became effective which placed a greater burden for FDIC insurance premiums on the nation’s largest banks, decreasing amounts due from smaller community banks, like PSB.

 

Year to date, noninterest expenses were $15,778,000 and $15,925,000 during 2011 and 2010, respectively, a decrease of $147,000, or 0.9%. However, loss on foreclosed assets and changes in FDIC insurance premium expense impact the analysis of year over year total noninterest expenses. Excluding these costs, operating expenses totaled $14,076,000 in 2011 and $14,294,000 in 2010, a decline of $218,000, or 1.5%, from declines in each primary expense category except data processing expenses. Offsetting the increase in data processing costs of $297,000 (up 27.4%) were declines in salaries and benefits of $130,000, decline in occupancy costs of $161,000, decline in advertising of $64,000 and decline in other noninterest expense of $160,000.

 

Prior to losses on foreclosed assets, total operating expenses during the past eight quarters have been contained in range of $3.6 million to $3.8 million per quarter. PSB expects operating expenses prior to foreclosure costs to be near the top of this range during the upcoming March 2012 quarter.

 

About PSB Holdings, Inc.

 

PSB Holdings, Inc. is the parent company of Peoples State Bank. Peoples is headquartered in Wausau, Wisconsin, operating eight full service retail and commercial locations serving north central Wisconsin in Marathon, Oneida, and Vilas counties. In addition to traditional retail and commercial banking products, Peoples provides retail investments and insurance annuities, retirement planning, commercial treasury management services, and long-term fixed rate residential mortgages. More information concerning the operations and performance of PSB Holdings, Inc. may be found on the PSB investor relations website, www.psbholdingsinc.com. PSB stock is traded on the Over the Counter Bulletin Board Exchange and the OTC Markets Exchange under the symbol PSBQ.

 

Forward Looking Statements

 

Certain matters discussed in this news release, including those relating to the growth of PSB, its profits, and future interest rates, are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities 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 outlined under “Forward - Looking Statements” and elsewhere in Item 1A of PSB’s Form 10-K for the year ended December 31, 2010. PSB assumes no obligation to update or supplement forward-looking statements that become untrue because of events subsequent to the release of this filing.

 

 

PSB Holdings, Inc.

Quarterly Financial Summary

(dollars in thousands, except per share data)

 

		Quarter ended – Unaudited
		December 31,				September 30,				June 30,				March 31,				December 31,
Earnings and dividends:		2011				2011				2011				2011				2010
Net income		$	1,400			$	1,394			$	1,226			$	1,285			$	1,334
Basic earnings per share(3)		$	0.89			$	0.89			$	0.78			$	0.82			$	0.85
Diluted earnings per share(3)		$	0.89			$	0.88			$	0.78			$	0.82			$	0.85
Dividends declared per share(3)		$	0.37			$	—			$	0.37			$	—			$	0.36
Net book value per share		$	31.96			$	31.60			$	30.95			$	30.46			$	29.85
Semi-annual dividend payout ratio			20.86	%			n/a				23.33	%			n/a				21.13	%
Average common shares outstanding			1,575,344				1,574,456				1,573,954				1,572,825				1,564,297
Balance sheet – average balances:
Loans receivable, net of allowances		$	440,737			$	434,031			$	437,314			$	431,139			$	430,923
Total assets		$	604,216			$	602,088			$	601,978			$	617,818			$	610,577
Deposits		$	457,916			$	452,225			$	451,214			$	463,773			$	454,735
Stockholders’ equity		$	50,910			$	49,369			$	48,978			$	47,352			$	47,219
Performance ratios:
Return on average assets(1)			0.92	%			0.92	%			0.82	%			0.84	%			0.87	%
Return on average stockholders’ equity(1)			10.91	%			11.20	%			10.04	%			11.01	%			11.21	%
Average tangible stockholders’ equity
less accumulated other comprehensive
income (loss) to average assets(4)			8.11	%			7.84	%			7.75	%			7.29	%			7.34	%
Net loan charge-offs to average loans(1)			0.28	%			0.14	%			-0.01	%			0.86	%			0.26	%
Nonperforming loans to gross loans			3.19	%			3.26	%			3.21	%			2.21	%			2.60	%
Allowance for loan losses to gross loans			1.78	%			1.82	%			1.75	%			1.66	%			1.81	%
Nonperforming assets to tangible equity
plus the allowance for loan losses(4)			31.32	%			32.82	%			35.03	%			28.43	%			30.61	%
Net interest rate margin(1)(2)			3.64	%			3.53	%			3.57	%			3.45	%			3.53	%
Net interest rate spread(1)(2)			3.38	%			3.28	%			3.34	%			3.23	%			3.27	%
Service fee revenue as a percent of
average demand deposits(1)			2.49	%			2.95	%			3.05	%			2.84	%			3.01	%
Noninterest income as a percent of gross revenue			16.31	%			16.15	%			14.40	%			16.55	%			17.03	%
Efficiency ratio(2)			62.34	%			59.75	%			61.92	%			62.18	%			65.15	%
Noninterest expenses to average assets(1)			2.71	%			2.53	%			2.58	%			2.59	%			2.80	%
Stock price information:
High		$	24.75			$	25.00			$	26.00			$	27.00			$	24.50
Low		$	23.55			$	23.15			$	24.00			$	22.10			$	21.00
Market value at quarter-end		$	23.60			$	23.75			$	24.26			$	24.00			$	23.00

 

⁽¹⁾ Annualized

⁽²⁾ The yield on tax-exempt loans and securities is computed on a tax-equivalent basis using a tax rate of 34%.

⁽³⁾ Due to rounding, cumulative quarterly per share performance may not equal annual per share totals.

⁽⁴⁾ Tangible stockholders’ equity excludes intangible assets and any preferred stock capital elements.

PSB Holdings, Inc.
Consolidated Statements of Income
		Three Months Ended								Year Ended
(dollars in thousands,		December 31,								December 31,
except per share data – unaudited)		2011				2010				2011				2010
Interest and dividend income:
Loans, including fees		$	6,184			$	6,360			$	24,480			$	25,419
Securities:
Taxable			596				682				2,637				2,946
Tax-exempt			267				305				1,125				1,265
Other interest and dividends			16				19				72				35
Total interest and dividend income			7,063				7,366				28,314				29,665
Interest expense:
Deposits			1,228				1,602				5,428				6,974
FHLB advances			396				463				1,776				1,864
Other borrowings			151				173				645				741
Senior subordinated notes			142				142				567				567
Junior subordinated debentures			86				86				341				420
Total interest expense			2,003				2,466				8,757				10,566
Net interest income			5,060				4,900				19,557				19,099
Provision for loan losses			240				240				1,390				1,795
Net interest income after provision for loan losses			4,820				4,660				18,167				17,304
Noninterest income:
Service fees			409				454				1,632				1,786
Mortgage banking			389				551				1,373				1,472
Investment and insurance sales commissions			161				151				631				633
Net gain (loss) on sale and write-down of securities			32				—				32				(20	)
Increase in cash surrender value of life insurance			104				103				415				410
Other noninterest income			281				253				1,254				1,082
Total noninterest income			1,376				1,512				5,337				5,363
Noninterest expense:
Salaries and employee benefits			2,026				2,124				8,337				8,467
Occupancy and facilities			453				418				1,702				1,863
Loss on foreclosed assets			558				544				1,197				849
Data processing and other office operations			381				224				1,382				1,085
Advertising and promotion			86				103				291				355
FDIC insurance premiums			108				192				505				782
Other noninterest expenses			509				700				2,364				2,524
Total noninterest expense			4,121				4,305				15,778				15,925
Income before provision for income taxes			2,075				1,867				7,726				6,742
Provision for income taxes			675				533				2,421				1,988
Net income		$	1,400			$	1,334			$	5,305			$	4,754
Basic earnings per share		$	0.89			$	0.85			$	3.37			$	3.04
Diluted earnings per share		$	0.89			$	0.85			$	3.37			$	3.04

PSB Holdings, Inc.
Consolidated Balance Sheets
December 31, 2011 unaudited, December 31, 2010 derived from audited financial statements
		December 31,				December 31,
(dollars in thousands, except per share data – unaudited)		2011				2010
Assets
Cash and due from banks		$	14,805			$	9,601
Interest-bearing deposits and money market funds			1,829				227
Federal Funds sold			21,571				30,503
Cash and cash equivalents			38,205				40,331
Securities available for sale (at fair value)			59,383				55,273
Securities held to maturity (fair value of $50,751 and $51,662)			49,294				53,106
Other investments			2,484				2,484
Loans held for sale			39				436
Loans receivable, net of allowance for loan losses			437,557				431,801
Accrued interest receivable			2,068				2,238
Foreclosed assets			2,939				4,967
Premises and equipment, net			9,928				10,464
Mortgage servicing rights, net			1,205				1,100
Federal Home Loan Bank stock (at cost)			3,250				3,250
Cash surrender value of bank-owned life insurance			11,406				10,899
Other assets			5,109				4,744
TOTAL ASSETS		$	622,867			$	621,093
Liabilities
Non-interest-bearing deposits		$	75,298			$	57,932
Interest-bearing deposits			406,211				407,325
Total deposits			481,509				465,257
Federal Home Loan Bank advances			50,124				57,434
Other borrowings			19,691				31,511
Senior subordinated notes			7,000				7,000
Junior subordinated debentures			7,732				7,732
Accrued expenses and other liabilities			6,449				5,469
Total liabilities			572,505				574,403
Stockholders’ equity
Preferred stock – no par value:  Authorized – 30,000 shares			—				—
Common stock – no par value with a stated value of $1 per share:
Authorized – 3,000,000 shares
Issued – 1,751,431 shares; Outstanding - 1,575,804 shares			1,751
Issued – 1,751,431 shares; Outstanding – 1,564,297 shares							1,751
Additional paid-in capital			5,323				5,506
Retained earnings			46,111				41,974
Accumulated other comprehensive income			1,934				2,528
Treasury stock, at cost – 175,627 and 187,134 shares, respectively			(4,757	)			(5,069	)
Total stockholders' equity			50,362				46,690
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	622,867			$	621,093

PSB Holdings, Inc.
Average Balances and Interest Rates
Quarter Ended  December 31,
		2011												2010
		Average Balance				Interest				Yield/Rate				Average Balance				Interest				Yield/Rate
Assets
Interest-earning assets:
Loans(1)(2)		$	448,872			$	6,221				5.50	%		$	438,997			$	6,399				5.78	%
Taxable securities			79,719				596				2.97	%			73,595				682				3.68	%
Tax-exempt securities(2)			31,271				405				5.14	%			34,782				462				5.27	%
FHLB stock			3,250				1				0.12	%			3,250				—				0.00	%
Other			7,291				15				0.82	%			22,717				19				0.33	%
Total(2)			570,403				7,238				5.03	%			573,341				7,562				5.23	%
Non-interest-earning assets:
Cash and due from banks			9,053												10,738
Premises and equipment, net			10,029												10,517
Cash surrender value insurance			11,342												10,836
Other assets			11,524												13,219
Allowance for loan losses			(8,135	)											(8,074	)
Total		$	604,216											$	610,577
Liabilities & stockholders’ equity
Interest-bearing liabilities:
Savings and demand deposits		$	128,050			$	232				0.72	%		$	117,085			$	303				1.03	%
Money market deposits			95,248				170				0.71	%			98,985				252				1.01	%
Time deposits			169,401				826				1.93	%			178,805				1,047				2.32	%
FHLB borrowings			54,961				396				2.86	%			57,434				463				3.20	%
Other borrowings			19,537				151				3.07	%			31,283				173				2.19	%
Senior subordinated notes			7,000				142				8.05	%			7,000				142				8.05	%
Junior subordinated debentures			7,732				86				4.41	%			7,732				86				4.41	%
Total			481,929				2,003				1.65	%			498,324				2,466				1.96	%
Non-interest-bearing liabilities:
Demand deposits			65,217												59,860
Other liabilities			6,160												5,174
Stockholders’ equity			50,910												47,219
Total		$	604,216											$	610,577
Net interest income						$	5,235											$	5,096
Rate spread											3.38	%											3.27	%
Net yield on interest-earning assets											3.64	%											3.53	%

 

⁽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 34%.

 

PSB Holdings, Inc.
Average Balances and Interest Rates
Year ended December 31,
		2011												2010
		Average Balance				Interest				Yield/Rate				Average Balance				Interest				Yield/Rate
Assets
Interest-earning assets:
Loans(1)(2)		$	443,709			$	24,640				5.55	%		$	443,293			$	25,579				5.77	%
Taxable securities			79,711				2,637				3.31	%			73,414				2,946				4.01	%
Tax-exempt securities(2)			32,625				1,705				5.23	%			34,344				1,917				5.58	%
FHLB stock			3,250				4				0.12	%			3,250				—				0.00	%
Other			12,679				68				0.54	%			13,666				35				0.26	%
Total(2)			571,974				29,054				5.08	%			567,967				30,477				5.37	%
Non-interest-earning assets:
Cash and due from banks			8,532												9,600
Premises and equipment, net			10,216												10,460
Cash surrender value insurance			11,175												10,682
Other assets			12,481												13,305
Allowance for loan losses			(7,884	)											(7,857	)
Total		$	606,494											$	604,157
Liabilities & stockholders’ equity
Interest-bearing liabilities:
Savings and demand deposits		$	126,944			$	1,109				0.87	%		$	120,556			$	1,310				1.09	%
Money market deposits			100,089				810				0.81	%			95,329				1,083				1.14	%
Time deposits			171,200				3,509				2.05	%			184,487				4,581				2.48	%
FHLB borrowings			56,730				1,776				3.13	%			57,725				1,864				3.23	%
Other borrowings			24,499				645				2.63	%			26,256				741				2.82	%
Senior subordinated notes			7,000				567				8.10	%			7,000				567				8.10	%
Junior subordinated debentures			7,732				341				4.41	%			7,732				420				5.43	%
Total			494,194				8,757				1.77	%			499,085				10,566				2.12	%
Non-interest-bearing liabilities:
Demand deposits			57,942												55,848
Other liabilities			5,150												4,340
Stockholders’ equity			49,208												44,884
Total		$	606,494											$	604,157
Net interest income						$	20,297											$	19,911
Rate spread											3.31	%											3.25	%
Net yield on interest-earning assets											3.55	%											3.51	%

 

⁽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 34%.