PSB Holding Corp. Reports First Quarter 2021 Results

Amortized net fees on PPP loans for the first quarter 2021 totaled $667,000.
Average investment balances increased from $71.58 million during the first quarter 2020 to $142.30 million during the first quarter 2021 with an average yield of 1.21% in first quarter 2021 compared to 2.15% in the first quarter 2020.
The net interest margin declined from 3.70% during the first quarter 2020 to 3.42% during the first quarter 2021.
The net interest margin, exclusive of amortized net fees on PPP loans, was 3.09% during the first quarter 2021.

PRESTON, Md., April 28, 2021 /PRNewswire/ -- PSB Holding Corp. (OTC-QX: PSBP), the parent company of Provident State Bank, Inc. ("Provident"), reported net income of $1.21 million ($.79 per diluted common share) for the first quarter ended March 31, 2021, compared to $1.44 million ($.94 per diluted common share) for the fourth quarter 2020 and $940,000 ($.61 per diluted common share) for the first quarter 2020.

When comparing net income for the first quarter 2021 to the fourth quarter 2020, net income decreased $229,000 primarily as a result of a decrease in mortgage banking activity driven by increasing long-term rates during the first quarter 2021. Specifically, gain on sale of loans decreased $242,000 on a linked-quarter basis.

When comparing net income for the first quarter of 2021 to the first quarter of 2020, net income increased $274,000 or 29.1%. The increase was largely the result of earned net fees on loans originated under the Small Business Administration's Payroll Protection Program ("PPP"), which began in April 2020, an increase in average investment balances (including interest-bearing deposits and federal funds sold) and an increase in gain on sale of loans. These positive influences on net income were offset by pressure on the net interest margin. Amortized net fees on PPP loans for the first quarter 2021 totaled $667,000. Average investment balances increased from $71.58 million during the first quarter 2020 to $142.30 million during the first quarter 2021 with an average yield of 1.21% in first quarter 2021 compared to 2.15% in the first quarter 2020. Gain on sale of loans increased $97,000. The net interest margin declined from 3.70% during the first quarter 2020 to 3.42% during the first quarter 2021. The net interest margin, exclusive of amortized net fees on PPP loans, was 3.09% during the first quarter 2021. Average earning assets increased from $435.18 million in 2020 to $527.13 million, inclusive of average PPP loans of $41.41 million, in 2021. The increase in gain on sale of loans and the decline in the net interest margin were the result of a lower interest rate environment pursued by the Federal Reserve to stabilize the economy during the pandemic.

Assets totaled $571.7 million at March 31, 2021, increasing $22.4 million or 4.1% compared to December 31, 2020 and $109.2 million or 23.6% compared to March 31, 2020. Growth in assets was driven primarily by growth in deposits as government stimulus increased customer liquidity. Deposits totaled $473.7 million at March 31, 2021 compared to $449.4 million at December 31, 2020 and $367.1 million at March 31, 2020, representing growth of 5.4% and 29.1%, respectively. Gross loans decreased $3.1 million to $383.0 million, a 1.0% decrease as compared to December 31, 2020. Gross loans increased $22.1 million or 6.1% compared to March 31, 2020 primarily as a result of PPP loan origination activity. As of March 31, 2021, non-performing assets and past due loans were .34% of total assets.

President and Chief Executive Officer Melissa Quirk commented, "Performance continued to remain strong with our fourth consecutive quarter of earnings in excess of $1.1 million, a first for our company. Our strong performance during this period was the result of our proactive initiative to participate in the PPP and our ability to maintain core business activities during an unprecedented pandemic. We remain grateful for the commitment of our staff and the patience of our customers during this extraordinary time."

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)		(unaudited)	Percent Change from
	Mar 31, 2021	Dec 31, 2020	Mar 31, 2020	Dec 31, 2020	Mar 31, 2020
Assets
Cash and cash equivalents	$ 44,956,382	$ 29,162,136	$ 19,641,503	54.2%	128.9%
Investment securities	122,078,560	111,930,314	59,796,786	9.1%	104.2%
Loans held for sale	1,414,221	2,367,448	1,988,172	-40.3%	-28.9%
Loans receivable	383,048,584	386,189,190	360,979,154	-0.8%	6.1%
Less allowance for loan losses	3,675,068	3,583,204	3,409,206	2.6%	7.8%
Loans, net of allowance for loan losses	379,373,516	382,605,986	357,569,948	-0.8%	6.1%
Property and equipment	8,196,751	8,401,637	9,694,554	-2.4%	-15.4%
Bank-owned life insurance	8,712,098	8,656,454	8,471,644	0.6%	2.8%
Lease assets	2,443,106	2,508,345	2,675,508	-2.6%	-8.7%
Accrued interest receivable	1,484,262	1,616,775	1,314,693	-8.2%	12.9%
Other assets	3,044,696	2,103,866	1,315,594	44.7%	131.4%
Total assets	$ 571,703,592	$ 549,352,961	$ 462,468,402	4.1%	23.6%

Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing	$ 210,026,953	$ 171,855,568	$ 139,853,993	22.2%	50.2%
Interest-bearing	263,682,755	277,526,516	227,202,014	-5.0%	16.1%
Total deposits	473,709,708	449,382,084	367,056,007	5.4%	29.1%
Repurchase agreements	11,891,020	15,528,356	7,447,748	-23.4%	59.7%
FHLB advances and other borrowing	32,801,481	31,078,123	38,907,389	5.5%	-15.7%
Lease liabilities	2,639,068	2,685,641	2,839,341	-1.7%	-7.1%
Other liabilities	2,016,381	1,934,558	1,277,975	4.2%	57.8%
Total liabilities	523,057,658	500,608,762	417,528,460	4.5%	25.3%
Stockholders' equity	48,645,934	48,744,199	44,939,942	-0.2%	8.2%
Total liabilities and equity	$ 571,703,592	$ 549,352,961	$ 462,468,402	4.1%	23.6%

Book value per common share	$ 31.76	$ 31.82	$ 29.34	-0.2%	8.2%

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

	Three Months Ended					Percent Change from
	Mar 31, 2021	Dec 31,2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2020	Mar 31, 2020
Interest income
Loans, including fee income	$ 4,763,112	$ 4,988,220	$ 4,796,814	$ 4,758,983	$ 4,591,832	-4.5%	3.7%
Investment securities	423,879	334,830	305,329	332,732	346,973	26.6%	22.2%
Other interest income	6,144	10,291	7,190	5,014	38,468	-40.3%	-84.0%
Total interest income	5,193,135	5,333,341	5,109,333	5,096,729	4,977,273	-2.6%	4.3%
Interest expense
Deposits	534,280	570,013	616,225	657,010	707,952	-6.3%	-24.5%
Repurchase agreements	1,079	1,298	782	1,036	4,945	-16.9%	-78.2%
FHLB advances	175,472	187,295	195,442	204,654	211,894	-6.3%	-17.2%
Other borrowings	34,937	36,686	38,461	39,834	40,298	-4.8%	-13.3%
Total interest expense	745,768	795,292	850,910	902,534	965,089	-6.2%	-22.7%
Net interest income	4,447,367	4,538,049	4,258,423	4,194,195	4,012,184	-2.0%	10.8%
Provision for loan losses	90,000	20,000	130,000	180,000	118,500	350.0%	-24.1%
Net interest income after provision	4,357,367	4,518,049	4,128,423	4,014,195	3,893,684	-3.6%	11.9%
Noninterest income
Service charges	417,139	416,823	412,317	374,471	423,478	0.1%	-1.5%
Gain on sale of loans	260,464	502,302	397,309	243,830	163,444	-48.1%	59.4%
Gain on sale of securities	-	18,557	-	25,470	-	-100.0%	NM
Other noninterest income	53,264	66,597	69,745	71,046	74,609	-20.0%	-28.6%
Total noninterest income	730,867	1,004,279	879,371	714,817	661,531	-27.2%	10.5%
Noninterest expense
Salaries and benefits	1,808,276	1,905,737	1,843,439	1,706,479	1,771,823	-5.1%	2.1%
Occupancy	513,208	507,121	488,246	492,731	521,550	1.2%	-1.6%
Data processing and software	312,620	294,390	287,995	268,884	234,771	6.2%	33.2%
Other noninterest expense	839,505	894,306	715,565	746,696	783,748	-6.1%	7.1%
Total noninterest expense	3,473,609	3,601,554	3,335,245	3,214,790	3,311,892	-3.6%	4.9%
Net income before tax	1,614,625	1,920,774	1,672,549	1,514,222	1,243,323	-15.9%	29.9%
Tax expense	401,375	478,399	420,666	376,544	303,494	-16.1%	32.3%
Net income	$1,213,250	$ 1,442,375	$ 1,251,883	$ 1,137,678	$ 939,829	-15.9%	29.1%

Net income per share	$ 0.79	$ 0.94	$ 0.82	$ 0.74	$ 0.61	-15.9%	29.1%

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SOURCE PSB Holding Corp.