PSB Holdings, Inc. · OTC:PSBQ
PSB — Raymond James 2024 US Bank Conference
36 slides from PSB's conference presentation, Sep 5, 2024
Slide 1: Raymond James 2024 US Bank Conference
Raymond James 2024 US Bank Conference September 5, 2024 1
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain matters discussed in this presentation, including without limitation those relating to potential loan and deposit growth, future profits, changes in noninterest income and expenses, pro-forma impacts to income from non- recurring or unusua
Slide 3: About PSB Holdings Inc. Peoples State Bank
About PSB Holdings Inc. Peoples State Bank 3
Slide 4: Management Team
Management Team Scott M. Cattanach has served as President & Chief Executive Officer of PSB Holdings, Inc. (“PSB”) and Peoples State Bank (“Bank”) since 2018. Mr. Cattanach previously served as Chief Financial Officer of PSB and the Bank from 2002 through 2017. Mr. Cattanach joined Peoples after ser
Slide 5: Company Overview
Overview Company Overview • PSB Holdings, Inc. ($1.5 billion in assets) is the parent company of Peoples State Bank, a community bank headquartered in Wausau, Wisconsin, serving northcentral and southeastern Wisconsin from 12 full-service banking locations and 1 loan production office (“LPO”). PSB H
Slide 6: Strategic Focus
Strategic Focus Continue building full banking relationships Headquarters 1905 Stewart Avenue with current and prospective business P.O. Box 1686 customers in Wisconsin Wausau, WI 54402-1686 PSBQ Locations Disciplined acquisition strategy: Explore Counties With $1MM or new LPO markets and small bank
Slide 7: Opportunities
Opportunities More Economic Upside than Downside. Economic Risks Already Imbedded in Current Stock Price: 1. Interest rates are expected to decline, which would lower the amount of unrealized security losses and move net book value per share higher. 2. Net interest margin is expected to increase qua
Slide 8: Northcentral Wisconsin Employment Base
Northcentral Wisconsin Employment Base Industry Marathon Oneida Vilas Total % of Total All of WI All Industries 69,570 15,761 7,889 93,220 100.00% 100.00% Manufacturing 18,339 1,670 458 20,467 21.96% 16.00% Trade, Transportation, Utilities 13,322 3,903 1,720 18,945 20.32% 19.00% Education & Health S
Slide 9: Business Model Strengths
Business Model Strengths Well-diversified loan portfolio with strong asset quality supported by conservative underwriting. History of strong earnings with consistent dividend growth. Margin improving in an uncertain economic environment. Deposit base stability and depth (strong liquidity).
Slide 10: Focused Management
Focused Management Company Overview Award Winning Service Shareholder focused – American Banker Magazine “Top 200 Community Banks” list in 2023 for 14 consecutive years based on 3-year average return on equity. Customer focused – Peoples State Bank voted the “Best Bank in Marathon County” (Peoples S
Slide 11: Industries Served
Industries Served 18.0% 16.0% 15.6% 15.2% 14.0% 12.0% 12.0% 10.3% 10.0% 8.0% 8.0% 7.4% 6.1% 6.0% 4.4% 3.6% 4.0% 3.6% 3.6% 3.3% 2.0% 1.4% 1.4% 1.2% 1.0% 0.8% 0.7% 0.3% 0.1% 0.1% 0.0% As of 06/30/24 11
Slide 12: Opportunities and Challenges
Opportunities and Challenges Opportunities Challenges • Strengthen capital through better • Margin management in a volatile earnings to facilitate capital and rapidly changing interest rate management strategies or environment. acquisitions. • Managing asset quality in a • Expanding market presence
Slide 13: Financial Trends
A PSB HOLDINGS, INC. Financial Trends 13
Slide 14: Key Data at a Glance
Key Data at a Glance (Dollars in Thousands) 2019 2020 2021 2022 2023 2024 Q2YTD Total Assets $974,893 $1,131,955 $1,298,711 $1,337,689 $1,424,100 $1,485,639 Total Loans $708,196 $821,910 $879,398 $961,865 $1,078,705 $1,077,112 Total Deposits $781,790 $932,137 $1,105,240 $1,148,755 $1,141,802 $1,152,
Slide 15: Net Income Trends
Net Income Trends Net Income to Common Shareholders $16,000 $14,000 (Dollars in Thousands) $12,000 $13,556 $12,817 $10,000 $11,247 $10,689 $8,000 $9,083 $6,000 $4,000 $2,000 $3,930 $0 2019 2020 2021 2022 2023 2024 YTD Diluted EPS per Common Share $3.00 $3.07 $2.50 $2.88 $2.51 $2.40 $2.00 $2.16 $1.50
Slide 16: New Wisconsin Tax Law in 2023
New Wisconsin Tax Law in 2023 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 o
Slide 17: Earnings Trends
Earnings Trends ROAA ROATCE 1.40% 16.00% 1.20% 14.00% 1.22% 14.08% 12.00% 1.00% 12.79% 1.01% 1.03% 1.05% 11.94% 10.00% 10.85% 0.80% 8.00% 9.65% 0.60% 0.69% 7.97% 6.00% 0.59% 0.40% 4.00% 0.20% 2.00% 0.00% 0.00% 2019 2020 2021 2022 2023 2024 YTD 2019 2020 2021 2022 2023 2024 YTD Net Interest Margin Ef
Slide 18: Operating Expense Trends
Operating Expense Trends Operating Expenses/Avg Assets 3.00% 2.50% 2.46% 2.33% 2.22% 2.25% 2.20% 2.00% 2.20% 1.50% 1.00% 0.50% 0.00% 2019 2020 2021 2022 2023 2024 YTD 18
Slide 19: Balance Sheet Trends
Balance Sheet Trends Total Assets (Dollars in $000’s) $1,600,000 $1,400,000 $1,485,639 $1,424,100 $1,200,000 $1,298,711 $1,337,689 $1,000,000 $1,131,955 $800,000 $974,893 $600,000 $400,000 $200,000 $0 2019 2020 2021 2022 2023 2024 Q2 Tangible Equity $000 (excluding AOCI) $140,000 $120,000 $129,080 $
Slide 20: Loan Portfolio
Loan Portfolio Consumer, Constr, Dev Consumer, Constr, Dev 0.6% & Vac Land, 0.4% & Vac Land, 10.4% 9.1% Residential Residential RE, 24.7% RE, 28.0% CRE Owner- Occ, 19.6% CRE Owner- Occ, 24.2% Comm/Ag Non RE, CRE Non- CRE Non- 19.1% Owner-Occ, Owner-Occ, Comm/Ag 20.9% 30.2% Non RE, 12.6% 06/30/2019 0
Slide 21: Asset Quality Trends
Asset Quality Trends NPA/Assets and Reserves/Total Loans 3.00% 2.87% 2.50% 2.64% 2.00% 1.96% 1.77% 1.50% 1.46% 1.49% 1.27% 1.00% 1.04% 1.06% 0.90% 0.23% 0.84% 0.50% 0.67% 0.55% 0.48% 0.42% 0.00% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q2 NPA/Assets Loan Loss Reserv
Slide 22: Charge-Off History
Charge-Off History Charge-Off History vs Peers 1.05% 0.90% 0.92% 0.75% 0.60% 0.54% 0.46% 0.45% 0.36% 0.30% 0.33% 0.20% 0.32% 0.28% 0.13% 0.15% 0.07% 0.06% 0.21% 0.18% 0.05% 0.04% 0.05% 0.01% 0.01% 0.02% 0.01% 0.00% 0.09% 0.23% 0.06% 0.05% 0.04% 0.01% 0.02% 0.00% -0.01% -0.02% -0.04% -0.15% -0.30% 20
Slide 23: Asset Quality Trends
Asset Quality Trends 100.00% 0.95% 0.99% 0.88% 0.68% 0.94% 2.17% 2.14% 2.07% 1.47% 2.11% 5.08% 5.21% % of Commercial, Com RE, C&D, Ag and Gov. Loans 5.41% 5.38% 5.89% 4.85% 4.89% 4.20% 95.00% 4.97% 5.14% 90.00% 85.00% 93.97% 93.60% 93.74% 94.11% 93.68% 93.69% 92.86% 92.72% 93.05% 93.17% 80.00% 75.00
Slide 24: Deposit Portfolio
Deposit Portfolio 22.60% 25.40% 25.70% 25.40% 23.40% 21.60% Nonint-Bearing Demand 29.6% 29.3% 32.9% 35.7% 37.4% 34.5% Int Bearing Demand & Savings Money Market Demand 23.4% 27.4% 23.5% 18.8% Retail & Local Time 23.8% 19.8% Wholesale Deposits 16.6% 13.5% 17.2% 16.7% 13.6% 15.4% 4.4% 7.8% 6.4% 5.0% 1.
Slide 25: Core Deposit Changes
Core Deposit Changes Retail and Commercial Deposits – Change Since 12/31/2022 $500,000,000 $450,000,000 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 Retail Deposits Retail CDs Commercial Deposits Commercial CDs Private Banking 12/31/2022 6
Slide 26: Available Liquidity
Available Liquidity Liquidity Review Utilized Authorized Excess 06/30/2024 % of Assets Available Capacity Bankers' Bank Fed Funds Line $ - 0.0% $ 15,000,000 $ 15,000,000 Other Fed Funds Lines * - 0.0% 18,000,000 18,000,000 FRB Discount Window * - 0.0% 24,340,000 24,340,000 FHLB Advances & Retail Rep
Slide 27: Asset Repricing Base Case at 6/30/24
Asset Repricing Base Case at 6/30/24 Securities $80,000 5.00% 4.38% 4.00% Volume ($000) $60,000 3.30% 2.50% 3.00% $40,000 2.31% 2.00% $20,000 1.00% $- 0.00% 1-12 Months 13-24 Months 25-60 Months Over 60 Months HTM Securities Vol AFS Securities Vol AFS Securities Rate Loans Receivable $500,000 8.00%
Slide 28: Shareholder Focus
APSB HOLDINGS, INC. Shareholder Focus
Slide 29: History of Strong Returns
History of Strong Returns History of Returns ROATCE 16% 14% 14.08% 13.43% 12% 12.48% 12.79% 12.17% 11.94% 11.33% 10% 10.59% 10.78% 10.83% 10.85% 9.62% 9.84% 9.65% 8% 8.37% 7.97% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q2 YTD 29
Slide 30: Per Share Trends
Per Share Trends Diluted EPS $3.50 $3.00 $3.07 $2.50 $2.88 $2.51 $2.40 $2.00 $2.29 $2.16 $1.50 $1.83 $1.61 $1.58 $1.00 $1.30 $1.20 $0.96 $1.07 $0.96 $0.95 $0.50 $0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YTD Annualized Dividend Per Share $0.70 $0.60 $0.64 $0.60
Slide 31: Per Share Trends
Per Share Trends Tangible Common Book Value Per Share $30 $25 $24.36 $24.55 $23.43 $23.84 $20 $21.37 $20.72 $17.98 $15 $16.28 $15.08 $13.72 $12.51 $10 $10.98 $11.45 $10.15 $9.48 $5 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q2 AOCI $0.51 $0.39 $0.28 ($0.07) ($0.13)
Slide 32: Capital Management Strategies
Capital Management Strategies Actively Support Liquidity with Stock Repurchases 200,000 4.50% 180,000 4.00% 160,000 3.50% % of shares outstanding 140,000 3.00% 120,000 # of Shares 2.50% 100,000 2.00% 80,000 1.50% 60,000 40,000 1.00% 20,000 0.50% 0 0.00% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 33: P/TBV Comparison
P/TBV Comparison P/TBV Comparison 140.00% 135.1% 129.86% 128.95% 127.70% 125.1% 120.00% 116.16% 109.17% 106.9% 99.61% 102.5% 101.0% 99.33% 100.00% 92.7% 87.8% 80.00% 60.00% 40.00% 0.23% 20.00% 0.00% 2018 2019 2020 2021 2022 2023 8/23/2024 PSBQ P/TBV Peer Median P/TBV Peers include all publicly-trade
Slide 34: P/E Comparison
P/E Comparison LTM P/E Comparison 16.00 14.00 14.10 13.85 12.00 12.62 10.00 11.10 10.66 10.56 10.20 9.83 9.50 8.00 9.00 9.05 8.95 8.57 7.13 6.00 4.00 0.23% 2.00 0.00 2018 2019 2020 2021 2022 2023 8/23/2024 PSBQ P/E Peer Median P/E Peers include all publicly-traded financial institutions with assets
Slide 35: Investment Appeal
Investment Appeal Current price discounted to growth, asset and earnings quality. Actively support liquidity with stock repurchases. Extended history of delivering double digit returns on tangible equity, building tangible book value. 30-year history of increasing dividends paid to sharehold
Slide 36: Capital Partners
Capital Partners What types of small banks have you invested with in the past and what level of investment? How would you approach the value of PSBQ today? Would you be more interested in acquiring PSBQ shares over time through open market purchases, or would you prefer the single purchase of