PSB Holdings, Inc. · OTC:PSBQ
PSB — DA Davidson 2023 Bison Select Conference
31 slides from PSB's conference presentation, Dec 7, 2023
Slide 1: 2023 Bison Select Conference
DA Davidson 2023 Bison Select Conference December 7, 2023 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: 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 4: Company Overview
Overview Company Overview • PSB Holdings, Inc. ($1.4 billion in assets) is the parent company of Peoples State Bank, a community bank headquartered in Wausau, Wisconsin, serving northcentral and southeastern Wisconsin from eleven full-service banking locations. PSB Holdings, Inc. has the leading com
Slide 5: Strategic Focus
Strategic Focus Headquarters 1905 Stewart Avenue Expand assets to $1.8B - $2.0B by 2026 P.O. Box 1686 Wausau, WI 54402-1686 PSBQ Locations Disciplined acquisition strategy: Explore Counties With new LPO markets and small bank $1MM or acquisitions. Downtown Milwaukee branch More Loans expansion plann
Slide 6: Northcentral Wisconsin Employment Base
Northcentral Wisconsin Employment Base Largest Area Employers 6
Slide 7: 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 stabilizing in an uncertain economic environment Deposit base stability and depth (strong liquidity) O
Slide 8: 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 “Best Bank in Marathon County” (Peoples State
Slide 9: Commercial Related Loan Industries Served
Commercial Related Loan Industries Served Other 20% Multi-Family and 1-4 Family Real Estate 20% Hotels 3% Campgrounds and Mobile Homes 4% Manufacturing 14% Trucking 5% Construction & Services Industrial Remodeling (Res'l and 7% Storage and Com'l) Mixed Use 10% Medical Commercial 8% Buildings 9% 9
Slide 10: Opportunities and Challenges
Opportunities and Challenges Opportunities Challenges • Strengthen Capital to Facilitate • Margin Management in a Volatile Capital Management Strategies or and Rapidly Changing Interest Acquisitions Rate Environment • Expanding Market Presence to • Managing Asset Quality in a New Growth Areas Slowin
Slide 11: Key Data at a Glance
Key Data at a Glance (Dollars in Thousands) 2018 2019 2020 2021 2022 2023 Q3 YTD Total Assets $915,998 $974,893 $1,131,955 $1,298,711 $1,337,689 $1,437,245 Total Loans $658,839 $708,196 $821,910 $879,398 $961,865 $1,098,019 Total Deposits $725,826 $781,790 $932,137 $1,105,240 $1,148,755 $1,172,239 T
Slide 12: Net Income Trends
Net Income Trends Net Income to Common Shareholders $16,000 (Dollars in Thousands) $14,000 $12,000 $10,000 $11,115* $8,000 $6,000 $12,817 $13,556 $10,312 $11,247 $10,689 $4,000 $9,053 $2,000 $0 2018 2019 2020 2021 2022 2023 YTD Diluted EPS per Common Share $3.00 $2.50 $2.63* $2.00 $1.50 $2.88 $3.07
Slide 13: New Wisconsin Tax Law
New Wisconsin Tax Law 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 lo
Slide 14: Earnings Trends
Earnings Trends ROAA ROATCE 1.40% 16.00% 1.19% 1.22% 13.46% 14.08% 1.20% 14.00% 12.77% 1.03% 1.05% 11.96% 11.78% 1.00% 1.01% 12.00% 10.83% 0.81% 10.00% 0.80% 9.62% 8.00% 0.60% 0.61% 6.00% 0.40% 4.00% 0.20% 2.00% 0.00% 0.00% 2018 2019 2020 2021 2022 2023 YTD 2018 2019 2020 2021 2022 2023 YTD Net Inte
Slide 15: Balance Sheet Trends
Balance Sheet Trends Total Assets (Dollars in $000’s) $1,600,000 $1,337,689 $1,437,245 $1,400,000 $1,298,711 $1,200,000 $1,131,955 $1,000,000 $915,998 $974,893 $800,000 $600,000 $400,000 $200,000 $0 2018 2019 2020 2021 2022 2023 Q3 Tangible Equity $000 (excluding AOCI) $140,000 $123,239 $126,260 $12
Slide 16: Loan Portfolio
Loan Portfolio Consumer, Constr, Dev Consumer, Constr, Dev 0.5% & Vac Land, 0.4% & Vac Land, 10.7% 9.0% Residential Residential RE, 21.5% RE, 19.8% CRE Owner- CRE Owner- Occ, 22.0% Comm/Ag Occ, 22.9% Comm/Ag Non RE, Non RE, 17.3% 22.2% CRE Non- CRE Non- Owner-Occ, Owner-Occ, 22.2% 31.5% 12/31/2018 0
Slide 17: Asset Quality Trends
Asset Quality Trends NPA/Assets and Reserves/Total Loans 3.00% 2.87% 2.64% 2.50% 2.00% 1.96% 1.77% 1.46% 1.49% 1.50% 1.27% 1.04% 1.06% 1.00% 0.90% 0.23% 0.67% 0.55% 0.50% 0.48% 0.42% 0.00% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 NPA/Assets Loan Loss Reserves/Total Lo
Slide 18: Charge-Off History
Charge-Off History Charge-Off History vs Peers 1.05% 0.96% 0.87% 0.90% 0.92% 0.75% 0.63% 0.60% 0.45% 0.35% 0.30% 0.33% 0.32% 0.21% 0.28% 0.14% 0.10% 0.11% 0.11% 0.15% 0.18% 0.04% 0.05% 0.04% 0.01% 0.01% 0.01% 0.23% 0.00% 0.09% 0.05% 0.06% 0.01% 0.02% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 19: Asset Quality Trends
Asset Quality Trends 100.00% 2.17% 2.14% 2.07% 0.95% 0.99% 0.88% 0.68% 4.97% 5.14% 4.89% 5.08% 5.41% 5.38% 5.21% 90.00% 92.86% 92.72% 93.05% 93.97% 93.60% 93.74% 94.11% % of Commercial, Com RE, C&D, Ag and Gov. Loans 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 3/31/2022 6/30/2022 9
Slide 20: Deposit Portfolio
Deposit Portfolio 20.50% 22.60% 25.40% 25.70% 25.40% 24.70% Nonint-Bearing Demand 35.1% 32.9% 28.2% 35.7% 37.4% 34.5% Int Bearing Demand & Savings Money Market Demand 20.0% 23.5% 22.8% 18.8% Retail & Local Time 23.8% 19.8% 16.8% 16.4% Wholesale Deposits 16.6% 13.5% 13.6% 15.4% 7.6% 4.4% 7.8% 7.9% 1.
Slide 21: Core Deposit Changes
Core Deposit Changes Retail and Commercial Deposits - Year Over Year Change $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 Official Check
Slide 22: Available Liquidity
Available Liquidity Liquidity Review Utilized Authorized Excess 09/30/2023 % of Assets Available Capacity FHLB Advances $ 128,000,000 8.9% $ 408,000,000 $280,000,000 Brokered CDs/NMCDs* 91,836,000 6.4% 431,000,000 339,164,000 CDARs/ICS 31,428,837 2.2% 31,428,837 NA Bankers' Bank Fed Funds Line - 0.0
Slide 23: Asset Repricing – Base Case
Asset Repricing – Base Case Securities $120,000 6.00% $100,000 5.17% 5.00% Volume ($000) $80,000 4.00% 3.37% Yield (%) $60,000 3.00% 2.11% $40,000 2.06% 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 R
Slide 24: History of Strong Returns
History of Strong Returns History of Returns ROATCE 16% 14.08% 14% 13.46% 12.48% 12.77% 12.17% 11.96% 11.78% 12% 11.33% 10.59% 10.78% 10.83% 10.83% 10% 9.84% 9.62% 8.37% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 YTD Pro Forma Annualized and adjusted for
Slide 25: Per Share Trends
Per Share Trends Diluted EPS $3.50 $3.07 $3.00 $2.88 $2.51 $2.40 $2.50 $2.29 $2.00 $1.97 $1.83 $1.61 $1.58 $1.50 $1.30 $0.96 $1.07 $1.20 $0.96 $1.00 $0.50 $0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Adjusted for Wisconsin Tax change. YTD Annualized Dividend Per Share
Slide 26: Per Share Trends
Per Share Trends Tangible Common Book Value Per Share $30 $25 $24.36 $23.43 $22.25 $21.37 $20.72 $20 $17.98 $16.28 $15.08 $15 $13.72 $12.51 $11.45 $10.98 $10.15 $10 $9.48 $5 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 AOCI $0.52 $0.46 $0.37 $0.12 $0.17 $0.05 ($0.15) (
Slide 27: 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 28: P/TBV Comparison
P/TBV Comparison P/TBV Comparison 140.00% 135.1% 130.53% 129.42% 128.52% 125.1% 120.00% 116.66% 106.9% 102.5% 104.86% 99.87% 100.00% 94.4% 87.8% 80.00% 60.00% 40.00% 0.23% 20.00% 0.00% 2018 2019 2020 2021 2022 2023 Q3 PSBQ P/TBV Peer Median P/TBV Peers include all publicly-traded financial instituti
Slide 29: P/E Comparison
P/E Comparison LTM P/E Comparison 12.00 11.23 11.10 11.20 10.00 9.83 9.24 9.00 9.11 8.57 8.60 8.16 8.00 7.44 7.13 6.00 4.00 0.23% 2.00 0.00 2018 2019 2020 2021 2022 2023 Q3 PSBQ P/E Peer Median P/E Peers include all publicly-traded financial institutions with assets between $1.0 billion and $3.0 bil
Slide 30: Investment Appeal
Investment Appeal Current Price Discounted to Growth, Asset and Earnings Quality Immediate Earnings Benefit from Wisconsin Tax Law Change Actively Support Liquidity with Stock Repurchases Extended History of Delivering Double Digit Returns on Tangible Equity, Building Tangible Book Value 3
Slide 31: Capital Partners
Capital Partners What types of small banks have you invested with in the past? 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 a larger block? Would you h
PSB Holdings — DA Davidson 2023 Bison Select Conference on 6ix