PSB Holdings, Inc. · OTC:PSBQ
PSB — PSB Holdings, Inc. Shareholder Webinar (November 2020)
45 slides from PSB's conference presentation, Nov 18, 2020
Slide 1: Presentation slides can be found at psbholdingsinc.com
Presentation slides can be found at psbholdingsinc.com – Upcoming Events 1
Slide 2: Today's Presenters
Today’s Presenters 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
Slide 3: Today's Agenda
Today’s Agenda • Today’s Peoples State Bank • What impact has COVID-19 had? • Learn about the Paycheck Protection Program (PPP) • Hear how our PPP loan helped a business customer • See our new West Allis bank location • Our financial trends • Shareholder value strategies and investment appeal • Ques
Slide 4: Submitting Questions
Submitting Questions Throughout the presentation, you may submit questions using the “Q & A” feature in the Zoom webinar. Look for the “Q & A” button at the bottom of your screen: Type your question into the box that opens. Hit submit, and we will answer questions at the end of our presentation.
Slide 5: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain matters discussed in this presentation, 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 Private Securities Lit
Slide 6: Today's Peoples State Bank
Today’s Peoples State Bank • In 2020, PSB Holdings, Inc., parent company of Peoples State Bank reached $1 billion in assets—now at $1.1 billion • Peoples locations: • Greater Wausau area – 5 • Northwoods – 3 • Milwaukee/West Allis – 1 • #1 Community Bank market share in combined Marathon, Oneida, an
Slide 7: COVID-19 Impact to Customers
COVID-19 Impact to Customers • Lobbies closed from mid-March through May 26 – appointments available • 30% of employees working from home during peak • Temporary lobby-only and/or full closures of one week or less on a few occasions • Heightened cleaning procedures including electrostatic disinfecti
Slide 8: COVID-19 Impact Industries
COVID-19 Impact Industries Restaurants Hotels Other • $24.6M, or 3.1% of total loan • $34.4M, or 4.3% of total loan • $3.0M or 0.4% of total loans portfolio at September 30, 2020 portfolio at September 30, 2020 portfolio consist of loan deferrals in various industries including • $1.4M or 0.17% of t
Slide 9: COVID-19 Impact Industries: Industry Concentration
COVID-19 Impact Industries Industry Concentration as of September 30, 2020
Slide 10: COVID-19 Loan Deferrals
COVID-19 Loan Deferrals Round 1 D eferrals Round 2 D eferrals Round 1 D eferrals Round 2 D eferrals (%) (%) (D ollars and C ounts) (D ollars and C ounts) Balance 17.50% 2.50% $143M $20M Account Relationships 4.40% 1.70% 114 44 Loan Deferrals $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,00
Slide 11: Asset Quality Trends
Asset Quality Trends Commercial, Commercial Real Estate, Construction & Development, Agricultural and Government Loans ($000) Risk Rating 12/2016 12/2017 12/2018 12/2019 03/2020 06/2020 09/2020 Rating 1 "High Quality" $ - $ - $ - $ - $ 71 $ 55 $ - Rating 2 "Minimal Risk" 67,468 76,710 85,382 57,904
Slide 12: Asset Quality Trends: Loan Portfolio
Asset Quality Trends LO AN PO RTFO LIO AT SEPTEM BER 30, 2020 C onstr & C &I Land 27.0% 8.6% O ther 4.8% 1-4 Family C RE N on- 14.2% O wner O cc C RE O wner 25.0% -O cc 20.4%
Slide 13: Economic Recovery
Economic Recovery Unemployment Rates in Primary Markets Compared to State and National Averages 21.0 18.0 15.0 12.0 9.0 6.0 3.0 0.0 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 United States 3.5 3.6 3.5 4.4 14.7 13.3 11.2 10.2 8.4 7.9 Wisconsin 3.5 3.5 3.5 3.1 13.6 12.1 8.6
Slide 14: Loan Loss Reserves
Loan Loss Reserves Loan Loss Reserves/Total Loans 1.90 1.70 1.50 1.30 1.10 0.90 0.70 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 3Q 2020 MW Banks Between $500M & $5B 1.13 1.20 1.43 1.56 1.61 1.56 1.49 1.36 1.29 1.21 1.17 1.17 1.17 1.23 Wisc Banks Between $500M & $5B 1.17 1.22 1.
Slide 15: Pat J. Heier
Pat J. Heier Vice President of PSB Holdings, Inc. Senior Vice President - Commercial Division Leader of Peoples State Bank
Slide 16: Paycheck Protection Program (PPP)
Paycheck Protection Program (PPP) People State Bank’s Response By The Numbers: • PPP Loans Approved: 736 • Total Dollars Deployed: $116.9 Million • Loans Over $1.0 Million: 21 • Average Loan: $159,000 • Number of employees supported by our loans: appx. 12,000 • State Rank in Total PPP Loan Productio
Slide 17: PPP Production
PPP Production Top 10 Publicly Traded Wisconsin Banks Paycheck Pro tectio n Pro gram L o an M o dificatio n Paycheck Pro tectio n Pro cessing Fees C O V ID - 19 L o an C O V ID - 19 L o an PPP L o an R atio Pro gram L o an PPP L o an R atio o n PPP L o ans M o dificatio n M o dificatio n # C o m pan
Slide 18: Placeholder for Earl Faulkner video
Placeholder for Earl Faulkner video
Slide 19: Successful PPP Response
Successful PPP Response • Dedicated response team working around the clock to process applications • Peoples’ size was ideal to respond faster than larger banks and more resources than smaller banks • Young tech-savvy support teams provided significant assistance to Peoples’ PPP loans • Peoples’ cus
Slide 20: Mark C. Oldenberg
Mark C. Oldenberg Secretary and Treasurer of PSB Holdings, Inc. Senior V.P. and Chief Financial Officer of Peoples State Bank
Slide 21: Branch Locations
Branch Locations M arathon C ounty 6/30/2020 N orthern Wisconsin 6/30/2020 D eposits D eposits Address C ity ($000) Street Address C ity ($000) 1905 Stewart Ave Wausau $402,967 8 E An derson St Rh in elan der $110,898 314 Main St Marath on $106,543 9560 Hwy 70 Min ocqua $44,189 1201 6th St Wausau $5
Slide 22: Placeholder for West Allis video
Placeholder for West Allis video
Slide 23: Profitability Trends
Profitability Trends ROAE (%) PSB Holdings, Inc. Median ROAA (%) PSB Holdings, Inc. Median 16.00 1.60 14.00 1.40 12.00 1.20 10.00 1.00 8.00 0.80 6.00 0.60 4.00 0.40 2.00 0.20 0.00 0.00 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 2020Q1 2020Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 201
Slide 24: Profitability Trends
Profitability Trends Efficiency Ratio (%) PSB Holdings, Inc. Median NPAs/Assets (%) PSB Holdings, Inc. Median 80.00 1.60 70.00 1.40 60.00 1.20 50.00 1.00 40.00 0.80 30.00 0.60 20.00 0.40 10.00 0.20 0.00 0.00 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 2020Q1 2020Q3 2016Q1 2016Q3 2017Q1 2
Slide 25: Balance Sheet Trends
Balance Sheet Trends Total Assets (Dollars in Thousands) $1,200,000 $1,104,283 $1,100,000 $1,000,000 $974,893 $915,998 $900,000 $847,681 $827,528 $784,410 $800,000 $734,367 $700,000 $600,000 $500,000 2014 2015 2016 2017 2018 2019 2020 3Q YTD Tangible C ommon Equity (Dollars in Thousands) $110,000 $1
Slide 26: Earnings Trends
Earnings Trends RO AA 1.40% 1.19% 1.22% 1.20% 1.03% 1.07% 1.00% 0.95% 0.90% 0.87% 0.80% 0.60% 0.40% 0.20% 0.00% 2014 2015 2016 2017 2018 2019 2020 3Q YTD RO ATC E 16.00% 14.00% 13.46% 12.48% 12.77% 12.17% 12.00% 10.83% 9.84% 10.23% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2014 2015 2016 2017 2018 2019 2
Slide 27: Earnings Trends
Earnings Trends N et Interest M argin 3.70% 3.62% 3.60% 3.54% 3.56% 3.50% 3.45% 3.46% 3.38% 3.40% 3.30% 3.18% 3.20% 3.10% 3.00% 2.90% 2014 2015 2016 2017 2018 2019 2020 3Q YTD Efficiency Ratio 62.00% 60.82% 60.07% 60.39% 60.00% 58.96% 59.29% 59.11% 58.00% 56.00% 54.00% 53.56% 52.00% 50.00% 48.00% 20
Slide 28: Per Share Trends
Per Share Trends EPS Tangible Book Value Per Share $3.00 $25.00 $22.73 $2.51 $23.00 $2.50 $2.29 $20.72 $21.00 $19.00 $17.98 $2.00 $1.83 $1.61 $1.67 $17.00 $16.28 $1.58 $15.08 $1.50 $1.30 $15.00 $13.72 $12.51 $13.00 $1.00 $11.00 $9.00 $0.50 $7.00 $0.00 $5.00 2014 2015 2016 2017 2018 2019 2020 3Q YTD
Slide 29: Net Income Trends
Net Income Trends N et Income and Diluted Earnings Per Share $12,000 $3.00 $2.51 $10,000 $2.29 $2.50 $2.23 $8,000 $1.83 $2.00 (D0llars in Thousands) $1.61 $1.58 $6,000 $1.30 $1.50 $4,000 $1.00 $2,000 $0.50 $0 $0.00 2014 2015 2016 2017 2018 2019 2020YTD N et Income Annualized Diluted EPS
Slide 30: Asset Quality Trends
Asset Quality Trends N PA/Assets, Reserves/Total Loans and C harge-O ff H istory 3.00% 2.81% 2.87% 2.64% At September 30, 2020, reserves/total 2.50% loans was 1.53% excluding PPP loans. 2.08% 1.96% 2.00% 1.77% 1.46% 1.49% 1.50% 1.27% 1.31% 1.04% 1.00% 0.83% 0.85% 0.67% 0.55% 0.50% 0.23% 0.00% 2007 2
Slide 31: Loan Portfolio
Loan Portfolio LO AN PO RTFO LIO TREN DS $850,000 $792,854 (Dollars in Thousands) $750,000 $708,196 $658,839 $650,000 $610,076 $586,911 $550,000 $535,325 $450,000 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 9/30/2020 Total N et Loans
Slide 32: Milwaukee
Milwaukee $300,000 $250,000 $200,000 (Dollars in Thousands) $150,000 $100,000 $50,000 $- Total Bank Loan G rowth M ilwaukee G rowth
Slide 33: Deposit Portfolio
Deposit Portfolio Wholesale D eposits Retail & Local Time M oney M arket D emand Int Bearing D emand &Savings N onint-Bearing D emand 40.00% 35.00% 19.0% 20.9% 21.6% 20.5% 22.6% 26.9% 30.00% 30.9% 32.9% 34.1% 35.1% 32.9% 25.00% 32.3% 20.00% 22.6% 20.7% 20.1% 20.0% 23.5% 23.7% 15.00% 17.4% 17.0% 16.5
Slide 34: Deposit Portfolio
32.3% Deposit 20.00% 22.6% 20.7% 20.1% 20.0% 23.5% 23.7% 15.00% 17.4% 10.1% 17.0% 8. 5% 16.5% 7. 7% Portfolio 16.8% 7. 6% 16.6% 4.4% 14.2% 2.9% 10.00% 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 9/30/2020 D eposit Trends $1,000,000 1.00% $900,614 $900,000 0.88% 0.90% $800,000 $781,790 0.8
Slide 35: Scott M. Cattanach
Scott M. Cattanach President & CEO of PSB Holdings, Inc. President & CEO of Peoples State Bank
Slide 36: Business Model Strengths
Business Model Strengths Consistent History of Strong Earnings Supported by low efficiency ratios and low-costing funds Well Diversified Loan Portfolio Industry sectors are not concentrated and represent “a little of a lot” of business types. Strong Presence In All Branch Markets Served with large d
Slide 37: Key Data at a Glance
Key Data at a Glance 2020 (Dollars in Thousands) 2015 2016 2017 2018 2019 3QYTD Total Assets $784,410 $827,528 $847,681 $915,998 $974,893 $1,104,283 Total Loans $535,325 $586,911 $610,076 $658,839 $708,196 $792,854 Total Deposits $666,176 $686,760 $702,303 $725,826 $781,790 $900,614 Tangible Common
Slide 38: Cumulative Shareholder Total Return
Cumulative Shareholder Total Return C umulative Shareholder Total Return (3 yrs ending Nov 16, 2020) O TC Q X :PSBQ SN L U .S. Banks, N ASDAQ SN L U .S. Thrifts, from $500M to $1B in Assets 40% 30% 20% 10% 0% -10% -20% -30% -40% -50%
Slide 39: Shareholder Value Strategies
Shareholder Value Strategies Prolonged Success in Putting The Wisconsin Banking Shareholder Capital to Work Market is Ripe for • ROAE has averaged 11.2% Consolidation since 2010 • There are 68 banks in WI • 27 consecutive years of with assets between dividend increases $100M and $300M Shareholder Ma
Slide 40: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy Areas of Potential Acquisition Opportunities PSBQ Locations PSBQ LPO Eau Hudson Potential Markets Claire Green Bay Counties With $1+ Million Loans Appleton Areas of M&A Interest La Crosse Milwaukee Madison
Slide 41: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy • Smart consolidation of community banks o Provides scale and operating efficiencies o Adds experienced and knowledgeable banking talent o Opportunity to drive scale and financial performance • Ability to execute M&A growth plans for improved performance of overall b
Slide 42: Capital Priorities
Capital Priorities • Use for new market investments • Support internal/organic market growth • Shareholder dividend trends • Restart stock buyback program
Slide 43: Directors Emeritus
Directors Emeritus Tom Polzer 28-years on PSB Holdings, Inc. Board of Directors William Reif 23-years on PSB Holdings, Inc. Board of Directors
Slide 44: Question & Answer Period
Question & Answer Period You may submit questions using the “Q & A” feature in the Zoom webinar. Look for the “Q & A” button at the bottom of your screen: Type your question into the box that opens and hit submit.
Slide 45: Thank you!
PSB Holdings, Inc. “PSBQ” Thank you!
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