EXHIBIT 99.1
PSB HOLDINGS, INC.
40 Main Street
Putnam, CT 06260
For Immediate Release
| | |
| CONTACT: | | Robert J. Halloran, Jr., President and Chief Financial Officer |
| | (860) 928-6501 |
PSB Holdings, Inc. Reports Increased Earnings
For the Fiscal Year Ended June 30, 2008
PUTNAM, CT, August 5, 2008 – PSB Holdings, Inc. (the “Company”) (NASDAQ: PSBH), the holding company for Putnam Bank, reported net income of $3.1 million or $.49 per basic share and $.48 per diluted share for the fiscal year ended June 30, 2008 compared to net income of $1.9 million or $.29 per basic share and $.28 per share diluted share for the fiscal year ended June 30, 2007.
Assets
At June 30, 2008, total assets were $494.5 million, an increase of $3.3 million, or 0.7%, from June 30, 2007. Total loans increased $11.0 million, or 4.7%, to $245.2 million at June 30, 2008 from $234.2 million at June 30, 2007. Total investment securities decreased $2.5 million, or 1.1%, to $220.0 million at June 30, 2008 from $222.5 million at June 30, 2007. Federal funds sold decreased $3.4 million, or 75.0%, to $1.1 million at June 30, 2008 from $4.5 million at June 30, 2007. Total deposits decreased by $9.8 million, or 3.3%, to $283.7 million at June 30, 2008 from $293.5 million at June 30, 2007. This decrease in deposits was related to a decrease of $11.4 million, or 100.0%, in brokered deposits since June 30, 2007. We have recently increased FHLB advances as a funding source because FHLB advance rates have been significantly lower than rates on brokered certificates of deposits. Excluding brokered deposits, total deposits would have increased $1.6 million, or 0.6% from June 30, 2007 to June 30, 2008. Borrowed funds increased by $14.7 million, or 10.4%, to $156.6 million at June 30, 2008 from $141.9 million at June 30, 2007. Total stockholders’ equity decreased $2.2 million, or 4.2%, to $49.1 million at June 30, 2008 from $51.3 million at June 30, 2007. This was primarily due to the repurchase of 226,810 shares of the Company’s common stock at a total cost of $2.4 million during the fiscal year ended June 30, 2008 and an increase in the unrealized loss on the available-for-sale securities to $3.8 million as of June 30, 2008 as compared to $1.4 million as of June 30, 2007. This was partially offset by net income of $3.1 million. The Company believes that the unrealized losses on the available-for-sale securities as of June 30, 2008 and June 30, 2007 were attributable solely to interest rate movements. Management does not consider the losses to be other than temporary.
“Continued management of overhead expenses, resulting in less than a 2% increase for the year, coupled with a favorable yield spread and retail loan growth, have positively impacted our net income. We have been able to take advantage of lower short-term deposit and borrowing costs, further increasing our yield spread,” said Chairman and Chief Executive Officer, Thomas A. Borner. “While the Bank continues to be a dominant lender in its primary market area, our loan losses have remained encouragingly low as we maintain our course of quality lending.”
Net Interest Income
Net interest income for the fiscal year ended June 30, 2008 was $11.9 million, an increase of $1.3 million, or 12.5%, over the fiscal year ended June 30, 2007. This was primarily due to an increase in the net interest margin. The net interest margin for the fiscal year ended June 30, 2008 was 2.56% as compared to 2.34% for the fiscal year ended June 30, 2007. Average interest-earning assets increased $12.7 million, or 2.8%, to $462.7 million for the fiscal year ended June 30, 2008 from $450.0 million for the fiscal year ended June 30, 2007. The yield on average interest-earning assets increased twenty two basis points to 5.86% for the fiscal year ended June 30, 2008 as compared to 5.64% for the fiscal year ended June 30, 2007. Average interest-bearing liabilities increased by $14.5 million, or 3.8%, to $396.3 million for the fiscal year ended June 30, 2008 from $381.8 million for the fiscal year ended June 30, 2007. The cost of average interest-bearing liabilities decreased four basis points to 3.84% for the fiscal year ended June 30, 2008 as compared to 3.88% for the fiscal year ended June 30, 2007.
Provision for Loan Losses
The provision for loan losses for the fiscal year ended June 30, 2008 was $51,000, a decrease of $212,000, or 80.6%, over the fiscal year ended June 30, 2007. The ratio of the allowance to gross loans outstanding was 0.72% as of June 30, 2008 compared to 0.76% as of June 30, 2007. The ratio of the allowance to nonperforming loans was 121.1% as of June 30, 2008 compared to 115.7% as of June 30, 2007.
Noninterest Income and Expense
Noninterest income for the fiscal year ended June 30, 2008 was $3.3 million, an increase of $541,000, or 19.7%, from the fiscal year ended June 30, 2007. This increase was primarily due to a $284,000 increase in net gains on securities sales and a $204,000 increase in service fee income during the fiscal year ended June 30, 2008. Noninterest expense for the fiscal year ended June 30, 2008 was $10.9 million, an increase of $176,000, or 1.6%, over the fiscal year ended June 30, 2007. This increase was primarily due to an increase in salaries and benefits of $217,000 and an increase in occupancy expense of $15,000. This was partially offset by a decrease of $56,000 in other noninterest expenses.
Provision for Taxes
The provision for taxes for the fiscal year ended June 30, 2008 was $1.1 million, an increase of $751,000 over the fiscal year ended June 30, 2007. This increase in the tax provision reflected a significant reduction in the Bank’s portfolio of Auction Rate Preferred investments that have a dividends-received deduction applicable to them. The reason for the reduction was to avoid being subject to Alternative Minimum Tax. Average Auction Rate Preferred securities for the fiscal year ended June 30, 2008 were $13.9 million as compared to $32.7 million for the fiscal year ended June 30, 2007.
About PSB Holdings, Inc.
PSB Holdings, Inc., headquartered in Putnam, Connecticut, is the parent of Putnam Bank, a federally chartered stock savings bank founded in 1862. The Bank offers a wide range of financial services through its seven offices located in eastern Connecticut. Putnam Bank also operates a full service loan center in Putnam, Connecticut. PSB Holdings Inc.’s common stock trades on the Nasdaq Global Market under the symbol PSBH. Investor information is available on Putnam Bank’s web site at www.putnambank.com.
Statements contained in this news release that are not historical facts are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those stated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. Subject to applicable laws and regulation, the Company does not undertake – and specifically disclaims any obligation – to publicly release the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
PSB HOLDINGS, INC.
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| | | Statistical Summary | |
| | | (Unaudited) | |
| | | (dollars in thousands) | |
| | | As of June 30, | | | As of June 30, | |
| | | 2008 | | | 2007 | |
Assets | | | | | | | | |
Cash and due from banks | | $ | 7,026 | | | $ | 8,718 | |
Federal funds sold | | | 1,120 | | | | 4,480 | |
| | | | | | | | |
Total cash and cash equivalents | | | 8,146 | | | | 13,198 | |
Investment securities, at fair value | | | 220,026 | | | | 222,502 | |
Loans | | | 245,162 | | | | 234,160 | |
Less: allowance for loan losses | | | (1,758 | ) | | | (1,780 | ) |
| | | | | | | | |
Net Loans | | | 243,404 | | | | 232,380 | |
Premises and equipment | | | 3,854 | | | | 4,218 | |
Bank owned life insurance | | | 5,798 | | | | 5,536 | |
Core deposit intangible | | | 856 | | | | 1,091 | |
Goodwill | | | 6,912 | | | | 6,912 | |
Other assets | | | 5,503 | | | | 5,361 | |
| | | | | | | | |
Total Assets | | $ | 494,499 | | | $ | 491,198 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | |
Deposits | | $ | 283,724 | | | $ | 293,473 | |
Borrowed funds | | | 156,621 | | | | 141,857 | |
Mortgagors’ escrow accounts | | | 1,423 | | | | 1,280 | |
Other liabilities | | | 3,634 | | | | 3,337 | |
| | | | | | | | |
Total Liabilities | | | 445,402 | | | | 439,947 | |
Total Stockholders’ Equity | | | 49,097 | | | | 51,251 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 494,499 | | | $ | 491,198 | |
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| | | Twelve Months Ended June 30, |
Income Statement | | 2008 | | 2007 |
Interest and dividend income | | $ | 27,116 | | $ | 25,364 |
Interest expense | | | 15,229 | | | 14,795 |
| | | | | | |
Net interest and dividend income | | | 11,887 | | | 10,569 |
Provision for loan losses | | | 51 | | | 263 |
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Net Interest income after provision for loan losses | | | 11,836 | | | 10,306 |
Noninterest income | | | 3,282 | | | 2,741 |
Noninterest expense | | | 10,945 | | | 10,769 |
| | | | | | |
Income before taxes | | | 4,173 | | | 2,278 |
Provision for taxes | | | 1,105 | | | 354 |
| | | | | | |
Net Income | | $ | 3,068 | | $ | 1,924 |
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| | | At or for the Twelve Months | |
| | | June 30, | |
Financial condition data: | | 2008 | | | 2007 | |
| (Dollars in thousands, except per share amounts) | | | | | | |
Average interest-earning assets | | $ | 462,721 | | | $ | 449,981 | |
Average interest-bearing liabilities | | $ | 396,262 | | | $ | 381,770 | |
Average interest-earning assets to average interest-bearing liabilities | | | 116.77 | % | | | 117.87 | % |
Non-performing loans | | $ | 1,452 | | | $ | 1,538 | |
Non-performing loans to total loans | | | 0.59 | % | | | 0.66 | % |
Allowance for loan losses | | $ | 1,758 | | | $ | 1,780 | |
Allowance for loan losses to total loans | | | 0.72 | % | | | 0.76 | % |
Shareholders’ equity to assets | | | 9.93 | % | | | 10.43 | % |
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Selected operating data: | | | | | | |
Return on average assets | | | 0.63 | % | | | 0.41 | % |
Return on average equity (1) | | | 5.84 | % | | | 3.66 | % |
Net interest rate spread | | | 2.01 | % | | | 1.76 | % |
Net interest margin (2) | | | 2.56 | % | | | 2.35 | % |
Efficiency ratio (3) | | | 72.15 | % | | | 80.91 | % |
| (1) | Net income divided by average equity capital excluding average unrealized gains or losses on available-for-sale securities. |
| (2) | Net interest margin represents net interest income divided by average total interest-earning assets. |
| (3) | Noninterest expense divided by net interest income before provision for loan losses plus noninterest income. |
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Per share data: | | | | |
Earnings per share: | | | | | | |
Basic | | $ | 0.49 | | $ | 0.29 |
Diluted | | $ | 0.48 | | $ | 0.28 |
Book value per share | | $ | 7.52 | | $ | 7.56 |
Market price per share: | | | | | | |
High for the period | | $ | 10.76 | | $ | 11.48 |
Low for the period | | $ | 7.58 | | $ | 10.32 |
Close at end of period | | $ | 8.99 | | $ | 10.58 |
Cash dividends declared per share | | $ | 0.09 | | $ | 0.06 |
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Weighted-average common shares outstanding: | | | | | | |
Basic | | | 6,297,478 | | | 6,707,697 |
Diluted | | | 6,370,683 | | | 6,810,614 |
