PSB HOLDING CORP. REPORTS RECORD 2021 RESULTS
PRESTON, Md., Feb. 2, 2022 /PRNewswire/ -- PSB Holding Corp. (OTC:PSBP) (the "Company"), the parent company of Provident State Bank, Inc. ("Provident" or the "Bank"), reported record net income of $5.28 million ($3.45 per diluted common share) for the year ended December 31, 2021, representing an increase of 10.7% compared to $4.77 million ($3.13 per diluted common share) for the year ended December 31, 2020. Return on average assets for the year ended December 31, 2021 remained consistent with 2020 at .93%. Return on average equity increased to 10.52% in 2021.
Performance Review
Small Business Administration's Payroll Protection Program
The Bank's participation in the Small Business Administration's Payroll Protection Program ("PPP"), established in April 2020, significantly influenced financial performance during both 2020 and 2021. During 2021, Provident originated PPP loans totaling $34.9 million and recognized fee income net of costs (amortized as a loan yield adjustment) of $3.13 million. PPP loan principal forgiven by the SBA and principal payments received totaled $70.6 million in 2021. During 2020, Provident originated PPP loans totaling $56.9 million and recognized net fee income totaling $1.02 million. PPP loan principal forgiven and principal payments received in 2020 totaled $20.1 million. As of December 31, 2021, PPP loans outstanding were $1.1 million and remaining net fees totaled $49,000.
Net Interest Margin
The net interest margin ("NIM") was 3.44% during 2021 compared to 3.52% during 2020 despite higher net fee income recognized under the PPP. Pressure on the NIM resulted from continuing economic challenges presented by the pandemic and the federal government's fiscal and monetary response to such. Specifically, the NIM has been challenged by (i) low interest rates, (ii) a change in the mix of earning assets, with larger than normal levels of excess liquidity invested in lower yielding investment securities and interest-earning cash, and (iii) highly competitive loan pricing.
Data Processing and software
Data processing and software expense increased $255,000 in 2021 compared to 2020. The increase reflected one-time costs of approximately $60,000 associated with the Bank's transition to a more robust network communication infrastructure and added costs associated with increased volumes and additional products and services, including upgraded anti-money laundering data monitoring capabilities and an on-line account opening solution.
Fourth Quarter 2021 Compared to Fourth Quarter 2020
Net income totaled $1.02 million during the three months ended December 31, 2021 compared to $1.44 million during the same period of 2020. The decline was attributable to a decline in fees recognized from PPP lending activities, a decline in gain on sale of loans and an increase in the provision for loan losses. Net fee income recognized from PPP lending activities declined from $600,000 during the fourth quarter 2020 to $418,000 during the same period in 2021. Gain on sale of loans totaled $315,000 during the three months ended December 31, 2021 compared to $502,000 during the same period in 2020. The decline in mortgage banking activity was largely driven by movement of interest rates higher. The provision for loan losses increased $210,000, from $20,000 in the fourth quarter 2020 to $230,000 in the fourth quarter 2021. The provision for loan losses recorded during the fourth quarter 2021 primarily reflected growth in loans, net of PPP loan forgiveness, of $16.7 million during the quarter.
Fourth Quarter 2021 Compared to Third Quarter 2021
Net income declined $508,000 when compared to the third quarter of 2021. The decline was primarily attributable to a decline of $790,000 in net fee income recognized from PPP lending activities.
Balance Sheet and Asset Quality
Assets totaled $585.0 million at December 31, 2021, increasing $35.7 million or 6.5% compared to December 31, 2020. Growth in assets was driven primarily by growth in deposits as government stimulus increased customer liquidity. Deposits and repurchase agreements totaled $510.6 million at December 31, 2021 compared to $464.9 million at December 31, 2020, representing growth of 9.8%. Gross loans totaled $357.8 million at December 31, 2021, representing a decrease of $28.4 million or 7.4% compared to December 31, 2020. The decrease in loans was driven primarily by a decline in PPP loans, which fell $35.7 million to $1.1 million outstanding at December 31, 2021 as a result of continuing loan forgiveness. Stockholders' Equity totaled $51.6 million at December 31, 2021 compared to $48.7 million at December 31, 2020, representing an increase of 5.8%. As of December 31, 2021, non-performing assets and past due loans 30 days or more were .38% of total assets compared to .44% at the end of 2020. The Bank remained well-capitalized at December 31, 2021.
President and Chief Executive Officer Melissa Quirk commented on the Company's performance stating, "We are grateful for the patience of our customers and communities and for the hard-work and commitment of our team members as we continue to navigate the pandemic and the challenges it presents. With the positive influence of PPP lending activity on our financial performance nearly ended, we look forward to traditional growth opportunities associated with more normalized economic and interest rate environments."
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 | ||||||
December 31, | ||||||
2021 | 2020 | % Change | ||||
(unaudited) | ||||||
Assets | ||||||
Cash and cash equivalents | $ 36,100,150 | $ 29,162,136 | 23.8% | |||
Investment securities | 167,167,082 | 111,930,314 | 49.3% | |||
Loans held for sale | 1,879,591 | 2,367,448 | -20.6% | |||
Loans receivable | 357,800,695 | 386,189,190 | -7.4% | |||
Less allowance for loan losses | 3,892,115 | 3,583,204 | 8.6% | |||
Loans, net of allowance for loan losses | 353,908,580 | 382,605,986 | -7.5% | |||
Property and equipment | 6,879,131 | 8,401,637 | -18.1% | |||
Bank-owned life insurance | 11,918,526 | 8,656,454 | 37.7% | |||
Lease assets | 2,720,578 | 2,508,345 | 8.5% | |||
Accrued interest receivable | 1,344,283 | 1,616,775 | -16.9% | |||
Other assets | 3,119,329 | 2,103,866 | 48.3% | |||
Total assets | $ 585,037,250 | $ 549,352,961 | 6.5% | |||
Liabilities and Stockholders' Equity | ||||||
Deposits: | ||||||
Noninterest-bearing | $ 191,144,058 | $ 171,855,568 | 11.2% | |||
Interest-bearing | 303,379,512 | 277,526,516 | 9.3% | |||
Total deposits | 494,523,570 | 449,382,084 | 10.0% | |||
Repurchase agreements | 16,104,671 | 15,528,356 | 3.7% | |||
FHLB advances and other borrowing | 18,220,887 | 31,078,123 | -41.4% | |||
Lease liabilities | 2,930,961 | 2,685,641 | 9.1% | |||
Other liabilities | 1,677,656 | 1,934,558 | -13.3% | |||
Total liabilities | 533,457,745 | 500,608,762 | 6.6% | |||
Stockholders' equity | 51,579,505 | 48,744,199 | 5.8% | |||
Total liabilities and equity | $ 585,037,250 | $ 549,352,961 | 6.5% | |||
Book value per common share | $ 33.86 | $ 32.00 | 5.8% | |||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
(unaudited) | |||||||||||
Years Ended | Three Months Ended | ||||||||||
December 31, | December 31, | ||||||||||
2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||
Interest income | |||||||||||
Loans, including fee income | $ 19,292,572 | $ 19,135,849 | 0.8% | $ 4,361,123 | $ 4,988,220 | -12.6% | |||||
Investment securities | 1,978,770 | 1,319,864 | 49.9% | 566,608 | 334,830 | 69.2% | |||||
Other interest income | 40,279 | 60,963 | -33.9% | 13,907 | 10,291 | 35.1% | |||||
Total interest income | 21,311,621 | 20,516,676 | 3.9% | 4,941,638 | 5,333,341 | -7.3% | |||||
Interest expense | |||||||||||
Deposits | 1,967,103 | 2,551,200 | -22.9% | 434,397 | 570,013 | -23.8% | |||||
Repurchase agreements | 4,811 | 8,061 | -40.3% | 1,375 | 1,298 | 5.9% | |||||
FHLB advances | 550,707 | 799,285 | -31.1% | 101,801 | 187,295 | -45.6% | |||||
Other borrowings | 133,495 | 155,279 | -14.0% | 31,250 | 36,686 | -14.8% | |||||
Total interest expense | 2,656,116 | 3,513,825 | -24.4% | 568,823 | 795,292 | -28.5% | |||||
Net interest income | 18,655,505 | 17,002,851 | 9.7% | 4,372,815 | 4,538,049 | -3.6% | |||||
Provision for loan losses | 560,000 | 448,500 | 24.9% | 230,000 | 20,000 | 1050.0% | |||||
Net interest income after provision | 18,095,505 | 16,554,351 | 9.3% | 4,142,815 | 4,518,049 | -8.3% | |||||
Noninterest income | |||||||||||
Service charges | 1,829,012 | 1,627,089 | 12.4% | 485,620 | 416,823 | 16.5% | |||||
Gain on sale of loans | 1,320,073 | 1,306,885 | 1.0% | 314,859 | 502,302 | -37.3% | |||||
Gain on sale of securities | 4,310 | 44,027 | -90.2% | - | 18,557 | -100.0% | |||||
Other noninterest income | 280,407 | 281,997 | -0.6% | 82,327 | 66,597 | 23.6% | |||||
Total noninterest income | 3,433,802 | 3,259,998 | 5.3% | 882,806 | 1,004,279 | -12.1% | |||||
Noninterest expense | |||||||||||
Salaries and benefits | 7,669,758 | 7,227,478 | 6.1% | 1,977,495 | 1,905,737 | 3.8% | |||||
Occupancy | 2,124,876 | 2,009,648 | 5.7% | 590,861 | 507,121 | 16.5% | |||||
Data processing and software | 1,340,576 | 1,086,040 | 23.4% | 311,239 | 294,390 | 5.7% | |||||
Other noninterest expense | 3,407,220 | 3,140,315 | 8.5% | 883,182 | 894,306 | -1.2% | |||||
Total noninterest expense | 14,542,430 | 13,463,481 | 8.0% | 3,762,777 | 3,601,554 | 4.5% | |||||
Net income before tax | 6,986,877 | 6,350,868 | 10.0% | 1,262,844 | 1,920,774 | -34.3% | |||||
Tax expense | 1,703,140 | 1,579,103 | 7.9% | 247,113 | 478,399 | -48.3% | |||||
Net income | $ 5,283,737 | $ 4,771,765 | 10.7% | $ 1,015,731 | $ 1,442,375 | -29.6% | |||||
Net income per diluted share | $ 3.45 | $ 3.13 | 10.3% | $ 0.66 | $ 0.95 | -29.9% | |||||
HISTORICAL TRENDS | |||||||||||||||||
QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL DATA | |||||||||||||||||
(unaudited) | |||||||||||||||||
2021 | |||||||||||||||||
2021 | Q4 vs. Q3 | 2020 | |||||||||||||||
Q4 | Q3 | Q2 | Q1 | % Change | Q4 | Q3 | Q2 | Q1 | |||||||||
Interest income | |||||||||||||||||
Loans, including fee income | $ 4,361,123 | $ 5,200,935 | $ 4,967,402 | $ 4,763,112 | -16.1% | $ 4,988,220 | $ 4,796,814 | $ 4,758,983 | $ 4,591,832 | ||||||||
Investment securities | 566,608 | 502,460 | 485,823 | 423,879 | 12.8% | 334,830 | 305,329 | 332,732 | 346,973 | ||||||||
Other interest income | 13,907 | 13,540 | 6,688 | 6,144 | 2.7% | 10,291 | 7,190 | 5,014 | 38,468 | ||||||||
Total interest income | 4,941,638 | 5,716,935 | 5,459,913 | 5,193,135 | -13.6% | 5,333,341 | 5,109,333 | 5,096,729 | 4,977,273 | ||||||||
Interest expense | |||||||||||||||||
Deposits | 434,397 | 490,718 | 507,708 | 534,280 | -11.5% | 570,013 | 616,225 | 657,010 | 707,952 | ||||||||
Repurchase agreements | 1,375 | 1,466 | 891 | 1,079 | -6.2% | 1,298 | 782 | 1,036 | 4,945 | ||||||||
FHLB advances | 101,801 | 109,882 | 163,552 | 175,472 | -7.4% | 187,295 | 195,442 | 204,654 | 211,894 | ||||||||
Other borrowings | 31,250 | 32,967 | 34,341 | 34,937 | -5.2% | 36,686 | 38,461 | 39,834 | 40,298 | ||||||||
Total interest expense | 568,823 | 635,033 | 706,492 | 745,768 | -10.4% | 795,292 | 850,910 | 902,534 | 965,089 | ||||||||
Net interest income | 4,372,815 | 5,081,902 | 4,753,421 | 4,447,367 | -14.0% | 4,538,049 | 4,258,423 | 4,194,195 | 4,012,184 | ||||||||
Provision for loan losses | 230,000 | 120,000 | 120,000 | 90,000 | 91.7% | 20,000 | 130,000 | 180,000 | 118,500 | ||||||||
Net interest income after provision | 4,142,815 | 4,961,902 | 4,633,421 | 4,357,367 | -16.5% | 4,518,049 | 4,128,423 | 4,014,195 | 3,893,684 | ||||||||
Noninterest income | |||||||||||||||||
Service charges | 485,620 | 480,290 | 445,963 | 417,139 | 1.1% | 416,823 | 412,317 | 374,471 | 423,478 | ||||||||
Gain on sale of loans | 314,859 | 407,328 | 337,422 | 260,464 | -22.7% | 502,302 | 397,309 | 243,830 | 163,444 | ||||||||
Gain on sale of securities | - | - | 4,310 | - | NM | 18,557 | - | 25,470 | - | ||||||||
Other noninterest income | 82,327 | 80,747 | 64,069 | 53,264 | 2.0% | 66,597 | 69,745 | 71,046 | 74,609 | ||||||||
Total noninterest income | 882,806 | 968,365 | 851,764 | 730,867 | -8.8% | 1,004,279 | 879,371 | 714,817 | 661,531 | ||||||||
Noninterest expense | |||||||||||||||||
Salaries and benefits | 1,977,495 | 2,063,437 | 1,820,550 | 1,808,276 | -4.2% | 1,905,737 | 1,843,439 | 1,706,479 | 1,771,823 | ||||||||
Occupancy | 590,861 | 512,155 | 508,652 | 513,208 | 15.4% | 507,121 | 488,246 | 492,731 | 521,550 | ||||||||
Data processing and software | 311,239 | 408,523 | 308,194 | 312,620 | -23.8% | 294,390 | 287,995 | 268,884 | 234,771 | ||||||||
Other noninterest expense | 883,182 | 893,689 | 790,844 | 839,505 | -1.2% | 894,306 | 715,565 | 746,696 | 783,748 | ||||||||
Total noninterest expense | 3,762,777 | 3,877,804 | 3,428,240 | 3,473,609 | -3.0% | 3,601,554 | 3,335,245 | 3,214,790 | 3,311,892 | ||||||||
Net income before tax | 1,262,844 | 2,052,463 | 2,056,945 | 1,614,625 | -38.5% | 1,920,774 | 1,672,549 | 1,514,222 | 1,243,323 | ||||||||
Tax expense | 247,113 | 528,699 | 525,953 | 401,375 | -53.3% | 478,399 | 420,666 | 376,544 | 303,494 | ||||||||
Net income | $ 1,015,731 | $ 1,523,764 | $ 1,530,992 | $ 1,213,250 | -33.3% | $ 1,442,375 | $ 1,251,883 | $ 1,137,678 | $ 939,829 | ||||||||
Net income per diluted share | $ 0.66 | $ 1.00 | $ 1.00 | $ 0.80 | -33.5% | $ 0.95 | $ 0.82 | $ 0.75 | $ 0.62 | ||||||||
Supplemental Data | |||||||||||||||||
PPP loans - net fee income | $ 418,004 | $ 1,207,559 | $ 832,733 | $ 667,482 | $ 600,105 | $ 237,633 | $ 178,801 | $ - | |||||||||
View original content:https://www.prnewswire.com/news-releases/psb-holding-corp-reports-record-2021-results-301474171.html
SOURCE PSB Holding Corp.