WAUSAU, Wisc., Jan. 26, 2026 (GLOBE NEWSWIRE) -- PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported record fourth quarter earnings ending December 31, 2025 of $0.97 per diluted common share on net income of $3.9 million, compared to $0.86 per diluted common share on net income of $3.5 million during the third quarter ending September 30, 2025, and $0.73 per diluted common share on net income of $3.0 million during the fourth quarter ending December 31, 2024. Record calendar 2025 earnings were $13.5 million, or $3.31 per diluted share compared to 2024 earnings of $9.8 million, or $2.37 per diluted share, up 40% per share.

PSB’s fourth quarter of 2025 operating results reflected the following changes from the third quarter of 2025: (1) a stronger net interest margin as funding costs declined; (2) slightly higher non-interest income from higher mortgage banking income and higher investment and insurance sales commissions; and (3) lower non-interest expenses due to lower benefit plan expenses.

“Our operations continue to benefit from the current interest rate environment, as many of our seasoned loans continue to reprice from historically low yields to higher yields while funding cost pressure has declined with the Federal Reserve’s reductions to the Federal Funds rate. As a result, our net interest margin has returned towards the lower end of our historical range,” stated Scott Cattanach, President and CEO. “We remain optimistic as we look to 2026 and anticipate credit improvement will add more earning assets and enhance interest income in the first half of the year. The Board’s confidence in our ability to consistently generate strong profitability led to their decision to institute quarterly dividend payments going forward, rather than a semi-annual dividend. While our record earnings in fiscal 2025 mark a significant milestone, we remain committed to surpassing these achievements in the periods ahead.”

December 31, 2025, Highlights:

• Net interest income increased $387,000 to $11.7 million for the quarter ended December 31, 2025, from $11.3 million for the quarter ended September 30, 2025, due in part to lower deposit and borrowing costs.
  
  
• Noninterest income increased $156,000 to $2.1 million for the quarter ended December 31, 2025, compared to $1.9 million the prior quarter due to higher mortgage banking income and higher investment and insurance sales commissions.
  
  
• Noninterest expenses decreased $170,000 to $8.6 million during the quarter ended December 31, 2025 from $8.8 million for the quarter ended September 30, 2025, reflecting lower salary and benefit plan expenses.
  
  
• Net loans decreased $19.1 million in the fourth quarter ended December 31, 2025, to $1.10 billion compared to September 30, 2025 due to a large borrower ($13.8 million) who sold their business and an expected loan payoff from another borrower for $6.4 million. The loan pipeline continues to remain strong. Allowance for credit losses increased to 1.14% of gross loans.
  
  
• Non-performing assets increased slightly to $17.3 million, or 1.18% of total assets at December 31, 2025, compared to $17.0 million, or 1.13% the previous quarter. The increase primarily relates to the addition of a restructured residential mortgage loan.
  
  
• Total deposits decreased $12.1 million to $1.18 billion at December 31, 2025, from $1.19 billion at September 30, 2025. Core deposits decreased $7.3 million due to business outflows for taxes while brokered deposits and time deposits greater than $250,000 decreased $4.8 million.
  
  
• Return on average tangible common equity was 12.86% for the quarter ended December 31, 2025, compared to 12.14% the prior quarter and 11.07% in the year ago quarter.
  
  
• Tangible book value per common share was up 15.43% over the past year to $29.99 at December 31, 2025, compared to $25.98 at December 31, 2024. Additionally, PSB paid dividends totaling $0.68 per share during the past year reflecting an earnings payout ratio of 20.37%.
  
  

Balance Sheet and Asset Quality Review

Total assets decreased $35.3 million during the fourth quarter to $1.46 billion at December 31, 2025, compared to $1.50 billion at September 30, 2025. Cash and cash equivalents decreased $7.6 million to $29.9 million at December 31, 2025, from $37.5 million at September 30, 2025, as liquid funds were used to pay-off Federal Home Loan Advances and brokered deposits. Investment securities available for sale decreased $6.4 million to $184.3 million at December 31, 2025, from $190.7 million one quarter earlier.

Gross loans receivable decreased $26.2 million to $1.13 billion at December 31, 2025, compared to one quarter earlier. Commercial real estate loans decreased $17.5 million to $551.9 million at December 31, 2025, compared to three months earlier while commercial & industrial loans increased $2.3 million to $139.5 million over the same time period. Commercial construction and development loans decreased $10.7 million to $70.6 million at December 31, 2025, while residential real estate loans decreased $2.5 million from the prior quarter to $340.4 million. Agricultural loans decreased $1.0 million to $11.5 million at December 31, 2025, compared to three months earlier and municipal loans increased $3.0 million over the same time period. The loan portfolio remains well diversified with commercial real estate and construction loans totaling 55.1% of gross loans, followed by residential real estate loans at 30.1% of gross loans, commercial non-real estate loans at 14.4% and consumer loans at 0.4%. The lending pipeline remains strong heading into 2026.

The allowance for credit losses increased to 1.14% of gross loans at December 31, 2025 while annualized net charge-offs to average loans were 0.16% for the quarter ended December 31, 2025. Non-performing assets increased $323,000 to $17.3 million, or 1.18% of total assets at December 31, 2025, up from 1.13% at September 30, 2025. The increase in non-performing assets primarily reflects the addition of a $721,000 restructured residential mortgage loan. Approximately 67% of all non-performing assets consisted of four lending relationships. The largest of these four relationships had a $1.2 million loan payoff occur subsequent to year-end.

Total deposits decreased $12.2 million from the prior quarter to $1.18 billion. The largest decrease in deposits was a decline in money market deposits, which declined $22.2 million during the fourth quarter, partially offset by an increase of $15.3 million in interest-bearings demand and savings deposits. Additionally, brokered deposits decreased $5.0 million during the quarter ended December 31, 2025.

Existing liquidity helped to reduce high costing FHLB advances during the quarter by $28.0 million to $113.0 million at December 31, 2025. Brokered deposits of $5.0 million were also repaid.

Tangible stockholder equity as a percentage of total tangible assets increased to 8.77% at December 31, 2025, compared to 8.34% at September 30, 2025, and 7.76% at December 31, 2024.

Tangible net book value per common share increased $4.01 to $29.99, at December 31, 2025, compared to $25.98 one year earlier, an increase of 15.43% after dividends of $0.68 were paid to shareholders. Relative to the prior quarter’s tangible book value per common share of $29.05, tangible net book value per common share increased primarily due to earnings and an increase in the fair market value of available for sale investment securities. The accumulated other comprehensive loss on the investment portfolio decreased to $13.0 million at December 31, 2025, compared to $14.2 million one quarter earlier and $19.3 million at December 31, 2024.

Operations Review

Net interest income increased to $11.7 million (on a net margin of 3.28%) for the fourth quarter of 2025, from $11.3 million (on a net margin of 3.16%) for the third quarter of 2025, and increased from $10.4 million (on a net margin of 2.96%) for the fourth quarter of 2024. The higher net interest income in the current period primarily relates to a slight increase in loan yields during the quarter and a decrease in the cost of funds. Overall earning asset yields decreased 1 basis point to 5.42% during the fourth quarter of 2025 from 5.43% the prior period and cost of funds decreased 12 basis points to 2.89% compared to 3.01% during the third quarter of 2025. Relative to one year earlier, interest-earning asset yields were up 13 basis points while the overall cost of funds declined 17 basis points.

The decrease in earning asset yields was due to lower yields on investment securities. Taxable security yields were 3.32% for the quarter ended December 31, 2025, compared to 3.38% for the quarter ended September 30, 2025, while a smaller balance of tax-exempt security yields remained at 3.33% for the quarter ended December 31, 2025. Loan yields increased during the fourth quarter of 2025 to 5.94% from 5.93% during the third quarter of 2025.

The decrease in funding costs was due to lower deposit costs, and costs related to FHLB advances. Deposits costs declined 9 basis points to 1.98% for the quarter ended December 31, 2025, from 2.07% the prior quarter. Similarly, FHLB advance costs declined 3 basis points to 4.36% for the fourth quarter from 4.39% the prior quarter.

Total noninterest income increased $156,000 during the fourth quarter of 2025 to $2.1 million. An increase in investment and insurances sales commissions accounted for the majority of the change. The government shutdown delayed the recognition of gains on the sale of SBA 7A loans, reducing other noninterest income during the quarter ended December 31, 2025 compared to the prior quarter.

Noninterest expenses decreased $170,000 to $8.6 million for the fourth quarter of 2025, compared to $8.8 million for the third quarter of 2025, and increased $634,000 from $8.0 million for the fourth quarter of 2024. On a linked quarter basis, salary and benefits expense decreased $287,000 due to lower benefit plan expenses. Occupancy and facilities costs remained at $712,000, data processing and other office operation expenses increased $66,000, foreclosed real estate was sold for a gain of $23,000 during the fourth quarter compared to a loss of $1,000 the previous quarter and advertising and promotion expenses increased $39,000.

Income taxes increased $163,000 during the fourth quarter to $883,000, from $720,000 one quarter earlier on higher pre-tax income levels. The effective tax rate for the quarter ended December 31, 2025, was 18.0% compared to 16.7% for the third quarter ended September 30, 2025.

About PSB Holdings, Inc.

PSB Holdings, Inc. is the parent company of Peoples State Bank. Peoples is a community bank headquartered in Wausau, Wisconsin, serving northcentral and southeastern Wisconsin from twelve full-service banking locations in Marathon, Oneida, Vilas, Portage, Milwaukee and Waukesha counties. Peoples also provides investment and insurance products, along with retirement planning services, through Peoples Wealth Management, a division of Peoples. PSB Holdings, Inc. is traded under the stock symbol PSBQ on the OTCQX Market. More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about PSB’s business based, in part, on assumptions made by management and include, without limitation, statements with respect to the potential growth of PSB, its future profits, expected stock repurchase levels, future dividend rates, future interest rates, and the adequacy of its capital position. Forward-looking statements can be affected by known and unknown risks, uncertainties, and other factors, including, but not limited to, strength of the economy, the effects of government policies, including interest rate policies, risks associated with the execution of PSB’s vision and growth strategy, including with respect to current and future M&A activity, and risks associated with global economic instability. The forward-looking statements in this press release speak only as of the date on which they are made and PSB does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.