PSB Holdings Inc. (PSBH, Financial) filed Quarterly Report for the period ended 2009-03-31.
PSB Holdings Inc. has a market cap of $75 million; its shares were traded at around $5.01 with a P/E ratio of 12.3 and P/S ratio of 7.9. The dividend yield of PSB Holdings Inc. stocks is 3.2%.
Total liabilities decreased to $441.3 million at March 31, 2009 from $445.1 million at June 30, 2008. Total deposits increased to $301.5 million at March 31, 2009 from $283.7 million at June 30, 2008, an increase of $17.8 million or 6.3%. Borrowed funds decreased to $133.9 million at March 31, 2009 from $156.6 million at June 30, 2008, a decrease of $22.7 million or 14.5%.
Net income amounted to $712,000 for the quarter ended March 31, 2009 compared to net income of $921,000 for the quarter ended March 31, 2008. This was primarily attributable to an increase in provision for loan losses of $157,000 and a reduction in noninterest income of $176,000. Included in this reduction in noninterest income were lower gain on sales of securities of $104,000 and an additional impairment charge on Lehman Brothers investments of $75,000 for the quarter ended March 31, 2009. The Company has now sold or written-off its entire investment in Lehman Brothers. This was partially offset by an increase in net interest and dividend income of $126,000 and a decrease in noninterest expense of $27,000.
The net loss amounted to $1.3 million for the nine months ended March 31, 2009 compared to net income of $2.1 million for the nine months ended March 31, 2008. The decrease in net income reflected an OTTI charge on investments of $5.9 million for the nine months ended March 31, 2009. The provision for loan losses increased by $707,000. This was partially offset by an increase in net interest and dividend income of $943,000 and a decrease in noninterest expense of $377,000 and a decrease in income tax expense of $1.7 million.
Interest and dividend income amounted to $19.2 million for the nine months ended March 31, 2009 as compared to $20.4 million for the nine months ended March 31, 2008, a decrease of $1.2 million or 5.9%. The decrease in yield on loans had the greatest impact on interest income when comparing these time periods. The yield on loans decreased 53 basis points. This was partially offset by an increase in average loan balances of $11.8 million when comparing the nine months ended March 31, 2009 and 2008. Average investment securities decreased $20.9 million and the yield increased 10 basis points. Included in the change in investment security yields for the nine months ended March 31, 2009 was the accrued interest and dividend income reversed on the Freddie Mac Auction Rate Preferred and Lehman Brothers investments that were written down. Average other earning assets decreased $483,000 and the yield decreased by 335 basis points when comparing the nine months ended March 31, 2009 and 2008. The decrease in yield is due to reductions in short-term rates implemented by the Federal Open Market Committee since March 31, 2008.
Noninterest charge amounted to $3.3 million for the nine months ended March 31, 2009 as compared to noninterest income of $2.4 million for the nine months ended March 31, 2008, a decrease of $5.8 million or 238.0%. This decrease was primarily due to OTTI investment write-downs of $5.9 million. The write-downs included $3.95 million in Freddie Mac pass-through auction-rate securities issued by trusts consisting solely of Freddie Mac preferred stock and $1.9 million in Lehman Brothers corporate debt. The current carrying values as of March 31, 2009 of the Freddie Mac auction-rate securities and Lehman Brothers corporate debt was $46,000 and $0, respectively. This decrease in the nine months ended March 31, 2009 was partially offset by increased BOLI income of $164,000.
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PSB Holdings Inc. has a market cap of $75 million; its shares were traded at around $5.01 with a P/E ratio of 12.3 and P/S ratio of 7.9. The dividend yield of PSB Holdings Inc. stocks is 3.2%.
Highlight of Business Operations:
During the quarter ended September 30, 2008, the U.S. Treasury announced a plan to place the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) under conservatorship under the authority of the Federal Housing Finance Agency. The actions of the U.S. Government adversely impacted the value of the preferred stock of Fannie Mae and Freddie Mac. The Bank owns $4.0 million of Freddie Mac auction pass-through certificates (APT) issued by trusts sponsored by Merrill Lynch. The results of this action, along with general concern in the market about the future value of Freddie Mac preferred stock, have caused the values for the APT certificates to decrease materially. The Company had recorded a non-cash other-than-temporary impairment (“OTTI”) charge of $3.7 million in the quarter ended September 30, 2008. On October 29, 2008, the U.S. Treasury clarified that ordinary loss treatment applies to these Freddie Mac APT certificates. As an ordinary loss, under generally accepted accounting principles banks may not record the effect of this tax change in their balance sheets and income statements for financial and regulatory purposes until the period in which the law was enacted, i.e., the fourth quarter of 2008. The carrying value of the Freddie Mac APT certificates is now $46,000 as of March 31, 2009. On September 15, 2008, Lehman Brothers Holdings Inc. (“LBHI”) filed a petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of the United States Bankruptcy Code. This action has adversely impacted the value of Lehman Brothers corporate debt. The Bank owned $2.0 million of this corporate debt. The Company had recorded an OTTI charge of $1.8 million in the quarter ended September 30, 2008. During the quarter ended December 31, 2008, the market value declined by an additional $30,000 and the Company recorded a non-cash OTTI charge of $30,000 during the quarter ended December 31, 2008. During the quarter ended March 31, 2009, the Company sold one of the two Lehman Brothers bonds it owned and recorded a $15,000 gain on sale. The remaining Lehman Brothers bond, which had a previous carrying value of $75,000, has been determined to be worthless and has been completely written-off during the current quarter. At this time it is unclear when and if the values of both these investments will recover in the future. Both of these investments were rated investment grade by Moody s and Standard & Poor s at the time of purchase.Total liabilities decreased to $441.3 million at March 31, 2009 from $445.1 million at June 30, 2008. Total deposits increased to $301.5 million at March 31, 2009 from $283.7 million at June 30, 2008, an increase of $17.8 million or 6.3%. Borrowed funds decreased to $133.9 million at March 31, 2009 from $156.6 million at June 30, 2008, a decrease of $22.7 million or 14.5%.
Net income amounted to $712,000 for the quarter ended March 31, 2009 compared to net income of $921,000 for the quarter ended March 31, 2008. This was primarily attributable to an increase in provision for loan losses of $157,000 and a reduction in noninterest income of $176,000. Included in this reduction in noninterest income were lower gain on sales of securities of $104,000 and an additional impairment charge on Lehman Brothers investments of $75,000 for the quarter ended March 31, 2009. The Company has now sold or written-off its entire investment in Lehman Brothers. This was partially offset by an increase in net interest and dividend income of $126,000 and a decrease in noninterest expense of $27,000.
The net loss amounted to $1.3 million for the nine months ended March 31, 2009 compared to net income of $2.1 million for the nine months ended March 31, 2008. The decrease in net income reflected an OTTI charge on investments of $5.9 million for the nine months ended March 31, 2009. The provision for loan losses increased by $707,000. This was partially offset by an increase in net interest and dividend income of $943,000 and a decrease in noninterest expense of $377,000 and a decrease in income tax expense of $1.7 million.
Interest and dividend income amounted to $19.2 million for the nine months ended March 31, 2009 as compared to $20.4 million for the nine months ended March 31, 2008, a decrease of $1.2 million or 5.9%. The decrease in yield on loans had the greatest impact on interest income when comparing these time periods. The yield on loans decreased 53 basis points. This was partially offset by an increase in average loan balances of $11.8 million when comparing the nine months ended March 31, 2009 and 2008. Average investment securities decreased $20.9 million and the yield increased 10 basis points. Included in the change in investment security yields for the nine months ended March 31, 2009 was the accrued interest and dividend income reversed on the Freddie Mac Auction Rate Preferred and Lehman Brothers investments that were written down. Average other earning assets decreased $483,000 and the yield decreased by 335 basis points when comparing the nine months ended March 31, 2009 and 2008. The decrease in yield is due to reductions in short-term rates implemented by the Federal Open Market Committee since March 31, 2008.
Noninterest charge amounted to $3.3 million for the nine months ended March 31, 2009 as compared to noninterest income of $2.4 million for the nine months ended March 31, 2008, a decrease of $5.8 million or 238.0%. This decrease was primarily due to OTTI investment write-downs of $5.9 million. The write-downs included $3.95 million in Freddie Mac pass-through auction-rate securities issued by trusts consisting solely of Freddie Mac preferred stock and $1.9 million in Lehman Brothers corporate debt. The current carrying values as of March 31, 2009 of the Freddie Mac auction-rate securities and Lehman Brothers corporate debt was $46,000 and $0, respectively. This decrease in the nine months ended March 31, 2009 was partially offset by increased BOLI income of $164,000.
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