PUTNAM, Conn. – PSB Holdings Inc., the holding company for Putnam Savings Bank, has told the U.S. Securities and Exchange Commission it had net income of $507,000, or 8 cents per basic share and 7 cents per diluted share, for the three months ended Sept. 30.
That’s down about 17.2 percent from the company’s net income of $612,000, or 9 cents per basic share and 9 cents per diluted share, posted for the third quarter of 2005.
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Total reported assets on Sept. 30 were $469.6 million, down $4.9 million, or 1.0 percent, since June 30, but up $122.2 million, or 35.2 percent, from assets on Sept. 30, 2005. Cited as contributors to the year-over-year gain were a 22.6-percent increase in total loans, to $211.5 million on Sept. 30, up $39.0 million from the year-ago’s $172.5 million; and a 48.8-percent increase in investment securities to $154.0 million, $75.2 million above the Sept. 30, 2005, figure of $154.0 million.
Borrowed funds also increased, by $54.1 million, or 89.4 percent, to $114.6 million on Sept. 30, from $60.5 million a year earlier.
Total deposits were up $69.0 million, or 29.7 percent, to $301.1 million on Sept. 30, from $232.1 million on the same date in 2005. The bank credited the increase primarily to branch acquisitions completed during the fiscal year, which resulted in $60.6 million in new deposits. Brokered deposits grew by $17.1 million, or 125.4 percent, to $30.7 million from the year-ago $13.6 million.
(Two of the newly-acquired branches are in Griswold and Gales Ferry, Conn., the company said; the third, in Plainfield, Conn., was consolidated in March into Putnam Savings Bank’s existing Plainfield branch.)
The company credited its growth in total loans mostly to an increase in commercial loans of $15.6 million, or 45.1 percent, and an increase in residential loans of $23.0 million, or 16.8 percent.
Its provision for loan loss was $85,000 for the quarter ended Sept. 30, an increase of $65,000 or 325.0 percent over the company’s $20,000 provision for loss in the third quarter of 2005 – mostly, the company said, because loans outstanding rose $39.0 million, to $211.5 million on Sept. 30, from $172.5 million a year earlier.
“We continue to enjoy strong performances from both our retail and commercial lending departments,” said President Robert J. Halloran Jr. “Our retail lending department holds the enviable position of number one mortgage lender in Windham County (as rated by the Commercial Record) for the second quarter in a row.
“We are also beginning to see measurable results from our intensified marketing efforts in our new southeastern Connecticut market, and fully expect to be a recognized mortgage lender in that area as well. Our commercial lending group has made tremendous headway in that region and they have already provided financing for a number of sizable projects.”
Net interest income for the three months ended Sept. 30 was $2.7 million, an increase of $223,000 or 9.1 percent from the year-ago period. Most of that, the company said, was from growth in average interest-earning assets, which increased to $449.6 million in the third quarter, up $122.1 million or 37.3 percent from the year-ago $327.5 million. The yield on those assets increased 52 basis points, to 5.56 percent, from 5.04 percent in the third quarter of 2005.
Average interest-bearing liabilities increased by $120.9 million or 46.0 percent, to $383.4 million, from the year-ago $262.5 million. The cost of those liabilities increased 116 basis points, to 3.76 percent, for the three months ended Sept. 30, from 2.60 percent for the three months ended Sept. 30, 2005.
The net interest margin for the three months ended Sept. 30 was 2.35 percent, down from the year-ago period’s margin of 2.96 percent, a problem that plagues financial institutions nationwide.
Noninterest income for the third quarter was $703,000, up $195,000 or 38.4 percent year-over-year. Chief contributors were a $297,000 increase in service-fee income, and a $12,000 rise in commissions from brokerage services. This was partially offset by a decrease of $120,000 in gains on sales of securities.
Noninterest expense for the third quarter was $2.7 million, up $613,000 or 29.4 percent year-over-year, as salaries and benefits rose $287,000, occupancy expense increased $97,000, and other expenses rose $229,000. Some of these new expenses were from operations of the new branches, acquired in October 2005.
Putnam, Conn.-based PSB Holdings Inc. (NASDAQ: PSBH) is the parent of Putnam Savings Bank, a federally chartered stock savings bank founded in 1862 that has seven offices in eastern Connecticut and a full-service loan center in Putnam. Additional information is available at www.putnamsavings.com.
