CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2011

Condensed Parent Company Only Financial Statements

CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

NOTE 23 CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

The following are condensed balance sheets as of December 31, 2011 and 2010, and condensed statements of income and cash flows for the years ended December 31, 2011, 2010, and 2009, for PSB Holdings, Inc.

Balance Sheets

December 31, 2011 and 2010

Assets	2011		2010
Cash and due from banks	$	3,108	$	1,930
Investment in Peoples State Bank		62,417		59,533
Other assets		884		704
TOTAL ASSETS	$	66,409	$	62,167
Liabilities and Stockholders’ Equity
Accrued dividends payable	$	583	$	563
Senior subordinated notes		7,000		7,000
Junior subordinated debentures		7,732		7,732
Other liabilities		732		182
Total stockholders’ equity		50,362		46,690
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	66,409	$	62,167

Statements of Income

Years Ended December 31, 2011, 2010, and 2009

	2011		2010		2009
Income:
Dividends from Peoples State Bank	$	2,875	$	2,525	$	1,950
Dividends from other investments		6		13		17
Interest		6		4		12
Total income		2,887		2,542		1,979
Expenses:
Interest expense on senior subordinated notes		567		567		341
Interest expense on junior subordinated debentures		341		420		454
Transfer agent and shareholder communication		38		31		27
Other		95		73		123
Total expenses		1,041		1,091		945
Income before income taxes and equity in undistributed net income of Peoples State Bank		1,846		1,451		1,034
Recognition of income tax benefit		402		420		372
Net income before equity in undistributed net income of Peoples State Bank		2,248		1,871		1,406
Equity in undistributed net income of Peoples State Bank		3,057		2,883		1,710
Net income	$	5,305	$	4,754	$	3,116

Statements of Cash Flows

Years Ended December 31, 2011, 2010, and 2009

	2011			2010			2009
Increase (decrease) in cash and due from banks:
Cash flows from operating activities:
Net income	$	5,305		$	4,754		$	3,116
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of Peoples State Bank		(3,057	)		(2,883	)		(1,710	)
Decrease (increase) in other assets		5			(55	)		(125	)
Increase (decrease) in other liabilities		28			(3	)		140
Increase in dividends payable		20			17			19
Net cash provided by operating activities		2,301			1,830			1,440
Net cash used in investing activities – Investment in Peoples State Bank		0			0			(7,000	)
Cash flows from financing activities:
Proceeds from exercise of stock options		45			0			0
Proceeds from issuance of senior subordinated notes		0			0			7,000
Dividends declared		(1,168	)		(1,128	)		(1,096	)
Net cash provided by (used in) financing activities		(1,123	)		(1,128	)		5,904
Net increase in cash and due from banks		1,178			702			344
Cash and due from banks at beginning		1,930			1,228			884
Cash and due from banks at end	$	3,108		$	1,930		$	1,228