2024 ANNUAL REPORT Empowering Success Together psbholdingsinc.com bankpeoples.com 2024 Annual Report: Empowering Success Together Since 1962, Peoples State Bank has served our customers and communities to support their fnancial growth in a way that delivers superior shareholder value. Our staf drive our success by earning the trust of our customers as a fnancial solutions partner. We remain focused on providing a great customer experience with up-to-date technology and products, to build thriving local communities. New Investor Relations Website Our new PSB Holdings, Inc. site includes enhanced navigation for an improved user experience. Visit the site for information on stock price, dividends, and fnancial performance. Scan the QR code to visit. Serving Wisconsin with 12 full-service bank locations and 1 loan production ofce. New In 2024 1 Message from the President Financial Focus We experienced strong and growing momentum in our fnancial performance as we moved through 2024, resulting in net income available to common shareholders of $9.8 million and $2.37 earnings per share, compared to net income available to common shareholders of $9.1 million and $2.16 earnings per share during 2023. Tangible net book value increased 9.0% to $25.98 per share during 2024, and cash dividends to shareholders were $0.64 per share, up 6.7% over the prior year. Our stock price achieved new highs during 2024, and closed at $26.50 per share, up 20% from the prior-year end. Step by step and quarter by quarter, key proftability measurements improved, with net interest margin increasing from a low of 2.80% early in the year to 2.96% in the fnal quarter of the year. We continue to move beyond the very low interest rate period that ended during 2022 as our loans regularly mature into today’s higher rates, while deposit cost increases have been more fully absorbed. Quickly rising deposit costs during 2023 and 2024 lowered net margin from traditional levels and hurt net income growth. Mortgage banking income rose 29% in 2024 as moderation in home mortgage rates increased customer demand and new mortgages were larger in size. We continued to grow sales in our new Small Business Administration (SBA) 7a loan program, where SBA guaranteed loan principal is sold to secondary market investors for a gain. During 2024, SBA sale gains totaled $405,000, and increased SBA 7a sales volume is expected in 2025. While loan demand eased in 2024 and fnished the year fat at $1.08 billion, total assets increased $42 million, or 2.9% from purchase of investment securities and increased use of Federal Home Loan Bank advances for liquidity. Deposits increased $6 million during the year, reaching $1.15 billion at year end. We continue to be recognized by our stakeholders for value delivered, including awards for Best Bank and Best Place to Work, which are highlighted later in this report. We surveyed 2,237 customers during 2024 who indicated a 91% satisfaction rate and were 14% more likely to recommend Peoples State Bank to a friend than the typical bank. Thank you for your trust and support. Scott M. Cattanach President & Chief Executive Ofcer PSB Holdings, Inc. & Peoples State Bank 2 Dane County Commerical Lending Ofce Stewart Avenue Remodel Downtown Milwaukee Branch Expanding and Renovating our Footprint Dane County Commercial Lending Ofce We began 2024 by opening a Dane County commercial lending ofce in Oregon, WI. This is our frst location in Dane County, an area with high growth potential. Since opening, we’ve added 18 new commercial relationships and originated $11.9 million of commercial loan principal. The primary focus of this location has been to target the needs of local business owners looking for tailored fnancial solutions and a consultative approach to ft their cash fow needs and growth goals. Stewart Avenue Remodel In the Spring, we remodeled our Stewart Avenue Wausau retail and lobby area almost 20 years to the day this home ofce was frst built. We accomplished our vision for the space: to provide the best banking experience for our customers and a more efective workspace for our team. This modern location is innovative and inviting and all are welcome to stop in for a delicious cappuccino or hot chocolate! Downtown Milwaukee Branch In July, we opened a new bank branch in downtown Milwaukee near Cathedral Square. The new full service branch and lending office, located at 790 N Jefferson Street, is the bank’s third location in southeastern Wisconsin after entering the Milwaukee market with a loan production office in 2016. The new location provides another service option for existing commercial and depository customers and increases brand recognition in the downtown business district for new customer growth. With branches also in West Allis and Waukesha, we are excited about the future of Peoples in metro Milwaukee! Digital Enhancements and New Products Our Peoples mobile app is one of the best in the business. This past year, we added a new feature for our retail checking customers, My Credit Manager: A free tool accessible through Peoples online and mobile banking platforms that provides your credit score and history with personalized information and educational resources. Within our mobile app, you can also Refer a Friend to Peoples and earn up to $500 a year and some extra spending money for your friend, too. To protect emerging-credit individuals in our Milwaukee area from predatory lending practices with high interest rates, we partnered with La Casa de Esperanza’s Center for Financial Stability to launch a new small dollar loan program. The La Casa loan program aims to address fnancial hardships with banking access and fnancial education so individuals can take control of their fnances. During 2024 we introduced the Tap to Pay feature on a newly redesigned Peoples Debit Mastercard. This feature makes the cards more convenient to use and the transactions more secure. Check out our redesigned investor relations website at psbholdingsinc.com. The website is easier to use and fnd information on the company’s fnancial performance, as well as to review current and historical stock prices and dividend information. You may also choose to receive via email our quarterly earnings release and fnd information on contacts to buy and sell PSBQ common stock shares. Investing in Our Team There’s no denying that we have the best bank staf in our markets. We invest in team building throughout the year, and in 2024, we implemented the Ideal Team Player strategy, which focuses on fostering the attributes of being humble, hungry, and smart. All executives and staf studied the Patrick Lencioni book, The Ideal Team Player: How to Recognize and Cultivate The Three Essential Virtues. Senior leadership led breakout sessions to review key topics, personal experiences, and lessons learned. We are committed to “being on the same page” for great customer service and actions within an engaging work environment. Looking Ahead The change in presidential administration and lending interest rates down from last year is reigniting customer loan demand. We believe net interest margin will improve in the coming year, building net income growth momentum that also supports ongoing dividend growth, book value per share growth, and stock buybacks to support shareholder needs. To conclude, your proxy statement includes a request to approve the addition of new bank directors, Andrea Golvach and Robert Stoehr, as director Bill Fish retires, and we add an additional member to the Board of Directors. Please refer to page 5 to learn about our proposed directors and their experience moving Peoples forward. We look forward to celebrating with you at our April 15, 2025 annual meeting, and thank you for investing with and utilizing Peoples State Bank for your fnancial needs. Scott M. Cattanach President & CEO PSB Holdings, Inc. Peoples State Bank 3 New Peoples mobile app feature, My Credit Manager Newly redesigned Peoples Debit Mastercard with Tap to Pay feature New Refer a Friend program 4 Bank Awards “These awards confrm that Peoples is the place for customers and employees to grow and thrive,” said Scott Cattanach. “We are proud to be the frst community bank to achieve these awards in both Marathon and Milwaukee Counties.” Best Banks to Work For American Banker magazine named Peoples one of the nation’s Best Banks to Work For in 2024. It’s the sixth year in a row Peoples has earned this recognition. Best of Marathon County Wausau Daily Herald readers voted Peoples the “Best Bank,” “Best Financial Planning Services,” “Best Mortgage Lending Company,” and “Best Place to Work” in Marathon County in 2024. It’s the thirteenth year in a row that Peoples has secured best bank. Top Three Finalist of Milwaukee County Milwaukee Journal Sentinel readers voted Peoples a Top Choice Finalist for “Best Bank,” “Best Financial Planning Services,” and “Best Mortgage Lending Company” in Milwaukee County in 2024. Peoples Wealth Management Growth Larson Financial Group, LLC, a well-respected Wausau fnancial advisory business, joined Peoples State Bank in January 2025. The bank welcomed investment representative David Larson to Peoples State Bank. Larson Financial Group, a Raymond James Financial Services partner, now operates as Peoples Wealth Management. Dave’s ofce is located at the Stewart Avenue branch in Wausau. “Peoples State Bank is fully committed to our wealth management customers, and this addition will greatly beneft them,” said Scott Cattanach, Peoples State Bank president and CEO. “Raymond James is among the world’s largest and most respected investment frms. Dave, along with our existing advisement team of Scott Wildman, Dana Kolbe, Bryan Nill, and Connie Higgins, will continue providing experienced investment advice and independent fnancial and retirement planning to our clients.” “This growth and strengthening of our Peoples Wealth Management division will help ensure our ability to expand our investment services portfolio and better service clients for years to come,” said Jefrey Saxton, Peoples State Bank executive vice president and retail banking group leader. “I am excited about joining Peoples Wealth Management,” said Larson. “Peoples is a reputable and well-respected fnancial institution. My clients experienced a smooth transition and will continue to receive tailored fnancial planning with our personalized, dedicated support and guidance every step of the way.” David Larson Securities ofered through Raymond James Financial Services, Inc., member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Peoples Wealth Management and Peoples State Bank are not registered broker/dealers, and are independent of Raymond James Financial Services. Investment Advisory Services ofered through Raymond James Financial Services Advisors, Inc. 1905 Stewart Avenue, Wausau, WI 54401 From left: Jefery Wickersham, Karla Kiefer, William Fish, Timothy Kilgore, Scott Cattanach, George Fahr, Kevin Kraft, Corey Vanderpoel, Patricia Hanz Not pictured: Lyn Falk Board of Directors Scott M. Cattanach President & CEO PSB Holdings, Inc. & Peoples State Bank George E. Fahr Director of Business Development & Founder Digicorp, Inc. Lyn M. Falk President & Founder Retailworks, Inc. William J. Fish Retired President of BILCO, Inc. Patricia M. Hanz Retired Briggs & Stratton U.S. Consumer Product Safety Commission Karla M. Kieffer Retired Vice President Sales & Marketing SUN Printing Timothy A. Kilgore Retired President of Sales Greenheck Fan Corporation Kevin J. Kraft Chairman of PSB Holdings, Inc. & Peoples State Bank Managing Director of Wisconsin River Partners, LLC Corey B. Vanderpoel Managing Director & Owner Taureau Group, LLC Jeffery J. Wickersham Owner Wickersham Jewelers 5 We welcome prospective board members Andrea Golvach and Robert Stoehr. Andrea L. Golvach Andrea is the retired vice president and treasurer of Briggs & Stratton. Her signifcant experience with capital structure, mergers and acquisitions, and building stakeholder relationships to drive long-term growth and stability will advise PSB Holdings, Inc. capital needs. Robert D. Stoehr Robert has been with County Materials Corporation of Marathon City for 29 years, currently serving as the chief fnancial and operating ofcer. Bob’s expertise in capital management, fnancial ventures, and operational innovation will be valuable for driving proftable growth. Board Retirement Bill Fish A special “thank you” to Bill Fish on his retirement from the PSB Holdings, Inc. board of directors at this shareholder annual meeting. Bill joined the bank and holding company board of directors in April 1995 and assumed the role of chairman in April 2012. Bill is the retired President of BILCO, Inc. (McDonald’s franchisee). 6 From left: Tina Seidl, Robert McPherson, Katie Tolokken, Scott Cattanach, Erik Rajek, Jefrey Saxton, Jessica Brown The Executive Management Team Working together on a common goal, Peoples’ Executive Management Team is responsible for ensuring the board’s directives are achieved and providing success for our customers, employees, and shareholders. Scott Cattanach President | Chief Executive Ofcer Jessica Brown Executive Vice President | Chief Financial Ofcer Robert McPherson Executive Vice President | Risk Management Erik Rajek Executive Vice President | Commercial Banking Group Leader Jeffrey Saxton Executive Vice President | Retail Banking Group Leader Tina Seidl Executive Vice President | Human Resources Director Katie Tolokken Executive Vice President | Chief Operating Ofcer Retirements Community banking is a people business, and we recognize our colleagues who retired this past year with 15 years or more of Peoples service! Jacqueline Kell 25 years Charlotte Ludkey 24 years Dawn Abreu 19 years Kathleen Klockziem 17 years Giving Back Peoples State Bank gives back time, talent, and dollars each year to needs in the communities where our banks are located. We proudly support essential community eforts with over a quarter of a million dollars in annual sponsorships, charitable contributions, and in-kind donations to local non proft organizations, schools, service organizations, and others. Our employees volunteered 5,225 hours of community service during 2024. Many of our bank associates hold leadership roles in civic, education, youth, economic, housing, cultural, health, and human service organizations that positively impact our communities. Beyond fnancial products and services, we help our neighbors and grow our communities through active participation. 7 8 Summary of Statements of Income Years ended December 31 (dollars in thousands, except per share data) 2024 2023 2022 2021 2020 Net interest income $38,983 $38,692 $40,003 $38,601 $31,879 Provision for credit losses 195 450 - 1,000 5,575 Net interest income after provision for credit loss 38,788 38,242 40,003 37,601 26,304 Noninterest income 6,070 6,720 7,444 9,418 11,413 Operating expenses 32,873 30,548 29,516 30,110 23,744 Net income before income taxes 11,985 14,414 17,931 16,909 13,973 Provision for income taxes 1,696 4,845 4,294 4,092 3,284 NET INCOME $10,289 $9,569 $13,637 $12,817 $10,689 Preferred stock dividends declared $486 $486 $81 - - Net income available to common shareholders $9,803 $9,083 $13,556 $12,817 $10,689 Diluted earnings per share $2.37 $2.16 $3.07 $2.88 $2.40 Cash dividends per share $0.64 $0.60 $0.50 $0.46 $0.42 Return on average assets 0.71% 0.69% 1.05% 1.03% 1.01% Return on average tangible common equity 9.57% 9.65% 14.08% 11.94% 10.83% 9 Summary of Balance Sheets As of December 31 (dollars in thousands, except per share data) ASSETS 2024 2023 2022 2021 2020 Cash and cash equivalents $40,498 $27,780 $29,409 $53,543 $38,528 Securities and certifcates of deposit 278,616 252,579 282,045 310,690 229,527 Loans receivable, net 1,078,421 1,078,705 961,865 876,337 820,956 Premises and equipment 13,805 13,098 13,164 12,695 10,920 Other assets 54,616 51,938 51,206 45,446 32,024 TOTAL ASSETS $1,465,956 $1,424,100 $1,337,689 $1,298,711 $1,131,955 LIABILITIES 2024 2023 2022 2021 2020 Deposits $1,147,349 $1,141,802 $1,148,755 $1,105,240 $932,137 Federal Home Loan Bank advances 162,250 134,000 43,000 47,000 62,000 Other borrowings 6,872 8,058 12,985 6,677 12,239 Senior subordinated notes 4,781 4,774 5,549 2,500 2,500 Junior subordinated debentures 13,023 12,921 12,819 12,717 7,732 Other liabilities 15,395 13,258 12,639 13,315 10,920 Stockholders’ equity 116,286 109,287 101,942 111,262 104,427 TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY $1,465,956 $1,424,100 $1,337,689 $1,298,711 $1,131,955 Common shares outstanding at year end 4,092,977 4,164,735 4,297,279 4,440,329 4,452,287 Tangible net book value per share $25.98 $23.84 $21.37 $24.36 $23.43 888.929.9902 investorrelations@bankpeoples.com psbholdingsinc.com bankpeoples.com