##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 Commission File No.: 000-50301
 PSB GROUP, INC.
  Michigan
    
    42-1591104(State or other jurisdiction of
    
    (I.R.S. Employer I.D. No.)incorporation or organization)
 1800 East Twelve Mile Road, Madison Heights, Michigan 48071
 (248) 548-2900
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



TABLE OF CONTENTS
 PAGEPART I  FINANCIAL INFORMATION
    
    
    3ITEM 1. FINANCIAL STATEMENTS
    
    
    3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    
    
    19ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    26ITEM 4T: CONTROLS AND PROCEDURES
    
    
    27PART II.  OTHER INFORMATION
    
    
    28Item 1. Legal Proceedings
    
    
    28Item 1A. Risk Factors
    
    
    28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 3. Defaults Upon Senior Securities
    
    
    28Item 4. Submission of Matters to a Vote of Security Holders
    
    
    28Item 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    28SIGNATURES
    
    
    30EX-31.1EX-31.2EX-32.1EX-32.2
  Information Concerning Forward-Looking Statements
 Statements contained in this Form 10-Q which are not historical facts are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements involve important known and unknown risks,
uncertainties and other factors and can be identified by phrases using estimate, anticipate,
believe, project, expect, intend, predict, potential, future, may, should and
similar expressions or words. Such forward-looking statements are subject to risk
and uncertainties which could cause actual results to differ materially from those projected. Such
risks and uncertainties include potential changes in interest rates, competitive factors in the
financial services industry, general economic conditions, the effect of new legislation and other
risks detailed in documents filed by the Company with the Securities and Exchange Commission from
time to time.
 2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
  Application of Critical Accounting Policies
 Allowance for Loan Losses 
  Accounting for Deferred Taxes 
 3




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##### Table of Contents



PSB Group, Inc.
Consolidated Balance Sheet
 September 30,2009
    
    
    December 31,(unaudited)
    
    
    2008AssetsCash and cash equivalents
    
    $
    19,698
    
    
    $
    12,268Securities available for sale
    
    
    69,618
    
    
    
    52,254Loans
    
    
    363,708
    
    
    
    374,809Less allowance for possible loan loss
    
    
    (7,327
    )
    
    
    (7,116
    )Net loans
    
    
    356,381
    
    
    
    367,693Loans held for sale
    
    
    1,733
    
    
    
    1,082Bank premises and equipment
    
    
    16,148
    
    
    
    14,107Accrued interest receivable
    
    
    2,473
    
    
    
    2,159Other real estate owned
    
    
    6,993
    
    
    
    8,459Other assets
    
    
    1,255
    
    
    
    2,494Total assets
    
    $
    474,299
    
    
    $
    460,516LiabilitiesDeposits:Non-interest bearing
    
    $
    54,330
    
    
    $
    49,661Interest bearing
    
    
    385,721
    
    
    
    362,781Total deposits
    
    
    440,051
    
    
    
    412,442FHLB Advances
    
    
    5,500
    
    
    
    15,000Long-term debt
    
    
    282
    
    
    
    436Accrued taxes, interest and other liabilities
    
    
    2,351
    
    
    
    2,536Total liabilities
    
    
    448,184
    
    
    
    430,414Shareholders EquityCommon stock  no par value - 10,000,000
authorized - 3,476,310 shares issued and
outstanding at Sept. 30, 2009 and 3,442,060 at
December 31, 2008
    
    
    23,693
    
    
    
    23,607Unearned ESOP benefits
    
    
    (282
    )
    
    
    (436
    )Common stock held in trust
    
    
    (410
    )
    
    
    (410
    )Deferred compensation obligation
    
    
    410
    
    
    
    410Additional paid in capital  stock options/awards
    
    
    1,015
    
    
    
    707Unearned compensation
    
    
    (1,168
    )
    
    
    (976
    )Retained earnings
    
    
    2,288
    
    
    
    6,191Accumulated other comprehensive income
    
    
    569
    
    
    
    1,009Total shareholders equity
    
    
    26,115
    
    
    
    30,102Total liabilities and stockholders equity
    
    $
    474,299
    
    
    $
    460,516
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##### Table of Contents



PSB Group, Inc.
Consolidated Statement of Income (unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Interest Income:Interest and fees on loans
    
    $
    5,122
    
    
    $
    6,339
    
    
    $
    16,600
    
    
    $
    19,567Securities:Taxable
    
    
    590
    
    
    
    591
    
    
    
    1,784
    
    
    
    1,846Tax-exempt
    
    
    54
    
    
    
    55
    
    
    
    163
    
    
    
    226Federal funds sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Total interest income
    
    
    5,766
    
    
    
    6,985
    
    
    
    18,547
    
    
    
    21,645Interest expense:Deposits
    
    
    2,148
    
    
    
    2,160
    
    
    
    6,630
    
    
    
    7,434Federal funds purchased
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    81Discount window borrowings
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    8Federal Home Loan Bank advances
    
    
    78
    
    
    
    164
    
    
    
    287
    
    
    
    425Total interest expense
    
    
    2,226
    
    
    
    2,346
    
    
    
    6,917
    
    
    
    7,948Net interest income
    
    
    3,540
    
    
    
    4,639
    
    
    
    11,630
    
    
    
    13,697Provision for loan losses
    
    
    1,620
    
    
    
    2,350
    
    
    
    6,378
    
    
    
    5,966Net interest income after provision for
loan losses
    
    
    1,920
    
    
    
    2,289
    
    
    
    5,252
    
    
    
    7,731Other operating income:Service charges on deposit accounts
    
    
    670
    
    
    
    618
    
    
    
    1,843
    
    
    
    1,757Gain on the sale of investment securities
    
    
    866
    
    
    
    
    
    
    
    1,974
    
    
    
    187Other income
    
    
    359
    
    
    
    301
    
    
    
    1,197
    
    
    
    1,363Total other income
    
    
    1,895
    
    
    
    919
    
    
    
    5,014
    
    
    
    3,307Other operating expense:Salaries and employee benefits
    
    
    1,933
    
    
    
    2,301
    
    
    
    6,129
    
    
    
    7,375Occupancy costs
    
    
    792
    
    
    
    1,121
    
    
    
    2,361
    
    
    
    2,961Legal and professional
    
    
    340
    
    
    
    335
    
    
    
    1,085
    
    
    
    1,053Other real estate owned expense
    
    
    231
    
    
    
    1,779
    
    
    
    1,103
    
    
    
    3,655Marketing expense
    
    
    61
    
    
    
    74
    
    
    
    251
    
    
    
    256FDIC insurance
    
    
    294
    
    
    
    122
    
    
    
    1,091
    
    
    
    240Other operating expense
    
    
    837
    
    
    
    574
    
    
    
    2,126
    
    
    
    1,919Total other operating expenses
    
    
    4,488
    
    
    
    6,306
    
    
    
    14,146
    
    
    
    17,459Loss  before federal income tax (benefit)
    
    
    (673
    )
    
    
    (3,098
    )
    
    
    (3,880
    )
    
    
    (6,421
    )Federal income tax benefit
    
    
    
    
    
    
    (1,068
    )
    
    
    23
    
    
    
    (2,243
    )Net loss
    
    $
    (673
    )
    
    $
    (2,030
    )
    
    $
    (3,903
    )
    
    $
    (4,178
    )Loss per average outstanding share of
common stock  Basic
    
    $
    (.19
    )
    
    $
    (.61
    )
    
    $
    (1.12
    )
    
    $
    (1.30
    )Fully diluted
    
    
    (.19
    )
    
    
    (.61
    )
    
    
    (1.12
    )
    
    
    (1.30
    )Cash dividends per share
    
    $
    .00
    
    
    $
    .00
    
    
    $
    .00
    
    
    $
    .04
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##### Table of Contents



PSB Group, Inc.
Consolidated Statement of Comprehensive Income (unaudited)
 Nine Months EndedSeptember 30,2009
    
    
    2008Net loss
    
    $
    (3,903
    )
    
    $
    (4,178
    )Other comprehensive income (loss):Change in unrealized loss on securities
available for sale, net of tax
    
    
    1,534
    
    
    
    1Less reclassification adjustment for gains
included in net loss, net of tax
    
    
    (1,974
    )
    
    
    (123
    )Other comprehensive loss
    
    
    (440
    )
    
    
    (122
    )Comprehensive loss
    
    $
    (4,343
    )
    
    $
    (4,300
    )
 6




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##### Table of Contents



PSB Group, Inc.
Consolidated Statement of Changes in Shareholders Equity (Unaudited)
Nine Months Ended September 30, 2009
(in thousands, except share data)
 Unearned
    
    
    Common
    
    
    Deferred
    
    
    Addl Paid in
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalCommon
    
    
    ESOP
    
    
    Stock
    
    
    Comp.
    
    
    Capital - Stock
    
    
    Unearned
    
    
    Retained
    
    
    Accumulated
    
    
    ShareholdersStock
    
    
    Benefits
    
    
    Held in Trust
    
    
    Obligation
    
    
    Options/Awards
    
    
    Compensation
    
    
    Earnings
    
    
    OCI
    
    
    EquityBalance  December 31, 2008
    
    $
    23,607
    
    
    $
    (436
    )
    
    $
    (410
    )
    
    $
    410
    
    
    $
    707
    
    
    $
    (976
    )
    
    $
    6,191
    
    
    $
    1,009
    
    
    $
    30,102Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,903
    )
    
    
    
    
    
    
    (3,903
    )Change in Other
Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (440
    )
    
    
    (440
    )Earned ESOP Benefit
    
    
    
    
    
    
    154
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    154Restricted Stock Awards
    
    
    138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    138Repurchase of common stock
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )Additional paid in capital
stock options and awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    308
    
    
    
    (192
    )
    
    
    
    
    
    
    
    
    
    
    116Balance  Sept. 30, 2009
    
    $
    23,693
    
    
    $
    (282
    )
    
    $
    (410
    )
    
    $
    410
    
    
    $
    1,015
    
    
    $
    (1,168
    )
    
    $
    2,288
    
    
    $
    569
    
    
    $
    26,115
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##### Table of Contents



PSB Group, Inc.
Consolidated Statement of Cash Flows (Unaudited)
 Nine Months EndedSeptember 302009
    
    
    2008Net cash provided by (used) in operating activities:
    
    $
    4,223
    
    
    $
    1,374Cash flow from investing activities:Purchase of securities available for sale
    
    
    (94,200
    )
    
    
    (25,841
    )Proceeds from maturities of securities available for sale
    
    
    8,418
    
    
    
    12,904Proceeds from sale of securities available for sale
    
    
    69,582
    
    
    
    25,017Net decrease in loans
    
    
    4,283
    
    
    
    2,331Capital expenditures
    
    
    (2,933
    )
    
    
    (274
    )Net cash (used in) provided by investing activities
    
    
    (14,850
    )
    
    
    14,137Cash flow from financing activities:Net increase (decrease) in deposits
    
    
    27,609
    
    
    
    (42,867
    )Net increase in short-term borrowings
    
    
    5,500
    
    
    
    8,850Net (decrease) increase in FHLB advances
    
    
    (15,000
    )
    
    
    15,000Issuance of common stock
    
    
    
    
    
    
    2,039Cash dividends
    
    
    
    
    
    
    (125
    )Repurchase of common stock
    
    
    (52
    )
    
    
    Net cash provided by (used in ) financing activities
    
    
    18,057
    
    
    
    (17,103
    )Net increase (decrease) in cash
    
    
    7,430
    
    
    
    (1,592
    )Cash and Cash Equivalents  Beginning of period
    
    
    12,268
    
    
    
    12,762Cash and Cash Equivalents  End of period
    
    $
    19,698
    
    
    $
    11,170Supplemental Information Cash paid (received) for:Interest
    
    $
    7,027
    
    
    $
    8,087Taxes
    
    $
    (1,218
    )
    
    $
    (723
    )
 8




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##### Table of Contents



PSB Group, Inc.  Notes to Consolidated Financial Statements (unaudited)
 Note 1  Basis of Presentation
     
    
    FASB ASC 820-10-65-4, Fair Value Measurements and Disclosures provides guidelines for
making fair value measurements that determine fair value when the volume and level of
activity for assets or liabilities have significantly decreased and identify transactions
that are not orderly.
    
    FASB ASC 320-10-65, Investments  Debt and Equity Securities provides additional guidance
designed to create greater clarity and consistency in accounting for and presenting
impairment losses on securities.
 9




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##### Table of Contents




    
    FASB ASC 825-10-65, Financial Instruments enhances consistency in financial reporting by
increasing the frequency of fair value disclosures.
     10




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##### Table of Contents



Note 2  Securities
  September 30, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueAvailable-for-sale securities:U.S. treasury securities and
obligations of U.S. government
corporations and agencies
    
    $
    46,695
    
    
    $
    455
    
    
    $
    (69
    )
    
    $
    47,081Obligations of state and political
subdivisions
    
    
    20,321
    
    
    
    277
    
    
    
    (43
    )
    
    
    20,555Corporate debt securities
    
    
    500
    
    
    
    
    
    
    
    (50
    )
    
    
    450Other
    
    
    1,532
    
    
    
    
    
    
    
    
    
    
    
    1,532Total available-for-sale securities
    
    $
    69,048
    
    
    $
    732
    
    
    $
    (162
    )
    
    $
    69,618
 December 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueAvailable-for-sale securities:U.S. Treasury securities and
obligations of U.S. government
corporations and agencies
    
    $
    43,833
    
    
    $
    1,318
    
    
    $
    (5
    )
    
    $
    45,146Obligations of state and political
subdivisions
    
    
    5,380
    
    
    
    6
    
    
    
    (260
    )
    
    
    5,126Corporate debt securities
    
    
    500
    
    
    
    
    
    
    
    (50
    )
    
    
    450Other
    
    
    1,532
    
    
    
    
    
    
    
    
    
    
    
    1,532Total available-for-sale securities
    
    $
    51,245
    
    
    $
    1,324
    
    
    $
    (315
    )
    
    $
    52,254
  11




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##### Table of Contents



Available for SaleAmortized
    
    
    MarketCost
    
    
    ValueDue in one year or less
    
    $
    15,631
    
    
    $
    15,633Due in one year through five years
    
    
    15,577
    
    
    
    15,700Due after five years through ten years
    
    
    2,424
    
    
    
    2,483Due after ten years
    
    
    9,098
    
    
    
    9,14542,730
    
    
    
    42,961Federal agency pools
    
    
    24,786
    
    
    
    25,125Other
    
    
    1,532
    
    
    
    1,532Total
    
    $
    69,048
    
    
    $
    69,618
  Note 3  Loans
  September 30,
    
    
    December 31,2009
    
    
    2008Commercial Real Estate
    
    $
    233,217
    
    
    $
    249,133Residential Mortgages
    
    
    85,718
    
    
    
    81,138Commercial
    
    
    38,405
    
    
    
    37,243Consumer
    
    
    6,368
    
    
    
    7,295Total
    
    $
    363,708
    
    
    $
    374,809
  12




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##### Table of Contents



September 30,
    
    
    December 31,2009
    
    
    2008Non-accrual loans
    
    $
    28,488
    
    
    $
    8,738Loans past due 90 or more days
    
    
    1,241
    
    
    
    543Restructured debt
    
    
    13,552
    
    
    
    4,746Total non-performing loans
    
    
    43,281
    
    
    
    14,027Other real estate owned
    
    
    6,993
    
    
    
    8,459Total non-performing assets
    
    $
    50,274
    
    
    $
    22,486Total non-performing loans to total loans
    
    
    11.90
    %
    
    
    3.74
    %Total non-performing assets to total assets
    
    
    10.60
    %
    
    
    4.88
    %
 Note 4  Allowance for Possible Loan Losses
  Nine MonthsEnded
    
    
    Year EndedSeptember 30,
    
    
    December 31,2009
    
    
    2008Loan loss balance  Beginning of period
    
    $
    7,116
    
    
    $
    5,184Provision for loan losses
    
    
    6,378
    
    
    
    9,956Charge-offs
    
    
    (6,574
    )
    
    
    (8,387
    )Recoveries
    
    
    407
    
    
    
    363Loan loss balance  End of period
    
    $
    7,327
    
    
    $
    7,116Allowance as a % of total loans
    
    
    2.01
    %
    
    
    1.90
    %Allowance as a % of total non-performing loans
    
    
    16.93
    %
    
    
    50.73
    %
  13




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Note 5  Fair Value Measurements
       
 SignificantQuoted Prices in
    
    Other
    
    SignificantActive
    
    Observable
    
    Unobservable
    
    Balance atMarkets for Identical
    
    Inputs
    
    Inputs
    
    September 30,Assets (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    2009AssetsInvestment
securities
available-for-sale
    
    $
    1,001
    
    
    $
    68,167
    
    
    $
    450
    
    
    $
    69,618
 14




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##### Table of Contents



Investmentsecurities - available-for-saleBalance at December 31, 2008
    
    $
    730Total realized and unrealized gains (losses) included in income
    
    
    Total unrealized gains (losses) included in other
comprehensive income
    
    
    Net purchases, sales, calls and maturities
    
    
    Net transfers in/out of Level 3
    
    
    (280
    )Balance at September 30, 2009
    
    $
    450
 Investment Securities Available for Sale.
     15




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TotalLossesQuoted Prices in
    
    Significant
    
    
    
    
    
    for theActive
    
    Other
    
    Significant
    
    periodBalance
    
    Markets for
    
    Observable
    
    Unobservable
    
    endedSeptember
    
    Identical
    
    Inputs
    
    Inputs
    
    September30, 2009
    
    Assets (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    30, 2009AssetsImpaired loans
accounted for under
FAS 114
    
    $
    35,422
    
    
    $
    
    
    
    $
    35,422
    
    
    $
    
    
    
    $
    3,266Other Real Estate
Owned
    
    $
    6,993
    
    
    $
    
    
    
    $
    6,993
    
    
    $
    
    
    
    $
    518
 Impaired Loans.
 Other Real Estate
  16




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##### Table of Contents



Note 6  Earnings per Share
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss)
    
    $
    (673
    )
    
    $
    (2,030
    )
    
    $
    (3,903
    )
    
    $
    (4,178
    )Average number of common shares outstanding used
to calculate basic earnings per common share
    
    
    3,476,310
    
    
    
    3,333,625
    
    
    
    3,476,149
    
    
    
    3,212,025Effect of dilutive securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Average number of common shares outstanding used
to calculate diluted earnings per common share
    
    
    3,476,310
    
    
    
    3,333,625
    
    
    
    3,476,149
    
    
    
    3,212,025Number of anti-dilutive stock options excluded from
    
    
    145,293
    
    
    
    148,193
    
    
    
    145,293
    
    
    
    148,193
 Note 7  Fair Value of Financial Instruments
   Cash and Cash Equivalents
 Securities
 17




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##### Table of Contents



Loans Held for Sale
 Loans Receivable
 Deposit Liabilities
 Long-term Borrowings
 Short-term Borrowings
 Accrued Interest
 Other Instruments
 18




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##### Table of Contents



September 30, 2009
    
    December 31, 2008Estimated
    
    
    
    
    
    EstimatedCarrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    ValueAssets:Cash and short-term
investments
    
    $
    19,698
    
    
    $
    19,698
    
    
    $
    12,268
    
    
    $
    12,268Securities
    
    
    69,618
    
    
    
    69,618
    
    
    
    52,254
    
    
    
    52,254Loans
    
    
    356,381
    
    
    
    369,576
    
    
    
    367,693
    
    
    
    379,809Loans held for sale
    
    
    1,733
    
    
    
    1,762
    
    
    
    1,082
    
    
    
    1,100Accrued interest receivable
    
    
    2,473
    
    
    
    2,473
    
    
    
    2,159
    
    
    
    2,159Liabilities:Noninterest-bearing deposits
    
    
    54,330
    
    
    
    54,330
    
    
    
    49,661
    
    
    
    49,661Interest-bearing deposits
    
    
    385,721
    
    
    
    388,352
    
    
    
    362,781
    
    
    
    366,465FHLB advances
    
    
    5,500
    
    
    
    5,500
    
    
    
    15,000
    
    
    
    15,488Long-term debt
    
    
    282
    
    
    
    282
    
    
    
    436
    
    
    
    436Accrued interest payable
    
    
    289
    
    
    
    289
    
    
    
    398
    
    
    
    398
 
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Overview
 .
   19




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Recent Events
   20




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##### Table of Contents



§
    
    The Bank shall have and retain qualified management.§
    
    The Board of directors shall assume full responsibility for the approval of sound
policies and objectives and for the supervision of all of the Banks activities.§
    
    Increase the Banks level of Tier 1 capital as a percentage of total assets to at least
8 percent.§
    
    Charge off any loans classified as loss.§
    
    Prohibit the extension of credit to borrowers that have had loans with the Bank that
were classified substandard, doubtful or special mention without prior board
approval.§
    
    Prohibit the extension of credit to borrowers that have had loans charged off or
classified as loss in exam reports.§
    
    The Bank may not declare or pay any cash dividend without prior written consent of the
FDIC and OFIR.§
    
    Prior to submission or publication of all Reports of Condition, the Board shall review
the adequacy of the Banks Allowance for Loan and Lease Losses.§
    
    Within 30 days of the effective date of the Stipulation and Order, the Bank shall
eliminate and/or correct all violations of law, rule, and regulations.§
    
    Within 60 days from the effective date of the Stipulation and Order, the Bank shall
correct all deficiencies in the loans listed for Special Mention.§
    
    Prepare and submit progress reports the FDIC and OFIR.
  Financial Condition
  21




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##### Table of Contents



Financial Results
 Three Months Ended September 30, 2009
  22




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##### Table of Contents



23




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##### Table of Contents



Nine Months Ended September 30, 2009
      24




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##### Table of Contents



Liquidity
  Off Balance Sheet Arrangements and Contractual Obligations
  25




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##### Table of Contents



Capital Resources
  Tier 1 capital
    
    $
    26,170Total capital
    
    $
    30,772Tier 1 capital to risk-weighted assets
    
    
    7.16
    %Total capital to risk-weighted assets
    
    
    8.42
    %Tier 1 capital to average assets
    
    
    5.37
    %
  
 ITEM 3:
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     26




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##### Table of Contents



ITEM 4T:
    
    CONTROLS AND PROCEDURES
 (a) Disclosure controls and procedures.
 (b) Internal controls.
 27




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  Exhibit 31.1
    
    Certification of Michael J. Tierney required by Rule 13a  14(a)Exhibit 31.2
    
    Certification of David A. Wilson required by Rule 13a  14(a)Exhibit 32.1
    
    Certification of Michael J. Tierney required by Rule 13a 
14(b) and Section 906 of the Sarbanes  Oxley Act of 2002, 18 U.S.C.
Section 1350Exhibit 32.2
    
    Certification of David A. Wilson required by Rule 13a  14(b)
and Section 906 of the Sarbanes  Oxley Act of 2002, 18 U.S.C. Section
1350
 28




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##### Table of Contents



SIGNATURES
  PSB GROUP, INC.Date:   November 16, 2009
    /s/ Michael J. TierneyMichael J. TierneyPresident and Chief Executive OfficerDate:  November 16, 2009
    /s/ David A. WilsonDavid A. WilsonChief Financial Officer 29




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##### Table of Contents



EXHIBIT INDEX
 Exhibit 31.1
    
    Certification of Michael J. Tierney required by Rule 13a  14(a)Exhibit 31.2
    
    Certification of David A. Wilson required by Rule 13a  14(a)Exhibit 32.1
    
    Certification of Michael J. Tierney required by Rule 13a  14(b) and Section 906 of
the Sarbanes  Oxley Act of 2002, 18 U.S.C. Section 1350Exhibit 32.2
    
    Certification of David A. Wilson required by Rule 13a  14(b) and Section 906 of the
Sarbanes  Oxley Act of 2002, 18 U.S.C. Section 1350
 30