FORM 10-Q

                              SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.  20549

    (Mark One)
      [X]               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                    SECURITIES EXCHANGE ACT OF 1934

                           For the quarterly period ended September 30, 2002

                                                  OR

      [  ]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                    SECURITIES EXCHANGE ACT OF 1934


                        For the transition period from __________ to __________


                                   Commission file number:

                                     PSB HOLDINGS, INC.
                  (Exact name of registrant as specified in charter)


                 WISCONSIN                                  39-1804877
          (State of incorporation)             (I.R.S Employer Identification
                                                Number)


                                 1905 West Stewart Avenue
                                  Wausau, Wisconsin 54401
                         (Address of principal executive office)


         Registrant's telephone number, including area code: 715-842-2191


 Indicate by check mark whether the registrant (1) has filed all reports
 required to be filed by section 13 or 15(d) of the Securities Exchange Act of
 1934 during the preceding 12 months (or for such shorter period that the
 registrant was required to file such report), and (2) has been subject to such
 filing requirements for the past 90 days.
                                               Yes   X   No


 Indicate by check mark whether the registrant is an accelerated filer (as
 defined in Rule 12b-2 of the Exchange Act).
                                    Yes          No   X


 The number of common shares outstanding at September 30, 2002 was 834,551.
<PAGE>
                             PSB HOLDINGS, INC.

                                 FORM 10-Q

                      QUARTER ENDED SEPTEMBER 30, 2002


                                                                   PAGE NO.

 PART I.  FINANCIAL INFORMATION

     Item 1.   Financial Statements

               Consolidated Balance Sheets
               September 30, 2002 (unaudited) and December 31,
               2001 (derived from audited financial statements)          1

               Consolidated Statements of Income
               Three Months and Nine Months Ended September 30, 2002
               and 2001 (unaudited)                                      2

               Consolidated Statement of Changes in Stockholders'
               Equity Nine Months Ended September 30, 2002 (unaudited)   3

               Consolidated Statements of Cash Flows
               Nine Months Ended September 30, 2002 and 2001 (unaudited) 4

               Notes to Consolidated Financial
               Statements                                                6

     Item 2.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations                       8

     Item 3.   Quantitative and Qualitative Disclosures About
               Market Risk                                              21

     Item 4.   Controls and Procedures                                  21
                                  (i)
<PAGE>
<TABLE>
<CAPTION>
                       PART I.  FINANCIAL INFORMATION

 ITEM 1. FINANCIAL STATEMENTS

 PSB HOLDINGS, INC.
 CONSOLIDATED BALANCE SHEETS
 September 30, 2002 unaudited, December 31, 2001 derived from audited financial
 statements)

                                                                      September 30,        December 31,
 (dollars in thousands, except per share data)                             2002               2001
 <S>                                                                   <C>               <C>
 ASSETS
 Cash and due from banks                                                  $10,826           $16,736
 Interest-bearing deposits and money market funds                           5,056             3,539
 Federal funds sold                                                         4,743             5,275
 Securities:
    Held to maturity (fair values of $22,379 and $20,355, respectively)    21,130            20,287
    Available for sale (at fair value)                                     54,543            50,157
 Federal Home Loan Bank stock (at cost)                                     2,236             2,151
 Loans held for sale                                                            -             1,403
 Loans receivable, net of allowance for loan losses of $3,394
    and $2,969, respectively                                              252,286           236,574
 Accrued interest receivable                                                1,906             1,873
 Foreclosed assets, net                                                       296               421
 Premises and equipment                                                     5,943             4,755
 Mortgage servicing rights                                                    534               284
 Other assets                                                                 806               841
 TOTAL ASSETS                                                          $  360,305        $  344,296

 LIABILITIES

 Non-interest-bearing deposits                                         $   43,316        $   41,507
 Interest-bearing deposits                                                245,276           232,128
    Total deposits                                                        288,592           273,635

 Short-term borrowings                                                      3,514             4,327
 Long-term Federal Home Loan Bank advances                                 38,000            38,000
 Accrued expenses and other liabilities                                     2,109             2,984
    Total liabilities                                                     332,215           318,946

 STOCKHOLDERS' EQUITY

 Common stock - no par value with a stated value of $2 per share:
    Authorized - 1,000,000 shares
    Issued - 902,425 shares                                                 1,805             1,805
 Additional paid-in capital                                                 7,150             7,159
 Retained earnings                                                         20,899            18,186
 Unrealized gain on securities available for sale, net of tax                 735               491
 Treasury stock, at cost - 67,874 and 62,720 shares, respectively
                                                                           (2,499)           (2,291)
    Total stockholders' equity                                             28,090            25,350

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $  360,305        $  344,296
</TABLE>
                                  -1-
<PAGE>
<TABLE>
<CAPTION>
 PSB HOLDINGS, INC.
 CONSOLIDATED STATEMENTS OF INCOME

                                                  Three Months Ended   Nine Months Ended
 (dollars in thousands,                               SEPTEMBER 30,       SEPTEMBER 30,
 except per share data - unaudited)                 2002         2001     2002     2001
 <S>                                             <C>         <C>      <C>      <C>
 Interest income:
    Interest and fees on loans                   $  4,627    $ 4,808  $ 13,466 $ 14,739
    Interest on securities:
       Taxable                                        665        685     2,033    2,143
       Tax-exempt                                     223        207       674      558
    Other interest and dividends                       86        133       203      418
     Total interest income                          5,601      5,833    16,376   17,858

 Interest expense:
    Deposits                                        1,733      2,273     5,195    7,763
    Short-term borrowings                              35         74       115      379
    Long-term FHLB advances                           577        577     1,712    1,689

     Total interest expense                         2,345      2,924     7,022    9,831

 Net interest income                                3,256      2,909     9,354    8,027
 Provision for loan losses                            450        150       810      450

 Net interest income after provision
 for loan losses                                    2,806      2,759     8,544    7,577

 Noninterest income:
    Service fees                                      334        246       890      743
    Gain on sale of loans                             310         34       642      146
    Investment and insurance
       sales commissions                               93         31       189      150
    Other noninterest income                          104         46       287      226
     Total noninterest income                         841        357     2,008    1,265

 Noninterest expense:
    Salaries and employee benefits                  1,320      1,082     3,735    3,110
    Occupancy                                         267        240       832      703
    Data processing and other office operations       153        137       413      378
    Advertising and promotion                          63         83       254      252
    Other noninterest expenses                        294        326       921      866
         Total noninterest expense                  2,097      1,868     6,155    5,309

 Income before provision for income taxes           1,550      1,248     4,397    3,533
 Provision for income taxes                           499        363     1,364    1,040

 Net income                                      $  1,051    $   885   $ 3,033  $ 2,493
 Basic earnings per share                        $   1.26    $  1.05   $  3.62  $  2.97
 Diluted earnings per share                      $   1.25    $  1.05   $  3.61  $  2.97
</TABLE>
                                  -2-
<PAGE>
<TABLE>
<CAPTION>

 PSB HOLDINGS, INC.
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
 Nine months ended September 30, 2002 - unaudited
                                                                            Unrealized
                                                                            Gain (Loss)
                                                         Additional        on Securities
                                                 Common   Paid-in  Retained  Available Treasury
 (dollars in thousands)                           STOCK   CAPITAL  EARNINGS  FOR SALE  STOCK   TOTALS
 <S>                                             <C>      <C>     <C>       <C>     <C>       <C>
 Balance January 1, 2002                         $ 1,805  $7,159  $ 18,186  $   491 $ (2,291) $ 25,350

 Comprehensive income:
  Net income                                                         3,033                       3,033
  Unrealized gain on securities
    available for sale, net of tax                                              244                244

     Total comprehensive income                                                                  3,277

 Purchase of treasury stock                                                             (329)     (329)
 Proceeds from stock options issued out
  of treasury                                                (9)                          61        52
 Distribution of treasury stock in settlement
  of liability to Company directors                                                       60        60
 Cash dividends declared $.38 per share                               (320)                       (320)

 Balance September 30, 2002                      $ 1,805 $ 7,150   $20,899  $   735  $(2,499)  $28,090
</TABLE>
                                  -3-
<PAGE>
<TABLE>
<CAPTION>
 PSB HOLDINGS, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine months ended September 30, 2002 and 2001 - unaudited

                                                              2002         2001
 Cash flows from operating activities:
  <S>                                                   <C>          <C>
  Net income                                            $    3,033   $    2,493
  Adjustments to reconcile net income to net
    cash provided by operating activities:
    Provision for depreciation and net amortization            500          462
    Provision for loan losses                                  810          450
    Gain on sale of loans held for sale                       (642)        (146)
    (Gain) loss on sale of premises and equipment               30          (46)
    Gain on sale of foreclosed assets                          (27)           -
    FHLB stock dividends                                       (85)        (110)
    Changes in operating assets and liabilities:
      Accrued interest receivable                              (33)         (17)
      Other assets                                            (129)        (376)
      Other liabilities                                       (815)      (1,024)

  Net cash provided by operating activities                  2,642        1,686

 Cash flows from investing activities:

  Net increase in interest-bearing deposits
    and money market funds                                  (1,517)      (1,737)
  Net (increase) decrease in federal funds sold                532       (7,755)
  Proceeds from sale and maturities of:
    Securities held to maturity                                682        1,010
    Securities available for sale                            8,848       24,148
  Payment for purchase of:
    Securities held to maturity                             (1,537)      (5,805)
    Securities available for sale                          (12,857)     (23,698)
  Net (increase) decrease in loans                         (14,919)       2,749
  Capital expenditures                                      (1,638)        (431)
  Proceeds from sale of premises and equipment                  29           41
  Proceeds from sale of foreclosed assets                      278            -

  Net cash used in investing activities                    (22,099)     (11,478)
</TABLE>
                                  -4-
<PAGE>
<TABLE>
<CAPTION>
 Consolidated Statements of Cash Flows, continued

 Cash flows from financing activities:
 <S>                                                             <C>          <C>
  Net increase (decrease) in non-interest-bearing deposits          1,809       (3,392)
  Net increase in interest-bearing deposits                        13,148       11,335
  Net decrease in short-term borrowings                              (813)      (7,823)
  Proceeds from long-term FHLB advances                                 -       10,000
  Dividends paid                                                     (320)        (319)
  Proceeds from issuance of stock options                              52            -
  Purchase of treasury stock                                         (329)           -

  Net cash provided by financing activities                        13,547        9,801

 Net increase (decrease) in cash and due from banks                (5,910)           9
 Cash and due from banks at beginning                              16,736        9,226

 Cash and due from banks at end                                  $ 10,826      $ 9,235

 Supplemental cash flow information:

 Cash paid during the period for:
    Interest                                                     $  7,330     $ 10,250
    Income taxes                                                    1,300        1,152

 Noncash investing and financing activities:

    Loans charged off                                            $    444     $     81
    Loans transferred to foreclosed assets                            397          642
    Loans originated on sale of foreclosed assets                     331            -
    Distribution of treasury stock in settlement of liability
      to Company directors                                             60            -
</TABLE>
                                  -5-

                             PSB Holdings, Inc.
                 Notes to Consolidated Financial Statements


 NOTE 1 - GENERAL

 In the opinion of management, the accompanying unaudited consolidated
 financial statements contain all adjustments necessary to present fairly
 PSB Holdings, Inc.'s ("Company") financial position, results of its
 operations, and cash flows for the periods presented, and all such
 adjustments are of a normal recurring nature.  The consolidated financial
 statements include the accounts of all subsidiaries.  All material
 intercompany transactions and balances are eliminated. The results of
 operations for the interim periods are not necessarily indicative of the
 results to be expected for the full year.

 These interim consolidated financial statements have been prepared
 according to the rules and regulations of the Securities and Exchange
 Commission and, therefore, certain information and footnote disclosures
 normally presented in accordance with generally accepted accounting
<PAGE>
 principles have been omitted or abbreviated.  The information contained in
 the consolidated financial statements and footnotes in the Company's 2001
 annual report on Form 10-K, should be referred to in connection with the
 reading of these unaudited interim financial statements.

 In preparing the consolidated financial statements, management is required
 to make estimates and assumptions that affect the reported amounts of
 assets and liabilities as of the date of the balance sheet and revenues
 and expenses for the period.  Actual results could differ significantly
 from those estimates.  Estimates that are susceptible to significant
 change include the determination of the allowance for loan losses,
 mortgage servicing right asset, and the valuations of investments.

 NOTE 2 - CHANGES IN ACCOUNTING PRINCIPLE

 In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS
 No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other
 Intangible Assets."  SFAS No. 141 requires the use of the purchase method
 of accounting for business combinations initiated after June 30, 2001.
 SFAS No. 142 addresses how intangible assets acquired outside of a
 business combination should be accounted for upon acquisition and how
 goodwill and other intangible assets should be accounted for after they
 have been initially recognized.  SFAS No. 142 eliminates the amortization
 for goodwill and other intangible assets with indefinite lives.  Other
 intangible assets with a finite life will be amortized over their useful
 life.  Goodwill and other intangible assets with indefinite useful lives
 shall be tested for impairment annually or more frequently if events or
 changes in circumstances indicate that the asset may be impaired.  SFAS
 No. 142 is effective for fiscal years beginning after December 15, 2001.
 The Corporation's adoption of SFAS No. 142 on January 1, 2002 had no
 impact on the consolidated financial statements as of the date of
 adoption.
                                  -6-
 NOTE 3 - EARNINGS PER SHARE

 Basic earnings per share of common stock are based on the weighted average
 number of common shares outstanding during the period.  Diluted earnings
 per share is calculated by dividing net income by the weighted average
 number of shares adjusted for the dilutive effect of outstanding stock
 options.  Presented below are the calculations for basic and diluted
 earnings per share:
<TABLE>
<CAPTION>
                                                 Three months ended  Nine months ended
 (dollars in thousands, except per share data)      SEPTEMBER 30,      SEPTEMBER 30,
                                                   2002     2001      2002      2001
 <S>                                            <C>      <C>        <C>       <C>
 Net income available to common stockholders     $1,051   $  885     $3,033    $2,493

 Weighted average shares outstanding            836,418  839,705    838,471   839,705
 Effect of dilutive stock options outstanding     2,356        -      1,554         -

 Diluted weighted average shares outstanding    838,774  839,705    840,025   839,705

 Basic earnings per share                       $  1.26  $  1.05    $  3.62   $  2.97
 Diluted earnings per share                     $  1.25  $  1.05    $  3.61   $  2.97
</TABLE>
<PAGE>
 NOTE 4 - COMPREHENSIVE INCOME

 Generally accepted accounting principles require comprehensive income and
 its components, as recognized under the accounting standards, to be
 displayed in a financial statement with the same prominence as other
 financial statements.  The disclosure requirements with respect to the
 Form 10-Q have been included in the Company's consolidated statement of
 changes in stockholders' equity.  Comprehensive income totaled the
 following for the periods indicated:
<TABLE>
<CAPTION>

 (dollars in thousands - unaudited)           Three months ended Nine months ended
                                                  SEPTEMBER 30,     SEPTEMBER 30,
                                                  2002     2001     2002     2001
 <S>                                          <C>       <C>      <C>     <C>
 Net income                                     $1,051  $   885  $3,033  $2,493
 Change in net unrealized gain or loss on
    securities available for sale, net of tax     (187)     453     244     957

 Comprehensive income                         $    864   $1,338  $3,277  $3,450
</TABLE>
                                  -7-

 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

 The following discussion and analysis is presented to assist in the
 understanding and evaluation of the Company's financial condition and
 results of operations.  It is intended to complement the unaudited
 financial statements, footnotes, and supplemental financial data appearing
 elsewhere in this Form 10-Q and should be read in conjunction therewith.
 Dollar amounts are in thousands, except per share amounts.

 Forward-looking statements have been made in this document that are
 subject to risks and uncertainties.  While the Company believes these
 forward-looking statements are based on reasonable assumptions, all such
 statements involve risk and uncertainties that could cause actual results
 to differ materially from those contemplated in this report.  The
 assumptions, risks, and uncertainties relating to the forward-looking
 statements in this report include those described under the caption
 "Cautionary Statements Regarding Forward-Looking Information" in Part I of
 the Company's Form 10-K for the year ended December 31, 2001 and, from
 time to time, in the Company's other filings with the Securities and
 Exchange Commission.

 BALANCE SHEET

 At September 30, 2002, total assets were $360,305, an increase of $41,839,
 or 13.1%, over September 30, 2001.  Assets increased $16,009, or 4.6% from
 December 31, 2001.  Gross loans (including loans held for sale and
 unamortized direct loan origination costs) were $255,680 at September 30,
 2002, growing $30,892 over third quarter 2001 and increasing $14,734 over
 fourth quarter 2001.  Loan growth through September 30, 2002 was funded by
 a reallocation of short-term investments, cash holdings, and overnight
 funds held at December 31, 2001 and deposit growth primarily by
 acquisition of broker and national certificates of deposit.
<PAGE>
<TABLE>
<CAPTION>
 Table 1:  Period-End Loan Composition

                                                  September 30,      September 30        December 31, 2001
                                               DOLLARS    DOLLARS PERCENTAGE OF TOTAL        Percentage
 (dollars in thousands)                          2002      2001     2002    2001     DOLLARS  OF TOTAL
 <S>                                          <C>        <C>       <C>     <C>     <C>       <C>
 Commercial, industrial and agricultural      $ 66,463   $ 66,630   26.0%   29.6%   $55,363   23.0%
 Commercial real estate mortgage               106,902     67,290   41.7%   29.9%    98,554   40.9%
 Residential real estate mortgage               64,823     72,845   25.4%   32.4%    67,723   28.1%
 Residential real estate loans held for sale         -        203    0.0%    0.1%     1,403    0.6%
 Consumer home equity                            6,601      4,419    2.6%    2.0%     4,576    1.9%
 Consumer and installment                       10,891     13,401    4.3%    6.0%    13,327    5.5%

 Totals                                       $255,680   $224,788  100.0%  100.0%  $240,946  100.0%
</TABLE>

 The decline in overall long-term real estate loan interest rates during
 2001 and again during 2002 contributed to a reallocation of the Bank's
 loans held for investment.  As part of the Company's strategic and asset
 liability management plan, long-term residential real estate customer
 refinancing loans were subsequently sold to investors in the secondary
 market, and commercial
                                  -8-
 real estate and industrial loans were increased to continue asset growth.
 During the past quarter, the Company has also aggressively sought high quality
 adjustable rate commercial and industrial loans to match short-term
 liabilities during anticipated future increases in short-term interest rates.

 As the Company reallocated resources to handle demand for residential real
 estate loans, it experienced substantial repayments of consumer retail
 installment loans that were not replaced.  In its markets, the Company
 faces substantial competition from credit unions and other financial
 institutions for retail installment lending such as for auto loans.
 During the fourth quarter 2002, the Company refocused efforts to increase
 retail installment loans by competitively seeking high quality individual
 borrowers and offering low interest rates as compared to local
 competitors.

 The loan portfolio is the Company's primary asset subject to credit risk.
 The Company's process for monitoring credit risks includes weekly analysis
 of loan quality, delinquencies, non-performing assets, and potential
 problem loans.  Loans are placed on a nonaccrual status when they become
 contractually past due 90 days or more as to interest or principal
 payments.  All interest accrued but not collected for loans (including
 applicable impaired loans) that are placed on nonaccrual or charged off is
 reversed to interest income.  The interest on these loans is accounted for
 on the cash basis until qualifying for return to accrual status.  Loans
 are returned to accrual status when all the principal and interest amounts
 contractually due have been collected and there is reasonable assurance
 that repayment according to the contractual terms will continue.

 The term "impaired loan" refers to certain commercial loans with respect
 to which, based on current information, it is probable that the Company
 will not be able to collect all amounts due in accordance with the
<PAGE>
 contractual terms of the loan agreement.  Impairment is based on
 discounted cash flows of expected future payments using the loan's
 effective interest rate or the fair value of the collateral if repayment
 of the loan is collateral-dependent.

 The aggregate amount of nonperforming assets increased $2,232 to $4,735 at
 September 30, 2002 from $2,503 at September 30, 2001, primarily because of
 additional loans going on nonaccrual status.  Nonperforming assets have
 also increased $279 from $4,456 at December 31, 2001.
<TABLE>
<CAPTION>
 Table 2:  Allowance for Loan Losses

                                               Three months ended   Nine months ended
                                                  SEPTEMBER 30,       SEPTEMBER 30,
 (dollars in thousands)                          2002      2001     2002         2001
 <S>                                          <C>       <C>        <C>       <C>
 Allowance for loan losses at beginning       $  3,254  $  2,682   $  2,969  $  2,407

 Provision for loan losses                         450       150        810       450
 Recoveries on loans previously charged-off         11         -         59         1
 Loans charged off                                (321)      (55)      (444)      (81)
 Allowance for loan losses at end             $  3,394  $  2,777   $  3,394  $  2,777
</TABLE>
                                  -9-
 Nonperforming assets include: 1) loans that are either contractually past
 due 90 days or more as to interest or principal payments, on a nonaccrual
 status, or the terms of which have been renegotiated to provide a
 reduction or deferral of interest or principal (restructured loans) and 2)
 foreclosed assets.

 At September 30, 2002 nonaccrual loans included $587 of loan principal to
 a borrower secured by non real-estate commercial collateral.  During
 September 2002, the Company was notified of the borrower's bankruptcy.
 The Bank was not the lead lender in the commercial relationship, and due
 to inadequate collateral protection, an additional $270 of loan loss
 provisions were recorded to cover estimated principal losses not
 specifically identified and reserved previously.  During October 2002, a
 charge-off of $376 was authorized and recorded.  The remaining principal
 balance on this relationship of approximately $211 is fully reserved in
 the allowance for loan losses as of September 30, 2002 from provisions
 made prior to September 30, 2002.

 The increase in loans charged off during 2002 (both through September 30,
 2002, and in October, 2002) is primarily due to the Company coming to
 terms with problem loan relationships that have existed and been on the
 balance sheet for many years.  During 2002, the Company changed internal
 policy making it more difficult for borrowers to qualify to be removed
 from nonaccrual status.  In general, borrowers placed on nonaccrual status
 must bring all past due amounts current, and make six monthly contractual
 payments on time before qualifying for removal from nonaccrual.  At
 September 30, 2002, $712 of nonaccrual principal was less than 30 days
 past due, but had not yet made six consecutive months of regular
 contractual payments.  Therefore, the change in policy has accounted for
 some of the increase in nonaccrual loans.  Management believes it has
 identified and is proactively dealing with significant problem loan
<PAGE>
 relationships.  The increase in nonaccrual loans is not believed to be due
 primarily to the general economic recession or Bank loan concentrations in
 volatile economic sectors.  Management expects the level of nonaccrual
 loans held at December 31, 2002 to be substantially reduced.
<TABLE>
<CAPTION>
 Table 3:  Nonperforming Assets

                                               SEPTEMBER 30,    DECEMBER 31,
 (dollars in thousands)                       2002        2001      2001
 <S>                                        <C>         <C>       <C>
 Nonaccrual loans                           $ 3,784     $ 1,395   $ 3,036

 Accruing loans past due 90 days or more          -         333         -
 Restructured loans                             655         428       999

 Total nonperforming loans                    4,439       2,156     4,035
 Foreclosed assets                              296         347       421

 Total nonperforming assets                 $ 4,735     $ 2,503   $ 4,456

 Nonperforming loans as a % of gross
    loans receivable                           1.74%       1.11%     1.68%

 Total nonperforming assets as a % of total
    assets                                     1.31%       0.79%     1.29%
</TABLE>
                                  -10-
 LIQUIDITY

 Liquidity refers to the ability of the Company to generate adequate
 amounts of cash to meet the Company's need for cash.  The Company manages
 its liquidity to provide adequate funds to support borrowing needs and
 deposit flow of its customers.  Management views liquidity as the ability
 to raise cash at a reasonable cost or with a minimum of loss and as a
 measure of balance sheet flexibility to react to marketplace, regulatory,
 and competitive changes.  Deposit growth is the primary source of funding.
 Retail consumer deposits as a percentage of total funding sources were
 75.2% at September 30, 2002, and 78.5% at September 30, 2001.  Wholesale
 funding and broker and national certificates of deposit represent the
 balance of the Company's total funding needs.
<PAGE>
<TABLE>
<CAPTION>
 Table 4: Period-end Deposit Composition

                                           September 30,        September 30,   December 31, 2001
                                        DOLLARS   DOLLARS  PERCENTAGE OF TOTAL       Percentage
 (dollars in thousands)                   2002     2001      2002     2001   DOLLARS  OF TOTAL
 <S>                                   <C>       <C>        <C>     <C>     <C>        <C>
 Non-interest-bearing demand           $ 43,316  $ 31,465    15.0%   12.6%  $ 41,508   15.2%
 Interest-bearing demand and savings     32,848    28,192    11.4%   11.3%    33,691   12.3%
 Money market deposits                   74,119    73,950    25.7%   29.6%    76,973   28.1%
 Retail time deposits less than $100     60,656    60,178    20.9%   24.2%    58,829   21.6%
 Retail time deposits $100 and over      37,424    34,889    13.0%   14.0%    37,033   13.5%
 Broker & national time deposits
    less than $100                       12,946     9,503     4.5%    3.8%     9,404    3.4%
 Broker & national time deposits
    $100 & over                          27,283    11,300     9.5%    4.5%    16,197    5.9%

 Totals                                $288,592  $249,477   100.0%  100.0%  $273,635  100.0%
</TABLE>
 The interest rate paid on money market deposits is adjustable based on the
 Company's discretion but generally tracks the movements of national money
 market funds.  As short-term interest rates have decreased during 2001 and
 2002, the yield on this account has declined substantially.  At the same
 time, the Company has offered long term (three years or longer)
 certificate of deposit rates to stabilize deposit funding cost if market
 interest rates increase.  Some customers appear to have moved money market
 funds into time deposits to secure a higher yield.
<TABLE>
<CAPTION>
 Table 5: Summary of Changes by Significant Deposit Source

          September 30,  Change from prior year
                                                      2002       2001        $        %
 <S>                                            <C>         <C>        <C>        <C>
 Total time deposits $100 and over              $   64,707  $  46,189  $ 18,518   40.1%
 Total broker and national time deposits            40,229     20,803    19,426   93.4%
 Total retail time deposits                         98,080     95,067     3,013    3.2%
 Core deposits, including money market
    deposits                                       150,283    133,607    16,676   12.5%
 Total retail deposits including core deposits     248,363    228,674    19,689    8.6%
</TABLE>
                                  -11-

 The Company's retail deposit offices are in locations that during the past
 year have demanded consumer retail deposit rates generally greater than
 national rates for equivalent certificate of deposit terms.  For example,
 late in October, 2002, the average offering rate for a 12 month
 certificate of deposit as published by Ratewatch Premium Report for the
 three community banks with the highest rates in the Company's largest
 market area was 55 basis points higher than available brokered deposits
 for a 12-month term.

 To lower deposit funding costs, the Company does use brokers to accumulate
 national funds generally in excess of $100 per account.  In addition,
 lower rate long-term broker certificates have been used in limited cases
<PAGE>
 to fund "match" longer term loan commitments desired by customers that are
 held on the balance sheet as loans held for investment.  Consequently,
 broker and national deposits increased substantially over the prior year,
 while local retail deposits have shown moderate growth in comparison.
 During September 2002, the Company opened a new full service retail and
 commercial branch location in Rhinelander, Wisconsin.  Formerly, the Bank
 operated only a grocery store branch location.  The Bank believes the
 retail markets in which they operate can provide retail deposit growth
 needed for asset growth in the long-term as local retail certificate of
 deposit rates begin to approximate national rates for similar funds.

 As of September 30, 2002, federal funds sold and short-term investments,
 loan principal, and investment securities maturing within one year totaled
 $131,890, while certificates of deposit, short-term borrowings and long-
 term borrowings maturing within one year totaled $96,731.  Unused credit
 advances from the Federal Home Loan Bank of Chicago available to the
 Company at September 30, 2002 totaled approximately $26,559.  In addition,
 the Bank had commitments from other correspondent banks for federal funds
 purchased up to $22,500.  The primary funding sources utilized are Federal
 Home Loan Bank advances, federal funds purchased, repurchase agreements
 from a base of individuals, businesses and public entities, and brokered
 time deposits.  The Company believes its current liquidity position and
 sources of funds for liquidity management is adequate.

 Table 6 below presents maturity repricing information as of September 30,
 2002.  The following repricing methodologies should be noted:

 1. Money market deposit accounts are considered fully repriced within 90
    days.  NOW and savings accounts are considered "core" deposits as they are
    generally insensitive to interest rate changes.  These deposits are
    considered to reprice beyond 5 years.

 2. Nonaccrual loans are considered to reprice beyond 5 years.

 3. Assets and liabilities with contractual calls or prepayment options are
    repriced according to the likelihood of the call or prepayment being
    exercised in the current interest rate environment.
                                  -12-
<PAGE>
<TABLE>
<CAPTION>
 Table 6: Interest Rate Sensitivity Gap Analysis

                                                    September 30, 2002
 (dollars in thousands)      0-90 DAYS  91-180 DAYS  181-365 DAYS  1-2 YRS.  BYND 2-5 YRS. BEYOND 5 YRS. TOTAL
 <S>                          <C>          <C>         <C>          <C>           <C>       <C>         <C>
 Earning assets:
 Loans                        $ 92,113     $ 19,007    $ 35,999     $ 57,922      $ 45,488  $  5,151    $255,680
  Securities                     8,043        7,389      13,154       19,316        12,709    15,062      75,673
  FHLB stock                     2,236                                                                     2,236
  Other earning assets           9,799                                                                     9,799

 Total                        $112,191     $ 26,396    $ 49,153     $ 77,238      $ 58,197  $ 20,213    $343,388
 Cumulative rate
   sensitive assets           $112,191     $138,587    $187,740     $264,978      $323,175  $343,388

 Interest-bearing liabilities
  Interest-bearing deposits   $ 92,836     $ 19,744    $ 46,185     $ 22,602      $ 29,416  $ 34,493    $245,276
  Short-term borrowings            653          351       1,439          300           771     3,514
  Long-term FHLB advances                    10,000                    6,000        19,000     3,000      38,000

 Total                        $ 93,489     $ 30,095    $ 47,624     $ 28,902      $ 49,187  $ 37,493    $286,790
 Cumulative interest
   sensitive liabilities      $ 93,489     $123,584    $171,208     $200,110      $249,297  $286,790
 Interest sensitivity gap
  for the individual period   $ 18,702     $ (3,699)   $  1,529     $ 48,336      $  9,010 $ (17,280)
 Ratio of rate sensitive
  assets to rate sensitive
  liabilities for the
  individual period                120%          88%        103%         267%          118%       54%

 Cumulative interest
   sensitivity gap            $ 18,702     $ 15,003    $ 16,532     $ 64,868      $ 73,878  $ 56,598
 Cumulative ratio of rate
  sensitive assets to rate
  sensitive liabilities            120%         112%        110%         132%          130%      120%
</TABLE>
 The Asset/Liability Committee uses financial modeling techniques that
 measure the interest rate risk.  Policies established by the Bank's
 Asset/Liability Committee are intended to limit exposure of earnings at
 risk.  A formal liquidity contingency plan exists that directs management
 to the least expensive liquidity sources to fund sudden and unanticipated
 liquidity needs.  The Company also uses various policy measures to assess
 adequacy of the Bank's liquidity and interest rate risk as described
 below.

 BASIC SURPLUS

 The Company measures basic surplus as the amount of existing net liquid
 assets (after deducting short-term liabilities and coverage for
 anticipated deposit funding outflows during the next 30 days) divided by
 total assets.  The basic surplus calculation does not consider unused but
 available correspondent bank federal funds purchased, as those funds are
 subject to availability based on the correspondent bank's own liquidity
 needs and therefore are not guaranteed contractual funds.  At September
<PAGE>
 30, 2002, the Company's basic surplus, including available FHLB advances
 not yet utilized was above the 5% minimum required by policy.
                                  -13-
 INTEREST RATE RISK LIMITS

 The Company balances the need for liquidity with the opportunity for
 increased net interest income available from longer term loans held for
 investment and securities.  To measure the impact on net interest income
 from interest rate changes, the Company models interest rate simulations
 on a quarterly basis.  Company policy is that projected net interest
 income over the next 12 months will not be reduced by more than 15% given
 a change in interest rates of up to 200 basis points.  At September 30,
 2002, projected net income for the next 12 months changed less than the
 15% required by policy and was considered acceptable by management.

 CORE FUNDING UTILIZATION

 To assess whether interest rate sensitivity beyond one year helps mitigate
 or exacerbate the short-term rate sensitive position, a quarterly measure
 of core funding utilization is made.  Core funding is defined as
 liabilities with a maturity in excess of 60 months and capital.  "Core"
 deposits including DDA, NOW and non-maturity savings accounts (except
 money market accounts) are also considered core long-term funding sources.
 The core funding utilization ratio is defined as assets with a maturity in
 excess of 60 months divided by core funding.  The Company's target for the
 core funding utilization ratio is to remain at 80% or below given the same
 200 basis point changes in rates that apply to the guidelines for interest
 rate risk limits exposure described previously.   At September 30, 2002,
 the Company's core fund utilization ratio was within policy requirements.

 CAPITAL RESOURCES

 Stockholders' equity at September 30, 2002 increased $2,684, or 10.6% from
 September 2001 to $28,090.  Stockholders' equity included unrealized gains
 on securities available for sale, net of their tax effect, of $735 at
 September 30, 2002 compared to unrealized gains of $832 at September 30,
 2001.

 The adequacy of the Company's capital is regularly reviewed to ensure
 sufficient capital is available for current and future needs and is in
 compliance with regulatory guidelines.  As of September 30, 2002, the
 Subsidiary Bank's Tier 1 risk-based capital ratio, total risk-based
 capital, and Tier 1 leverage ratio were well in excess of regulatory
 minimums.

 On July 12, 2002, the Company announced an ongoing share repurchase
 program of up to 1% of outstanding shares per year to recur on an annual
 basis.  The Company anticipates purchasing on the open market and holding
 as treasury approximately 8,400 shares during 2002.  At September 30, 2002
 approximately 6,400 of the 8,400 shares for 2002 had been purchased by the
 Company.  Through September 30, 2002, the average price paid by the
 Company for treasury shares acquired during 2002 was $40.21 per share.

 Current monthly net income allows the Company to increase assets by
 approximately $5 million per month and maintain a leverage capital ratio
 above 7.0%.  Although the Company is currently purchasing treasury shares
<PAGE>
 under the buyback program described above, management is pursuing a growth
 strategy which requires significant capital to be maintained to support
 asset growth.
                                  -14-
 Therefore, large scale stock buybacks or dividend payments
 in excess of past periods are not anticipated.  Recently, the Bank hired
 two additional commercial lenders, and opened a new brick and mortar full
 service branch in Rhinelander, Wisconsin.  Previously, the Bank had a
 grocery store location in Rhinelander which generated significant loan
 growth even in that limited facility.  With the new Rhinelander location
 and additional lenders, the Bank needs existing capital to significantly
 increase loans held for investment in the near term.
<TABLE>
<CAPTION>
 Table 7:  Capital Ratios - Consolidated Holding Company

                                            Tier 1   Total Risk-
                                           Leverage    Based
                                           CAPITAL    CAPITAL
 <S>                                         <C>       <C>
 September 30, 2002                          7.6%      11.6%
 December 31, 2001                           7.2%      11.2%
 September 30, 2001                          7.7%      12.0%

 Regulatory minimum for capital adequacy     4.0%       8.0%
</TABLE>
 On October 4, 2002, the Company announced approval of a 2-for-1 stock
 split payable December 2, 2002, to shareholders of record on November 19,
 2002, subject to shareholder approval of an increase in authorized shares.
 This special meeting to vote on the increase in authorized shares is
 scheduled for November 19, 2002.  The stock split will increase the number
 of issued shares in circulation to approximately 1.7 million shares, and
 place the "post split" value per share in the low $20's per share.  The
 split is anticipated to increase interest in institutional investors in
 the Company's stock while making it easier for smaller investors to
 purchase shares, both of which are expected to increase stock liquidity.

 RESULTS OF OPERATIONS

 Net income for the quarter ended September 30, 2002 totaled $1,051, or
 $1.25 per share on a diluted basis ($1.26 per basic earnings per share).
 Comparatively, net income for the quarter ended September 30, 2001 was
 $885, or $1.05 per share for basic and diluted earnings per share.
 Operating results for the third quarter 2002 generated an annualized
 return on average assets of 1.17% and an annualized return on average
 equity of 15.00%, compared to 1.12% and 14.31% for the comparable period
 in 2001.  The net interest margin for the third quarter 2002 was 3.95%
 compared to 4.03% for the comparable quarter in 2001.

 The following Table 8 presents consolidated quarterly summary financial
 data of PSB Holdings, Inc. and Subsidiary.
                                  -15-
<PAGE>
<TABLE>
<CAPTION>
 Table 8: Financial Summary

 (dollars in thousands, except per share data)
                                                                 QUARTER ENDED
                                              Sept. 30,   June 30,  March 31, Dec. 31, Sept. 30,
 EARNINGS AND DIVIDENDS:                         2002       2002       2002     2001      2001
   <S>                                        <C>        <C>        <C>      <C>        <C>
   Net interest income                        $  3,256   $  3,104  $  2,994  $  2,934   $  2,909
   Provision for loan losses                  $    450   $    180  $    180  $    440        150
   Other noninterest income                   $    841   $    602  $    565  $    798        357
   Other noninterest expense                  $  2,097   $  2,046  $  2,012  $  2,006      1,868
   Net income                                 $  1,051   $  1,024  $    958  $    873        885

   Basic earnings per share                   $   1.26   $   1.22  $   1.14  $   1.04   $   1.05
   Diluted earnings per share                 $   1.25   $   1.22  $   1.14  $   1.04   $   1.05
   Dividends declared per share               $      -   $   0.38  $      -  $   0.70   $      -
   Net book value per share                   $  33.66   $  32.68  $  31.18  $  30.19   $  30.25

   Dividend payout ratio                          0.00%     31.15%     0.00%    67.31%      0.00%
   Average common shares outstanding           836,418    839,416   839,615   839,705    839,705

 BALANCE SHEET - AVERAGE BALANCES:

   Loans receivable, net                      $249,691   $240,602  $238,284  $ 229,994  $219,793
   Assets                                     $355,224   $336,125  $336,879  $ 331,381  $316,592
   Deposits                                   $283,889   $265,931  $267,050  $ 261,556  $245,177
   Stockholders' equity                       $ 27,792   $ 26,972  $ 25,924  $  25,671  $ 24,737

 PERFORMANCE RATIOS:

   Return on average assets (1)                   1.17%      1.22%     1.14%     1.05%      1.12%
   Return on average stockholders' equity (1)    15.00%     15.23%    14.78%    13.60%     14.31%
   Average tangible stockholders' equity to
     average assets                               7.61%      7.87%     7.59%     7.61%      7.57%
   Net loan charge-offs to average loans          0.12%      0.03%     0.00%     0.11%      0.02%
   Nonperforming loans to gross loans             1.74%      1.23%     1.62%     1.68%      0.96%
   Allowance for loan losses to gross loans       1.33%      1.30%     1.31%     1.24%      1.24%
   Net interest rate margin (1)(2)                3.95%      4.04%     3.87%     3.89%      4.03%
   Net interest rate spread (1)(2)                3.43%      3.53%     3.35%     3.38%      3.41%
   Service fee revenue as a percent of
     average demand deposits (1)                  3.41%      3.76%     2.65%     2.91%      3.21%
   Noninterest income as a percent
     of gross revenue                            13.05%     10.02%     9.52%    12.56%      5.77%
   Efficiency ratio                              49.52%     53.23%    54.54%    52.20%     55.38%
   Noninterest expenses to average assets (1)     2.34%      2.44%     2.39%     2.42%      2.36%

 STOCK PRICE INFORMATION:
   High                                        $ 42.10    $ 39.25  $  36.00  $  33.40   $  31.75
   Low                                         $ 38.35    $ 35.00  $  33.25  $  30.75   $  29.00
   Market value at quarter-end                 $ 41.15    $ 38.50  $  35.50  $  33.40   $  31.75
<FN>
 (1) Annualized
 (2) The yield on tax-exempt loans and securities is computed on a tax-equivalent basis using a tax
     rate of 34%.
</TABLE>
                                  -16-
<PAGE>
 NET INTEREST INCOME

 Net interest income is the most significant component of earnings.  Net
 interest income increased $347 from $2,909 for the quarter ended September
 30, 2001 to $3,256 for the current quarter ended September 30, 2002.  Tax-
 adjusted net interest margin as a percent of average interest earning
 assets declined from 4.03 percent in September 2001 to 3.95 percent in
 September 2002. Net interest margin was 3.73 percent for the year ended
 December 31, 2001.

 Since early 2001, the Company benefited from a falling interest rate
 environment as deposits and short-term borrowings have repriced faster at
 lower rates than loans with longer terms and maturities.  However, during
 the third quarter 2002, it appears that short-term deposits have been
 significantly repriced to current levels, but that loans are renewed and
 originated at continually lower rates.  This situation was anticipated and
 is not unusual in the banking industry.  The Company considers the current
 short-term interest rate environment to be temporary.  The primary
 strategies currently utilized by the Company to manage net interest margin
 include:

 1. Consider national and broker certificate of deposit offering rates when
    determining local retail certificate pricing.  Ensure core deposits are
    priced appropriately considering existing rates and changes in short-term
    interest rates in the national markets.

 2. Increase interest rate pricing on commercial loans that provide option
    features to the borrower, such as prepayment without penalty.

 3. Originate adjustable rate commercial loans to allow the bank to benefit
    from anticipated increases in short-term interest rates on which many
    commercial loans are based.  Management recognizes that in the short-term
    such a strategy would reduce net interest income in the event of a
    decrease in the prime rate or other short-term rate indexes.

 In addition to the change in tax-adjusted net interest margin percentage,
 net interest income increased from income earned from additional loans
 originated since September 30, 2001.  Since September 2001, average loans
 receivable (net of allowances for loan loss) increased $29,898, or 13.6%.

 Yield on earning assets decreased 125 basis points to 6.68% compared to
 7.93% at September 30, 2001.  Similarly, the costs for interest-bearing
 liabilities decreased 127 basis points to 3.25% from 4.52%.  Decreased
 national market short-term term interest rates have impacted all types of
 earning assets and paying liabilities and the Company believes current
 short-term rates represent the approximate bottom of the rate cycle.
 Refer to the previous discussion on management of net interest margin for
 the Company's strategy in this area.
                                  -17-
<PAGE>
<TABLE>
<CAPTION>
 Table 9: Net Interest Income Analysis

 (dollars in thousands)            Quarter ended Sept. 30, 2002       Nine months ended Sept. 30, 2002
                                  Average              Yield/         Average                  Yield/
                                  BALANCE    INTEREST      RATE       BALANCE       INTEREST     RATE
 <S>                            <C>        <C>            <C>      <C>            <C>            <C>
 Assets
 Interest-earning assets:
    Loans (1)(2)                $ 252,879  $   4,650      7.30%    $ 246,040      $   13,525     7.35%
    Taxable securities             50,678        665      5.21%       49,901           2,033     5.45%
    Tax-exempt securities (2)      20,431        338      6.56%       20,400           1,021     6.69%
    FHLB stock                      2,234         27      4.79%        2,204              81     4.91%
    Other                          14,698         59      1.59%        9,893             122     1.65%

    Total (2)                     340,920      5,739      6.68%      328,438          16,782     6.83%

 Non-interest-earning assets:
    Cash and due from banks         8,529                              9,023
    Premises and equipment, net     5,692                              5,226
    Other assets                    3,271                              3,231
    Allowance for loan losses      (3,188)                            (3,140)

    Total                       $ 355,224                          $ 342,778

 Liabilities & stockholders'
   equity
 Interest-bearing liabilities:
    Savings and demand
       deposits                  $ 34,110  $      88      1.02%     $ 32,018       $     267     1.11%
    Money market deposits          72,555        267      1.46%       73,312             818     1.49%
    Time deposits                 138,413      1,378      3.95%      130,834           4,110     4.20%
    Short-term borrowings           3,363         35      4.13%        3,521             115     4.37%
    Long-term borrowings           38,000        577      6.02%       38,000           1,712     6.02%

    Total                         286,441      2,345      3.25%      277,685           7,022     3.38%

 Non-interest-bearing
   liabilities:
    Demand deposits                38,811                             36,178
    Other liabilities               2,180                              2,009
    Stockholders' equity           27,792                             26,906

    Total                       $ 355,224                          $ 342,778

 Net interest income                           3,394                                   9,760
 Rate spread                                              3.43%                                  3.45%
 Net yield on interest-earning assets                     3.95%                                  3.97%
<FN>
 (1) Nonaccrual loans are included in the daily average loan balances
     outstanding.
 (2) The yield on tax-exempt loans and securities is computed on a tax-
      equivalent basis using a tax rate of 34%.
</TABLE>
                                  -18-
<PAGE>
 PROVISION FOR LOAN LOSSES
 Management determines the adequacy of the provision for loan losses based
 on past loan experience, current economic conditions, composition of the
 loan portfolio, and the potential for future loss.  Accordingly, the
 amount charged to expense is based on management's evaluation of the loan
 portfolio.  It is the Company's policy that when available information
 confirms that specific loans and leases, or portions thereof, including
 impaired loans, are uncollectible, these amounts are promptly charged off
 against the allowance.  The provision for loan losses was $450 for the
 three months ended September 30, 2002, and $150 for the three months ended
 September 30, 2001.  Net charge-offs as a percentage of average loans
 outstanding were .12% and .02% during the three months ended September 30,
 2002 and 2001, respectively.

 At September 30, 2002 nonaccrual loans included $587 of loan principal to
 a borrower secured by non real-estate commercial collateral.  During
 September 2002, the Company was notified of the borrower's bankruptcy.
 The Bank was not the lead lender in the commercial relationship, and due
 to inadequate collateral protection, an additional $270 of loan loss
 provisions were recorded to cover estimated principal losses not
 specifically identified and reserved previously.  During October 2002, a
 charge-off of $376 was authorized and recorded.  The remaining principal
 balance on this relationship of approximately $211 is fully reserved in
 the allowance for loan losses as of September 30, 2002 from provisions
 made prior to September 30, 2002.

 Nonperforming loans are reviewed to determine exposure for potential loss
 within each loan category.  The adequacy of the allowance for loan losses
 is assessed based on credit quality and other pertinent loan portfolio
 information.  The adequacy of the allowance and the provision for loan
 losses is consistent with the composition of the loan portfolio and recent
 credit quality history.

 NONINTEREST INCOME

 Noninterest income increased $484 to $841 during the three months ended
 September 30, 2002, from $357 in the comparable third quarter of 2001.
 There were no gains or losses on securities during the three months ended
 September 30, 2002 and 2001.  Service fees on deposit accounts increased
 $88, or 35.8%, for the three months ended September 30, 2002 from the
 three months ended September 30, 2001.  During the first quarter 2002, the
 Bank began to offer a new overdraft protection product that increased the
 level of collected service fees.  In addition, commercial deposit account
 service charges have increased due to reduced customer "earnings credits"
 which are based on the declining short-term deposit interest rates
 experienced by the market as whole.

 The Company continued to earn a significant amount of income from the sale
 of long-term fixed rate mortgage loans to outside investors.  The Bank
 does not retain such fixed rate loans as part of its asset liability
 management strategy.  Gain on sale of such loans was $310 in September
 2002 compared to $34 during September 2001 for an increase of $276.  The
 majority of loans sold to outside investors continue to be serviced by the
 Bank directly with the customer.  At September 30, 2002, the Bank serviced
 $64,780 of loans for outside investors compared to $18,848 serviced at
 September 30, 2001.  The Bank has seen customer demand for fixed rate
                                  -19-
<PAGE>
 mortgages increase as long-term fixed interest rates in the overall market
 reached historical low levels.  The gain on sale of loans during the
 quarter ended September 30, 2002 was increased $167 from capitalization of
 originated mortgage servicing rights.  At September 30, 2002, mortgage
 servicing rights totaled $534, which were carried at amortized cost.
 There were no mortgage servicing rights recorded at September 30, 2001.
 Growth in loan sale income has come primarily from new customers and not
 refinancing of loans already serviced by the Bank for others.  As of
 September 30, 2002, approximately 86% of the $36 million of sold loans
 originated during calendar 2001 with servicing rights retained are still
 outstanding and serviced by the bank.

 During the past quarter, the Bank introduced a new annuity investment
 product for customers looking for a higher yield than available on
 traditional certificates of deposit.  The product generated an additional
 $47 of commission income during the third quarter 2002.  Total investment
 and insurance product commissions increased $62 to $93 in the quarter
 ended September 30, 2002 compared to $31 for September 2001.

 The remaining increase in noninterest income came primarily from an
 increase in debit card interchange income and mortgage servicing fees,
 accounting for approximately $44 of the increase of $58 in other
 noninterest income during the quarter ended September 30, 2002 compared to
 the third quarter of 2001.

 NONINTEREST EXPENSE

 Noninterest operating expenses increased $229, or 12.3% to $2,097 in
 September 2002 compared to $1,868 during September 2001.  However,
 operating costs as a percentage of average assets decreased from 2.36
 percent in September 2001 to 2.34 percent in the current quarter.  The
 majority of the increase in operating expenses was from additional
 salaries, wages, and benefits paid to employees.  Average wages and
 benefits before year-end incentive compensation dependant upon overall
 Company profitability was $45,138 per full time equivalent employee (FTE)
 during the quarter ended September 30, 2002 compared to $43,578 per FTE in
 the third quarter 2001 for an increase of 3.6% during the past 12 months.
 Separate from salaries and wages, noninterest expenses decreased $9, or
 1.1%.  Additional wage and other operating costs have been offset by
 increased revenue, as the expense efficiency ratio has improved from 55.4%
 in September 2001, to 49.5% in the current quarter.
                                  -20-
 ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 There has been no material change in the information provided in response
 to Item 7A of the Company's Form 10-K for the year ended December 31,
 2001.

 ITEM 4.  CONTROLS AND PROCEDURES

 The Company maintains controls and other procedures that are designed to
 ensure that information required to be disclosed in the Company's reports
 under the Securities Exchange Act of 1934 (the "Exchange Act") is
 recorded, processed, summarized, and reported in accordance with
 Securities and Exchange Commission rules, and that such information is
 accumulated and communicated to the Company's management, including the
<PAGE>
 President and Chief Executive Officer and Chief Financial Officer, as
 appropriate, to allow timely decisions regarding required disclosure.
 Management necessarily applied its judgment in assessing the costs and
 benefits of such controls and procedures which, by their nature, can
 provide only reasonable assurance regarding management's control
 objectives.

 Within 90 days prior to the date of this report, the Company carried out
 an evaluation, under the supervision and with the participation of the
 Company's management, including the President and Chief Executive Officer
 along with the Chief Financial Officer, of the effectiveness of the design
 and operation of the Company's disclosure controls and procedures pursuant
 to Exchange Act Rule 13a-14. Based upon the foregoing, the President and
 Chief Executive Officer along with the Chief Financial Officer concluded
 that the Company's disclosure controls and procedures are effective in
 timely alerting them to material information relating to the Company
 (including its consolidated subsidiaries) required to be included in the
 Company's Exchange Act reports. There have been no significant changes in
 the Company's internal controls or in other factors which could
 significantly affect internal controls subsequent to the date the Company
 carried out its evaluation.
                                  -21-
                        PART II - OTHER INFORMATION

 Item 6.  Exhibits and Reports on Form 8-K:

 (a) Exhibits.

 The following exhibits have been filed with the Securities and Exchange
 Commission.  Exhibits filed as part of this report, and listed below, are
 set forth on the Exhibit Index which follows the signature page.

   Exhibit
   NUMBER                     DESCRIPTION

   3.1    Restated Articles of Incorporation, as amended (incorporated by
          reference to Exhibit 3.1 to the Company's Annual Report on Form
          10-K for the fiscal year ended December 31, 2000)

   3.2    Bylaws (incorporated by reference to Exhibit 3.2 to the Company's
          Annual Report on Form 10-K for the fiscal year ended December 31,
          2000)

   4.1    Articles of Incorporation and Bylaws (see Exhibits 3.1 and 3.2)

  10.1    Bonus Plan of Directors of the Bank (incorporated by reference to
          Exhibit 10.1 to the Company's Annual Report on Form 10-K for the
          fiscal year ended December 31, 2000)

  10.2    Non-Qualified Retirement Plan for Directors of the Bank
          (incorporated by reference to Exhibit 10.2 to the Company's
          Annual Report on Form 10-K for the fiscal year ended December
          31, 2000)
<PAGE>
  10.3    Senior Management Incentive Compensation Plan (incorporated by
          reference to Exhibit 10.4 to the Company's Quarterly Report on
          Form 10-Q for the period ended June 30, 2000)*

  10.4    Consulting Agreement with Chairman of the Board (incorporated by
          reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K
          for the fiscal year ended December 31, 2000)*

  10.5    2001 Stock Option Plan (incorporated by reference to Exhibit 10.5 to
          the Company's Quarterly Report on Form 10-Q for the period ended
          June 30, 2001)*

  21.1    Subsidiaries of the Company (incorporated by reference to Exhibit
          21.1 to the Company's Annual Report on Form 10-K for the fiscal year
          ended December 31, 2000)

  99.1    Certification under Section 906 of Sarbanes-Oxley Act of 2002.

      *Denotes Executive Compensation Plans and Arrangements.
                                  -22-
 (b) Reports on Form 8-K:

     FORM 8-K DATED JULY 18, 2002.  The Company filed a current report on Form
     8-K on July 18, 2002, reporting earnings for the quarter ended June 30,
     2002 under Item 5 and additional related disclosure under Item 9,
     Regulation FD Disclosure.
                                  -23-

                                 SIGNATURES

 Pursuant to the requirements of the Securities Exchange Act of 1934, the
 registrant has duly caused this report to be signed on its behalf by the
 undersigned thereunto duly authorized.


                              PSB HOLDINGS, INC.



 November 14, 2002            SCOTT M. CATTANACH
                              Scott M. Cattanach
                              Treasurer

                              (On behalf of the Registrant and as
                               Principal Financial Officer)
                                  -24-
<PAGE>
                          CERTIFICATIONS

     I, David K. Kopperud, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of PSB
 Holdings, Inc. (the "registrant");

     2.   Based on my knowledge, this quarterly report does not contain any
 untrue statement of a material fact or omit to state a material fact
 necessary to make the statements made, in light of the circumstances under
 which such statements were made, not misleading with respect to the period
 covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other
 financial information included in this quarterly report, fairly present in
 all material respects the financial condition, results of operations and
 cash flows of the registrant as of, and for, the periods presented in this
 quarterly report;

     4.   The registrant's other certifying officer and I are responsible
 for establishing and maintaining disclosure controls and procedures (as
 defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
 have:

          (a)  designed such disclosure controls and procedures to ensure
 that material information relating to the registrant, including its
 consolidated subsidiaries, is made known to us by others within those
 entities, particularly during the period in which this quarterly report is
 being prepared;

          (b)  evaluated the effectiveness of the registrant's disclosure
 controls and procedures as of a date within 90 days prior to the filing
 date of this quarterly report (the "Evaluation Date"); and

          (c)  presented in this quarterly report our conclusions about the
 effectiveness of the disclosure controls and procedures based on our
 evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officer and I have disclosed,
 based on our most recent evaluation, to the registrant's auditors and the
 audit committee of registrant's board of directors (or persons performing
 the equivalent function):

          (a)  all significant deficiencies in the design or operation of
 internal controls which could adversely affect the registrant's ability to
 record, process, summarize and report financial data and have identified
 for the registrant's auditors any material weaknesses in internal
 controls; and

          (b)  any fraud, whether or not material, that involves management
 or other employees who have a significant role in the registrant's
 internal controls; and
                                  -25-
     6.   The registrant's other certifying officer and I have indicated in
 this quarterly report whether or not there were significant changes in
 internal controls or in other factors that could significantly affect
<PAGE>
 internal controls subsequent to the date of our most recent evaluation,
 including any corrective actions with regard to significant deficiencies
 and material weaknesses.


 Date:  November 14, 2002


                              DAVID K. KOPPERUD
                              David K. Kopperud
                              President and Chief Executive Officer
                                  -26-


                          CERTIFICATIONS

     I, Scott M. Cattanach, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of PSB
 Holdings, Inc. (the "registrant");

     2.   Based on my knowledge, this quarterly report does not contain any
 untrue statement of a material fact or omit to state a material fact
 necessary to make the statements made, in light of the circumstances under
 which such statements were made, not misleading with respect to the period
 covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other
 financial information included in this quarterly report, fairly present in
 all material respects the financial condition, results of operations and
 cash flows of the registrant as of, and for, the periods presented in this
 quarterly report;

     4.   The registrant's other certifying officer and I are responsible
 for establishing and maintaining disclosure controls and procedures (as
 defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
 have:

          (a)  designed such disclosure controls and procedures to ensure
 that material information relating to the registrant, including its
 consolidated subsidiaries, is made known to us by others within those
 entities, particularly during the period in which this quarterly report is
 being prepared;

          (b)  evaluated the effectiveness of the registrant's disclosure
 controls and procedures as of a date within 90 days prior to the filing
 date of this quarterly report (the "Evaluation Date"); and

          (c)  presented in this quarterly report our conclusions about the
 effectiveness of the disclosure controls and procedures based on our
 evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officer and I have disclosed,
 based on our most recent evaluation, to the registrant's auditors and the
 audit committee of registrant's board of directors (or persons performing
 the equivalent function):
<PAGE>
          (a)  all significant deficiencies in the design or operation of
 internal controls which could adversely affect the registrant's ability to
 record, process, summarize and report financial data and have identified
 for the registrant's auditors any material weaknesses in internal
 controls; and

          (b)  any fraud, whether or not material, that involves management
 or other employees who have a significant role in the registrant's
 internal controls; and
                                  -27-
     6.   The registrant's other certifying officer and I have indicated in
 this quarterly report whether or not there were significant changes in
 internal controls or in other factors that could significantly affect
 internal controls subsequent to the date of our most recent evaluation,
 including any corrective actions with regard to significant deficiencies
 and material weaknesses.


 Date:  November 14, 2002



                              SCOTT M. CATTANACH
                              Scott M. Cattanach
                              Treasurer
                              (Principal Financial Officer)
                                  -28-

                              EXHIBIT INDEX
                                   to
                                FORM 10-Q
                                   of
                           PSB HOLDINGS, INC.
          for the quarterly period ended September 30, 2002
               Pursuant to Section 102(d) of Regulation S-T
                      (17 C.F.R. section 232.102(d))



 The following exhibits are filed as part this report:

 99.1  Certification under Section 906 of Sarbanes-Oxley Act of 2002.
                                  -29-