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, 2005
                                      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:  0-26480

                              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
                                 P.O. BOX 1686
                            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

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
                              Yes ____     No   X

  The number of common shares outstanding at November 4, 2005 was 1,712,771.
<PAGE>
                              PSB HOLDINGS, INC.

                                   FORM 10-Q

                       Quarter Ended September 30, 2005


                                                                       Page No.
PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Balance Sheets
              September 30, 2005 (unaudited) and December 31,
              2004 (derived from audited financial statements)               1

              Consolidated Statements of Income
              Three Months and Nine Months Ended September 30,
              2005 and 2004 (unaudited)                                      2

              Consolidated Statement of Changes in Stockholders' Equity
              Nine Months Ended September 30, 2005 (unaudited)               3

              Consolidated Statements of Cash Flows
              Nine Months Ended September 30, 2005 and 2004 (unaudited)      4

              Notes to Consolidated Financial Statements                     6

     Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                      9

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk    28

     Item 4.  Controls and Procedures                                       28


PART II. OTHER INFORMATION

     Item 6.  Exhibits                                                      29
                                       i
<PAGE>
<TABLE>
<CAPTION>
                        PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

PSB HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2005 (unaudited), December 31, 2004 (derived from audited
financial statements)

(dollars in thousands, except per share data)                        September 30,  December 31,
                                                                          2005          2004
<S>                                                                  <C>          <C>
ASSETS
Cash and due from banks                                              $  11,978    $  12,680
Interest-bearing deposits and money market funds                         3,324        3,265
Federal funds sold                                                      11,683        7,379
Cash and cash equivalents                                               26,985       23,324

Securities available for sale (at fair value)                           78,598       68,894
Federal Home Loan Bank stock (at cost)                                   2,989        2,874
Loans held for sale                                                        451          342
Loans receivable, net of allowance for loan losses of $4,200
   and $4,157, respectively                                            363,428      343,923
Accrued interest receivable                                              2,108        1,744
Foreclosed assets                                                          313            7
Premises and equipment                                                  12,737       12,432
Mortgage servicing rights, net                                             880          839
Cash surrender value of bank-owned life insurance                        4,674           -
Other assets                                                             1,541          595
TOTAL ASSETS                                                         $ 494,704    $ 454,974

LIABILITIES
Non-interest-bearing deposits                                         $ 56,653     $ 51,635
Interest-bearing deposits                                              335,497      306,590
   Total deposits                                                      392,150      358,225

Federal Home Loan Bank advances                                         52,000       52,000
Other borrowings                                                         4,090        8,565
Junior subordinated debentures                                           7,732           -
Accrued expenses and other liabilities                                   3,089        2,568
   Total liabilities                                                   459,061      421,358

STOCKHOLDERS' EQUITY
Common stock - no par value with a stated value of $1 per share:
   Authorized - 3,000,000 shares
   Issued - 1,887,179 shares                                             1,887        1,887
Additional paid-in capital                                               9,655        9,672
Retained earnings                                                       28,026       25,281
Accumulated other comprehensive income (loss)                              (67)         384
Treasury stock, at cost - 174,408 and 167,586 shares, respectively      (3,858)      (3,608)
   Total stockholders' equity                                           35,643       33,616

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           $ 494,704    $ 454,974
</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)                               2005     2004      2005     2004
<S>                                                           <C>      <C>      <C>      <C>
Interest and dividend income:
   Loans, including fees                                      $ 5,734  $ 4,882  $ 16,518 $ 14,150
   Securities:
      Taxable                                                     488      454     1,407    1,368
      Tax-exempt                                                  247      247       725      735
   Other interest and dividends                                   137       55       260      147

         Total interest and dividend income                     6,606    5,638    18,910   16,400

Interest expense:
   Deposits                                                     2,403    1,543     6,355    4,194
   FHLB advances                                                  532      515     1,589    1,485
   Other borrowings                                                48       59       237      209
   Junior subordinated debentures                                 115        -       119        -
         Total interest expense                                 3,098    2,117     8,300    5,888

Net interest income                                             3,508    3,521    10,610   10,512
Provision (credit) for loan losses                                (50)     195       130      675

Net interest income after provision (credit) for loan losses    3,558    3,326    10,480    9,837

Noninterest income:
   Service fees                                                   296      320       880      933
   Mortgage banking                                               287      187       691      655
   Investment and insurance sales commissions                     159      164       531      345
   Net gain on sale of securities                                   -        -         6      111
   Increase in cash surrender value of life insurance              47        -       113        -
   Other noninterest income                                       117       93       435      315

         Total noninterest income                                 906      764     2,656    2,359

Noninterest expense:
   Salaries and employee benefits                               1,744    1,718     5,014    4,813
   Occupancy and facilities                                       436      445     1,308    1,107
   Loss on abandonment of premises and equipment                    -        -         -      329
   Data processing and other office operations                    192      155       532      502
   Advertising and promotion                                       73       97       231      195
   Other noninterest expenses                                     439      418     1,219    1,403

        Total noninterest expense                               2,884    2,833     8,304    8,349

Income before provision for income taxes                        1,580    1,257     4,832    3,847
Provision for income taxes                                        514      510     1,555    1,364

Net income                                                    $ 1,066  $   747  $  3,277 $  2,483
Basic earnings per share                                      $  0.62  $  0.43  $   1.91 $   1.44
Diluted earnings per share                                    $  0.62  $  0.43  $   1.90 $   1.42
</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
PSB HOLDINGS, INC
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

Nine months ended September 30, 2005 - unaudited
                                                                       Accumulated
                                                                          Other
                                                     Additional       Comprehensive
                                              Common  Paid-in   Retained Income  Treasury
(dollars in thousands)                         Stock  Capital   Earnings (Loss)    Stock     Totals
<S>                                          <C>      <C>      <C>       <C>    <C>        <C>
Balance January 1, 2005                      $ 1,887  $ 9,672  $ 25,281  $ 384  $ (3,608)  $ 33,616

Comprehensive income:
   Net income                                                     3,277                       3,277
   Unrealized loss on securities available
      for sale, net of tax                                                (449)                (449)
   Reclassification adjustment for security
      gain included in net income, net of tax                               (2)                  (2)

         Total comprehensive income                                                           2,826

Purchase of treasury stock                                                          (318)      (318)
Proceeds from stock options issued out
   of treasury                                            (17)                        65         48
Distribution of treasury stock in settlement
   of liability to Company directors                                                   3          3
Cash dividends declared $.31 per share                             (532)                       (532)

Balance September 30, 2005                   $ 1,887  $ 9,655  $ 28,026  $ (67) $ (3,858)  $ 35,643
</TABLE>
                                       3
<PAGE>
<TABLE>
<CAPTION>
PSB HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 2005 and 2004 - unaudited

                                                                     2005        2004
<S>                                                              <C>         <C>
Cash flows from operating activities:
   Net income                                                    $  3,277    $  2,483
   Adjustments to reconcile net income to net
      cash provided by operating activities:
         Provision for depreciation and net amortization            1,276         885
         Provision for loan losses                                    130         675
         Deferred net loan origination costs                         (394)          -
         Gain on sale of loans                                       (492)       (542)
         Provision for servicing right valuation allowance             (6)         32
         Gain on sale of premises and equipment                        (2)          -
         Loss on abandonment of premises and equipment                            329
         (Gain) loss on sale of foreclosed assets                       1         (37)
         Gain on sale of securities                                    (6)       (111)
         Increase in cash surrender value of life insurance          (113)          -
         FHLB stock dividends                                        (115)       (119)
         Changes in operating assets and liabilities:
            Accrued interest receivable                              (364)       (178)
            Other assets                                             (446)       (218)
            Other liabilities                                         524        (922)
   Net cash provided by operating activities                        3,270       2,277

Cash flows from investing activities:
   Proceeds from sale and maturities of:
      Securities available for sale                                 8,754      11,591
   Payment for purchase of:
      Securities available for sale                               (19,264)    (13,955)
   Purchase of FHLB stock                                               -        (271)
   Net increase in loans                                          (19,766)    (29,050)
   Capital expenditures                                              (972)     (5,269)
   Proceeds from sale of premises and equipment                         2           -
   Proceeds from sale of foreclosed assets                             69           7
   Purchase of bank-owned life insurance                           (4,561)          -
   Net cash used in investing activities                          (35,738)    (36,947)

Cash flows from financing activities:
   Net increase in non-interest-bearing deposits                    5,018       1,513
   Net increase in interest-bearing deposits                       28,907      34,581
   Proceeds from long-term FHLB advances                           19,000      13,000
   Repayments of long-term FHLB advances                          (19,000)    (10,000)
   Net decrease in other borrowings                                (4,475)     (3,668)
   Proceeds from issuance of junior subordinated debentures         7,481           -
   Dividends declared                                                (532)       (518)
   Proceeds from issuance of stock options                             48          11
   Purchase of treasury stock                                        (318)       (628)
   Net cash provided by financing activities                       36,129      34,291

Net increase (decrease) in cash and cash equivalents                3,661        (379)
Cash and cash equivalents at beginning                             23,324      18,927
Cash and cash equivalents at end                                 $ 26,985    $ 18,548
</TABLE>
<PAGE>
                                       4
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
Nine months ended September 30, 2005 and 2004 - unaudited

                                                                               2005        2004
<S>                                                                          <C>         <C>
Supplemental cash flow information:
Cash paid during the period for:
      Interest                                                               $ 8,096     $ 5,814
      Income taxes                                                             1,212       1,520
Noncash investing and financing activities:
      Loans charged off                                                         $ 98        $126
      Loans transferred to foreclosed assets                                     376           -
      Loans originated on sale of foreclosed assets                                -          70
      Distribution of treasury stock in settlement of liability
         to Company directors                                                      3           8
      Common stock of PSB Holdings Statutory Trust I acquired in exchange for
         junior subordinated debentures                                          232           -
</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 ("PSB") 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.  Any
reference to "PSB" refers to the consolidated or individual operations of PSB
Holdings, Inc. and its subsidiary Peoples State Bank.

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 principles have been omitted or
abbreviated.  The information contained in the consolidated financial
statements and footnotes in PSB's 2004 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 assets, and the
valuation of investment securities.
<PAGE>
NOTE 2 - STOCK-BASED COMPENSATION

PSB records expense relative to stock-based compensation using the "intrinsic
value method."  Since the exercise price is equal to the fair value of PSB's
common stock on the date of the award, the intrinsic value of PSB's stock
options is "zero" at the time of the award and no expense is recorded.

As permitted by generally accepted accounting principles, PSB has not adopted
the "fair value method" of expense recognition for stock-based compensation
awards.  Rather, the effects of the fair value method on PSB's earnings are
presented on a pro forma basis.  Because no grants of stock options were made
during the three months and nine months ended September 30, 2005 and 2004,
there was no pro forma impact to net income or earnings per share during these
periods.

Under the terms of an incentive stock option plan adopted during 2001, shares
of unissued common stock are reserved for options to officers and key employees
at prices not less than the fair market value of the shares at the date of the
grant.  These options expire 10 years after the grant date with the first
options scheduled to expire beginning in the year 2011.  As of
September 30, 2005, 21,215 options outstanding were eligible to be exercised at
a weighted average exercise price of $16.06 per share.  No additional shares of
common stock remain reserved for future grants under the option plan approved
by the shareholders.

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:
                                       6
<TABLE>
<CAPTION>
                                                               Three months ended    Nine months ended
(dollars in thousands, except per share data - Unaudited)          September 30,        September 30,
                                                                 2005       2004       2005       2004
<S>                                                         <C>        <C>         <C>         <C>
Net income                                                  $   1,066  $     747   $   3,277   $   2,483

Weighted average shares outstanding                         1,712,771  1,720,436   1,715,957   1,727,736
Effect of dilutive stock options outstanding                   10,156     15,052      10,238      15,158

Diluted weighted average shares outstanding                 1,722,927  1,735,488   1,726,195   1,742,894

Basic earnings per share                                    $    0.62  $    0.43   $    1.91   $    1.44
Diluted earnings per share                                  $    0.62  $    0.43   $    1.90   $    1.42
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 4 - COMPREHENSIVE INCOME

Comprehensive income as defined by current accounting standards for the three
months and nine months ended September 30, 2005 and 2004 is as follows:

                                               Three months ended       Nine months ended
                                                     Sept 30,              Sept 30,
(dollars in thousands - unaudited)              2005       2004         2005      2004
<S>                                          <C>       <C>           <C>       <C>
Net income                                   $ 1,066   $    747      $ 3,277   $ 2,483
Unrealized gain (loss) on securities
  available for sale, net of tax                (139)       666         (449)     (115)
Reclassification adjustment for security
  gain included in net income, net of tax          -          -           (2)      (67)

Comprehensive income                         $   927   $  1,413      $ 2,826   $ 2,301
</TABLE>
NOTE 5 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

Loans receivable are stated at unpaid principal balances plus net deferred loan
origination costs less loans in process and the allowance for loan losses.

Interest on loans is credited to income as earned.  Interest income is not
accrued on loans where management has determined collection of such interest is
doubtful or those loans which are past due 90 days or more as to principal or
interest payments.  When a loan is placed on nonaccrual status, previously
accrued but unpaid interest deemed uncollectible is reversed and charged
against current income.  After being placed on nonaccrual status, additional
income is recorded only to the extent that payments are received or the
collection of principal becomes reasonably assured.  Interest income
recognition on loans considered to be impaired under current accounting
standards is consistent with the recognition on all other loans.

Loan origination fees and certain direct loan origination costs are deferred
and amortized to income over the contractual life of the underlying loan.

The allowance for loan losses is established through a provision for loan
losses charged to expense.  Loans are charged against the allowance for loan
losses when management believes that the collectibility of the principal is
unlikely.  Management believes the allowance for loan losses is adequate to
cover probable credit losses relating to specifically identified loans, as well
as probable credit losses inherent in the balance of the loan portfolio.  In
accordance with current accounting standards, the allowance is provided for
losses that have been incurred as of the balance sheet date.  The allowance is
based on past events and current economic conditions, and does not include the
effects of expected losses on specific loans or groups of loans that are
related to future events or expected changes in economic conditions.  While
management uses the best information available to
                                       7
make its evaluation, future adjustments to the allowance may be necessary if
there are significant changes in economic conditions.

The allowance for loan losses includes specific allowances related to loans
which have been judged to be impaired as defined by current accounting
<PAGE>
standards.  A loan is impaired when, based on current information, it is
probable that PSB will not collect all amounts due in accordance with the
contractual terms of the loan agreement.  Management has determined that
commercial, financial, agricultural, and commercial real estate loans that have
a nonaccrual status or have had their terms restructured meet this definition.
Large groups of homogenous loans, such as residential mortgage and consumer
loans, are collectively evaluated for impairment.  Specific allowances are
based on discounted cash flows of expected future payments using the loan's
initial effective interest rate or the fair value of collateral if the loan is
collateral dependent.

In addition, various regulatory agencies periodically review the allowance for
loan losses.  These agencies may require the subsidiary Bank to make additions
to the allowance for loan losses based on their judgments of collectibility
based on information available to them at the time of their examination.

Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated market value in the aggregate and are
carried as "Loans held for sale" on the balance sheet.  Net unrealized losses
are recognized through a valuation allowance by charges to income.  Gains and
losses on the sale of loans held for sale are determined using the specific
identification method using quoted market prices.

NOTE 6 - FORECLOSED REAL ESTATE

Real estate properties acquired through, or in lieu of, loan foreclosure are to
be sold and are initially recorded at fair value (after deducting estimated
costs to sell) at the date of foreclosure, establishing a new cost basis.
Costs related to development and improvement of property are capitalized,
whereas costs related to holding property are expensed.  After foreclosure,
valuations are periodically performed by management and the real estate is
carried at the lower of carrying amount or fair value less estimated costs to
sell.  Revenue and expenses from operations and changes in any valuation
allowance are included in loss on foreclosed real estate.

NOTE 7 - INCOME TAXES

The Internal Revenue Service (IRS) has audited PSB's federal income tax returns
for 1999 through 2002, and has disallowed a portion of People State Bank's
interest deductions for such years.  The IRS asserts that PSB owes an
additional $184,000 of tax and interest (computed through November 15, 2005).
The IRS's contention is that municipal bonds owned by the Bank's Nevada
investment subsidiary should be treated as owned by the Bank for purposes of
computing the Bank's allowable interest expense.  The IRS has made the same
adjustment for other Wisconsin banks that have Nevada investment subsidiaries.
In August 2005, PSB filed a petition with the United State Tax Court contesting
such adjustment.  PSB believes all tax returns are correct as filed, and, at
this time, no additional tax expense for this adjustment has been recorded.

NOTE 8 - CONTINGENCIES

In the normal course of business, PSB is involved in various legal proceedings.
In the opinion of management, any liability resulting from such proceedings
would not have a material adverse effect on the consolidated financial
statements.
<PAGE>
NOTE 9 - JUNIOR SUBORDINATED DEBENTURES

PSB Holdings Statutory Trust I, a Delaware business trust wholly owned by PSB,
completed the sale of $7,500,000 of Trust Preferred Securities to a pooling
vehicle of other trust preferred securities whose shares were later sold to
private investors (a pooled trust preferred offering).  The Trust used the
proceeds from the offering and the issuance of $232,000 of common stock
ownership in the Trust to purchase $7,732,000 of PSB Junior Subordinated
Debentures from PSB.
                                       8
The Trust Preferred Securities mature in 30 years and have an initial fixed
rate of 5.82% until September 2010.  Following September 2010, the rate is
adjusted quarterly to the three month London Interbank Offered Rate (LIBOR)
plus 1.70%.  The Trust Preferred Securities may be called in part or in full on
September 15, 2010, and quarterly thereafter, with 30 days notice.  The Trust
Preferred Securities are mandatorily redeemable upon the maturity of the
Debentures on September 15, 2035 or upon earlier redemption.

PSB has fully and unconditionally guaranteed all of the obligations of the
Trust.  The guarantee covers the quarterly distributions and payments on
liquidation or redemption of the Trust Preferred Securities, but only to the
extent of funds held by the Trust.  The Trust Preferred Securities qualify
under the risk-based capital guidelines as Tier 1 capital for regulatory
purposes.  PSB used the proceeds from the sales of the debentures for general
corporate purposes and to support continued asset growth through funding
qualifying as regulatory capital.

NOTE 10 - DERIVATIVE INSTRUMENT

PSB uses an interest rate swap to manage its risk associated with fixed rate
liability funding that is subject to changes in fair value.  The contract has
been designated and qualifies as a fair value hedge and is reported at fair
value.  The contract is deemed to be fully effective and, therefore, the change
in fair value of the hedge is offset against the opposite change of fair value
in the liability being hedged.  At the inception of the contract, PSB has
documented its risk management strategy and the hedge's effectiveness.  PSB
interest rate risk management strategy is to change fixed brokered time deposit
interest payments to a floating rate payment to better match adjustable rate
funding with recently originated adjustable rate commercial loans.  Consistent
with the classification of interest payments on the related debt, the cash
settlements associated with the interest rate swap are presented as operating
activities in the statement of cash flows.

During April 2005, PSB entered into a $10,000,000 notional amount interest rate
swap contract under which it pays interest at a floating rate equal to 30 day
LIBOR less 2.5 basis points and receives fixed rate payments of 4.25%.  The
contract is considered to be a fully effective fair value hedge and therefore
changes in the fair value of the interest rate swap directly offset changes to
the fair value of the liability on the balance sheet.  Interest expense
reported on the statement of income is equal to the floating rate paid on the
swap.  Both the swap (by the swap counterparty) and the liability (by PSB) are
callable in April 2006, with additional semi-annual call dates until final
maturity in October 2008.  The fair value liability of the swap at September
30, 2005 of $103,000 is included in other liabilities on the balance sheet.
<PAGE>
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 PSB'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.  The quarterly report on Form 10-Q
describes the business of PSB Holdings, Inc. and its subsidiary Peoples State
Bank as in effect on September 30, 2005, and any reference to "PSB" refers to
the consolidated or individual operations of PSB Holdings, Inc. and Peoples
State Bank.

Forward-looking statements have been made in this document that are subject to
risks and uncertainties.  While PSB 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 PSB's Form 10-K for the year ended December 31, 2004
and, from time to time, in PSB's other filings with the Securities and Exchange
Commission.
                                       9
EXECUTIVE OVERVIEW

This overview summarizes PSB's financial trends and the primary opportunities
and challenges faced by management.  It is intended to assist the reader in
better understanding these trends and management's plan to address them.  In
addition, the near-term issues on which management is most focused are outlined
in general terms as a backdrop for more detailed statistical and narrative
analysis presented in this Quarterly Report on Form 10-Q.

PSB earnings increased substantially during the three and nine months ended
September 30, 2005 ($1,066 and $3,277, respectively) compared to the prior year
periods.  The prior year quarter ended September 30, 2004 net income of $747
included a special charge of $150 after federal tax benefits for settlement of
an income tax audit with the State of Wisconsin regarding PSB's out of state
subsidiary.  Even if this tax settlement is disregarded, earnings per share are
up 19% in the September 2005 quarter compared to last year.

This special tax charge in addition to the $199 loss on abandonment (after tax
benefits) of the prior home office building (located on the same property now
used as a home office by PSB) in the June 2004 quarter lowered net income for
the prior year nine months ended September 2004 of $2,483.  Even if both of
these special charges are disregarded, earnings per share are up 17% for the
nine months ended September 30, 2005 compared to last year.  Refer to Table 10
for additional proforma ratios related to these special charges and the
comparison between 2005 and 2004 income.

Credit quality during all of 2005 has been strong with nonperforming assets to
total assets declining and net loan charge-offs to loans very low.  During the
September 2005 quarter, PSB received repayment of a long-time problem loan for
which specific loss reserves had been allocated.  Combined with a reduction in
loans held on the balance sheet during the quarter, third quarter provision for
loan losses was reduced $80 compared to the June 2005 quarter after being
<PAGE>
reduced $120 in the June 2005 quarter compared to the March 2005 quarter.  For
the nine months ended September 30, 2005 provision for loan losses has declined
$545 compared to 2004, which has contributed to increased earnings over 2004 of
$330 after tax impacts.

Since late in 2004, PSB has strategically expanded into additional commercial
banking products and has invested in people, equipment, and products to serve
larger commercial borrowers.  Loans originated to this customer base are
typically at much lower credit spreads than lending to PSB's traditional small
business customer.  Initially, because this loan growth substantially outpaced
deposit growth, these loans were funded with high-cost funding, primarily
brokered certificates of deposit and high-yield money market and government
funds.  However, changes to reduce fees on commercial demand deposit accounts
in an effort to market more competitive accounts and an emphasis on sale of
demand accounts has increased average quarterly non-interest bearing demand
account balances 11.1% from September 2004 to September 2005.

During the September 2005 quarter, competition in PSB's markets increased with
aggressive pricing from both large bank and community bank competitors.
Internal profit models have in some cases shown competitor pricing to be out of
line with borrower credit and interest rate risk. During the current quarter,
competitor terms on an existing $2.6 million loan were not matched and PSB lost
the relationship.  In addition, on-balance sheet residential mortgage loans
declined $2.9 million in part to borrower construction loans placed into
permanent financing and sold into the secondary market.  In total, loans
receivable, net of allowance for loan losses, decreased $6.8 million as of
September 30, 2005 quarter compared to June 30, 2005.

The flattening yield curve has negatively impacted income by lowering net
margin on earning assets.  For the nine months ended September 30, yield on
earning assets increased 17 basis points in 2005 compared to 2004, while cost
of funding liabilities increased 54 basis points, a ratio of over 3 to 1.
Reduced margin combined with lower loans receivable caused tax adjusted net
interest income in the September 2005 quarter to be flat compared to the
September 2004 quarter despite average asset growth of 12.3% as growth was not
able to outpace declines in income from tighter margins.  Net margin percentage
is expected to continue declining under pressure during the remainder of 2005
and 2006 and expected loan growth during the fourth quarter 2005 is not
expected to increase net interest income over prior year levels.
                                       10
In June 2005, PSB raised $7.5 million of regulatory capital for general
corporate purposes from the issuance of trust preferred securities.  This
capital will support continued asset growth at a minimal cost of capital
without diluting the holdings of existing shareholders.  Despite the new
capital, PSB did not repurchase treasury shares during the September 2005
quarter.  In addition to supporting future asset growth, PSB is evaluating
other uses of capital including continued implementation of its market
expansion plan as described in Item 1 of its 2004 Form 10-K and an expanded
treasury buyback program.

DETAILED MANAGEMENT DISCUSSION AND ANALYSIS

BALANCE SHEET

At September 30, 2005, total assets were $494,704, an increase of $8,474, or
1.7%, over June 30, 2005, and an increase of $39,730, or 8.7%, over December
31, 2004.  Asset growth for the three months and nine months ended September
30, 2005, consisted of:
<PAGE>
<TABLE>
<CAPTION>
                                                                Three months ended  Nine months ended
Increase (decrease) in assets ($000s)                              Sept 30, 2005      Sept 30, 2005
                                                                     $       %          $       %
<S>                                                             <C>        <C>      <C>      <C>
Increase in cash and cash equivalents                           $ 8,723    47.8%    $ 3,661   15.7%
Increase in investment securities                                 6,134     8.5%      9,704   14.1%
Net change in other assets (various categories)                     547     1.5%      3,354   10.2%
Investment in bank-owned life insurance                              47     1.0%      4,674  100.0%
Increase (decrease) in commercial real estate mortgage loans       (935)   -0.2%      1,853    1.1%
Increase (decrease) in residential real estate mortgage loans    (2,937)    3.0%      1,465    1.6%
Increase (decrease) in commercial, industrial and ag. loans      (3,105)   -3.4%     15,019   20.7%

Total increase in assets                                        $ 8,474     1.7%    $39,730    8.7%
</TABLE>
Despite declines in the current quarter, PSB has emphasized commercial purpose
loan originations during 2005, and growth in this type of loan represented
42.3% of the total net increase in assets during the nine months ended
September 30, 2005.  Commercial purpose lending growth is anticipated to be the
greatest portion of asset growth during the remainder of 2005.

Cash and cash equivalents increased $8,723 and investment securities increased
$6,134 during the quarter ended September 30, 2005 from repaid loan proceeds
and a significant increase in core deposits.  Net asset growth for the three
months and nine months ended September 30, 2005, was funded by the following:
<TABLE>
<CAPTION>
                                                                   Three months ended  Nine months ended
Increase (decrease) in liabilities and equity  ($000s)                Sept 30, 2005      Sept 30, 2005
                                                                      $           %        $       %
<S>                                                              <C>          <C>    <C>        <C>
Increase in core deposits (including MMDA)                       $ 16,331       6.5% $ 16,809     6.8%
Increase in stockholders' equity                                      927       2.7%    2,027     6.0%
Increase in junior subordinated debentures                              -       0.0%    7,732   100.0%
Net increase (decrease) in other liabilities (various categories)    (274)     -8.1%      521    20.3%
Increase (decrease) in wholesale certificates of deposit             (929)     -1.3%   17,263    32.0%
Decrease in other borrowings                                       (1,789)    -30.4%   (4,475)  -52.2%
Decrease in retail certificates of deposit > $100                  (2,792)     -4.8%     (147)   -0.3%
Decrease in FHLB advances                                          (3,000)     -5.5%        -     0.0%

Total increase in liabilities and stockholders' equity           $   8,474      1.7% $ 39,730     8.7%
</TABLE>
While the first six months of 2005 were dominated by increases in wholesale
certificates of deposit, the September 2005 quarter saw virtually all funding
growth from core deposits, primarily from growth in
                                       11
municipal deposits of $7.3 million.  Due to loan pay downs during the September
2005 quarter, these higher cost municipal deposits were invested in overnight
federal funds sold providing little net interest income and contributed to a
declining net interest margin for the quarter.  The increase in core deposits
was also used to repay $3,929 of wholesale funding during the September 2005
quarter.  These municipal deposits are typically cyclical and managed as part
of multi-year contracts.  Such deposits are expected to continue to fund loan
growth in future quarters.
<PAGE>
<TABLE>
<CAPTION>
Table 1:  Period-End Loan Composition

                                                        Sept 30,          Sept 30,      December 31, 2004
                                                 Dollars    Dollars Percentage of total    Percentage
(dollars in thousands)                            2005        2004    2005    2004     Dollars  of total
<S>                                           <C>         <C>         <C>     <C>     <C>        <C>
Commercial, industrial and agricultural       $  87,475   $  71,325   23.8%   21.1%   $  72,456   20.8%
Commercial real estate mortgage                 166,384     160,168   45.2%   47.6%     164,531   47.2%
Residential real estate mortgage                 94,476      88,477   25.7%   26.2%      93,011   26.7%
Residential real estate loans held for sale         451          62    0.1%    0.0%         342    0.1%
Consumer home equity                             13,419      10,557    3.6%    3.1%      11,620    3.3%
Consumer and installment                          5,874       6,780    1.6%    2.0%       6,462    1.9%

Totals                                        $ 368,079   $ 337,369  100.0%  100.0%   $ 348,422  100.0%
</TABLE>
The loan portfolio is PSB's primary asset subject to credit risk.  PSB's
process for monitoring credit risks includes monthly analysis of loan quality,
delinquencies, nonperforming 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 against 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.

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), 2) restructured loans until six
consecutive monthly payments are received under the new loan terms, and
3) foreclosed assets.  The aggregate amount of nonperforming assets increased
$125 (4.4%) to $2,934 at September 30, 2005 from $2,809 at December 31, 2004.
Total nonperforming assets as a percentage of total assets decreased to .59% at
September 30, 2005 from .62% at December 31, 2004, and .73% at September 30,
2004.  PSB also tracks delinquencies on a contractual basis quarter to quarter.
Loans contractually delinquent 30 days or more as a percentage of gross loans
were .67% at September 30, 2005 compared to .56% at December 31, 2004, and .71%
at September 30, 2004.  The allowance for loan losses was 1.14% of gross loans
at September 30, 2005 compared to 1.19% at December 31, 2004, and 1.22% at
September 30, 2004.
<PAGE>
<TABLE>
<CAPTION>
Table 2:  Allowance for Loan Losses
                                            Three months ended     Nine months ended
                                                  Sept 30,            Sept 30,
(dollars in thousands)                        2005      2004        2005      2004
<S>                                        <C>       <C>         <C>       <C>
Allowance for loan losses at beginning     $ 4,309   $ 3,906     $ 4,157   $ 3,536

Provision for loan losses                      (50)      195         130       675
Recoveries on loans previously charged-off       5        15          11        22
Loans charged off                              (64)       (9)        (98)     (126)

Allowance for loan losses at end           $ 4,200   $ 4,107     $ 4,200   $ 4,107
</TABLE>
                                       12
<TABLE>
<CAPTION>
Table 3:  Nonperforming Assets

                                                          September 30,      Dec. 31,
(dollars in thousands)                                   2005      2004        2004
<S>                                                   <C>       <C>         <C>
Nonaccrual loans                                      $ 2,383   $ 2,594     $ 2,174
Accruing loans past due 90 days or more                     -         -           -
Restructured loans not on nonaccrual                      238       592         628

Total nonperforming loans                               2,621     3,186       2,802
Foreclosed assets                                         313        52           7

Total nonperforming assets                            $ 2,934   $ 3,238     $ 2,809

Nonperforming loans as a % of gross loans receivable     0.71%     0.94%       0.80%

Total nonperforming assets as a % of total assets        0.59%     0.73%       0.62%
</TABLE>
LIQUIDITY

Liquidity refers to the ability of PSB to generate adequate amounts of cash to
meet PSB's need for cash at a reasonable cost.  PSB 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 and local deposits
continue to comprise the bulk of asset funding and were 64.9% of total assets
at September 30, 2005 compared to 66.9% of total assets at December 31, 2004
and 65.5% at September 30, 2004.  Federal Home Loan Bank advances and broker
and national certificates of deposit continue to represent a significant
portion of PSB's total funding ability, and is expected to remain stable as a
percentage of assets during the remainder of 2005.
<PAGE>
<TABLE>
<CAPTION>
Table 4: Period-end Deposit Composition

                                                                   Sept 30,                   December 31,
                                                          2005               2004                  2004
(dollars in thousands)                                 $       %          $         %          $         %
<S>                                              <C>         <C>     <C>         <C>      <C>         <C>
Non-interest bearing demand                      $  56,653   14.4%   $  52,076    14.8%   $  51,635   14.4%
Interest-bearing demand and savings                 75,512   19.3%      55,024    15.6%      64,574   18.0%
Money market deposits                               65,945   16.8%      65,816    18.7%      68,666   19.2%
Retail time deposits less than $100                 67,567   17.3%      63,823    18.0%      63,993   17.8%

Total core deposits                                265,677   67.8%     236,739    67.1%     248,868   69.4%
Retail time deposits $100 and over                  55,312   14.1%      54,584    15.5%      55,459   15.5%
Broker & national time deposits less than $100       1,726    0.4%       4,889     1.4%       4,594    1.3%
Broker & national time deposits $100 and over       69,435   17.7%      56,296    16.0%      49,304   13.8%

Totals                                           $ 392,150  100.0%   $ 352,508   100.0%   $ 358,225  100.0%
</TABLE>
A significant portion of the increase in core deposits over the prior periods
came from interest bearing demand (NOW) deposits from local governmental
entities.  These deposits are required to be collateralized and carry an
interest rate that adjusts with the overall market.  Because the local
governmental entities are dependent on local tax revenue and state funding for
operations, balances within these accounts may be cyclical during the year.
However, high-yield municipal NOW deposits increased $13,405, or 88% from
September 30, 2004 to September 30, 2005.
                                       13
Wholesale certificates of deposit grew $9,976 since September 2004 and $17,263
since December 2004.  During the second quarter 2005, brokered certificates of
deposit increased $10,000 from one transaction on which an interest rate swap
was also purchased to convert the certificate from fixed to variable payments.
Refer to Note 10 in Item 1 of Form 10-Q for additional information on that
specific transaction.

PSB originates retail certificates of deposit with local depositors under a
program known as the Certificate of Deposit Account Registry System (CDARS) in
which PSB customer deposits (with participation of other banks in the CDARS
network) are able to obtain levels of FDIC deposit insurance coverage in
amounts greater than traditional limits.  For purposes of Table 4 above, these
certificates are included in retail time deposits $100 and over and totaled
$9,378 at September 30, 2005, $7,666 at December 31, 2004, and $8,026 at
September 30, 2004.  Although classified as retail time deposits in the table
above, these balances are required to be classified as broker deposits on PSB's
quarterly regulatory call reports.

PSB's policy is to limit broker and national time (not including CDARS)
deposits to 20% of total assets.  Broker and national deposits as a percentage
of total assets was 14.4%, 11.8%, and 13.8% at September 30, 2005, December 31,
2004, and September 30, 2004, respectively. Broker deposits as a percentage of
total assets is expected to remain stable for the remainder of 2005 as cash and
short-term investments are used to fund anticipated asset growth.
<PAGE>
<TABLE>
<CAPTION>
Table 5: Summary of Balance by Significant Deposit Source

                                                         Sept. 30,          Dec. 31,
(dollars in thousands)                              2005        2004         2004
<S>                                             <C>         <C>          <C>
Total time deposits $100 and over               $ 124,747   $ 110,880    $ 104,763
Total broker and national time deposits            71,161      61,185       53,898
Total retail time deposits                        122,879     118,407      119,452
Core deposits, including money market deposits    265,677     236,739      248,868
</TABLE>
<TABLE>
<CAPTION>
Table 6: Change in September 30, 2005 Deposit Balance since Prior Period Ended

                                                   Sept. 30, 2004    December 31, 2004
(dollars in thousands)                                $       %          $        %
<S>                                             <C>        <C>     <C>         <C>
Total time deposits $100 and over               $ 13,867   12.5%   $ 19,984    19.1%
Total broker and national time deposits            9,976   16.3%     17,263    32.0%
Total retail time deposits                         4,472    3.8%      3,427     2.9%
Core deposits, including money market deposits    28,938   12.2%     16,809     6.8%
</TABLE>
<TABLE>
<CAPTION>
Table 7:  Available but Unused Funding Sources other than Retail Deposits

                                             Sept. 30, 2005      December 31, 2004
                                          Unused, but  Amount   Unused, but  Amount
(dollars in thousands)                     Available    Used     Available    Used
<S>                                        <C>       <C>         <C>      <C>
Overnight federal funds purchased           $32,500   $     -    $22,500       $ -
FHLB advances under blanket mortgage lien    28,773    52,000     14,855    52,000
Repurchase agreements                        17,505     4,090     12,871     8,565
Wholesale market time deposits               27,780    71,161     37,097    53,898

Total available but unused funds           $106,558  $127,251    $87,323  $114,463

Funding as a percent of total assets           21.5%     25.7%      19.2%     25.2%
</TABLE>
                                       14
Despite the increased usage of broker deposits, PSB continues to have adequate
sources of available funding for growth as outlined in Table 7 above.  Unused
FHLB advances available under the blanket mortgage lien have increased $13,918,
or 93.7% since December 31, 2004 due to a change by the FHLB in the September
2005 quarter to allow borrowing up to 75% of the qualifying mortgage collateral
base.  Previously, that base had been 61%.  As the securities portfolio has
increased in size $9,704, the amount available for pledging increased $4,634
since December 31, 2004.  As described previously, an individual $10 million
brokered certificate taken in the June 2005 quarter reduced brokered time
deposit capacity since December 31, 2004, falling $9,317, or 25.1%.

Overnight federal funds purchased totaling $32,500 are available through four
primary correspondent banks.  These lines are not supported by a formal written
arrangement, but represent best efforts ability on the part of correspondent
<PAGE>
banks to raise these funds.  During the nine months ended September 30, 2005,
average daily federal funds purchased were $3,134 compared to $2,647 during the
same period in 2004.  The cost of these funds is subject to change based on
changes in the discount rate as determine by the Federal Reserve.  PSB may
maintain a continuous position in overnight federal funds purchased generally
up to 14 days before amounts must be liquidated for at least one business day.
Consideration of the need for federal funds purchased is part of PSB's daily
cash management and funding procedures and represents the first source of
liquidity as needed.

Table 8 below presents maturity repricing information as of September 30,
2005.  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 generally
considered to reprice beyond five years.

2.    Nonaccrual loans are considered to reprice beyond five 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.

4.    Impact of rising or falling interest rates is based on a parallel yield
curve change that is fully implemented within a 12-month time horizon.
                                       15
<PAGE>
<TABLE>
<CAPTION>
Table 8:  Interest Rate Sensitivity Gap Analysis

                                                                September 30, 2005
(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                              $ 141,074   $ 24,944   $ 45,658   $ 57,744   $ 79,108   $ 19,551   $368,079
 Securities                             6,201      2,136      7,698     14,745     33,150     14,668     78,598
 FHLB stock                             2,989                                                             2,989
 CSV bank-owned life ins.                                                                      4,674      4,674
 Other earning assets                  15,007                                                            15,007

Total                               $ 165,271   $ 27,080   $ 53,356   $ 72,489   $112,258   $ 38,893   $469,347
Cumulative rate
 sensitive assets                   $ 165,271   $192,351   $245,707   $318,196   $430,454   $469,347

Interest-bearing liabilities
 Interest-bearing deposits          $ 135,605   $ 18,179   $ 55,751   $ 41,807   $ 42,673   $ 41,482   $335,497
 FHLB advances                          2,000      6,000                 7,000     37,000                52,000
 Other borrowings                       1,344        250        737        511      1,248                 4,090
 Junior subordinated debentures                                                     7,732                 7,732

Total                               $ 138,949   $ 24,429   $ 56,488   $ 49,318   $ 88,653   $ 41,482   $399,319
Cumulative interest
 sensitive liabilities              $ 138,949   $163,378   $219,866   $269,184   $357,837   $399,319

Interest sensitivity gap for
 the individual period              $  26,322   $  2,651   $ (3,132)  $ 23,171   $ 23,605   $ (2,589)
Ratio of rate sensitive assets to
 rate sensitive liabilities for
 the individual period                  118.9%     110.9%      94.5%     147.0%     126.6%      93.8%

Cumulative interest
 sensitivity gap                    $  26,322   $ 28,973   $ 25,841   $ 49,012   $ 72,617   $ 70,028
Cumulative ratio of rate sensitive
 assets to rate sensitive liabilities   118.9%     117.7%     111.8%     118.2%     120.3%     117.5%
</TABLE>
At September 30, 2005, if interest rates had changed 200 basis points, the 365-
day cumulative ratio of rate sensitive assets to rate sensitive liabilities
would have changed from approximately 112% to 109% (if up 200 basis points) and
123% (if down 200 basis points), respectively.  At December 31, 2004, the 365-
day cumulative ratio of rate sensitive assets to rate sensitive liabilities
would have changed from approximately 101% to 95% (if up 200 basis points) and
105% (if down 100 basis points), respectively.  At September 30, 2004, if
interest rates had risen 200 basis points or had fallen 100 basis points, the
365-day cumulative ratio of rate sensitive assets to rate sensitive liabilities
would have changed from approximately 101% to 92% (if up 200 basis points) and
104% (if down 100 basis points), respectively.  Beginning in June 2005, PSB
began to model downward rate change projections up to 200 basis points, rather
than 100 basis points, reflecting the short-term rate increases from
historically low interest rate floors during the past twelve months.

The Asset/Liability Committee uses financial modeling techniques that measure
the interest rate risk.  Policies established by PSB's Asset/Liability
<PAGE>
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.
PSB also uses various policy measures to assess the adequacy of PSB's liquidity
and interest rate risk as described below.

Basic Surplus

PSB 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,
                                       16
as those funds are subject to availability based on the correspondent bank's
own liquidity needs and therefore are not guaranteed contractual funds.  PSB's
basic surplus, including available open line of credit FHLB advances not yet
utilized at September 30, 2005, December 31, 2004, and September 30, 2004, was
8.2%, 7.1%, and 6.6%, respectively and above the 5% minimum required by policy.
The increase in the basic surplus is primarily a result of increased FHLB
borrowing capacity from the FHLB's change to increase the loan to qualifying
collateral ratio.

Interest Rate Risk Limits

PSB 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, PSB 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, 2005, December 31, 2004, and September 30, 2004, net
interest income for the next 12 months was projected to increase 1.15%,
decrease .04%, and increase .83%, respectively, if rates increase 200 basis
points.  At September 30, 2005, net interest income for the next 12 months was
projected to decrease 4.05% if rates decrease 200 basis points.  At December
31, 2004, and September 30, 2004, net interest income for the next 12 months
was projected to decrease 2.15% and 2.46%, respectively, if rates decrease 100
basis points.  These changes are within policy requirements.

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.  PSB'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, 2005, December 31, 2004, and September 30, 2004, PSB's core
funding utilization ratio was projected to be 52%, 46% and 53%, respectively,
after a rate increase of 200 basis points and was therefore within policy
requirements.
<PAGE>
CAPITAL RESOURCES

Stockholders' equity at September 30, 2005 increased $2,027 to $35,643, or 6.0%
from $33,616 at December 31, 2004.  After stock buybacks of $318 and cash
dividends declared of $532, net income retained during the nine months ended
September 30, 2005 was $2,427.  However, capital decreased $451 since December
31, 2004 from a decline in the unrealized gain on securities available for sale
(net of tax effects) as increases in short-term rates reduced the value of
fixed rate debt securities.  All other net increases in capital totaled $51.
Stockholders' equity included unrealized losses on securities available for
sale, net of their tax effect, of $67 at September 30, 2005, compared to
unrealized gains of $384 at December 31, 2004.

The adequacy of PSB'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, 2005 and December 31, 2004, PSB's
subsidiary bank's Tier 1 risk-based capital ratio, total risk-based capital,
and Tier 1 leverage ratio were in excess of regulatory minimums and were
classified as "well-capitalized."  Failure to remain well-capitalized would
prevent PSB from obtaining future wholesale broker time deposits which have
been an important source of funding during the past several years.  Average
tangible stockholders' equity (book basis) to average assets was 7.14% during
the September 2005 quarter, 7.49% during the December 2004 quarter, and 7.46%
during the September 2004 quarter.

During 2005 regulatory capital increased $7,500 as PSB issued pooled trust
preferred securities, which qualify as Tier 1 regulatory capital although
presented as junior subordinated debentures under current accounting standards.
The junior subordinated debentures carry a fixed interest rate of 5.82% through
September 2010,
                                       17
after which interest is adjusted quarterly to 90 day LIBOR plus 1.70%.  This
additional regulatory capital will be used for general corporate purposes
including supporting additional asset growth.  As noted in the Executive
Summary, PSB is also evaluating other uses of capital including continued
implementation of its market expansion plan as described in Item 1 of its 2004
Form 10-K and an expanded treasury buyback program.

PSB maintains an annual, ongoing share repurchase program of up to 1% of
outstanding shares per year but repurchased no shares during the quarter ended
September 30, 2005.  During the nine months ended September 30, 2005, 10,000
shares at an average price of $31.80 per share were purchased under this
program.  In order to fund an exercise of employee stock options, exercised at
a price of $15.83 per share, 3,058 shares of the buyback were re-issued.  PSB
anticipates that it will purchase another 7,200 shares during 2005 on the open
market at prices then in effect.
                                       18
<PAGE>
<TABLE>
<CAPTION>
Table 9:  Capital Ratios - Consolidated Holding Company

                                                                        Sept 30,         Dec 31.
(dollars in thousands)                                             2005         2004       2004
<S>                                                          <C>          <C>         <C>
Stockholders' equity                                         $   35,643   $   33,315  $   33,616
Junior subordinated debentures, net                               7,500            -           -
Disallowed mortgage servicing right assets                          (88)         (81)        (84)
Unrealized (gain) loss on securities available for sale              67         (662)       (384)

Tier 1 regulatory capital                                        43,122       32,572      33,148
Add: allowance for loan losses                                    4,200        4,107       4,157

Total regulatory capital                                     $   47,322   $   36,679  $   37,305

Total assets                                                 $  494,704   $  444,603  $  454,974
Disallowed mortgage servicing right assets                          (88)         (81)        (84)
Unrealized (gain) loss on securities available for sale              67         (662)       (384)

Tangible assets                                              $  494,683   $  443,860  $  454,506

Risk-weighted assets (as defined by current regulations)     $  381,408   $  347,014  $  350,224

Tier 1 capital to average tangible assets (leverage ratio)        8.75%         7.42%       7.40%
Tier 1 capital to adjusted risk-weighted assets                  11.31%         9.39%       9.46%
Total capital to adjusted risk-weighted assets                   12.41%        10.57%      10.65%
</TABLE>
RESULTS OF OPERATIONS

Net income for the quarter ended September 30, 2005 was $1,066, or $.62 for
basic and diluted earnings per share.  Comparatively, net income for the
quarter ended September 30, 2004 was $747, or $.43 per share for basic and
diluted earnings per share.  The prior year September 2004 quarter included a
special charge of $.09 per share ($150 after tax benefits) for a standardized
settlement of a Wisconsin income tax audit concerning PSB's out of state
subsidiary, as did many Wisconsin banks with out of state subsidiaries.
September 2004 earnings before the special charge were $.52 per share.

Net income for the nine months ended September 30, 2005 was $3,277, or $1.91
for basic and $1.90 for diluted earnings per share.  Comparatively, net income
for the nine months ended September 30, 2004 was $2,483, or $1.44 for basic and
$1.42 for diluted earnings per share.  The June 2004 included a special charge
of $.11 per share ($199 after tax benefits) for write-off of investment in the
old home office.  Diluted earnings per share for the nine months ended
September 2004 before the special income tax and abandonment charges were $1.62
per share.
                                       19
Both the September quarterly and year-to-date periods saw increased earnings
over last year and 2005 net income is expected to be in a range of $4.3 million
to $4.6 million.  Table 10 below indicates the return on average assets, return
on average equity, and key operating expense ratios for the quarterly and year-
to-date periods as reported and adjusted for the special charges in 2004.
<PAGE>
<TABLE>
<CAPTION>
Table 10:  Proforma Impact of Special 2004 Charges on Financial Ratios

                                                Quarter ended Sept 30,     Nine months ended Sept 30,
                                                     Reported  Proforma            Reported   Proforma
                                          2005         2004      2004*     2005       2004      2004**
<S>                                     <C>           <C>       <C>       <C>        <C>       <C>
Net income                              $1,066        $ 747     $ 897     $3,277     $2,483    $2,832
Return on average assets                  0.86%        0.67%     0.81%      0.91%      0.78%     0.89%
Return on average equity                 12.03%        8.98%    10.78%     12.61%      9.99%    11.44%
Efficiency ratio                         63.25%       63.95%    63.95%     60.63%     62.76%    61.27%
Noninterest expense to average assets     2.32%        2.56%     2.56%      2.32%      2.63%     2.57%
<FN>
 * Proforma quarter ended Sept 30, 2004 is before the special charge of
 Wisconsin state income tax settlement in September   2004 of $150, after tax
 benefits.

** Proforma nine months ended Sept 30, 2004 is before the special charges for
 abandonment of home office in June 2004 of $199 and Wisconsin state income
 tax settlement in September 2004 of $150, after tax benefits.
</TABLE>
                                       20
<PAGE>
<TABLE>
<CAPTION>
Table 11:  Financial Summary

(dollars in thousands, except per share data)                               Quarter ended
                                                    Sept 30,     June 30,    March 31,   Dec. 31    Sept.30,
EARNINGS AND DIVIDENDS:                               2005         2005        2005       2004        2004
<S>                                                <C>           <C>         <C>        <C>         <C>
  Net interest income                              $  3,508      $ 3,582     $ 3,520    $ 3,577     $ 3,521
  Provision for loan losses                        $    (50)     $    30     $   150    $   180     $   195
  Other noninterest income                         $    906      $   947     $   803    $   764     $   764
  Other noninterest expense                        $  2,884      $ 2,780     $ 2,640    $ 2,626     $ 2,833
  Net income                                       $  1,066      $ 1,171     $ 1,040    $ 1,043     $   747

  Basic earnings per share (3)                     $   0.62      $  0.68     $  0.60    $  0.61     $  0.43
  Diluted earnings per share (3)                   $   0.62      $  0.68     $  0.60    $  0.60     $  0.43
  Dividends declared per share (3)                 $      -      $ 0.310     $     -    $  0.30     $     -
  Net book value per share                         $  20.81      $ 20.27     $ 19.77    $ 19.55     $ 19.41

  Semi-annual dividend payout ratio                     n/a        24.06%        n/a      28.82%        n/a
  Average common shares outstanding               1,712,771    1,714,134   1,721,058  1,717,394   1,720,436

BALANCE SHEET - AVERAGE BALANCES:

  Loans receivable, net of allowances for loss    $ 369,489    $ 367,948   $ 354,136   $341,997   $ 331,167
  Assets                                          $ 493,035    $ 480,325   $ 465,083  $ 448,591   $ 439,177
  Deposits                                        $ 387,969    $ 376,252   $ 367,394  $ 353,310   $ 347,015
  Stockholders' equity                            $  35,143    $  34,665   $  33,989  $  34,076   $  33,010

PERFORMANCE RATIOS:

  Return on average assets (1)                         0.86%        0.98%       0.91%     0.92%       0.67%
  Return on average stockholders' equity (1)          12.03%       13.55%      12.41%     12.18%      8.98%
  Average tangible stockholders' equity to
    average assets                                     7.14%        7.22%       7.25%      7.49%      7.46%
  Net loan charge-offs to average loans                0.02%        0.01%       0.00%      0.04%      0.00%
  Nonperforming loans to gross loans                   0.71%        0.60%       0.74%      0.80%      0.94%
  Allowance for loan losses to gross loans             1.14%        1.15%       1.18%      1.19%      1.22%
  Net interest rate margin (1)(2)                      3.14%        3.32%       3.40%      3.50%      3.51%
  Net interest rate spread (1)(2)                      2.72%        2.96%       3.05%      3.12%      3.17%
  Service fee revenue as a percent of
    average demand deposits (1)                        2.10%        2.56%       2.19%      2.22%      2.52%
  Noninterest income as a percent
    of gross revenue                                  12.06%       13.00%      11.87%     11.64%     11.93%
  Efficiency ratio (2)                                63.25%       59.53%      59.11%     58.52%     63.95%
  Noninterest expenses to average assets (1)           2.32%        2.32%       2.30%      2.33%      2.56%

STOCK PRICE INFORMATION:

  High                                              $ 32.00      $ 31.85     $ 32.20    $ 33.25    $ 35.25
  Low                                               $ 30.65      $ 30.63     $ 31.85    $ 32.00    $ 33.00
  Market value at quarter-end                       $ 30.70      $ 30.75     $ 31.85    $ 32.10    $ 33.00
<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%.
(3) Due to rounding, cumulative quarterly per share performance may not equal annual per share totals.
</TABLE>
                                       21
<PAGE>
NET INTEREST INCOME

Net interest income is the most significant component of earnings.  Tax
adjusted net interest income decreased $12 (0.3%) from $3,666 for the quarter
ended September 30, 2004 to $3,654 for the current quarter ended September 30,
2005, and increased $97 (0.9%) from $10,943 for the nine months ended September
30, 2004 to $11,040 for the nine months ended September 30, 2005.  Net interest
income has been negatively impacted by a flattening yield curve and competitive
pressures on deposit rates.  Margin on earning assets declined from 3.51% in
the September 2004 quarter, and from 3.32% in the June 2005 quarter to 3.14%
during the September 2005 quarter.  Earning asset yields increased slightly and
were 5.80% at September 2005, 5.78% at June 2005, and 5.54% at September 2004.
However, the cost of interest-bearing liabilities increased from 2.37% during
the quarter ended September 2004 to 2.82% for the June 2005 quarter and 3.08%
for the September 2005 quarter.

PSB updated accounting procedures early during 2005 to improve recognition and
amortization of deferred loan origination fees and costs in accordance with
Statement of Financial Accounting Standard No. 91, Accounting for Nonrefundable
Fees and Costs Associated with Originating or Acquiring Loans ("FAS 91").  This
change is more fully described in this press release under operating expenses.
Tax-adjusted net interest margin before accounting adjustments for FAS 91 would
have been 3.27% during the September 2005 quarter (compared to a reported
3.14%), 3.46% during the June 2005 quarter (compared to a reported 3.32%), and
3.55% in the September 2004 quarter (compared to a reported 3.51%).

The increase in funding costs has been led by interest-bearing core deposits
(excluding retail certificates of deposit), whose average cost increased from
..80% for the quarter ended September 2004 to 1.80% (an increase of 1.00%) for
the quarter ended September 30, 2005.  In addition, time deposit costs have
increased from 2.90% to 3.65% (an increase of .75%) during that same period.
This increase is in response to Federal Reserve discount rate increases that
began in June 2004 and have continued through the current date.  Discount rate
increases since September 2004 through September 30, 2005 totaled 2.00%.  A
portion of future discount rate increases are expected to continue to be
reflected in the core deposit rates.

In addition, a significant portion of asset growth in the nine months ended
September 2005 was funded by high-yield money market and NOW accounts sold to
new large depositors and local governmental entities earning rates tied to the
30-day LIBOR rate or other adjustable wholesale rates.  Lastly, wholesale
deposits continue to make up a growing portion of the deposit base and renewal
rates on these time deposits have increased at a rate similar to the Federal
Reserve discount rate increases and related changes in the interest yield
curve, which has increased funding costs.

While short-term funding costs have increased as described above, mid-term
rates such as the 5 year U. S Treasury rate have increased from 3.25% at
September 2004 to 4.14% at September 2005 (an increase of .89%) despite short-
term rate increases during this period of 2.00% (as represented by the Federal
Reserve discount rate).  Because PSB originates some loans with fixed rates to
mid-term maturities funded by short-term deposits, this flattening yield curve
has decreased the interest rate spread seen during 2003 and 2004.

PSB's balance sheet is asset sensitive (assets reprice faster than liabilities)
with a cumulative 12 month gap ratio of approximately 112%.  However, a
flattening yield curve impacts the extent to which assets can reprice compared
to greater repricing potential on shorter-term funding liabilities.  Projecting
<PAGE>
continued rate increases of 200 basis points fully implemented over the next 12
months, net interest margin for the upcoming December 2005 quarter is expected
to decline within a range of 0 to 10 basis points compared to the September
2005 quarter.  Net margin is expected to continue to experience pressure into
2006 in the current interest rate and competitive environment.
                                       22
<PAGE>
<TABLE>
<CAPTION>
Table 12A:  Net Interest Income Analysis (Quarter)

(dollars in thousands)                 Quarter ended September 30, 2005  Quarter ended September 30, 2004
                                        Average               Yield/     Average              Yield/
                                        Balance     Interest   Rate      Balance   Interest    Rate
<S>                                   <C>           <C>        <C>     <C>         <C>        <C>
Assets
Interest-earning assets:
   Loans (1)(2)                       $ 373,716     $ 5,753    6.11%   $ 335,157   $ 4,900    5.80%
   Taxable securities                    49,107         488    3.94%      47,388       454    3.80%
   Tax-exempt securities (2)             24,474         374    6.06%      24,575       374    6.04%
   FHLB stock                             2,982          35    4.66%       2,821        42    5.91%
   Other                                 11,752         102    3.44%       3,972        13    1.30%

   Total (2)                            462,031       6,752    5.80%     413,913     5,783    5.54%

Non-interest-earning assets:
   Cash and due from banks               13,058                           14,645
   Premises and equipment, net           12,769                           11,230
   Cash surrender value ins               4,649                                -
   Other assets                           4,755                            3,379
   Allowance for loan losses             (4,227)                          (3,990)

   Total                              $ 493,035                        $ 439,177

Liabilities & stockholders' equity
Interest-bearing liabilities:
   Savings and demand deposits        $  67,787     $   306    1.79%   $  51,053   $    86    0.67%
   Money market deposits                 71,080         323    1.80%      66,946       152    0.90%
   Time deposits                        193,076       1,774    3.65%     178,575     1,305    2.90%
   FHLB borrowings                       53,446         532    3.95%      47,413       515    4.31%
   Other borrowings                       5,450          48    3.49%      10,105        59    2.32%
   Junior sub. Debentures                 7,732         115    5.90%           -         -    0.00%

   Total                                398,571       3,098    3.08%     354,092     2,117    2.37%

Non-interest-bearing liabilities:
   Demand deposits                       56,026                           50,441
   Other liabilities                      3,295                            1,634
   Stockholders' equity                  35,143                           33,010

   Total                              $ 493,035                        $ 439,177

Net interest income                                   3,654                          3,666
Rate spread                                                    2.72%                          3.17%
Net yield on interest-earning assets                           3.14%                          3.51%
<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>
                                       23
<PAGE>
<TABLE>
<CAPTION>
Table 12B:  Net Interest Income Analysis (Nine Months)

(dollars in thousands)              Nine months ended September 30,2005     Nine months ended September 30, 2004
                                      Average                Yield/     Average               Yield/
                                      Balance     Interest    Rate      Balance     Interest   Rate
<S>                                 <C>          <C>         <C>      <C>          <C>         <C>
Assets
Interest earning assets:
   Loans (1)(2)                     $ 367,999    $ 16,575    6.02%    $ 323,418    $ 14,202    5.85%
   Taxable securities                  48,062       1,407    3.91%       47,619       1,368    3.83%
   Tax-exempt securities (2)           24,226       1,098    6.06%       24,603       1,114    6.03%
   FHLB stock                           2,941         115    5.23%        2,658         118    5.91%
   Other                                6,254         145    3.10%        3,706          29    1.04%

   Total (2)                          449,482      19,340    5.75%      402,004      16,831    5.58%

Non-interest-earning assets:
   Cash and due from banks             13,557                            13,325
   Premises and equipment, net         12,632                             9,926
   Cash surrender value ins             4,000                                 -
   Other assets                         4,168                             3,118
   Allowance for loan losses           (4,260)                           (3,794)

   Total                            $ 479,579                         $ 424,579

Liabilities & stockholders' equity
Interest-bearing liabilities:
   Savings and demand deposits      $  68,323    $    794    1.55%    $  52,014    $    259    0.66%
   Money market deposits               70,899         846    1.60%       65,880         450    0.91%
   Time deposits                      186,382       4,715    3.38%      163,842       3,485    2.83%
   FHLB borrowings                     51,817       1,589    4.10%       47,011       1,485    4.21%
   Other borrowings                    10,364         237    3.06%       12,783         209    2.18%
   Junior sub. Debentures               2,691         119    5.91%            -           -    0.00%


   Total                              390,476       8,300    2.84%      341,530       5,888    2.30%

Non-interest-bearing liabilities:
   Demand deposits                     51,659                            48,150
   Other liabilities                    2,701                             1,796
   Stockholders' equity                34,743                            33,103

   Total                            $ 479,579                         $ 424,579

Net interest income                                11,040                            10,943
Rate spread                                                  2.91%                             3.28%
Net yield on interest-earning assets                         3.28%                             3.63%
<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>
                                       24
<PAGE>
<TABLE>
<CAPTION>
Table 13:  Interest Expense and Expense Volume and Rate Analysis (Nine Months)

                                             2005 compared to 2004
                                          increase (decrease) due to (1)
(dollars in thousands)                 Volume        Rate          Net
<S>                                  <C>         <C>           <C>
Interest earned on:
   Loans (2)                         $ 1,951     $    422      $ 2,373
   Taxable securities                     13           26           39
   Tax-exempt securities (2)             (17)           1          (16)
   FHLB stock                             13          (16)          (3)
   Other interest income                  20           96          116

Total                                  1,980          529        2,509

Interest paid on:
   Savings and demand deposits            81          454          535
   Money market deposits                  34          362          396
   Time deposits                         477          753        1,230
   FHLB borrowings                       151          (47)         104
   Other borrowings                      (39)          67           28
   Junior subordinated debentures          -          119          119

Total                                    704        1,708        2,412

Net interest earnings                $ 1,276     $ (1,179)   $      97
<FN>
(1) The change in interest due to both rate and volume has been allocated to
volume and rate changes in proportion to the relationship of the absolute
dollar amounts of the change in each.
(2) The yield on tax-exempt loans and investment securities has been adjusted
to its fully taxable equivalent using a 34% tax rate.
</TABLE>
PROVISION FOR LOAN LOSSES

Management determines the adequacy of the provision for loan losses based on
past loan experience, current economic conditions, and composition of the loan
portfolio.  Accordingly, the amount charged to expense is based on management's
evaluation of the loan portfolio.  It is PSB'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 (credit) for loan losses was ($50)
and $195 for the three months ended September 30, 2005, and 2004, respectively.
The provision for loan losses was $130 and $675 for the nine months ended
September 30, 2005, and 2004, respectively.  The continued improvement in
credit quality, a growing history of minimal net loan charge-offs of similar
loans, and recovery of a $160 specific allocation for loss on a problem
borrower who repaid during the September 2005 quarter allowed PSB to reduce the
provision for loan losses during the September 2005 quarter.  Provisions for
loan losses are expected to remain low compared to prior year quarters for the
remainder of 2005.  Based on projected loan growth at levels similar to prior
years during 2006, the 2006 provision for loan losses is expected to increase
to levels similar to those seen before 2005.
<PAGE>
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.
                                       25
NONINTEREST INCOME

Quarterly noninterest income increased $142 in the September 2005 quarter to
$906 compared to $764 in September 2004. The change was led by an increase of
$100 in mortgage banking income and $47 from increase in the cash surrender
value of life insurance.

Year to date, noninterest income before gains on sale of securities has
increased $402 to $2,650, or 17.9%.  The increase was due primarily to higher
retail investment sales commissions of $139, increase in cash surrender value
of life insurance of $113, and $78 payout of our investment on the sale of the
Pulse ATM system (a cooperative) to Discover Financial Services.

Service fee income of $880 year to date through September 2005 declined $53, or
5.7% from $933 in September 2004.  During 2005, substantial changes to deposit
service fee structure have occurred for both retail and commercial accounts.
Some changes reduced fee income in an effort to market more competitive demand
deposit accounts.  These changes, along with an emphasis on sale of demand
accounts has increased average quarterly non-interest bearing demand account
balances 11.1% from September 2004 to September 2005.

As a FHLB Mortgage Partnership Finance (MPF) loan servicer, PSB has provided a
credit enhancement guarantee to reimburse the FHLB for foreclosure losses in
excess of 1% of the original loan principal sold to the FHLB on an aggregate
pool basis.  The following table 14 summarizes loan principal serviced for the
FHLB by the MPF program as of September 30, 2005.
<TABLE>
<CAPTION>
Table 14:  FHLB Mortgage Partnership Financing (MPF) Program Servicing

                                                   PSB Credit      FHLB      Mortgage
                                       Principal  Enhancement Funded First  Servicing
As of September 30, 2005 ($000s)       Serviced    Guarantee  Loss Account Right, net
<S>                                    <C>        <C>           <C>          <C>
MPF 100 Program (agent program)        $103,629     $499        $2,494       $473
MPF 125 Program (closed loan program)    65,014      564           746        407

Total FHLB MPF serviced loans          $168,643   $1,063        $3,240       $880
</TABLE>
<TABLE>
<CAPTION>
FHLB MPF Program elements as a percentage of principal serviced:

As of September 30, 2005                MPF 100     MPF 125
<S>                                      <C>         <C>
PSB credit enhancement guarantee          .48%        .87%
FHLB funded first loss account           2.41%       1.15%
Mortgage servicing right, net             .46%        .63%
</TABLE>
<PAGE>
PSB ceased originating loans under the MPF 100 program during November 2003.
Since that time all originations have been through the FHLB MPF 125 closed loan
program.  Due to historical strength of mortgage borrowers in our markets, the
original 1% of principal loss pool provided by the FHLB, and current economic
conditions, management believes the possibility of losses under guarantees to
the FHLB to be remote.  Accordingly, no provision for a recourse liability has
been made for this recourse obligation on loans currently serviced by PSB.

NONINTEREST EXPENSE

Noninterest operating expenses increased $51, or 1.8%, to $2,884 in the quarter
ended September 2005 compared to $2,833 during the quarter ended September
2004.  In addition, salaries and wages in the September 2005 quarter were
reduced by $154 as PSB implemented a daily automated system to improve
accounting for deferred loan fees and costs (including lender and support
personnel salaries) in accordance
                                       26
with current accounting standards (FAS 91) earlier in 2005.  FAS 91 requires
loan origination fees and direct loan origination costs to be deferred and
amortized as a yield adjustment earned on the loan.  Previously, these
accounting adjustments for deferral of costs were made only at year-end and in
prior years had an immaterial impact on the individual quarterly financial
statements.  The change in accounting procedure was made to simplify operations
and improve the accuracy of earnings reporting.

Before the September 2005 deferral of wages under FAS 91, noninterest expenses
were $3,038 for September 2005, and $2,833 in September 2004, an increase of
$205, or 7.2%.  The increase over the prior year quarter consisted primarily of
$180 in additional wages and benefits in the September 2005 quarter.  Total
quarterly operating expenses to average total assets before the FAS 91 deferral
of wages were 2.44% for September 2005 and 2.56% for September 2004
(annualized).

Offsetting the increase to September 2005 income from deferred employee wage
expense related to new loan originations under FAS 91 were reductions to income
from deferral of loan origination fees collected, and amortization of
previously capitalized net loan origination costs  against net interest income.
Taken together, all FAS 91 accounting adjustments decreased September 2005 net
income by $3 and decreased September 2004 net income by $22.

For the nine months ended September 30, noninterest operating expenses declined
$45 to $8,304 in 2005 compared to $8,349 during 2004.  During the March 2005
quarter, a reimbursement of collection fees on a problem loan were recovered,
which decreased other noninterest expenses by $101.  Conversely, the prior year
March 2004 quarter included $127 of collection fees written off to other
noninterest expense in response to regulatory requirements to account for
collection fees as expense until collected.  The June 2004 quarter included a
special charge to write-off the remaining investment in the prior home office
totaling $329.  In addition, salaries and wages during the nine months ended
September 2005 quarter were reduced by $501 as PSB implemented a daily
automated system to improve accounting for deferred loan fees and costs
(including lender and support personnel salaries) in accordance with current
accounting standards (FAS 91) earlier in 2005.

For the nine months ended September 30, before the deferral of wages under FAS
91, the June 2004 special home office write-off, and the impact of the special
<PAGE>
collection expense adjustments, noninterest expenses were $8,906 for September
2005, and $7,893 in September 2004, an increase of $1,013, or 12.8%.  The
increase over the prior year consisted primarily of $702 in additional wages
and benefits and $201 in additional occupancy expenses. Total year-to-date
operating expenses to average total assets before the FAS 91 deferral of wages,
the June 2004 special home office write-off, and the special collection
expenses were 2.48% for September 2005 and 2.49% for September 2004
(annualized).

Offsetting the increase to income during the nine months ended September 30,
2005 from deferred employee wage expense related to new loan originations under
FAS 91 were reductions to income from deferral of loan origination fees
collected, and amortization of previously capitalized net loan origination
costs against net interest income.  Taken together, all FAS 91 accounting
adjustments increased year-to-date September 2005 net income by $44 and
decreased year-to-date September 2004 income by $66.
                                       27
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 PSB's Form 10-K for the year ended December 31, 2004.

ITEM 4.  CONTROLS AND PROCEDURES

As of the end of the period covered by this report, management, under the
supervision, and with the participation, of PSB's President and Chief Executive
Officer and the Chief Financial Officer, evaluated the effectiveness of the
design and operation of PSB's disclosure controls and procedures pursuant to
Rule 13a-15(c) under the Securities Exchange Act of 1934.  Based upon such
evaluation, the President and Chief Executive Officer and the Chief Financial
Officer concluded that PSB's disclosure controls and procedures were effective
in all material respects as of the end of the period covered by this report.
There were no changes in PSB's internal control over financial reporting during
the fiscal quarter covered by this report that materially affected, or are
reasonably likely to materially affect, PSB's internal control over financial
reporting.
                                       28
                          PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS

Exhibits required by Item 601 of Regulation S-K.

      Exhibit
      Number      Description

      31.1        Certification of CEO under Section 302 of Sarbanes-Oxley Act
                  of 2002
      31.2        Certification of CFO under Section 302 of Sarbanes-Oxley Act
                  of 2002
      32.1        Certifications under Section 906 of Sarbanes-Oxley Act of
                  2002
                                       29
<PAGE>
                                  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, 2005                   SCOTT M. CATTANACH
                                    Scott M. Cattanach
                                    Treasurer

                                    (On behalf of the Registrant and as
                                    Principal Financial Officer)
                                       30

                                 EXHIBIT INDEX
                                      TO
                                   FORM 10-Q
                                      OF
                              PSB HOLDINGS, INC.
               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005
                 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:

31.1  Certification of CEO under Section 302 of Sarbanes-Oxley Act of 2002
31.2  Certification of CFO under Section 302 of Sarbanes-Oxley Act of 2002
32.1  Certifications under Section 906 of Sarbanes-Oxley Act of 2002