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|   |
|--------|

|                                                   |
|--------------------------------------------------------|
| PSB Holdings, Inc.                                     |
| (Exact name of registrant as specified in its charter) |

| United States                                                  |                              | 42-1597948 |
|----------------------------------------------------------------|-----------------------------------|------------|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |

| 40 Main Street, Putnam, Connecticut 06260                                          |
|------------------------------------------------------------------------------------|
| (Address of principal executive offices)(Zip Code)                                 |
|                                                                               |
| (860) 928-6501                                                                     |
| (Issuer’s telephone number)                                                  |
|                                                                               |
| N/A                                                                                |
| (Former name, former address and former fiscal year, if changed since last report) |

| Large accelerated filer                       | o      | Accelerated filer         | o |
|-----------------------------------------------|--------|---------------------------|---|
| Non-accelerated filer                         | o      | Smaller reporting company | x |
| (Do not check if a smaller reporting company) |   |                      |

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|              |
|-------------------|
| Table of Contents |

|       |                                                                                                                                         |     |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Part I.    | FINANCIAL INFORMATION                                                                                                                        |     |
|       |                                                                                                                                         | Page No. |
| Item 1.    | Financial Statements                                                                                                                         |     |
|       |                                                                                                                                         |     |
|       | Condensed Consolidated Balance Sheets at September 30, 2009 (Unaudited) andJune 30, 2009 (Audited)                                           | 1        |
|       |                                                                                                                                         |     |
|       | Condensed Consolidated Statements of Income (Loss) for the Three Months EndedSeptember 30, 2009 and 2008 (Unaudited)                         | 2        |
|       |                                                                                                                                         |     |
|       | Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months EndedSeptember 30, 2009 and 2008 (Unaudited) | 3        |
|       |                                                                                                                                         |     |
|       | Condensed Consolidated Statements of Cash Flows for the Three Months EndedSeptember 30, 2009 and 2008 (Unaudited)                            | 4        |
|       |                                                                                                                                         |     |
|       | Notes to Consolidated Financial Statements (Unaudited)                                                                                       | 5        |
|       |                                                                                                                                         |     |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                  | 21       |
|       |                                                                                                                                         |     |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                                                   | 31       |
|       |                                                                                                                                         |     |
| Item 4.    | Controls and Procedures                                                                                                                      | 31       |
|       |                                                                                                                                         |     |
| Item 4T.   | Controls and Procedures                                                                                                                      | 31       |
|       |                                                                                                                                         |     |
| Part II.   | OTHER INFORMATION                                                                                                                            |     |
|       |                                                                                                                                         |     |
| Item 1.    | Legal Proceedings                                                                                                                            | 32       |
|       |                                                                                                                                         |     |
| Item 1A.   | Risk Factors                                                                                                                                 | 32       |
|       |                                                                                                                                         |     |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                  | 33       |
|       |                                                                                                                                         |     |
| Item 3.    | Defaults Upon Senior Securities                                                                                                              | 33       |
|       |                                                                                                                                         |     |
| Item 4.    | Submission of Matters to a Vote of Security Holders                                                                                          | 33       |
|       |                                                                                                                                         |     |
| Item 5.    | Other Information                                                                                                                            | 33       |
|       |                                                                                                                                         |     |
| Item 6.    | Exhibits                                                                                                                                     | 33       |
|       |                                                                                                                                         |     |
| SIGNATURES | 34                                                                                                                                           |

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|                                                                                                                                                       |   |                             |    |   |         |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|--------------|--------|
|                                                                                                                                                       |   | September 30,2009                |    |   | June 30,2009 |   |
|                                                                                                                                                       |   | (Unaudited)                      |    |   | (Audited)    |   |
|                                                                                                                                                       |   | (in thousands except share data) |    |
| ASSETS                                                                                                                                                     |   |                             |    |   |         |   |
| Cash and due from depository institutions                                                                                                                  |   | $                                | 20,882  |   |         | $      | 5,509 |   |
| Federal funds sold                                                                                                                                         |   |                             | — |   |         |   | 550 |   |
| Total cash and cash equivalents                                                                                                                            |   |                             | 20,882  |   |         |   | 6,059 |   |
| Securities available for sale (at fair value)                                                                                                              |   |                             | 140,409 |   |         |   | 164,888 |   |
| Securities held-to-maturity (fair value of $12,883 as of                                                                                                   |   |                             |    |   |         |   |   |   |
| September 30, 2009 and $1,945 as of June 30, 2009                                                                                                          |   |                             | 12,894  |   |         |   | 2,000 |   |
| Federal Home Loan Bank stock, at cost                                                                                                                      |   |                             | 8,056   |   |         |   | 8,056 |   |
| Loans held-for-sale                                                                                                                                        |   |                             | 563     |   |         |   | 1,200 |   |
| Loans                                                                                                                                                      |   |                             | 266,728 |   |         |   | 266,517 |   |
| Allowance for loan losses                                                                                                                                  |   |                             | (2,128  | )      |         |   | (2,200 | ) |
| Net loans                                                                                                                                                  |   |                             | 264,600 |   |         |   | 264,317 |   |
| Premises and equipment                                                                                                                                     |   |                             | 5,539   |   |         |   | 5,159 |   |
| Accrued interest receivable                                                                                                                                |   |                             | 1,645   |   |         |   | 1,891 |   |
| Other real estate owned                                                                                                                                    |   |                             | 1,292   |   |         |   | 1,211 |   |
| Goodwill                                                                                                                                                   |   |                             | 6,912   |   |         |   | 6,912 |   |
| Intangible assets                                                                                                                                          |   |                             | 607     |   |         |   | 651 |   |
| Bank owned life insurance                                                                                                                                  |   |                             | 5,982   |   |         |   | 5,912 |   |
| Other assets                                                                                                                                               |   |                             | 8,057   |   |         |   | 9,093 |   |
|                                                                                                                                                       |   |                             |    |   |         |   |   |   |
| Total assets                                                                                                                                               |   | $                                | 477,438 |   |         | $      | 477,349 |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                 |   |                             |    |   |         |   |   |   |
| Liabilities                                                                                                                                                |   |                             |    |   |         |   |   |   |
| Deposits                                                                                                                                                   |   |                             |    |   |         |   |   |   |
| Noninterest-bearing                                                                                                                                        |   | $                                | 32,010  |   |         | $      | 35,246 |   |
| Interest-bearing                                                                                                                                           |   |                             | 279,174 |   |         |   | 272,853 |   |
| Total deposits                                                                                                                                             |   |                             | 311,184 |   |         |   | 308,099 |   |
| Mortgagors’ escrow accounts                                                                                                                          |   |                             | 841     |   |         |   | 1,564 |   |
| Federal Home Loan Bank advances                                                                                                                            |   |                             | 106,500 |   |         |   | 120,500 |   |
| Securities sold under agreements to repurchase                                                                                                             |   |                             | 8,110   |   |         |   | 4,471 |   |
| Due to broker                                                                                                                                              |   |                             | 6,630   |   |         |   | — |   |
| Other liabilities                                                                                                                                          |   |                             | 2,235   |   |         |   | 2,819 |   |
| Total liabilities                                                                                                                                          |   |                             | 435,500 |   |         |   | 437,453 |   |
|                                                                                                                                                       |   |                             |    |   |         |   |   |   |
| Commitments and Contingencies                                                                                                                              |   |                             |    |   |         |   |   |   |
|                                                                                                                                                       |   |                             |    |   |         |   |   |   |
| Stockholders’ Equity                                                                                                                                 |   |                             |    |   |         |   |   |   |
| Preferred stock, $0.10 par value, 1,000,000 shares authorized, no shares issued and outstanding                                                            |   |                             | — |   |         |   | — |   |
| Common stock, $0.10 par value, 12,000,000 shares authorized, 6,943,125 shares issued, 6,529,209 shares outstanding at September 30, 2009 and June 30, 2009 |   |                             | 694     |   |         |   | 694 |   |
| Additional paid-in capital                                                                                                                                 |   |                             | 30,678  |   |         |   | 30,656 |   |
| Retained earnings                                                                                                                                          |   |                             | 20,684  |   |         |   | 20,383 |   |
| Accumulated other comprehensive loss                                                                                                                       |   |                             | (3,558  | )      |         |   | (5,277 | ) |
| Unearned ESOP shares                                                                                                                                       |   |                             | (1,940  | )      |         |   | (1,940 | ) |
| Unearned stock awards                                                                                                                                      |   |                             | (409    | )      |         |   | (409 | ) |
| Treasury stock, at cost (413,916 shares at                                                                                                                 |   |                             |    |   |         |   |   |   |
| September 30, 2009 and June 30, 2009)                                                                                                                      |   |                             | (4,211  | )      |         |   | (4,211 | ) |
| Total stockholders’ equity                                                                                                                           |   |                             | 41,938  |   |         |   | 39,896 |   |
|                                                                                                                                                       |   |                             |    |   |         |   |   |   |
| Total liabilities and stockholders’ equity                                                                                                           |   | $                                | 477,438 |   |         | $      | 477,349 |   |

----

|                                               |
|----------------------------------------------------|
| Condensed Consolidated Statements of Income (Loss) |
| (Unaudited)                                        |

|                                                             |   | Three Months EndedSeptember 30,   |   |
|------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                             |   | 2009                              |   |   | 2008 |   |
|                                                             |   | (in thousands, except share data) |   |
| Interest and dividend income:                                    |   |                              |   |   |   |   |
| Interest on loans                                                |   | $                                 | 3,740  |   |   | $ | 3,705 |   |
| Interest and dividends on investments                            |   |                              | 2,273  |   |   |   | 2,804 |   |
| Total interest and dividend income                               |   |                              | 6,013  |   |   |   | 6,509 |   |
|                                                             |   |                              |   |   |   |   |   |   |
| Interest expense:                                                |   |                              |   |   |   |   |   |   |
| Deposits and escrow                                              |   |                              | 1,615  |   |   |   | 1,763 |   |
| Borrowed funds                                                   |   |                              | 1,252  |   |   |   | 1,571 |   |
| Total interest expense                                           |   |                              | 2,867  |   |   |   | 3,334 |   |
| Net interest and dividend income                                 |   |                              | 3,146  |   |   |   | 3,175 |   |
|                                                             |   |                              |   |   |   |   |   |   |
| Provision for loan losses                                        |   |                              | 242    |   |   |   | 274 |   |
| Net interest and dividend income after provision for loan losses |   |                              | 2,904  |   |   |   | 2,901 |   |
|                                                             |   |                              |   |   |   |   |   |   |
| Noninterest income (charge):                                     |   |                              |   |   |   |   |   |   |
| Fees for services                                                |   |                              | 598    |   |   |   | 637 |   |
| Mortgage banking activities                                      |   |                              | 65     |   |   |   | 28 |   |
| Net commissions from brokerage service                           |   |                              | 13     |   |   |   | 46 |   |
| Loss on writedowns of securities                                 |   |                              | (330   | ) |   |   | (5,480 | ) |
| Gain on sale of securities                                       |   |                              | 331    |   |   |   | — |   |
| Other income                                                     |   |                              | 108    |   |   |   | 107 |   |
| Total noninterest income (charge)                                |   |                              | 785    |   |   |   | (4,662 | ) |
|                                                             |   |                              |   |   |   |   |   |   |
| Noninterest expense:                                             |   |                              |   |   |   |   |   |   |
| Compensation and benefits                                        |   |                              | 1,502  |   |   |   | 1,465 |   |
| Occupancy and equipment                                          |   |                              | 305    |   |   |   | 270 |   |
| Data processing                                                  |   |                              | 194    |   |   |   | 196 |   |
| Advertising and marketing                                        |   |                              | 56     |   |   |   | 105 |   |
| Prepayment penalties on borrowings                               |   |                              | 131    |   |   |   | — |   |
| FDIC deposit insurance                                           |   |                              | 204    |   |   |   | 51 |   |
| Writedown of other real estate owned                             |   |                              | 321    |   |   |   | — |   |
| Other noninterest expense                                        |   |                              | 466    |   |   |   | 477 |   |
| Total noninterest expense                                        |   |                              | 3,179  |   |   |   | 2,564 |   |
| Income (loss) before income tax expense (benefit)                |   |                              | 510    |   |   |   | (4,325 | ) |
|                                                             |   |                              |   |   |   |   |   |   |
| Income tax expense (benefit)                                     |   |                              | 106    |   |   |   | (315 | ) |
| NET INCOME (LOSS)                                                |   | $                                 | 404    |   |   | $ | (4,010 | ) |
| Earnings (loss) per common share                                 |   |                              |   |   |   |   |   |   |
| Basic                                                            |   | $                                 | 0.06   |   |   | $ | (0.64 | ) |
| Diluted                                                          |   | $                                 | 0.06   |   |   | $ | (0.64 | ) |

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| PSB Holdings, Inc.                                                         |
|----------------------------------------------------------------------------|
|                                                                       |
| Condensed Consolidated Statements of Changes in Stockholders’ Equity |
| For the Three Months Ended September 30, 2009 and 2008                     |
| (Unaudited)                                                                |
|                                                                       |

|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |
|---------------------------------------------------------------------------------------------|--------|----------------|---------|--------|--------------------------|--------|---------|------------------|--------|--------|------------------------------------|--------|--------|---------------------|---------|--------|---------------------|--------|---------|---------------|--------|--------|--------------------------------|--------|
|                                                                                        |   | CommonStock    |    |   | AdditionalPaid-inCapital |   |    | RetainedEarnings |   |   | Accumulated OtherComprehensiveLoss |   |   | UnearnedESOP Shares |    |   | UnearnedStockAwards |   |    | TreasuryStock |   |   | TotalStockholders’Equity |   |
|                                                                                        |   | (in thousands) |    |
| Balances at June 30, 2008                                                                   |   | $              | 694     |   |                     | $      | 30,795  |             |   | $      | 28,663                             |   |   | $                   | (3,816  | )      |                | $      | (2,089  | )             |   | $      | (605                           | )      |   | $ | (4,205 | ) |   | $ | 49,437 |   |
|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Dividends declared                                                                          |   |           | — |   |                     |   | — |             |   |   | (264                               | )      |   |                | — |   |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   | (264 | ) |
| Stock-based compensation                                                                    |   |           | — |   |                     |   | (45     | )                |   |   | —                            |   |   |                | — |   |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   | (45 | ) |
|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Comprehensive loss:                                                                         |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                    |   |           | — |   |                     |   | — |             |   |   | (4,010                             | )      |   |                | — |   |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   | — |   |
| Net change in unrealized holding losses on available-for-sale securities, net of tax effect |   |           | — |   |                     |   | — |             |   |   | —                            |   |   |                | (4,610  | )      |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   |   |   |
| Comprehensive loss                                                                          |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   | (8,620 | ) |
|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Balances at September 30, 2008                                                              |   | $              | 694     |   |                     | $      | 30,750  |             |   | $      | 24,389                             |   |   | $                   | (8,426  | )      |                | $      | (2,089  | )             |   | $      | (605                           | )      |   | $ | (4,205 | ) |   | $ | 40,508 |   |
|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Balances at June 30, 2009                                                                   |   | $              | 694     |   |                     | $      | 30,656  |             |   | $      | 20,383                             |   |   | $                   | (5,277  | )      |                | $      | (1,940  | )             |   | $      | (409                           | )      |   | $ | (4,211 | ) |   | $ | 39,896 |   |
|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Dividends declared                                                                          |   |           | — |   |                     |   | — |             |   |   | (103                               | )      |   |                | — |   |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   | (103 | ) |
| Stock-based compensation                                                                    |   |           | — |   |                     |   | 22      |             |   |   | —                            |   |   |                | — |   |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   | 22 |   |
|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                       |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Net income                                                                                  |   |           | — |   |                     |   | — |             |   |   | 404                                |   |   |                | — |   |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   | — |   |
| Net change in unrealized holding losses on available-for-sale securities, net of tax effect |   |           | — |   |                     |   | — |             |   |   | —                            |   |   |                | 1,719   |   |                |   | — |          |   |   | —                        |   |   |   | — |   |   |   |   |   |
| Comprehensive income                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   | 2,123 |   |
|                                                                                        |   |           |    |   |                     |   |    |             |   |   |                               |   |   |                |    |   |                |   |    |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Balances at September 30, 2009                                                              |   | $              | 694     |   |                     | $      | 30,678  |             |   | $      | 20,684                             |   |   | $                   | (3,558  | )      |                | $      | (1,940  | )             |   | $      | (409                           | )      |   | $ | (4,211 | ) |   | $ | 41,938 |   |

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| PSB Holdings, Inc.                              |
|-------------------------------------------------|
|                                            |
| Condensed Consolidated Statements of Cash Flows |
| (Unaudited)                                     |
|                                            |

|                                                                                 |   | For the Three MonthsEnded September 30, |    |
|--------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                                 |   | 2009                                    |    |   | 2008 |   |
|                                                                                 |   | (in thousands)                          |    |
| Cash flows from operating activities                                                 |   |                                    |    |   |   |   |
| Net income (loss)                                                                    |   | $                                       | 404     |   |   | $ | (4,010 | ) |
| Adjustments to reconcile net income (loss) to cash provided by operating activities: |   |                                    |    |   |   |   |   |   |
| Amortization of securities, net                                                      |   |                                    | 52      |   |   |   | 56 |   |
| Gain on sales and calls of securities, net                                           |   |                                    | (331    | ) |   |   | — |   |
| Write down of securities                                                             |   |                                    | 330     |   |   |   | 5,480 |   |
| Net decrease in loans held-for-sale                                                  |   |                                    | 637     |   |   |   | 184 |   |
| Change in deferred loan costs, net                                                   |   |                                    | 12      |   |   |   | (28 | ) |
| Provision for loan losses                                                            |   |                                    | 242     |   |   |   | 274 |   |
| Loss on sale of other real estate owned                                              |   |                                    | 6       |   |   |   | — |   |
| Writedown of other real esate owned                                                  |   |                                    | 321     |   |   |   | — |   |
| Depreciation and amortization                                                        |   |                                    | 143     |   |   |   | 119 |   |
| Amortization of core deposit intangible                                              |   |                                    | 44      |   |   |   | 52 |   |
| Decrease (increase) in accrued interest receivable and other assets                  |   |                                    | 394     |   |   |   | (104 | ) |
| Increase in cash surrender value of bank owned life insurance                        |   |                                    | (70     | ) |   |   | (66 | ) |
| Decrease in other liabilities                                                        |   |                                    | (605    | ) |   |   | (541 | ) |
| Deferred tax expense (benefit)                                                       |   |                                    | 1       |   |   |   | (626 | ) |
| Stock-based compensation                                                             |   |                                    | 71      |   |   |   | 4 |   |
| Net cash provided by operating activities                                            |   |                                    | 1,651   |   |   |   | 794 |   |
| Cash flows from investing activities                                                 |   |                                    |    |   |   |   |   |   |
| Purchase of available-for-sale securities                                            |   |                                    | — |   |   |   | (2,002 | ) |
| Proceeds from sales of available-for-sale securities                                 |   |                                    | 11,454  |   |   |   | — |   |
| Proceeds from maturities of available-for-sale securities                            |   |                                    | 15,581  |   |   |   | 7,132 |   |
| Purchase of held-for-sale securities                                                 |   |                                    | (4,265  | ) |   |   | — |   |
| Purchase of Federal Hole Loan Bank stock                                             |   |                                    | — |   |   |   | (113 | ) |
| Loan originations net of principal collections, net                                  |   |                                    | (1,104  | ) |   |   | (5,843 | ) |
| Recoveries of loans previously charged off                                           |   |                                    | 10      |   |   |   | 14 |   |
| Proceeds from sale of other real estate owned                                        |   |                                    | 149     |   |   |   | — |   |
| Capital expenditures                                                                 |   |                                    | (523    | ) |   |   | (12 | ) |
| Net cash provided (used) by investing activities                                     |   |                                    | 21,302  |   |   |   | (824 | ) |
| Cash flows from financing activities                                                 |   |                                    |    |   |   |   |   |   |
| Net increase (decrease) in savings, demand deposits and NOW accounts                 |   |                                    | 7,087   |   |   |   | (3,038 | ) |
| Net (decrease) increase in time deposit accounts                                     |   |                                    | (4,002  | ) |   |   | 1,270 |   |
| Net decrease in mortgagors’ escrow account                                     |   |                                    | (723    | ) |   |   | (681 | ) |
| Net change in short term Federal Home Loan Bank advances                             |   |                                    | — |   |   |   | (3,000 | ) |
| Proceeds from Federal Home Loan Bank advances                                        |   |                                    | — |   |   |   | 8,000 |   |
| Repayments of Federal Home Loans Bank advances                                       |   |                                    | (14,000 | ) |   |   | (5,031 | ) |
| Net increase in securities sold under agreement to repurchase                        |   |                                    | 3,639   |   |   |   | 118 |   |
| Dividends paid                                                                       |   |                                    | (131    | ) |   |   | (261 | ) |
| Net cash used by financing activities                                                |   |                                    | (8,130  | ) |   |   | (2,623 | ) |
| Increase (decrease) in cash and cash equivalents                                     |   |                                    | 14,823  |   |   |   | (2,653 | ) |
| Cash and cash equivalents at beginning of year                                       |   |                                    | 6,059   |   |   |   | 8,146 |   |
| Cash and cash equivalents at end of period                                           |   | $                                       | 20,882  |   |   | $ | 5,493 |   |
| Supplemental disclosures                                                             |   |                                    |    |   |   |   |   |   |
| Cash paid during the period for:                                                     |   |                                    |    |   |   |   |   |   |
| Interest                                                                             |   | $                                       | 2,912   |   |   | $ | 3,337 |   |
| Income taxes (received) paid                                                         |   | $                                       | 2       |   |   | $ | 1 |   |
| Loans transferred to other real estate owned                                         |   | $                                       | 557     |   |   | $ | — |   |
| Increase in due to broker                                                            |   | $                                       | 6,630   |   |   | $ | — |   |

----

| PSB Holdings, Inc.                                   |
|------------------------------------------------------|
|                                                 |
| Notes to Condensed Consolidated Financial Statements |
| (Unaudited)                                          |

----

----

----

|                                |   |                                 |      |   |                                 |   |
|-------------------------------------|--------|--------------------------------------|-----------|--------|--------------------------------------|--------|
|                                |   | Three Months EndedSeptember 30, 2009 |      |   | Three Months EndedSeptember 30, 2008 |   |
| Basic EPS computation:              |   |                                 |      |   |                                 |   |
| Net income (loss)                   |   | $                                    | 404,000   |   |                                 | $      | (4,010,000 | ) |
|                                |   |                                 |      |   |                                 |   |   |   |
|                                |   |                                 |      |   |                                 |   |   |   |
| Weighted average shares outstanding |   |                                 | 6,295,863 |   |                                 |   | 6,263,728 |   |
|                                |   |                                 |      |   |                                 |   |   |   |
| Basic EPS                           |   | $                                    | 0.06      |   |                                 | $      | (0.64 | ) |
|                                |   |                                 |      |   |                                 |   |   |   |
| Diluted EPS computation:            |   |                                 |      |   |                                 |   |   |   |
| Net income (loss)                   |   | $                                    | 404,000   |   |                                 | $      | (4,010,000 | ) |
|                                |   |                                 |      |   |                                 |   |   |   |
| Weighted average shares outstanding |   |                                 | 6,295,863 |   |                                 |   | 6,263,728 |   |
| Dilutive potential shares           |   |                                 | 38,501    |   |                                 |   | 0 |   |
|                                |   |                                 | 6,334,364 |   |                                 |   | 6,263,728 |   |
|                                |   |                                 |      |   |                                 |   |   |   |
| Diluted EPS                         |   | $                                    | 0.06      |   |                                 | $      | (0.64 | ) |

----

|                                  |   |               |    |   |            |   |   |    |   |   |            |   |
|---------------------------------------|--------|--------------------|---------|--------|-----------------|--------|--------|---------|--------|--------|-----------------|--------|
|                                  |   | Carrying Value at  |    |
|                                  |   | September 30, 2009 |    |   | June 30, 2009   |   |
|                                  |   | Balance            |    |   | Percentof total |   |   | Balance |   |   | Percentof total |   |
| (Dollars in thousands)                |   |               |    |   |            |   |   |    |   |   |            |   |
| Securities, available-for-sale:       |   |               |    |   |            |   |   |    |   |   |            |   |
| U.S. Government and agency securities |   | $                  | 11,965  |   |            |   | 7.8    | %       |   | $      | 19,667          |   |   |   | 11.8 | % |
| Corporate bonds and other securities  |   |               | 4,750   |   |            |   | 3.1    | %       |   |   | 9,263           |   |   |   | 5.6 | % |
| Mortgage-backed securities            |   |               | 109,978 |   |            |   | 71.7   | %       |   |   | 123,596         |   |   |   | 74.0 | % |
| Equity securities                     |   |               | 13,716  |   |            |   | 9.0    | %       |   |   | 12,362          |   |   |   | 7.4 | % |
| Total securities, available-for-sale  |   |               | 140,409 |   |            |   | 91.6   | %       |   |   | 164,888         |   |   |   | 98.8 | % |
| Securities, held-to-maturity:         |   |               |    |   |            |   |   |    |   |   |            |   |   |   |   |   |
| U.S. Government and agency securities |   |               | 12,894  |   |            |   | 8.4    | %       |   |   | 2,000           |   |   |   | 1.2 | % |
| Total securities                      |   | $                  | 153,303 |   |            |   | 100.0  | %       |   | $      | 166,888         |   |   |   | 100.0 | % |

----

|                        |   |      |                |             |              |      |   |             |    |      |   |             |   |   |   |   |   |   |   |
|-----------------------------|--------|-----------|---------------------|------------------|-------------------|-----------|--------|------------------|---------|-----------|--------|------------------|--------|--------|--------|--------|--------|--------|--------|
| September 30, 2009:         |   |      | Less than 12 months |             | 12 months or more |      | Total  |             |
| (Dollars in thousands)      |   | FairValue |                | UnrealizedLosses |              | FairValue |   | UnrealizedLosses |    | FairValue |   | UnrealizedLosses |   |
| US Government Agencies      |   | $         | 985                 |             | $                 | 15        |   | $                | — |      | $      | —          |   | $      | 985    |   | $      | 15     |   |
| Corporate bonds             |   |      | —             |             |              | —   |   |             | 4,750   |      |   | 2,242            |   |   | 4,750  |   |   | 2,242  |   |
| Mortgage-backed securities  |   |      | 2,741               |             |              | 676       |   |             | 15,069  |      |   | 5,672            |   |   | 17,810 |   |   | 6,348  |   |
| Equity securities           |   |      | 13,431              |             |              | 1,569     |   |             | — |      |   | —          |   |   | 13,431 |   |   | 1,569  |   |
|                        |   |      |                |             |              |      |   |             |    |      |   |             |   |   |   |   |   |   |   |
| Total investment securities |   | $         | 17,157              |             | $                 | 2,260     |   | $                | 19,819  |      | $      | 7,914            |   | $      | 36,976 |   | $      | 10,174 |   |

| June 30, 2009:              |   |      | Less than 12 months |             | 12 months or more |      | Total  |             |
|-----------------------------|--------|-----------|---------------------|------------------|-------------------|-----------|--------|------------------|
| (Dollars in thousands)      |   | FairValue |                | UnrealizedLosses |              | FairValue |   | UnrealizedLosses |   | FairValue |   | UnrealizedLosses |   |
| US Government Agencies      |   | $         | 984                 |             | $                 | 16        |   | $                | — |   | $ | — |   | $ | 984 |   | $ | 16 |   |
| Corporate bonds             |   |      | —             |             |              | —   |   |             | 5,493 |   |   | 2,528 |   |   | 5,493 |   |   | 2,528 |   |
| Mortgage-backed securities  |   |      | 5,268               |             |              | 1,053     |   |             | 16,123 |   |   | 5,730 |   |   | 21,391 |   |   | 6,783 |   |
| Equity securities           |   |      | 12,227              |             |              | 2,773     |   |             | — |   |   | — |   |   | 12,227 |   |   | 2,773 |   |
|                        |   |      |                |             |              |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total investment securities |   | $         | 18,479              |             | $                 | 3,842     |   | $                | 21,616 |   | $ | 8,258 |   | $ | 40,095 |   | $ | 12,100 |   |

----

----

|                    |   |          |   |         |   |          |   |            |   |        |   |        |
|-------------------------|--------|---------------|--------|--------------|--------|---------------|--------|-----------------|--------|-------------|--------|-------------|
| Issuer                  |   | Goldman Sachs |   | Pitney Bowes |   | Merrill Lynch |   | Bank of America |   | Freddie Mac |   | Freddie Mac |
| Par amount              |   | $3,000,000    |   | $5,000,000   |   | $5,000,000    |   | $2,000,000      |   | $2,000,000  |   | $2,000,000  |
| Book Value              |   | $3,000,000    |   | $5,000,000   |   | $5,000,000    |   | $2,000,000      |   | $23,000     |   | $23,000     |
| Purchase Date           |   | 12-12-07      |   | 11-06-06     |   | 09-04-07      |   | 11-20-07        |   | 11-09-07    |   | 01-03-08    |
| Maturity Date           |   | 08-23-26      |   | 06-30-20     |   | 05-28-27      |   | 08-17-47        |   | 06-30-20    |   | 06-30-20    |
| Next Reset Date         |   | 11-20-09      |   | 10-30-09     |   | 11-27-09      |   | 11-16-09        |   | 10-09-09    |   | 10-02-09    |
| Reset Frequency         |   | Quarterly     |   | Three years  |   | Quarterly     |   | Quarterly       |   | Quarterly   |   | Quarterly   |
| Failed Auction          |   | Yes           |   | No           |   | Yes           |   | Yes             |   | Yes         |   | Yes         |
| Receiving Default Rates |   | Yes           |   | N/A          |   | Yes           |   | Yes             |   | No          |   | No          |
| Current Rate            |   | 4.655%        |   | 4.872%       |   | 4.578%        |   | 4.679%          |   | 0.000%      |   | 0.000%      |
| Dividends Current:      |   | Yes           |   | Yes          |   | Yes           |   | Yes             |   | No          |   | No          |

----

|                          |   |                   |    |         |   |   |   |    |    |   |   |   |   |
|-------------------------------|--------|------------------------|---------|--------------|--------|--------|--------|---------|---------|--------|--------|--------|--------|
|                          |   | September 30,2009      |    | June 30,2009 |   |
|                          |   | Amount                 |    | Percent      |   | Amount |   | Percent |    |
|                          |   | (Dollars in thousands) |    |
| Mortgage Loans:               |   |                   |    |         |   |   |   |    |    |   |   |   |   |
| Residential (1)               |   | $                      | 201,084 |         |   | 74.66  | %      | $       | 200,680 |   |   | 74.57  | %      |
| Commercial real estate        |   |                   | 56,772  |         |   | 21.08  |   |    | 56,500  |   |   | 20.99  |   |
| Residential construction      |   |                   | 1,686   |         |   | 0.63   |   |    | 1,887   |   |   | 0.70   |   |
| Commercial                    |   |                   | 8,564   |         |   | 3.18   |   |    | 8,958   |   |   | 3.33   |   |
| Consumer and other            |   |                   | 1,205   |         |   | 0.45   |   |    | 1,097   |   |   | 0.41   |   |
|                          |   |                   |    |         |   |   |   |    |    |   |   |   |   |
| Total loans                   |   |                   | 269,311 |         |   | 100.00 | %      |    | 269,122 |   |   | 100.00 | %      |
|                          |   |                   |    |         |   |   |   |    |    |   |   |   |   |
| Unadvanced construction loans |   |                   | (2,895  | )            |   |   |   |    | (2,929  | )      |   |   |   |
|                          |   |                   | 266,416 |         |   |   |   |    | 266,193 |   |   |   |   |
| Net deferred loan costs       |   |                   | 312     |         |   |   |   |    | 324     |   |   |   |   |
| Allowance for loan losses     |   |                   | (2,128  | )            |   |   |   |    | (2,200  | )      |   |   |   |
|                          |   |                   |    |         |   |   |   |    |    |   |   |   |   |
| Loans, net                    |   | $                      | 264,600 |         |   |   |   | $       | 264,317 |   |   |   |   |

|   |   |                                                                                                                       |   |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|--------|
|   | (1)    | Residential mortgage loans include one- to four-family mortgage loans, home equity loans, and home equity lines of credit. |

----

|                                                                         |   |                   |    |   |            |   |
|------------------------------------------------------------------------------|--------|------------------------|---------|--------|-----------------|--------|
|                                                                         |   | At September 30,2009   |    |   | At June 30,2009 |   |
|                                                                         |   | (Dollars in thousands) |    |
|                                                                         |   |                   |    |   |            |   |
| Non-accrual loans:                                                           |   |                   |    |   |            |   |
| Residential mortgage loans (1)                                               |   | $                      | 1,480   |   |            | $      | 1,277 |   |
| Commercial real estate                                                       |   |                   | 4,934   |   |            |   | 5,073 |   |
| Residential construction                                                     |   |                   | — |   |            |   | — |   |
| Commercial                                                                   |   |                   | 99      |   |            |   | 99 |   |
| Consumer and other                                                           |   |                   | — |   |            |   | — |   |
| Total non-accrual loans                                                      |   |                   | 6,513   |   |            |   | 6,449 |   |
|                                                                         |   |                   |    |   |            |   |   |   |
| Accruing loans past due 90 days or more:                                     |   |                   |    |   |            |   |   |   |
| Residential mortgage loans (1)                                               |   |                   | — |   |            |   | — |   |
| Commercial real estate                                                       |   |                   | 832     |   |            |   | — |   |
| Residential construction                                                     |   |                   | — |   |            |   | — |   |
| Commercial                                                                   |   |                   | 195     |   |            |   | — |   |
| Consumer and other                                                           |   |                   | — |   |            |   | — |   |
| Total                                                                        |   |                   | 1,027   |   |            |   | — |   |
| Total non-performing loans                                                   |   |                   | 7,540   |   |            |   | 6,449 |   |
|                                                                         |   |                   |    |   |            |   |   |   |
| Other real estate owned                                                      |   |                   | 1,292   |   |            |   | 1,211 |   |
| Other non-performing assets                                                  |   |                   | 46      |   |            |   | 46 |   |
| Total non-performing assets                                                  |   |                   | 8,878   |   |            |   | 7,706 |   |
|                                                                         |   |                   |    |   |            |   |   |   |
| Troubled debt restructurings in compliance with restructured terms           |   |                   | 1,075   |   |            |   | 259 |   |
|                                                                         |   | $                      | 9,953   |   |            | $      | 7,965 |   |
|                                                                         |   |                   |    |   |            |   |   |   |
| Total non-performing loans to total loans                                    |   |                   | 2.83    | %      |            |   | 2.42 | % |
| Total non-performing assets to total assets                                  |   |                   | 1.86    |   |            |   | 1.61 |   |
| Total non-performing assets and troubled debt restructurings to total assets |   |                   | 2.08    |   |            |   | 1.67 |   |

|   |   |                                                                                                                       |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|
|   | (1)    | Residential mortgage loans include one- to four-family mortgage loans, home equity loans, and home equity lines of credit. |

----

|                         |   |                            |   |   |   |   |   |
|------------------------------|--------|---------------------------------|--------|--------|--------|--------|--------|
|                         |   | Three Months EndedSeptember 30, |   |
|                         |   | 2009                            |   | 2008   |   |
|                         |   | (in thousands)                  |   |
|                         |   |                            |   |   |   |   |   |
| Balance, beginning of period |   | $                               | 2,200  |   | $      | 1,758  |   |
| Provision for loan losses    |   |                            | 242    |   |   | 274    |   |
| Charge offs                  |   |                            | (324   | )      |   | (50    | )      |
| Recoveries                   |   |                            | 10     |   |   | 14     |   |
| Balance, end of period       |   | $                               | 2,128  |   | $      | 1,996  |   |

----

|                                  |   |              |   |   |           |   |
|---------------------------------------|--------|-------------------|--------|--------|----------------|--------|
|                                  |   | September 30,2009 |   |   | June 30,2009   |   |
|                                  |   |              |   |   | (in thousands) |   |
| Balances not subject to amortization: |   |              |   |   |           |   |
| Goodwill                              |   | $                 | 6,912  |   |           | $      | 6,912 |   |
| Balances subject to amortization:     |   |              |   |   |           |   |   |   |
| Core Deposit Intangible               |   |              | 607    |   |           |   | 651 |   |
| Total intangible assets               |   | $                 | 7,519  |   |           | $      | 7,563 |   |

|                                       |   |          |   |   |
|--------------------------------------------|--------|---------------|--------|--------|
|                                       |   | (in thousands | )      |
| For the nine months ending June 30, 2010   |   | $             | 134    |   |
| For the twelve months ending June 30, 2011 |   |          | 149    |   |
| For the twelve months ending June 30, 2012 |   |          | 121    |   |
| For the twelve months ending June 30, 2013 |   |          | 93     |   |
| For the twelve months ending June 30, 2014 |   |          | 65     |   |
| Thereafter                                 |   |          | 45     |   |
| Total                                      |   | $             | 607    |   |

----

|                                                                               |   |                            |   |   |   |   |
|------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|--------|--------|
|                                                                               |   | Three Months EndedSeptember 30, |   |
|                                                                               |   | 2009                            |   |   | 2008   |   |
|                                                                               |   | (in thousands)                  |   |
|                                                                               |   |                            |   |   |   |   |   |   |
| Net Income (Loss)                                                                  |   | $                               | 404    |   |   | $      | (4,010 | ) |
| Other comprehensive income (loss):                                                 |   |                            |   |   |   |   |   |   |
| Net unrealized holding gains (losses) on available-for-sale securities             |   |                            | 2,607  |   |   |   | (12,465 | ) |
| Reclassification adjustment for (gain) loss recognized in net income               |   |                            | (1     | )      |   |   | 5,480 |   |
| Other comprehensive income (loss) before tax (expense) benefit                     |   |                            | 2,606  |   |   |   | (6,985 | ) |
| Income tax (expense) benefit related to items of other comprehensive income (loss) |   |                            | (887   | )      |   |   | 2,375 |   |
| Other comprehensive income (loss), net of tax                                      |   |                            | 1,719  |   |   |   | (4,610 | ) |
| Total comprehensive income (loss)                                                  |   | $                               | 2,123  |   |   | $      | (8,620 | ) |

----

----

|                                                                            |   |                                             |    |   |                                                      |   |    |                                      |   |   |                                  |   |
|---------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|--------|-----------------------------------------------------------|--------|---------|-------------------------------------------|--------|--------|---------------------------------------|--------|
|                                                                            |   | Fair Value Measurements at Reporting Date Using: |    |
|                                                                            |   | September 30, 2009                               |    |   | Quoted Prices inActive Markets forIdentical AssetsLevel 1 |   |    | Significant OtherObservable InputsLevel 2 |   |   | SignificantUnobservable InputsLevel 3 |   |
|                                                                            |   |                                             |    |   |                                                      |   |    |                                      |   |   |                                  |   |
| Securities available for sale                                                   |   |                                             |    |   |                                                      |   |    |                                      |   |   |                                  |   |
| U. S. Government agency securities                                              |   | $                                                | 11,965  |   |                                                      | $      | — |                                      |   | $      | 11,965                                |   |   | $ | — |   |
| Corporate securities                                                            |   |                                             | 4,750   |   |                                                      |   | — |                                      |   |   | 4,750                                 |   |   |   | — |   |
| Mortgage backed securities insured or guaranteed by U.S. Government enterprises |   |                                             | 90,672  |   |                                                      |   | — |                                      |   |   | 90,672                                |   |   |   | — |   |
| Non-agency mortgage-backed securities                                           |   |                                             | 19,306  |   |                                                      |   | — |                                      |   |   | 19,306                                |   |   |   | — |   |
| Equity securities                                                               |   |                                             | 13,716  |   |                                                      |   | — |                                      |   |   | 4,895                                 |   |   |   | 8,821 |   |
| Impaired Loans                                                                  |   |                                             | 7,401   |   |                                                      |   | — |                                      |   |   | 7,401                                 |   |   |   | — |   |
| Total                                                                           |   | $                                                | 147,810 |   |                                                      | $      | — |                                      |   | $      | 138,989                               |   |   | $ | 8,821 |   |

|                                                                                       |   |                                                                  |    |   |   |   |
|--------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|--------|--------|--------|
|                                                                                       |   | Fair Value MeasurementsUsing Significant Unobservable Inputs(Level 3) |    |
|                                                                                       |   | Available-for-saleSecurities                                          |    |   | Total  |   |
| Beginning balance, July 1, 2009                                                            |   | $                                                                     | 7,466   |   |   | $      | 7,466 |   |
| Total gains or losses                                                                      |   |                                                                  |    |   |   |   |   |   |
| Included in earnings                                                                       |   |                                                                  | — |   |   |   | — |   |
| Included in other comprehensive income                                                     |   |                                                                  | 1,355   |   |   |   | 1,355 |   |
| Principal payments on securities                                                           |   |                                                                  | — |   |   |   | — |   |
| Amortization of securities, net                                                            |   |                                                                  | — |   |   |   | — |   |
| Transfers in and/or out of Level 3                                                         |   |                                                                  | — |   |   |   | — |   |
| Ending balance, September 30, 2009                                                         |   | $                                                                     | 8,821   |   |   | $      | 8,821 |   |
|                                                                                       |   |                                                                  |    |   |   |   |   |   |
| The amount of total gains or losses for the period included in earnings (or changes in net |   |                                                                  |    |   |   |   |   |   |
| assets) attributable to the change in unrealized gains or losses relating to assets still  |   |                                                                  |    |   |   |   |   |   |
| held at the reporting date for trading securities                                          |   | $                                                                     | — |   |   | $      | — |   |

----

|                   |   |                  |   |   |              |   |   |              |   |
|------------------------|--------|-----------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                   |   | November 7, 2005Grant |   |   | June 7, 2006Grant |   |   | May 25, 2007Grant |   |
| Dividend yield         |   |                  | 1.89   | %      |              |   | 2.23   | %                 |   |   | 2.24 | % |
| Expected volatility    |   |                  | 12.65  | %      |              |   | 12.17  | %                 |   |   | 11.04 | % |
| Risk-free rate         |   |                  | 4.56   | %      |              |   | 4.95   | %                 |   |   | 4.86 | % |
| Expected life in years |   |                  | 6.5    |   |              |   | 6.5    |              |   |   | 6.5 |   |
| Fair value             |   | $                     | 2.00   |   |              | $      | 1.97   |              |   | $ | 1.84 |   |

----

|                          |   |              |   |   |         |   |
|-------------------------------|--------|-------------------|--------|--------|--------------|--------|
|                          |   | September 30,2009 |   |   | June 30,2009 |   |
|                          |   | (in thousands)    |   |
| Commitments to extend credit: |   |              |   |   |         |   |
| Loan commitments              |   | $                 | 3,407  |   |         | $      | 4,687 |   |
| Unadvanced construction loans |   |              | 2,895  |   |         |   | 2,929 |   |
| Unadvanced lines of credit    |   |              | 16,195 |   |         |   | 16,859 |   |
| Standby letters of credit     |   |              | 998    |   |         |   | 898 |   |
|                          |   |              |   |   |         |   |   |   |
| Outstanding commitments       |   | $                 | 23,495 |   |         | $      | 25,373 |   |

----

----

----

|                              |   |                   |    |   |         |   |
|-----------------------------------|--------|------------------------|---------|--------|--------------|--------|
|                              |   | September 30,2009      |    |   | June 30,2009 |   |
|                              |   | (Dollars in thousands) |    |
|                              |   |                   |    |   |         |   |
| Allowance for loan losses         |   | $                      | 2,128   |   |         | $      | 2,200 |   |
| Gross loans outstanding           |   |                   | 266,728 |   |         |   | 266,517 |   |
| Nonperforming loans               |   |                   | 7,540   |   |         |   | 6,449 |   |
|                              |   |                   |    |   |         |   |   |   |
| Allowance/gross loans outstanding |   |                   | 0.80    | %      |         |   | 0.83 | % |
| Allowance/nonperforming loans     |   |                   | 28.2    | %      |         |   | 34.1 | % |

|                                          |   |              |   |   |         |   |
|-----------------------------------------------|--------|-------------------|--------|--------|--------------|--------|
|                                          |   | September 30,2009 |   |   | June 30,2009 |   |
|                                          |   | (in thousands)    |   |
|                                          |   |              |   |   |         |   |   |   |
| Past due 30 days through 89 days and accruing |   | $                 | 4,472  |   |         | $      | 3,445 |   |
|                                          |   |              |   |   |         |   |   |   |
| Past due 90 days or more and accruing         |   | $                 | 1,027  |   |         | $      | — |   |
|                                          |   |              |   |   |         |   |   |   |
| Past due 90 days or more and nonaccruing      |   | $                 | 4,208  |   |         | $      | 6,449 |   |

----

----

----

|                                   |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
|----------------------------------------|--------|------------------------------------------|---------|------------------------|--------|------------|--------|----------------|--------|---------------------------------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|                                   |   | For the Three Months Ended September 30, |    |
|                                   |   | 2009                                     |    | 2008                   |   |
|                                   |   | (Dollars in thousands)                   |    |
|                                   |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
| Interest-earning assets:               |   | AverageBalance                           |    | InterestIncome/Expense |   | Yield/Cost |   | AverageBalance |   | InterestIncome/Expense          |   | Yield/Cost |   |
|                                   |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
| Investment securities                  |   | $                                        | 171,446 |                   | $      | 2,271      |   |           | 5.26   | %      | $      | 215,247    |   | $      | 2,792  |   |   | 5.15   | %      |
| Loans                                  |   |                                     | 268,451 |                   |   | 3,740      |   |           | 5.53   | %                               |   | 247,242    |   |   | 3,705  |   |   | 5.95   | %      |
| Other earning assets                   |   |                                     | 8,863   |                   |   | 2          |   |           | 0.09   | %                               |   | 2,611      |   |   | 12     |   |   | 1.82   | %      |
| Total interest-earnings assets         |   |                                     | 448,760 |                   |   | 6,013      |   |           | 5.32   | %                               |   | 465,100    |   |   | 6,509  |   |   | 5.55   | %      |
| Non-interest-earning assets            |   |                                     | 34,347  |                   |   |       |   |           |   |                            |   | 27,643     |   |   |   |   |   |   |   |
| Total assets                           |   | $                                        | 483,107 |                   |   |       |   |           |   |                            | $      | 492,743    |   |   |   |   |   |   |   |
|                                   |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
|                                   |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
| Interest-bearing liabilities:          |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
| NOW accounts                           |   | $                                        | 64,178  |                   |   | 320        |   |           | 1.98   | %                               | $      | 37,448     |   |   | 225    |   |   | 2.38   | %      |
| Savings accounts                       |   |                                     | 46,048  |                   |   | 54         |   |           | 0.47   | %                               |   | 45,306     |   |   | 68     |   |   | 0.60   | %      |
| Money market accounts                  |   |                                     | 11,462  |                   |   | 32         |   |           | 1.11   | %                               |   | 12,429     |   |   | 53     |   |   | 1.69   | %      |
| Time deposits                          |   |                                     | 154,385 |                   |   | 1,209      |   |           | 3.11   | %                               |   | 151,041    |   |   | 1,417  |   |   | 3.72   | %      |
| Borrowed money                         |   |                                     | 126,988 |                   |   | 1,252      |   |           | 3.91   | %                               |   | 158,371    |   |   | 1,571  |   |   | 3.94   | %      |
| Total interest-bearing liabilities     |   |                                     | 403,061 |                   |   | 2,867      |   |           | 2.82   | %                               |   | 404,595    |   |   | 3,334  |   |   | 3.27   | %      |
| Non-interest-bearing demand deposits   |   |                                     | 35,292  |                   |   |       |   |           |   |                            |   | 36,156     |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities |   |                                     | 4,171   |                   |   |       |   |           |   |                            |   | 3,857      |   |   |   |   |   |   |   |
| Capital accounts                       |   |                                     | 40,583  |                   |   |       |   |           |   |                            |   | 48,135     |   |   |   |   |   |   |   |
| Total liabilities and capital accounts |   | $                                        | 483,107 |                   |   |       |   |           |   |                            | $      | 492,743    |   |   |   |   |   |   |   |
|                                   |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
|                                   |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
| Net interest income                    |   |                                     |    |                   | $      | 3,146      |   |           |   |                            |   |       |   | $      | 3,175  |   |   |   |   |
| Interest rate spread                   |   |                                     |    |                   |   |       |   |           | 2.50   | %                               |   |       |   |   |   |   |   | 2.28   | %      |
| Net interest-earning assets            |   | $                                        | 45,699  |                   |   |       |   |           |   |                            | $      | 60,505     |   |   |   |   |   |   |   |
| Net interest margin                    |   |                                     |    |                   |   |       |   |           | 2.78   | %                               |   |       |   |   |   |   |   | 2.71   | %      |
| Average earning assets to              |   |                                     |    |                   |   |       |   |           |   |                            |   |       |   |   |   |   |   |   |   |
| average interest-bearing liabilities   |   |                                     |    |                   |   |       |   |           | 111.34 | %                               |   |       |   |   |   |   |   | 114.95 | %      |

----

|                          |   |                                                  |   |
|-------------------------------|--------|-------------------------------------------------------|--------|
|                          |   | For the Three Months Ended September 30, 2009         |   |
|                          |   |                                                  |   |   |   |   |   |   |   |   |
|                          |   | Compared to the Three Months Ended September 30, 2008 |
|                          |   |                                                  |   |   |   |   |
|                          |   | Increase(Decrease) Due to                             |   |   |   |   |
|                          |   | Rate                                                  |   | Volume |   | Net |   |
|                          |   |                                                  |   |   |   |   |   |   |   |   |
| INTEREST INCOME               |   |                                                  |   |   |   |   |   |   |   |   |
| Investment securities         |   | $                                                     | 376    |   | $ | (897 | ) | $ | (521 | ) |
| Loans                         |   |                                                  | (1,120 | ) |   | 1,155 |   |   | 35 |   |
| Other interest-earning assets |   |                                                  | (68    | ) |   | 58 |   |   | (10 | ) |
| TOTAL INTEREST INCOME         |   |                                                  | (812   | ) |   | 316 |   |   | (496 | ) |
|                          |   |                                                  |   |   |   |   |   |   |   |   |
| INTEREST EXPENSE:             |   |                                                  |   |   |   |   |   |   |   |   |
|                          |   |                                                  |   |   |   |   |   |   |   |   |
| NOW accounts                  |   |                                                  | (227   | ) |   | 322 |   |   | 95 |   |
| Savings accounts              |   |                                                  | (21    | ) |   | 7 |   |   | (14 | ) |
| Money Market accounts         |   |                                                  | (17    | ) |   | (4 | ) |   | (21 | ) |
| Time deposits                 |   |                                                  | (403   | ) |   | 195 |   |   | (208 | ) |
| Other borrowed money          |   |                                                  | (10    | ) |   | (309 | ) |   | (319 | ) |
| TOTAL INTEREST INCOME         |   |                                                  | (678   | ) |   | 211 |   |   | (467 | ) |
|                          |   |                                                  |   |   |   |   |   |   |   |   |
|                          |   |                                                  |   |   |   |   |   |   |   |   |
| CHANGE IN NET INTEREST INCOME |   | $                                                     | (134   | ) | $ | 105 |   | $ | (29 | ) |

----

|                                   |   |                                             |   |                                              |   |   |   |
|----------------------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------|--------|--------|--------|
| Net Interest Income At-Risk            |
|                                   |   |                                             |   |                                              |   |
| Change in Interest Rates(Basis Points) |   | Estimated Increase (Decrease)in NIIJune 30, 2009 |   | Estimated Increase (Decrease)in NIIMarch 31, 2009 |   |
|                                   |   |                                             |   |                                              |   |   |   |
| Stable                                 |   |                                             |   |                                              |   |   |   |
| + 100                                  |   |                                             | -1.50% |                                              |   | 0.17%  |   |
| + 200                                  |   |                                             | -4.14% |                                              |   | -1.05% |   |

----

|                                      |   |             |   |                                |   |          |   |   |                             |   | NPV as a Percentage of PresentValue of Assets (3) |   |
|-------------------------------------------|--------|------------------|--------|-------------------------------------|--------|---------------|--------|--------|----------------------------------|--------|---------------------------------------------------|--------|
| Change inInterest Rates(basis points) (1) |   | EstimatedNPV (2) |   | Estimated Increase (Decrease) inNPV |   |          |   |   | Increase(Decrease)(basis points) |   |
|                                      |   | Amount           |   | Percent                             |   | NPV Ratio (4) |   |   |
|                                      |   |             |   |                                |   |          |   |   |                             |   |                                              |   |   |   |   |   |
| +300                                      |   | $                | 20,204 |                                | $      | (17,713       | )      |   | -47%                             |   |                                              | 4.40%  |   |   | -336 |   |
| +200                                      |   | $                | 27,465 |                                | $      | (10,453       | )      |   | -28%                             |   |                                              | 5.84%  |   |   | -191 |   |
| +100                                      |   | $                | 33,582 |                                | $      | (4,335        | )      |   | -11%                             |   |                                              | 6.99%  |   |   | -76 |   |
| 0                                         |   | $                | 37,917 |                                | $      | —       |   |   | 0%                               |   |                                              | 7.75%  |   |   | 0 |   |
| -100                                      |   | $                | 40,008 |                                | $      | 2,090         |   |   | 6%                               |   |                                              | 8.07%  |   |   | 32 |   |

|   |   |
|--------|--------|

|   | (1) | Assumes an instantaneous uniform change in interest rates at all maturities.                                         |
|--------|-----|----------------------------------------------------------------------------------------------------------------------|
|   | (2) | NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts. |
|   | (3) | Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.   |
|   | (4) | NPV ratio represents NPV divided by the present value of assets.                                                     |

----

|                                                       |   |     |   |   |   |   |   |
|------------------------------------------------------------|--------|----------|--------|--------|--------|--------|--------|
|                                                       |   | Required |   | Actual |   |
|                                                       |   |     |   |   |   |   |   |
| Ratio of Tier 1 Capital to total assets                    |   |     | 4%     |   |   | 6.87%  |   |
| Ratio of Total Risk Based Capital to risk-weighted assets  |   |     | 8%     |   |   | 11.08% |   |
| Ratio of Tier 1 Risk Based Capital to risk-weighted assets |   |     | 4%     |   |   | 10.41% |   |
|                                                       |   |     |   |   |   |   |   |

|                                                              |   |
|-------------------------------------------------------------------|--------|
| Item 3.Quantitative and Qualitative Disclosures About Market Risk |

|                           |   |
|--------------------------------|--------|
| Item 4.Controls and Procedures |

|                            |   |
|---------------------------------|--------|
| Item 4T.Controls and Procedures |

----

|     |                                     |
|----------|------------------------------------------|
| Item 1.  | Legal Proceedings – Not applicable |
|     |                                     |
| Item 1A. | Risk Factors                             |

----

| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
|---------|-------------------------------------------------------------|

|    |                                                   |
|---------|--------------------------------------------------------|
| Item 3. | Defaults Upon Senior Securities – Not applicable |
|    |                                                   |
| Item 4. | Submission of Matters to a Vote of Security Holders    |

|              |   |   |      |     |   |    |   |
|-------------------|--------|--------|-----------|----------|--------|---------|--------|
|              |   | For    |      | Withheld |   |
| Thomas A. Borner  |   |   | 5,508,216 |     |   | 337,431 |   |
| Richard A. Loomis |   |   | 5,696,071 |     |   | 149,576 |   |
| John P. Miller    |   |   | 5,748,013 |     |   | 97,634  |   |

|                                              |   |   |      |    |   |    |   |   |   |   |
|---------------------------------------------------|--------|--------|-----------|---------|--------|---------|--------|--------|--------|--------|
|                                              |   | For    |      | Against |   | Abstain |   |
| Number of votes                                   |   |   | 5,836,868 |    |   | 6,797   |   |   | 1,982  |   |
| Percentage of shares voting in person or by proxy |   |   | 89.40     | %       |   | 0.10    | %      |   | 0.03   | %      |

| Item 5. | Other Information |
|---------|-------------------|

|   | a. | Not applicable.                                                                                                                                                                          |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | b. | There were no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors during the period covered by this Form 10-Q. |

| Item 6. | Exhibits |
|---------|----------|

| Exhibits |   |                                                                                                                                      |
|----------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1     |   | Chief Executive Officer Certification pursuant to 17 CFR 240.13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2     |   | Chief Financial Officer Certification pursuant to 17 CFR 240.13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1     |   | Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350.                                                                 |
| 32.2     |   | Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350.                                                                 |

----

|   |              |   |                                             |   |
|--------|-------------------|--------|--------------------------------------------------|--------|
|   |              |   | PSB HOLDINGS, INC.                               |   |
|   |              |   | (Registrant)                                     |   |
|   |              |   |                                             |   |
| Date   | November 13, 2009 |   | /s/ Thomas A. Borner                             |   |
|   |              |   | Thomas A. Borner                                 |   |
|   |              |   | Chief Executive Officer                          |   |
|   |              |   |                                             |   |
| Date   | November 13, 2009 |   | /s/ Robert J. Halloran, Jr.                      |   |
|   |              |   | Robert J. Halloran, Jr.                          |   |
|   |              |   | President, Chief Financial Officer and Treasurer |   |