NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
Jun. 30, 2026
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1:NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations PSB Financial, Inc. (the “Company”) is a Maryland corporation incorporated on September 10, 2025 to serve as the bank holding company for Pioneer State Bank (the “Bank”) in connection with the conversion of Pioneer Federal Savings and Loan Association (the “Association”) from a mutual form of organization to a stock form of organization (the “Conversion”) through the merger of the Association with and into the Bank, with the Bank as the surviving entity. The Conversion was completed on May 21, 2026. In connection with the Conversion, the Company acquired 100% ownership of the Bank and the Company sold 1,719,250 shares of its common stock at $10.00 per share, for gross offering proceeds of $17,192,500. The cost of the conversion and issuance of common stock was $3,640,933, which was deducted from the gross offering proceeds. The Company’s employee stock ownership plan (the “ESOP”) purchased 137,540 shares of the common stock sold by the Company, which was equal to 8% of the shares of common stock issued by the Company. The ESOP purchased the shares using a loan from the Company. The Company contributed $6,775,783 of the net proceeds from the offering to the Bank, loaned $1,375,400 of the net proceeds to the ESOP and retained approximately $5,400,383 of the net proceeds. The Bank provides a variety of financial services to individuals and corporate members through its branches in Dillon and Deer Lodge, Montana. The Bank’s primary source of revenue is residential single-family loans. The conversion was accounted for as a change in corporate form with the historic basis of the Association’s assets, liabilities, and equity unchanged as a result. The Company is an “emerging growth company”, as defined in the JOBS Act, and, for as long as it continues to be an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies.” The Company intends to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, the financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. Segment Information The Bank’s reportable segment is determined by the President/Chief Executive Officer (CEO) based upon information provided about the Bank’s products and services offered, which relate primarily to banking operations. The segment is also distinguished by the level of information provided by the CEO, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products/services, and customers are similar. The CEO will evaluate the financial performance of the Bank’s business components such as evaluating revenue streams, significant expenses, and budget to actual results in assessing the Bank’s segment and in the determination of allocating resources. The CEO uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The CEO uses net income to benchmark the Bank against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessing performance and in establishing compensation. Loans, investments, and deposit product service fees provide the revenues in the banking operation. Interest expense and salaries and employee benefits, as reported on the statements of operations, provide the significant expenses in the banking operation. All operations are domestic. The Bank operates under a single segment. Segment performance is evaluated using net income. The measure of segment assets is reported on the balance sheets as total assets. Noncash items, such as depreciation and amortization, as well as expenditures for premises and equipment, are reported on the statements of cash flows. Basis of Presentation The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited interim condensed financial statements and notes should be read in conjunction with the Bank’s audited financial statements and notes thereto for the year ended December 31, 2025, filed as part of the Company’s Registration Statement on Form S-1 filed in connection with the Conversion, as declared effective by the SEC on March 16, 2026 (the “Form S-1”). In the opinion of management, all adjustments necessary for a fair statement have been made and consist only of normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the entire year. Significant Accounting Policies and Use of Estimates in Preparation of Financial Statements The Bank has adopted various accounting policies, which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements. Our significant accounting policies are described in the footnotes to the audited financial statements for the year ended December 31, 2025, filed as part of the Form S-1. Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of certain assets and liabilities, and, as such, have a greater possibility of producing results that could be materially different than originally reported. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations. There have been no significant changes to the application of significant accounting policies since December 31, 2025. The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates. Employee Stock Ownership Plan (ESOP) In connection with the conversion completed on May 21, 2026, the Company established an Employee Stock Ownership Plan ("ESOP"). The ESOP purchased 137,540 shares of the Company's common stock using a loan from the Company. In accordance with ASC 718-40, Employee Stock Ownership Plans, shares acquired by the ESOP and not yet allocated to participants are reported as unallocated ESOP shares and reflected as a reduction of shareholders' equity. Compensation expense is recognized as shares are committed to be released to participants based on the fair value of the shares released during the period. The ESOP loan receivable is eliminated in consolidation. Unearned ESOP shares are reflected as a reduction of shareholders’ equity until committed for release.

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2026

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1:NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

PSB Financial, Inc. (the “Company”) is a Maryland corporation incorporated on September 10, 2025 to serve as the bank holding company for Pioneer State Bank (the “Bank”) in connection with the conversion of Pioneer Federal Savings and Loan Association (the “Association”) from a mutual form of organization to a stock form of organization (the “Conversion”) through the merger of the Association with and into the Bank, with the Bank as the surviving entity. The Conversion was completed on May 21, 2026. In connection with the Conversion, the Company acquired 100% ownership of the Bank and the Company sold 1,719,250 shares of its common stock at $10.00 per share, for gross offering proceeds of $17,192,500. The cost of the conversion and issuance of common stock was $3,640,933, which was deducted from the gross offering proceeds. The Company’s employee stock ownership plan (the “ESOP”) purchased 137,540 shares of the common stock sold by the Company, which was equal to 8% of the shares of common stock issued by the Company. The ESOP purchased the shares using a loan from the Company. The Company contributed $6,775,783 of the net proceeds from the offering to the Bank, loaned $1,375,400 of the net proceeds to the ESOP and retained approximately $5,400,383 of the net proceeds.

The Bank provides a variety of financial services to individuals and corporate members through its branches in Dillon and Deer Lodge, Montana. The Bank’s primary source of revenue is residential single-family loans.

The conversion was accounted for as a change in corporate form with the historic basis of the Association’s assets, liabilities, and equity unchanged as a result. The Company is an “emerging growth company”, as defined in the JOBS Act, and, for as long as it continues to be an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies.” The Company intends to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, the financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.

Segment Information

The Bank’s reportable segment is determined by the President/Chief Executive Officer (CEO) based upon information provided about the Bank’s products and services offered, which relate primarily to banking operations. The segment is also distinguished by the level of information provided by the CEO, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products/services, and customers are similar. The CEO will evaluate the financial performance of the Bank’s business components such as evaluating revenue streams, significant expenses, and budget to actual results in assessing the Bank’s segment and in the determination of allocating resources. The CEO uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The CEO uses net income to benchmark the Bank against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessing performance and in establishing compensation. Loans, investments, and deposit product service fees provide the revenues in the banking operation. Interest expense and salaries and employee benefits, as reported on the statements of operations, provide the significant expenses in the banking operation. All operations are domestic.

The Bank operates under a single segment. Segment performance is evaluated using net income. The measure of segment assets is reported on the balance sheets as total assets. Noncash items, such as depreciation and amortization, as well as expenditures for premises and equipment, are reported on the statements of cash flows.

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited interim condensed financial statements and notes should be read in conjunction with the Bank’s audited financial statements and notes thereto for the year ended December 31, 2025, filed as part of the Company’s Registration Statement on Form S-1 filed in connection with the Conversion, as declared effective by the SEC on March 16, 2026 (the “Form S-1”). In the opinion of management, all adjustments necessary for a fair statement have been made and consist only of normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the entire year.

Significant Accounting Policies and Use of Estimates in Preparation of Financial Statements

The Bank has adopted various accounting policies, which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements. Our significant accounting policies are described in the footnotes to the audited financial statements for the year ended December 31, 2025, filed as part of the Form S-1. Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of certain assets and liabilities, and, as such, have a greater possibility of producing results that could be materially different than originally reported. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations. There have been no significant changes to the application of significant accounting policies since December 31, 2025.

The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates.

Employee Stock Ownership Plan (ESOP)

In connection with the conversion completed on May 21, 2026, the Company established an Employee Stock Ownership Plan ("ESOP"). The ESOP purchased 137,540 shares of the Company's common stock using a loan from the Company.

In accordance with ASC 718-40, Employee Stock Ownership Plans, shares acquired by the ESOP and not yet allocated to participants are reported as unallocated ESOP shares and reflected as a reduction of shareholders' equity. Compensation expense is recognized as shares are committed to be released to participants based on the fair value of the shares released during the period. The ESOP loan receivable is eliminated in consolidation. Unearned ESOP shares are reflected as a reduction of shareholders’ equity until committed for release.