PMHG Prime Meridian Holding Company (QX)

Florida	333-191801	27-2980805
(State or other jurisdiction of incorporation)	(Commission file number)	(IRS employer identification no.)

1471 Timberlane Road Tallahassee, FL	32312
(Address of principal executive offices)	(Zip Code)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1933 (§240.12b-2 of this chapter)   Emerging growth company            ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Title of each class			Trading Symbol(s)	Name of exchange on which registered
None			N/A	N/A

	(d)	Exhibits.
		99.1               Press release dated July 27, 2023
		99.2                Investor Presentation Q2 2023
		104                 Cover Page Interactive Data File (embedded within the Inline XBRL document)

	PRIME MERIDIAN HOLDING COMPANY
	By:	/s/ Clint F. Weber
		Clint F. Weber
		Chief Financial Officer and Executive Vice President

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Prime Meridian Holding Company Reports

SECOND QUARTER 2023 RESULTS

 

 

Financial Highlights - Prime Meridian Holding Company and Subsidiary (Unaudited)

(dollars in thousands except per share amounts)

 

		2Q'23				1Q'23				4Q'22				3Q'22				2Q'22
Net earnings		$	2,257			$	2,501			$	2,642			$	2,831			$	1,967
Book value per share		$	23.25			$	22.81			$	21.19			$	20.20			$	20.48
Earnings per share - Basic		$	0.71			$	0.79			$	0.83			$	0.90			$	0.62
Earnings per share - Diluted		$	0.70			$	0.78			$	0.83			$	0.89			$	0.62
Weighted-average basic shares outstanding			3,189,353				3,175,807				3,164,211				3,159,526				3,151,760
Weighted-average diluted shares outstanding			3,201,531				3,210,012				3,198,744				3,197,282				3,189,319
Return on average assets(1)			1.10	%			1.23	%			1.27	%			1.32	%			0.90	%
Return on average equity(1)			12.31				14.20				16.36				17.19				12.13
Average yield on earning assets(1)			4.98				4.78				4.59				4.04				3.43
Net interest margin(1)			3.78				3.92				3.98				3.71				3.21
Efficiency ratio(2)			57.84				55.72				54.56				50.53				54.32
Nonperforming assets/total assets(3)			0.17				0.17				0.09				0.12				0.04

 

(1) Ratio has been annualized on a 30/360 basis.

(2) Efficiency Ratio represents noninterest expense divided by the sum of net interest income plus noninterest income. (3) Nonperforming assets include loans greater than 90 days past due and nonaccrual loans.

 

•	Diluted earnings per share of $0.70 for the second quarter of 2023 and $1.48 for the first six months of 2023 represent growth of 12.9% and 12.1%, respectively, over 2022.
•	Return on average assets (ROAA) of 1.10% for 2Q23 represents the fourth consecutive quarter the Company's ROAA was above 1.0%.
•	Gross loans increased $23.8 million, or 4.0%, since December 31, 2022 with growth occurring in all categories, except consumer.  Gross loans are up $75.4 million over the same period last year, or 13.9%.
•	Since December 31, 2022, period-end deposit balances have decreased 3.9%, or $28.7 million, and average deposit balances have decreased 6.3%, or $47.1 million. The Company, however, opened 239 net new non-maturity deposit accounts during the second quarter of 2023 and 537 net new non-maturity deposit accounts since December 31, 2022.
•	The Bank's estimated uninsured deposits were $192.1 million, or 27% of total deposits at June 30, 2023, excluding collateralized public funds accounts.
•	At June 30, 2023, available secured and unsecured borrowing capacity was $150.4 million through various sources including the Federal Home Loan Bank of Atlanta (FHLB) and lines of credit with several banks. When combined with maximum available brokered and wholesale funding capacity of $205.3 million, off-balance sheet funding sources total $355.7 million.
•	At June 30, 2023, on balance sheet liquidity was $145.6 million, consisting of cash and cash equivalents and unpledged debt securities at fair value. Total liquidity sources of $501.3 million, or 71.3% of total deposits, represents 261% of estimated uninsured deposits at June 30, 2023.
•	Compared to the linked quarter, book value per share increased $0.44 per share, or 1.9%, to $23.25 due to strong quarterly earnings.  Book value per share is up 13.5% from June 30, 2022.
•	The Company's tangible common equity ratio was 9.03% at June 30, 2023 compared to 8.23% at December 31, 2022.  This is considered a non-GAAP financial measure and additional information, including a reconciliation, can be found on page 11.

 

 

 

Earnings Summary (Unaudited)

(dollars in thousands)

 

														Change 2Q'23 vs.								For the Six Months Ended
		2Q'23				1Q'23				2Q'22				1Q'23				2Q'22				June 30, 2023				June 30, 2022				% Change
Net interest income		$	7,353			$	7,555			$	6,642				(2.7	%)			10.7	%		$	14,908			$	12,501				19.3	%
Provision for credit losses			325				243				731				33.7				(55.5	)			568				360				57.8
Noninterest income			463				441				504				5.0				(8.1	)			904				1,022				(11.5	)
Noninterest expense			4,521				4,455				3,882				1.5				16.5				8,976				7,662				17.1
Income taxes			713				797				566				(10.5	)			26.0				1,510				1,293				16.8
Net earnings		$	2,257			$	2,501			$	1,967				(9.8	)%			14.7	%		$	4,758			$	4,208				13.1	%

 

Net Interest Income (Unaudited)

(dollars in thousands)

 

														Change 2Q'23 vs.								For the Six Months Ended
		2Q'23				1Q'23				2Q'22				1Q'23				2Q'22				June 30, 2023				June 30, 2022				% Change
Interest income:
Loans		$	8,570			$	8,044			$	6,029				6.5	%			42.1	%		$	16,614			$	11,813				40.6	%
Debt securities			925				933				737				(0.9	)			25.5				1,858				1,122				65.6
Other			184				222				331				(17.1	)			(44.4	)			406				455				(10.8	)
Total interest income			9,679				9,199				7,097				5.2	%			36.4	%			18,878				13,390				41.0	%
Interest expense:
Deposits			1,917				1,533				415				25.0	%			361.9	%			3,450				818				321.8	%
Other borrowings			409				111				40				268.5				922.5				520				71				632.4
Total interest expense			2,326				1,644				455				41.5				411.2				3,970				889				346.6
Net interest income		$	7,353			$	7,555			$	6,642				(2.7%	)			10.7	%		$	14,908			$	12,501				19.3	%

 

The Company reported net interest income of $7.4 million for the second quarter of 2023, a decrease of $202,000, or 2.7%, from the linked quarter.  Higher loan yields and loan growth during the quarter were offset by higher funding costs and reduced cash balances. Average interest-earning assets increased 1.1%, or $8.2 million since the first quarter of 2023.

 

Comparing the three and six months ended June 30, 2023 and 2022, a change in the earning asset mix and higher yields on interest-earning assets drove the improvement in net interest income, outpacing the effect of higher funding costs.  

 

The Company's net interest margin ("NIM") for the second quarter of 2023 was 3.78%, a decrease of 14 basis points from the linked quarter as a 20-basis point increase in the average yield on interest-earning assets was more than offset by a 48-basis point increase in the average cost of interest-bearing liabilities.  For the three and six-month periods ending June 30, 2023 and 2022, the Company's NIM improved 57 basis points and 77 basis points, respectively, to 3.78% and 3.81%. An improved earning asset mix and higher interest rates were key drivers. Current macro trends indicate that NIM will be challenged through the rest of 2023, even if Fed tightening ends, with continued pressure on funding costs. As a result, loan growth may slow in an effort to manage balance sheet constraints.

 

 

Provision for Credit Losses

 

The provision for credit loss expense was $325,000 for the second quarter of 2023, compared to $243,000 for the first quarter of 2023 and $731,000 for the second quarter of 2022.  For the second quarter of 2022, credit loss expense of $731,000 was attributed to loan production during the quarter.  For the first quarter of 2023, credit loss expense of $243,000 was attributed to fully reserving for one PPP loan and loan growth during the quarter.  For the second quarter of 2023, credit loss expense of $325,000 was attributed to $350,000 in net charge-off activity, and to a lesser extent, due to loan growth during the quarter. The allowance for credit losses to total loans was 0.76% at June 30, 2023 compared to 1.20% at December 31, 2022.

 

For the six-month period ended June 30, 2023, the provision for credit loss expense was $568,000 compared to $360,000 for the same period in 2022.    

 

The Company adopted ASC 326 Current Expected Credit Losses "CECL" effective January 1, 2023.  The impact of adopting CECL resulted in a $2.6 million decrease to the allowance for credit losses. 

 

Noninterest income (Unaudited)

(dollars in thousands)

 

														Change 2Q'23 vs.								For the Six Months Ended
		2Q'23				1Q'23				2Q'22				1Q'23				2Q'22				June 30, 2023				June 30, 2022				% Change
Service charges and fees on deposit accounts		$	84			$	85			$	73				(1.2	)%			15.1	%		$	169			$	141				19.9	%
Debit card/ATM revenue, net			149				151				143				(1.3	)			4.2				300				272				10.3
Mortgage banking revenue, net			75				54				139				38.9				(46.0	)			129				304				(57.6	)
Income from bank-owned life insurance			96				94				94				2.1				2.1				190				189				0.5
Other income			59				57				55				3.5				7.3				116				116				-
Total noninterest income		$	463			$	441			$	504				5.0	%			(8.1	)%		$	904			$	1,022				(11.5	)%

 

Noninterest income increased slightly from its linked quarter due primarily to higher mortgage banking revenue.  Comparing the three and six months ended June 30, 2023 and 2022, the decline in mortgage banking revenue from 2022 outpaced increases in all other noninterest income categories.  Lower mortgage banking activity for 2023 reflects the negative impact of higher rates on refinancing and homebuying activity, compounded by inventory issues in our local markets.  

 

Noninterest expense (Unaudited)

(dollars in thousands)

 

														Change 2Q'23 vs.								For the Six Months Ended
		2Q'23				1Q'23				2Q'22				1Q'23				2Q'22				June 30, 2023				June 30, 2022				% Change
Salaries and employee benefits		$	2,743			$	2,752			$	2,238				(0.3	)%			22.6	%		$	5,495			$	4,398				24.9	%
Occupancy and equipment			399				409				396				(2.4	)			0.8				808				804				0.5
Professional fees			132				135				130				(2.2	)			1.5				267				276				(3.3	)
Marketing			250				223				213				12.1				17.4				473				380				24.5
FDIC assessment			87				84				84				3.6				3.6				171				208				(17.8	)
Software maintenance, amortization and other			294				277				285				6.1				3.2				571				527				8.3
Other			616				575				536				7.1				14.9				1,191				1,069				11.4
Total noninterest expense		$	4,521			$	4,455			$	3,882				1.5	%			16.5	%		$	8,976			$	7,662				17.1	%

 

Compared to the linked quarter, the increase in noninterest expense is mostly attributed to an increase in other noninterest expense (namely higher travel expense connected with conventions and conferences), higher marketing expense, and higher software maintenance, amortization and other expense.  Comparing the three and six-month periods ending June 30, 2023 and 2022, the primary driver of higher noninterest expense is salaries and employee benefits.  The Company reported 108 at June 30, 2023 compared to 100 FTEs at June 30, 2022.  In addition to higher headcount, a full quarter impact of annual raises that were effective March 1, 2023, higher group insurance costs, higher incentive accrual and fewer deferred loan costs also contributed to the overall increase.  

 

 

 

Financial Condition

 

At June 30, 2023, the Company reported $821.0 million in total assets, $702.8 million in deposits, and $614.7 million in net portfolio loans. This compares to $815.2 million in total assets, $731.5 million in deposits, and $588.7 million in net portfolio loans at December 31, 2022.  Compared to December 31, 2022, the Company reported growth across all loan categories, except consumer.

 

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

 

			June 30, 2023								December 31, 2022
			Unaudited								Audited
			Amount				% of Total				Amount				% of Total
Commercial real estate			$	205,460				33.2	%		$	202,263				34.0	%
Residential real estate and home equity				234,486				37.8				224,211				37.6
Construction				83,704				13.5				75,151				12.6
Commercial				90,290				14.6				86,308				14.5
Consumer				5,525				0.9				7,698				1.3
Total loans				619,465				100.0	%			595,631				100.0	%
Net deferred loan costs				8								229
Allowance for credit losses				(4,729	)							(7,145	)
Loans, net			$	614,744							$	588,715

 

At June 30, 2023, the allowance for credit losses of $4.7 million, represented 0.76% of gross loans compared to $7.1 million, or 1.20% of gross loans, at December 31, 2022.  The adoption of CECL on January 1, 2023 resulted in a $2.6 million decrease in the allowance for credit losses. 

 

Deposit balances decreased $28.7 million, or 3.9%, since December 31, 2022, and $81.8 million, or 10.4% since June 30, 2022, with declining balances in all categories, except time deposits.  Time deposit account balances increased $22.5 million, or 56.2%, since year-end, with $10.6 million of that increase attributed to public funds.  We continue to monitor our deposits closely as we manage through this rising rate environment.

 

Total stockholders’ equity was $74.2 million, or 9.0% of total assets, at June 30, 2023, compared to $67.1 million at December 31, 2022, or 8.2% of total assets.  Strong earnings in the first half of 2023, a $570,000 favorable change in the Company's accumulated other comprehensive income (loss), and a $1.9 million tax-effected change resulting from the adoption of CECL all contributed to higher equity, partially offset by common stock dividends of $698,000 ($0.22 per common share).  Book value per share increased from $21.19 at December 31, 2022 with 3,164,491 common shares outstanding to $23.25 at June 30, 2023, with 3,190,052 common shares outstanding.  

 

As of June 30, 2023, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 9.98%, a 13.00% Common Equity Tier 1 Capital Ratio, a 13.00% Tier 1 Risk-Based Capital Ratio, and a 13.76% Total Risk-Based Capital Ratio.  The Company maintains a $15 million, 5-year revolving Line of Credit, enhancing its liquidity sources to support the ongoing capital needs of the Bank. The Line of Credit matures in August 2025 and currently has a zero outstanding balance.  As of June 30, 2023, the Company reported $35 million in FHLB advances. Year-to-date interest expense totaled $520,000 for FHLB advances and other borrowings.  

 

Asset Quality

 

At June 30, 2023 the Bank had five nonaccrual loans totaling $1.39 million compared to two nonaccrual loans totaling $343,000 at December 31, 2022.  Net charge-offs totaled $350,000 for the quarter ended June 30, 2023 and the ratio of nonperforming assets as a percentage of total assets was 0.17%. The Company adopted CECL effective January 1, 2023 which resulted in a $2.6 million ($1.9 million tax-effected) decrease in the allowance for credit losses.  Management believes that the allowance for credit losses which was $4.7 million, or 0.76% of gross loans, at June 30, 2023 is adequate. 

 

 

 

About Prime Meridian Holding Company

 

Headquartered in Tallahassee, Florida, Prime Meridian Holding Company (OTCQX: PMHG) offers a broad range of banking services through its wholly owned subsidiary, Prime Meridian Bank, a Florida state-chartered non-member bank. Founded in 2008, the Bank now serves the Tallahassee and Lakeland/Winter Haven Metropolitan Statistical Areas (MSA), including clients in North and Central Florida as well as South Georgia and South Alabama. The Bank currently has four Florida locations: two in Tallahassee, Florida, one in Crawfordville, Florida, and one in Lakeland, Florida. As of June 30, 2023, the Bank had 108 full-time equivalent employees. For more information about Prime Meridian Holding Company, please visit www.primemeridianbank.com.

 

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “is confident that” and similar expressions are intended to identify these forward-looking statements. These forward-looking statements involve risk and uncertainty and a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. We do not have a policy of updating or revising forward-looking statements except as otherwise required by law, and silence by management over time should not be construed to mean that actual events are occurring as estimated in such forward-looking statements.

 

About Non-GAAP Financial Measures

 

Certain financial measures and ratios we present including "pre-tax, pre-provision ("PTPP") net earnings," "PTPP return on average common equity," "PTPP return on average assets," and "adjusted average loan yield" are supplemental measures that are not required by, or are not presented in accordance with, accounting principles generally accepted in the United States of America ("GAAP"). We refer to those financial measures and ratios as "non-GAAP financial measures." We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results.

 

We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present, and future periods.

 

These non-GAAP measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures is included at the end of the financial statement tables.

 

 

 

Tables Follow

 

 

 

 

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

 

		2Q'23				1Q'23				4Q'22				3Q'22				2Q'22
Interest income:
Loans		$	8,570			$	8,044			$	7,653			$	6,755			$	6,029
Debt securities			925				933				938				878				737
Other			184				222				477				649				331
Total interest income			9,679				9,199				9,068				8,282				7,097
Interest expense:
Deposits			1,917				1,533				1,137				624				415
Other borrowings			409				111				73				56				40
Total interest expense			2,326				1,644				1,210				680				455
Net interest income			7,353				7,555				7,858				7,602				6,642
Credit loss expense			325				243				289				241				731
Net interest income after credit loss expense			7,028				7,312				7,569				7,361				5,911
Noninterest income:
Service charges and fees on deposit accounts			84				85				83				78				73
Debit card/ATM revenue, net			149				151				136				132				143
Mortgage banking revenue, net			75				54				53				116				139
Income from bank-owned life insurance			96				94				94				96				94
Other income			59				57				63				61				55
Total noninterest income			463				441				429				483				504
Noninterest expense:
Salaries and employee benefits			2,743				2,752				2,862				2,367				2,238
Occupancy and equipment			399				409				404				413				396
Professional fees			132				135				114				124				130
Marketing			250				223				218				195				213
FDIC assessment			87				84				57				95				84
Software maintenance, amortization and other			294				277				325				310				285
Other			616				575				541				581				536
Total noninterest expense			4,521				4,455				4,521				4,085				3,882
Earnings before income taxes			2,970				3,298				3,477				3,759				2,533
Income taxes			713				797				835				928				566
Net earnings		$	2,257			$	2,501			$	2,642			$	2,831			$	1,967
Basic earnings per common share		$	0.71			$	0.79			$	0.83			$	0.90			$	0.62
Diluted earnings per common share			0.70				0.78				0.83				0.89				0.62

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings

(in thousands, except per share amounts)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
		Unaudited								Unaudited
Interest income:
Loans		$	8,570			$	6,029			$	16,614			$	11,813
Debt securities			925				737				1,858				1,122
Other			184				331				406				455
Total interest income			9,679				7,097				18,878				13,390
Interest expense:
Deposits			1,917				415				3,450				818
Other borrowings			409				40				520				71
Total interest expense			2,326				455				3,970				889
Net interest income			7,353				6,642				14,908				12,501
Credit loss expense			325				731				568				360
Net interest income after credit loss expense			7,028				5,911				14,340				12,141
Noninterest income:
Service charges and fees on deposit accounts			84				73				169				141
Debit card/ATM revenue, net			149				143				300				272
Mortgage banking revenue, net			75				139				129				304
Income from bank-owned life insurance			96				94				190				189
Other income			59				55				116				116
Total noninterest income			463				504				904				1,022
Noninterest expense:
Salaries and employee benefits			2,743				2,238				5,495				4,398
Occupancy and equipment			399				396				808				804
Professional fees			132				130				267				276
Marketing			250				213				473				380
FDIC assessment			87				84				171				208
Software maintenance, amortization and other			294				285				571				527
Other			616				536				1,191				1,069
Total noninterest expense			4,521				3,882				8,976				7,662
Earnings before income taxes			2,970				2,533				6,268				5,501
Income taxes			713				566				1,510				1,293
Net earnings		$	2,257			$	1,967			$	4,758			$	4,208
Earnings per common share:
Basic		$	0.71			$	0.62			$	1.49			$	1.34
Diluted			0.70				0.62				1.48				1.32
Cash dividends per common share(1)			-				-				0.22				0.18

 

 

 

⁽¹⁾ Annual cash dividends were paid during the first quarters of 2023 and 2022.

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

 

		2Q'23				1Q'23				4Q'22				3Q'22				2Q'22
		(Unaudited)				(Unaudited)				(Audited)				(Unaudited)				(Unaudited)
Assets
Cash & cash equivalents		$	21,799			$	22,714			$	39,788			$	76,017			$	134,122
Debt securities available for sale			126,792				129,748				129,436				131,668				133,382
Debt securities held to maturity			11,827				11,816				11,805				11,794				8,777
Loans, held for sale			6,614				8,105				7,058				8,911				10,725
Loans, net			614,744				606,128				588,715				565,877				537,566
Federal Home Loan Bank stock			1,895				1,045				463				463				463
Premises & equipment, net			7,746				7,893				8,022				8,169				8,228
Right of use lease asset			2,934				2,989				3,044				3,098				3,151
Accrued interest receivable			2,713				2,623				2,385				2,132				1,933
Bank-owned life insurance			16,722				16,626				16,532				16,438				16,342
Other assets			7,253				6,570				7,924				7,748				6,148
Total Assets		$	821,039			$	816,257			$	815,172			$	832,315			$	860,837
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits		$	189,362			$	199,492			$	197,987			$	216,533			$	210,685
Savings, NOW and money-market deposits			450,820				466,202				493,439				500,263				535,359
Time deposits			62,646				51,542				40,109				38,618				38,545
Total Deposits			702,828				717,236				731,535				755,414				784,589
Other borrowings			-				1,725				4,275				4,125				4,125
FHLB Advances			35,000				15,000				-				-				-
Official checks			1,114				1,671				4,090				1,277				776
Operating lease liability			3,111				3,159				3,208				3,256				3,303
Other liabilities			4,816				4,790				5,011				4,339				3,415
Total Liabilities			746,869				743,581				748,119				768,411				796,208
Total Stockholders' Equity			74,170				72,676				67,053				63,904				64,629
Total Liabilities and Stockholders' Equity		$	821,039			$	816,257			$	815,172			$	832,315			$	860,837

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Average Balance Sheets (Unaudited)

(in thousands)

		2Q'23											1Q'23												2Q'22
						Interest											Interest												Interest
		Average				and			Yield/				Average				and				Yield/				Average				and				Yield/
		Balance				Dividends			Rate(5)				Balance				Dividends				Rate(5)				Balance				Dividends				Rate(5)
Interest-earning assets:
Loans(1)		$	613,318			$	8,465			5.52	%		$	602,022			$	7,958				5.29	%		$	514,166			$	5,912				4.60	%
Loans held for sale			8,466				105			4.96				7,345				86				4.68				11,174				117				4.19
Debt securities			140,699				925			2.63				141,268				933				2.64				132,562				737				2.22
Other(2)			15,646				184			4.70				19,335				222				4.59				170,320				331				0.78
Total interest-earning assets			778,129			$	9,679			4.98	%			769,970			$	9,199				4.78	%			828,222			$	7,097				3.43	%
Noninterest-earning assets			39,540											40,538												41,391
Total assets		$	817,669										$	810,508											$	869,613
Interest-bearing liabilities:
Savings, NOW and money-market deposits		$	453,129			$	1,585			1.40	%		$	482,788			$	1,387				1.15	%		$	536,209			$	357				0.27	%
Time deposits			55,192				332			2.41				42,099				146				1.39				43,611				58				0.53
Total interest-bearing deposits			508,321				1,917			1.51				524,887				1,533				1.17				579,820				415				0.29
Other borrowings			32,113				409			5.09				7,301				111				6.08				4,034				40				3.97
Total interest-bearing liabilities			540,434			$	2,326			1.72	%			532,188			$	1,644				1.24	%			583,854			$	455				0.31	%
Noninterest-bearing deposits			195,657											198,790												213,521
Noninterest-bearing liabilities			8,231											9,074												7,345
Stockholders' equity			73,347											70,456												64,893
Total liabilities and stockholders' equity		$	817,669										$	810,508											$	869,613
Net earning assets		$	237,695										$	237,782											$	244,368
Net interest income						$	7,353										$	7,555											$	6,642
Interest rate spread(3)										3.26	%											3.54	%											3.12	%
Net interest margin(4)										3.78	%											3.92	%											3.21	%

 

		For the Six Months Ended June 30,
		2023												2022
						Interest												Interest
		Average				and				Yield/				Average				and				Yield/
(dollars in thousands)		Balance				Dividends				Rate(5)				Balance				Dividends				Rate(5)
Interest-earning assets:
Loans(1)		$	615,610			$	16,422				5.34	%		$	501,783			$	11,596				4.62	%
Loans held for sale			7,909				192				4.86				10,864				217				3.99
Debt securities			140,982				1,858				2.64				108,459				1,122				2.07
Other(2)			17,480				406				4.65				200,167				455				0.45
Total interest-earning assets			781,981			$	18,878				4.83	%			821,273			$	13,390				3.26	%
Noninterest-earning assets			32,127												40,004
Total assets		$	814,108											$	861,277
Interest-bearing liabilities:
Savings, NOW and money-market deposits		$	467,877			$	2,972				1.27	%		$	526,909			$	693				0.26	%
Time deposits			48,682				478				1.96				46,251				125				0.54
Total interest-bearing deposits			516,559				3,450				1.34				573,160				818				0.29
Other borrowings and FHLB advances			19,776				520				5.26				3,877				71				3.66
Total interest-bearing liabilities			536,335			$	3,970				1.48	%			577,037			$	889				0.31	%
Noninterest-bearing deposits			197,215												211,170
Noninterest-bearing liabilities			8,648												7,202
Stockholders' equity			71,910												65,868
Total liabilities and stockholders' equity		$	814,108											$	861,277
Net earning assets		$	245,646											$	244,236
Net interest income						$	14,908											$	12,501
Interest rate spread (3)											3.35	%											2.95	%
Net interest margin(4)											3.81	%											3.04	%

 

⁽¹⁾ Includes nonaccrual loans

⁽²⁾ Other interest-earning assets includes federal funds sold, interest-bearing deposits and Federal Home Loan Bank stock

⁽³⁾ Interest rate spread is the difference between total interest-earning asset yield and the rate paid on total interest-bearing liabilities

⁽⁴⁾ Net interest margin is net interest income divided by total average interest-earning assets, annualized on a 30/360 basis.

⁽⁵⁾ Annualized

 

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands except per share amounts)

 

		2Q'23				1Q'23				4Q'22				3Q'22				2Q'22
Per Share Data:
Earnings per common share - Basic		$	0.71			$	0.79			$	0.83			$	0.90				0.62
Earnings per common share - Diluted		$	0.70			$	0.78			$	0.83			$	0.89				0.62
Book value per common share		$	23.25			$	22.81			$	21.19			$	20.20				20.48
Common shares outstanding			3,190,052				3,185,765				3,164,491				3,162,975				3,155,308
Weighted-average basic common shares outstanding			3,189,353				3,175,807				3,164,211				3,159,526				3,151,760
Weighted-average diluted common shares outstanding			3,201,531				3,210,012				3,198,744				3,197,282				3,189,319
Selected Performance Ratios and Other Data:
Return on average assets(1)			1.10	%			1.23	%			1.27	%			1.32	%			0.90	%
Return on average equity(1)			12.31				14.20				16.36				17.19				12.13
Average yield on earning assets			4.98				4.78				4.59				4.04				3.43
Net interest margin(2)			3.78				3.92				3.98				3.71				3.21
Efficiency ratio(3)			57.84				55.72				54.56				50.53				54.32
Noninterest expense/average assets(1)			2.21				2.20				2.18				1.90				1.79
Asset Quality Data:
Nonaccrual loans		$	1,391			$	1,348			$	343			$	1,006			$	349
Loans 90 days past due and still accruing			-				-				404				-				-
Total nonperforming assets			1,391				1,348				747				1,006				349
Nonperforming assets/total assets			0.17	%			0.17	%			0.09	%			0.12	%			0.04	%
Loans 30-89 days past due		$	826			$	2,414			$	2,900			$	1,024			$	1,597
Total loans			619,465				610,792				595,631				572,639				544,084
Loans 30-89 days past due/total loans			0.13	%			0.40	%			0.49	%			0.18	%			0.29	%
Net charge-offs/average loans (1)			0.23	%			-				-				-				-
Capital Ratios:
Tier 1 Leverage Capital Ratio (Company)			10.14	%			9.93	%			9.09	%			8.59	%			8.14	%
Common Equity Tier 1 Capital Ratio (Company)			13.22				12.82				12.25				11.98				11.95
Tier 1 Risk-Based Capital Ratio (Company)			13.22				12.82				12.25				11.98				11.95
Total Risk-Based Capital Ratio (Company)			13.97				13.58				13.39				13.09				13.06
Tangible Common Equity Ratio(4) (Company)			9.03				8.90				8.23				7.68				7.51
Tier 1 Leverage Capital Ratio (Bank)			9.98				10.13				9.70				9.07				8.61
Common Equity Tier 1 Capital Ratio (Bank)			13.00				13.07				12.90				12.62				12.61
Tier 1 Risk-Based Capital Ratio (Bank)			13.00				13.07				12.90				12.62				12.61
Total Risk-Based Capital Ratio (Bank)			13.76				13.83				14.04				13.73				13.72
Tangible Common Equity Ratio(4) (Bank)			8.87				9.10				8.73				8.15				7.96

 

(1) Annualized

(2) Net interest margin is net interest income divided by total average interest-earning assets, annualized.

(3) Efficiency Ratio represents noninterest expense divided by the sum of net interest income plus noninterest income.

(4) Tangible Common Equity Ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, please refer to page 11.

 

 

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation Quarterly Pre-Tax Pre-Provision Calculation (Unaudited)

(dollars in thousands except per share amounts)

 

		2Q'23				1Q'23				4Q'22				3Q'22				2Q'22
Net Income
Net earnings (GAAP)		$	2,257			$	2,501			$	2,642			$	2,831			$	1,967
Plus: Provision (credit) for credit losses			325				243				289				241				731
Plus: income taxes			713				797				835				928				566
PTPP(1) net earnings (non-GAAP)		$	3,295			$	3,541			$	3,766			$	4,000			$	3,264
Earnings per Share (EPS)
Weighted average common shares, diluted			3,201,531				3,210,012				3,198,744				3,197,282				3,189,319
EPS, diluted (GAAP)		$	0.70			$	0.78			$	0.83			$	0.89			$	0.62
PTPP(1) EPS, diluted (non-GAAP)		$	1.03			$	1.10			$	1.18			$	1.25			$	1.02
Return on Average Assets (ROAA)(2)
Average assets		$	817,669			$	810,508			$	828,912			$	857,917			$	869,613
ROAA (GAAP)			1.10	%			1.23	%			1.27	%			1.32	%			0.90	%
PTPP(1) ROAA (non-GAAP)			1.61	%			1.75	%			1.82	%			1.86	%			1.50	%
Return on Average Equity (ROAE)(2)
Average equity		$	73,347			$	70,456			$	64,578			$	65,891			$	64,893
ROAE (GAAP)			12.31	%			14.20	%			16.36	%			17.19	%			12.13	%
PTPP(1) ROAE (non-GAAP)			17.97	%			20.10	%			23.33	%			24.28	%			20.12	%
Adjusted Average Loan Yield:
Net loans, excluding loans held for sale		$	614,744			$	606,128			$	588,715			$	565,877			$	537,566
Less PPP loans			(48	)			(181	)			(191	)			(199	)			(1,023	)
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)		$	614,696			$	605,947			$	588,524			$	565,678			$	536,543
Average loans, excluding loans held for sale		$	613,318			$	602,022			$	588,727			$	555,764			$	514,166
Less average PPP loans			(175	)			(185	)			(195	)			(312	)			(2,876	)
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)		$	613,143			$	601,837			$	588,532			$	555,452			$	511,290
Interest on loans, excluding loans held for sale		$	8,465			$	7,958			$	7,561			$	6,646			$	5,912
Less interest income and earned fee income on PPP loans			(4	)			3				(1	)			(41	)			(237	)
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)		$	8,461			$	7,961			$	7,560			$	6,605			$	5,675
Growth rate over linked quarter			6.3	%			5.3	%			14.5	%			16.4	%			9.4	%
Average loan yield, excluding loans held for sale (GAAP)			5.52	%			5.29	%			5.14	%			4.78	%			4.60	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)			5.52	%			5.29	%			5.14	%			4.76	%			4.44	%
Tangible Common Equity Ratio (Company)
Stockholders' Equity (GAAP)		$	74,170			$	72,676			$	67,053			$	63,904			$	64,629
Less: Intangibles			-				-				-				-				-
Tangible Stockholders' Equity (non-GAAP)		$	74,170			$	72,676			$	67,053			$	63,904			$	64,629
Total Assets (GAAP)		$	821,039			$	816,257			$	815,172			$	832,315			$	860,837
Less: Intangibles			-				-				-				-				-
Tangible Assets (non-GAAP)		$	821,039			$	816,257			$	815,172			$	832,315			$	860,837
Tangible Common Equity Ratio (non-GAAP)			9.03	%			8.90	%			8.23	%			7.68	%			7.51	%
Tangible Common Equity Ratio (Bank)
Stockholders' Equity (GAAP)		$	72,816			$	74,287			$	71,125			$	67,860			$	68,550
Less: Intangibles			-				-				-				-				-
Tangible Stockholders' Equity (non-GAAP)		$	72,816			$	74,287			$	71,125			$	67,860			$	68,550
Total Assets (GAAP)		$	820,921			$	816,173			$	815,142			$	832,170			$	860,735
Less: Intangibles			-				-				-				-				-
Tangible Assets (non-GAAP)		$	820,921			$	816,173			$	815,142			$	832,170			$	860,735
Tangible Common Equity Ratio (non-GAAP)			8.87	%			9.10	%			8.73	%			8.15	%			7.96	%

 

⁽¹⁾ Pre-tax, pre-provision

⁽²⁾ Annualized

 

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation

Year-to-Date Pre-Tax Pre-Provision Calculation (Unaudited)

(dollars in thousands except per share amounts)

 

		For the Six Months Ended
		June 30, 2023				June 30, 2022
Net Income
Net earnings (GAAP)		$	4,758			$	4,208
Plus: (credit) provision for loan losses			568				360
Plus: income taxes			1,510				1,293
PTPP(1) net earnings (non-GAAP)		$	6,836			$	5,861
Earnings per Share (EPS)
Weighted average common shares, diluted			3,211,095				3,188,802
EPS, diluted (GAAP)		$	1.48			$	1.32
PTPP(1) EPS, diluted (non-GAAP)		$	2.13			$	1.84
Return on Average Assets (ROAA)(2)
Average assets		$	814,108			$	861,277
ROAA (GAAP)			1.17	%			0.98	%
PTPP(1) ROAA (non-GAAP)			1.68	%			1.36	%
Return on Average Equity (ROAE)(2)
Average equity (GAAP)		$	71,910			$	65,868
ROAE (GAAP)			13.23	%			12.78	%
PTPP(1) ROAE (non-GAAP)			19.01	%			17.80	%

 

 

⁽¹⁾ Pre-tax, pre-provision

⁽²⁾ Annualized

 

 

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation Annual Pre-Tax Pre-Provision Calculation Unaudited)

(dollars in thousands except per share amounts)

 

		For the Year Ended December 31,
		2022				2021				2020				2019				2018
Net Income
Net earnings (GAAP)		$	9,681			$	8,347			$	4,458			$	3,542			$	4,042
Plus: Provision (credit) for credit losses			890				(104	)			2,850				1,131				591
Plus: income taxes			3,056				2,517				1,295				1,092				1,220
PTPP(1) net earnings (non-GAAP)		$	13,627			$	10,760			$	8,603			$	5,765			$	5,853
Earnings per Share (EPS)
Weighted average common shares, diluted			3,193,774				3,142,482				3,134,124				3,159,635				3,131,546
EPS, diluted (GAAP)		$	3.03			$	2.66			$	1.42			$	1.12			$	1.29
PTPP(1) EPS, diluted (non-GAAP)		$	4.27			$	3.42			$	2.74			$	1.82			$	1.87
Return on Average Assets (ROAA)
Average assets		$	852,272			$	751,576			$	595,363			$	456,797			$	379,288
ROAA (GAAP)			1.14	%			1.11	%			0.75	%			0.78	%			1.07	%
PTPP(1) ROAA (non-GAAP)			1.60	%			1.43	%			1.45	%			1.26	%			1.54	%
Return on Average Equity (ROAE)
Average equity		$	65,549			$	65,179			$	57,386			$	53,172			$	47,932
ROAE (GAAP)			14.77	%			12.81	%			7.77	%			6.66	%			8.43	%
PTPP(1) ROAE (non-GAAP)			20.79	%			16.51	%			14.99	%			10.84	%			12.21	%
Adjusted Average Loan Yield:
Net loans, excluding loans held for sale		$	588,715			$	490,198			$	476,661			$	337,710			$	290,113
Less PPP loans			(191	)			(15,172	)			(66,774	)			-				-
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)		$	588,524			$	475,026			$	409,887			$	337,710			$	290,113
Average loans, excluding loans held for sale		$	537,304			$	480,606			$	429,802			$	309,350			$	283,967
Less average PPP loans			(3,061	)			(50,315	)			(55,529	)			-				-
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)		$	534,243			$	430,291			$	374,273			$	309,350			$	283,967
Interest on loans, excluding loans held for sale		$	25,803			$	22,598			$	19,553			$	15,884			$	14,215
Less interest income and earned fee income on PPP loans			(776	)			(3,358	)			(1,725	)			-				-
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)		$	25,027			$	19,240			$	17,828			$	15,884			$	14,215
Average loan yield, excluding loans held for sale (GAAP)			4.80	%			4.70	%			4.55	%			5.13	%			5.01	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)			4.68	%			4.47	%			4.76	%			5.13	%			5.01	%

 

⁽¹⁾ Pre-tax, pre-provision

 

 

 

CONTACT:	Clint F. Weber, Chief Financial Officer and Executive Vice President
	(850) 907-2300
	Prime Meridian Holding Company
	Website: www.primemeridianbank.com

 

 

 

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v3.23.2

Document And Entity Information	Jul. 27, 2023
Document Information [Line Items]
Entity, Registrant Name	PRIME MERIDIAN HOLDING COMPANY
Document, Type	8-K
Document, Period End Date	Jul. 27, 2023
Entity, Incorporation, State or Country Code	FL
Entity, File Number	333-191801
Entity, Tax Identification Number	27-2980805
Entity, Address, Address Line One	1471 Timberlane Road
Entity, Address, City or Town	Tallahassee
Entity, Address, State or Province	FL
Entity, Address, Postal Zip Code	32312
City Area Code	850
Local Phone Number	907-2300
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001586454

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