Toggle SGML Header (+)


Section 1: 8-K (FORM 8-K)

pmhg20190729_8k.htm

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) January 30, 2020

 

 

 

PRIME MERIDIAN HOLDING COMPANY 

(Exact name of registrant as specified in its charter)

 

 

 

Florida

333-191801

27-2980805

(State or other jurisdiction of incorporation)

(Commission file number)

(IRS employer identification no.)

 

1897 Capital Circle NE, Second Floor, Tallahassee, FL

32308

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (850907-2301

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

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.☐

 

Securities Registered pursuant to Section 12(b) of the Act:

 

Title of each class

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

 

 

 

 

Item 2.02.    Results of Operations and Financial Condition.

 

On January 30, 2020, Prime Meridian Holding Company issued a press release announcing financial results for the three and twelve-month periods ended December 31, 2019. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K.

 

Item 9.01     Financial Statements and Exhibits.

 

     (d)     Exhibits.
     
       99.1                 Press release dated January 30, 2020

          

The information in this report (including the exhibits) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

 

SIGNATURE

 

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

 

 

PRIME MERIDIAN HOLDING COMPANY

 

 

 

 

 

 

 

By:

/s/ Clint F. Weber

 

 

Clint F. Weber

 

 

Chief Financial Officer and

Executive Vice President

 

Date: January 30, 2020

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_156525.htm

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

Prime Meridian Holding Company Reports

Fourth Quarter AND FULL YEAR 2019 Results

 

TALLAHASSEE, FL – January 30, 2020 (GLOBE NEWSWIRE) – Prime Meridian Holding Company (OTCQX: PMHG) the parent bank holding company for Prime Meridian Bank today announced unaudited financial results for the quarter and year ended December 31, 2019. The Company reported net earnings of $947,000, or $0.29 per basic and diluted share, for the quarter ended December 31, 2019, compared to net earnings of $1,268,000, or $0.40 per basic and diluted share, for the quarter ended December 31, 2018. The Company reported net earnings of $3,542,000 or $1.12 per basic and diluted share, for the year ended December 31, 2019, compared to net earnings of $4,042,000 or $1.29 per basic and diluted share, for the year ended December 31, 2018.

 

The Company also announced today that its Board of Directors declared an annual cash dividend of $0.12 per share of the Company's common stock.  The dividend is payable on March 3, 2020 to shareholders of record on February 13, 2020.

 

"Exceptional loan growth in the third and fourth quarters of 2019, coupled with already-strong deposit growth, are providing strong momentum heading into 2020 as assets rose just over $500 million, as of December 31, 2019," said Sammie D. Dixon, Jr., Vice Chairman, President, and CEO of the Bank. "We completed our first out-of-market expansion last year and expect the Lakeland office to establish our brand and increase market share in Polk County in 2020."

 

Mortgage revenue continued to be a bright spot, with year-over-year net revenue up 49.2%. "Traditionally, mortgage lending is weaker during the fourth quarter," added Dixon, "However, our mortgage team exceeded performance expectations posting record numbers for October and November, increasing net mortgage revenue 97.2% over the fourth quarter of 2018. Debit card/ATM net revenue increased 31.9% year over year as well and continues to be a growing source of noninterest income."

 

The Board recently approved the Company's fifth consecutive annual dividend. "Our outlook is as positive as it's ever been," said Dixon. "We are looking forward to steady growth in all markets."

 

Fourth Quarter 2019 Highlights

 

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

(dollars in thousands except per share amounts)

 

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

 

Net earnings

  $ 947     $ 964     $ 764     $ 867     $ 1,268  

Book value per share

  $ 17.51     $ 17.25     $ 16.85     $ 16.44     $ 16.19  

Earnings per share - Basic

  $ 0.29     $ 0.31     $ 0.24     $ 0.28     $ 0.40  

Earnings per share - Diluted

  $ 0.29     $ 0.31     $ 0.24     $ 0.28     $ 0.40  

Weighted-average basic shares outstanding

    3,190,933       3,147,696       3,144,068       3,140,401       3,131,379  

Weighted-average diluted shares outstanding

    3,195,793       3,151,321       3,150,136       3,144,071       3,136,048  

Return on average assets(1)

    0.75 %     0.83 %     0.70 %     0.82 %     1.07 %

Return on average equity(1)

    6.84       7.14       5.85       6.79       8.43  

Average yield on earning assets(1)

    4.17       4.48       4.49       4.48       4.52  

Net interest margin(1)

    3.36       3.63       3.66       3.67       3.75  

Efficiency ratio(2)

    60.40       65.03       71.52       67.45       59.02  

Nonperforming assets/total assets(3)

    0.52       0.54       0.44       0.14       0.09  

 

(1) Ratio has been annualized

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

(3) Nonperforming assets exclude troubled debt restructuring loans (TDRs)

 

 

 

 

 

 

Earnings Summary (Unaudited)

(dollars in thousands)

 

                           

Change 4Q'19 vs.

 
   

4Q'19

   

3Q'19

   

4Q'18

   

3Q'19

   

4Q'18

 

Net Interest Income

  $ 3,991     $ 3,980     $ 3,666       0.3 %     8.9 %

Provision for Loan Losses

    546       241       47       126.6       1,061.7  

Noninterest income

    428       370       302       15.7       41.7  
Noninterest expense     2,669       2,829       2,342       (5.7 )     14.0  

Income Taxes

    257       316       311       (18.7 )     (17.4 )

Net earnings

  $ 947     $ 964     $ 1,268       (1.8 )%     (25.3 )%

 

On a linked quarter basis, the Company’s net income in the fourth quarter of 2019 benefited from a 15.7% increase in noninterest income and lower noninterest expense and income tax expense. These results were offset by a $305,000 increase in the provision for loan losses, resulting in a $17,000 decrease in net income. 

 

Compared to the same period a year ago, the decrease in the Company's fourth quarter net income is primarily attributed to a $499,000 increase in the provision for loan losses and a $327,000 increase in noninterest expense.  These increases were partially offset by the $325,000 increase in net interest income, $126,000 increase in noninterest income and lower income tax expense. 

 

   

For the Year Ended December 31,

                 
   

2019

   

2018

   

$ Change

   

% Change

 

Net interest income

  $ 15,417     $ 13,927     $ 1,490       10.7 %

Provision for loan losses

    1,131       591       540       91.4  

Noninterest income

    1,534       1,155       379       32.8  

Noninterest expense

    11,186       9,229       1,957       21.2  

Income taxes

    1,092       1,220       (128 )     (10.5 )

Net earnings

  $ 3,542     $ 4,042     $ (500 )     (12.4 )%

 

Year over year, the Company's $500,000 decrease in net income is attributed to increases in the provision for loan losses and noninterest expense. Increases in net interest income and noninterest income and a decrease in income tax expense helped offset the impact of the increased provision and noninterest expense. 

 

Interest income (Unaudited)

(dollars in thousands)

 

                           

Change 4Q'19 vs.

 
   

4Q'19

   

3Q'19

   

4Q'18

   

3Q'19

   

4Q'18

 

Interest income:

                                       

Loans

  $ 4,237     $ 4,179     $ 3,854       1.4 %     9.9 %

Securities

    342       338       280       1.2       22.1  

Other

    378       402       280       (6.0 )     35.0  

Total interest income

  $ 4,957     $ 4,919     $ 4,414       0.8 %     12.3 %

 

The increase in total interest income in the fourth quarter of 2019 compared to the fourth quarter of 2018 primarily reflects the Company's loan growth, with the average balance of loans growing 11.7% since the fourth quarter of 2018.  Net loan growth during the first half of 2019 was negatively impacted by a high level of loan participation payoffs, but the Company saw an increase in loan origination activity in the  second half of the year with net loans increasing $47.6 million, or 16.4%, since December 31, 2018. Despite a decrease in yields on securities and other interest-earning assets since the fourth quarter of last year, higher average balances of securities and other interest-earning assets also helped drive higher interest income.  

 

 

   

For the Year Ended December 31,

                 
   

2019

   

2018

   

$ Change

   

% Change

 

Interest income:

                               

Loans

  $ 16,188     $ 14,469     $ 1,719       11.9 %
Securities     1,309       1,131       178       15.7  

Other

    1,489       634       855       134.9  

Total interest income

  $ 18,986     $ 16,234     $ 2,752       17.0 %

 

Year over year, a higher volume of loans and other interest-earnings assets was the key driver of the increase in total interest income.  

2

 

 

Interest expense: (Unaudited)

(dollars in thousands)

 

                           

Change 4Q'19 vs.

 
   

4Q'19

   

3Q'19

   

4Q'18

   

3Q'19

   

4Q'18

 

Total interest expense

  $ 966     $ 939     $ 748       2.9 %     29.1 %

 

The increase in total interest expense on a linked quarter basis and compared to the fourth quarter of 2018 was driven by growing balances of time deposits and money-market accounts, with the average balance of total interest-bearing deposits up 8.9% since the third quarter of 2019 and up 24.6% since the fourth quarter of 2018. 

 

   

For the Year Ended December 31,

                 
   

2019

   

2018

   

$ Change

   

% Change

 

Total interest expense

  $ 3,569     $ 2,307     $ 1,262       54.7 %

 

Year over year, the average balance of interest-bearing deposits increased $55.7 million in 2019, while the average rate paid on these deposits increased 24 basis points, leading to the 54.7% increase in total interest expense year over year. Management strategically began reducing rates in the fourth quarter of 2019 in tandem with the three rate cuts by the Federal Reserve in the latter part of 2019.

 

Margin Analysis (Unaudited)

dollars in thousands

   

4Q'19

   

3Q'19

   

4Q'18

 
           

Interest

                   

Interest

                   

Interest

         
   

Average

   

and

   

Yield/

   

Average

   

and

   

Yield/

   

Average

   

and

   

Yield/

 
   

Balance

   

Dividends

   

Rate

   

Balance

   

Dividends

   

Rate

   

Balance

   

Dividends

   

Rate

 

Interest-earning assets:

                                                                       

Loans(1)

  $ 329,980     $ 4,160       5.04 %   $ 313,595     $ 4,093       5.22 %   $ 295,516     $ 3,793       5.13 %

Mortgage loans held for sale

    7,026       77       4.38       7,164       86       4.80       4,850       61       5.03  

Securities

    57,203       342       2.39       53,507       338       2.53       44,872       280       2.50  

Other(2)

    81,169       378       1.86       64,794       402       2.48       45,629       280       2.45  

Total interest-earning assets

    475,378     $ 4,957       4.17 %     439,060     $ 4,919       4.48 %     390,867     $ 4,414       4.52 %

Noninterest-earning assets

    26,500                       26,699                       16,126                  

Total assets

  $ 501,878                     $ 465,759                     $ 406,993                  
                                                                         

Interest-bearing liabilities:

                                                                       

Savings, NOW and money-market deposits

  $ 274,903     $ 617       0.90 %   $ 255,563     $ 629       0.98 %   $ 231,299     $ 563       0.97 %

Time deposits

    64,305       345       2.15       56,000       305       2.18       40,944       185       1.81  

Total interest-bearing deposits

    339,208       962       1.13       311,563       934       1.20       272,243       748       1.10  

Other borrowings

    1,307       4       1.22       1,249       5       1.60       -       -       -  

Total interest-bearing liabilities

    340,515       966       1.13 %     312,812     $ 939       1.20 %     272,243     $ 748       1.10 %

Noninterest-bearing deposits

    100,151                       93,981                       83,029                  

Noninterest-bearing liabilities

    5,872                       4,981                       2,351                  

Stockholders' equity

    55,340                       53,985                       49,370                  

Total liabilities and stockholders' equity

  $ 501,878                     $ 465,759                     $ 406,993                  
                                                                         

Net earning assets

  $ 134,863                     $ 126,248                     $ 118,624                  

Net interest income

          $ 3,991                     $ 3,980                     $ 3,666          

Interest rate spread

                    3.04 %                     3.28 %                     3.42 %

Net interest margin(3)

                    3.36 %                     3.63 %                     3.75 %

 

(1)   Includes nonaccrual loans

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

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

 

Pressure on the Company's net interest margin continued into the fourth quarter of 2019.  The impact from three rate cuts by the Federal Reserve in the latter half of the year materialized during the fourth quarter and negatively impacted the loan yield.  In addition, liquidity levels continued to increase in 2019 as deposit growth outpaced loan growth which further lowered the margin. 

3

 

 

   

For the Year Ended

 
   

December 31, 2019

   

December 31, 2018

 
           

Interest

                   

Interest

         
   

Average

   

and

   

Yield/

   

Average

   

and

   

Yield/

 
   

Balance

   

Dividends

   

Rate

   

Balance

   

Dividends

   

Rate

 

Interest-earning assets:

                                               

Loans(1)

  $ 309,350     $ 15,884       5.13 %   $ 283,967     $ 14,215       5.01 %

Mortgage loans held for sale

    6,677       304       4.55       5,385       254       4.72  

Securities

    51,951       1,309       2.52       46,866       1,131       2.41  

Other(2)

    64,058       1,489       2.32       29,625       634       2.14  

Total interest-earning assets

    432,036     $ 18,986       4.39 %     365,843     $ 16,234       4.44 %

Noninterest-earning assets

    24,761                       13,445                  

Total assets

  $ 456,797                     $ 379,288                  
                                                 

Interest-bearing liabilities:

                                               

Savings, NOW and money-market deposits

  $ 254,287     $ 2,445       0.96 %   $ 218,921     $ 1,824       0.83 %

Time deposits

    52,962       1,115       2.11       32,665       483       1.48  

Total interest-bearing deposits

    307,249       3,560       1.16       251,586       2,307       0.92  

Other borrowings

    653       9       1.38       -       -       -  

Total interest-bearing liabilities

    307,902     $ 3,569       1.16 %     251,586     $ 2,307       0.92 %

Noninterest-bearing deposits

    91,016                       78,061                  

Noninterest-bearing liabilities

    4,707                       1,709                  

Stockholders' equity

    53,172                       47,932                  

Total liabilities and stockholders' equity

  $ 456,797                     $ 379,288                  
                                                 

Net earning assets

  $ 124,134                     $ 114,257                  

Net interest income

          $ 15,417                     $ 13,927          

Interest rate spread

                    3.23 %                     3.52 %

Net interest margin(3)

                    3.57 %                     3.81 %

 

(1)   Includes nonaccrual loans

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

(3)    Net interest margin is net interest income divided by total average interest-earning assets

 

 

With the exception of mortgage loans held for sale, the yields on all categories of interest-earning assets increased year over year.  However, the change in the interest-earning assets mix from 2018 to 2019 impacted the overall yield of total interest-earning assets as other interest-earning assets comprised a larger percentage of the total.  This combined with higher average balances and yields on total interest-bearing deposits resulted in the lower net interest margin. 

 

Provision for Loan Losses

 

The provision for loan losses for the fourth quarter of 2019 was $546,000, compared to $241,000 for the third quarter of 2019 and $47,000 for the fourth quarter of 2018.  For the year 2019, the provision for loan losses was $1.1 million compared to $591,000 in 2018.  Approximately $272,000 of the increase in the quarterly provision is attributed to loan growth while $274,000 is attributed to higher specific reserves on several impaired and charged-off loans and overdrafts. For the year 2019, approximately 48.6% (or $550,000) is attributed to loan growth and 51.4% (or $581,000) is attributed to higher specific reserves on impaired and charged-off loans and overdrafts.

4

 

 

Noninterest income (Unaudited)

(dollars in thousands)

 

                           

Change 4Q'19 vs.

 
   

4Q'19

   

3Q'19

   

4Q'18

   

3Q'19

   

4Q'18

 

Service charges and fees on deposit accounts

  $ 75     $ 74     $ 74       1.4 %     1.4 %
Debit card/ATM revenue, net     60       67       52       (10.4 )     15.4  

Mortgage banking revenue

    213       151       108       41.1       97.2  

Income from bank-owned life insurance

    42       46       34       (8.7 )     23.5  

Other income

    38       32       34       18.8       11.8  

Total noninterest income

  $ 428     $ 370     $ 302       15.7 %     41.7 %

 

 

The increase in total noninterest income for the fourth quarter of 2019, when compared to the linked quarter and the same period last year, is primarily attributed to an increase in mortgage banking revenue.  The Company defines mortgage banking revenue as gains and losses on the sale of mortgage loans originated for sale, net of direct origination costs, and wholesale brokerage fees.  Due to lower mortgage rates, the Company experienced an increase in both mortgages for purchase and for refinancing during the fourth quarter of 2019.

 

Service charges and fees remained steady compared to the linked quarter and the fourth quarter of 2018.  Despite the 8.7% decrease in income from bank-owned life insurance from the third quarter of 2019, the Company has profited favorably year-over-year following the increased investment in this asset that occurred in the fourth quarter of 2018.  This income is market-driven and experiences small fluctuations at the current investment level.

 

With the exception of the most recent quarter, debit card/ATM net revenue has seen a steady increase each quarter since the fourth quarter of 2017.  Management anticipates that it will continue to be a growing source of noninterest income. 

 

   

For the Year Ended December 31,

                 
   

2019

   

2018

   

$ Change

   

% Change

 

Service charges and fees on deposit accounts

  $ 288     $ 333     $ (45 )     (13.5 )%
Debit card/ATM revenue, net     252       191       61       31.9  

Mortgage banking revenue

    667       447       220       49.2  

Income from bank-owned life insurance

    178       66       112       169.7  

Gain on sale of securities available for sale

    7       -       7       N/A  

Other income

    142       118       24       20.3  

Total noninterest income

  $ 1,534     $ 1,155     $ 379       32.8 %

 

With the exception of service charges and fees on deposit accounts, all categories of noninterest income reported year-over-year increases.  The decrease in service charges and fees on deposit accounts is primarily explained by lower overdraft activity. Debit card/ATM net revenue increased 31.9% in 2019 and accounts for roughly 16% of total noninterest income.  In 2019, the mortgage department increased the number of loans originated, the average balance per loan originated, and the average profitability per loan originated. Higher income from bank-owned life insurance followed the Company's increased investment in this asset during the fourth quarter of 2018.  Both mortgage banking revenue and income from bank-owned life insurance accounted for a larger percentage of total noninterest income in 2019 when compared to 2018. 

 

Noninterest expense (Unaudited)

(dollars in thousands)

 

                           

Change 4Q'19 vs.

 
   

4Q'19

   

3Q'19

   

4Q'18

   

3Q'19

   

4Q'18

 

Salaries and employee benefits

  $ 1,384     $ 1,575     $ 1,319       (12.1 )%     4.9 %

Occupancy and equipment

    330       373       234       (11.5 )     41.0  

Professional fees

    112       79       107       41.8       4.7  

Marketing

    178       172       144       3.5       23.6  

FDIC Assessment

    26       6       51       333.3       (49.0 )

Software maintenance, amortization and other

    185       188       160       (1.6 )     15.6  

Other

    454       436       327       4.1       38.8  

Total noninterest expense

  $ 2,669     $ 2,829     $ 2,342       (5.7 )%     14.0 %

 

On a linked quarter basis, the $160,000 decrease in noninterest expense is mostly explained by the $191,000 decrease in salaries and employee benefits.  A net increase in salaries and commissions was offset by higher deferred loan costs and a reversal of a portion of incentive pay that had been accrued during the year.  Also contributing was a $43,000 decrease in occupancy expense which is attributed to lower amortization expense on leasehold improvements during the fourth quarter of 2019.      

 

Compared to the fourth quarter of 2018, the $327,000 increase in noninterest expense is mostly attributed to higher salaries and employee benefits, increased occupancy cost due to higher depreciation and lease expense, and increased other noninterest expense (namely due to increases in software expense, loan related expense and travel and entertainment expense). These increases were partially offset by a $36,000 credit towards the Company's FDIC assessment cost in the fourth quarter of 2019 which resulted from the Deposit Insurance Fund Reserve Ratio exceeding its 1.38% threshold on June 30, 2019.  

 

5

 

 

   

For the Year Ended December 31,

                 
   

2019

   

2018

   

$ Change

   

% Change

 

Salaries and employee benefits

  $ 6,095     $ 5,106     $ 989       19.4 %

Occupancy and equipment

    1,405       932       473       50.8  

Professional fees

    374       374       -       -  

Marketing

    743       677       66       9.7  

FDIC Assessment

    119       163       (44 )     (27.0 )

Software maintenance, amortization and other

    692       634       58       9.1  

Other

    1,758       1,343       415       30.9  

Total noninterest expense

  $ 11,186     $ 9,229     $ 1,957       21.2 %

 

Year over year, more than half of the increase in total noninterest expense is attributed to the Company's new office in Lakeland, Florida which opened in April, 2019.   The Company has expanded from 79 full-time equivalents (FTEs) at December 31, 2018 to 88 FTEs  at December 31, 2019, with 8 FTEs located in Lakeland at December 31, 2019.   Approximately $234,000 of the $473,000 increase in occupancy expense is attributed to higher depreciation expense and higher lease expense associated with the new lease for our expanded Timberlane office. The new office in Lakeland accounted for approximately $216,000 of the $473,000 increase in occupancy expense.   Other noninterest expense increased $415,000 for a variety of reasons, most notably due to higher printing and supplies expense, travel and entertainment expense and software expense. These increases were partially offset by a credit towards the Company's FDIC assessment. With the credits, the FDIC total assessment decreased $44,000 year over year, or 27.0%.  

 

Balance Sheet

 

At December 31, 2019, the Company reported $500.9 million in total assets, $438.3 million in deposits, and $337.7 million in net portfolio loans. This compares to $401.7 million in total assets, $349.1 million in deposits, and $290.1 million in net portfolio loans at December 31, 2018. Loan growth occurred in all categories with the exception of consumer loans which remained relatively flat.   The composition of the Bank’s loan portfolio was as follows on the indicated dates:

 

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

 

   

December 31, 2019

   

December 31, 2018

 
   

Unaudited

   

Audited

 
   

Amount

   

% of Total

   

Amount

   

% of Total

 

Commercial real estate

  $ 94,728       27.7 %   $ 82,494       28.1 %

Residential real estate and home equity

    135,913       39.8       121,454       41.4  

Construction

    33,583       9.8       31,601       10.8  

Commercial

    69,770       20.4       51,018       17.4  

Consumer

    7,631       2.3       6,747       2.3  

Total Loans

    341,625       100.0 %     293,314       100.0 %
                                 

Net deferred loan costs

    499               460          

Allowance for loan losses

    (4,414 )             (3,661 )        

Loans, net

  $ 337,710             $ 290,113          

 

Total stockholders’ equity was $55.9 million, or 11.2% of total assets, at December 31, 2019, compared to $50.8 million, or 12.7% of total assets, at December 31, 2018.  Retained earnings, a $756,000 positive change in accumulated other comprehensive income and a small stock offering in Lakeland, Florida drove the increase in equity. Book value per share increased from $16.19 at December 31, 2018 to $17.51 at December 31, 2019, with 3,191,288 common shares outstanding.

 

As of December 31, 2019, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 9.31%, a 13.24% Common Equity Tier 1 Risk-Based Capital Ratio, a 13.24% Tier 1 Risk-Based Capital Ratio, and a 14.49% Total Risk-Based Capital Ratio.

 

Asset Quality

 

Loans totaling $3.2 million were deemed to be impaired under the Bank’s policy at December 31, 2019, while loans totaling $1.2 million were deemed to be impaired under the Bank’s policy at December 31, 2018. At December 31, 2019, the Bank had twelve nonaccrual loans in the aggregate amount of $2.6 million compared to six nonaccrual loans totaling $342,000 at December 31, 2018. At December 31, 2019, the Company reported no accruing loans greater than 90 days past due. Net charge-offs totaled $378,000 for the year  ended December 31, 2019 and nonperforming assets as a percentage of total assets was 0.52%. Management believes that the allowance for loan losses which was $4.4 million, or 1.29% of gross loans, at December 31, 2019 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 December 31, 2019, the Bank had 88 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.

 

Tables Follow

6

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

 

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

 

Interest income:

                                       

Loans

  $ 4,237     $ 4,179     $ 3,916     $ 3,856     $ 3,854  

Securities

    342       338       333       296       280  

Other

    378       402       361       348       280  

Total interest income

    4,957       4,919       4,610       4,500       4,414  

Interest Expense:

                                       

Deposits

    962       934       851       813       748  

Other Borrowings

    4       5       -       -       -  

Total interest expense

    966       939       851       813       748  

Net interest income

    3,991       3,980       3,759       3,687       3,666  

Provision for loan losses

    546       241       179       165       47  

Net interest income after provision for loan losses

    3,445       3,739       3,580       3,522       3,619  
                                         

Noninterest income:

                                       

Service charges and fees on deposit accounts

    75       74       68       71       74  
Debit card/ATM revenue, net     60       67       64       62       52  

Mortgage banking revenue

    213       151       197       106       108  

Income from bank-owned life insurance

    42       46       45       45       34  

Other income

    38       32       38       41       34  

Total noninterest income

    428       370       412       325       302  
                                         

Noninterest expense:

                                       

Salaries and employee benefits

    1,384       1,575       1,579       1,557       1,319  

Occupancy and equipment

    330       373       427       275       234  

Professional fees

    112       79       106       77       107  

Marketing

    178       172       194       199       144  

FDIC Assessment

    26       6       44       43       51  

Software maintenance, amortization and other

    185       188       167       152       160  

Other

    454       436       466       403       327  

Total noninterest expense

    2,669       2,829       2,983       2,706       2,342  
                                         

Earnings before income taxes

    1,204       1,280       1,009       1,141       1,579  

Income taxes

    257       316       245       274       311  

Net earnings

  $ 947     $ 964     $ 764     $ 867     $ 1,268  
                                         

Basic earnings per share

  $ 0.29     $ 0.31     $ 0.24     $ 0.28     $ 0.40  
                                         

Diluted earnings per share

    0.29       0.31       0.24       0.28       0.40  

 

7

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings 

(in thousands, except per share amounts)

 

   

Three Months Ended December 31,

   

Year Ended December 31,

 
   

2019

   

2018

   

2019

   

2018

 
      Unaudited       Unaudited       Unaudited       Audited  

Interest income:

                               

Loans

  $ 4,237     $ 3,854     $ 16,188     $ 14,469  

Securities

    342       280       1,309       1,131  

Other

    378       280       1,489       634  

Total interest income

    4,957       4,414       18,986       16,234  

Interest expense:

                               

Deposits

    962       748       3,560       2,307  

Other borrowings

    4       -       9       -  

Total interest expense

    966       748       3,569       2,307  

Net interest income

    3,991       3,666       15,417       13,927  

Provision for loan losses

    546       47       1,131       591  

Net interest income after provision for loan losses

    3,445       3,619       14,286       13,336  

Noninterest income:

                               

Service charges and fees on deposit accounts

    75       74       288       333  
Debit card/ATM revenue, net     60       52       252       191  

Mortgage banking revenue

    213       108       667       447  

Income from bank-owned life insurance

    42       34       178       66  

Gain on sale of securities available for sale

    -       -       7       -  

Other income

    38       34       142       118  

Total noninterest income

    428       302       1,534       1,155  

Noninterest expense:

                               

Salaries and employee benefits

    1,384       1,319       6,095       5,106  

Occupancy and equipment

    330       234       1,405       932  

Professional fees

    112       107       374       374  

Marketing

    178       144       743       677  

FDIC assessment

    26       51       119       163  

Software maintenance, amortization and other

    185       160       692       634  

Other

    454       327       1,758       1,343  

Total noninterest expense

    2,669       2,342       11,186       9,229  

Earnings before income taxes

    1,204       1,579       4,634       5,262  

Income taxes

    257       311       1,092       1,220  

Net earnings

  $ 947     $ 1,268     $ 3,542     $ 4,042  
                                 

Earnings per common share:

                               

Basic

  $ 0.29     $ 0.40     $ 1.12     $ 1.29  

Diluted

    0.29       0.40       1.12       1.29  

Cash dividends per common share(1)

    -       -       0.12       0.10  

 

(1) Annual cash dividends were paid during the first quarters of 2019 and 2018.

 

8

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

 

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

 
   

Unaudited

   

Unaudited

   

Unaudited

   

Unaudited

   

Audited

 

Assets

                                       

Cash & cash equivalents

  $ 75,082     $ 84,278     $ 72,042     $ 66,805     $ 48,038  

Securities available for sale

    61,333       55,773       52,431       48,205       45,384  

Loans, held for sale

    6,193       7,907       6,223       5,808       4,767  

Loans, net

    337,710       315,807       299,949       289,900       290,113  

Federal Home Loan Bank stock

    404       404       404       404       355  

Premises & equipment, net

    7,744       7,787       7,311       7,055       4,656  

Right of use asset

    3,669       3,719       3,768       -       -  

Accrued interest receivable

    1,137       1,073       1,100       1,023       1,034  

Bank-owned life insurance

    6,501       6,459       6,413       6,368       6,323  

Other assets

    1,088       859       1,086       1,281       1,032  

Total Assets

  $ 500,861     $ 484,066     $ 450,727     $ 426,849     $ 401,702  
                                         
                                         

Liabilities and Stockholders' Equity

                                       

Noninterest-bearing demand deposits

  $ 96,807     $ 96,732     $ 89,608     $ 83,186     $ 80,097  

Savings, NOW and money-market deposits

    272,283       265,518       247,804       244,584       227,674  

Time deposits

    69,174       58,947       52,912       45,743       41,296  

Total Deposits

    438,264       421,197       390,324       373,513       349,067  

Other borrowings

    1,254       2,053       770       -       -  

Official checks

    606       900       1,496       495       837  

Lease liability

    3,758       3,801       3,827       -       -  

Other liabilities

    1,111       1,088       1,314       1,157       978  

Total Liabilities

    444,993       429,039       397,731       375,165       350,882  

Total Stockholders' Equity

    55,868       55,027       52,996       51,684       50,820  

Total Liabilities and Stockholders' Equity

  $ 500,861     $ 484,066     $ 450,727     $ 426,849     $ 401,702  

 

9

 

 

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands, except per share amounts)

 

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

 
                                         

Per Share Data:

                                       

Earnings per share - Basic

  $ 0.29     $ 0.31     $ 0.24     $ 0.28     $ 0.40  

Earnings per share - Diluted

  $ 0.29     $ 0.31     $ 0.24     $ 0.28     $ 0.40  

Book value per share

  $ 17.51     $ 17.25     $ 16.85     $ 16.44     $ 16.19  

Shares outstanding

    3,191,288       3,190,031       3,144,456       3,143,140       3,138,945  

Weighted-average basic shares outstanding

    3,190,933       3,147,696       3,144,068       3,140,401       3,131,379  

Weighted-average diluted shares outstanding

    3,195,793       3,151,321       3,150,136       3,144,071       3,136,048  
                                         

Selected Performance Ratios and Other Data:

                                       

Return on average assets(1)

    0.75 %     0.83 %     0.70 %     0.82 %     1.07 %

Return on average equity(1)

    6.84       7.14       5.85       6.79       8.43  

Average yield on earning assets

    4.17       4.48       4.49       4.48       4.52  

Net interest margin(2)

    3.36       3.63       3.66       3.67       3.75  

Efficiency ratio(3)

    60.40       65.03       71.52       67.45       59.02  

Noninterest expense/average assets(1)

    2.13       2.43       2.73       2.56       2.30  
                                         

Asset Quality Data:

                                       

Nonaccrual loans

  $ 2,591     $ 2,603     $ 1,962     $ 365     $ 342  

Total nonperforming assets

    2,591       2,603       1,962       608       342  

Nonperforming assets/total assets

    0.52 %     0.54 %     0.44 %     0.14 %     0.09 %
                                         

Capital Ratios:

                                       

Tier 1 Leverage Capital Ratio (Company)

    11.08 %     11.73 %     12.08 %     12.28 %     12.61 %

Tier 1 Leverage Capital Ratio (Bank)

    9.31       9.24       9.10       9.18       9.28  

Common Equity Tier I Capital Ratio (Bank)

    13.24       12.95       12.69       13.00       12.90  

Tier I Risk-Based Capital Ratio (Bank)

    13.24       12.95       12.69       13.00       12.90  

Total Capital Ratio (Bank)

    14.49       14.15       13.94       14.25       14.15  

 

(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.

 

CONTACT: Clint F. Weber, Chief Financial Officer and Executive Vice President
  (850) 907-2301
  Prime Meridian Holding Company
  Website: www.primemeridianbank.com

 

10

(Back To Top)