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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) October 28, 2019

 

 

 

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 October 28, 2019, Prime Meridian Holding Company issued a press release announcing financial results for the three- and nine-month periods ended September 30, 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 October 28, 2019

          

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: October 28, 2019

(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

Third Quarter 2019 Results

 

TALLAHASSEE, FL – October 28, 2019 (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 nine months ended September 30, 2019. The Company reported net earnings of $964,000, or $0.31 per basic and diluted share, for the quarter ended September 30, 2019, compared to net earnings of $1,018,000, or $0.33 per basic and diluted share, for the quarter ended September 30, 2018. The Company reported net earnings of $2,595,000, or $0.83 per basic and diluted share, for the nine months ended September 30, 2019, compared to net earnings of $2,774,000, or $0.89 per basic and diluted share, for the nine months ended September 30, 2018.

 

Third Quarter 2019 Highlights

 

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

(dollars in thousands except per share amounts)

 

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

   

3Q'18

 

Net Earnings

  $ 964     $ 764     $ 867     $ 1,268     $ 1,018  

Book value per share

  $ 17.25     $ 16.85     $ 16.44     $ 16.19     $ 15.61  

Earnings per share - Basic

  $ 0.31     $ 0.24     $ 0.28     $ 0.40     $ 0.33  

Earnings per share - Diluted

  $ 0.31     $ 0.24     $ 0.28     $ 0.40     $ 0.33  

Weighted-average basic shares outstanding

    3,147,696       3,144,068       3,140,401       3,131,379       3,127,038  

Weighted-average diluted shares outstanding

    3,151,321       3,150,136       3,144,071       3,136,048       3,130,171  

Return on average assets(1)

    0.83 %     0.70 %     0.82 %     1.07 %     1.03 %

Return on average equity(1)

    7.14       5.85       6.79       8.43       8.42  

Average yield on earning assets(1)

    4.48       4.49       4.48       4.52       4.47  

Net interest margin(1)

    3.63       3.66       3.67       3.75       3.78  

Efficiency ratio(2)

    65.45       71.86       67.75       59.45       62.26  

Nonpeforming assets/total assets(3)

    0.54       0.44       0.14       0.09       0.04  

 

1 Ratio has been annualized

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

Nonperforming assets exclude troubled debt restructuring loans (TDRs)

 

 

“We are pleased with the Bank’s third quarter growth in loans and deposits,” said Sammie D. Dixon, Jr., Vice Chairman, President and CEO of the Bank.  “In the wake of some large loan participation payoffs earlier this year, new loan production brought our year-to-date loan growth to 8.9%.  Coupled with a 20.7% increase in deposits, particularly in transaction accounts, we are showing good expansion of the balance sheet and a stabilizing of our cost of funds.

 

According to Dixon, the Bank’s net interest margin decreased on a linked quarter basis due to the high volume of liquidity in a falling rate environment. "Despite the margin reduction, earnings per share for the quarter rose to $0.31 up from $0.24 for the second quarter, " he said.

 

“Noninterest income rose over last year due to several factors,” explained Dixon. Of them, mortgage revenue, though lower than the previous quarter, was up 34% over the same quarter last year. Interchange income (from ATM/debit cards) before direct expenses, increased 33%.  “Our mortgage and interchange income drivers maintained their long-term growth trajectory,” he said.

 

“With our Lakeland office complete, and construction at the Timberlane (Tallahassee) location well underway, occupancy expense has leveled off,” said Dixon, citing noninterest expense down $152,000 from this year’s second quarter. 

 

Nonperforming assets (NPAs), as a percentage of total assets, rose ten basis points to 0.54% for the third quarter, up from 0.44% at the end of the second quarter.  According to Dixon, “We have kept up an aggressive resolution strategy to reduce NPAs." Commenting further Dixon said, "The increase in NPAs we experienced in the third quarter are one-off credit issues that arise from time to time. Our credit culture remains unchanged in terms of our underwriting standards and loan terms."

 

"This year has been transitional for the Bank," said Dixon. "We have engaged a new, larger market in Lakeland and are expanding our facilities and our capacity in Tallahassee. As we finish 2019, we are poised for tremendous opportunity in the coming year."

 

 

 

 

Earnings Summary (Unaudited)

(dollars in thousands)

 

                           

Change 3Q'19 vs.

 
   

3Q'19

   

2Q'19

   

3Q'18

   

2Q'19

   

3Q'18

 

Net Interest Income

  $ 3,980     $ 3,759     $ 3,610       5.9 %     10.2 %

Provision for Loan Losses

    241       179       135       34.6       78.5  

Noninterest income

    422       462       338       (8.7 )     24.9  

Noninterest expense

    2,881       3,033       2,458       (5.0 )     17.2  

Income Taxes

    316       245       337       29.0       (6.2 )

Net Income

  $ 964     $ 764     $ 1,018       26.2 %     (5.3 )%

 

On a linked quarter basis, the Company’s net income in the third quarter of 2019 benefited from growth in all categories of interest-earning assets and lower noninterest expense. These gains were partially offset by a $62,000 increase in the provision for loan losses, a $40,000 decrease in noninterest income and a $71,000 increase in income tax expense. 

 

Compared to the same period a year ago, the increase in the Company's third quarter net income is primarily attributed to higher interest income earned on growing average balances of interest-earning assets, an $84,000 increase in noninterest income and a $21,000 decrease in income tax expense. These gains were offset by a higher provision for loan losses and higher noninterest expense which was mainly driven by increases in salaries and employee benefits expense and occupancy and equipment expense.

 

   

Nine Months Ended

                 
   

September 30, 2019

   

September 30, 2018

   

$ Change

   

% Change

 

Net interest income

  $ 11,426     $ 10,261     $ 1,165       11.4 %

Provision for loan losses

    585       544       41       7.5  

Noninterest income

    1,246       962       284       29.5  

Noninterest expense

    8,657       6,996       1,661       23.7  

Income taxes

    835       909       (74 )     (8.1 )

Net income

  $ 2,595     $ 2,774     $ (179 )     (6.5 )%

 

Comparing the nine-month periods in 2018 and 2019, an 11.4% increase in net interest income, a 29.5% increase in noninterest income, and an 8.1% decrease in income tax expense were offset by a higher loan loss provision and higher noninterest expense, resulting in a 6.5% or $179,000 decrease in net income. 

 

Interest income (Unaudited)

(dollars in thousands)

 

                           

Change 3Q'19 vs.

 
   

3Q'19

   

2Q'19

   

3Q'18

   

2Q'19

   

3Q'18

 

Interest income:

                                       

Loans

  $ 4,179     $ 3,916     $ 3,798       6.7 %     10.0 %

Securities

    338       333       276       1.5       22.5  

Other

    402       361       198       11.4       103.0  

Total interest income

  $ 4,919     $ 4,610     $ 4,272       6.7 %     15.1 %

 

The increase in total interest income compared to the second quarter of 2019 and the third quarter of 2018 reflects growth in all categories of interest-earning assets and higher yields on loans. Securities and other interest earning assets saw an increase in yields through June 30, 2019, but experienced declines in the third quarter of 2019 due to the recent falling rate environment.  Net loan growth during the first half of 2019 was negatively impacted by a higher-than-normal level of loan participation payoffs, but the Company saw an increase in activity in the third quarter with net loans increasing $15.9 million.  Excess cash continues to be deployed in federal funds sold and interest-bearing accounts at other financial institutions.

 

   

Nine Months Ended

                 
   

September 30, 2019

   

September 30, 2018

   

$ Change

   

% Change

 

Interest income:

                               

Loans

  $ 11,951     $ 10,615     $ 1,336       12.6 %

Securities

    967       851       116       13.6  

Other

    1,111       354       757       213.8  

Total interest income

  $ 14,029     $ 11,820     $ 2,209       18.7 %

 

Comparing the nine-month periods, total interest income increased due to higher balances and higher yields across all categories of interest-earning assets. 

 

 

 

Interest expense: (Unaudited)

(dollars in thousands)

 

                           

Change 3Q'19 vs.

 
   

3Q'19

   

2Q'19

   

3Q'18

   

2Q'19

   

3Q'18

 

Total interest expense

  $ 939     $ 851     $ 662       10.3 %     41.8 %

 

The increase in the Company’s cost of funds on a linked quarter basis and compared to the third quarter of 2018 was driven by growing balances of time deposits and money market accounts coupled with higher rates paid on those deposits. For the quarter ended September 30, 2019, the average balance of total interest-bearing deposits increased $47.7 million, or 18.1%, while the average rate paid on total interest-bearing deposits increased twenty basis points, when compared to the same period a year ago. 

 

   

Nine Months Ended

                 
   

September 30, 2019

   

September 30, 2018

   

$ Change

   

% Change

 

Total interest expense

  $ 2,603     $ 1,559     $ 1,044       67.0 %

 

Comparing the nine-month periods, the average balance of interest-bearing deposits has increased $51.9 million in 2019 while the average rate paid on these deposits has increased thirty-two basis points. 

 

Margin Analysis (Unaudited)

dollars in thousands

   

3Q'19

   

2Q'19

   

3Q'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)

  $ 313,595     $ 4,093       5.22 %   $ 298,058     $ 3,834       5.15 %   $ 292,026     $ 3,722       5.10 %

Mortgage loans held for sale

    7,164       86       4.80       6,957       82       4.71       6,315       76       4.81  

Securities

    53,507       338       2.53       50,943       333       2.61       45,836       276       2.41  

Other(2)

    64,794       402       2.48       54,650       361       2.64       38,081       198       2.08  

Total interest-earning assets

    439,060     $ 4,919       4.48       410,608     $ 4,610       4.49       382,258     $ 4,272       4.47  

Noninterest-earning assets

    26,699                       25,684                       12,626                  

Total assets

  $ 465,759                     $ 436,292                     $ 394,884                  
                                                                         

Interest-bearing liabilities:

                                                                       

Savings, NOW and money-market deposits

  $ 255,563     $ 629       0.98 %   $ 242,815     $ 597       0.98 %   $ 224,448     $ 499       0.89 %

Time deposits

    56,000       305       2.18       48,573       254       2.09       39,389       163       1.66  

Total interest-bearing deposits

    311,563       934       1.20       291,388       851       1.17       263,837       662       1.00  
Other borrowings     1,249       5       1.60       34       -               -       -          

Total interest-bearing liabilities

    312,812     $ 939       1.20       291,422     $ 851       1.17       263,837     $ 662       1.00  

Noninterest-bearing deposits

    93,981                       87,077                       80,943                  

Noninterest-bearing liabilities

    4,981                       5,545                       1,738                  

Stockholders' equity

    53,985                       52,248                       48,366                  

Total liabilities and stockholders' equity

  $ 465,759                     $ 436,292                     $ 394,884                  
                                                                         

Net earning assets

  $ 126,248                     $ 119,186                     $ 118,421                  

Interest rate spread

                    3.28 %                     3.32 %                     3.47 %

Net interest margin(3)

                    3.63                       3.66                       3.78  

 

(1)   Includes nonaccrual loans

(2)    Other interest-earning assets include federal funds sold, interest-bearing deposits and FHLB stock.

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

 

Excess liquidity and higher cost of funds continued to pressure the net interest margin through the third quarter. Other interest-earning assets, predominantly federal funds sold and interest-bearing deposits, account for the majority of growth in interest-earning assets since September 30, 2018. Management expects margin improvement when these funds are strategically deployed into loans.

 

Provision for Loan Losses

 

The provision for loan losses for the third quarter of 2019 was $241,000, compared to $179,000 for the second quarter of 2019 and $135,000 for the third quarter of 2018.  For the first nine months of 2019, the loan loss provision was $585,000 compared to $544,000 a year ago.  The higher provision this quarter reflects $15.9 million in new loan production during the quarter and higher specific reserves on one overdraft account. For the nine-month period ending September 30, 2019, the loan loss provision reflects higher specific reserves that were mostly taken during the second quarter and modest loan growth during the year, while the loan loss provision for the nine-month period ending September 30, 2018 largely reflects reserves taken on funded loan growth.

 

 

 

 

Noninterest income (Unaudited)

(dollars in thousands)

 

                           

Change 3Q'19 vs.

 
   

3Q'19

   

2Q'19

   

3Q'18

   

2Q'19

   

3Q'18

 

Service charges and fees on deposit accounts

  $ 74     $ 68     $ 83       8.8 %     (10.8 )%

Mortgage banking revenue

    151       197       124       (23.4 )     21.8  

Income from bank-owned life insurance

    46       45       11       2.2       318.2  

Other income

    151       152       120       (0.7 )     25  

Total noninterest income

  $ 422     $ 462     $ 338       (8.7) %     24.9 %

 

 

For the first time since June 30, 2018, service charges and fees on deposit accounts saw an increase on a linked quarter basis. Although down from the second quarter, mortgage banking revenue of $151,000 for the third quarter compares favorably to other prior quarters. The Company defines mortgage banking revenue as gains and losses on the sale of mortgage loans originated for sale and wholesale brokerage fees, net of direct origination costs.  The noticeable increase in income from bank-owned life insurance from 2018 to 2019 is due to an increased investment in this asset that occurred during the fourth quarter of 2018. Other income of $151,000 stayed steady from the second quarter of 2019. Year over year, the 25.8% increase in other noninterest income was driven by higher interchange income (before direct expenses) from ATM/debit cards. 

 

   

Nine Months Ended

                 
   

September 30, 2019

   

September 30, 2018

   

$ Change

   

% Change

 

Service charges and fees on deposit accounts

  $ 213     $ 259     $ (46 )     (17.8 )%

Mortgage banking revenue

    454       339       115       33.9  

Income from bank-owned life insurance

    136       32       104       325.0  

Gain on sale of securities available for sale

    7       -       7       N/A  

Other income

    436       332       104       31.3  

Total noninterest income

  $ 1,246     $ 962     $ 284       29.5 %

 

With the exception of service charges and fees on deposit accounts, all categories of noninterest income reported increases over the nine-month period from 2018 to 2019.  In 2019, the mortgage department has 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.  Increases in other income are primarily attributed to higher interchange income (before direct expenses) from ATM/debit cards and credit cards.

 

Noninterest expense (Unaudited)

(dollars in thousands)

 

                           

Change 3Q'19 vs.

 
   

3Q'19

   

2Q'19

   

3Q'18

   

2Q'19

   

3Q'18

 

Salaries and employee benefits

  $ 1,575     $ 1,579     $ 1,341       -0.3 %     17.4 %

Occupancy and equipment

    373       427       237       (12.6 )     57.4  

Professional fees

    79       106       86       (25.5 )     (8.1 )

Marketing

    172       194       193       (11.3 )     (10.9 )

FDIC Assessment

    6       44       38       (86.4 )     (84.2 )

Software maintenance, amortization and other

    188       167       167       12.6       12.6  

Other

    488       516       396       (5.4 )     23.2  

Total noninterest expense

  $ 2,881     $ 3,033     $ 2,458       (5.0) %     17.2 %

 

Expenses related to the opening of our new office in Lakeland, Florida peaked during the second quarter of 2019, partially explaining the $152,000, or 5%, decrease in noninterest expense during the third quarter.   Also contributing to the linked quarter decrease was a $27,000 decrease in professional fees, a $22,000 decrease in marketing expenses, and a $38,000 decrease in FDIC deposit insurance.  Non-loan legal fees were higher than normal during the second quarter of 2019 and mostly related to executive compensation matters.  The decrease in marketing expense from the second quarter of 2019 was expected as the Company curtailed some of its promotional spending in the Lakeland market.  The decrease in the Company's FDIC assessment was also anticipated after the Deposit Insurance Fund Reserve Ratio exceeded its 1.38% threshold on June 30, 2019, resulting in a credit toward the Bank's quarterly assessment.

 

Compared to the same period a year ago, the key drivers of the increase in total noninterest expense were higher salaries and employee benefits expense and occupancy and equipment expense. Over half of the increase in total noninterest expense is attributed to higher salaries and employee benefits expense. The Company had seventy-six full-time equivalent employees at September 30, 2018, compared to ninety full-time equivalent employees at September 30, 2019. The increase in employees is mostly attributed to staffing the Lakeland office. In August 2018, the Company executed a new lease for its Timberlane Road location that included revised terms and additional space, partially explaining the increase in occupancy expense year over year. Lease expense was up $48,000 year over year, while depreciation expense increased $56,000, mostly due to bank building improvements and FF&E expenditures in Lakeland and an acceleration of Timberlane leasehold improvements. The increase in other noninterest expense can be attributed to higher travel expense and small incremental increases in numerous expense categories, all expected with a growing company. These increases were partially offset by a $32,000 decrease in FDIC deposit insurance and a $7,000 decrease in professional fees year over year. All in all, expenses associated with the new Lakeland office accounted for approximately 73%, or $309,000, of the increase in noninterest expense when comparing the third quarter of 2019 over the comparable period in 2018.

 

 

 

 

 

   

Nine Months Ended

                 
   

September 30, 2019

   

September 30, 2018

   

$ Change

   

% Change

 

Salaries and employee benefits

  $ 4,711     $ 3,787     $ 924       24.4 %

Occupancy and equipment

    1,075       698       377       54.0  

Professional fees

    262       267       (5 )     (1.9 )

Marketing

    565       533       32       6.0  

FDIC Assessment

    93       112       (19 )     (17.0 )

Software maintenance, amortization and other

    507       474       33       7.0  

Other

    1,444       1,125       319       28.4  

Total noninterest expense

  $ 8,657     $ 6,996     $ 1,661       23.7 %

 

Comparing the nine-month periods, salaries and employee benefits, occupancy and equipment, and other noninterest expense were the key drivers of the increase in noninterest expense.  The expenses associated with the opening of the Lakeland office accounted for approximately 45% of this increase. 

 

Balance Sheet

 

At September 30, 2019, the Company reported $484.1 million in total assets, $421.2 million in deposits, and $315.8 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 commercial real estate which experienced a $4.5 million decrease since December 31, 2018. 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)

 

   

September 30, 2019

   

December 31, 2018

 
   

Unaudited

   

Audited

 
   

Amount

   

% of Total

   

Amount

   

% of Total

 

Commercial real estate

  $ 78,024       24.4 %   $ 82,494       28.1 %

Residential real estate and home equity

    128,918       40.4 %     121,454       41.4  

Construction

    41,149       12.9 %     31,601       10.8  

Commercial

    63,471       19.9 %     51,018       17.4  

Consumer

    7,699       2.4 %     6,747       2.3  
                                 

Total Loans

    319,261       100.0 %     293,314       100.0 %
                                 

Net deferred loan costs

    528               460          

Allowance for loan losses

    (3,982 )             (3,661 )        
Loans, net   $ 315,807             $ 290,113          

 

Total stockholders’ equity was $55.0 million, or 11.4% of total assets, at September 30, 2019, compared to $50.8 million, or 12.7% of total assets, at December 31, 2018.  Retained earnings, a $931,000 positive change in accumulated other comprehensive income, and a small stock offering in Lakeland drove the increase in equity. Book value per share increased from $16.19 at December 31, 2018 to $17.25 at September 30, 2019, with 3,190,031 common shares outstanding.

 

As of September 30, 2019, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 9.24%, a 12.95% Common Equity Tier 1 Risk-Based Capital Ratio, a 12.95% Tier 1 Risk-Based Capital Ratio, and a 14.15% Total Risk-Based Capital Ratio.

 

Asset Quality

 

Loans totaling $3.2 million were deemed to be impaired under the Bank’s policy at September 30, 2019, while loans totaling $1.2 million were deemed to be impaired under the Bank’s policy at December 31, 2018. At September 30, 2019, the Bank had thirteen nonaccrual loans in the aggregate amount of $2.6 million compared to six nonaccrual loans totaling $342,000 at December 31, 2018. At September 30, 2019, the Company reported no accruing loans greater than 90 days past due. Net charge-offs totaled $265,000 for the quarter ended September 30, 2019 and nonperforming assets as a percentage of total assets was 0.54%. Management believes that the allowance for loan losses which was $4.0 million, or 1.25% of gross loans, at September 30, 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 September 30, 2019, the Bank had 90 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

 

 

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

 

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

   

3Q'18

 

Interest income:

                                       

Loans

  $ 4,179     $ 3,916     $ 3,856     $ 3,854     $ 3,798  

Securities

    338       333       296       280       276  

Other

    402       361       348       280       198  

Total interest income

    4,919       4,610       4,500       4,414       4,272  

Interest Expense-

                                       

Deposits

    934       851       813       748       662  

Other Borrowings

    5       -       -       -       -  

Total interest expense

    939       851       813       748       662  

Net interest income

    3,980       3,759       3,687       3,666       3,610  

Provision for loan losses

    241       179       165       47       135  

Net interest income after provision for loan losses

    3,739       3,580       3,522       3,619       3,475  
                                         

Noninterest income:

                                       

Service charges and fees on deposit accounts

    74       68       71       74       83  

Mortgage banking revenue

    151       197       106       108       124  

Income from bank-owned life insurance

    46       45       45       34       11  

Other income

    151       152       140       128       120  

Total noninterest income

    422       462       362       344       338  
                                         

Noninterest expense:

                                       

Salaries and employee benefits

    1,575       1,579       1,557       1,319       1,341  

Occupancy and equipment

    373       427       275       234       237  

Professional fees

    79       106       77       107       86  

Marketing

    172       194       199       144       193  

FDIC Assessment

    6       44       43       51       38  

Software maintenance, amortization and other

    188       167       152       160       167  

Other

    488       516       440       369       396  

Total noninterest expense

    2,881       3,033       2,743       2,384       2,458  
                                         

Earnings before income taxes

    1,280       1,009       1,141       1,579       1,355  

Income taxes

    316       245       274       311       337  

Net earnings

  $ 964     $ 764     $ 867     $ 1,268     $ 1,018  
                                         

Basic earnings per share

  $ 0.31     $ 0.24     $ 0.28     $ 0.40     $ 0.33  
                                         

Diluted earnings per share

  $ 0.31     $ 0.24     $ 0.28     $ 0.40     $ 0.33  

 

 

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings 

(in thousands, except per share amounts)

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

Unaudited

   

Unaudited

 
   

2019

   

2018

   

2019

   

2018

 

Interest income:

                               

Loans

  $ 4,179     $ 3,798     $ 11,951     $ 10,615  

Securities

    338       276       967       851  

Other

    402       198       1,111       354  

Total interest income

    4,919       4,272       14,029       11,820  

Interest expense-

                               

Deposits

    934       662       2,598       1,559  
Other borrowings     5       -       5       -  

Total interest expense

    939       662       2,603       1,559  

Net interest income

    3,980       3,610       11,426       10,261  

Provision for loan losses

    241       135       585       544  

Net interest income after provision for loan losses

    3,739       3,475       10,841       9,717  

Noninterest income:

                               

Service charges and fees on deposit accounts

    74       83       213       259  

Mortgage banking revenue

    151       124       454       339  

Income from bank-owned life insurance

    46       11       136       32  

Gain on sale of securities available for sale

    -       -       7       -  

Other income

    151       120       436       332  

Total noninterest income

    422       338       1,246       962  

Noninterest expense:

                               

Salaries and employee benefits

    1,575       1,341       4,711       3,787  

Occupancy and equipment

    373       237       1,075       698  

Professional fees

    79       86       262       267  

Marketing

    172       193       565       533  

FDIC assessment

    6       38       93       112  

Software maintenance, amortization and other

    188       167       507       474  

Other

    488       396       1,444       1,125  

Total noninterest expense

    2,881       2,458       8,657       6,996  

Earnings before income taxes

    1,280       1,355       3,430       3,683  

Income taxes

    316       337       835       909  

Net earnings

  $ 964     $ 1,018     $ 2,595     $ 2,774  
                                 

Earnings per common share:

                               

Basic

  $ 0.31     $ 0.33     $ 0.83     $ 0.89  

Diluted

    0.31       0.33       0.83       0.89  

Cash dividends per common share(1)

    -       -       0.12       0.10  

 

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

 

 

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

 

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

   

3Q'18

 
   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

   

(Audited)

   

(Unaudited)

 

Assets

                                       

Cash & cash equivalents

  $ 84,278     $ 72,042     $ 66,805     $ 48,038     $ 56,775  

Securities available for sale

    55,773       52,431       48,205       45,384       44,359  

Loans, held for sale

    7,907       6,223       5,808       4,767       6,782  

Loans, net

    315,807       299,949       289,900       290,113       289,022  

Federal Home Loan Bank stock

    404       404       404       355       355  

Premises & equipment, net

    7,787       7,311       7,055       4,656       4,699  

Right of use asset

    3,719       3,768       -       -       -  

Accrued interest receivable

    1,073       1,100       1,023       1,034       1,028  

Bank-owned life insurance

    6,459       6,413       6,368       6,323       1,789  

Other assets

    859       1,086       1,281       1,032       1,149  

Total Assets

  $ 484,066     $ 450,727     $ 426,849     $ 401,702     $ 405,958  
                                         
                                         

Liabilities and Stockholders' Equity

                                       

Noninterest-bearing demand deposits

    96,732       89,608       83,186       80,097       83,296  

Savings, NOW and money-market deposits

    265,518       247,804       244,584       227,674       230,817  

Time deposits

    58,947       52,912       45,743       41,296       41,133  

Total Deposits

    421,197       390,324       373,513       349,067       355,246  

Other borrowings

    2,053       770       -       -       -  

Official checks

    900       1,496       495       837       865  

Lease liability

    3,801       3,827       -       -       -  

Other liabilities

    1,088       1,314       1,157       978       984  

Total Liabilities

    429,039       397,731       375,165       350,882       357,095  

Total Stockholders' Equity

    55,027       52,996       51,684       50,820       48,863  

Total Liabilities and Stockholders' Equity

  $ 484,066     $ 450,727     $ 426,849     $ 401,702     $ 405,958  

 

 

 

 

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands, except per share amounts)

 

   

3Q'19

   

2Q'19

   

1Q'19

   

4Q'18

   

3Q'18

 
                                         

Per Share Data:

                                       

Earnings per share - Basic

  $ 0.31     $ 0.24     $ 0.28     $ 0.40     $ 0.33  

Earnings per share - Diluted

  $ 0.31     $ 0.24     $ 0.28     $ 0.40     $ 0.33  

Book value per share

  $ 17.25     $ 16.85     $ 16.44     $ 16.19     $ 15.61  

Shares outstanding

    3,190,031       3,144,456       3,143,140       3,138,945       3,128,671  

Weighted-average basic shares outstanding

    3,147,696       3,144,068       3,140,401       3,131,379       3,127,038  

Weighted-average diluted shares outstanding

    3,151,321       3,150,136       3,144,071       3,136,048       3,130,171  
                                         

Selected Performance Ratios and Other Data:

                                       

Return on average assets(1)

    0.83 %     0.70 %     0.82 %     1.07 %     1.03 %

Return on average equity(1)

    7.14       5.85       6.79       8.43       8.42  

Average yield on earning assets

    4.48       4.49       4.48       4.52       4.47  

Net interest margin(2)

    3.63       3.66       3.67       3.75       3.78  

Efficiency ratio(3)

    65.45       71.86       67.75       59.45       62.26  

Noninterest expense/average assets(1)

    2.47       2.78       2.60       2.34       2.49  
                                         

Asset Quality Data:

                                       

Nonaccrual loans

  $ 2,603     $ 1,962     $ 365     $ 342     $ 179  

Total nonperforming assets

    2,603       1,962       608       342       179  

Nonpeforming assets/total assets

    0.54 %     0.44 %     0.14 %     0.09 %     0.04 %
                                         

Capital Ratios:

                                       

Tier 1 Leverage Capital Ratio (Company)

    11.73 %     12.08 %     12.28 %     12.61 %     12.64 %

Tier 1 Leverage Capital Ratio (Bank)

    9.24       9.10       9.18       9.28       9.21  

Common Equity Tier I Capital Ratio (Bank)

    12.95       12.69       13.00       12.90       12.40  

Tier I Risk-Based Capital Ratio (Bank)

    12.95       12.69       13.00       12.90       12.40  

Total Capital Ratio (Bank)

    14.15       13.94       14.25       14.15       13.65  

 

(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

 

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