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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) April 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.)

 

1471 Timberlane Road Tallahassee, FL

32312

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (850907-2300

 

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 April 30, 2020, Prime Meridian Holding Company issued a press release announcing financial results for the three-month period ended March 31, 2020. 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 April 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: April 30, 2020

 
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Section 2: EX-99.1 (EXHIBIT 99.1)

ex_156525.htm

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

Prime Meridian Holding Company Reports

First Quarter 2020 Results

 

TALLAHASSEE, FL – April 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 ended March 31, 2020. The Company reported net earnings of $716,000, or $0.22 per basic and diluted share, for the quarter ended March 31, 2020 compared to net earnings of $867,000 or $0.28 per basic and diluted share, for the quarter ended March 31, 2019.
 
“The economic fallout from the COVID-19 pandemic is causing financial hardship for every community,” said Sammie D. Dixon, Jr., Vice Chairman, President and CEO of the Bank.  “We are focused on doing everything we can, for as many as we can, as they grapple with their own unique circumstances.”

 

The Bank is providing tens of millions of dollars of support to hundreds of small business owners through the Small Business Administration Paycheck Protection Program (PPP).  All PPP loans are 100 percent guaranteed by the Small Business Administration (SBA).

 

According to Dixon, the Company plans to utilize the Federal Reserve Bank’s Paycheck Protection Program Liquidity Facility (PPPLF). The PPPLF will provide dollar-for-dollar funding for pledged PPP loans and result in the pledged loans being excluded from the calculation of the Bank's regulatory capital ratios. “The use of the PPPLF will alleviate any leverage or liquidity issues in the near-term, related to us making a large volume of PPP loans,” he explained.

 

“While we acknowledge there will be some credit quality deterioration in our current loan portfolio, we are moving forward judiciously,” Dixon continued. “By the end of the second quarter we expect to have a better understanding of where we are.”

 

“The extent of the impacts on our clients and their businesses from shut downs and social distancing will depend on future developments, most of which are highly uncertain at this time,” he added. “Truth is, right now, we just don’t know.”

 

“One thing is for sure,” Dixon said, “we are in this together and doing our part to help our communities and our country protect the livelihoods of as many as we can.

 

“We salute the medical community – physicians, nurses, and health care workers everywhere – who risk their health and well-being serving others during this pandemic.

 

“Likewise, we thank our team – and their counterparts in community banks across the country – for standing at the frontlines of the battle to save our collective economic lives.  They show up every day to support one another and they are getting it done.

 

“A lot of goodwill has been generated on behalf of clients by the way our team has navigated the first-of-its-kind build out of SBA’s PPP program.  The strength of our culture has become self-evident during this crisis – the team spirit, ability to pivot, the tenacity and grace – have all been brought to bear on this challenge.  I could not be more proud.”

 

Operationally, the renovation of the Timberlane office was completed during the quarter and it has now been designated the Bank’s Main Office. The Bank is continuing to operate a full service branch at the former main office on Capital Circle Northeast.

 

First Quarter 2020 Highlights

 

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

(dollars in thousands except per share amounts)

 

   

1Q'20

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

 

Net earnings

  $ 716     $ 947     $ 964     $ 764     $ 867  

Book value per share

  $ 17.88     $ 17.51     $ 17.25     $ 16.85     $ 16.44  

Earnings per share - Basic

  $ 0.22     $ 0.29     $ 0.31     $ 0.24     $ 0.28  

Earnings per share - Diluted

  $ 0.22     $ 0.29     $ 0.31     $ 0.24     $ 0.28  

Weighted-average basic shares outstanding

    3,183,857       3,190,933       3,147,696       3,144,068       3,140,401  

Weighted-average diluted shares outstanding

    3,185,558       3,195,793       3,151,321       3,150,136       3,144,071  

Return on average assets(1)

    0.56 %     0.75 %     0.83 %     0.70 %     0.82 %

Return on average equity(1)

    5.09       6.84       7.14       5.85       6.79  

Average yield on earning assets(1)

    4.17       4.17       4.48       4.49       4.48  

Net interest margin(1)

    3.42       3.36       3.63       3.66       3.67  

Efficiency ratio(2)

    65.14       60.40       65.03       71.52       67.45  

Nonperforming assets/total assets(3)

    0.57       0.52       0.54       0.44       0.14  

 

(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 include other real estate owned and loans greater than 90 days past due and exclude troubled debt restructuring loans (TDRs). 

 

 

 

 

 

 

COVID-19 Response

 

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets and significantly increased unemployment levels.  The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments and the duration of the pandemic and actions taken by governmental authorities to slow the spread of the disease.

 

The Company has taken action during the first quarter to prepare its employees, support its clients, and help its communities.   In mid-March, the Company closed its lobbies to foot traffic, making them available by appointment only.  At the same time, the Company moved to a split-staff schedule to decrease the number of employees in an office and enhanced its cleaning and disinfecting procedures.  Meetings of more than ten people have transitioned to virtual or online platforms and clients have the option to sign documents electronically. 

 

The Company is supporting small business owners by making PPP loans. As of April 29, 2020, the Bank had received SBA approval on 746 loans for a total dollar amount of $80.0 million.  As of this date, $74.4 million had been disbursed to clients.  These loans are 100% guaranteed by the SBA. The Company plans to fund the majority of PPP loans through the Federal Reserve's PPPLF. Loans pledged to secure the PPPLF advances will be excluded from the calculations of the Bank's regulatory capital ratios. Therefore, PPP loans will have no effect on those ratios and the PPPLF will alleviate any potential liquidity issues at this time related to funding PPP loans. 


Management expects payment deferral activity on existing loans will be concentrated in the second quarter and that credit quality deterioration directly related to the pandemic could materialize in the future. As of April 27, 2020, the Company had received 64 requests on loans totaling $44.3 million asking for payment deferrals. Approximately 85.5% of the requests are for loans secured with real estate. Management is fully monitoring this situation and anticipates providing more detail in the second quarter.  

 

Earnings Summary (Unaudited)

(dollars in thousands)

 

                           

Change 1Q'20 vs.

 
   

1Q'20

   

4Q'19

   

1Q'19

   

4Q'19

   

1Q'19

 

Net interest income

  $ 4,143     $ 3,991     $ 3,687       3.8 %     12.4 %

Provision for loan losses

    636       546       165       16.5       285.5  

Noninterest income

    367       428       325       (14.3 )     12.9  
Noninterest expense     2,938       2,669       2,706       10.1       8.6  

Income taxes

    220       257       274       (14.4 )     (19.7 )

Net earnings

  $ 716     $ 947     $ 867       (24.4 )%     (17.4 )%

 

On a linked quarter basis, the Company’s performance during the first quarter of 2020 reflects solid loan growth with interest income from loans up 4.5%.  This growth was offset by a $90,000, or 16.5%, increase in the provision for loan losses, a $61,000, or 14.3%, decline in noninterest income and a 10.1%, or $269,000, increase in noninterest expense. 

 

Compared to the same period a year ago, the decrease in the Company's first quarter net income is primarily attributed to a $471,000 increase in the provision for loan losses and a $232,000 increase in noninterest expense, partially offset by the $456,000 increase in net interest income, $42,000 increase in noninterest income and lower income tax expense. 

 

In response to a growing threat from the global coronavirus pandemic, the Federal Reserve cut rates twice in the month of March at emergency meetings.  These rate cuts in conjunction with various state actions calling for strict social distancing and "stay-at-home" guidelines caused instability in the capital markets and created tremendous economic uncertainty.  The full economic impact of the pandemic was just beginning to unfold as we ended the first quarter and will continue to develop throughout 2020 and possibly beyond.  

 

Interest income (Unaudited)

(dollars in thousands)

 

                           

Change 1Q'20 vs.

 
   

1Q'20

   

4Q'19

   

1Q'19

   

4Q'19

   

1Q'19

 

Interest income:

                                       

Loans

  $ 4,429     $ 4,237     $ 3,856       4.5 %     14.9 %

Securities

    384       342       296       12.3       29.7  

Other

    232       378       348       (38.6 )     (33.3 )

Total interest income

  $ 5,045     $ 4,957     $ 4,500       1.8 %     12.1 %

 

Net loans grew $24.7 million, or 7.3%, from December 31, 2019 and $72.5 million, or 25.0%, from March 31, 2019.  This strong increase in volume was partially tempered by lower average loan yields which have declined 18 basis points since the first quarter of 2019 due to declining interest rates. Also during the first quarter of 2020, there was a shift in the earnings asset mix from federal funds sold and interest-bearing deposits at banks into higher-yielding securities which positively affected total interest income and there was one additional day of interest bearing activity in the first quarter of 2020 compared to the same period a year ago. 

 

2

 

 

Interest expense: (Unaudited)

(dollars in thousands)

 

                           

Change 1Q'20 vs.

 
   

1Q'20

   

4Q'19

   

1Q'19

   

4Q'19

   

1Q'19

 

Total interest expense

  $ 902     $ 966     $ 813       (6.6 )%     10.9 %

 

Interest expense declined $64,000 from the fourth quarter of 2019 to the first quarter of 2020.  Management strategically reduced rates in the fourth quarter of 2019 following three interest rate cuts by the Federal Reserve in the second half of 2019.  This effort continued into the first quarter of 2020 and was accelerated after the Federal Reserve cut its benchmark interest rate by 50 basis points on March 3rd and another 100 basis points on March 15th, both in emergency meetings scheduled in response to the growing global coronavirus pandemic.

 

The increase in interest expense from the first quarter of 2019 is primarily a function of volume as the average balance of interest-bearing deposits increased $61 million, or 21.3%, from the first quarter of 2019 to the first quarter of 2020.  This increase in interest expense due to volume was partially offset by a 10-basis-point reduction in the average rate paid on deposits.  

 

Margin Analysis (Unaudited)

(dollars in thousands)

   

      1Q'20

   

   4Q19

   

  1Q'19

 
           

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)

  $ 352,921     $ 4,363     4.95 %   $ 329,980     $ 4,160       5.04 %   $ 296,137     $ 3,798       5.13 %

Mortgage loans held for sale

    5,551       66     4.76       7,026       77       4.38       4,742       58       4.89  

Securities

    63,583       384     2.42       57,203       342       2.39       46,010       296       2.57  

Other(2)

    62,157       232     1.49       81,169       378       1.86       55,327       348       2.52  

Total interest-earning assets

    484,212     $ 5,045     4.17 %     475,378     $ 4,957       4.17 %     402,216     $ 4,500       4.48 %

Noninterest-earning assets

    26,021                     26,500                       20,134                  

Total assets

  $ 510,233                   $ 501,878                     $ 422,350                  
                                                                       

Interest-bearing liabilities:

                                                                     

Savings, NOW and money-market deposits

  $ 277,254     $ 544     0.78 %   $ 274,903     $ 617       0.90 %   $ 243,509     $ 603       0.99 %

Time deposits

    69,906       355     2.03       64,305       345       2.15       42,699       210       1.97  

Total interest-bearing deposits

    347,160       899     1.04       339,208       962       1.13       286,208       813       1.14  

Other borrowings

    1,273       3     0.94       1,307       4       1.22       -       -       -  

Total interest-bearing liabilities

    348,433       902     1.04 %     340,515       966       1.13 %     286,208     $ 813       1.14 %

Noninterest-bearing deposits

    99,857                     100,151                       83,184                  

Noninterest-bearing liabilities

    5,690                     5,872                       1,900                  

Stockholders' equity

    56,253                     55,340                       51,058                  

Total liabilities and stockholders' equity

  $ 510,233                   $ 501,878                     $ 422,350                  
                                                                       

Net earning assets

  $ 135,779                   $ 134,863                     $ 116,008                  

Net interest income

          $ 4,143                   $ 3,991                     $ 3,687          

Interest rate spread(3)

                  3.13 %                     3.04 %                     3.34 %

Net interest margin(4)

                  3.42 %                     3.36 %                     3.67 %

 

(1)   Includes nonaccrual loans

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

(3)    Interest rate spread is the difference between the 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.

 

 

During the quarter, the Company effectively managed its liquidity position while funding strong loan growth.  In the first quarter of 2020, the Company's net interest margin improved slightly to 3.42% as the average yield on interest-earning assets stayed flat and management strategically reduced the cost of funds.  Compared to the first quarter of 2019,  the average rate on interest-earning assets has declined 31 basis points as the Federal Reserve has decreased rates five times in the intervening 12-month period.  The reduction in deposit costs generally lagged behind, decreasing ten basis points in that same time period. 

 

 

3

 

Provision for Loan Losses

 

From the fourth quarter of 2019 to the first quarter of 2020 the provision for loan losses increased $90,000, or 16.5%.   The increased provision resulted from $24.7 million in net loan growth during the first quarter of 2020, partially offset by $343,000 in net charge-offs during the quarter.  Also, an increase in the Company's historical loss factor for the commercial & industrial sector resulted in a three basis point increase to the overall general reserve rate. None of the provision or charge-offs in the first quarter of 2020 was related to the COVID-19 pandemic.

 

The large variance from the first quarter of 2019 is primarily attributed to minimal loan growth in the first quarter of 2019 when compared to the first quarter of 2020.  The provision that quarter was mostly attributed to higher reserves on specific impaired loans.  

 

Noninterest income (Unaudited)

(dollars in thousands)

 

                           

Change 1Q'20 vs.

 
   

1Q'20

   

4Q'19

   

1Q'19

   

4Q'19

   

1Q'19

 

Service charges and fees on deposit accounts

  $ 64     $ 75     $ 71       (14.7 )%     (9.9 )%
Debit card/ATM revenue, net     81       60       62       35.0       30.6  

Mortgage banking revenue

    148       213       106       (30.5 )     39.6  

Income from bank-owned life insurance

    40       42       45       (4.8 )     (11.1 )

Other income

    34       38       41       (10.5 )     (17.1 )

Total noninterest income

  $ 367     $ 428     $ 325       (14.3 )%     12.9 %

 

On a linked quarter basis, the decline in total noninterest income is mostly attributed to a seasonal drop in mortgage banking revenue as lower applications in December generally lead to lower mortgage banking revenue in January and February.  The reduction in interest rates in March sparked an increase in refinancing applications in March.  Compared to a year ago, the Bank reported a 39.6% increase in mortgage banking revenue as the Bank’s mortgage team claimed the number two market position in dollar volume in Leon County, Florida for the first quarter of 2020, according to Metro Market Trends.  Looking forward, management anticipates a possible modest decrease in mortgage activity in terms of both new purchases and refinancings in the second quarter of 2020.

 

Service charges and fees on deposit accounts, income from bank-owned life insurance, and other income have all stayed within a fairly tight range over the last twelve months.  After staying fairly steady in 2019, ATM/debit card revenue, net of expenses, reported a $21,000, or 35.0%, increase from the fourth quarter of 2019 to the first quarter of 2020.  This increase in net revenue resulted from higher usage in the first quarter of 2020 and also from a higher level of direct expenses recorded in the fourth quarter of 2019.

 

Noninterest expense (Unaudited)

(dollars in thousands)

 

                           

Change 1Q'20 vs.

 
   

1Q'20

   

4Q'19

   

1Q'19

   

4Q'19

   

1Q'19

 

Salaries and employee benefits

  $ 1,618     $ 1,384     $ 1,557       16.9 %     3.9 %

Occupancy and equipment

    338       330       275       2.4       22.9  

Professional fees

    91       112       77       (18.8 )     18.2  

Marketing

    201       178       199       12.9       1.0  

FDIC Assessment

    52       26       43       100.0       20.9  

Software maintenance, amortization and other

    193       185       152       4.3       27.0  

Other

    445       454       403       (2.0 )     10.4  

Total noninterest expense

  $ 2,938     $ 2,669     $ 2,706       10.1 %     8.6 %

 

On a linked quarter basis, the $269,000 increase in total noninterest expense is primarily attributed to the $234,000, or 16.9%, increase in salaries and employee benefits.  The increase was primarily due to higher personnel costs and a larger accrual for incentive pay during the first quarter of 2020, when compared to the fourth quarter of 2019. 

 

Compared to the first quarter of 2019, the increase in noninterest expense is primarily related to increases in salaries and employee benefits, occupancy and equipment, software and other noninterest expense.  The increase in salaries and employee benefits can be attributed to more full-time equivalents (FTEs) as the Company reported 83 FTEs at March 31, 2019 compared to 88 FTEs at March 31, 2020.  Higher occupancy expense largely stems from higher lease expense due to the increased amount of space under lease at our Timberlane Road office.  The 27% increase in software, amortization and other expense compared to the first quarter of 2019 is mostly attributed to additional technology and communications expenditures related to enhancing digital capabilities for employees working from home. The 10.4% increase in other noninterest expense is primarily related to higher regulatory fees due to the larger size of the Bank and higher fees paid for outside contract services.

 

4

 

 

 Balance Sheet

 

At March 31, 2020, the Company reported $536.1 million in total assets, $474.3 million in deposits, and $362.4 million in net portfolio loans. This compares to $500.9 million in total assets, $438.3 million in deposits, and $337.7 million in net portfolio loans at December 31, 2019. Loan growth occurred in all categories with the exception of consumer loans which declined slightly.   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)

 

     

March 31, 2020

   

December 31, 2019

 
     

Unaudited

   

Audited

 
     

Amount

   

% of Total

   

Amount

   

% of Total

 

Commercial real estate

    $ 106,819       29.1 %   $ 94,728       27.7 %

Residential real estate and home equity

      140,103       38.2       135,913       39.8  

Construction

      38,369       10.5       33,583       9.8  
Commercial       73,733       20.1       69,770       20.4  
Consumer       7,603       2.1       7,631       2.3  

Total Loans

      366,627       100.0 %     341,625       100.0 %
                                   

Net deferred loan costs

      516               499          

Allowance for loan losses

      (4,707 )             (4,414 )        

Loans, net

    $ 362,436             $ 337,710          

 

Total stockholders’ equity was $55.7 million, or 10.4% of total assets, at March 31, 2020 compared to $55.9 million at December 31, 2019, or 11.2% of total assets.  Positive increases in retained earnings and accumulated other comprehensive income were offset by the Company's $1.2 million share repurchase that was initiated toward the end of the first quarter.  Book value per share increased from $17.51 at December 31, 2019 to $17.88 at March 31, 2020, with 3,115,334 common shares outstanding.

 

As of March 31, 2020, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 9.33%, a 12.41% Common Equity Tier 1 Capital Ratio, a 12.41% Tier 1 Risk-Based Capital Ratio, and a 13.64% Total Risk-Based Capital Ratio.

 

As part of the Company's overall capital management plan, the Company elected to initiate a share repurchase program of up to $2 million in the first quarter.  As of March 31, 2020, the Company had repurchased 82,784 shares at a weighted-average cost per share of $14.70 for a total of $1.2 million.  If there are further significant declines in the Company’s stock price and shares become available, the Company will consider the merits of a repurchase as part of its overall capital management plan. At present, the Company has discontinued its repurchase plan.

 

Asset Quality

 

Loans totaling $2.8 million were deemed to be impaired under the Bank’s policy at March 31, 2020, while loans totaling $3.2 million were deemed to be impaired under the Bank’s policy at December 31, 2019.  At March 31, 2020, the Bank had thirteen nonaccrual loans in the aggregate amount of $2.2 million compared to twelve nonaccrual loans totaling $2.6 million at December 31, 2019.  At March 31, 2020, the Company reported $553,000 in loans greater than 90 days past due and transferred $234,000 to other real estate owned. Net charge-offs totaled $343,000 for the quarter ended March 31, 2020 and nonperforming assets as a percentage of total assets was 0.57%.  Management believes that the allowance for loan losses which was $4.7 million, or 1.28% of gross loans, at March 31, 2020 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 March 31, 2020, 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

5

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

 

   

1Q'20

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

 

Interest income:

                                       

Loans

  $ 4,429     $ 4,237     $ 4,179     $ 3,916     $ 3,856  

Securities

    384       342       338       333       296  

Other

    232       378       402       361       348  

Total interest income

    5,045       4,957       4,919       4,610       4,500  

Interest Expense:

                                       

Deposits

    899       962       934       851       813  

Other Borrowings

    3       4       5       -       -  

Total interest expense

    902       966       939       851       813  

Net interest income

    4,143       3,991       3,980       3,759       3,687  

Provision for loan losses

    636       546       241       179       165  

Net interest income after provision for loan losses

    3,507       3,445       3,739       3,580       3,522  
                                         

Noninterest income:

                                       

Service charges and fees on deposit accounts

    64       75       74       68       71  

Debit card/ATM revenue, net

    81       60       67       64       62  

Mortgage banking revenue

    148       213       151       197       106  

Income from bank-owned life insurance

    40       42       46       45       45  

Other income

    34       38       32       38       41  

Total noninterest income

    367       428       370       412       325  
                                         

Noninterest expense:

                                       

Salaries and employee benefits

    1,618       1,384       1,575       1,579       1,557  

Occupancy and equipment

    338       330       373       427       275  

Professional fees

    91       112       79       106       77  

Marketing

    201       178       172       194       199  

FDIC Assessment

    52       26       6       44       43  

Software maintenance, amortization and other

    193       185       188       167       152  

Other

    445       454       436       466       403  

Total noninterest expense

    2,938       2,669       2,829       2,983       2,706  
                                         

Earnings before income taxes

    936       1,204       1,280       1,009       1,141  

Income taxes

    220       257       316       245       274  

Net earnings

  $ 716     $ 947     $ 964     $ 764     $ 867  
                                         

Basic earnings per share

  $ 0.22     $ 0.29     $ 0.31     $ 0.24     $ 0.28  
                                         

Diluted earnings per share

    0.22       0.29       0.31       0.24       0.28  

 

6

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings 

(in thousands, except per share amounts)

 

   

Three Months Ended March 31,

 
   

2020

   

2019

 
   

Unaudited

 

Interest income:

               

Loans

  $ 4,429     $ 3,856  

Securities

    384       296  

Other

    232       348  

Total interest income

    5,045       4,500  

Interest expense:

               

Deposits

    899       813  

Other borrowings

    3       -  

Total interest expense

    902       813  

Net interest income

    4,143       3,687  

Provision for loan losses

    636       165  

Net interest income after provision for loan losses

    3,507       3,522  

Noninterest income:

               

Service charges and fees on deposit accounts

    64       71  

Debit card/ATM revenue, net

    81       62  

Mortgage banking revenue

    148       106  

Income from bank-owned life insurance

    40       45  

Gain on sale of securities available for sale

    -       7  

Other income

    34       34  

Total noninterest income

    367       325  

Noninterest expense:

               

Salaries and employee benefits

    1,618       1,557  

Occupancy and equipment

    338       275  

Professional fees

    91       77  

Marketing

    201       199  

FDIC assessment

    52       43  

Software maintenance, amortization and other

    193       152  

Other

    445       403  

Total noninterest expense

    2,938       2,706  

Earnings before income taxes

    936       1,141  

Income taxes

    220       274  

Net earnings

  $ 716     $ 867  
                 

Earnings per common share:

               

Basic

  $ 0.22     $ 0.28  
   Diluted     0.22       0.28  

   Cash dividends per common share(1)

    0.12       0.12  

 

(1) Annual cash dividends were paid during the first quarters of 2020 and 2019.

 

7

 

 

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

 

   

1Q'20

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

 
   

(Unaudited)

   

(Audited)

   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

 

Assets

                                       

Cash & cash equivalents

  $ 72,677     $ 75,082     $ 84,278     $ 72,042     $ 66,805  

Debt securities available for sale

    70,976       61,333       55,773       52,431       48,205  

Loans, held for sale

    8,946       6,193       7,907       6,223       5,808  

Loans, net

    362,436       337,710       315,807       299,949       289,900  

Federal Home Loan Bank stock

    493       404       404       404       404  

Premises & equipment, net

    8,072       7,744       7,787       7,311       7,055  

Right of use asset

    3,619       3,669       3,719       3,768       -  

Accrued interest receivable

    1,273       1,137       1,073       1,100       1,023  

Bank-owned life insurance

    6,541       6,501       6,459       6,413       6,368  
Other real estate owned     234       -       -       -       -  

Other assets

    850       1,088       859       1,086       1,281  

Total Assets

  $ 536,117     $ 500,861     $ 484,066     $ 450,727     $ 426,849  
                                         
                                         

Liabilities and Stockholders' Equity

                                       

Noninterest-bearing demand deposits

  $ 106,176     $ 96,807     $ 96,732     $ 89,608     $ 83,186  

Savings, NOW and money-market deposits

    297,991       272,283       265,518       247,804       244,584  

Time deposits

    70,116       69,174       58,947       52,912       45,743  

Total Deposits

    474,283       438,264       421,197       390,324       373,513  

Other borrowings

    -       1,254       2,053       770       -  

Official checks

    1,391       606       900       1,496       495  

Lease liability

    3,714       3,758       3,801       3,827       -  

Other liabilities

    1,038       1,111       1,088       1,314       1,157  

Total Liabilities

    480,426       444,993       429,039       397,731       375,165  

Total Stockholders' Equity

    55,691       55,868       55,027       52,996       51,684  

Total Liabilities and Stockholders' Equity

  $ 536,117     $ 500,861     $ 484,066     $ 450,727     $ 426,849  

 

8

 

 

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands except per share amounts)

 

   

1Q'20

   

4Q'19

   

3Q'19

   

2Q'19

   

1Q'19

 
                                         

Per Share Data:

                                       

Earnings per share - Basic

  $ 0.22     $ 0.29     $ 0.31     $ 0.24     $ 0.28  

Earnings per share - Diluted

  $ 0.22     $ 0.29     $ 0.31     $ 0.24     $ 0.28  

Book value per share

  $ 17.88     $ 17.51     $ 17.25     $ 16.85     $ 16.44  

Shares outstanding

    3,115,334       3,191,288       3,190,031       3,144,456       3,143,140  

Weighted-average basic shares outstanding

    3,183,857       3,190,933       3,147,696       3,144,068       3,140,401  

Weighted-average diluted shares outstanding

    3,185,558       3,195,793       3,151,321       3,150,136       3,144,071  
                                         

Selected Performance Ratios and Other Data:

                                       

Return on average assets(1)

    0.56 %     0.75 %     0.83 %     0.70 %     0.82 %

Return on average equity(1)

    5.09       6.84       7.14       5.85       6.79  

Average yield on earning assets

    4.17       4.17       4.48       4.49       4.48  

Net interest margin(2)

    3.42       3.36       3.63       3.66       3.67  

Efficiency ratio(3)

    65.14       60.40       65.03       71.52       67.45  

Noninterest expense/average assets(1)

    2.30       2.13       2.43       2.73       2.56  
                                         

Asset Quality Data:

                                       

Nonaccrual loans

  $ 2,244     $ 2,591     $ 2,603     $ 1,962     $ 365  
Loans 90 days past due + other real estate owned     787       -       -       -       243  

Total nonperforming assets

    3,031       2,591       2,603       1,962       608  

Nonperforming assets/total assets

    0.57 %     0.52 %     0.54 %     0.44 %     0.14 %
                                         

Capital Ratios:

                                       

Tier 1 Leverage Capital Ratio (Company)

    10.75 %     11.08 %     11.73 %     12.08 %     12.28 %

Tier 1 Leverage Capital Ratio (Bank)

    9.33       9.31       9.24       9.10       9.18  

Common Equity Tier 1 Capital Ratio (Bank)

    12.41       13.24       12.95       12.69       13.00  

Tier 1 Risk-Based Capital Ratio (Bank)

    12.41       13.24       12.95       12.69       13.00  

Total Capital Ratio (Bank)

    13.64       14.49       14.15       13.94       14.25  

 

(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) 907-2300
  Prime Meridian Holding Company
  Website: www.primemeridianbank.com

 

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