Prime Meridian Holding Company Reports

FIRST quarter 2022 Results

TALLAHASSEE, FL - April 27, 2022 (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, 2022. The Company reported net earnings of $2,241,000, or $0.71 per basic and diluted share, for the quarter ended March 31, 2022, compared to net earnings of $2,234,000 or $0.72 per basic and $0.71 per diluted share, for the quarter ended March 31, 2021.
"We continue to move towards the $1 billion asset milestone," said Sammie D. Dixon, Jr., Vice Chairman, President and CEO of Prime Meridian. "We finished the quarter at $866 million in total assets with strong loan production, even though those gains were muted by payoffs."
Dixon is referring to first quarter loan activity of $60 million in commitments -- $32.8 million of which are new fundings -- and $19.9 million in draws on existing facilities. This growth was, however, offset by $41.9 million in prepayments, $10.2 million in PPP forgiveness, and $11.9 million in curtailments and amortization. The result was a $10.7 million net loan decrease.

Dixon explained, "We believe the high volume of payoffs was due to market uncertainty about the future. Our relationship brand of banking continues to be successful as the Bank grew deposits by $25.0 million during the quarter. All in all, we are very pleased."

"The national and geopolitical events that have taken place since February have made forecasting a challenge," he continued. "Though local markets have largely recovered from the pandemic, elevated inflation has clouded the outlook of most analysts," Dixon said.

"Rising interest rates, inflation, supply chain issues and war are new headwinds we have not faced simultaneously since the inception of the Bank," according to Dixon.

"Community banks could benefit if the Federal Reserve implements the rate hikes that are expected," he said. "We recognize, though, that doing so may also negatively impact the mortgage market and some commercial borrowers. The Bank is well-positioned either way for a changing rate environment," Dixon continued. "We will embrace the opportunities ahead of us as we always have by keeping our hands on the plough and our heads on a swivel."

"We maintain a clean balance sheet and a focus on 1) asset quality, 2) profitability, and 3) growth. We will continue to do things the right way. It's really as simple as that," said Dixon.

1
First Quarter 2022 Highlights

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

(dollars in thousands except per share amounts)

1Q'22

4Q'21

3Q'21

2Q'21

1Q'21

Net earnings

$ 2,241 $ 1,752 $ 2,099 $ 2,262 $ 2,234

Book value per share

$ 20.87 $ 21.42 $ 20.99 $ 20.40 $ 19.56

Earnings per share - Basic

$ 0.71 $ 0.56 $ 0.67 $ 0.72 $ 0.72

Earnings per share - Diluted

$ 0.71 $ 0.55 $ 0.67 $ 0.72 $ 0.71

Weighted-average basic shares outstanding

3,138,695 3,128,831 3,127,524 3,126,197 3,123,565

Weighted-average diluted shares outstanding

3,174,697 3,162,746 3,145,017 3,139,179 3,125,249

Return on average assets(1)

 1.05 % 0.85 % 1.09 % 1.24 % 1.32 %

Return on average equity(1)

 12.70 10.11 12.99 14.40 14.72

Average yield on earning assets(1)

 3.09 3.11 3.34 3.40 3.77

Net interest margin(1)

 2.88 2.85 3.06 3.11 3.44

Efficiency ratio(2)

 59.28 63.83 55.90 53.99 52.85

Nonperforming assets/total assets(3)

 - - - - 0.11

(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.

•

Net earnings of $2.2 million held steady with the first quarter of 2021 and compared favorably to the fourth quarter of 2021 despite the large decrease in fee and interest income earned on the Paycheck Protection Program (PPP). For both comparison periods, interest income from securities and other earning assets, a credit for loan losses of $371,000, and decreased interest expense were positive contributors to net earnings.

•

Adjusted pre-tax, pre-provision net earnings for the first quarter of 2022 were $2.6 million and adjusted pre-tax, pre-provision annualized returns on average assets and average common equity were 1.22% and 14.72%, respectively. (These are considered non-GAAP financial measures. Please refer to "Non-GAAP Measures and Ratio Reconciliation" in the Tables on page 12 for more detail.)

•

Book value per share fell $0.55 to $20.87 due to increased unrealized losses in the Company's portfolio of debt securities available for sale, exceeding earnings retention.

•

Deposits increased by $25.0 million, or 3.3%, since December 31, 2021.

•

At March 31, 2022, $4.9 million in PPP loans remained on the balance sheet with $274,000 in fee income, net of costs, left to be recognized. Since March 31, 2020, the Company has recognized over $5.5 million in PPP fee and interest income, net of costs.

• Asset quality remained strong with no nonperforming assets, no loans that were 90 days or greater past due, and no other real estate owned.

COVID-19 Update

The extent to which the COVID-19 pandemic may continue to impact our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios will depend on unknown future developments. We continue to monitor the state of the pandemic and national and local responses to ensure the safety of our clients and employees. At March 31, 2022, all loans which were on payment COVID-19 related deferrals or modifications have reverted back to their premodification terms.

2

Earnings Summary (Unaudited)

(dollars in thousands)

Change 1Q'22 vs.

1Q'22

4Q'21

1Q'21

4Q'21

1Q'21

Net interest income

$ 5,859 $ 5,653 $ 5,566 3.6 % 5.3 %

Provision (credit) for loan losses

(371 ) 81 - N/A N/A

Noninterest income

518 601 672 (13.8 ) (22.9 )

Noninterest expense

3,780 3,992 3,297 (5.3 ) 14.6

Income taxes

727 429 707 69.5 2.8

Net earnings

$ 2,241 $ 1,752 $ 2,234 27.9 % 0.3 %

On a linked quarter basis, the $489,000 increase in net earnings is primarily attributed to higher interest income on securities and deposits with banks, lower interest and noninterest expense, and a credit for loan losses, partially offset by lower noninterest income and higher taxes. Compared to the same period a year ago, net earnings were relatively flat as higher interest income from securities and deposits with banks, lower interest expense, and the credit for loan losses were offset by lower noninterest income, higher noninterest expense and slightly higher income taxes.

Net Interest Income (Unaudited)

(dollars in thousands)

Change 1Q'22 vs.

1Q'22

4Q'21

1Q'21

4Q'21

1Q'21

Interest income:

Loans

$ 5,784 $ 5,794 $ 5,805 (0.2 %) (0.4 %)

Securities

385 292 249 31.8 54.6

Other

124 76 49 63.2 153.1

Total interest income

6,293 6,162 6,103 2.1 % 3.1 %

Interest expense:

Deposits

403 483 537 (16.6 %) (25.0 %)

Other borrowings

31 26 - 19.2 N/A

Total interest expense

434 509 537 (14.7 ) (19.2 )

Net interest income

$ 5,859 $ 5,653 $ 5,566 3.6 % 5.3 %

On a linked quarter basis and compared to the first quarter of 2021, the increase in net interest income resulted from higher interest income on securities and deposits with banks (driven by both volume and rate) and lower interest expense (driven by management's strategic reduction of deposit costs in the first quarter). Two fewer interest earning days during the first quarter also positively contributed to lower interest expense when compared to the linked quarter.

On a linked quarter basis, the Bank reported slightly lower interest income from loans as higher fee and interest income from non-PPP loans (up $85,000) was offset by a decline in fee and interest income from PPP loans (down $88,000). Two fewer interest earning days during the first quarter are also a contributing factor. Compared to the first quarter of 2021, fee and interest income from PPP loans declined $529,000. Excluding the impact of PPP, interest on loans would have increased 1.7% on a linked quarter basis and 11.2%, compared to the first quarter of 2021 (please refer to "Non-GAAP Measures and Ratio Reconciliation" in the Tables on page 12 for more detail.)

Despite higher balances of interest-bearing liabilities, total interest expense declined $75,000 from the fourth quarter of 2021 and $103,000 from the first quarter of 2021. The average rate paid on interest-bearing liabilities declined 8 basis points from fourth quarter of 2021 and 20 basis points from the first quarter of 2021. For both periods, this is primarily a function of lower deposit costs.

The Company's net interest margin of 2.88% was relatively flat with the fourth quarter of 2021 and down 56 basis points from the first quarter of 2021, primarily due to the shift in the earning asset mix from PPP loans to cash.

3

Provision for Loan Losses

Excluding PPP activity, net loan growth from December 31, 2021 was essentially flat. In addition, the Bank realized a $284,000 net recovery during the quarter which reduced the historical loss factor on commercial loans by 19 basis points. The combination of these factors led to a $371,000 credit for loan losses in the first quarter of 2022.

Noninterest income (Unaudited)

(dollars in thousands)

Change 1Q'22 vs.

1Q'22

4Q'21

1Q'21

4Q'21

1Q'21

Service charges and fees on deposit accounts

$ 68 $ 75 $ 53 (9.3 )% 28.3 %

Debit card/ATM revenue, net

129 129 109 - 18.3

Mortgage banking revenue, net

165 216 301 (23.6 ) (45.2 )

Income from bank-owned life insurance

95 69 63 37.7 50.8

Gain on sale of debt securities available for sale

- - 108 - -

Other income

61 112 38 (45.5 ) 60.5

Total noninterest income

$ 518 $ 601 $ 672 (13.8 )% (22.9 )%

On a linked quarter basis, the decline in noninterest income is primarily attributed to lower mortgage banking revenue and other income. The decline in mortgage banking revenue was anticipated given the rising rate environment and the high level of refinancing activity that occurred in 2021. The decline in other income is attributed to additional merchant card income that was received in the fourth quarter to correct a fee arrearage and the absence of swap fee income in the first quarter of this year. Compared to a year ago, the two key drivers of lower noninterest income are lower mortgage banking revenue and the absence of a gain on sale of debt securities available for sale.

Noninterest expense (Unaudited)

(dollars in thousands)

Change 1Q'22 vs.

1Q'22

4Q'21

1Q'21

4Q'21

1Q'21

Salaries and employee benefits

$ 2,160 $ 2,408 $ 1,852 (10.3 )% 16.6 %

Occupancy and equipment

408 402 386 1.5 5.7

Professional fees

146 130 130 12.3 12.3

Marketing

167 171 140 (2.3 ) 19.3

FDIC assessment

124 119 70 4.2 77.1

Software maintenance, amortization and other

242 237 250 2.1 (3.2 )

Other

533 525 469 1.5 13.6

Total noninterest expense

$ 3,780 $ 3,992 $ 3,297 (5.3 )% 14.6 %

On a linked quarter basis, the decrease in noninterest expense is mostly due to lower mortgage commissions in the first quarter of 2022 and a higher bonus incentive accrual during the fourth quarter of 2021. Compared to the same period a year ago, nearly half of the increase in total noninterest expense is attributed to increased salaries. The Bank reported higher head count with 99 full-time equivalents (FTEs) at March 31, 2022 compared to 88 FTEs a year ago. Annual raises, higher group insurance costs, higher incentive accrual, and increases to other employee benefit accounts also contributed to the overall increase.

4

Balance Sheet

At March 31, 2022, the Company reported $866.2 million in total assets, $787.9 million in deposits, and $479.5 million in net portfolio loans. This compares to $841.1 million in total assets, $762.9 million in deposits, and $490.2 million in net portfolio loans at December 31, 2021. Excluding $10.2 million in PPP loan forgiveness during the first quarter of 2022, the Company's net loan growth was essentially flat from year-end. Strong loan production ($32.8 million in new fundings) and $19.9 million in draws on existing facilities were offset by approximately $41.9 million in loan prepayments and $11.9 million in curtailments and amortization.

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

March 31, 2022

December 31, 2021

Unaudited

Audited

Amount

% of Total

Amount

% of Total

Commercial real estate

$ 150,257 31.0 % $ 156,306 31.5 %

Residential real estate and home equity

188,993 38.9 183,536 36.9

Construction

65,740 13.5 71,164 14.3

Commercial

71,864 14.8 78,584 15.8

Consumer

8,719 1.8 7,283 1.5

Total loans

485,573 100.0 % 496,873 100.0 %

Net deferred loan fees

(160 ) (701 )

Allowance for loan losses

(5,887 ) (5,974 )

Loans, net

$ 479,526 $ 490,198

Total stockholders' equity was $65.7 million, or 7.6% of total assets, at March 31, 2022 compared to $67.0 million at December 31, 2021, or 8.0% of total assets. The $1.3 million decrease in equity stemmed from a $3.3 million change in accumulated other comprehensive loss on the company's portfolio of debt securities available for sale. Book value per share decreased from $21.42 at December 31, 2021 to $20.87 at March 31, 2022, with 3,150,261 common shares outstanding.

As of March 31, 2022, the Bank was considered to be "well capitalized" with a Tier 1 Leverage Capital Ratio of 8.56%, a 13.60% Common Equity Tier 1 Capital Ratio, a 13.60% Tier 1 Risk-Based Capital Ratio, and a 14.70% Total Risk-Based Capital Ratio. Since December of 2019, the Company has injected $9.7 million into the Bank to support growth. The Company maintains a $15 million, 5-year revolving Line of Credit, enhancing its liquidity sources to support the ongoing capital needs of the Bank. As of March 31, 2022, the Company had an outstanding loan balance under this line of $3.975 million and year-to-date interest expense of $31,000.

Asset Quality

At March 31, 2022 and December 31, 2021, the Bank had no nonaccrual loans and no nonperforming assets. Net recoveries for the quarter totaled $284,000 for the quarter ended March 31, 2022. Management believes that the allowance for loan losses which was $5.89 million, or 1.22% of gross loans (excluding PPP loans), at March 31, 2022 is adequate.

5

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, 2022, the Bank had 99 full-time equivalent employees. For more information about Prime Meridian Holding Company, please visit www.primemeridianbank.com.

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

About Non-GAAP Financial Measures

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

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

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

Tables Follow

6

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

1Q'22

4Q'21

3Q'21

2Q'21

1Q'21

Interest income:

Loans

$ 5,784 $ 5,794 $ 5,819 $ 5,632 $ 5,805

Securities

385 292 283 262 249

Other

124 76 78 65 49

Total interest income

6,293 6,162 6,180 5,959 6,103

Interest expense:

Deposits

403 483 502 500 537

Other borrowings

31 26 25 7 -

Total interest expense

434 509 527 507 537

Net interest income

5,859 5,653 5,653 5,452 5,566

Provision (credit) for loan losses

(371 ) 81 - (185 ) -

Net interest income after provision for loan losses

6,230 5,572 5,653 5,637 5,566

Noninterest income:

Service charges and fees on deposit accounts

68 75 61 56 53

Debit card/ATM revenue, net

129 129 108 124 109

Mortgage banking revenue, net

165 216 325 332 301

Income from bank-owned life insurance

95 69 73 67 63

Gain on sale of debt securities available for sale

- - - - 108

Other income

61 112 46 41 38

Total noninterest income

518 601 613 620 672

Noninterest expense:

Salaries and employee benefits

2,160 2,408 2,028 1,805 1,852

Occupancy and equipment

408 402 380 378 386

Professional fees

146 130 103 120 130

Marketing

167 171 197 199 140

FDIC assessment

124 119 78 49 70

Software maintenance, amortization and other

242 237 237 251 250

Other

533 525 480 476 469

Total noninterest expense

3,780 3,992 3,503 3,278 3,297

Earnings before income taxes

2,968 2,181 2,763 2,979 2,941

Income taxes

727 429 664 717 707

Net earnings

$ 2,241 $ 1,752 $ 2,099 $ 2,262 $ 2,234

Basic earnings per common share

$ 0.71 $ 0.56 $ 0.67 $ 0.72 $ 0.72

Diluted earnings per common share

$ 0.71 $ 0.55 $ 0.67 $ 0.72 $ 0.71
7

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings

(in thousands, except per share amounts)

Three Months Ended March 31,

2022

2021

UnauditedUnaudited

Interest income:

Loans

$ 5,784 $ 5,805

Securities

385 249

Other

124 49

Total interest income

6,293 6,103

Interest expense:

Deposits

403 537

Other borrowings

31 -

Total interest expense

434 537

Net interest income

5,859 5,566

Provision (credit) for loan losses

(371 ) -

Net interest income after provision for loan losses

6,230 5,566

Noninterest income:

Service charges and fees on deposit accounts

68 53

Debit card/ATM revenue, net

129 109

Mortgage banking revenue, net

165 301

Income from bank-owned life insurance

95 63

Gain on sale of securities available for sale

- 108

Other income

61 38

Total noninterest income

518 672

Noninterest expense:

Salaries and employee benefits

2,160 1,852

Occupancy and equipment

408 386

Professional fees

146 130

Marketing

167 140

FDIC assessment

124 70

Software maintenance, amortization and other

242 250

Other

533 469

Total noninterest expense

3,780 3,297

Earnings before income taxes

2,968 2,941

Income taxes

727 707

Net earnings

$ 2,241 $ 2,234

Earnings per common share:

Basic

$ 0.71 $ 0.72

Diluted

0.71 0.71

Cash dividends per common share(1)

 0.18 0.14

(1)Annual cash dividends were paid during the first quarters of 2022 and 2021.

8

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

1Q'22

4Q'21

3Q'21

2Q'21

1Q'21

(Unaudited)

(Audited)

(Unaudited)

(Unaudited)

(Unaudited)

Assets

Cash & cash equivalents

$ 233,789 $ 233,473 $ 212,652 $ 181,599 $ 141,787

Debt securities available for sale

101,868 73,763 67,124 63,306 58,915

Debt securities held to maturity

6,185 - - - -

Loans, held for sale

11,241 11,768 10,976 13,736 12,532

Loans, net

479,526 490,198 476,513 470,488 480,772

Federal Home Loan Bank stock

463 366 366 366 366

Premises & equipment, net

7,905 7,962 8,018 8,159 8,200

Right of use lease asset

3,205 3,258 3,310 3,363 3,415

Accrued interest receivable

1,649 1,505 1,478 1,751 1,797

Bank-owned life insurance

16,248 16,153 12,085 12,012 10,748

Other assets

4,087 2,677 1,952 1,839 2,371

Total Assets

 $ 866,166 $ 841,123 $ 794,474 $ 756,619 $ 720,903

Liabilities and Stockholders' Equity

Liabilities:

Noninterest-bearing demand deposits

$ 206,018 $ 209,351 $ 219,996 $ 199,662 $ 193,061

Savings, NOW and money-market deposits

534,049 503,759 448,528 433,954 406,413

Time deposits

47,876 49,832 49,817 49,744 51,955

Total Deposits

787,943 762,942 718,341 683,360 651,429

Other borrowings

3,975 3,575 3,075 3,075 750

Official checks

1,625 1,141 1,168 965 1,257

Operating lease liability

3,350 3,397 3,443 3,489 3,535

Other liabilities

3,512 3,037 2,798 1,943 2,803

Total Liabilities

800,405 774,092 728,825 692,832 659,774

Total Stockholders' Equity

65,761 67,031 65,649 63,787 61,129

Total Liabilities and Stockholders' Equity

 $ 866,166 $ 841,123 $ 794,474 $ 756,619 $ 720,903
9

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Average Balance Sheets (Unaudited)

(in thousands)

1Q'22

4Q'21

1Q'21

Interest

Interest

Interest

Average

and

Yield/

Average

and

Yield/

Average

and

Yield/

Balance

Dividends

Rate(5)

Balance

Dividends

Rate(5)

Balance

Dividends

Rate(5)

Interest-earning assets:

Loans(1)

 $ 489,263 $ 5,684 4.65 % $ 477,175 $ 5,686 4.77 % $ 484,455 $ 5,699 4.71 %

Loans held for sale

10,550 100 3.79 11,700 108 3.69 13,370 106 3.17

Debt securities available for sale

84,088 385 1.83 71,348 292 1.64 59,629 249 1.67

Other(2)

 230,348 124 0.22 231,846 76 0.13 89,646 49 0.22

Total interest-earning assets

814,249 $ 6,293 3.09 % 792,069 $ 6,162 3.11 % 647,100 $ 6,103 3.77 %

Noninterest-earning assets

38,599 33,958 27,743

Total assets

$ 852,848 $ 826,027 $ 674,843

Interest-bearing liabilities:

Savings, NOW and money-market deposits

$ 517,506 $ 335 0.26 % $ 481,074 $ 410 0.34 % $ 379,031 $ 401 0.42 %

Time deposits

48,920 68 0.56 49,881 73 0.59 54,456 136 1.00

Total interest-bearing deposits

566,426 403 0.28 530,955 483 0.36 433,487 537 0.50

Other borrowings

3,717 31 3.34 3,140 26 3.31 17 - -

Total interest-bearing liabilities

570,143 $ 434 0.30 % 534,095 $ 509 0.38 % 433,504 $ 537 0.50 %

Noninterest-bearing deposits

208,793 217,934 173,997

Noninterest-bearing liabilities

3,328 4,662 6,638

Stockholders' equity

70,584 69,336 60,704

Total liabilities and stockholders' equity

$ 852,848 $ 826,027 $ 674,843

Net earning assets

$ 244,106 $ 257,974 $ 213,596

Net interest income

$ 5,859 $ 5,653 $ 5,566

Interest rate spread(3)

 2.79 % 2.73 % 3.27 %

Net interest margin(4)

 2.88 % 2.85 % 3.44 %

(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.

(5) Annualized

10

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands except per share amounts)

1Q'22

4Q'21

3Q'21

2Q'21

1Q'21

Per Share Data:

Earnings per common share - Basic $ 0.71 $ 0.56 $ 0.67 $ 0.72 $ 0.72

Earnings per common share - Diluted

$ 0.71 $ 0.55 $ 0.67 $ 0.72 $ 0.71

Book value per common share

$ 20.87 $ 21.42 $ 20.99 $ 20.40 $ 19.56

Common shares outstanding

3,150,261 3,129,046 3,127,730 3,126,474 3,124,794

Weighted-average basic common shares outstanding

3,138,695 3,128,831 3,127,524 3,126,197 3,123,565

Weighted-average diluted common shares outstanding

3,174,697 3,162,746 3,145,017 3,139,179 3,125,249

Selected Performance Ratios and Other Data:

Return on average assets(1)

 1.05 % 0.85 % 1.09 % 1.24 % 1.32 %

Return on average equity(1)

 12.70 10.11 12.99 14.40 14.72

Average yield on earning assets

3.09 3.11 3.34 3.40 3.77

Net interest margin(2)

 2.88 2.85 3.06 3.11 3.44

Efficiency ratio(3)

 59.28 63.83 55.90 53.99 52.85
Noninterest expense/average assets(1) 1.77 1.93 1.82 1.79 1.95

Asset Quality Data:

Nonaccrual loans

$ - $ - $ - $ - $ 797

Loans 90 days past due + other real estate owned

- - - - -

Total nonperforming assets

- - - - 797

Nonperforming assets/total assets

- - - - 0.11 %

Loans 30-89 days past due

$ 1,546 $ 1,121 $ 526 $ 1,022 $ 1,795

Total loans

485,573 496,873 483,634 478,138 488,795

Loans 30-89 days past due/total loans

0.32 % 0.23 % 0.11 % 0.21 % 0.37 %

Net (recoveries) charge-offs/average loans(1)

 (0.23 )% 0.00 % 0.00 % 0.01 % 0.00 %

Capital Ratios:

Tier 1 Leverage Capital Ratio (Company)

8.10 % 8.12 % 8.45 % 8.61 % 9.00 %

Tier 1 Leverage Capital Ratio (Bank)

8.56 8.53 8.82 9.01 9.07

Common Equity Tier 1 Capital Ratio (Bank)

13.60 12.72 13.30 13.87 13.72

Tier 1 Risk-Based Capital Ratio (Bank)

13.60 12.72 13.30 13.87 13.72

Total Risk-Based Capital Ratio (Bank)

14.70 13.80 14.45 15.11 14.98

(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.

11

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation

Quarterly Pre-Tax Pre-Provision Calculation (Unaudited)

(dollars in thousands except per share amounts)

1Q'22

4Q'21

3Q'21

2Q'21

1Q'21

Net Income

Net earnings (GAAP)

$ 2,241 $ 1,752 $ 2,099 $ 2,262 $ 2,234

Plus: Provision (credit) for loan losses

(371 ) 81 - (185 ) -

Plus: income taxes

727 429 664 717 707

PTPP(1) net earnings (non-GAAP)

$ 2,597 $ 2,262 $ 2,763 $ 2,794 $ 2,941

Earnings per Share (EPS)

Weighted average common shares, diluted

3,174,697 3,162,746 3,145,017 3,139,179 3,125,249

EPS, diluted (GAAP)

$ 0.71 $ 0.55 $ 0.67 $ 0.72 $ 0.71

PTPP(1) EPS, diluted (non-GAAP)

$ 0.82 $ 0.72 $ 0.88 $ 0.89 $ 0.94

Return on Average Assets (ROAA)

Average assets

$ 852,848 $ 826,027 $ 771,867 $ 731,681 $ 674,843

ROAA (GAAP)

1.05 % 0.85 % 1.09 % 1.24 % 1.32 %

PTPP(1) ROAA (non-GAAP)

1.22 % 1.10 % 1.43 % 1.53 % 1.74 %

Return on Average Equity

Average equity

$ 70,584 $ 69,336 $ 64,636 $ 62,837 $ 60,704

ROAE (GAAP)

12.70 % 10.11 % 12.99 % 14.40 % 14.72 %

PTPP(1) ROAE (non-GAAP)

14.72 % 13.05 % 17.10 % 17.79 % 19.38 %

Adjusted Average Loan Yield:

Net loans, excluding loans held for sale

$ 479,526 $ 490,198 $ 476,513 $ 470,488 $ 480,772

Less PPP loans

(4,937 ) (15,172 ) (27,554 ) (54,563 ) (78,625 )

Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)

$ 474,589 $ 475,026 $ 448,959 $ 415,925 $ 402,147

Average loans, excluding loans held for sale

$ 489,263 $ 477,175 $ 477,322 $ 483,587 $ 484,455

Less average PPP loans

(9,652 ) (18,684 ) (43,033 ) (69,318 ) (70,880 )

Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)

$ 479,611 $ 458,491 $ 434,289 $ 414,269 $ 413,575

Interest on loans, excluding loans held for sale

$ 5,684 $ 5,686 $ 5,708 $ 5,505 $ 5,699

Less interest income and earned fee income on PPP loans

(496 ) (584 ) (865 ) (874 ) (1,035 )

Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)

$ 5,188 $ 5,102 $ 4,843 $ 4,631 $ 4,664

Growth rate over linked quarter

1.7 % 5.3 % 4.6 % (0.7 )% 0.5 %

Average loan yield, excluding loans held for sale (GAAP)

4.65 % 4.77 % 4.78 % 4.55 % 4.71 %

Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)

4.33 % 4.45 % 4.46 % 4.47 % 4.51 %

(1) Pre-tax, pre-provision

12

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation

Annual Pre-Tax Pre-Provision Calculation Unaudited)

(dollars in thousands except per share amounts)

For the Year Ended December 31,

2021

2020

2019

2018

2017

Net Income

Net earnings (GAAP)

$ 8,347 $ 4,458 $ 3,542 $ 4,042 $ 2,817

Plus: Provision (credit) for loan losses

(104 ) 2,850 1,131 591 256

Plus: income taxes

2,517 1,295 1,092 1,220 1,735

PTPP (1) net earnings (non-GAAP)

$ 10,760 $ 8,603 $ 5,765 $ 5,853 $ 4,808

Earnings per Share (EPS)

Weighted average common shares, diluted

3,142,482 3,134,124 3,159,635 3,131,546 2,711,699

EPS, diluted (GAAP)

$ 2.66 $ 1.42 $ 1.12 $ 1.29 $ 1.04

PTPP (1) EPS, diluted (non-GAAP)

$ 3.42 $ 2.74 $ 1.82 $ 1.87 $ 1.77

Return on Average Assets (ROAA)

Average assets

$ 751,576 $ 595,363 $ 456,797 $ 379,288 $ 331,682

ROAA (GAAP)

1.11 % 0.75 % 0.78 % 1.07 % 0.85 %

PTPP (1) ROAA (non-GAAP)

1.43 % 1.45 % 1.26 % 1.54 % 1.45 %

Return on Average Equity

Average equity

$ 65,179 $ 57,386 $ 53,172 $ 47,932 $ 39,283

ROAE (GAAP)

12.81 % 7.77 % 6.66 % 8.43 % 7.17 %

PTPP (1) ROAE (non-GAAP)

16.51 % 14.99 % 10.84 % 12.21 % 12.24 %

Adjusted Average Loan Yield:

Net loans, excluding loans held for sale

$ 490,198 $ 476,661 $ 337,710 $ 290,113 $ 250,259

Less PPP loans

(15,172 ) (66,774 ) - - -

Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)

$ 475,026 $ 409,887 $ 337,710 $ 290,113 $ 250,259

Average loans, excluding loans held for sale

$ 480,606 $ 429,802 $ 309,350 $ 283,967 $ 240,875

Less average PPP loans

(50,315 ) (55,529 ) - - -

Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)

$ 430,291 $ 374,273 $ 309,350 $ 283,967 $ 240,875

Interest on loans, excluding loans held for sale

$ 22,598 $ 19,553 $ 15,884 $ 14,215 $ 11,403

Less interest income and earned fee income on PPP loans

(3,358 ) (1,725 ) - - -

Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)

$ 19,240 $ 17,828 $ 15,884 $ 14,215 $ 11,403

Average loan yield, excluding loans held for sale (GAAP)

4.70 % 4.55 % 5.13 % 5.01 % 4.73 %

Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)

4.47 % 4.76 % 5.13 % 5.01 % 4.73 %

(1) Pre-tax, pre-provision

CONTACT: Clint F. Weber, Chief Financial Officer and Executive Vice President
(850) 907-2300
Prime Meridian Holding Company
Website: www.primemeridianbank.com
13

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Prime Meridian Holding Company published this content on 27 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2022 10:44:05 UTC.