Form 8-K - Current report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) January 29, 2024

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 FLTallahassee,	32312
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (850) 907-2300

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 January 29, 2024, Prime Meridian Holding Company issued and posted to its website a press release and investor presentation announcing financial results for the quarter and year ended December 31, 2023. Copies of the press release and investor presentaion are attached as Exhibit 99.1 and 99.2 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

	(d)	Exhibits.

		99.1 Press release dated January 29, 2024
		104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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

SIGNATURE

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

	PRIME MERIDIAN HOLDING COMPANY


	By:	/s/ Clint F. Weber
		Clint F. Weber
		Chief Financial Officer and Executive Vice President

Date: January 29, 2024

Exhibit 99.1

FOR IMMEDIATE RELEASE

Prime Meridian Holding Company Reports

FOURTH QUARTER AND yEAR END 2023 RESULTS

TALLAHASSEE, FL – January 29, 2024 (GLOBE NEWSWIRE) – Prime Meridian Holding Company (OTCQX: PMHG), the parent bank holding company for Prime Meridian Bank, today announced unaudited financial results for the quarter and year ended December 31, 2023. The Company reported net earnings of $1,830,000, or $0.56 per basic and $0.55 per diluted share, for the quarter ended December 31, 2023, compared to $2,642,000, or $0.83 per basic and diluted share, for the quarter ended December 31, 2022. The Company reported net earnings of $8,708,000 or $2.71 per basic and $2.68 per diluted share, for the year ended December 31, 2023 compared to net earnings of $9,681,000 or $3.07 per basic and $3.03 per diluted share, for the year ended December 31, 2022.

The Company also announced that its Board of Directors declared an annual cash dividend of $0.25 per share of the Company's common stock. The dividend is payable on February 29, 2024 to shareholders of record on February 9, 2024.

“As Prime Meridian starts its sixteenth year in February, let's look at how far we’ve come,” said Sammie D. Dixon, Jr., Vice Chairman, President and CEO of the Company and the Bank. “We are knocking on the door of becoming a $1 billion bank – built on years of organic growth. And we have achieved this in markets dominated by national competitors and much older institutions,” he continued.

“Was last year challenging? You bet … and for all banks," he added. "A national liquidity shrinkage and a weak economic outlook made 2023 interesting. The Fed rolled out rate increases at a pace unprecedented in recent memory."

"Since March of 2022, the industry has withstood 11 rate hikes totaling 525 bps - with a full 1.5 percentage point increase since December, 2022," Dixon reminded. These moves resulted in balance sheet shifts for most financial institutions, including Prime Meridian. On the deposit side some clients made moves to alternative higher-yielding investments. Loan balances were up 9.5% even as activity slowed from previous years and many borrowers adopted a wait-and-see attitude.

"Inflationary pressures – and higher rates than we’ve seen in years -- dampened mortgage activity though that appears to be easing,” Dixon said.

“All the while we remained focused on tuning our engines, making system improvements, and bringing in new efficiencies to handle the needs that are coming," he said. “We focus on the positives created over the last 15 years.”

“We have a team and a culture whose reputation for service is something clients recognize and appreciate. And it’s this team that will take us to the next level,” he said. “In times like these you better believe culture matters.”

“I am as excited about the future now as the day we opened the Bank,” said Dixon.

Fourth Quarter and Year End Highlights - Prime Meridian Holding Company and Subsidiary (Unaudited)

(dollars in thousands except per share amounts)

	2023			2022			4Q'23			3Q'23			2Q'23			1Q'23			4Q'22
Net earnings	$	8,708		$	9,681		$	1,830		$	2,120		$	2,257		$	2,501		$	2,642
Book value per share	$	24.53		$	21.19		$	24.53		$	22.91		$	23.25		$	22.81		$	21.19
Earnings per share - Basic	$	2.71		$	3.07		$	0.56		$	0.66		$	0.71		$	0.79		$	0.83
Earnings per share - Diluted	$	2.68		$	3.03		$	0.55		$	0.66		$	0.70		$	0.78		$	0.83
Weighted-average basic shares outstanding		3,209,924			3,154,866			3,259,247			3,214,323			3,189,353			3,175,807			3,164,211
Weighted-average diluted shares outstanding		3,251,080			3,193,774			3,299,212			3,235,920			3,201,531			3,210,012			3,198,744
Return on average assets⁽¹⁾		1.07	%		1.14	%		0.87	%		1.03	%		1.10	%		1.23	%		1.27	%
Return on average equity⁽¹⁾		11.91			14.77			9.85			11.31			12.31			14.20			16.36
Average yield on earning assets⁽¹⁾		5.15			3.78			5.40			5.21			4.98			4.78			4.59
Net interest margin⁽¹⁾		3.79			3.44			3.61			3.68			3.78			3.92			3.98
Efficiency ratio⁽²⁾		58.72			54.42			59.99			61.45			57.84			55.72			54.56
Nonperforming assets/total assets⁽³⁾		0.40			0.09			0.40			0.19			0.17			0.17			0.09

⁽¹⁾Quarterly ratios have been annualized on a 30/360 basis.

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

⁽³⁾Nonperforming assets include loans greater than 90 days past due and nonaccrual loans.

•	Book value per share increased $1.62, or 7.1%, since the linked quarter and $3.34, or 15.8%, since the fourth quarter of 2022.
•	For 2023, the return on average assets was 1.07% and the return on average equity was 11.91%, compared to 1.14% and 14.77%, respectively, in 2022.
•	Pre-tax pre-provision return on assets was 1.58% and pre-tax pre-provision return on equity was 17.65% in 2023, compared to 1.60% and 20.79%, respectively, in 2022. This is considered a non-GAAP financial measure and additional information, including a reconciliation, can be found on page 12.
•	Historically, the Company has maintained a stable efficiency ratio and reported an efficiency ratio of 58.72% for the full year 2023.
•	Gross loan balances increased $56.3 million, or 9.5%, since December 31, 2022 with most growth occurring in commercial real estate and residential real estate loans.
•	Total deposits increased 2.3%, or $17.2 million, to $748.7 million in 2023. Growth in time deposits offset decreases in other account categories.
•	At December 31, 2023, available secured and unsecured borrowing capacity was $176.1 million through various sources including the Federal Home Loan Bank of Atlanta (FHLB) and lines of credit with several banks. When combined with maximum available brokered and wholesale funding capacity of $213.6 million, off-balance sheet funding sources total $389.7 million.
•	At December 31, 2023, on balance sheet liquidity was $146.8 million, consisting of cash and cash equivalents and unpledged debt securities at fair value. Total liquidity sources of $536.5 million represent 71.7% of total deposits.
•	The Bank remains well capitalized with a Tier 1 Leverage ratio of 10.15% and a Total Risk Based Capital Ratio of 14.03%.
•	At December 31, 2023, if all held-to-maturity securities are adjusted to fair value, the tangible common equity ratio decreases from 9.36% to 9.24%. This is considered a non-GAAP financial measure and additional information, including a reconciliation, can be found on page 13.

Earnings Summary (Unaudited)

(dollars in thousands)

							Change 4Q'23 vs.						For the Year Ended December 31,
	4Q'23		3Q'23		4Q'22		3Q'23			4Q'22			2023		2022		% Change
Net interest income	$	7,253	$	7,187	$	7,858		0.9	%		(7.7	)%	$	29,348	$	27,961		5.0	%
Credit loss expense		707		175		289		304.0			144.6			1,450		890		62.9
Noninterest income		492		499		429		(1.4	)		14.7			1,895		1,934		(2.0	)
Noninterest expense		4,646		4,723		4,521		(1.6	)		2.8			18,345		16,268		12.8
Income taxes		562		668		835		(15.9	)		(32.7	)		2,740		3,056		(10.3	)
Net earnings	$	1,830	$	2,120	$	2,642		(13.7	)%		(30.7	)%	$	8,708	$	9,681		(10.1	)%

Net Interest Income (Unaudited)

(dollars in thousands)

							Change 4Q'23 vs.						For the Year Ended December 31,
	4Q'23		3Q'23		4Q'22		3Q'23			4Q'22			2023		2022		% Change
Interest income:
Loans	$	9,658	$	9,019	$	7,653		7.1	%		26.2	%	$	35,291	$	26,221		34.6	%
Debt securities		921		919		938		0.2			(1.8	)		3,698		2,938		25.9
Other		287		244		477		17.6			(39.8	)		937		1,581		(40.7	)
Total interest income		10,866		10,182		9,068		6.7	%		19.8	%		39,926		30,740		29.9	%
Interest expense:
Deposits		3,351		2,691		1,137		24.5	%		194.7	%		9,492		2,579		268.0	%
FHLB advances and other borrowings		262		304		73		(13.8	)		258.9			1,086		200		443.0
Total interest expense		3,613		2,995		1,210		20.6			198.6			10,578		2,779		280.6
Net interest income	$	7,253	$	7,187	$	7,858		0.9	%		(7.7	)%	$	29,348	$	27,961		5.0	%

Since March 2022, the Federal Open Market Committee ("FOMC") has raised the target federal funds rate eleven times, or 525 basis points. This rising rate environment was a key contributing factor to the financial performance of the Company and the banking industry in general in 2023. The Company reported net interest income of $7.3 million for the fourth quarter of 2023, an increase of $66,000, or 0.9%, from the linked quarter as revenue generated from loan growth and loan repricing outpaced higher interest expense. Compared to the fourth quarter of 2022, net interest income decreased $605,000, or 7.7%, as higher yields on interest-earning assets and loan growth were more than offset by a higher cost of funds. Average earnings assets were up 3.0% over the linked quarter and 1.8% over the fourth quarter of 2022 while the yield on average earning assets was 5.40% (4Q'23), compared to 5.21% (3Q'23) and 4.59% (4Q'22). The average cost of funds has risen from 0.64% in 4Q'22 to 1.90% in 4Q'23, reflecting the rising rate environment and a change in funding mix. Over the past twelve months, there has been a shift away from noninterest-bearing and lower cost deposits toward higher cost money-market and time deposit accounts and other funding sources such as FHLB advances. The Company's net interest margin ("NIM") for the fourth quarter of 2023 was 3.61%, compared to 3.68% (3Q'23) and 3.98% (4Q'22).

Net interest income in 2023 increased 5.0%, or $1.4 million, as higher yields on interest-earning assets and loan growth during the year outpaced the impact of a higher cost of funds and a higher level of borrowings. Average earning assets decreased 4.7%, or $37.9 million, year-over-year, while average total deposits declined $62.8 million, or 8.1%. The decrease in average deposits reflects both a migration of deposits to higher paying investment alternatives outside the Bank and a general reduction in excess liquidity in the banking system. The Company's cost of funds for 2023 was 1.44% compared to 0.36% in 2022. The Company's NIM for 2023 was 3.79% compared to 3.44% for the same period a year ago.

Provision for Credit Losses

The provision for credit loss expense was $707,000 for the quarter and $1.45 million for the year ending December 31, 2023. The allowance for credit losses to total loans was 0.86% at December 31, 2023 compared to 1.20% at December 31, 2022. The Company adopted ASC 326 Current Expected Credit Losses ("CECL") January 1, 2023 which resulted in a $2.6 million decrease to the allowance for credit losses at the time of adoption. Provision expense for both the quarter and year ended December 31, 2023 primarily reflects specific reserves required by several new individually evaluated loans, followed by loan growth of $17.9 million during the fourth quarter and $56.3 million during the year, and environmental factors reflecting a greater number of past due loans in the residential mortgage sector during the fourth quarter.

Noninterest income (Unaudited)

(dollars in thousands)

							Change 4Q'23 vs.						For the Year Ended December 31,
	4Q'23		3Q'23		4Q'22		3Q'23			4Q'22			2023		2022		% Change
Service charges and fees on deposit accounts	$	96	$	92	$	83		4.3	%		15.7	%	$	357	$	302		18.2	%
Debit card/ATM revenue, net		136		137		136		(0.7	)		-			573		540		6.1
Mortgage banking revenue, net		102		121		53		(15.7	)		92.5			352		473		(25.6	)
Income from bank-owned life insurance		99		100		94		(1.0	)		5.3			389		379		2.6
Other income		59		49		63		20.4			(6.3	)		224		240		(6.7	)
Total noninterest income	$	492	$	499	$	429		(1.4	)%		14.7	%	$	1,895	$	1,934		(2.0	)%

Noninterest income remained relatively flat with the linked quarter and was up $63,000, or 14.7%, over the fourth quarter of 2022. Compared to the same period a year ago, a $49,000, or 92.5%, increase in mortgage banking revenue and a $13,000, or 15.7%, increase in service charges and fees on deposit accounts were the key drivers of the 14.7% increase in noninterest income Comparing the full years of 2023 and 2022, the $121,000, or 25.6%, decline in mortgage banking revenue, partially offset by a $55,000, or 18.2%, increase in service charges and fees on deposit account were the primary drivers of a 2.0% overall decline in noninterest income.

Noninterest expense (Unaudited)

(dollars in thousands)

							Change 4Q'23 vs.						For the Year Ended December 31,
	4Q'23		3Q'23		4Q'22		3Q'23			4Q'22			2023		2022		% Change
Salaries and employee benefits	$	2,813	$	2,864	$	2,862		(1.8	)%		(1.7	)%	$	11,172	$	9,627		16.0	%
Occupancy and equipment		412		427		404		(3.5	)		2.0			1,647		1,621		1.6
Professional fees		143		149		114		(4.0	)		25.4			559		514		8.8
Marketing		215		215		218		-			(1.4	)		903		793		13.9
FDIC assessment		85		104		57		(18.3	)		49.1			360		360		-
Software maintenance, amortization and other		302		341		325		(11.4	)		(7.1	)		1,214		1,162		4.5
Other		676		623		541		8.5			25.0			2,490		2,191		13.6
Total noninterest expense	$	4,646	$	4,723	$	4,521		(1.6	)%		2.8	%	$	18,345	$	16,268		12.8	%

Operating expenses were down $77,000, or 1.6%, from the linked quarter, mostly attributed to lower expenses for salaries and employee benefits, FDIC assessment, and software, maintenance, amortization and other, partially offset by higher other noninterest expense, which is mostly deposit related operating and fraud expenses. Compared to the fourth quarter a year ago, the $125,000, or 2.8%, increase in noninterest expense is mostly due to higher other noninterest expense (mainly deposit related operating and fraud expenses), higher professional fees, and higher FDIC assessment expense, partially offset by slightly lower salaries and employee benefits expense.

Operating expenses increased $2.1 million, or 12.8%, in 2023 over the prior year with 74.4% of that increase driven by the $1.5 million increase in salaries and employee benefits. The Company reported 110 FTEs at December 31, 2023 compared to 107 FTEs at December 31, 2022. In addition to slightly higher headcount, the increase in salaries is attributed to annual raises that were effective March 1, 2023, general wage inflation, and a decline in deferred loan costs due to lower loan production in 2023. The $110,000 increase in marketing stems primarily from business development activities including a client appreciation campaign in the fourth quarter. Nearly a third of the $299,000, or 13.6%, increase in other noninterest expense is attributed to the aforementioned deposit related operating and fraud expenses.

Financial Condition

At December 31, 2023, the Company reported $854.5 million in total assets, $748.7 million in deposits, and $646.1 million in net portfolio loans. This compares to $815.2 million in total assets, $731.5 million in deposits, and $588.7 million in net portfolio loans at December 31, 2022.

The majority of the Company's debt securities are categorized as available-for-sale ("AFS") and carried on the balance sheet at fair value. At December 31, 2023, the $10.5 million in unrealized losses on these AFS securities are fully reflected on the balance sheet as an after-tax reduction to equity capital of $7.8 million. The portfolio also includes $11.9 million in securities classified as held-to-maturity ("HTM") with a fair value of $10.4 million. HTM securities consist of U.S. agency mortgage-backed securities and municipal securities, each of which is expected to recoup any unrealized losses over its holding period as the debt securities move to maturity. Management believes that the Company has ample liquidity and available borrowing capacity to support holding these securities until maturity.

Gross loans increased $56.3 million, or 9.5%, since December 31, 2022 with commercial real estate and residential real estate loans reporting the largest dollar volume increases. At December 31, 2023, the allowance for credit losses of $5.6 million, represented 0.86% of gross loans compared to $7.1 million, or 1.20% of gross loans, at December 31, 2022. The adoption of CECL on January 1, 2023 resulted in a $2.6 million decrease in the allowance for credit losses in the first quarter of 2023.

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

	December 31, 2023						December 31, 2022
	*Unaudited*						*Audited*
	Amount			% of Total			Amount			% of Total
Commercial real estate	$	223,795			34.3	%	$	202,263			34.0	%
Residential real estate and home equity		254,574			39.1			224,211			37.6
Construction		81,640			12.5			75,151			12.6
Commercial		85,983			13.2			86,308			14.5
Consumer		5,936			0.9			7,698			1.3
Total loans		651,928			100.0	%		595,631			100.0	%

Net deferred loan (fees) costs		(192	)					229
Allowance for credit losses		(5,609	)					(7,145	)
Loans, net	$	646,127					$	588,715

Deposit balances increased $17.2 million, or 2.3%, since December 31, 2022, with declining balances in all categories, except time deposits. Time deposit account balances increased $42.3 million since December 31, 2022, with $20 million of that increase attributed to public funds. We continue to monitor our deposits closely in this challenging rate environment.

Federal Home Loan Bank advances totaled $15.0 million at December 31, 2023 with a weighted average interest rate of 4.5%. Deposit inflows during the third and fourth quarter enabled the $20.0 million reduction in FHLB borrowings from the highpoint ($35.0 million) reported at June 30, 2023.

Total stockholders’ equity was $80.0 million, or 9.36% of total assets, at December 31, 2023, compared to $67.1 million at December 31, 2022, or 8.23% of total assets. Retained earnings, a $2.2 million favorable change in the accumulated other comprehensive loss balance, and a $1.9 million tax-effected change resulting from the adoption of CECL were the primary contributors to higher equity and offset common stock dividends of $698,000 ($0.22 per common share). At December 31, 2023, book value per share was $24.53 with 3,259,881 common shares outstanding.

As of December 31, 2023, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 10.15%, a 13.18% Common Equity Tier 1 Capital Ratio, a 13.18% Tier 1 Risk-Based Capital Ratio, and a 14.03% Total Risk-Based Capital Ratio. The Company maintains a $15 million, 5-year revolving Line of Credit, enhancing its liquidity sources to support the ongoing capital needs of the Bank. The Line of Credit matures in August 2025 and currently has a zero outstanding balance. As of December 31, 2023, the Company reported $15 million in FHLB advances, a $10 million decrease from September 30, 2023. Borrowed funds represented only 1.9% of total liabilities at December 31, 2023 and interest expense totaled $1.1 million for FHLB advances and other borrowings in 2023.

Asset Quality

At December 31, 2023, the Bank had twelve nonperforming loans totaling $3.4 million. The balance of nonperforming loans at December 31, 2023 was divided among residential and home equity loans (60%); commercial loans (23%) and construction loans (17%). During 2023, charge-offs totaled $433,000 while recoveries totaled $53,000. The ratio of nonperforming assets as a percentage of total assets was 0.40%. The Company adopted CECL effective January 1, 2023 which resulted in a $2.6 million ($1.9 million tax-effected) decrease in the allowance for credit losses. Management believes that the allowance for credit losses which was $5.6 million, or 0.86% of gross loans, at December 31, 2023 is adequate.

About Prime Meridian Holding Company

Headquartered in Tallahassee, Florida, Prime Meridian Holding Company (OTCQX: PMHG) offers a broad range of banking services through its wholly owned subsidiary, Prime Meridian Bank, a Florida state-chartered non-member bank. Founded in 2008, the Bank now serves the Tallahassee and Lakeland/Winter Haven Metropolitan Statistical Areas (MSA), including clients in North and Central Florida as well as South Georgia and South Alabama. The Bank currently has four Florida locations: two in Tallahassee, Florida, one in Crawfordville, Florida, and one in Lakeland, Florida. As of December 31, 2023, the Bank had 110 full-time equivalent employees. For more information about Prime Meridian Holding Company, please visit www.primemeridianbank.com.

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

About Non-GAAP Financial Measures

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

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

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

Tables Follow

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

	4Q'23		3Q'23		2Q'23		1Q'23		4Q'22
Interest income:
Loans	$	9,658	$	9,019	$	8,570	$	8,044	$	7,653
Debt securities		921		919		925		933		938
Other		287		244		184		222		477
Total interest income		10,866		10,182		9,679		9,199		9,068
Interest expense:
Deposits		3,351		2,691		1,917		1,533		1,137
FHLB advances and other borrowings		262		304		409		111		73
Total interest expense		3,613		2,995		2,326		1,644		1,210
Net interest income		7,253		7,187		7,353		7,555		7,858
Credit loss expense		707		175		325		243		289
Net interest income after credit loss expense		6,546		7,012		7,028		7,312		7,569

Noninterest income:
Service charges and fees on deposit accounts		96		92		84		85		83
Debit card/ATM revenue, net		136		137		149		151		136
Mortgage banking revenue, net		102		121		75		54		53
Income from bank-owned life insurance		99		100		96		94		94
Other income		59		49		59		57		63
Total noninterest income		492		499		463		441		429

Noninterest expense:
Salaries and employee benefits		2,813		2,864		2,743		2,752		2,862
Occupancy and equipment		412		427		399		409		404
Professional fees		143		149		132		135		114
Marketing		215		215		250		223		218
FDIC assessment		85		104		87		84		57
Software maintenance, amortization and other		302		341		294		277		325
Other		676		623		616		575		541
Total noninterest expense		4,646		4,723		4,521		4,455		4,521
Earnings before income taxes		2,392		2,788		2,970		3,298		3,477
Income taxes		562		668		713		797		835
Net earnings	$	1,830	$	2,120	$	2,257	$	2,501	$	2,642

Basic earnings per common share	$	0.56	$	0.66	$	0.71	$	0.79	$	0.83

Diluted earnings per common share		0.55		0.66		0.70		0.78		0.83

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings

(in thousands, except per share amounts)

	Year Ended December 31,
	2023		2022
		*Unaudited*		*Audited*
Interest income:
Loans	$	35,291	$	26,221
Debt securities		3,698		2,938
Other		937		1,581
Total interest income		39,926		30,740
Interest expense:
Deposits		9,492		2,579
FHLB advances and other borrowings		1,086		200
Total interest expense		10,578		2,779
Net interest income		29,348		27,961
Credit loss expense		1,450		890
Net interest income after credit loss expense		27,898		27,071
Noninterest income:
Service charges and fees on deposit accounts		357		302
Debit card/ATM revenue, net		573		540
Mortgage banking revenue, net		352		473
Income from bank-owned life insurance		389		379
Other income		224		240
Total noninterest income		1,895		1,934
Noninterest expense:
Salaries and employee benefits		11,172		9,627
Occupancy and equipment		1,647		1,621
Professional fees		559		514
Marketing		903		793
FDIC assessment		360		360
Software maintenance, amortization and other		1,214		1,162
Other		2,490		2,191
Total noninterest expense		18,345		16,268
Earnings before income taxes		11,448		12,737
Income taxes		2,740		3,056
Net earnings	$	8,708	$	9,681

Earnings per common share:
Basic	$	2.71	$	3.07
Diluted		2.68		3.03
Cash dividends per common share(1)		0.22		0.18

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

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

	4Q'23		3Q'23		2Q'23		1Q'23		4Q'22
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Audited)
Assets
Cash & cash equivalents	$	28,416	$	22,404	$	21,799	$	22,714	$	39,788
Debt securities available for sale		124,475		123,838		126,792		129,748		129,436
Debt securities held to maturity		11,850		11,838		11,827		11,816		11,805
Loans, held for sale		5,288		5,182		6,614		8,105		7,058
Loans, net		646,127		628,974		614,744		606,128		588,715
Federal Home Loan Bank stock		1,283		1,758		1,895		1,045		463
Premises & equipment, net		7,476		7,613		7,746		7,893		8,022
Right of use lease asset		2,823		2,879		2,934		2,989		3,044
Accrued interest receivable		3,114		2,671		2,713		2,623		2,385
Bank-owned life insurance		16,921		16,822		16,722		16,626		16,532
Other real estate owned		-		117		-		-		-
Other assets		6,755		7,889		7,253		6,570		7,924
Total Assets	$	854,528	$	831,985	$	821,039	$	816,257	$	815,172


Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits	$	189,426	$	193,439	$	189,362	$	199,492	$	197,987
Savings, NOW and money-market deposits		476,826		451,492		450,820		466,202		493,439
Time deposits		82,436		77,876		62,646		51,542		40,109
Total Deposits		748,688		722,807		702,828		717,236		731,535
Other borrowings		-		-		-		1,725		4,275
FHLB Advances		15,000		25,000		35,000		15,000		-
Official checks		2,377		717		1,114		1,671		4,090
Operating lease liability		3,013		3,062		3,111		3,159		3,208
Other liabilities		5,474		5,612		4,816		4,790		5,011
Total Liabilities		774,552		757,198		746,869		743,581		748,119
Total Stockholders' Equity		79,976		74,787		74,170		72,676		67,053
Total Liabilities and Stockholders' Equity	$	854,528	$	831,985	$	821,039	$	816,257	$	815,172

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Average Balance Sheets (Unaudited)

(in thousands)

	4Q'23							3Q'23							4Q'22
			Interest							Interest							Interest
	Average		and		Yield/			Average		and		Yield/			Average		and		Yield/
	Balance		Dividends		Rate⁽⁵⁾			Balance		Dividends		Rate(⁵⁾			Balance		Dividends		Rate(⁵⁾
Interest-earning assets:
Loans⁽¹⁾	$	643,222	$	9,577		5.96	%	$	620,297	$	8,939		5.76	%	$	588,727	$	7,561		5.14	%
Loans held for sale		5,730		81		5.65			5,850		80		5.47			7,845		92		4.69
Debt securities		134,694		921		2.74			137,731		919		2.67			142,205		938		2.64
Other⁽²⁾		20,901		287		5.49			17,398		244		5.61			51,585		477		3.70
Total interest-earning assets		804,547	$	10,866		5.40	%		781,276	$	10,182		5.21	%		790,362	$	9,068		4.59	%
Noninterest-earning assets		40,288							42,065							38,550
Total assets	$	844,835						$	823,341						$	828,912

Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	459,949	$	2,620		2.28	%	$	449,396	$	2,089		1.86	%	$	494,146	$	1,052		0.85	%
Time deposits		79,937		731		3.66			73,071		602		3.30			39,519		85		0.86
Total interest-bearing deposits		539,886		3,351		2.48			522,467		2,691		2.06			533,665		1,137		0.85
FHLB advances and other borrowings		21,361		262		4.91			24,582		304		4.95			4,180		73		6.99
Total interest-bearing liabilities		561,247	$	3,613		2.57	%		547,049	$	2,995		2.19	%		537,845	$	1,210		0.90	%
Noninterest-bearing deposits		198,669							192,686							217,401
Noninterest-bearing liabilities		10,601							8,644							9,088
Stockholders' equity		74,318							74,962							64,578
Total liabilities and stockholders' equity	$	844,835						$	823,341						$	828,912

Net earning assets	$	243,300						$	234,227						$	252,517
Net interest income			$	7,253						$	7,187						$	7,858
Interest rate spread⁽³⁾						2.83	%						3.02	%						3.69	%
Net interest margin⁽⁴⁾						3.61	%						3.68	%						3.98	%

	For the Year Ended December 31,
	2023							2022
			Interest							Interest
	Average		and		Yield/			Average		and		Yield/
(dollars in thousands)	Balance		Dividends		Rate			Balance		Dividends		Rate
Interest-earning assets:
Loans⁽¹⁾	$	613,059	$	34,938		5.70	%	$	537,304	$	25,803		4.80	%
Loans held for sale		6,769		353		5.21			9,852		418		4.24
Debt securities		137,066		3,698		2.70			126,102		2,938		2.33
Other⁽²⁾		18,106		937		5.18			139,614		1,581		1.13
Total interest-earning assets		775,000	$	39,926		5.15	%		812,872	$	30,740		3.78	%
Noninterest-earning assets		40,813							39,400
Total assets	$	815,813						$	852,272

Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	456,263	$	7,681		1.68	%	$	518,777	$	2,315		0.45	%
Time deposits		61,893		1,811		2.93			42,536		264		0.62
Total interest-bearing deposits		518,156		9,492		1.83			561,313		2,579		0.46
FHLB advances and other borrowings		20,127		1,086		5.40			4,016		200		4.98
Total interest-bearing liabilities		538,283	$	10,578		1.97	%		565,329	$	2,779		0.49	%
Noninterest-bearing deposits		193,896							213,570
Noninterest-bearing liabilities		10,540							7,824
Stockholders' equity		73,094							65,549
Total liabilities and stockholders' equity	$	815,813						$	852,272

Net earning assets	$	236,717						$	247,543
Net interest income			$	29,348						$	27,961
Interest rate spread ⁽³⁾						3.18	%						3.29	%
Net interest margin⁽⁴⁾						3.79	%						3.44	%

⁽¹⁾ Includes nonaccrual loans

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

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

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

⁽⁵⁾ Annualized on a 30/360 basis

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands except per share amounts)

	4Q'23			3Q'23			2Q'23			1Q'23			4Q'22
Per Share Data:
Earnings per common share - Basic	$	0.56		$	0.66		$	0.71		$	0.79		$	0.83
Earnings per common share - Diluted	$	0.55		$	0.66		$	0.70		$	0.78		$	0.83
Book value per common share	$	24.53		$	22.91		$	23.25		$	22.81		$	21.19
Common shares outstanding		3,259,881			3,263,733			3,190,052			3,185,765			3,164,491
Weighted-average basic common shares outstanding		3,259,247			3,214,323			3,189,353			3,175,807			3,164,211
Weighted-average diluted common shares outstanding		3,299,212			3,235,920			3,201,531			3,210,012			3,198,744

Selected Performance Ratios and Other Data:
Return on average assets(1)		0.87	%		1.03	%		1.10	%		1.23	%		1.27	%
Return on average equity(1)		9.85			11.31			12.31			14.20			16.36
Average yield on earning assets		5.40			5.21			4.98			4.78			4.59
Net interest margin(2)		3.61			3.68			3.78			3.92			3.98
Efficiency ratio(3)		59.99			61.45			57.84			55.72			54.56
Noninterest expense/average assets(1)		2.20			2.29			2.21			2.20			2.18

Asset Quality Data:
Nonaccrual loans	$	2,335		$	1,112		$	1,391		$	1,348		$	343
Loans 90 days past due and still accruing		1,110			367			-			-			404
Other real estate owned		-			117			-			-			-
Total nonperforming assets		3,445			1,596			1,391			1,348			747
Nonperforming assets/total assets		0.40	%		0.19	%		0.17	%		0.17	%		0.09	%
Loans 30-89 days past due	$	5,353		$	1,060		$	826		$	2,414		$	2,900
Total loans		651,928			633,982			619,465			610,792			595,631
Loans 30-89 days past due/total loans		0.82	%		0.17	%		0.13	%		0.40	%		0.49	%
Net charge-offs/average loans (1)		-			0.03			0.23			-			-

Capital Ratios:
Tier 1 Leverage Capital Ratio (Company)		10.29	%		10.34	%		10.14	%		9.93	%		9.09	%
Common Equity Tier 1 Capital Ratio (Company)		13.37			13.42			13.22			12.82			12.25
Tier 1 Risk-Based Capital Ratio (Company)		13.37			13.42			13.22			12.82			12.25
Total Risk-Based Capital Ratio (Company)		14.22			14.19			13.97			13.58			13.39
Tangible Common Equity Ratio(4) (Company)		9.36			8.99			9.03			8.90			8.23

Tier 1 Leverage Capital Ratio (Bank)		10.15			10.18			9.98			10.13			9.70
Common Equity Tier 1 Capital Ratio (Bank)		13.18			13.23			13.00			13.07			12.90
Tier 1 Risk-Based Capital Ratio (Bank)		13.18			13.23			13.00			13.07			12.90
Total Risk-Based Capital Ratio (Bank)		14.03			13.99			13.76			13.83			14.04
Tangible Common Equity Ratio(4) (Bank)		9.22			8.84			8.87			9.10			8.73

⁽¹⁾Annualized on a 30/360 basis

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

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

⁽⁴⁾^{Tangible Common Equity Ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, please refer to page 13.}

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation (Unaudited)

(dollars in thousands except per share amounts)

	4Q'23			3Q'23			2Q'23			1Q'23			4Q'22
Net Income
Net earnings (GAAP)	$	1,830		$	2,120		$	2,257		$	2,501		$	2,642
Plus: Provision (credit) for credit losses		707			175			325			243			289
Plus: income taxes		562			668			713			797			835
PTPP⁽¹⁾ net earnings (non-GAAP)	$	3,099		$	2,963		$	3,295		$	3,541		$	3,766

Earnings per Share (EPS)
Weighted average common shares, diluted		3,299,212			3,235,920			3,201,531			3,210,012			3,198,744
EPS, diluted (GAAP)	$	0.55		$	0.66		$	0.70		$	0.78		$	0.83
PTPP⁽¹⁾ EPS, diluted (non-GAAP)	$	0.94		$	0.92		$	1.03		$	1.10		$	1.18

Return on Average Assets (ROAA)⁽²⁾
Average assets	$	844,835		$	823,341		$	817,669		$	810,508		$	828,912
ROAA (GAAP)		0.87	%		1.03	%		1.10	%		1.23	%		1.27	%
PTPP⁽¹⁾ ROAA (non-GAAP)		1.47	%		1.44	%		1.61	%		1.75	%		1.82	%

Return on Average Equity (ROAE)⁽²⁾
Average equity	$	74,318		$	74,962		$	73,347		$	70,456		$	64,578
ROAE (GAAP)		9.85	%		11.31	%		12.31	%		14.20	%		16.36	%
PTPP⁽¹⁾ ROAE (non-GAAP)		16.68	%		15.81	%		17.97	%		20.10	%		23.33	%

⁽¹⁾Pre-tax, pre-provision

⁽²⁾ Annualized on a 30/360 basis

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation (Unaudited)

(dollars in thousands except per share amounts)

	4Q'23			3Q'23			2Q'23			1Q'23			4Q'22
Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	646,127		$	628,974		$	614,744		$	606,128		$	588,715
Less PPP loans		(36	)		(41	)		(48	)		(181	)		(191	)
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	646,091		$	628,933		$	614,696		$	605,947		$	588,524

Average loans, excluding loans held for sale	$	643,222		$	620,297		$	613,318		$	602,022		$	588,727
Less average PPP loans		(38	)		(45	)		(175	)		(185	)		(195	)
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	643,184		$	620,252		$	613,143		$	601,837		$	588,532

Interest on loans, excluding loans held for sale	$	9,577		$	8,939		$	8,465		$	7,958		$	7,561
Less interest income and earned fee income on PPP loans		-			-			(4	)		3			(1	)
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	9,577		$	8,939		$	8,461		$	7,961		$	7,560
Growth rate over linked quarter		7.1	%		5.6	%		6.3	%		5.3	%		14.5	%

Average loan yield, excluding loans held for sale (GAAP)		5.96	%		5.76	%		5.52	%		5.29	%		5.14	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		5.96	%		5.76	%		5.52	%		5.29	%		5.14	%

Tangible Common Equity Ratio (Company)
Stockholders' Equity (GAAP)	$	79,976		$	74,787		$	74,170		$	72,676		$	67,053
Less: Intangibles		-			-			-			-			-
Tangible Stockholders' Equity (non-GAAP)	$	79,976		$	74,787		$	74,170		$	72,676		$	67,053

Total Assets (GAAP)	$	854,528		$	831,985		$	821,039		$	816,257		$	815,172
Less: Intangibles		-			-			-			-			-
Tangible Assets (non-GAAP)	$	854,528		$	831,985		$	821,039		$	816,257		$	815,172
Tangible Common Equity Ratio (non-GAAP)		9.36	%		8.99	%		9.03	%		8.90	%		8.23	%

Tax-effected adjustment of losses in HTM securities portfolio (non-GAAP)	$	1,114		$	1,624		$	1,063		$	1,118		$	1,409
Tangible Assets adjusted for HTM securities at fair value (non-GAAP)		853,414			830,361			819,976			815,139			813,763
Tangible Equity adjusted for HTM securities at fair value (non-GAAP)		78,862			73,163			73,107			71,558			65,644
Tangible Common Equity Ratio Adjusted (non-GAAP)		9.24	%		8.81	%		8.92	%		8.78	%		8.07	%

Tangible Common Equity Ratio (Bank)
Stockholders' Equity (GAAP)	$	78,763		$	73,514		$	72,816		$	74,287		$	71,125
Less: Intangibles		-			-			-			-			-
Tangible Stockholders' Equity (non-GAAP)	$	78,763		$	73,514		$	72,816		$	74,287		$	71,125

Total Assets (GAAP)	$	854,494		$	831,830		$	820,921		$	816,173		$	815,142
Less: Intangibles		-			-			-			-			-
Tangible Assets (non-GAAP)	$	854,494		$	831,830		$	820,921		$	816,173		$	815,142
Tangible Common Equity Ratio (non-GAAP)		9.22	%		8.84	%		8.87	%		9.10	%		8.73	%

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,
	2023			2022			2021			2020			2019
Net Income
Net earnings (GAAP)	$	8,708		$	9,681		$	8,347		$	4,458		$	3,542
Plus: Provision (credit) for credit losses		1,450			890			(104	)		2,850			1,131
Plus: income taxes		2,740			3,056			2,517			1,295			1,092
PTPP(1) net earnings (non-GAAP)	$	12,898		$	13,627		$	10,760		$	8,603		$	5,765

Earnings per Share (EPS)
Weighted average common shares, diluted		3,251,080			3,193,774			3,142,482			3,134,124			3,159,635
EPS, diluted (GAAP)	$	2.68		$	3.03		$	2.66		$	1.42		$	1.12
PTPP(1) EPS, diluted (non-GAAP)	$	3.97		$	4.27		$	3.42		$	2.74		$	1.82

Return on Average Assets (ROAA)
Average assets	$	815,813		$	852,272		$	751,576		$	595,363		$	456,797
ROAA (GAAP)		1.07	%		1.14	%		1.11	%		0.75	%		0.78	%
PTPP(1) ROAA (non-GAAP)		1.58	%		1.60	%		1.43	%		1.45	%		1.26	%

Return on Average Equity (ROAE)
Average equity	$	73,094		$	65,549		$	65,179		$	57,386		$	53,172
ROAE (GAAP)		11.91	%		14.77	%		12.81	%		7.77	%		6.66	%
PTPP(1) ROAE (non-GAAP)		17.65	%		20.79	%		16.51	%		14.99	%		10.84	%

Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	646,127		$	588,715		$	490,198		$	476,661		$	337,710
Less PPP loans		(36	)		(191	)		(15,172	)		(66,774	)		-
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	646,091		$	588,524		$	475,026		$	409,887		$	337,710

Average loans, excluding loans held for sale	$	613,059		$	537,304		$	480,606		$	429,802		$	309,350
Less average PPP loans		(108	)		(3,061	)		(50,315	)		(55,529	)		-
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	612,951		$	534,243		$	430,291		$	374,273		$	309,350

Interest on loans, excluding loans held for sale	$	34,938		$	25,803		$	22,598		$	19,553		$	15,884
Less interest income and earned fee income on PPP loans		(2	)		(776	)		(3,358	)		(1,725	)		-
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	34,936		$	25,027		$	19,240		$	17,828		$	15,884

Average loan yield, excluding loans held for sale (GAAP)		5.70	%		4.80	%		4.70	%		4.55	%		5.13	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		5.70	%		4.68	%		4.47	%		4.76	%		5.13	%

⁽¹⁾ Pre-tax, pre-provision

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

Exhibit 99.2

Document And Entity Information	Jan. 29, 2024
Document Information [Line Items]
Entity, Registrant Name	PRIME MERIDIAN HOLDING COMPANY
Document, Type	8-K
Document, Period End Date	Jan. 29, 2024
Entity, Incorporation, State or Country Code	FL
Entity, File Number	333-191801
Entity, Tax Identification Number	27-2980805
Entity, Address, Address Line One	1471 Timberlane Road
Entity, Address, State or Province	FL
Entity, Address, City or Town	Tallahassee
Entity, Address, Postal Zip Code	32312
City Area Code	850
Local Phone Number	907-2300
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001586454