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) July 27, 2023

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: (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 July 27, 2023, Prime Meridian Holding Company issued and posted to its website a press release and investor presentation announcing financial results for the three and six months ended June 30, 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 July 27, 2023
		99.2 Investor Presentation Q2 2023
		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: July 27, 2023

Exhibit 99.1

FOR IMMEDIATE RELEASE

Prime Meridian Holding Company Reports

SECOND QUARTER 2023 RESULTS

TALLAHASSEE, FL – July 27, 2023 (GLOBE NEWSWIRE) – Prime Meridian Holding Company (OTCQX: PMHG), the parent bank holding company for Prime Meridian Bank, today announced unaudited financial results for the three and six months ended June 30, 2023. The Company reported net earnings of $2,257,000, or $0.71 per basic and $0.70 per diluted share, for the three months ended June 30, 2023 compared to net earnings of $1,967,000 or $0.62 per basic and diluted share, for the three months ended June 30, 2022. The Company reported net earnings of $4,758,000, or $1.49 per basic and $1.48 per diluted share, for the six months ended June 30, 2023 compared to net earnings of $4,208,000 or $1.34 per basic and $1.32 per diluted share, for the six months ended June 30, 2022.

“We are staying the course even as Banks face an economy that seems a bit rudderless,” said Sammie D. Dixon, Jr., Vice Chairman, President, and CEO. “Our strength and success are rooted in our ability to orient ourselves to an ever-changing financial landscape,” he said.

“We are actively using this time as an opportunity to stay top-of-mind with clients and prospects. These connections deepen relationships with those we bank as well as the communities we serve,” he continued. “Whether on calls, in our lobbies or during person-to-person events like our spring Client Appreciation lunches, we want our clients to feel that focus. One thing that sets us apart is our recognition that there is always another bank ready to serve our clients. We work hard to treat everyone with humility and respect."

“Despite the headwinds facing our industry and economy, we continue to work with our clients to find solutions for their financial needs and assist them in their financial future. Our success in meeting these challenges comes from flexibility and nimbleness - the strength of our balance sheet and capital base," he said.

When asked to summarize Prime Meridian Bank’s approach in one word Dixon replied, ‘onward.’

Second Quarter 2023 Highlights

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

(dollars in thousands except per share amounts)

	2Q'23			1Q'23			4Q'22			3Q'22			2Q'22
Net earnings	$	2,257		$	2,501		$	2,642		$	2,831		$	1,967
Book value per share	$	23.25		$	22.81		$	21.19		$	20.20		$	20.48
Earnings per share - Basic	$	0.71		$	0.79		$	0.83		$	0.90		$	0.62
Earnings per share - Diluted	$	0.70		$	0.78		$	0.83		$	0.89		$	0.62
Weighted-average basic shares outstanding		3,189,353			3,175,807			3,164,211			3,159,526			3,151,760
Weighted-average diluted shares outstanding		3,201,531			3,210,012			3,198,744			3,197,282			3,189,319
Return on average assets(1)		1.10	%		1.23	%		1.27	%		1.32	%		0.90	%
Return on average equity(1)		12.31			14.20			16.36			17.19			12.13
Average yield on earning assets(1)		4.98			4.78			4.59			4.04			3.43
Net interest margin(1)		3.78			3.92			3.98			3.71			3.21
Efficiency ratio(2)		57.84			55.72			54.56			50.53			54.32
Nonperforming assets/total assets(3)		0.17			0.17			0.09			0.12			0.04

⁽¹⁾Ratio has 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.

•	Diluted earnings per share of $0.70 for the second quarter of 2023 and $1.48 for the first six months of 2023 represent growth of 12.9% and 12.1%, respectively, over 2022.
•	Return on average assets (ROAA) of 1.10% for 2Q23 represents the fourth consecutive quarter the Company's ROAA was above 1.0%.
•	Gross loans increased $23.8 million, or 4.0%, since December 31, 2022 with growth occurring in all categories, except consumer. Gross loans are up $75.4 million over the same period last year, or 13.9%.
•	Since December 31, 2022, period-end deposit balances have decreased 3.9%, or $28.7 million, and average deposit balances have decreased 6.3%, or $47.1 million. The Company, however, opened 239 net new non-maturity deposit accounts during the second quarter of 2023 and 537 net new non-maturity deposit accounts since December 31, 2022.
•	The Bank's estimated uninsured deposits were $192.1 million, or 27% of total deposits at June 30, 2023, excluding collateralized public funds accounts.
•	At June 30, 2023, available secured and unsecured borrowing capacity was $150.4 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 $205.3 million, off-balance sheet funding sources total $355.7 million.
•	At June 30, 2023, on balance sheet liquidity was $145.6 million, consisting of cash and cash equivalents and unpledged debt securities at fair value. Total liquidity sources of $501.3 million, or 71.3% of total deposits, represents 261% of estimated uninsured deposits at June 30, 2023.
•	Compared to the linked quarter, book value per share increased $0.44 per share, or 1.9%, to $23.25 due to strong quarterly earnings. Book value per share is up 13.5% from June 30, 2022.
•	The Company's tangible common equity ratio was 9.03% at June 30, 2023 compared to 8.23% at December 31, 2022. This is considered a non-GAAP financial measure and additional information, including a reconciliation, can be found on page 11.

Earnings Summary (Unaudited)

(dollars in thousands)

							Change 2Q'23 vs.						For the Six Months Ended
	2Q'23		1Q'23		2Q'22		1Q'23			2Q'22			June 30, 2023		June 30, 2022		% Change
Net interest income	$	7,353	$	7,555	$	6,642		(2.7	%)		10.7	%	$	14,908	$	12,501		19.3	%
Provision for credit losses		325		243		731		33.7			(55.5	)		568		360		57.8
Noninterest income		463		441		504		5.0			(8.1	)		904		1,022		(11.5	)
Noninterest expense		4,521		4,455		3,882		1.5			16.5			8,976		7,662		17.1
Income taxes		713		797		566		(10.5	)		26.0			1,510		1,293		16.8
Net earnings	$	2,257	$	2,501	$	1,967		(9.8	)%		14.7	%	$	4,758	$	4,208		13.1	%

Net Interest Income (Unaudited)

(dollars in thousands)

							Change 2Q'23 vs.						For the Six Months Ended
	2Q'23		1Q'23		2Q'22		1Q'23			2Q'22			June 30, 2023		June 30, 2022		% Change
Interest income:
Loans	$	8,570	$	8,044	$	6,029		6.5	%		42.1	%	$	16,614	$	11,813		40.6	%
Debt securities		925		933		737		(0.9	)		25.5			1,858		1,122		65.6
Other		184		222		331		(17.1	)		(44.4	)		406		455		(10.8	)
Total interest income		9,679		9,199		7,097		5.2	%		36.4	%		18,878		13,390		41.0	%
Interest expense:
Deposits		1,917		1,533		415		25.0	%		361.9	%		3,450		818		321.8	%
Other borrowings		409		111		40		268.5			922.5			520		71		632.4
Total interest expense		2,326		1,644		455		41.5			411.2			3,970		889		346.6
Net interest income	$	7,353	$	7,555	$	6,642		(2.7%	)		10.7	%	$	14,908	$	12,501		19.3	%

The Company reported net interest income of $7.4 million for the second quarter of 2023, a decrease of $202,000, or 2.7%, from the linked quarter. Higher loan yields and loan growth during the quarter were offset by higher funding costs and reduced cash balances. Average interest-earning assets increased 1.1%, or $8.2 million since the first quarter of 2023.

Comparing the three and six months ended June 30, 2023 and 2022, a change in the earning asset mix and higher yields on interest-earning assets drove the improvement in net interest income, outpacing the effect of higher funding costs.

The Company's net interest margin ("NIM") for the second quarter of 2023 was 3.78%, a decrease of 14 basis points from the linked quarter as a 20-basis point increase in the average yield on interest-earning assets was more than offset by a 48-basis point increase in the average cost of interest-bearing liabilities. For the three and six-month periods ending June 30, 2023 and 2022, the Company's NIM improved 57 basis points and 77 basis points, respectively, to 3.78% and 3.81%. An improved earning asset mix and higher interest rates were key drivers. Current macro trends indicate that NIM will be challenged through the rest of 2023, even if Fed tightening ends, with continued pressure on funding costs. As a result, loan growth may slow in an effort to manage balance sheet constraints.

Provision for Credit Losses

The provision for credit loss expense was $325,000 for the second quarter of 2023, compared to $243,000 for the first quarter of 2023 and $731,000 for the second quarter of 2022. For the second quarter of 2022, credit loss expense of $731,000 was attributed to loan production during the quarter. For the first quarter of 2023, credit loss expense of $243,000 was attributed to fully reserving for one PPP loan and loan growth during the quarter. For the second quarter of 2023, credit loss expense of $325,000 was attributed to $350,000 in net charge-off activity, and to a lesser extent, due to loan growth during the quarter. The allowance for credit losses to total loans was 0.76% at June 30, 2023 compared to 1.20% at December 31, 2022.

For the six-month period ended June 30, 2023, the provision for credit loss expense was $568,000 compared to $360,000 for the same period in 2022.

The Company adopted ASC 326 Current Expected Credit Losses "CECL" effective January 1, 2023. The impact of adopting CECL resulted in a $2.6 million decrease to the allowance for credit losses.

Noninterest income (Unaudited)

(dollars in thousands)

							Change 2Q'23 vs.						For the Six Months Ended
	2Q'23		1Q'23		2Q'22		1Q'23			2Q'22			June 30, 2023		June 30, 2022		% Change
Service charges and fees on deposit accounts	$	84	$	85	$	73		(1.2	)%		15.1	%	$	169	$	141		19.9	%
Debit card/ATM revenue, net		149		151		143		(1.3	)		4.2			300		272		10.3
Mortgage banking revenue, net		75		54		139		38.9			(46.0	)		129		304		(57.6	)
Income from bank-owned life insurance		96		94		94		2.1			2.1			190		189		0.5
Other income		59		57		55		3.5			7.3			116		116		-
Total noninterest income	$	463	$	441	$	504		5.0	%		(8.1	)%	$	904	$	1,022		(11.5	)%

Noninterest income increased slightly from its linked quarter due primarily to higher mortgage banking revenue. Comparing the three and six months ended June 30, 2023 and 2022, the decline in mortgage banking revenue from 2022 outpaced increases in all other noninterest income categories. Lower mortgage banking activity for 2023 reflects the negative impact of higher rates on refinancing and homebuying activity, compounded by inventory issues in our local markets.

Noninterest expense (Unaudited)

(dollars in thousands)

							Change 2Q'23 vs.						For the Six Months Ended
	2Q'23		1Q'23		2Q'22		1Q'23			2Q'22			June 30, 2023		June 30, 2022		% Change
Salaries and employee benefits	$	2,743	$	2,752	$	2,238		(0.3	)%		22.6	%	$	5,495	$	4,398		24.9	%
Occupancy and equipment		399		409		396		(2.4	)		0.8			808		804		0.5
Professional fees		132		135		130		(2.2	)		1.5			267		276		(3.3	)
Marketing		250		223		213		12.1			17.4			473		380		24.5
FDIC assessment		87		84		84		3.6			3.6			171		208		(17.8	)
Software maintenance, amortization and other		294		277		285		6.1			3.2			571		527		8.3
Other		616		575		536		7.1			14.9			1,191		1,069		11.4
Total noninterest expense	$	4,521	$	4,455	$	3,882		1.5	%		16.5	%	$	8,976	$	7,662		17.1	%

Compared to the linked quarter, the increase in noninterest expense is mostly attributed to an increase in other noninterest expense (namely higher travel expense connected with conventions and conferences), higher marketing expense, and higher software maintenance, amortization and other expense. Comparing the three and six-month periods ending June 30, 2023 and 2022, the primary driver of higher noninterest expense is salaries and employee benefits. The Company reported 108 at June 30, 2023 compared to 100 FTEs at June 30, 2022. In addition to higher headcount, a full quarter impact of annual raises that were effective March 1, 2023, higher group insurance costs, higher incentive accrual and fewer deferred loan costs also contributed to the overall increase.

Financial Condition

At June 30, 2023, the Company reported $821.0 million in total assets, $702.8 million in deposits, and $614.7 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. Compared to December 31, 2022, the Company reported growth across all loan categories, except consumer.

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

	June 30, 2023						December 31, 2022
	Unaudited						Audited
	Amount			% of Total			Amount			% of Total
Commercial real estate	$	205,460			33.2	%	$	202,263			34.0	%
Residential real estate and home equity		234,486			37.8			224,211			37.6
Construction		83,704			13.5			75,151			12.6
Commercial		90,290			14.6			86,308			14.5
Consumer		5,525			0.9			7,698			1.3
Total loans		619,465			100.0	%		595,631			100.0	%

Net deferred loan costs		8						229
Allowance for credit losses		(4,729	)					(7,145	)
Loans, net	$	614,744					$	588,715

At June 30, 2023, the allowance for credit losses of $4.7 million, represented 0.76% 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.

Deposit balances decreased $28.7 million, or 3.9%, since December 31, 2022, and $81.8 million, or 10.4% since June 30, 2022, with declining balances in all categories, except time deposits. Time deposit account balances increased $22.5 million, or 56.2%, since year-end, with $10.6 million of that increase attributed to public funds. We continue to monitor our deposits closely as we manage through this rising rate environment.

Total stockholders’ equity was $74.2 million, or 9.0% of total assets, at June 30, 2023, compared to $67.1 million at December 31, 2022, or 8.2% of total assets. Strong earnings in the first half of 2023, a $570,000 favorable change in the Company's accumulated other comprehensive income (loss), and a $1.9 million tax-effected change resulting from the adoption of CECL all contributed to higher equity, partially offset by common stock dividends of $698,000 ($0.22 per common share). Book value per share increased from $21.19 at December 31, 2022 with 3,164,491 common shares outstanding to $23.25 at June 30, 2023, with 3,190,052 common shares outstanding.

As of June 30, 2023, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 9.98%, a 13.00% Common Equity Tier 1 Capital Ratio, a 13.00% Tier 1 Risk-Based Capital Ratio, and a 13.76% 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 June 30, 2023, the Company reported $35 million in FHLB advances. Year-to-date interest expense totaled $520,000 for FHLB advances and other borrowings.

Asset Quality

At June 30, 2023 the Bank had five nonaccrual loans totaling $1.39 million compared to two nonaccrual loans totaling $343,000 at December 31, 2022. Net charge-offs totaled $350,000 for the quarter ended June 30, 2023 and the ratio of nonperforming assets as a percentage of total assets was 0.17%. 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 $4.7 million, or 0.76% of gross loans, at June 30, 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 June 30, 2023, the Bank had 108 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)

	2Q'23		1Q'23		4Q'22		3Q'22		2Q'22
Interest income:
Loans	$	8,570	$	8,044	$	7,653	$	6,755	$	6,029
Debt securities		925		933		938		878		737
Other		184		222		477		649		331
Total interest income		9,679		9,199		9,068		8,282		7,097
Interest expense:
Deposits		1,917		1,533		1,137		624		415
Other borrowings		409		111		73		56		40
Total interest expense		2,326		1,644		1,210		680		455
Net interest income		7,353		7,555		7,858		7,602		6,642
Credit loss expense		325		243		289		241		731
Net interest income after credit loss expense		7,028		7,312		7,569		7,361		5,911

Noninterest income:
Service charges and fees on deposit accounts		84		85		83		78		73
Debit card/ATM revenue, net		149		151		136		132		143
Mortgage banking revenue, net		75		54		53		116		139
Income from bank-owned life insurance		96		94		94		96		94
Other income		59		57		63		61		55
Total noninterest income		463		441		429		483		504

Noninterest expense:
Salaries and employee benefits		2,743		2,752		2,862		2,367		2,238
Occupancy and equipment		399		409		404		413		396
Professional fees		132		135		114		124		130
Marketing		250		223		218		195		213
FDIC assessment		87		84		57		95		84
Software maintenance, amortization and other		294		277		325		310		285
Other		616		575		541		581		536
Total noninterest expense		4,521		4,455		4,521		4,085		3,882

Earnings before income taxes		2,970		3,298		3,477		3,759		2,533
Income taxes		713		797		835		928		566
Net earnings	$	2,257	$	2,501	$	2,642	$	2,831	$	1,967

Basic earnings per common share	$	0.71	$	0.79	$	0.83	$	0.90	$	0.62

Diluted earnings per common share		0.70		0.78		0.83		0.89		0.62

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings

(in thousands, except per share amounts)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	*Unaudited*				*Unaudited*
Interest income:
Loans	$	8,570	$	6,029	$	16,614	$	11,813
Debt securities		925		737		1,858		1,122
Other		184		331		406		455
Total interest income		9,679		7,097		18,878		13,390
Interest expense:
Deposits		1,917		415		3,450		818
Other borrowings		409		40		520		71
Total interest expense		2,326		455		3,970		889
Net interest income		7,353		6,642		14,908		12,501
Credit loss expense		325		731		568		360
Net interest income after credit loss expense		7,028		5,911		14,340		12,141
Noninterest income:
Service charges and fees on deposit accounts		84		73		169		141
Debit card/ATM revenue, net		149		143		300		272
Mortgage banking revenue, net		75		139		129		304
Income from bank-owned life insurance		96		94		190		189
Other income		59		55		116		116
Total noninterest income		463		504		904		1,022
Noninterest expense:
Salaries and employee benefits		2,743		2,238		5,495		4,398
Occupancy and equipment		399		396		808		804
Professional fees		132		130		267		276
Marketing		250		213		473		380
FDIC assessment		87		84		171		208
Software maintenance, amortization and other		294		285		571		527
Other		616		536		1,191		1,069
Total noninterest expense		4,521		3,882		8,976		7,662
Earnings before income taxes		2,970		2,533		6,268		5,501
Income taxes		713		566		1,510		1,293
Net earnings	$	2,257	$	1,967	$	4,758	$	4,208

Earnings per common share:
Basic	$	0.71	$	0.62	$	1.49	$	1.34
Diluted		0.70		0.62		1.48		1.32
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)

	2Q'23		1Q'23		4Q'22		3Q'22		2Q'22
	(Unaudited)		(Unaudited)		(Audited)		(Unaudited)		(Unaudited)
Assets
Cash & cash equivalents	$	21,799	$	22,714	$	39,788	$	76,017	$	134,122
Debt securities available for sale		126,792		129,748		129,436		131,668		133,382
Debt securities held to maturity		11,827		11,816		11,805		11,794		8,777
Loans, held for sale		6,614		8,105		7,058		8,911		10,725
Loans, net		614,744		606,128		588,715		565,877		537,566
Federal Home Loan Bank stock		1,895		1,045		463		463		463
Premises & equipment, net		7,746		7,893		8,022		8,169		8,228
Right of use lease asset		2,934		2,989		3,044		3,098		3,151
Accrued interest receivable		2,713		2,623		2,385		2,132		1,933
Bank-owned life insurance		16,722		16,626		16,532		16,438		16,342
Other assets		7,253		6,570		7,924		7,748		6,148
Total Assets	$	821,039	$	816,257	$	815,172	$	832,315	$	860,837


Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits	$	189,362	$	199,492	$	197,987	$	216,533	$	210,685
Savings, NOW and money-market deposits		450,820		466,202		493,439		500,263		535,359
Time deposits		62,646		51,542		40,109		38,618		38,545
Total Deposits		702,828		717,236		731,535		755,414		784,589
Other borrowings		-		1,725		4,275		4,125		4,125
FHLB Advances		35,000		15,000		-		-		-
Official checks		1,114		1,671		4,090		1,277		776
Operating lease liability		3,111		3,159		3,208		3,256		3,303
Other liabilities		4,816		4,790		5,011		4,339		3,415
Total Liabilities		746,869		743,581		748,119		768,411		796,208
Total Stockholders' Equity		74,170		72,676		67,053		63,904		64,629
Total Liabilities and Stockholders' Equity	$	821,039	$	816,257	$	815,172	$	832,315	$	860,837

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Average Balance Sheets (Unaudited)

(in thousands)

	2Q'23							1Q'23							2Q'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⁾	$	613,318	$	8,465		5.52	%	$	602,022	$	7,958		5.29	%	$	514,166	$	5,912		4.60	%
Loans held for sale		8,466		105		4.96			7,345		86		4.68			11,174		117		4.19
Debt securities		140,699		925		2.63			141,268		933		2.64			132,562		737		2.22
Other⁽²⁾		15,646		184		4.70			19,335		222		4.59			170,320		331		0.78
Total interest-earning assets		778,129	$	9,679		4.98	%		769,970	$	9,199		4.78	%		828,222	$	7,097		3.43	%
Noninterest-earning assets		39,540							40,538							41,391
Total assets	$	817,669						$	810,508						$	869,613

Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	453,129	$	1,585		1.40	%	$	482,788	$	1,387		1.15	%	$	536,209	$	357		0.27	%
Time deposits		55,192		332		2.41			42,099		146		1.39			43,611		58		0.53
Total interest-bearing deposits		508,321		1,917		1.51			524,887		1,533		1.17			579,820		415		0.29
Other borrowings		32,113		409		5.09			7,301		111		6.08			4,034		40		3.97
Total interest-bearing liabilities		540,434	$	2,326		1.72	%		532,188	$	1,644		1.24	%		583,854	$	455		0.31	%
Noninterest-bearing deposits		195,657							198,790							213,521
Noninterest-bearing liabilities		8,231							9,074							7,345
Stockholders' equity		73,347							70,456							64,893
Total liabilities and stockholders' equity	$	817,669						$	810,508						$	869,613

Net earning assets	$	237,695						$	237,782						$	244,368
Net interest income			$	7,353						$	7,555						$	6,642
Interest rate spread⁽³⁾						3.26	%						3.54	%						3.12	%
Net interest margin⁽⁴⁾						3.78	%						3.92	%						3.21	%

	For the Six Months Ended June 30,
	2023							2022
			Interest							Interest
	Average		and		Yield/			Average		and		Yield/
(dollars in thousands)	Balance		Dividends		Rate(5)			Balance		Dividends		Rate(5)
Interest-earning assets:
Loans(1)	$	615,610	$	16,422		5.34	%	$	501,783	$	11,596		4.62	%
Loans held for sale		7,909		192		4.86			10,864		217		3.99
Debt securities		140,982		1,858		2.64			108,459		1,122		2.07
Other(2)		17,480		406		4.65			200,167		455		0.45
Total interest-earning assets		781,981	$	18,878		4.83	%		821,273	$	13,390		3.26	%
Noninterest-earning assets		32,127							40,004
Total assets	$	814,108						$	861,277

Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	467,877	$	2,972		1.27	%	$	526,909	$	693		0.26	%
Time deposits		48,682		478		1.96			46,251		125		0.54
Total interest-bearing deposits		516,559		3,450		1.34			573,160		818		0.29
Other borrowings and FHLB advances		19,776		520		5.26			3,877		71		3.66
Total interest-bearing liabilities		536,335	$	3,970		1.48	%		577,037	$	889		0.31	%
Noninterest-bearing deposits		197,215							211,170
Noninterest-bearing liabilities		8,648							7,202
Stockholders' equity		71,910							65,868
Total liabilities and stockholders' equity	$	814,108						$	861,277

Net earning assets	$	245,646						$	244,236
Net interest income			$	14,908						$	12,501
Interest rate spread (3)						3.35	%						2.95	%
Net interest margin(4)						3.81	%						3.04	%

⁽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

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands except per share amounts)

	2Q'23			1Q'23			4Q'22			3Q'22			2Q'22
Per Share Data:
Earnings per common share - Basic	$	0.71		$	0.79		$	0.83		$	0.90			0.62
Earnings per common share - Diluted	$	0.70		$	0.78		$	0.83		$	0.89			0.62
Book value per common share	$	23.25		$	22.81		$	21.19		$	20.20			20.48
Common shares outstanding		3,190,052			3,185,765			3,164,491			3,162,975			3,155,308
Weighted-average basic common shares outstanding		3,189,353			3,175,807			3,164,211			3,159,526			3,151,760
Weighted-average diluted common shares outstanding		3,201,531			3,210,012			3,198,744			3,197,282			3,189,319

Selected Performance Ratios and Other Data:
Return on average assets(1)		1.10	%		1.23	%		1.27	%		1.32	%		0.90	%
Return on average equity(1)		12.31			14.20			16.36			17.19			12.13
Average yield on earning assets		4.98			4.78			4.59			4.04			3.43
Net interest margin(2)		3.78			3.92			3.98			3.71			3.21
Efficiency ratio(3)		57.84			55.72			54.56			50.53			54.32
Noninterest expense/average assets(1)		2.21			2.20			2.18			1.90			1.79

Asset Quality Data:
Nonaccrual loans	$	1,391		$	1,348		$	343		$	1,006		$	349
Loans 90 days past due and still accruing		-			-			404			-			-
Total nonperforming assets		1,391			1,348			747			1,006			349
Nonperforming assets/total assets		0.17	%		0.17	%		0.09	%		0.12	%		0.04	%
Loans 30-89 days past due	$	826		$	2,414		$	2,900		$	1,024		$	1,597
Total loans		619,465			610,792			595,631			572,639			544,084
Loans 30-89 days past due/total loans		0.13	%		0.40	%		0.49	%		0.18	%		0.29	%
Net charge-offs/average loans (1)		0.23	%		-			-			-			-

Capital Ratios:
Tier 1 Leverage Capital Ratio (Company)		10.14	%		9.93	%		9.09	%		8.59	%		8.14	%
Common Equity Tier 1 Capital Ratio (Company)		13.22			12.82			12.25			11.98			11.95
Tier 1 Risk-Based Capital Ratio (Company)		13.22			12.82			12.25			11.98			11.95
Total Risk-Based Capital Ratio (Company)		13.97			13.58			13.39			13.09			13.06
Tangible Common Equity Ratio(4) (Company)		9.03			8.90			8.23			7.68			7.51

Tier 1 Leverage Capital Ratio (Bank)		9.98			10.13			9.70			9.07			8.61
Common Equity Tier 1 Capital Ratio (Bank)		13.00			13.07			12.90			12.62			12.61
Tier 1 Risk-Based Capital Ratio (Bank)		13.00			13.07			12.90			12.62			12.61
Total Risk-Based Capital Ratio (Bank)		13.76			13.83			14.04			13.73			13.72
Tangible Common Equity Ratio(4) (Bank)		8.87			9.10			8.73			8.15			7.96

⁽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.

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

	2Q'23			1Q'23			4Q'22			3Q'22			2Q'22
Net Income
Net earnings (GAAP)	$	2,257		$	2,501		$	2,642		$	2,831		$	1,967
Plus: Provision (credit) for credit losses		325			243			289			241			731
Plus: income taxes		713			797			835			928			566
PTPP(1) net earnings (non-GAAP)	$	3,295		$	3,541		$	3,766		$	4,000		$	3,264

Earnings per Share (EPS)
Weighted average common shares, diluted		3,201,531			3,210,012			3,198,744			3,197,282			3,189,319
EPS, diluted (GAAP)	$	0.70		$	0.78		$	0.83		$	0.89		$	0.62
PTPP(1) EPS, diluted (non-GAAP)	$	1.03		$	1.10		$	1.18		$	1.25		$	1.02

Return on Average Assets (ROAA)⁽²⁾
Average assets	$	817,669		$	810,508		$	828,912		$	857,917		$	869,613
ROAA (GAAP)		1.10	%		1.23	%		1.27	%		1.32	%		0.90	%
PTPP(1) ROAA (non-GAAP)		1.61	%		1.75	%		1.82	%		1.86	%		1.50	%

Return on Average Equity (ROAE)⁽²⁾
Average equity	$	73,347		$	70,456		$	64,578		$	65,891		$	64,893
ROAE (GAAP)		12.31	%		14.20	%		16.36	%		17.19	%		12.13	%
PTPP(1) ROAE (non-GAAP)		17.97	%		20.10	%		23.33	%		24.28	%		20.12	%

Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	614,744		$	606,128		$	588,715		$	565,877		$	537,566
Less PPP loans		(48	)		(181	)		(191	)		(199	)		(1,023	)
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	614,696		$	605,947		$	588,524		$	565,678		$	536,543

Average loans, excluding loans held for sale	$	613,318		$	602,022		$	588,727		$	555,764		$	514,166
Less average PPP loans		(175	)		(185	)		(195	)		(312	)		(2,876	)
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	613,143		$	601,837		$	588,532		$	555,452		$	511,290

Interest on loans, excluding loans held for sale	$	8,465		$	7,958		$	7,561		$	6,646		$	5,912
Less interest income and earned fee income on PPP loans		(4	)		3			(1	)		(41	)		(237	)
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	8,461		$	7,961		$	7,560		$	6,605		$	5,675
Growth rate over linked quarter		6.3	%		5.3	%		14.5	%		16.4	%		9.4	%

Average loan yield, excluding loans held for sale (GAAP)		5.52	%		5.29	%		5.14	%		4.78	%		4.60	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		5.52	%		5.29	%		5.14	%		4.76	%		4.44	%

Tangible Common Equity Ratio (Company)
Stockholders' Equity (GAAP)	$	74,170		$	72,676		$	67,053		$	63,904		$	64,629
Less: Intangibles		-			-			-			-			-
Tangible Stockholders' Equity (non-GAAP)	$	74,170		$	72,676		$	67,053		$	63,904		$	64,629
Total Assets (GAAP)	$	821,039		$	816,257		$	815,172		$	832,315		$	860,837
Less: Intangibles		-			-			-			-			-
Tangible Assets (non-GAAP)	$	821,039		$	816,257		$	815,172		$	832,315		$	860,837
Tangible Common Equity Ratio (non-GAAP)		9.03	%		8.90	%		8.23	%		7.68	%		7.51	%

Tangible Common Equity Ratio (Bank)
Stockholders' Equity (GAAP)	$	72,816		$	74,287		$	71,125		$	67,860		$	68,550
Less: Intangibles		-			-			-			-			-
Tangible Stockholders' Equity (non-GAAP)	$	72,816		$	74,287		$	71,125		$	67,860		$	68,550
Total Assets (GAAP)	$	820,921		$	816,173		$	815,142		$	832,170		$	860,735
Less: Intangibles		-			-			-			-			-
Tangible Assets (non-GAAP)	$	820,921		$	816,173		$	815,142		$	832,170		$	860,735
Tangible Common Equity Ratio (non-GAAP)		8.87	%		9.10	%		8.73	%		8.15	%		7.96	%

⁽¹⁾ Pre-tax, pre-provision

⁽²⁾ Annualized

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation

Year-to-Date Pre-Tax Pre-Provision Calculation (Unaudited)

(dollars in thousands except per share amounts)

	For the Six Months Ended
	June 30, 2023			June 30, 2022
Net Income
Net earnings (GAAP)	$	4,758		$	4,208
Plus: (credit) provision for loan losses		568			360
Plus: income taxes		1,510			1,293
PTPP(1) net earnings (non-GAAP)	$	6,836		$	5,861

Earnings per Share (EPS)
Weighted average common shares, diluted		3,211,095			3,188,802
EPS, diluted (GAAP)	$	1.48		$	1.32
PTPP(1) EPS, diluted (non-GAAP)	$	2.13		$	1.84

Return on Average Assets (ROAA)⁽²⁾
Average assets	$	814,108		$	861,277
ROAA (GAAP)		1.17	%		0.98	%
PTPP(1) ROAA (non-GAAP)		1.68	%		1.36	%

Return on Average Equity (ROAE)⁽²⁾
Average equity (GAAP)	$	71,910		$	65,868
ROAE (GAAP)		13.23	%		12.78	%
PTPP(1) ROAE (non-GAAP)		19.01	%		17.80	%

⁽¹⁾ Pre-tax, pre-provision

⁽²⁾ Annualized

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,
	2022			2021			2020			2019			2018
Net Income
Net earnings (GAAP)	$	9,681		$	8,347		$	4,458		$	3,542		$	4,042
Plus: Provision (credit) for credit losses		890			(104	)		2,850			1,131			591
Plus: income taxes		3,056			2,517			1,295			1,092			1,220
PTPP(1) net earnings (non-GAAP)	$	13,627		$	10,760		$	8,603		$	5,765		$	5,853

Earnings per Share (EPS)
Weighted average common shares, diluted		3,193,774			3,142,482			3,134,124			3,159,635			3,131,546
EPS, diluted (GAAP)	$	3.03		$	2.66		$	1.42		$	1.12		$	1.29
PTPP(1) EPS, diluted (non-GAAP)	$	4.27		$	3.42		$	2.74		$	1.82		$	1.87

Return on Average Assets (ROAA)
Average assets	$	852,272		$	751,576		$	595,363		$	456,797		$	379,288
ROAA (GAAP)		1.14	%		1.11	%		0.75	%		0.78	%		1.07	%
PTPP(1) ROAA (non-GAAP)		1.60	%		1.43	%		1.45	%		1.26	%		1.54	%

Return on Average Equity (ROAE)
Average equity	$	65,549		$	65,179		$	57,386		$	53,172		$	47,932
ROAE (GAAP)		14.77	%		12.81	%		7.77	%		6.66	%		8.43	%
PTPP(1) ROAE (non-GAAP)		20.79	%		16.51	%		14.99	%		10.84	%		12.21	%

Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	588,715		$	490,198		$	476,661		$	337,710		$	290,113
Less PPP loans		(191	)		(15,172	)		(66,774	)		-			-
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	588,524		$	475,026		$	409,887		$	337,710		$	290,113

Average loans, excluding loans held for sale	$	537,304		$	480,606		$	429,802		$	309,350		$	283,967
Less average PPP loans		(3,061	)		(50,315	)		(55,529	)		-			-
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	534,243		$	430,291		$	374,273		$	309,350		$	283,967

Interest on loans, excluding loans held for sale	$	25,803		$	22,598		$	19,553		$	15,884		$	14,215
Less interest income and earned fee income on PPP loans		(776	)		(3,358	)		(1,725	)		-			-
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	25,027		$	19,240		$	17,828		$	15,884		$	14,215

Average loan yield, excluding loans held for sale (GAAP)		4.80	%		4.70	%		4.55	%		5.13	%		5.01	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		4.68	%		4.47	%		4.76	%		5.13	%		5.01	%

⁽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	Jul. 27, 2023
Document Information [Line Items]
Entity, Registrant Name	PRIME MERIDIAN HOLDING COMPANY
Document, Type	8-K
Document, Period End Date	Jul. 27, 2023
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, City or Town	Tallahassee
Entity, Address, State or Province	FL
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