Prime Meridian Holding (PMHG) 8-K Prime Meridian Holding Company Reports

Exhibit 99

PRIME MERIDIAN HOLDING COMPANY REPORTS

FOURTH QUARTER AND YEAR END 2014 RESULTS

TALLAHASSEE, FL., March 18, 2015 (GLOBE NEWSWIRE) – Prime Meridian Holding Company (the “Company”), the parent bank holding company for Prime Meridian Bank (the “Bank”), today announced financial results for the quarter and year ended December 31, 2014. The Company reported net earnings of $1.0 million, or $0.59 per basic and $0.58 per diluted share for the year ended December 31, 2014, compared to net earnings of $1.1 million, or $0.77 per basic and $0.76 per diluted share, for the year ended December 31, 2013.

Highlights

• The Company realized net earnings of $1.0 million for the year ended December 31, 2014, despite taking a net loan charge-off of $403,000 in connection with a $1.4 million impaired loan.

• Net Interest Income grew 19.0% during 2014 to $7.5 million, due to a combination of higher loans balances and interest expense management.

• Fourth quarter 2014 earnings were $545,000, up $247,000 from the fourth quarter 2013 and up $250,000 from the third quarter 2014.

• Total assets of the Company were $210.4 million as of December 31, 2014, with a net loan portfolio of $151.9 million.

• The Company grew its net loan portfolio by nearly $31 million, increasing its net loan portfolio by 25.3% over last year.

• For the year ended December 31, 2014, the Return on Average Assets was 0.48%, the Return on Average Equity was 5.21%, and the net interest margin was 3.70%.

Net Interest Income

The Company reported net interest income of $2.0 million for the quarter ended December 31, 2014 compared to $1.7 million for the same period a year ago. The $344,000, or 20.2% increase, was driven by higher loan balances and modest gains in investment interest income. A $6,000, or 3.5%, decrease in interest expense also contributed to the higher net interest income.

Net interest income was $7.5 million for the year ended December 31, 2014, compared to $6.3 million for the prior year, a 19.0% increase year over year. The increase in net interest income for the year was driven by higher loan balances as the Company reported total net loans of $151.9 million at December 31, 2014 compared to $121.2 million at December 31, 2013. Also contributing to the increase in net interest income was an $84,000, or 10.0%, increase in investment interest income from securities. Interest expense decreased $43,000, or 6.1%, to $661,000 for the year ended December 31, 2014 due to a combination of a lower interest rate environment and a higher average balance of noninterest bearing deposit accounts in 2014.

The net interest margin was 3.70% for the year ended December 31, 2014, up from 3.55% for the year ended December 31, 2013, as an 8 basis points increase in the average yield on total interest-earning assets was complemented by a 7 basis points decrease in the average yield on total interest-bearing liabilities. Although there continues to be downward pricing pressure on loans, higher yields on securities resulted in the higher yield on total interest-earning assets.

Noninterest Income

For the quarter ended December 31, 2014, noninterest income increased $59,000 from the same period a year ago, due to a $16,000 increase in mortgage banking revenue and a $43,000 increase in gain on sale of securities.

For the year 2014, noninterest income decreased $149,000, or 17.3%, to $710,000. The decrease was primarily due to a $246,000 gain on sale of an SBA loan that was recorded during the first quarter of 2013 compared to no gain on sale of SBA loans in 2014. The Bank reported increases in other noninterest income categories, including a $34,000 increase in service charges and fees, a $46,000 increase in gain on sale of securities, and a $37,000 increase in other noninterest income, driven primarily by increases in credit card fees.

Noninterest Expense

Noninterest expense increased $162,000 from the fourth quarter of 2013 to the fourth quarter of 2014, due to a $50,000 increase in salaries and employee benefits, a $44,000 increase in professional fees, and a $68,000 increase in other noninterest expenses.

Noninterest expense increased $1.0 million from $4.9 million for the year ended December 31, 2013 to $5.9 million for the year ended December 31, 2014. The increase was primarily attributable to a $560,000, or 21.1%, increase in salaries and employee benefits and a $267,000 increase in professional fees.

For both reporting periods, the increase in salaries and employee benefits relates to additional personnel and the higher professional fees can be substantially attributed to both the Company’s first full year as an SEC reporting company and higher than normal legal costs associated with the resolution of one impaired loan. Full-time equivalent employees increased from 38 at December 31, 2013 to 42 at December 31, 2014 as the Company continues to position itself for further growth.

Financial Condition

Balance Sheet

As of December 31, 2014

(in thousands)

ASSETS			LIABILITIES AND STOCKHOLDERS’ EQUITY
Cash & Investments	$	49,952	Deposits	$	183,971
Loans, held for sale		1,871	Other Liabilities		3,520
Loans, net		151,869
Premises & Equipment		3,563	Total Liabilities		187,491
Other Assets		3,103
			Stockholders’ Equity		22,867
Total Assets	$	210,358	Total Liabilities & Stockholders’ Equity	$	210,358

As of December 31, 2014, the Company had grown to $210.4 million in total assets, $184.0 million in deposits, and $151.9 million in portfolio net loans. This compares to $206.5 million in total assets, $183.4 million in deposits, and $121.2 million in portfolio net loans as of December 31, 2013. Although the Bank did not experience significant growth in deposits or assets, this was anticipated due to the effect of one deposit account balance that increased to $23.9 million at December 31, 2013 in preparation for a November, 2014, election and then declined to $132,000 by December 31, 2014.

Loan growth was strong in 2014 across all sectors. The composition of the Bank’s loan portfolio consisted of the following at December 31, 2014 and 2013 (in thousands):

	As of December 31,
	2014						2013
	Amount			% of Total			Amount			% of Total
Commercial real estate	$	52,661			34.2	%	$	44,796			36.4	%
Residential real estate and home equity		51,858			33.7	%		38,571			31.4	%
Construction		15,876			10.3	%		12,933			10.5	%
Commercial		30,755			20.0	%		24,651			20.0	%
Consumer		2,877			1.8	%		2,072			1.7	%
Total Loans	$	154,027			100.00	%	$	123,023			100.00	%
Deferred loan costs, net		(60	)					(69	)
Allowance for loan and lease losses		(2,098	)					(1,734	)
Loans, net	$	151,869					$	121,220

Loans totaling $237,000 were deemed to be impaired under the Bank’s policy at December 31, 2014, while loans totaling $382,000 were deemed to be impaired under the Bank’s policy at December 31, 2013. At December 31, 2014, we had two non-accruing loans in the aggregate amount of $171,000, compared to no non-accruing loans at December 31, 2013. Net charge-offs totaled $383,000 for the year ended December 31, 2014, compared to $22,000 for the year ended December 31, 2013. The increase in the charge-off number is attributed to the one impaired commercial real estate loan that has since been resolved.

The provision for loan losses for the years ended December 31, 2014 and 2013, was $747,000 and $513,000, respectively. Management believes that the allowance for loan and losses (“ALLL”), which was $2.1 million, or 1.36% of gross loans, at December 31, 2014 is adequate.

Total stockholder’s equity was $22.9 million as of December 31, 2014, compared to $16.4 million as of December 31, 2013. Book value per share was $11.78 as of December 31, 2014, with 1,941,617 common shares outstanding. Equity capital increased in 2014 due to retention of earnings as well as $4.96 million of capital, net of expenses, raised in our public stock offering. As of December 31, 2014, the Bank was considered to be well capitalized with a Tier 1 Leverage Ratio of 9.52%, a 12.84% Tier 1 Leverage Risk-Based Capital Ratio and a 14.09% Total Risk-Based Capital Ratio, well above the current minimum capital ratios to be considered “well capitalized.”

“The degree to which a bank is considered strong and healthy is often determined by its resiliency,” said Sammie D. Dixon, President and CEO of Prime Meridian Holding Company. “Last year we showed how truly healthy we are. Over the course of 2014, we successfully navigated an impaired loan participation and maintained our deposit base, despite the anticipated loss of a large short term deposit. We ended the year ready to take on 2015. Our team is in place. Our numbers are good. Our outlook is very positive moving forward.”

About Prime Meridian Holding Company

Prime Meridian Holding Company headquartered in Tallahassee, Florida offers a broad range of banking services through its wholly owned subsidiary, Prime Meridian Bank, a Florida state chartered non-member bank. The Bank, founded in 2008, serves its primary market of the Tallahassee Metropolitan Statistical Area, but also serves clients in the North Florida, South Georgia, and South Alabama markets. The Bank has two office locations, both in Tallahassee, and 42 full time equivalent employees as of December 31, 2014. For more information about Prime Meridian Holding Company, please visit our website at www.primemeridianbank.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. 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. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiary or on the Company’s current plans, estimates, and expectations. 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. Factors that could have a material adverse effect on our operations and the operations of our subsidiary, Prime Meridian Bank, include, but are not limited to various risks, uncertainties, and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy, and liquidity. These factors should not be construed as exhaustive. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Registration Statement on Form S-1, dated December 11, 2013, and other reports and statements the Company has filed with Securities and Exchange Commission which are available at the SEC’s website (www.sec.gov). 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.

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(Dollars in thousands)

	Year Ended December 31,
	2014		2013
	(Unaudited)
Assets
Cash & cash equivalents		7,555		34,166
Securities available for sale		42,397		44,071
Loans, held for sale		1,871		150
Loans, net		151,869		121,220
Federal Home Loan Bank stock		186		204
Premises & equipment, net		3,563		3,757
Deferred tax asset		362		426
Accrued interest receivable		624		516
Bank-owned life insurance		1,613		1,562
Other assets		318		401
Total Assets		210,358		206,473
Liabilities and Stockholder’s Equity
Noninterest-bearing demand deposits		43,148		59,011
Savings, NOW and money-market deposits		122,166		109,760
Time deposits		18,657		14,594
Other borrowings		2,699		5,719
Official checks		368		636
Other liabilities		453		392
Total Liabilities		187,491		190,112
Total Stockholders’ Equity		22,867		16,361
Total Liabilities and Stockholder’s Equity		210,358		206,473

Prime Meridian Holding Company and Subsidiary

Consolidated Statements of Earnings

(Dollars in thousands except per share data)

	For the Three Months Ended					For the Years Ended
	December 31,					December 31,
	2014			2013		2014		2013
	(Unaudited)					(Unaudited)
Interest income:
Loans	$	1,963		$	1,624	$	7,134	$	6,076
Securities		247			233		922		838
Other		1			16		60		56
Total interest income		2,211			1,873		8,116		6,970
Interest Expense:
Deposits		157			155		625		646
Other borrowings		7			15		36		58
Total interest expense		164			170		661		704
Net interest income		2,047			1,703		7,455		6,266
Provision for loan losses		(50	)		110		747		513
Net interest income after provision for loan losses		2,097			1,593		6,708		5,753
Noninterest income:
Service charges and fees on deposit accounts		31			33		138		104
Gain on sale of SBA loans		—			—		—		246
Mortgage banking revenue		74			58		309		325
Gain on sale of securities available for sale		43			—		60		14
Other income		51			49		203		170
Total noninterest income		199			140		710		859
Noninterest expense:
Salaries and employee benefits		756			706		3,210		2,650
Occupancy and equipment		235			235		899		897
Professional fees		69			25		395		128
Other		392			324		1,394		1,186
Total noninterest expense		1,452			1,290		5,898		4,861
Earnings before income taxes		844			443		1,520		1,751
Income taxes		299			145		514		602
Net earnings		545			298		1,006		1,149
Basic earnings per share	$	0.30		$	0.20	$	0.59	$	0.77
Diluted earnings per share	$	0.30		$	0.20	$	0.58	$	0.76

Prime Meridian Holding Company and Subsidiary

Financial Highlights (unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2014			2013			2014			2013
	(Unaudited)
Per Share Data:
Earnings per share - Basic	$	0.30		$	0.20		$	0.58		$	0.77
Earnings per share - Diluted	$	0.30		$	0.20		$	0.59		$	0.76
Book value per share	$	11.78		$	10.92		$	11.78		$	10.92
Weighted average basic shares outstanding		1,822,116			1,498,830			1,709,746			1,497,737
Weighted average diluted shares outstanding		1,826,345			1,504,093			1,726,662			1,518,618
Selected Performance Ratios and Other Data:
Return on average assets(1)		1.06	%		0.65	%		0.48	%		0.62	%
Return on average equity(1)		10.33	%		7.34	%		5.21	%		7.08	%
Average yield on earning assets		4.49	%		3.95	%		4.02	%		3.94	%
Net interest margin		4.14	%		3.58	%		3.70	%		3.55	%

	Year Ended December 31,
	2014			2013
Net charge-offs (recoveries) to average loans		0.28	%		0.02	%
Stockholders’ equity to total assets		9.34	%		7.89	%
Tier 1 leverage capital ratio (Bank)		9.52	%		8.41	%
Tier 1 risk-based capital ratio (Bank)		12.84	%		12.41	%
Total risk-based capital ratio (Bank)		14.09	%		13.66	%
Nonaccrual loans (in thousand)	$	171,000		$	—
Total nonperforming assets	$	171,000		$	—
NPAs / Assets		0.08	%		0.00	%

¹ ROAA andROAE are annualized

CONTACT:	Kathy Jones, Chief Financial Officer
	(850) 907-2301
	Prime Meridian Holding Company
	Website: www.primemeridianbank.com