EXHIBIT 99.1
FOR IMMEDIATE RELEASE
PRIME MERIDIAN HOLDING COMPANY REPORTS
SECOND QUARTER RESULTS
TALLAHASSEE, FL – August 5, 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 ended June 30, 2015. The Company reported net earnings of $376,000, or $0.19 per basic and diluted share for the quarter ended June 30, 2015, compared to a net loss of $91,000, or ($0.05) per basic and diluted share for the quarter ended June 30, 2014. For the first six months of 2015, the Company reported net income of $825,000, or $0.42 per basic and diluted share, compared to net income of $165,000, or $0.10 per basic and diluted share for the same period in 2014. Included in the 2014 second quarter and six month results was a higher loan loss provision related to one impaired commercial real estate loan.
Highlights
| | • | | Net interest income grew 18.8%, or $334,000, to $2.1 million over the prior year second quarter and 18.1%, or $633,000, to $4.1 million over the prior year six month period due primarily to increased loan production. |
| | • | | Mortgage banking revenue continued its positive trend, increasing $68,000, or 82.9%, during the three months ended June 30, 2015 over the prior year quarter and $83,000, or 64.8%, during the six months ended June 30, 2015 over the prior year six month period. |
| | • | | Total assets of the Company have grown 9% since December 31, 2014 to $229.3 million at June 30, 2015. |
| | • | | The Company’s net loan portfolio grew $19.7 million, or 13.0%, to $171.6 million from December 31, 2014. |
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
| | • | | For the six months ended June 30, 2015, the annualized Return on Average Assets was 0.75%, the annualized Return on Average Equity was 7.05%, and the net interest margin was 3.91%. |
| | • | | The company recently closed on three acres of land in Wakulla County, Florida with the intention of constructing first a modular bank building, and eventually, a permanent branch building. This new branch location is already yielding significant deposit and loan opportunities for the Company. |
| | • | | The Company has been approved for listing on the OTCQX venue of OTC Markets under the symbol PMHG. Trading of the stock is expected to begin during the third quarter of this year. |
Commenting on the second quarter, Sammie D. Dixon, President and Chief Executive Officer, of Prime Meridian Bank and Prime Meridian Holding Company stated, “We are pleased with our year-to-date performance, particularly our net loan production and growth in mortgage banking revenue.”
“We eagerly await the opening of our next branch in Wakulla County and continue to explore and evaluate expansion and acquisition opportunities. Our forthcoming listing on the OTCQX venue of OTC Markets is also an important step in preparing the Company for execution of its growth strategy.”
“We think the future holds great opportunities, and we are making preparations to take advantage of them as they unfold.”
Earnings Summary
The Company reported net interest income of $2.1 million for the quarter ended June 30, 2015 compared to $1.8 million for the same period a year ago. The net interest margin for the quarter ended June 30, 2015 was 3.91%, compared to 3.55% for the 2014 second quarter. For the six months ended June 30, 2015, net interest income totaled $4.1 million, compared to $3.5 million for the comparable period in 2014, and the net interest margin was 3.91% for the six months ended June 30, 2015, compared to 3.42% a year ago. The increase in net interest income for both periods was driven by higher loan production and modest gains in interest income from securities, partially offset by slight decreases in other interest income. Although there continues to be downward pricing pressure on loans, higher average loan balances as a percentage of total interest earning assets also helped improve the overall yield on interest earning assets, thereby boosting net interest margin in both periods.
For the quarter ended June 30, 2015, the Company reported a $191,000 loan loss provision, compared to a $562,000 provision in the second quarter of 2014. For the six months ended June 30, 2015, the Company recorded a $209,000 loan loss provision, compared to a $591,000 provision for the comparable period in 2014. The higher provision in 2014 was primarily caused by one impaired commercial real estate loan.
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
Noninterest income for the quarter ended June 30, 2015 increased $75,000 from the same period a year ago and noninterest income for the six months ended June 30, 2015 increased $132,000 over the comparable period in 2014. The increases for the quarter and the six-month period ended June 30, 2015 were predominantly driven by increases in mortgage banking revenue.
Noninterest expense increased $31,000, or 2.0%, to $1.6 million for the three months ended June 30, 2015 compared to the same period a year ago. For the six months ended June 30, 2015, noninterest expense totaled $3.1 million, a $92,000 increase over the comparable period in 2014. The increase in both periods is primarily due to higher occupancy and equipment expense and marketing expense. Although salaries and employee benefits expense decreased in both periods despite growth in the number of employees, the decrease in both periods is explained by a change in our estimated standard deferred loan costs related to loan originations and renewals, which is booked as an offset to salary expense and amortized over the life of the loan.
Balance Sheet
As of June 30, 2015, the Company had grown to $229.3 million in total assets, $199.3 million in deposits, and $171.6 million in portfolio net loans. This compares to $210.4 million in total assets, $184.0 million in deposits, and $151.9 million in portfolio net loans as of December 31, 2014. Growth in assets is primarily due to the growth in our loan portfolio.
The composition of the Bank’s loan portfolio consisted of the following at June 30, 2015 and December 31, 2014, showing growth across all sectors from year-end (in thousands):
| | | | | | | | | | | | | | | | |
| | | June 30, 2015 | | | December 31, 2014 | |
| | | Amount | | | % of Total | | | Amount | | | % of Total | |
Commercial real estate | | $ | 56,240 | | | | 32.4 | % | | $ | 52,661 | | | | 34.2 | % |
Residential real estate and home equity | | | 63,038 | | | | 36.3 | % | | | 51,858 | | | | 33.7 | % |
Construction | | | 16,039 | | | | 9.2 | % | | | 15,876 | | | | 10.3 | % |
Commercial | | | 35,224 | | | | 20.3 | % | | | 30,755 | | | | 20.0 | % |
Consumer | | | 3,154 | | | | 1.8 | % | | | 2,877 | | | | 1.8 | % |
| | | | | | | | | | | | | | | | |
Total Loans | | $ | 173,695 | | | | 100.00 | % | | $ | 154,027 | | | | 100.00 | % |
| | | | | | | | | | | | | | | | |
Deferred loan costs, net | | | 187 | | | | | | | | (60 | ) | | | | |
Allowance for loan and lease losses | | | (2,307 | ) | | | | | | | (2,098 | ) | | | | |
| | | | | | | | | | | | | | | | |
Loans, net | | $ | 171,575 | | | | | | | $ | 151,869 | | | | | |
| | | | | | | | | | | | | | | | |
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
Total stockholder’s equity totaled $23.7 million, or 10.3% of total assets, at June 30, 2015, compared to $22.9 million, or 11.0% of total assets, at December 31, 2014, and book value per share increased from $11.78 at December 31, 2014 to $12.19 at June 30, 2015. Equity capital and book value per share have increased from December 31, 2014 due mostly to earnings retention. The Bank was considered to be “well capitalized” at June 30, 2015, with a 10.04% Tier 1 leverage Capital ratio, a 13.10% Common Equity Tier 1 Risk-Based Capital Ratio, a 13.10% Tier 1 Risk-Based Capital Ratio, and a 14.35% Total Risk-Based Capital Ratio, all above the minimum ratios to be considered “well capitalized.”
Asset Quality
Loans totaling $175,000 were deemed to be impaired under the Bank’s policy at June 30, 2015, while loans totaling $237,000 were deemed to be impaired under the Bank’s policy at December 31, 2014. At June 30, 2015, we had three non-accruing loans in the aggregate amount of $168,000, compared to two non-accruing loans at December 31, 2014, totaling $171,000. There were no net charge-offs or recoveries for the quarter ended June 30, 2015.
About Prime Meridian Holding Company
Headquartered in Tallahassee, Florida, Prime Meridian Holding Company 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 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 currently has two office locations, both in Tallahassee, and will soon open a third branch in Crawfordville, Florida. As of June 30, 2015, the consolidated Company had 52 full time equivalent employees. 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 Annual Report on Form 10-K for the year ended December 31, 2014, and other reports
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
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.
Tables Follow
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
Prime Meridian Holding Company and Subsidiary
Condensed Consolidated Balance Sheets
(Dollars in thousands)
| | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2015 | | | 2014 | |
| | | (Unaudited) | | | | |
ASSETS | | | | | | | | |
Cash & cash equivalents | | | 7,665 | | | | 7,555 | |
Securities available for sale | | | 40,910 | | | | 42,397 | |
Loans, held for sale | | | 2,160 | | | | 1,871 | |
Loans, net | | | 171,575 | | | | 151,869 | |
Federal Home Loan Bank stock | | | 402 | | | | 186 | |
Premises & equipment, net | | | 3,627 | | | | 3,563 | |
Deferred tax asset | | | 400 | | | | 362 | |
Accrued interest receivable | | | 636 | | | | 624 | |
Bank-owned life insurance | | | 1,638 | | | | 1,613 | |
Other assets | | | 277 | | | | 318 | |
| | | | | | | | |
Total Assets | | | 229,290 | | | | 210,358 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDER’S EQUITY | | | | | | | | |
Noninterest-bearing demand deposits | | | 47,365 | | | | 43,148 | |
Savings, NOW and money-market deposits | | | 130,112 | | | | 122,166 | |
Time deposits | | | 21,776 | | | | 18,657 | |
Federal Home Loan Bank advance | | | 5,000 | | | | — | |
Other borrowings | | | — | | | | 2,699 | |
Official checks | | | 883 | | | | 368 | |
Other liabilities | | | 445 | | | | 453 | |
| | | | | | | | |
Total Liabilities | | | 205,581 | | | | 187,491 | |
| | | | | | | | |
Total Stockholders’ Equity | | | 23,709 | | | | 22,867 | |
| | | | | | | | |
Total Liabilities and Stockholder’s Equity | | | 229,290 | | | | 210,358 | |
| | | | | | | | |
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
Prime Meridian Holding Company and Subsidiary
Consolidated Statements of Earnings (Unaudited)
(Dollars in thousands except per share data)
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Interest income: | | | | | | | | | | | | | | | | |
Loans | | $ | 2,033 | | | $ | 1,693 | | | $ | 3,980 | | | $ | 3,335 | |
Securities | | | 243 | | | | 228 | | | | 465 | | | | 448 | |
Other | | | 8 | | | | 19 | | | | 21 | | | | 44 | |
| | | | | | | | | | | | | | | | |
Total interest income | | | 2,284 | | | | 1,940 | | | | 4,466 | | | | 3,827 | |
| | | | | | | | | | | | | | | | |
Interest Expense: | | | | | | | | | | | | | | | | |
Deposits | | | 166 | | | | 156 | | | | 328 | | | | 314 | |
Other borrowings | | | 8 | | | | 8 | | | | 14 | | | | 22 | |
| | | | | | | | | | | | | | | | |
Total interest expense | | | 174 | | | | 164 | | | | 342 | | | | 336 | |
| | | | | | | | | | | | | | | | |
Net interest income | | | 2,110 | | | | 1,776 | | | | 4,124 | | | | 3,491 | |
Provision for loan losses | | | 191 | | | | 562 | | | | 209 | | | | 591 | |
| | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 1,919 | | | | 1,214 | | | | 3,915 | | | | 2,900 | |
| | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | |
Service charges and fees on deposit accounts | | | 39 | | | | 34 | | | | 73 | | | | 75 | |
Mortgage banking revenue | | | 150 | | | | 82 | | | | 211 | | | | 128 | |
Income from bank-owned life insurance | | | 13 | | | | 10 | | | | 25 | | | | 26 | |
Gain on sale of securities available for sale | | | — | | | | — | | | | 42 | | | | — | |
Other income | | | 45 | | | | 46 | | | | 85 | | | | 75 | |
| | | | | | | | | | | | | | | | |
Total noninterest income | | | 247 | | | | 172 | | | | 436 | | | | 304 | |
| | | | | | | | | | | | | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 804 | | | | 813 | | | | 1,612 | | | | 1,625 | |
Occupancy and equipment | | | 279 | | | | 218 | | | | 562 | | | | 421 | |
Professional fees | | | 161 | | | | 175 | | | | 237 | | | | 261 | |
Marketing | | | 96 | | | | 78 | | | | 209 | | | | 95 | |
FDIC Investment | | | 29 | | | | 33 | | | | 55 | | | | 60 | |
Other | | | 215 | | | | 236 | | | | 401 | | | | 522 | |
| | | | | | | | | | | | | | | | |
Total noninterest expense | | | 1,584 | | | | 1,553 | | | | 3,076 | | | | 2,984 | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 582 | | | | (167 | ) | | | 1,275 | | | | 220 | |
Income taxes | | | 206 | | | | (76 | ) | | | 450 | | | | 55 | |
| | | | | | | | | | | | | | | | |
Net earnings | | | 376 | | | | (91 | ) | | | 825 | | | | 165 | |
| | | | | | | | | | | | | | | | |
Basic earnings per share | | $ | 0.19 | | | $ | (0.05 | ) | | $ | 0.42 | | | $ | 0.10 | |
Diluted earnings per share | | $ | 0.19 | | | $ | (0.05 | ) | | $ | 0.42 | | | $ | 0.10 | |
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
Prime Meridian Holding Company and Subsidiaries
Financial Highlights
Dollars in thousands, except per share data
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | | | Year Ended | |
| | | June 30, | | | June 30, | | | December 31, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | | | 2014 | | | 2013 | |
| | | (Unaudited) | | | (Unaudited) | | | | | | | |
Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings per share - Basic | | $ | 0.19 | | | $ | (0.05 | ) | | $ | 0.42 | | | $ | 0.10 | | | $ | 0.59 | | | $ | 0.77 | |
Earnings per share - Diluted | | $ | 0.19 | | | $ | (0.05 | ) | | $ | 0.42 | | | $ | 0.10 | | | $ | 0.58 | | | $ | 0.76 | |
Book value per share | | $ | 12.19 | | | $ | 11.33 | | | $ | 12.19 | | | $ | 11.33 | | | $ | 11.78 | | | $ | 10.92 | |
Weighted average basic shares outstanding | | | 1,944,355 | | | | 1,692,105 | | | | 1,943,788 | | | | 1,613,921 | | | | 1,709,746 | | | | 1,497,737 | |
Weighted average diluted shares outstanding | | | 1,948,440 | | | | 1,692,105 | | | | 1,951,913 | | | | 1,624,218 | | | | 1,726,662 | | | | 1,518,618 | |
Selected Performance Ratios and Other Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets(1) | | | 0.67 | % | | | (0.17 | %) | | | 0.75 | % | | | 0.15 | % | | | 0.48 | % | | | 0.62 | % |
Return on average equity(1) | | | 6.37 | % | | | (1.90 | %) | | | 7.05 | % | | | 1.77 | % | | | 5.21 | % | | | 7.08 | % |
Average yield on earning assets | | | 4.23 | % | | | 3.88 | % | | | 4.23 | % | | | 3.75 | % | | | 4.02 | % | | | 3.94 | % |
Net interest margin | | | 3.91 | % | | | 3.55 | % | | | 3.91 | % | | | 3.42 | % | | | 3.70 | % | | | 3.55 | % |
Efficiency ratio(2) | | | 67.20 | % | | | 79.72 | % | | | 67.46 | % | | | 78.63 | % | | | 72.24 | % | | | 68.22 | % |
Stockholders’ equity to total assets | | | 10.34 | % | | | 9.81 | % | | | 10.34 | % | | | 9.81 | % | | | 9.34 | % | | | 7.89 | % |
Asset Quality Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 167,825 | | | $ | 1,403,420 | | | | 167,825 | | | $ | 1,403,420 | | | $ | 171,000 | | | $ | 0.00 | |
Total non-performing assets | | $ | 167,825 | | | $ | 1,403,420 | | | | 167,825 | | | $ | 1,403,420 | | | $ | 171,000 | | | $ | 0.00 | |
Non-peforming assets/ total assets | | | 0.07 | % | | | 0.68 | % | | | 0.07 | % | | | 0.68 | % | | | 0.08 | % | | | 0.00 | % |
Net charge-offs (recoveries) to average loans | | | 0.00 | % | | | (0.01 | %) | | | 0.00 | % | | | (0.02 | %) | | | 0.28 | % | | | 0.02 | % |
Regulatory Capital Ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 Leverage Capital Ratio | | | 10.04 | % | | | 8.96 | % | | | 10.04 | % | | | 8.96 | % | | | 9.52 | % | | | 8.41 | % |
Common Equity Tier I Capital Ratio | | | 13.10 | % | | | 13.18 | % | | | 13.10 | % | | | 13.18 | % | | | 12.84 | % | | | 12.41 | % |
Tier I Risk Based Capital Ratio | | | 13.10 | % | | | 13.18 | % | | | 13.10 | % | | | 13.18 | % | | | 12.84 | % | | | 12.41 | % |
Total Capital Ratio | | | 14.35 | % | | | 14.43 | % | | | 14.35 | % | | | 14.43 | % | | | 14.09 | % | | | 13.66 | % |
| 1 | ROAA and ROAE are annualized |
| 2 | Efficiency Ratio represents noninterest expense divided by the sum of net interest income plus noninterest income. |
| | | | |
| CONTACT: | | | | Kathy Jones, Chief Financial Officer |
| | | | (850) 907-2301 |
| | | | Prime Meridian Holding Company |
| | | | Website: www.primemeridianbank.com |
Prime Meridian Holding Company ● P.O. Box 13629 ● Tallahassee, Florida 32317
Phone 850.907.2301 ● Fax 850.907.2932
