Exhibit 99.1
FOR IMMEDIATE RELEASE
Prime Meridian Holding Company Reports
SECOND Quarter 2020 Results
The Bank continued to work closely with clients and their businesses throughout the second quarter to help them navigate the financial impacts of COVID-19, partial shutdowns and related challenges. “The Paycheck Protection Program (PPP) was instrumental in helping businesses sustain their operations,” said Sammie D. Dixon, Jr., Vice Chairman, President and CEO of Prime Meridian Bank. Dixon credits his team’s adept handling of PPP for the abundance of community goodwill generated, which translated to new client relationships and strengthening of existing ones. “The infusion of 855 SBA-backed PPP loans totaling $81.5 million to our local economies enabled many to maintain workers and remain viable,” he continued. "Approximately 84% of these loans are less than $150,000, " he added.
According to Dixon, though the Bank is seeing pressure on cash flows in certain loan sectors, including hospitality, it is currently not experiencing significant widespread deterioration in its loan portfolio. “We are closely monitoring all loan sectors, particularly those with loans that are under payment modification,” he said. “As we move into the third quarter, we traditionally see increases in seasonal activities and spending (ie: college football, fall travel, etc.) in the Tallahassee and Lakeland markets.” Dixon acknowledges, though, it is still too early to know how this will unfold. “A lot depends on how local and state ordinances -- designed to address COVID-19 -- will impact our markets,” he said.
The Bank’s mortgage department continues to perform well, especially in Leon County, where it ranks first in dollar volume and second in number of mortgages originated, for the first six months of 2020 according to Metro Market Trends reporting. Comparing the six-month period ended June 30, 2020 to the same period in 2019, mortgage banking revenue stood at $367,000 – a 21.1% increase.
Dixon maintained that, “If we look at our total performance since year-end, or compare it with the same period year-over-year, the numbers reveal the underlying strength of the Company and real value creation for all stakeholders.” He added the Company maintains ample access to capital resources. “I am as excited as I’ve ever been at the opportunities ahead,” he continued. “We remain cautiously optimistic as we move toward a post-COVID-19 economy.”
Second Quarter 2020 Highlights
Financial Highlights - Prime Meridian Holding Company and Subsidiary (Unaudited) |
(dollars in thousands except per share amounts) |
2Q'20 | 1Q'20 | 4Q'19 | 3Q'19 | 2Q'19 | ||||||||||||||||
Net earnings | $ | 720 | $ | 716 | $ | 947 | $ | 964 | $ | 764 | ||||||||||
Book value per share | $ | 18.30 | $ | 17.88 | $ | 17.51 | $ | 17.25 | $ | 16.85 | ||||||||||
Earnings per share - Basic | $ | 0.23 | $ | 0.22 | $ | 0.29 | $ | 0.31 | $ | 0.24 | ||||||||||
Earnings per share - Diluted | $ | 0.23 | $ | 0.22 | $ | 0.29 | $ | 0.31 | $ | 0.24 | ||||||||||
Weighted-average basic shares outstanding | 3,116,307 | 3,183,857 | 3,190,933 | 3,147,696 | 3,144,068 | |||||||||||||||
Weighted-average diluted shares outstanding | 3,116,370 | 3,185,558 | 3,195,793 | 3,151,321 | 3,150,136 | |||||||||||||||
Return on average assets(1) | 0.47 | % | 0.56 | % | 0.75 | % | 0.83 | % | 0.70 | % | ||||||||||
Return on average equity(1) | 5.09 | 5.09 | 6.84 | 7.14 | 5.85 | |||||||||||||||
Average yield on earning assets(1) | 3.59 | 4.17 | 4.17 | 4.48 | 4.49 | |||||||||||||||
Net interest margin(1) | 3.07 | 3.42 | 3.36 | 3.63 | 3.66 | |||||||||||||||
Efficiency ratio(2) | 56.57 | 65.14 | 60.40 | 65.03 | 71.52 | |||||||||||||||
Nonperforming assets/total assets(3) | 0.33 | 0.57 | 0.52 | 0.54 | 0.44 |
(1) Ratio has been annualized |
(2) Efficiency Ratio represents noninterest expense divided by the sum of net interest income plus noninterest income. (3) Nonperforming assets include other real estate owned and loans greater than 90 days past due and exclude troubled debt restructuring loans (TDRs). |
• During the second quarter, the Company originated and funded 855 loans, or $81.5 million, in Paycheck Protection Program ("PPP") loans offered through the Small Business Administration ("SBA"). Of this amount, approximately 373 loans, or $28.2 million, were originated with new clients.
• Adjusted pre-tax, pre-provision net earnings for the second quarter were $2.2 million and adjusted pre-tax, pre-provision annualized returns on average assets and average common equity were 1.40% and 15.30%, respectively. (These are considered non-GAAP financial measures. Please refer to "Non-GAAP Measures and Ratio Reconciliation" in the Tables on pages 11-12 for more detail.)
• The provision for loan losses for the second quarter of 2020 was substantially higher than prior periods at $1.2 million, with $686,000 in net charge-offs for the quarter and $236,000 placed in unallocated reserves to account for potential COVID-19 related credit deterioration. The charge-offs during the quarter consisted of six loans, were centered in the general Commercial and Industrial category, and were unrelated to the COVID-19 pandemic.
• Bank capital remained strong with a Tier 1 Leverage Capital Ratio of 8.99%. The Company ended the quarter with a well-positioned balance sheet reflecting solid interest rate risk management, strong liquidity, and the ability to access other capital sources if needed.
COVID-19 Response
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets and significantly increased unemployment levels. The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments and the duration of the pandemic and actions taken by governmental authorities to slow the spread of the disease and mitigate its economic impact.
The Company took actions during the first and second quarters to prepare its employees, support its clients, and help its communities. In mid-March, the Company closed its lobbies to foot traffic, making them available by appointment only. At the same time, the Company moved to a split-staff schedule to decrease the number of employees in an office and enhanced its cleaning and disinfecting procedures. Meetings of more than ten people transitioned to virtual or online platforms and clients have the option to sign documents electronically. As of the date of this earnings release, the State of Florida was in Phase Two of Governor DeSantis' reopening plan for the state which became effective June 5, 2020. The Bank has reopened its lobbies, but continues to follow guidance from the Centers for Disease Control ("CDC") and the Florida Department of Health in best practices for maintaining a healthy work environment.
The Company is supporting small business owners by making PPP loans. As of June 30, 2020, the Bank had originated $81.5 million in PPP loans. These loans are 100% guaranteed by the SBA. The Company has the option of funding PPP loans through the Federal Reserve's Paycheck Protection Program Lending Facility (the "PPPLF"). Loans pledged to secure PPPLF advances are excluded from the calculations of the Bank's regulatory capital ratios. The Company funded $51.1 million under the PPPLF during the quarter, but elected to prepay these borrowing tranches before June 30th using excess liquidity. The Company maintains its access to the PPPLF, along with its other borrowing sources, if needed.
Management believes credit quality deterioration directly related to the pandemic could materialize in the future. As of June 30, 2020, the Company had accommodated 70 requests for payment deferrals or modifications on loans totaling $42.4 million, or 11.5% of the Bank’s portfolio loans, excluding PPP loans. Approximately 88.9% of the requests were for loans secured with real estate. Since quarter end, 25 loans totaling $7.8 million have reverted back to original pre-modification terms and are being paid as agreed. Seven loans totaling $9.5 million have been approved for a second payment deferral/modification in the 3rd quarter, and the remaining 38 loans are either being paid within modified terms or their payments were originally deferred until the middle of the 3rd quarter. The tables below give more detail on loan modification activity and PPP loan originations through June 30, 2020.
Loan Deferral Requests
June 30, 2020
(dollars in thousands)
Percent | ||||||||||||||||||||||||||||||||
Average | Full | Weighted | of | |||||||||||||||||||||||||||||
Number of | Dollar | Balance | Interest | Interest | Payment | Average | Total Loan | |||||||||||||||||||||||||
Loans | Amount Loans | Loans | Only | Only | Deferral | LTV Loans | Collateral | |||||||||||||||||||||||||
Collateral or Loan Type | Modified | Modified | Modified | 3 Months | 4-6 Months | 3 Months | Modified | or Type | ||||||||||||||||||||||||
1-4 family owner occupied | 15 | $ | 7,558 | $ | 504 | $ | - | $ | - | $ | 7,558 | 75.0 | % | 17.8 | % | |||||||||||||||||
1-4 family non-owner occupied | 9 | 3,035 | 337 | 948 | 167 | 1,920 | 67.0 | 7.1 | ||||||||||||||||||||||||
CRE owner occupied | 13 | 10,730 | 825 | - | - | 10,730 | 61.0 | 25.3 | ||||||||||||||||||||||||
CRE non-owner occupied | 9 | 16,407 | 1,823 | - | 1,737 | 14,670 | 62.0 | 38.7 | ||||||||||||||||||||||||
Commercial & Industrial | 15 | 3,898 | 260 | 417 | 672 | 2,809 | N/A | 9.2 | ||||||||||||||||||||||||
Construction/Land | 7 | 781 | 112 | 23 | - | 758 | 47.0 | 1.8 | ||||||||||||||||||||||||
Consumer | 2 | 29 | 15 | 29 | - | - | N/A | 0.1 | ||||||||||||||||||||||||
Total | 70 | $ | 42,438 | $ | 606 | $ | 1,417 | $ | 2,576 | $ | 38,445 | - | 100.0 | % |
PPP Loans by Industry
June 30, 2020
(dollars in thousands)
Total | Avg. Loan | % of | ||||||||||
Category | Balance | Balance | Total | |||||||||
Hospitality | $ | 6,368 | $ | 75 | 7.8 | % | ||||||
Real estate services and construction | 13,033 | 72 | 16.0 | |||||||||
Wholesale and retail trade and manufacturing | 10,861 | 88 | 13.3 | |||||||||
Financial, professional, and information services | 23,234 | 113 | 28.5 | |||||||||
Administrative, religious and other services | 16,334 | 86 | 20.1 | |||||||||
Healthcare services | 11,621 | 168 | 14.3 | |||||||||
TOTAL | $ | 81,451 | $ | 95 | 100.0 | % |
Earnings Summary (Unaudited)
(dollars in thousands)
Change 2Q'20 vs. | ||||||||||||||||||||
2Q'20 | 1Q'20 | 2Q'19 | 1Q'20 | 2Q'19 | ||||||||||||||||
Net interest income | $ | 4,569 | $ | 4,143 | $ | 3,759 | 10.3 | % | 21.5 | % | ||||||||||
Provision for loan losses | 1,227 | 636 | 179 | 92.9 | 585.5 | |||||||||||||||
Noninterest income | 414 | 367 | 412 | 12.8 | 0.5 | |||||||||||||||
Noninterest expense | 2,819 | 2,938 | 2,983 | (4.1 | ) | (5.5 | ) | |||||||||||||
Income taxes | 217 | 220 | 245 | (1.4 | ) | (11.4 | ) | |||||||||||||
Net earnings | $ | 720 | $ | 716 | $ | 764 | 0.6 | % | (5.8 | )% |
On a linked quarter basis, the Company’s performance during the second quarter of 2020 benefitted from growth in both net interest income and noninterest income, driven primarily by interest and fees on the $81.5 million in PPP loans booked in the second quarter and strong performance in our mortgage banking area. Also contributing to earnings was a 4.1% decrease in noninterest expense and a 1.4% decrease in income tax expense. Offsetting these positive net income drivers was a $1.2 million provision for loan losses.
Compared to the same period a year ago, the decrease in the Company's second quarter net income is primarily attributed to a $1.0 million increase in the provision for loan losses, despite a 21.5% increase in net interest income, a 5.5% decrease in noninterest expense, and an 11.4% decrease in income tax expense.
Six Months Ended | ||||||||||||||||
June 30, 2020 | June 30, 2019 | $ Change | % Change | |||||||||||||
Net interest income | $ | 8,712 | $ | 7,446 | $ | 1,266 | 17.0 | % | ||||||||
Provision for loan losses | 1,863 | 344 | 1,519 | 441.6 | ||||||||||||
Noninterest income | 781 | 737 | 44 | 6.0 | ||||||||||||
Noninterest expense | 5,757 | 5,689 | 68 | 1.2 | ||||||||||||
Income taxes | 437 | 519 | (82 | ) | (15.8 | ) | ||||||||||
Net income | $ | 1,436 | $ | 1,631 | $ | (195 | ) | (12.0 | )% |
Comparing the six-month periods, the $1.5 million increase in the provision for loan losses offset growth in net interest income and noninterest income and a 15.8% decrease in income tax expense.
Interest income (Unaudited)
(dollars in thousands)
Change 2Q'20 vs. | ||||||||||||||||||||
2Q'20 | 1Q'20 | 2Q'19 | 1Q'20 | 2Q'19 | ||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans | $ | 4,844 | $ | 4,429 | $ | 3,916 | 9.4 | % | 23.7 | % | ||||||||||
Securities | 428 | 384 | 333 | 11.5 | 28.5 | |||||||||||||||
Other | 62 | 232 | 361 | (73.3 | ) | (82.8 | ) | |||||||||||||
Total interest income | $ | 5,334 | $ | 5,045 | $ | 4,610 | 5.7 | % | 15.7 | % |
On a linked quarter basis, the 5.7% increase in total interest income was driven by interest income and fees on PPP originations, totaling $392,000 in the second quarter. The increase in interest income from securities is attributed to higher average balances and a $56,000 discount accreted to interest income after a corporate bond was called in April, 2020. The decrease in other interest income is attributed to lower yields on federal funds sold and deposits with other banks. Without the PPP loan activity during the second quarter, total interest income would have been down slightly on a linked quarter basis, primarily due to decreased average loan yields.
Compared to the second quarter of 2019, the 15.7% increase in total interest income is mostly attributed to loan growth, with average loan balances increasing $129.8 million, or 43.6%. More than half of the loan growth came from PPP loan originations in the second quarter of 2020. Partially offsetting this loan growth were lower yields on loans, federal funds sold and deposits with banks as the Federal Reserve has cut rates five times since June 30, 2019.
Six Months Ended | ||||||||||||||||
June 30, 2020 | June 30, 2019 | $ Change | % Change | |||||||||||||
Interest income: | ||||||||||||||||
Loans | $ | 9,273 | $ | 7,772 | $ | 1,501 | 19.3 | % | ||||||||
Securities | 812 | 629 | 183 | 29.1 | ||||||||||||
Other | 294 | 709 | (415 | ) | (58.5 | ) | ||||||||||
Total interest income | $ | 10,379 | $ | 9,110 | $ | 1,269 | 13.9 | % |
Comparing the six-month period ended June 30, 2020 to the same period a year ago, growth in total interest income was driven by a higher volume of loans and securities, partially offset by lower yields across most interest-earning asset categories.
Interest expense (Unaudited)
(dollars in thousands)
Change 2Q'20 vs. | ||||||||||||||||||||
2Q'20 | 1Q'20 | 2Q'19 | 1Q'20 | 2Q'19 | ||||||||||||||||
Total interest expense | $ | 765 | $ | 902 | $ | 851 | (15.2 | )% | (10.1 | )% |
Despite higher balances of interest-bearing liabilities, total interest expense declined $137,000 from the first quarter of 2020 and $86,000 from the second quarter of 2019. Management strategically reduced rates in the fourth quarter of 2019 following three interest rate cuts by the Federal Reserve in the second half of 2019. This effort continued into the first half of 2020 and was accelerated after the Federal Reserve cut its benchmark interest rate twice in the month of March, both in emergency meetings scheduled in response to the growing global coronavirus pandemic. Average interest-bearing deposit costs have decreased 43 basis points since the second quarter of 2019.
Six Months Ended | ||||||||||||||||
June 30, 2020 | June 30, 2019 | $ Change | % Change | |||||||||||||
Total interest expense | $ | 1,667 | $ | 1,664 | $ | 3 | 0.2 | % |
Looking at the six-month periods, total interest expense stayed relatively flat as the effect of higher average balances of interest-bearing liabilities and lower rates offset one another.
Margin Analysis (Unaudited)
(dollars in thousands)
2Q'20 | 1Q'20 | 2Q'19 | |||||||||||||||||||||||||||||||||
Interest | Interest | Interest | |||||||||||||||||||||||||||||||||
Average | and | Yield/ | Average | and | Yield/ | Average | and | Yield/ | |||||||||||||||||||||||||||
Balance | Dividends | Rate | Balance | Dividends | Rate | Balance | Dividends | Rate | |||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Loans(1) | $ | 427,902 | $ | 4,745 | 4.44 | % | $ | 352,421 | $ | 4,363 | 4.95 | % | $ | 298,058 | $ | 3,834 | 5.15 | % | |||||||||||||||||
Loans held for sale | 9,788 | 99 | 4.05 | 6,051 | 66 | 4.36 | 6,957 | 82 | 4.71 | ||||||||||||||||||||||||||
Debt securities available for sale | 68,014 | 428 | 2.52 | 63,583 | 384 | 2.42 | 50,943 | 333 | 2.61 | ||||||||||||||||||||||||||
Other(2) | 89,217 | 62 | 0.28 | 62,157 | 232 | 1.49 | 54,650 | 361 | 2.64 | ||||||||||||||||||||||||||
Total interest-earning assets | 594,921 | $ | 5,334 | 3.59 | % | 484,212 | $ | 5,045 | 4.17 | % | 410,608 | $ | 4,610 | 4.49 | % | ||||||||||||||||||||
Noninterest-earning assets | 21,749 | 26,021 | 25,684 | ||||||||||||||||||||||||||||||||
Total assets | $ | 616,670 | $ | 510,233 | $ | 436,292 | |||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Savings, NOW and money-market deposits | $ | 311,237 | $ | 412 | 0.53 | % | $ | 277,254 | $ | 544 | 0.78 | % | $ | 242,815 | $ | 597 | 0.98 | % | |||||||||||||||||
Time deposits | 67,287 | 325 | 1.93 | 69,906 | 355 | 2.03 | 48,573 | 254 | 2.09 | ||||||||||||||||||||||||||
Total interest-bearing deposits | 378,524 | 737 | 0.78 | 347,160 | 899 | 1.04 | 291,388 | 851 | 1.17 | ||||||||||||||||||||||||||
Other borrowings | 33,129 | 28 | 0.34 | 1,273 | 3 | 0.94 | 34 | - | - | ||||||||||||||||||||||||||
Total interest-bearing liabilities | 411,653 | 765 | 0.74 | % | 348,433 | 902 | 1.04 | % | 291,422 | $ | 851 | 1.17 | % | ||||||||||||||||||||||
Noninterest-bearing deposits | 140,234 | 99,857 | 87,077 | ||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities | 8,220 | 5,690 | 5,545 | ||||||||||||||||||||||||||||||||
Stockholders' equity | 56,563 | 56,253 | 52,248 | ||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 616,670 | $ | 510,233 | $ | 436,292 | |||||||||||||||||||||||||||||
Net earning assets | $ | 183,268 | $ | 135,779 | $ | 119,186 | |||||||||||||||||||||||||||||
Net interest income | $ | 4,569 | $ | 4,143 | $ | 3,759 | |||||||||||||||||||||||||||||
Interest rate spread (3) | 2.85 | % | 3.13 | % | 3.32 | % | |||||||||||||||||||||||||||||
Net interest margin (4) | 3.07 | % | 3.42 | % | 3.66 | % |
(1) Includes nonaccrual loans |
(2) Other interest-earning assets include federal funds sold, interest-bearing deposits and Federal Home Loan Bank stock. |
(3) Interest rate spread is the difference between the total interest-earning asset yield and the rate paid on total interest-bearing liabilities. (4) Net interest margin is net interest income divided by total average interest-earning assets, annualized.
|
Dilution from the PPP loans contributed materially to the quarter's lower net interest margin as these loans are yielding 2.53%, inclusive of recognized fees and costs. In addition, the full quarter impact of the Federal Reserve's actions in March became evident in the Company's net interest margin in the second quarter of 2020. Subtracting out the impact of the PPP loans, the Company's adjusted average loan yield was 4.76%, compared to 4.95% on a linked quarter basis. (Please refer to "Non-GAAP Measures and Ratio Reconciliation" in the Tables on pages 11-12 for more detail). Looking forward, management expects fluctuations in its net interest margin, in part, due to the uncertain timing of PPP loans exiting the balance sheet.
Provision for Loan Losses
The provision for loan losses for the quarter and six months ended June 30, 2020 increased substantially over the same periods in 2019. The Company took $686,000 in net charge-offs during the second quarter of 2020 and $1.0 million in net charge-offs for the first six months of 2020. These charge-offs were unrelated to the COVID-19 pandemic. The charge-offs, in conjunction with an increase in general and specific reserves and a $236,000 addition to unallocated reserves in anticipation of possible COVID-19 related credit deterioration, resulted in the large increase in the provision in the second quarter.
Noninterest income (Unaudited)
(dollars in thousands)
Change 2Q'20 vs. | ||||||||||||||||||||
2Q'20 | 1Q'20 | 2Q'19 | 1Q'20 | 2Q'19 | ||||||||||||||||
Service charges and fees on deposit accounts | $ | 44 | $ | 64 | $ | 68 | (31.3 | )% | (35.3 | )% | ||||||||||
Debit card/ATM revenue, net | 79 | 81 | 64 | (2.5 | ) | 23.4 | ||||||||||||||
Mortgage banking revenue | 219 | 148 | 197 | 48.0 | 11.2 | |||||||||||||||
Income from bank-owned life insurance | 40 | 40 | 45 | - | (11.1 | ) | ||||||||||||||
Other income | 32 | 34 | 38 | (5.9 | ) | (15.8 | ) | |||||||||||||
Total noninterest income | $ | 414 | $ | 367 | $ | 412 | 12.8 | % | 0.5 | % |
On a linked quarter basis, the increase in total noninterest income was driven by a $71,000 increase in mortgage banking revenue. This was partially offset by a $20,000 decrease in service charges and fees on deposit accounts.
Compared to the second quarter of 2019, increases in debit card/ATM net revenue and mortgage banking revenue were offset by declines in service charges and fees on deposit accounts, income from bank-owned life insurance and other income, leaving total noninterest income relatively flat with the second quarter of last year.
Six Months Ended | ||||||||||||||||
June 30, 2020 | June 30, 2019 | $ Change | % Change | |||||||||||||
Service charges and fees on deposit accounts | $ | 108 | $ | 139 | $ | (31 | ) | (22.3 | )% | |||||||
Debit card / ATM revenue, net | 160 | 126 | 34 | 27.0 | ||||||||||||
Mortgage banking revenue | 367 | 303 | 64 | 21.1 | ||||||||||||
Income from bank-owned life insurance | 80 | 90 | (10 | ) | (11.1 | ) | ||||||||||
Gain on sale of securities available for sale | - | 7 | (7 | ) | N/A | |||||||||||
Other income | 66 | 72 | (6 | ) | (8.3 | ) | ||||||||||
Total noninterest income | $ | 781 | $ | 737 | $ | 44 | 6.0 | % |
Comparing the six-month period ended June 30, 2020 to 2019, increases in the two most important noninterest income drivers (debit card/ATM net revenue and mortgage banking revenue) were partially offset by declines in other noninterest income categories. The most notable decline was in service charges and fees on deposit accounts.
Noninterest expense (Unaudited)
(dollars in thousands)
Change 2Q'20 vs. | ||||||||||||||||||||
2Q'20 | 1Q'20 | 2Q'19 | 1Q'20 | 2Q'19 | ||||||||||||||||
Salaries and employee benefits | $ | 1,546 | $ | 1,618 | $ | 1,579 | (4.4 | )% | (2.1 | )% | ||||||||||
Occupancy and equipment | 381 | 338 | 427 | 12.7 | (10.8 | ) | ||||||||||||||
Professional fees | 83 | 91 | 106 | (8.8 | ) | (21.7 | ) | |||||||||||||
Marketing | 100 | 201 | 194 | (50.2 | ) | (48.5 | ) | |||||||||||||
FDIC Assessment | 67 | 52 | 44 | 28.8 | 52.3 | |||||||||||||||
Software maintenance, amortization and other | 201 | 193 | 167 | 4.1 | 20.4 | |||||||||||||||
Other | 441 | 445 | 466 | (0.9 | ) | (5.4 | ) | |||||||||||||
Total noninterest expense | $ | 2,819 | $ | 2,938 | $ | 2,983 | (4.1 | )% | (5.5 | )% |
On a linked quarter basis, a $72,000 decline in salaries and employee benefits and a $101,000 decline in marketing expense were the two key drivers of the 4.1% decrease in total noninterest expense. The significant decrease in marketing expenses can be attributed to the COVID-19 pandemic and the limitation on in-person gatherings. Sponsored events, client appreciation events, and business development activity were all suspended in the second quarter. The decline in salaries and employee benefits is attributed to a higher level of PPP-related deferred loan origination costs which offset increases in salaries and commissions. The $43,000 increase in occupancy expense is attributed to the completion of leasehold improvements at the Timberlane office and its subsequent amortization, along with higher depreciation expense of FF&E and computer equipment.
Compared to the second quarter of 2019, salaries and employee benefits show a decline due to higher deferred loan origination costs in the second quarter of 2020, driven by PPP loan originations. Occupancy and equipment expense declined 10.8% from the second quarter of 2019, in part because the Company expensed approximately $69,000 in non-recurring occupancy costs related to the opening of the Lakeland office in the second quarter of 2019. Marketing costs are down significantly due to the COVID-19 pandemic and the suspension of most group activities in the second quarter of 2020. In addition, the Company had large marketing expenditures associated with the opening of our Lakeland office in the second quarter of 2019 compared to the second quarter of 2020, also explaining the decrease in marketing expenses.
Six Months Ended | ||||||||||||||||
June 30, 2020 | June 30, 2019 | $ Change | % Change | |||||||||||||
Salaries and employee benefits | $ | 3,164 | $ | 3,136 | $ | 28 | 0.9 | % | ||||||||
Occupancy and equipment | 719 | 702 | 17 | 2.4 | ||||||||||||
Professional fees | 174 | 183 | (9 | ) | (4.9 | ) | ||||||||||
Marketing | 301 | 393 | (92 | ) | (23.4 | ) | ||||||||||
FDIC assessment | 119 | 87 | 32 | 36.8 | ||||||||||||
Software maintenance, amortization and other | 394 | 319 | 75 | 23.5 | ||||||||||||
Other | 886 | 869 | 17 | 2.0 | ||||||||||||
Total noninterest expense | $ | 5,757 | $ | 5,689 | $ | 68 | 1.2 | % |
Comparing the six-month periods, the $92,000 decrease in marketing expense (for reasons already discussed) offset increases in other areas, the most notable one being a $75,000 increase in software maintenance, amortization, and other. The 36.8% increase in the FDIC assessment is calculated on the Company's increased deposit base, net of regulatory adjustments related to PPP activity.
Balance Sheet
At June 30, 2020, the Company reported $602.2 million in total assets, $536.5 million in deposits, and $442.6 million in net portfolio loans. This compares to $500.9 million in total assets, $438.3 million in deposits, and $337.7 million in net portfolio loans at December 31, 2019. Loan growth occurred in all categories, with the exception of consumer loans which declined slightly, and was driven by the addition of $81.5 million in PPP loans. Subtracting out PPP loans, commercial loans actually declined $1.8 million, or 2.6%, from December 31, 2019. During the second quarter of 2020, the Company utilized the Federal Reserve's PPPLF to help fund the PPP loans. The Company borrowed $51.1 million during the quarter, but elected to prepay the PPPLF prior to June 30th with excess liquidity. The composition of the Bank’s loan portfolio was as follows on the indicated dates:
Prime Meridian Holding Company and Subsidiary
Loans by Class
(dollars in thousands)
June 30, 2020 | December 31, 2019 | ||||||||||||||||
Unaudited | Audited | ||||||||||||||||
Amount | % of Total | Amount | % of Total | ||||||||||||||
Commercial real estate | $ | 108,970 | 24.2 | % | $ | 94,728 | 27.7 | % | |||||||||
Residential real estate and home equity | 141,932 | 31.6 | 135,913 | 39.8 | |||||||||||||
Construction | 42,142 | 9.4 | 33,583 | 9.8 | |||||||||||||
Commercial | 149,437 | 33.2 | 69,770 | 20.4 | |||||||||||||
Consumer | 7,186 | 1.6 | 7,631 | 2.3 | |||||||||||||
Total Loans | 449,667 | 100.0 | % | 341,625 | 100.0 | % | |||||||||||
Net deferred loan costs | (1,845 | ) | 499 | ||||||||||||||
Allowance for loan losses | (5,248 | ) | (4,414 | ) | |||||||||||||
Loans, net | $ | 442,574 | $ | 337,710 |
The $98.3 million increase in deposits since December 31, 2019 is attributed to increased market share, deposits associated with PPP loans, and conversion of new PPP clients to full banking relationships. While management anticipates some shrinkage in deposits as PPP funds are spent, management expects the majority of this deposit increase will remain long-term.
As part of the Company's overall capital management plan, the Company initiated a share repurchase program of up to $2 million in the first quarter. As of June 30, 2020, the Company had repurchased 82,784 shares at a weighted-average cost per share of $14.70 for a total of $1.2 million. The share repurchase plan was suspended in late March and expired on June 30, 2020. If there are further significant declines in the Company’s stock price and shares become available, the Company will reconsider the merits of a repurchase program as part of its overall capital management plan
Total stockholders’ equity was $57.0 million, or 9.5% of total assets, at June 30, 2020 compared to $55.9 million at December 31, 2019, or 11.2% of total assets. Increases in retained earnings and accumulated other comprehensive income were partially offset by the Company's $1.2 million share repurchase that was initiated toward the end of the first quarter. Book value per share increased from $17.51 at December 31, 2019 to $18.30 at June 30, 2020, with 3,116,499 common shares outstanding.
As of June 30, 2020, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 8.99%, a 13.80% Common Equity Tier 1 Capital Ratio, a 13.80% Tier 1 Risk-Based Capital Ratio, and a 15.05% Total Risk-Based Capital Ratio. During the second quarter of 2020, the Company made a $4 million capital injection into the Bank and benefitted from favorable regulatory treatment of PPP loans pledged towards the Company's borrowings under the PPPLF.
Asset Quality
Loans totaling $1.9 million were deemed to be impaired under the Bank’s policy at June 30, 2020, while loans totaling $3.2 million were deemed to be impaired under the Bank’s policy at December 31, 2019. At June 30, 2020, the Bank had eight nonaccrual loans in the aggregate amount of $1.8 million, compared to twelve nonaccrual loans totaling $2.6 million at December 31, 2019. At June 30, 2020, the Company reported no loans greater than 90 days past due and accruing and $234,000 in other real estate owned. Net charge-offs, totaling $686,000 for the quarter ended June 30, 2020, were predominantly in the commercial loan category and were not related to the COVID-19 pandemic. The commercial charge-off activity did result in an increase to the general reserve rate for commercial loans. With the charge-off activity, nonperforming assets as a percentage of total assets fell to 0.33%. Management believes that the allowance for loan losses which was $5.2 million, or 1.42% of gross loans (excluding PPP loans), at June 30, 2020 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, 2020, the Bank had 89 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 of the financial measures and ratios we present including "pre-tax, pre-provision (PTPP) operating earnings," "PTPP return on average common equity," "PTPP return on average assets," and "adjusted average loan yield" are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to those financial measures and ratios as "non-GAAP financial measures." We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results.
We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present, and future periods.
These non-GAAP measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures is included at the end of the financial statement tables.
Tables Follow
Prime Meridian Holding Company and Subsidiary
Condensed Consolidated Statements of Earnings (Unaudited)
(in thousands except per share amounts)
2Q'20 | 1Q'20 | 4Q'19 | 3Q'19 | 2Q'19 | ||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans | $ | 4,844 | $ | 4,429 | $ | 4,237 | $ | 4,179 | $ | 3,916 | ||||||||||
Securities | 428 | 384 | 342 | 338 | 333 | |||||||||||||||
Other | 62 | 232 | 378 | 402 | 361 | |||||||||||||||
Total interest income | 5,334 | 5,045 | 4,957 | 4,919 | 4,610 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 737 | 899 | 962 | 934 | 851 | |||||||||||||||
Other borrowings | 28 | 3 | 4 | 5 | - | |||||||||||||||
Total interest expense | 765 | 902 | 966 | 939 | 851 | |||||||||||||||
Net interest income | 4,569 | 4,143 | 3,991 | 3,980 | 3,759 | |||||||||||||||
Provision for loan losses | 1,227 | 636 | 546 | 241 | 179 | |||||||||||||||
Net interest income after provision for loan losses | 3,342 | 3,507 | 3,445 | 3,739 | 3,580 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges and fees on deposit accounts | 44 | 64 | 75 | 74 | 68 | |||||||||||||||
Debit card/ATM revenue, net | 79 | 81 | 60 | 67 | 64 | |||||||||||||||
Mortgage banking revenue | 219 | 148 | 213 | 151 | 197 | |||||||||||||||
Income from bank-owned life insurance | 40 | 40 | 42 | 46 | 45 | |||||||||||||||
Other income | 32 | 34 | 38 | 32 | 38 | |||||||||||||||
Total noninterest income | 414 | 367 | 428 | 370 | 412 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 1,546 | 1,618 | 1,384 | 1,575 | 1,579 | |||||||||||||||
Occupancy and equipment | 381 | 338 | 330 | 373 | 427 | |||||||||||||||
Professional fees | 83 | 91 | 112 | 79 | 106 | |||||||||||||||
Marketing | 100 | 201 | 178 | 172 | 194 | |||||||||||||||
FDIC assessment | 67 | 52 | 26 | 6 | 44 | |||||||||||||||
Software maintenance, amortization and other | 201 | 193 | 185 | 188 | 167 | |||||||||||||||
Other | 441 | 445 | 454 | 436 | 466 | |||||||||||||||
Total noninterest expense | 2,819 | 2,938 | 2,669 | 2,829 | 2,983 | |||||||||||||||
Earnings before income taxes | 937 | 936 | 1,204 | 1,280 | 1,009 | |||||||||||||||
Income taxes | 217 | 220 | 257 | 316 | 245 | |||||||||||||||
Net earnings | $ | 720 | $ | 716 | $ | 947 | $ | 964 | $ | 764 | ||||||||||
Basic earnings per share | $ | 0.23 | $ | 0.22 | $ | 0.29 | $ | 0.31 | $ | 0.24 | ||||||||||
Diluted earnings per share | 0.23 | 0.22 | 0.29 | 0.31 | 0.24 |
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, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Unaudited | Unaudited | |||||||||||||||
Interest income: | ||||||||||||||||
Loans | $ | 4,844 | $ | 3,916 | $ | 9,273 | $ | 7,772 | ||||||||
Securities | 428 | 333 | 812 | 629 | ||||||||||||
Other | 62 | 361 | 294 | 709 | ||||||||||||
Total interest income | 5,334 | 4,610 | 10,379 | 9,110 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 737 | 851 | 1,636 | 1,664 | ||||||||||||
Other borrowings | 28 | - | 31 | - | ||||||||||||
Total interest expense | 765 | 851 | 1,667 | 1,664 | ||||||||||||
Net interest income | 4,569 | 3,759 | 8,712 | 7,446 | ||||||||||||
Provision for loan losses | 1,227 | 179 | 1,863 | 344 | ||||||||||||
Net interest income after provision for loan losses | 3,342 | 3,580 | 6,849 | 7,102 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges and fees on deposit accounts | 44 | 68 | 108 | 139 | ||||||||||||
Debit card/ATM revenue, net | 79 | 64 | 160 | 126 | ||||||||||||
Mortgage banking revenue | 219 | 197 | 367 | 303 | ||||||||||||
Income from bank-owned life insurance | 40 | 45 | 80 | 90 | ||||||||||||
Gain on sale of securities available for sale | - | - | - | 7 | ||||||||||||
Other income | 32 | 38 | 66 | 72 | ||||||||||||
Total noninterest income | 414 | 412 | 781 | 737 | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | 1,546 | 1,579 | 3,164 | 3,136 | ||||||||||||
Occupancy and equipment | 381 | 427 | 719 | 702 | ||||||||||||
Professional fees | 83 | 106 | 174 | 183 | ||||||||||||
Marketing | 100 | 194 | 301 | 393 | ||||||||||||
FDIC assessment | 67 | 44 | 119 | 87 | ||||||||||||
Software maintenance, amortization and other | 201 | 167 | 394 | 319 | ||||||||||||
Other | 441 | 466 | 886 | 869 | ||||||||||||
Total noninterest expense | 2,819 | 2,983 | 5,757 | 5,689 | ||||||||||||
Earnings before income taxes | 937 | 1,009 | 1,873 | 2,150 | ||||||||||||
Income taxes | 217 | 245 | 437 | 519 | ||||||||||||
Net earnings | $ | 720 | $ | 764 | $ | 1,436 | $ | 1,631 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.23 | $ | 0.24 | $ | 0.45 | $ | 0.52 | ||||||||
Diluted | 0.23 | 0.24 | 0.45 | 0.52 | ||||||||||||
Cash dividends per common share(1) | - | - | 0.12 | 0.12 |
(1) Annual cash dividends were paid during the first quarters of 2020 and 2019.
Prime Meridian Holding Company and Subsidiary |
Condensed Consolidated Balance Sheets |
(in thousands) |
2Q'20 | 1Q'20 | 4Q'19 | 3Q'19 | 2Q'19 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Audited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash & cash equivalents | $ | 62,307 | $ | 72,677 | $ | 75,082 | $ | 84,278 | $ | 72,042 | ||||||||||
Debt securities available for sale | 66,898 | 70,976 | 61,333 | 55,773 | 52,431 | |||||||||||||||
Loans, held for sale | 8,949 | 8,946 | 6,193 | 7,907 | 6,223 | |||||||||||||||
Loans, net | 442,574 | 362,436 | 337,710 | 315,807 | 299,949 | |||||||||||||||
Federal Home Loan Bank stock | 493 | 493 | 404 | 404 | 404 | |||||||||||||||
Premises & equipment, net | 8,187 | 8,072 | 7,744 | 7,787 | 7,311 | |||||||||||||||
Right of use lease asset | 3,568 | 3,619 | 3,669 | 3,719 | 3,768 | |||||||||||||||
Accrued interest receivable | 1,723 | 1,273 | 1,137 | 1,073 | 1,100 | |||||||||||||||
Bank-owned life insurance | 6,581 | 6,541 | 6,501 | 6,459 | 6,413 | |||||||||||||||
Other real estate owned | 234 | 234 | - | - | - | |||||||||||||||
Other assets | 658 | 850 | 1,088 | 859 | 1,086 | |||||||||||||||
Total Assets | $ | 602,172 | $ | 536,117 | $ | 500,861 | $ | 484,066 | $ | 450,727 | ||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 146,542 | $ | 106,176 | $ | 96,807 | $ | 96,732 | $ | 89,608 | ||||||||||
Savings, NOW and money-market deposits | 323,523 | 297,991 | 272,283 | 265,518 | 247,804 | |||||||||||||||
Time deposits | 66,449 | 70,116 | 69,174 | 58,947 | 52,912 | |||||||||||||||
Total Deposits | 536,514 | 474,283 | 438,264 | 421,197 | 390,324 | |||||||||||||||
Other borrowings | - | - | 1,254 | 2,053 | 770 | |||||||||||||||
Official checks | 3,373 | 1,391 | 606 | 900 | 1,496 | |||||||||||||||
Operating lease liability | 3,669 | 3,714 | 3,758 | 3,801 | 3,827 | |||||||||||||||
Other liabilities | 1,584 | 1,038 | 1,111 | 1,088 | 1,314 | |||||||||||||||
Total Liabilities | 545,140 | 480,426 | 444,993 | 429,039 | 397,731 | |||||||||||||||
Total Stockholders' Equity | 57,032 | 55,691 | 55,868 | 55,027 | 52,996 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 602,172 | $ | 536,117 | $ | 500,861 | $ | 484,066 | $ | 450,727 |
Prime Meridian Holding Company and Subsidiary |
Financial Highlights (Unaudited) |
(dollars in thousands except per share amounts) |
2Q'20 | 1Q'20 | 4Q'19 | 3Q'19 | 2Q'19 | |||||||||||||||||
Per Share Data: | |||||||||||||||||||||
$ | 0.23 | $ | 0.22 | $ | 0.29 | $ | 0.31 | $ | 0.24 | ||||||||||||
Earnings per share - Diluted | $ | 0.23 | $ | 0.22 | $ | 0.29 | $ | 0.31 | $ | 0.24 | |||||||||||
Book value per share | $ | 18.30 | $ | 17.88 | $ | 17.51 | $ | 17.25 | $ | 16.85 | |||||||||||
Shares outstanding | 3,116,499 | 3,115,334 | 3,191,288 | 3,190,031 | 3,144,456 | ||||||||||||||||
Weighted-average basic shares outstanding | 3,116,307 | 3,183,857 | 3,190,933 | 3,147,696 | 3,144,068 | ||||||||||||||||
Weighted-average diluted shares outstanding | 3,116,370 | 3,185,558 | 3,195,793 | 3,151,321 | 3,150,136 | ||||||||||||||||
Selected Performance Ratios and Other Data: | |||||||||||||||||||||
Return on average assets(1) | 0.47 | % | 0.56 | % | 0.75 | % | 0.83 | % | 0.70 | % | |||||||||||
Return on average equity(1) | 5.09 | 5.09 | 6.84 | 7.14 | 5.85 | ||||||||||||||||
Average yield on earning assets | 3.59 | 4.17 | 4.17 | 4.48 | 4.49 | ||||||||||||||||
Net interest margin(2) | 3.07 | 3.42 | 3.36 | 3.63 | 3.66 | ||||||||||||||||
Efficiency ratio(3) | 56.57 | 65.14 | 60.40 | 65.03 | 71.52 | ||||||||||||||||
Noninterest expense/average assets(1) | 1.83 | 2.30 | 2.13 | 2.43 | 2.73 | ||||||||||||||||
Asset Quality Data: | |||||||||||||||||||||
Nonaccrual loans | $ | 1,756 | $ | 2,244 | $ | 2,591 | $ | 2,603 | $ | 1,962 | |||||||||||
Loans 90 days past due + other real estate owned | 234 | 787 | - | - | - | ||||||||||||||||
Total nonperforming assets | 1,990 | 3,031 | 2,591 | 2,603 | 1,962 | ||||||||||||||||
Nonperforming assets/total assets | 0.33 | % | 0.57 | % | 0.52 | % | 0.54 | % | 0.44 | % | |||||||||||
Loans 30-89 days past due | $ | 5 | $ | 3,029 | $ | 743 | $ | 254 | $ | 688 | |||||||||||
Total loans, net of held-for-sale loans | 449,667 | 366,627 | 341,625 | 319,261 | 303,484 | ||||||||||||||||
Loans 30-89 days past due / total loans | 0.00 | % | 0.83 | % | 0.22 | % | 0.08 | % | 0.23 | % | |||||||||||
Net charge-offs / average loans (1) | 0.64 | % | 0.39 | % | 0.32 | % | 0.34 | % | 0.04 | % | |||||||||||
Capital Ratios: | |||||||||||||||||||||
Tier 1 Leverage Capital Ratio (Company) | 9.53 | % | 10.75 | % | 11.08 | % | 11.73 | % | 12.08 | % | |||||||||||
Tier 1 Leverage Capital Ratio (Bank) | 8.99 | 9.33 | 9.31 | 9.24 | 9.10 | ||||||||||||||||
Common Equity Tier 1 Capital Ratio (Bank) | 13.80 | 12.41 | 13.24 | 12.95 | 12.69 | ||||||||||||||||
Tier 1 Risk-Based Capital Ratio (Bank) | 13.80 | 12.41 | 13.24 | 12.95 | 12.69 | ||||||||||||||||
Total Capital Ratio (Bank) | 15.05 | 13.64 | 14.49 | 14.15 | 13.94 |
(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. |
Prime Meridian Holding Company and Subsidiary |
Non-GAAP Measures and Ratio Reconciliation Quarterly Pre-Pax Pre-Provision Calculation (Unaudited) |
(dollars in thousands except per share amounts) |
2Q'20 | 1Q'20 | 4Q'19 | 3Q'19 | 2Q'19 | ||||||||||||||||
Net Income | ||||||||||||||||||||
Net earnings (GAAP) | $ | 720 | $ | 716 | $ | 947 | $ | 964 | $ | 764 | ||||||||||
Plus: provision for loan losses | 1,227 | 636 | 546 | 241 | 179 | |||||||||||||||
Plus: income taxes | 217 | 220 | 257 | 316 | 245 | |||||||||||||||
PTPP operating earnings (non-GAAP) | $ | 2,164 | $ | 1,572 | $ | 1,750 | $ | 1,521 | $ | 1,188 | ||||||||||
Earnings per Share EPS | ||||||||||||||||||||
Weighted average common shares, diluted | 3,116,370 | 3,185,558 | 3,195,793 | 3,151,321 | 3,150,136 | |||||||||||||||
EPS, diluted (GAAP) | $ | 0.23 | $ | 0.22 | $ | 0.29 | $ | 0.31 | $ | 0.24 | ||||||||||
PTPP EPS, diluted (non-GAAP) | $ | 0.69 | $ | 0.49 | $ | 0.55 | $ | 0.48 | $ | 0.38 | ||||||||||
Return on Average Assets (ROAA) | ||||||||||||||||||||
Average assets | $ | 616,670 | $ | 510,233 | $ | 501,878 | $ | 465,759 | $ | 436,292 | ||||||||||
ROAA (GAAP) | 0.47 | % | 0.56 | % | 0.75 | % | 0.83 | % | 0.70 | % | ||||||||||
PTPP ROAA (non-GAAP) | 1.40 | % | 1.23 | % | 1.39 | % | 1.31 | % | 1.09 | % | ||||||||||
Return on Average Common Equity | ||||||||||||||||||||
Average common equity | $ | 56,563 | $ | 56,253 | $ | 55,340 | $ | 53,985 | $ | 52,248 | ||||||||||
ROAE (GAAP) | 5.09 | % | 5.09 | % | 6.84 | % | 7.14 | % | 5.85 | % | ||||||||||
PTPP ROAE (non-GAAP) | 15.30 | % | 11.18 | % | 12.65 | % | 11.27 | % | 9.10 | % | ||||||||||
Adjusted Average Loan Yield: | ||||||||||||||||||||
Average loans, excluding loans held for sale | $ | 427,902 | $ | 352,421 | $ | 329,980 | $ | 313,595 | $ | 298,058 | ||||||||||
Less average PPP loans | (62,086 | ) | - | - | - | - | ||||||||||||||
Adjusted average loans, excluding loans held for sale (non-GAAP) | $ | 365,816 | $ | 352,421 | $ | 329,980 | $ | 313,595 | $ | 298,058 | ||||||||||
Average interest on loans, excluding loans held for sale | 4,745 | 4,363 | 4,160 | 4,093 | 3,834 | |||||||||||||||
Less interest income and earned fee income on PPP loans | (392 | ) | - | - | - | - | ||||||||||||||
Adjusted interest on loans, excluding loans held for sale (non-GAAP) | $ | 4,353 | $ | 4,363 | $ | 4,160 | $ | 4,093 | $ | 3,834 | ||||||||||
Average loan yield, excluding loans held for sale (GAAP) | 4.44 | % | 4.95 | % | 5.04 | % | 5.22 | % | 5.15 | % | ||||||||||
Adjusted average loan yield, excluding loans held for sale (non-GAAP) | 4.76 | % | - | - | - | - |
Prime Meridian Holding Company and Subsidiary |
Non-GAAP Measures and Ratio Reconciliation Pre-Tax Pre-Provision Calculation (6-months) (Unaudited) |
(dollars in thousands except per share amounts) |
6 Months Ended | ||||||||
June 30, 2020 | June 30, 2019 | |||||||
Net Income | ||||||||
Net earnings (GAAP) | $ | 1,436 | $ | 1,631 | ||||
Plus: provision for loan losses | 1,863 | 344 | ||||||
Plus: income taxes | 437 | 519 | ||||||
PTPP operating earnings (non-GAAP) | $ | 3,736 | $ | 2,494 | ||||
Earnings per Share EPS | ||||||||
Weighted average common shares, diluted | 3,150,240 | 3,146,878 | ||||||
EPS, diluted (GAAP) | $ | 0.45 | $ | 0.52 | ||||
PTPP EPS, diluted (non-GAAP) | $ | 1.19 | $ | 0.79 | ||||
Return on Average Assets (ROAA) | ||||||||
Average assets | $ | 563,451 | $ | 429,359 | ||||
ROAA (GAAP) | 0.51 | % | 0.76 | % | ||||
PTPP ROAA (non-GAAP) | 1.33 | % | 1.16 | % | ||||
Return on Average Common Equity | ||||||||
Average common equity (GAAP) | $ | 56,408 | $ | 51,656 | ||||
ROAE (GAAP) | 5.09 | % | 6.32 | % | ||||
PTPP ROAE (non-GAAP) | 13.25 | % | 9.66 | % | ||||
CONTACT: | Clint F. Weber, Chief Financial Officer and Executive Vice President |
(850) 907-2300 | |
Prime Meridian Holding Company | |
Website: www.primemeridianbank.com |