Prime Meridian Holding (PMHG) 8-K Prime Meridian Holding Company Reports SECOND quarter 2022 Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

Prime Meridian Holding Company Reports

SECOND quarter 2022 Results

TALLAHASSEE, FL – July 28, 2022 (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, 2022. The Company reported net earnings of $1,967,000, or $0.62 per basic and diluted share, for the three months ended June 30, 2022, compared to net earnings of $2,262,000 or $0.72 per basic and diluted share, for the three months ended June 30, 2021.  The Company reported 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, compared to $4,496,000, or $1.44 per basic and diluted share for the six months ended June 30, 2021.

"Rising interest rates and inflation concerns have now extended the period of economic uncertainty that began in 2020 with the pandemic," said Sammie D. Dixon, Vice Chairman, President and CEO of Prime Meridian. "You are going to get different forecasts depending on which advisor or expert you hear. With a number of external factors changing, our game plan is to stay the course while continuing to be nimble enough to make adjustments when needed. New information, new decision. We keep an eye out for any credit weaknesses as we move forward and continue to see opportunities for responsible growth in the markets we serve."

"We are performing well as a company with strong year-to-date loan activity and continued deposit growth. The Company's net loan portfolio increased $61.5 million, or 12.5% since year-end, excluding $14.1 million in PPP loan forgiveness during the first half of the year. Operationally, we are proud of where we are. Our same quarter, year-over-year, asset growth is up 13.8% due to our core belief in relationship banking, our culture," Dixon said.  "Client relationships, and the ability to pivot, are performance keys in times of change."

It is those client relationships that drove over 1,000 clients and their friends to take part in the Bank's Client Appreciation grill events during the quarter. "Folks enjoy coming out to have lunch with us and sharing a sense of community. It's pretty special," said Dixon. "Taking care of the client is more important than anything else and the clients appreciate it," he said.

Second Quarter 2022 Highlights

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

(dollars in thousands except per share amounts)

	2Q'22			1Q'22			4Q'21			3Q'21			2Q'21
Net earnings	$	1,967		$	2,241		$	1,752		$	2,099		$	2,262
Book value per share	$	20.48		$	20.87		$	21.42		$	20.99		$	20.40
Earnings per share - Basic	$	0.62		$	0.71		$	0.56		$	0.67		$	0.72
Earnings per share - Diluted	$	0.62		$	0.71		$	0.55		$	0.67		$	0.72
Weighted-average basic shares outstanding		3,151,760			3,138,695			3,128,831			3,127,524			3,126,197
Weighted-average diluted shares outstanding		3,189,319			3,174,697			3,162,746			3,145,017			3,139,179
Return on average assets(1)		0.90	%		1.05	%		0.85	%		1.09	%		1.24	%
Return on average equity(1)		12.13			12.70			10.11			12.99			14.40
Average yield on earning assets(1)		3.43			3.09			3.11			3.34			3.40
Net interest margin(1)		3.21			2.88			2.85			3.06			3.11
Efficiency ratio(2)		54.32			59.28			63.83			55.90			53.99
Nonperforming assets/total assets(3)		0.04			-			-			-			-

⁽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, loans greater than 90 days past due, and nonaccrual loans.

• Net earnings of $1.967 million fell modestly from 1Q22 and 2Q21 levels, due to the provision for loan losses (compared to a credit in the other periods), decreasing fee and interest income earned on the Paycheck Protection Program (PPP), a decline in mortgage banking net revenue, and higher noninterest expense.  Partially offsetting this was strong second-quarter loan production coupled with investment activity which boosted total interest income. 

• Adjusted pre-tax, pre-provision net earnings for the second quarter of 2022 were $3.3 million and adjusted pre-tax, pre-provision annualized returns on average assets and average common equity were 1.50% and 20.12%, respectively. (These are considered non-GAAP financial measures. Please refer to "Non-GAAP Measures and Ratio Reconciliation" in the Tables on page 11 for more detail.)

• Book value per share fell $0.39, or 1.9%, to $20.48 as rising interest rates have caused unrealized market value declines in the Company's investment securities portfolio, outpacing earnings retention.

• Since December 31, 2021, net loans increased $47.4 million, or 9.7%, while deposits increased by $21.6 million, or 2.8%. 

• Asset quality remained strong with two loans totaling $349,000 on nonaccrual status and a nonperforming assets/total assets ratio of 0.04%. 

1

Earnings Summary (Unaudited)

(dollars in thousands)

									Change 2Q'22 vs.
	2Q'22		1Q'22			2Q'21			1Q'22			2Q'21
Net interest income	$	6,642	$	5,859		$	5,452			13.4	%		21.8	%
Provision (credit) for loan losses		731		(371	)		(185	)		297.0			495.1
Noninterest income		504		518			620			(2.7	)		(18.7	)
Noninterest expense		3,882		3,780			3,278			2.7			18.4
Income taxes		566		727			717			(22.1	)		(21.1	)
Net earnings	$	1,967	$	2,241		$	2,262			(12.2	)%		(13.0	)%

On a linked quarter basis and compared to 2Q21, the decrease in net earnings is primarily attributed to the provision for loan losses (compared to a credit in both prior periods), partially offset by higher net interest income and lower income taxes.  Lower income from mortgage banking activities and increases in noninterest expense (mostly attributed to higher salaries and employee benefits) also contributed to the decline in net earnings. 

	For the Six Months Ended
	June 30, 2022		June 30, 2021			$ Change			% Change
Net interest income	$	12,501	$	11,018		$	1,483			13.5	%
Provision (credit) for loan losses		360		(185	)		545			294.6
Noninterest income		1,022		1,292			(270	)		(20.9	)
Noninterest expense		7,662		6,575			1,087			16.5
Income taxes		1,293		1,424			(131	)		(9.2	)
Net earnings	$	4,208	$	4,496		$	(288	)		(6.4	)%

Comparing the six-month periods, higher net interest income and lower taxes were offset primarily by higher noninterest expense and secondarily by the provision for loan losses and lower noninterest income.

Net Interest Income (Unaudited)

(dollars in thousands)

							Change 2Q'22 vs.
	2Q'22		1Q'22		2Q'21		1Q'22			2Q'21
Interest income:
Loans	$	6,029	$	5,784	$	5,632		4.2	%		7.0	%
Securities		737		385		262		91.4			181.3
Other		331		124		65		166.9			409.2
Total interest income		7,097		6,293		5,959		12.8	%		19.1	%
Interest expense:
Deposits		415		403		500		3.0	%		(17.0	)%
Other borrowings		40		31		7		29.0			471.4
Total interest expense		455		434		507		4.8			(10.3	)
Net interest income	$	6,642	$	5,859	$	5,452		13.4	%		21.8	%

On a linked quarter basis and compared to the second quarter of 2021, the volume increase in loans and securities is the biggest driver of the increase in net interest income, followed by rate increases, and to a lesser extent, one additional day when comparing 2Q22 to 1Q22.  Average interest-earning assets totaled $828.2 million for 2Q22, compared to $814.2 million for 1Q22 and $700.4 million for 2Q21. Partially offsetting this was a $259,000 and a $637,000 reduction in PPP fee and interest income when compared to 1Q22 and 2Q21, respectively.   Excluding the impact of PPP, interest on loans would have increased 9.4% on a linked quarter basis and 22.6%, compared to the second quarter of 2021 (please refer to "Non-GAAP Measures and Ratio Reconciliation" in the Tables on page 11 for more detail.) Interest expense increased $21,000 from the first quarter of 2022 due to volume increases in average interest-earning deposit balances and other borrowings.  Compared to 2Q21, interest expense decreased $52,000 as volume increases were offset by a strategic reduction of deposit rates made in the first quarter of 2022.  The Company's 2Q22 net interest margin of 3.21% compared favorably to 1Q22 (2.88%) and 2Q21 (3.11%). 

	For the Six Months Ended
	June 30, 2022		June 30, 2021		$ Change			% Change
Interest income:
Loans	$	11,813	$	11,437	$	376			3.3	%
Securities		1,122		511		611			119.6
Other		455		114		341			299.1
Total interest income		13,390		12,062		1,328			11.0	%
Interest expense:
Deposits		818		1,037		(219	)		(21.1	)%
Other borrowings		71		7		64			914.3
Total interest expense		889		1,044		(155	)		(14.8	)
Net interest income	$	12,501	$	11,018	$	1,483			13.5	%

Comparing the six-month periods, the average balance of interest-earnings assets increased 22.0%, or $147.8 million, and was the primary driver of the increase in net interest income.  Partially offsetting this was a $1.2 million decrease in interest and fee income from PPP Loans as the Bank moved through the forgiveness process of these loans which impacted average loan yields and the net interest margin.  The yield on the average balance of interest-earning assets declined from 3.79% for the six months ended June 30, 2021 to 3.26% for the six months ended June 30, 2022 while the net interest margin dipped from 3.27% to 3.04% for the same time period.  (Please refer to the average balance sheet on page 9).

2

Provision for Loan Losses

After recording a $371,000 and a $185,000 credit for loan losses in 1Q22 and 2Q21, respectively, the Company's strong loan production in the second quarter of 2022 resulted in a $731,000 provision for loan losses. 

Noninterest income (Unaudited)

(dollars in thousands)

							Change 2Q'22 vs.
	2Q'22		1Q'22		2Q'21		1Q'22			2Q'21
Service charges and fees on deposit accounts	$	73	$	68	$	56		7.4	%		30.4	%
Debit card/ATM revenue, net		143		129		124		10.9			15.3
Mortgage banking revenue, net		139		165		332		(15.8	)		(58.1	)
Income from bank-owned life insurance		94		95		67		(1.1	)		40.3
Other income		55		61		41		(9.8	)		34.1
Total noninterest income	$	504	$	518	$	620		(2.7	)%		(18.7	)%

	For the Six Months Ended
	June 30, 2022		June 30, 2021		$ Change			% Change
Service charges and fees on deposit accounts	$	141	$	109	$	32			29.4	%
Debit card/ATM revenue, net		272		233		39			16.7
Mortgage banking revenue, net		304		633		(329	)		(52.0	)
Income from bank-owned life insurance		189		130		59			45.4
Gain on sale of debt securities available for sale		-		108		(108	)		N/A
Other income		116		79		37			46.8
Total noninterest income	$	1,022	$	1,292	$	(270	)		(20.9	)%

For all comparison periods, the decline in noninterest income is predominantly due to lower mortgage banking revenue which was anticipated given the rising rate environment and the high level of refinancing activity that occurred in 2021. Increases in bank-owned life insurance ("BOLI") income, fees on deposit accounts, and fee income from merchant cards, debit cards, and ATM transactions partially offset the decrease in mortgage banking revenue. 

Noninterest expense (Unaudited)

(dollars in thousands)

							Change 2Q'22 vs.
	2Q'22		1Q'22		2Q'21		1Q'22			2Q'21
Salaries and employee benefits	$	2,238	$	2,160	$	1,805		3.6	%		24.0	%
Occupancy and equipment		396		408		378		(2.9	)		4.8
Professional fees		130		146		120		(11.0	)		8.3
Marketing		213		167		199		27.5			7.0
FDIC assessment		84		124		49		(32.3	)		71.4
Software maintenance, amortization and other		285		242		251		17.8			13.5
Other		536		533		476		0.6			12.6
Total noninterest expense	$	3,882	$	3,780	$	3,278		2.7	%		18.4	%

	For the Six Months Ended
	June 30, 2022		June 30, 2021		$ Change		% Change
Salaries and employee benefits	$	4,398	$	3,657	$	741		20.3	%
Occupancy and equipment		804		764		40		5.2
Professional fees		276		250		26		10.4
Marketing		380		339		41		12.1
FDIC assessment		208		119		89		74.8
Software maintenance, amortization and other		527		501		26		5.2
Other		1,069		945		124		13.1
Total noninterest expense	$	7,662	$	6,575	$	1,087		16.5	%

For all comparison periods, an increase in salaries and employee benefits is the primary driver of higher noninterest expense due to a larger employee base (100 FTEs at June 30, 2022 versus 95 at June 30, 2021) and annual raises that went in effect in March of 2022.  The fluctuation in the quarterly FDIC assessment is primarily attributed to changing assessment rates while an increased assessment rate and higher deposit balances led to the $89,000 increase when comparing the six-month periods. The $124,000 increase in other noninterest expense from the first half of 2021 to the first half of 2022 is attributed to modest fluctuations in various miscellaneous expense categories. 

3

Balance Sheet

At June 30, 2022, the Company reported $860.8 million in total assets, $784.6 million in deposits, and $537.6 million in net portfolio loans. This compares to $841.1 million in total assets, $762.9 million in deposits, and $490.2 million in net portfolio loans at December 31, 2021. Excluding $14.1 million in PPP loan forgiveness during the first half of 2022, the Company's net loan portfolio increased $61.5 million, or 12.5%, since year-end.   At June 30, 2022, $1.0 million in PPP loans remained on the balance sheet with $44,000 in fee income, net of costs, left to be recognized.

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

	June 30, 2022						December 31, 2021
	Unaudited						Audited
	Amount			% of Total			Amount			% of Total
Commercial real estate	$	179,976			33.0	%	$	156,306			31.5	%
Residential real estate and home equity		208,769			38.4			183,536			36.9
Construction		71,382			13.1			71,164			14.3
Commercial		75,996			14.0			78,584			15.8
Consumer		7,961			1.5			7,283			1.5
Total loans		544,084			100.0	%		496,873			100.0	%
Net deferred loan costs (fees)		93						(701	)
Allowance for loan losses		(6,611	)					(5,974	)
Loans, net	$	537,566					$	490,198

Deposit balances decreased $3.4 million from 1Q22 and is attributed to seasonal outflows of public funds rather than a trend linked to business or consumer accounts. Given the current interest rate environment, management is monitoring potential volatility in deposit balances closely. Total stockholders’ equity was $64.6 million, or 7.5% of total assets, at June 30, 2022 compared to $67.0 million at December 31, 2021, or 8.0% of total assets.  The $2.4 million decrease in equity from year-end stemmed from a $6.5 million change in accumulated other comprehensive loss on the company's investment securities portfolio due to the rising rate environment, partially offset by net earnings for the six months ended June 30, 2022.  Book value per share decreased from $21.42 at December 31, 2021 with 3,129,046 common shares outstanding to $20.48 at June 30, 2022, with 3,155,308 common shares outstanding.  While the Company acknowledges that rising interest rates have generated unrealized losses in its investment portfolio during the six months ended June 30, 2022, the Company's asset sensitive balance sheet is expected to respond well to the current rate environment. 

As of June 30, 2022, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 8.61%, a 12.61% Common Equity Tier 1 Capital Ratio, a 12.61% Tier 1 Risk-Based Capital Ratio, and a 13.72% Total Risk-Based Capital Ratio.  Since December of 2019, the Company has injected $9.7 million into the Bank to support growth.  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.  As of June 30, 2022, the Company had an outstanding loan balance under this line of $4.1 million and year-to-date interest expense of $71,000.  

Asset Quality

At June 30, 2022, the Bank had nonaccrual loans totaling $349,000 compared to none at December 31, 2021.  Net charge-offs totaled $7,000 for the quarter ended June 30, 2022 and that ratio of nonperforming assets as a percentage of total assets was 0.04%. Management believes that the allowance for loan losses which was $6.6 million, or 1.22% of gross loans, at June 30, 2022 is adequate.

4

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, 2022, the Bank had 100 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

5

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

	2Q'22		1Q'22			4Q'21		3Q'21		2Q'21
Interest income:
Loans	$	6,029	$	5,784		$	5,794	$	5,819	$	5,632
Securities		737		385			292		283		262
Other		331		124			76		78		65
Total interest income		7,097		6,293			6,162		6,180		5,959
Interest expense:
Deposits		415		403			483		502		500
Other borrowings		40		31			26		25		7
Total interest expense		455		434			509		527		507
Net interest income		6,642		5,859			5,653		5,653		5,452
Provision (credit) for loan losses		731		(371	)		81		-		(185	)
Net interest income after provision for loan losses		5,911		6,230			5,572		5,653		5,637
Noninterest income:
Service charges and fees on deposit accounts		73		68			75		61		56
Debit card/ATM revenue, net		143		129			129		108		124
Mortgage banking revenue, net		139		165			216		325		332
Income from bank-owned life insurance		94		95			69		73		67
Other income		55		61			112		46		41
Total noninterest income		504		518			601		613		620
Noninterest expense:
Salaries and employee benefits		2,238		2,160			2,408		2,028		1,805
Occupancy and equipment		396		408			402		380		378
Professional fees		130		146			130		103		120
Marketing		213		167			171		197		199
FDIC assessment		84		124			119		78		49
Software maintenance, amortization and other		285		242			237		237		251
Other		536		533			525		480		476
Total noninterest expense		3,882		3,780			3,992		3,503		3,278
Earnings before income taxes		2,533		2,968			2,181		2,763		2,979
Income taxes		566		727			429		664		717
Net earnings	$	1,967	$	2,241		$	1,752	$	2,099	$	2,262
Basic earnings per common share	$	0.62	$	0.71		$	0.56	$	0.67	$	0.72
Diluted earnings per common share	$	0.62	$	0.71		$	0.55	$	0.67	$	0.72

6

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,
	2022		2021			2022		2021
	Unaudited					Unaudited
Interest income:
Loans	$	6,029	$	5,632		$	11,813	$	11,437
Securities		737		262			1,122		511
Other		331		65			455		114
Total interest income		7,097		5,959			13,390		12,062
Interest expense:
Deposits		415		500			818		1,037
Other borrowings		40		7			71		7
Total interest expense		455		507			889		1,044
Net interest income		6,642		5,452			12,501		11,018
Provision (credit) for loan losses		731		(185	)		360		(185	)
Net interest income after provision for loan losses		5,911		5,637			12,141		11,203
Noninterest income:
Service charges and fees on deposit accounts		73		56			141		109
Debit card/ATM revenue, net		143		124			272		233
Mortgage banking revenue, net		139		332			304		633
Income from bank-owned life insurance		94		67			189		130
Gain on sale of securities available for sale		-		-			-		108
Other income		55		41			116		79
Total noninterest income		504		620			1,022		1,292
Noninterest expense:
Salaries and employee benefits		2,238		1,805			4,398		3,657
Occupancy and equipment		396		378			804		764
Professional fees		130		120			276		250
Marketing		213		199			380		339
FDIC assessment		84		49			208		119
Software maintenance, amortization and other		285		251			527		501
Other		536		476			1,069		945
Total noninterest expense		3,882		3,278			7,662		6,575
Earnings before income taxes		2,533		2,979			5,501		5,920
Income taxes		566		717			1,293		1,424
Net earnings	$	1,967	$	2,262		$	4,208	$	4,496
Earnings per common share:
Basic	$	0.62	$	0.72		$	1.34	$	1.44
Diluted		0.62		0.72			1.32		1.44
Cash dividends per common share(1)		-		-			0.18		0.14

⁽¹⁾ Annual cash dividends were paid during the first quarters of 2022 and 2021.

7

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

	2Q'22		1Q'22		4Q'21		3Q'21		2Q'21
	(Unaudited)		(Unaudited)		(Audited)		(Unaudited)		(Unaudited)
Assets
Cash & cash equivalents	$	134,122	$	233,789	$	233,473	$	212,652	$	181,599
Debt securities available for sale		133,382		101,868		73,763		67,124		63,306
Debt securities held to maturity		8,777		6,185		-		-		-
Loans, held for sale		10,725		11,241		11,768		10,976		13,736
Loans, net		537,566		479,526		490,198		476,513		470,488
Federal Home Loan Bank stock		463		463		366		366		366
Premises & equipment, net		8,228		7,905		7,962		8,018		8,159
Right of use lease asset		3,151		3,205		3,258		3,310		3,363
Accrued interest receivable		1,933		1,649		1,505		1,478		1,751
Bank-owned life insurance		16,342		16,248		16,153		12,085		12,012
Other assets		6,148		4,087		2,677		1,952		1,839
Total Assets	$	860,837	$	866,166	$	841,123	$	794,474	$	756,619
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits	$	210,685	$	206,018	$	209,351	$	219,996	$	199,662
Savings, NOW and money-market deposits		535,359		534,049		503,759		448,528		433,954
Time deposits		38,545		47,876		49,832		49,817		49,744
Total Deposits		784,589		787,943		762,942		718,341		683,360
Other borrowings		4,125		3,975		3,575		3,075		3,075
Official checks		776		1,625		1,141		1,168		965
Operating lease liability		3,303		3,350		3,397		3,443		3,489
Other liabilities		3,415		3,512		3,037		2,798		1,943
Total Liabilities		796,208		800,405		774,092		728,825		692,832
Total Stockholders' Equity		64,629		65,761		67,031		65,649		63,787
Total Liabilities and Stockholders' Equity	$	860,837	$	866,166	$	841,123	$	794,474	$	756,619

8

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Average Balance Sheets (Unaudited)

(in thousands)

	2Q'22							1Q'22							2Q'21
			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)	$	514,166	$	5,912		4.60	%	$	489,263	$	5,684		4.65	%	$	483,587	$	5,505		4.55	%
Loans held for sale		11,174		117		4.19			10,550		100		3.79			14,784		127		3.44
Debt securities		132,562		737		2.22			84,088		385		1.83			60,155		262		1.74
Other(2)		170,320		331		0.78			230,348		124		0.22			141,842		65		0.18
Total interest-earning assets		828,222	$	7,097		3.43	%		814,249	$	6,293		3.09	%		700,368	$	5,959		3.40	%
Noninterest-earning assets		41,391							38,599							31,313
Total assets	$	869,613						$	852,848						$	731,681
Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	536,209	$	357		0.27	%	$	517,506	$	335		0.26	%	$	413,859	$	410		0.40	%
Time deposits		43,611		58		0.53			48,920		68		0.56			51,372		90		0.70
Total interest-bearing deposits		579,820		415		0.29			566,426		403		0.28			465,231		500		0.43
Other borrowings		4,034		40		3.97			3,717		31		3.34			802		7		3.49
Total interest-bearing liabilities		583,854	$	455		0.31	%		570,143	$	434		0.30	%		466,033	$	507		0.44	%
Noninterest-bearing deposits		213,521							208,793							196,726
Noninterest-bearing liabilities		7,345							3,328							6,085
Stockholders' equity		64,893							70,584							62,837
Total liabilities and stockholders' equity	$	869,613						$	852,848						$	731,681
Net earning assets	$	244,368						$	244,106						$	234,335
Net interest income			$	6,642						$	5,859						$	5,452
Interest rate spread(3)						3.12	%						2.79	%						2.96	%
Net interest margin(4)						3.21	%						2.88	%						3.11	%

	For the Six Months Ended June 30,
	2022							2021
			Interest							Interest
	Average		and		Yield/			Average		and		Yield/
(dollars in thousands)	Balance		Dividends		Rate(5)			Balance		Dividends		Rate(5)
Interest-earning assets:
Loans(1)	$	501,783	$	11,596		4.62	%	$	483,586	$	11,204		4.63	%
Loans held for sale		10,864		217		3.99			14,081		233		3.31
Debt securities		108,459		1,122		2.07			59,893		511		1.71
Other(2)		200,167		455		0.45			115,888		114		0.20
Total interest-earning assets		821,273	$	13,390		3.26	%		673,448	$	12,062		3.58	%
Noninterest-earning assets		40,004							29,971
Total assets	$	861,277						$	703,419
Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	526,909	$	693		0.26	%	$	396,541	$	811		0.41	%
Time deposits		46,251		125		0.54			52,906		226		0.85
Total interest-bearing deposits		573,160		818		0.29			449,447		1,037		0.46
Other borrowings		3,877		71		3.66			411		7		3.41
Total interest-bearing liabilities		577,037	$	889		0.31	%		449,858	$	1,044		0.46	%
Noninterest-bearing deposits		211,170							185,424
Noninterest-bearing liabilities		7,202							6,361
Stockholders' equity		65,868							61,776
Total liabilities and stockholders' equity	$	861,277						$	703,419
Net earning assets	$	244,236						$	223,590
Net interest income			$	12,501						$	11,018
Interest rate spread (3)						2.95	%						3.12	%
Net interest margin(4)						3.04	%						3.27	%

⁽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.

⁽⁵⁾  Annualized

9

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands except per share amounts)

	2Q'22			1Q'22			4Q'21			3Q'21			2Q'21
Per Share Data:
Earnings per common share - Basic	$	0.62		$	0.71		$	0.56		$	0.67		$	0.72
Earnings per common share - Diluted	$	0.62		$	0.71		$	0.55		$	0.67		$	0.72
Book value per common share	$	20.48		$	20.87		$	21.42		$	20.99		$	20.40
Common shares outstanding		3,155,308			3,150,261			3,129,046			3,127,730			3,126,474
Weighted-average basic common shares outstanding		3,151,760			3,138,695			3,128,831			3,127,524			3,126,197
Weighted-average diluted common shares outstanding		3,189,319			3,174,697			3,162,746			3,145,017			3,139,179
Selected Performance Ratios and Other Data:
Return on average assets(1)		0.90	%		1.05	%		0.85	%		1.09	%		1.24	%
Return on average equity(1)		12.13			12.70			10.11			12.99			14.40
Average yield on earning assets		3.43			3.09			3.11			3.34			3.40
Net interest margin(2)		3.21			2.88			2.85			3.06			3.11
Efficiency ratio(3)		54.32			59.28			63.83			55.90			53.99
Noninterest expense/average assets(1)		1.79			1.77			1.93			1.82			1.79
Asset Quality Data:
Nonaccrual loans	$	349		$	-		$	-		$	-		$	-
Loans 90 days past due + other real estate owned		-			-			-			-			-
Total nonperforming assets		349			-			-			-			-
Nonperforming assets/total assets		0.04	%		-			-			-			-
Loans 30-89 days past due	$	1,597		$	1,546		$	1,121		$	526		$	1,022
Total loans		544,084			485,573			496,873			483,634			478,138
Loans 30-89 days past due/total loans		0.29	%		0.32	%		0.23	%		0.11	%		0.21	%
Net (recoveries) charge-offs/average loans (1)		-			(0.23	)		-			-			0.01
Capital Ratios:
Tier 1 Leverage Capital Ratio (Company)		8.16	%		8.10	%		8.12	%		8.45	%		8.61	%
Tier 1 Leverage Capital Ratio (Bank)		8.61			8.56			8.53			8.82			9.01
Common Equity Tier 1 Capital Ratio (Bank)		12.61			13.60			12.72			13.30			13.87
Tier 1 Risk-Based Capital Ratio (Bank)		12.61			13.60			12.72			13.30			13.87
Total Risk-Based Capital Ratio (Bank)		13.72			14.70			13.80			14.45			15.11

⁽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.

10

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'22			1Q'22			4Q'21			3Q'21			2Q'21
Net Income
Net earnings (GAAP)	$	1,967		$	2,241		$	1,752		$	2,099		$	2,262
Plus: Provision (credit) for loan losses		731			(371	)		81			-			(185	)
Plus: income taxes		566			727			429			664			717
PTPP(1) net earnings (non-GAAP)	$	3,264		$	2,597		$	2,262		$	2,763		$	2,794
Earnings per Share (EPS)
Weighted average common shares, diluted		3,189,319			3,174,697			3,162,746			3,145,017			3,139,179
EPS, diluted (GAAP)	$	0.62		$	0.71		$	0.55		$	0.67		$	0.72
PTPP(1) EPS, diluted (non-GAAP)	$	1.02		$	0.82		$	0.72		$	0.88		$	0.89
Return on Average Assets (ROAA)
Average assets	$	869,613		$	852,848		$	826,027		$	771,867		$	731,681
ROAA (GAAP)		0.90	%		1.05	%		0.85	%		1.09	%		1.24	%
PTPP(1) ROAA (non-GAAP)		1.50	%		1.22	%		1.10	%		1.43	%		1.53	%
Return on Average Equity
Average equity	$	64,893		$	70,584		$	69,336		$	64,636		$	62,837
ROAE (GAAP)		12.13	%		12.70	%		10.11	%		12.99	%		14.40	%
PTPP(1) ROAE (non-GAAP)		20.12	%		14.72	%		13.05	%		17.10	%		17.79	%
Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	537,566		$	479,526		$	490,198		$	476,513		$	470,488
Less PPP loans		(1,023	)		(4,937	)		(15,172	)		(27,554	)		(54,563	)
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	536,543		$	474,589		$	475,026		$	448,959		$	415,925
Average loans, excluding loans held for sale	$	514,166		$	489,263		$	477,175		$	477,322		$	483,587
Less average PPP loans		(2,876	)		(9,652	)		(18,684	)		(43,033	)		(69,318	)
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	511,290		$	479,611		$	458,491		$	434,289		$	414,269
Interest on loans, excluding loans held for sale	$	5,912		$	5,684		$	5,686		$	5,708		$	5,505
Less interest income and earned fee income on PPP loans		(237	)		(496	)		(584	)		(865	)		(874	)
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	5,675		$	5,188		$	5,102		$	4,843		$	4,631
Growth rate over linked quarter		9.4	%		1.7	%		5.3	%		4.6	%		(0.7	)%
Average loan yield, excluding loans held for sale (GAAP)		4.60	%		4.65	%		4.77	%		4.78	%		4.55	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		4.44	%		4.33	%		4.45	%		4.46	%		4.47	%

⁽¹⁾ Pre-tax, pre-provision

11

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, 2022			June 30, 2021
Net Income
Net earnings (GAAP)	$	4,208		$	4,496
Plus: (credit) provision for loan losses		360			(185	)
Plus: income taxes		1,293			1,424
PTPP(1) net earnings (non-GAAP)	$	5,861		$	5,735
Earnings per Share (EPS)
Weighted average common shares, diluted		3,188,802			3,128,185
EPS, diluted (GAAP)	$	1.32		$	1.44
PTPP(1) EPS, diluted (non-GAAP)	$	1.84		$	1.83
Return on Average Assets (ROAA)
Average assets	$	861,277		$	703,419
ROAA (GAAP)		0.98	%		1.28	%
PTPP(1) ROAA (non-GAAP)		1.36	%		1.63	%
Return on Average Equity (ROAE)
Average equity (GAAP)	$	65,868		$	61,776
ROAE (GAAP)		12.78	%		14.56	%
PTPP(1) ROAE (non-GAAP)		17.80	%		18.57	%

⁽¹⁾ Pre-tax, pre-provision

12

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,
	2021			2020			2019			2018			2017
Net Income
Net earnings (GAAP)	$	8,347		$	4,458		$	3,542		$	4,042		$	2,817
Plus: Provision (credit) for loan losses		(104	)		2,850			1,131			591			256
Plus: income taxes		2,517			1,295			1,092			1,220			1,735
PTPP(1) net earnings (non-GAAP)	$	10,760		$	8,603		$	5,765		$	5,853		$	4,808
Earnings per Share (EPS)
Weighted average common shares, diluted		3,142,482			3,134,124			3,159,635			3,131,546			2,711,699
EPS, diluted (GAAP)	$	2.66		$	1.42		$	1.12		$	1.29		$	1.04
PTPP(1) EPS, diluted (non-GAAP)	$	3.42		$	2.74		$	1.82		$	1.87		$	1.77
Return on Average Assets (ROAA)
Average assets	$	751,576		$	595,363		$	456,797		$	379,288		$	331,682
ROAA (GAAP)		1.11	%		0.75	%		0.78	%		1.07	%		0.85	%
PTPP(1) ROAA (non-GAAP)		1.43	%		1.45	%		1.26	%		1.54	%		1.45	%
Return on Average Equity
Average equity	$	65,179		$	57,386		$	53,172		$	47,932		$	39,283
ROAE (GAAP)		12.81	%		7.77	%		6.66	%		8.43	%		7.17	%
PTPP(1) ROAE (non-GAAP)		16.51	%		14.99	%		10.84	%		12.21	%		12.24	%
Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	490,198		$	476,661		$	337,710		$	290,113		$	250,259
Less PPP loans		(15,172	)		(66,774	)		-			-			-
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	475,026		$	409,887		$	337,710		$	290,113		$	250,259
Average loans, excluding loans held for sale	$	480,606		$	429,802		$	309,350		$	283,967		$	240,875
Less average PPP loans		(50,315	)		(55,529	)		-			-			-
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	430,291		$	374,273		$	309,350		$	283,967		$	240,875
Interest on loans, excluding loans held for sale	$	22,598		$	19,553		$	15,884		$	14,215		$	11,403
Less interest income and earned fee income on PPP loans		(3,358	)		(1,725	)		-			-			-
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	19,240		$	17,828		$	15,884		$	14,215		$	11,403
Average loan yield, excluding loans held for sale (GAAP)		4.70	%		4.55	%		5.13	%		5.01	%		4.73	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		4.47	%		4.76	%		5.13	%		5.01	%		4.73	%

⁽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

13