Prime Meridian Holding (PMHG) 8-K Prime Meridian Holding Company Reports First Quarter 2023 Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

Prime Meridian Holding Company Reports

FIRST QUARTER 2023 RESULTS

TALLAHASSEE, FL – April 27, 2023 (GLOBE NEWSWIRE) – Prime Meridian Holding Company (OTCQX: PMHG), the parent bank holding company for Prime Meridian Bank, today announced unaudited financial results for the quarter ended March 31, 2023. The Company reported net earnings of $2,501,000, or $0.79 per basic and $0.78 per diluted share, for the quarter ended March 31, 2023 compared to net earnings of $2,241,000 or $0.71 per basic and diluted share, for the quarter ended March 31, 2022.  

"We remain fully committed to our relationship banking strategy despite recent disruptive forces in the industry and general economy," said Sammie D. Dixon, Jr., Vice Chairman, President, and CEO regarding the Company's first quarter results. 

"We continue to focus on growing client relationships and providing exceptional service through all economic cycles.  Our core principles guide us every day to do the right thing for our clients, our employees, our shareholders.  That's what community banking is all about," he stressed.

"So long as we keep these core principles top of mind- layered with strong capital, liquidity, and credit metrics- we feel confident about our position in the markets we serve and about the opportunities ahead," he added.

First Quarter 2023 Highlights

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

(dollars in thousands except per share amounts)

	1Q'23			4Q'22			3Q'22			2Q'22			1Q'22
Net earnings	$	2,501		$	2,642		$	2,831		$	1,967		$	2,241
Book value per share	$	22.81		$	21.19		$	20.20		$	20.48		$	20.87
Earnings per share - Basic	$	0.79		$	0.83		$	0.90		$	0.62		$	0.71
Earnings per share - Diluted	$	0.78		$	0.83		$	0.89		$	0.62		$	0.71
Weighted-average basic shares outstanding		3,175,807			3,164,211			3,159,526			3,151,760			3,138,695
Weighted-average diluted shares outstanding		3,210,012			3,198,744			3,197,282			3,189,319			3,174,697
Return on average assets(1)		1.23	%		1.27	%		1.32	%		0.90	%		1.05	%
Return on average equity(1)		14.20			16.36			17.19			12.13			12.70
Average yield on earning assets(1)		4.78			4.59			4.04			3.43			3.09
Net interest margin(1)		3.92			3.98			3.71			3.21			2.88
Efficiency ratio(2)		55.72			54.56			50.53			54.32			59.28
Nonperforming assets/total assets(3)		0.17			0.09			0.12			0.04			-

⁽¹⁾ Ratio has been annualized on a 30/360 basis.

⁽²⁾ Efficiency Ratio represents noninterest expense divided by the sum of net interest income plus noninterest income.

⁽³⁾ Nonperforming assets include loans greater than 90 days past due and nonaccrual loans.

• Diluted earnings per share were $0.78 for the first quarter of 2023, a 9.9% increase over the first quarter of 2022.

• Return on assets increased to 1.23%, compared to 1.05% in the first quarter a year ago.

• Gross loans increased $15.2 million, or 2.5%, since December 31, 2022 with growth occurring in all categories, except consumer.  Gross loans are up $125.2 million over the same period last year, or 25.8%.

• Deposit balances decreased 2.0%, or $14.3 million, from year end (with average deposit balances down 3.6%, or $27.4 million) and decreased 9.0%, or $70.7 million, from a year ago (with average deposit balances down 6.7%, or $51.5 million). The Company, however, opened 301 net new non-maturity deposit accounts during the first quarter, a 2.2% growth rate since December 31, 2022.

• The Bank's estimated uninsured deposits were $240.4 million, or 34% of total deposits at March 31, 2023, excluding collateralized public funds accounts. 

• At March 31, 2023, available secured and unsecured borrowing capacity was $164.7 million through various sources including the Federal Home Loan Bank of Atlanta (FHLB) and lines of credit with several banks. When combined with maximum available brokered and wholesale funding capacity of $204.1 million, off-balance sheet funding sources total $368.8 million.

• At March 31, 2023, on balance sheet liquidity was $149.2 million, consisting of cash and equivalents and unpledged debt securities at fair value. Total liquidity sources of $518 million, or 72.2% of total deposits, represents 216% of estimated uninsured deposits at March 31, 2023.

• Compared to the linked quarter, book value per share increased $1.62 per share, or 7.6%, to $22.81 due to strong quarterly earnings, a favorable change in accumulated other comprehensive loss, and the favorable impact of adopting CECL.  

• The Bank's tangible common equity ratio was 9.10% at March 31, 2023 compared to 8.73% at December 31, 2022.  This is considered a non-GAAP financial measure and additional information, including a reconciliation, can be found on page 11.

1

Earnings Summary (Unaudited)

(dollars in thousands)

								Change 1Q'23 vs.
	1Q'23		4Q'22		1Q'22			4Q'22			1Q'22
Net interest income	$	7,555	$	7,858	$	5,859			(3.9	%)		28.9	%
Provision for credit losses		243		289		(371	)		(15.9	)		165.5
Noninterest income		441		429		518			2.8			(14.9	)
Noninterest expense		4,455		4,521		3,780			(1.5	)		17.9
Income taxes		797		835		727			(4.6	)		9.6
Net earnings	$	2,501	$	2,642	$	2,241			(5.3	)%		11.6	%

Net Interest Income (Unaudited)

(dollars in thousands)

							Change 1Q'23 vs.
	1Q'23		4Q'22		1Q'22		4Q'22			1Q'22
Interest income:
Loans	$	8,044	$	7,653	$	5,784		5.1	%		39.1	%
Debt securities		933		938		385		(0.5	)		142.3
Other		222		477		124		(53.5	)		79.0
Total interest income		9,199		9,068		6,293		1.4	%		46.2	%
Interest expense:
Deposits		1,533		1,137		403		34.8	%		280.4	%
Other borrowings		111		73		31		52.1			258.1
Total interest expense		1,644		1,210		434		35.9			278.8
Net interest income	$	7,555	$	7,858	$	5,859		(3.9	%)		28.9	%

On a linked quarter basis, the Company reported net interest income of $7.56 million for the first quarter of 2023, a decrease of $303,000, or 3.9%.   Strong loan growth and higher loan yields were offset by reduced cash balances, higher deposit costs, and the disproportionate effect of two fewer net interest-earning days.   Average interest-earning assets were down 2.6%, or $20.4 million. Compared to the first quarter of 2022, a change in the earnings asset mix and higher yields on all categories of interest-earning assets drove the improvement in net interest income, outpacing the effect of higher funding costs.

Our net interest margin for the first quarter of 2023 was 3.92%, a decrease of 6 basis points from the fourth quarter of 2022 and an increase of 104 basis points over the first quarter of 2022.  An improved earnings asset mix and higher interest rates were key drivers.  We anticipate that the Company's net interest income volume and net interest margin will be challenged the rest of the year due to industry-wide pressure for overall liquidity maintenance and funding demands.

2

Provision for Credit Losses

The Company adopted ASC 326 Current Expected Credit Losses "CECL" effective January 1, 2023.  The impact of adopting CECL resulted in a $2.6 million decrease to the allowance for credit losses.  The provision for credit loss expense was $243,000 for the quarter, with approximately half of that expense attributed to one of two remaining PPP loans being fully reserved for during the quarter and the balance attributed to loan growth. The allowance for credit losses to total loans was 0.79% at March 31, 2023 compared to 1.2% at December 31, 2022. 

Noninterest income (Unaudited)

(dollars in thousands)

							Change 1Q'23 vs.
	1Q'23		4Q'22		1Q'22		4Q'22			1Q'22
Service charges and fees on deposit accounts	$	85	$	83	$	68		2.4	%		25.0	%
Debit card/ATM revenue, net		151		136		129		11.0			17.1
Mortgage banking revenue, net		54		53		165		1.9			(67.3	)
Income from bank-owned life insurance		94		94		95		-			(1.1	)
Other income		57		63		61		(9.5	)		(6.6	)
Total noninterest income	$	441	$	429	$	518		2.8	%		(14.9	)%

Noninterest income increased slightly from its linked quarter due primarily to higher income from debit cards and ATM cards.  Compared to a year ago, the decline in mortgage banking revenue outpaced modest increases in service charges and fees on deposit accounts and income from debit cards and ATM cards leading to the 14.9% decrease in noninterest income.

Noninterest expense (Unaudited)

(dollars in thousands)

							Change 1Q'23 vs.
	1Q'23		4Q'22		1Q'22		4Q'22			1Q'22
Salaries and employee benefits	$	2,752	$	2,862	$	2,160		(3.8	)%		27.4	%
Occupancy and equipment		409		404		408		1.2			0.2
Professional fees		135		114		146		18.4			(7.5	)
Marketing		223		218		167		2.3			33.5
FDIC assessment		84		57		124		47.4			(32.3	)
Software maintenance, amortization and other		277		325		242		(14.8	)		14.5
Other		575		541		533		6.3			7.9
Total noninterest expense	$	4,455	$	4,521	$	3,780		(1.5	)%		17.9	%

Compared to the linked quarter, the decline in noninterest expense is mostly attributed to a decrease in salaries and employee benefits expense (due to less incentive pay) and lower software, amortization and other expense (mostly due to timing).  Occupancy and equipment expense and marketing expense were relatively flat.  Professional fees typically run higher in the first quarter due to year-end reporting activities.  The FDIC assessment expense reflects a combination of changing assessment rates and lower deposit balances. 

Compared to a year ago, the 17.9% increase in total noninterest expense is mostly attributed to higher salaries and employee benefits. Employee headcount increased from 99 FTEs at March 31, 2022 to 109 FTEs at March 31, 2023.  In addition to higher headcount, annual raises, higher group insurance costs, higher incentive accrual and increases to other employee benefit accounts also contributed to the overall increase.  Increases in marketing and software expenses reflect the needs of a growing bank.  The Company's efficiency ratio was 55.72% in the first quarter of 2023 and has remained below 56.0% for the last four quarters. 

3

Financial Condition

At March 31, 2023, the Company reported $816.3 million in total assets, $717.2 million in deposits, and $606.1 million in net portfolio loans. This compares to $815.2 million in total assets, $731.5 million in deposits, and $588.7 million in net portfolio loans at December 31, 2022.  Compared to December 31, 2022, the Company reported growth across all loan categories, except consumer.

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

	March 31, 2023						December 31, 2022
	Unaudited						Audited
	Amount			% of Total			Amount			% of Total
Commercial real estate	$	207,456			34.0	%	$	202,263			34.0	%
Residential real estate and home equity		227,595			37.2			224,211			37.6
Construction		78,159			12.8			75,151			12.6
Commercial		90,487			14.8			86,308			14.5
Consumer		7,095			1.2			7,698			1.3
Total loans		610,792			100.0	%		595,631			100.0	%
Net deferred loan costs		138						229
Allowance for credit losses		(4,802	)					(7,145	)
Loans, net	$	606,128					$	588,715

At March 31, 2023, the allowance for credit losses of $4.8 million, represented 0.79% of gross loans compared to $7.1 million, or 1.2% of gross loans, at December 31, 2022.  The adoption of CECL on January 1, 2023 resulted in a $2.6 million decrease in the allowance for credit losses. 

Deposit balances decreased $14.3 million, or 2.0%, since December 31, 2022, and $70.7 million, or 9.0% from the first quarter of 2022, with declining average balances in all categories, except time deposits.  Time deposit account balances increased $11.4 million, or 28.5%, since year-end, with $10.0 million of that increase attributed to public funds. Excess liquidity stemming in part from PPP-related stimulus programs started to dissipate in 2022, followed by competitive rate pressure on deposits in the second half of 2022 and early 2023 as some clients moved their deposits to higher-paying banks and alternative higher-yielding investments. We continue to monitor our deposits closely as we manage through this rising rate environment.

Total stockholders’ equity was $72.3 million, or 8.9% of total assets, at March 31, 2023, compared to $67.0 million at December 31, 2022, or 8.2% of total assets.  Strong earnings in the first quarter of 2023, a $1.5 million favorable change in the Company's accumulated other comprehensive income (loss), and a $1.9 million tax-effected change resulting from the adoption of CECL all contributed to higher equity, partially offset by common stock dividends of $698,000 ($0.22 per common share).  Book value per share increased from $21.19 at December 31, 2022 with 3,164,491 common shares outstanding to $22.81 at March 31, 2023, with 3,185,765 common shares outstanding.  

As of March 31, 2023, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 10.13%, a 13.07% Common Equity Tier 1 Capital Ratio, a 13.07% Tier 1 Risk-Based Capital Ratio, and a 13.83% Total Risk-Based Capital Ratio.  The Company maintains a $15 million, 5-year revolving Line of Credit, enhancing its liquidity sources to support the ongoing capital needs of the Bank. The Line of Credit matures in August 2025.  As of March 31, 2023, the Company reported an outstanding loan balance under this line of $1.725 million, $15 million in FHLB advances, and year-to-date interest expense of $111,000.  

Asset Quality

At March 31, 2023 the Bank had six nonaccrual loans totaling $1.35 million compared to two nonaccrual loans totaling $343,000 at December 31, 2022.  Net recoveries totaled $20,000 for the quarter ended March 31, 2023 and the ratio of nonperforming assets as a percentage of total assets was 0.17%. The Company adopted CECL effective January 1, 2023 which resulted in a $2.6 million ($1.9 million tax-effected) decrease in the allowance for credit losses.  Management believes that the allowance for credit losses which was $4.8 million, or 0.79% of gross loans, at March 31, 2023 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 March 31, 2023, the Bank had 109 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)

	1Q'23		4Q'22		3Q'22		2Q'22		1Q'22
Interest income:
Loans	$	8,044	$	7,653	$	6,755	$	6,029	$	5,784
Debt securities		933		938		878		737		385
Other		222		477		649		331		124
Total interest income		9,199		9,068		8,282		7,097		6,293
Interest expense:
Deposits		1,533		1,137		624		415		403
Other borrowings		111		73		56		40		31
Total interest expense		1,644		1,210		680		455		434
Net interest income		7,555		7,858		7,602		6,642		5,859
Provision for credit losses		243		289		241		731		(371	)
Net interest income after provision for credit losses		7,312		7,569		7,361		5,911		6,230
Noninterest income:
Service charges and fees on deposit accounts		85		83		78		73		68
Debit card/ATM revenue, net		151		136		132		143		129
Mortgage banking revenue, net		54		53		116		139		165
Income from bank-owned life insurance		94		94		96		94		95
Other income		57		63		61		55		61
Total noninterest income		441		429		483		504		518
Noninterest expense:
Salaries and employee benefits		2,752		2,862		2,367		2,238		2,160
Occupancy and equipment		409		404		413		396		408
Professional fees		135		114		124		130		146
Marketing		223		218		195		213		167
FDIC assessment		84		57		95		84		124
Software maintenance, amortization and other		277		325		310		285		242
Other		575		541		581		536		533
Total noninterest expense		4,455		4,521		4,085		3,882		3,780
Earnings before income taxes		3,298		3,477		3,759		2,533		2,968
Income taxes		797		835		928		566		727
Net earnings	$	2,501	$	2,642	$	2,831	$	1,967	$	2,241
Basic earnings per common share	$	0.79	$	0.83	$	0.90	$	0.62	$	0.71
Diluted earnings per common share		0.78		0.83		0.89		0.62		0.71

6

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings 

(in thousands, except per share amounts)

	Three Months Ended March 31,
	2023		2022
	Unaudited		Audited
Interest income:
Loans	$	8,044	$	5,784
Debt securities		933		385
Other		222		124
Total interest income		9,199		6,293
Interest expense:
Deposits		1,533		403
Other borrowings		111		31
Total interest expense		1,644		434
Net interest income		7,555		5,859
Provision for credit losses		243		(371	)
Net interest income after provision for credit losses		7,312		6,230
Noninterest income:
Service charges and fees on deposit accounts		85		68
Debit card/ATM revenue, net		151		129
Mortgage banking revenue, net		54		165
Income from bank-owned life insurance		94		95
Other income		57		61
Total noninterest income		441		518
Noninterest expense:
Salaries and employee benefits		2,752		2,160
Occupancy and equipment		409		408
Professional fees		135		146
Marketing		223		167
FDIC assessment		84		124
Software maintenance, amortization and other		277		242
Other		575		533
Total noninterest expense		4,455		3,780
Earnings before income taxes		3,298		2,968
Income taxes		797		727
Net earnings	$	2,501	$	2,241
Earnings per common share:
Basic	$	0.79	$	0.71
Diluted		0.78		0.71
Cash dividends per common share(1)		0.22		0.18

⁽¹⁾ Annual cash dividends were paid during the first quarters of 2023 and 2022.

7

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands)

	1Q'23		4Q'22		3Q'22		2Q'22		1Q'22
	(Unaudited)		(Audited)		(Unaudited)		(Unaudited)		(Unaudited)
Assets
Cash & cash equivalents	$	22,714	$	39,788	$	76,017	$	134,122	$	233,789
Debt securities available for sale		129,748		129,436		131,668		133,382		101,868
Debt securities held to maturity		11,816		11,805		11,794		8,777		6,185
Loans, held for sale		8,105		7,058		8,911		10,725		11,241
Loans, net		606,128		588,715		565,877		537,566		479,526
Federal Home Loan Bank stock		1,045		463		463		463		463
Premises & equipment, net		7,893		8,022		8,169		8,228		7,905
Right of use lease asset		2,989		3,044		3,098		3,151		3,205
Accrued interest receivable		2,623		2,385		2,132		1,933		1,649
Bank-owned life insurance		16,626		16,532		16,438		16,342		16,248
Other assets		6,570		7,924		7,748		6,148		4,087
Total Assets	$	816,257	$	815,172	$	832,315	$	860,837	$	866,166
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits	$	199,492	$	197,987	$	216,533	$	210,685	$	206,018
Savings, NOW and money-market deposits		466,202		493,439		500,263		535,359		534,049
Time deposits		51,542		40,109		38,618		38,545		47,876
Total Deposits		717,236		731,535		755,414		784,589		787,943
Other borrowings		1,725		4,275		4,125		4,125		3,975
FHLB Advances		15,000		-		-		-		-
Official checks		1,671		4,090		1,277		776		1,625
Operating lease liability		3,159		3,208		3,256		3,303		3,350
Other liabilities		4,790		5,011		4,339		3,415		3,512
Total Liabilities		743,581		748,119		768,411		796,208		800,405
Total Stockholders' Equity		72,676		67,053		63,904		64,629		65,761
Total Liabilities and Stockholders' Equity	$	816,257	$	815,172	$	832,315	$	860,837	$	866,166

8

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Average Balance Sheets (Unaudited)

(in thousands)

	1Q'23							4Q'22							1Q'22
			Interest							Interest							Interest
	Average		and		Yield/			Average		and		Yield/			Average		and		Yield/
	Balance		Dividends		Rate(5)			Balance		Dividends		Rate(5)			Balance		Dividends		Rate(5)
Interest-earning assets:
Loans(1)	$	602,022	$	7,958		5.29	%	$	588,727	$	7,561		5.14	%	$	489,263	$	5,684		4.65	%
Loans held for sale		7,345		86		4.68			7,845		92		4.69			10,550		100		3.79
Debt securities		141,268		933		2.64			142,205		938		2.64			84,088		385		1.83
Other(2)		19,335		222		4.59			51,585		477		3.70			230,348		124		0.22
Total interest-earning assets		769,970	$	9,199		4.78	%		790,362	$	9,068		4.59	%		814,249	$	6,293		3.09	%
Noninterest-earning assets		40,538							38,550							38,599
Total assets	$	810,508						$	828,912						$	852,848
Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	482,788	$	1,387		1.15	%	$	494,146	$	1,052		0.85	%	$	517,506	$	335		0.26	%
Time deposits		42,099		146		1.39			39,519		85		0.86			48,920		68		0.56
Total interest-bearing deposits		524,887		1,533		1.17			533,665		1,137		0.85			566,426		403		0.28
Other borrowings		7,301		111		6.08			4,180		73		6.99			3,717		31		3.34
Total interest-bearing liabilities		532,188	$	1,644		1.24	%		537,845	$	1,210		0.90	%		570,143	$	434		0.30	%
Noninterest-bearing deposits		198,790							217,401							208,793
Noninterest-bearing liabilities		9,074							9,088							3,328
Stockholders' equity		70,456							64,578							70,584
Total liabilities and stockholders' equity	$	810,508						$	828,912						$	852,848
Net earning assets	$	237,782						$	252,517						$	244,106
Net interest income			$	7,555						$	7,858						$	5,859
Interest rate spread(3)						3.54	%						3.69	%						2.79	%
Net interest margin(4)						3.92	%						3.98	%						2.88	%

⁽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 on a 30/360 basis.

⁽⁵⁾  Annualized

9

Prime Meridian Holding Company and Subsidiary

Financial Highlights (Unaudited)

(dollars in thousands except per share amounts)

	1Q'23			4Q'22			3Q'22			2Q'22			1Q'22
Per Share Data:
Earnings per common share - Basic	$	0.79		$	0.83		$	0.90			0.62		$	0.71
Earnings per common share - Diluted	$	0.78		$	0.83		$	0.89			0.62		$	0.71
Book value per common share	$	22.81		$	21.19		$	20.20			20.48		$	20.87
Common shares outstanding		3,185,765			3,164,491			3,162,975			3,155,308			3,150,261
Weighted-average basic common shares outstanding		3,175,807			3,164,211			3,159,526			3,151,760			3,138,695
Weighted-average diluted common shares outstanding		3,210,012			3,198,744			3,197,282			3,189,319			3,174,697
Selected Performance Ratios and Other Data:
Return on average assets(1)		1.23	%		1.27	%		1.32	%		0.90	%		1.05	%
Return on average equity(1)		14.20			16.36			17.19			12.13			12.70
Average yield on earning assets		4.78			4.59			4.04			3.43			3.09
Net interest margin(2)		3.92			3.98			3.71			3.21			2.88
Efficiency ratio(3)		55.72			54.56			50.53			54.32			59.28
Noninterest expense/average assets(1)		2.20			2.18			1.90			1.79			1.77
Asset Quality Data:
Nonaccrual loans	$	1,348		$	343		$	1,006		$	349		$	-
Loans 90 days past due and still accruing		-			404			-			-			-
Total nonperforming assets		1,348			747			1,006			349			-
Nonperforming assets/total assets		0.17	%		0.09	%		0.12	%		0.04	%		-
Loans 30-89 days past due	$	2,414		$	2,900		$	1,024		$	1,597		$	1,546
Total loans		610,792			595,631			572,639			544,084			485,573
Loans 30-89 days past due/total loans		0.40	%		0.49	%		0.18	%		0.29	%		0.32	%
Net (recoveries) charge-offs/average loans (1)		-			-			-			-			(0.23	%)
Capital Ratios:
Tier 1 Leverage Capital Ratio (Company)		9.93	%		9.09	%		8.59	%		8.16	%		8.10	%
Tier 1 Leverage Capital Ratio (Bank)		10.13			9.70			9.07			8.61			8.56
Common Equity Tier 1 Capital Ratio (Bank)		13.07			12.90			12.62			12.61			13.60
Tier 1 Risk-Based Capital Ratio (Bank)		13.07			12.90			12.62			12.61			13.60
Total Risk-Based Capital Ratio (Bank)		13.83			14.04			13.73			13.72			14.70
Tangible Common Equity Ratio(4) (Bank)		9.10			8.73			8.15			7.96			8.04

⁽¹⁾   Annualized

⁽²⁾   Net interest margin is net interest income divided by total average interest-earning assets, annualized.

⁽³⁾   Efficiency Ratio represents noninterest expense divided by the sum of net interest income plus noninterest income.

^{(4)   Tangible Common Equity Ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, please refer to page 11.} 

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)

	1Q'23			4Q'22			3Q'22			2Q'22			1Q'22
Net Income
Net earnings (GAAP)	$	2,501		$	2,642		$	2,831		$	1,967		$	2,241
Plus: Provision (credit) for credit losses		243			289			241			731			(371	)
Plus: income taxes		797			835			928			566			727
PTPP(1) net earnings (non-GAAP)	$	3,541		$	3,766		$	4,000		$	3,264		$	2,597
Earnings per Share (EPS)
Weighted average common shares, diluted		3,210,012			3,198,744			3,197,282			3,189,319			3,174,697
EPS, diluted (GAAP)	$	0.78		$	0.83		$	0.89		$	0.62		$	0.71
PTPP(1) EPS, diluted (non-GAAP)	$	1.10		$	1.18		$	1.25		$	1.02		$	0.82
Return on Average Assets (ROAA)(2)
Average assets	$	810,508		$	828,912		$	857,917		$	869,613		$	852,848
ROAA (GAAP)		1.23	%		1.27	%		1.32	%		0.90	%		1.05	%
PTPP(1) ROAA (non-GAAP)		1.75	%		1.82	%		1.86	%		1.50	%		1.22	%
Return on Average Equity(2)
Average equity	$	70,456		$	64,578		$	65,891		$	64,893		$	70,584
ROAE (GAAP)		14.20	%		16.36	%		17.19	%		12.13	%		12.70	%
PTPP(1) ROAE (non-GAAP)		20.10	%		23.33	%		24.28	%		20.12	%		14.72	%
Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	606,128		$	588,715		$	565,877		$	537,566		$	479,526
Less PPP loans		(181	)		(191	)		(199	)		(1,023	)		(4,937	)
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	605,947		$	588,524		$	565,678		$	536,543		$	474,589
Average loans, excluding loans held for sale	$	602,022		$	588,727		$	555,764		$	514,166		$	489,263
Less average PPP loans		(185	)		(195	)		(312	)		(2,876	)		(9,652	)
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	601,837		$	588,532		$	555,452		$	511,290		$	479,611
Interest on loans, excluding loans held for sale	$	7,958		$	7,561		$	6,646		$	5,912		$	5,684
Less interest income and earned fee income on PPP loans		3			(1	)		(41	)		(237	)		(496	)
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	7,961		$	7,560		$	6,605		$	5,675		$	5,188
Growth rate over linked quarter		5.3	%		14.5	%		16.4	%		9.4	%		1.7	%
Average loan yield, excluding loans held for sale (GAAP)		5.29	%		5.14	%		4.78	%		4.60	%		4.65	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		5.29	%		5.14	%		4.76	%		4.44	%		4.33	%
Tangible Common Equity Ratio
Stockholders' Equity (GAAP)	$	74,287		$	71,125		$	67,860		$	68,550		$	69,653
Less: Intangibles		-			-			-			-			-
Tangible Stockholders' Equity (non-GAAP)	$	74,287		$	71,125		$	67,860		$	68,550		$	69,653
Total Assets (GAAP)	$	816,173		$	815,142		$	832,170		$	860,735		$	866,103
Less: Intangibles		-			-			-			-			-
Tangible Assets (non-GAAP)	$	816,173		$	815,142		$	832,170		$	860,735		$	866,103
Tangible Common Equity Ratio (non-GAAP)		9.10	%		8.73	%		8.15	%		7.96	%		8.04	%

⁽¹⁾ Pre-tax, pre-provision

⁽²⁾ Annualized

11

Prime Meridian Holding Company and Subsidiary

Non-GAAP Measures and Ratio Reconciliation

Annual Pre-Tax Pre-Provision Calculation Unaudited)

(dollars in thousands except per share amounts)

	For the Year Ended December 31,
	2022			2021			2020			2019			2018
Net Income
Net earnings (GAAP)	$	9,681		$	8,347		$	4,458		$	3,542		$	4,042
Plus: Provision (credit) for credit losses		890			(104	)		2,850			1,131			591
Plus: income taxes		3,056			2,517			1,295			1,092			1,220
PTPP(1) net earnings (non-GAAP)	$	13,627		$	10,760		$	8,603		$	5,765		$	5,853
Earnings per Share (EPS)
Weighted average common shares, diluted		3,193,774			3,142,482			3,134,124			3,159,635			3,131,546
EPS, diluted (GAAP)	$	3.03		$	2.66		$	1.42		$	1.12		$	1.29
PTPP(1) EPS, diluted (non-GAAP)	$	4.27		$	3.42		$	2.74		$	1.82		$	1.87
Return on Average Assets (ROAA)
Average assets	$	852,272		$	751,576		$	595,363		$	456,797		$	379,288
ROAA (GAAP)		1.14	%		1.11	%		0.75	%		0.78	%		1.07	%
PTPP(1) ROAA (non-GAAP)		1.60	%		1.43	%		1.45	%		1.26	%		1.54	%
Return on Average Equity
Average equity	$	65,549		$	65,179		$	57,386		$	53,172		$	47,932
ROAE (GAAP)		14.77	%		12.81	%		7.77	%		6.66	%		8.43	%
PTPP(1) ROAE (non-GAAP)		20.79	%		16.51	%		14.99	%		10.84	%		12.21	%
Adjusted Average Loan Yield:
Net loans, excluding loans held for sale	$	588,715		$	490,198		$	476,661		$	337,710		$	290,113
Less PPP loans		(191	)		(15,172	)		(66,774	)		-			-
Adjusted net loans, excluding loans held for sale and PPP (non-GAAP)	$	588,524		$	475,026		$	409,887		$	337,710		$	290,113
Average loans, excluding loans held for sale	$	537,304		$	480,606		$	429,802		$	309,350		$	283,967
Less average PPP loans		(3,061	)		(50,315	)		(55,529	)		-			-
Adjusted average loans, excluding loans held for sale and PPP (non-GAAP)	$	534,243		$	430,291		$	374,273		$	309,350		$	283,967
Interest on loans, excluding loans held for sale	$	25,803		$	22,598		$	19,553		$	15,884		$	14,215
Less interest income and earned fee income on PPP loans		(776	)		(3,358	)		(1,725	)		-			-
Adjusted interest on loans, excluding loans held for sale and PPP (non-GAAP)	$	25,027		$	19,240		$	17,828		$	15,884		$	14,215
Average loan yield, excluding loans held for sale (GAAP)		4.80	%		4.70	%		4.55	%		5.13	%		5.01	%
Adjusted average loan yield, excluding loans held for sale and PPP (non-GAAP)		4.68	%		4.47	%		4.76	%		5.13	%		5.01	%

⁽¹⁾ Pre-tax, pre-provision

CONTACT:	Clint F. Weber, Chief Financial Officer and Executive Vice President
	(850) 907-2300
	Prime Meridian Holding Company
	Website: www.primemeridianbank.com

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