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8-K - FORM 8-K - Prime Meridian Holding Cod894390d8k.htm

Exhibit 99

PRIME MERIDIAN HOLDING COMPANY REPORTS

FOURTH QUARTER AND YEAR END 2014 RESULTS

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

Highlights

 

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

 

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

 

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

 

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

 

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

 

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

Net Interest Income

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

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


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

Noninterest Income

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

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

Noninterest Expense

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

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

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


Financial Condition

Balance Sheet

As of December 31, 2014

(in thousands)

 

ASSETS          

LIABILITIES AND

STOCKHOLDERS’ EQUITY

 

Cash & Investments

   $ 49,952       Deposits    $ 183,971   

Loans, held for sale

     1,871       Other Liabilities      3,520   
        

 

 

 

Loans, net

  151,869   

Premises & Equipment

  3,563    Total Liabilities   187,491   

Other Assets

  3,103   
  

 

 

       
Stockholders’ Equity   22,867   

Total Assets

$ 210,358    Total Liabilities & Stockholders’ Equity $ 210,358   
  

 

 

       

 

 

 

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

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

 

     As of December 31,  
     2014     2013  
     Amount      % of Total     Amount      % of Total  

Commercial real estate

   $ 52,661         34.2   $ 44,796         36.4

Residential real estate and home equity

     51,858         33.7     38,571         31.4

Construction

     15,876         10.3     12,933         10.5

Commercial

     30,755         20.0     24,651         20.0

Consumer

     2,877         1.8     2,072         1.7
  

 

 

      

 

 

    

Total Loans

$ 154,027      100.00 $ 123,023      100.00
  

 

 

      

 

 

    

Deferred loan costs, net

  (60   (69

Allowance for loan and lease losses

  (2,098   (1,734
  

 

 

      

 

 

    

Loans, net

$ 151,869    $ 121,220   
  

 

 

      

 

 

    


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

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

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

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

About Prime Meridian Holding Company

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


Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. Words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “is confident that,” and similar expressions are intended to identify these forward-looking statements. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiary or on the Company’s current plans, estimates, and expectations. These forward-looking statements involve risk and uncertainty and a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. Factors that could have a material adverse effect on our operations and the operations of our subsidiary, Prime Meridian Bank, include, but are not limited to various risks, uncertainties, and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy, and liquidity. These factors should not be construed as exhaustive. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Registration Statement on Form S-1, dated December 11, 2013, and other reports and statements the Company has filed with Securities and Exchange Commission which are available at the SEC’s website (www.sec.gov). We do not have a policy of updating or revising forward-looking statements except as otherwise required by law, and silence by management over time should not be construed to mean that actual events are occurring as estimated in such forward-looking statements.


Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Balance Sheets

(Dollars in thousands)

 

     Year Ended December 31,  
     2014      2013  
     (Unaudited)         

Assets

     

Cash & cash equivalents

     7,555         34,166   

Securities available for sale

     42,397         44,071   

Loans, held for sale

     1,871         150   

Loans, net

     151,869         121,220   

Federal Home Loan Bank stock

     186         204   

Premises & equipment, net

     3,563         3,757   

Deferred tax asset

     362         426   

Accrued interest receivable

     624         516   

Bank-owned life insurance

     1,613         1,562   

Other assets

     318         401   
  

 

 

    

 

 

 

Total Assets

  210,358      206,473   
  

 

 

    

 

 

 

Liabilities and Stockholder’s Equity

Noninterest-bearing demand deposits

  43,148      59,011   

Savings, NOW and money-market deposits

  122,166      109,760   

Time deposits

  18,657      14,594   

Other borrowings

  2,699      5,719   

Official checks

  368      636   

Other liabilities

  453      392   
  

 

 

    

 

 

 

Total Liabilities

  187,491      190,112   
  

 

 

    

 

 

 

Total Stockholders’ Equity

  22,867      16,361   
  

 

 

    

 

 

 

Total Liabilities and Stockholder’s Equity

  210,358      206,473   
  

 

 

    

 

 

 


Prime Meridian Holding Company and Subsidiary

Consolidated Statements of Earnings

(Dollars in thousands except per share data)

 

     For the Three Months Ended      For the Years Ended  
     December 31,      December 31,  
     2014     2013      2014      2013  
     (Unaudited)            (Unaudited)         

Interest income:

          

Loans

   $ 1,963      $ 1,624       $ 7,134       $ 6,076   

Securities

     247        233         922         838   

Other

     1        16         60         56   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total interest income

  2,211      1,873      8,116      6,970   
  

 

 

   

 

 

    

 

 

    

 

 

 

Interest Expense:

Deposits

  157      155      625      646   

Other borrowings

  7      15      36      58   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total interest expense

  164      170      661      704   
  

 

 

   

 

 

    

 

 

    

 

 

 

Net interest income

  2,047      1,703      7,455      6,266   

Provision for loan losses

  (50   110      747      513   
  

 

 

   

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

  2,097      1,593      6,708      5,753   
  

 

 

   

 

 

    

 

 

    

 

 

 

Noninterest income:

Service charges and fees on deposit accounts

  31      33      138      104   

Gain on sale of SBA loans

  —        —        —        246   

Mortgage banking revenue

  74      58      309      325   

Gain on sale of securities available for sale

  43      —        60      14   

Other income

  51      49      203      170   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total noninterest income

  199      140      710      859   
  

 

 

   

 

 

    

 

 

    

 

 

 

Noninterest expense:

Salaries and employee benefits

  756      706      3,210      2,650   

Occupancy and equipment

  235      235      899      897   

Professional fees

  69      25      395      128   

Other

  392      324      1,394      1,186   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total noninterest expense

  1,452      1,290      5,898      4,861   
  

 

 

   

 

 

    

 

 

    

 

 

 

Earnings before income taxes

  844      443      1,520      1,751   

Income taxes

  299      145      514      602   
  

 

 

   

 

 

    

 

 

    

 

 

 

Net earnings

  545      298      1,006      1,149   
  

 

 

   

 

 

    

 

 

    

 

 

 

Basic earnings per share

$ 0.30    $ 0.20    $ 0.59    $ 0.77   

Diluted earnings per share

$ 0.30    $ 0.20    $ 0.58    $ 0.76   


Prime Meridian Holding Company and Subsidiary

Financial Highlights (unaudited)

 

     Three Months Ended     Year Ended  
     December 31,     December 31,  
     2014     2013     2014     2013  
     (Unaudited)                    

Per Share Data:

        

Earnings per share - Basic

   $ 0.30      $ 0.20      $ 0.58      $ 0.77   

Earnings per share - Diluted

   $ 0.30      $ 0.20      $ 0.59      $ 0.76   

Book value per share

   $ 11.78      $ 10.92      $ 11.78      $ 10.92   

Weighted average basic shares outstanding

     1,822,116        1,498,830        1,709,746        1,497,737   

Weighted average diluted shares outstanding

     1,826,345        1,504,093        1,726,662        1,518,618   

Selected Performance Ratios and Other Data:

        

Return on average assets(1)

     1.06     0.65     0.48     0.62

Return on average equity(1)

     10.33     7.34     5.21     7.08

Average yield on earning assets

     4.49     3.95     4.02     3.94

Net interest margin

     4.14     3.58     3.70     3.55

 

     Year Ended
December 31,
 
     2014     2013  

Net charge-offs (recoveries) to average loans

     0.28     0.02

Stockholders’ equity to total assets

     9.34     7.89

Tier 1 leverage capital ratio (Bank)

     9.52     8.41

Tier 1 risk-based capital ratio (Bank)

     12.84     12.41

Total risk-based capital ratio (Bank)

     14.09     13.66

Nonaccrual loans (in thousand)

   $ 171,000      $ —     

Total nonperforming assets

   $ 171,000      $ —     

NPAs / Assets

     0.08     0.00

 

1 ROAA and ROAE are annualized

 

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