Prime Meridian Holding Company
Prime Meridian — FY2023 Earnings Presentation
37 slides from Prime Meridian's earnings presentation, Jan 29, 2024
Slide 1: Investor Presentation 2023Y
Investor Presentation 2023Y 7s HOLDING COMPANY
Slide 2: Forward-looking statements and non-GAAP measures
This Presertaton, including informaton incorporated herein by reference, may contain forwerdooking statements wihin the mearing of fe Private Secures Litgaton Reform Act of 1995, Words such as “may,” “coud,” “shoul,” woul,” “beleve,” “anécpat,” “estmate,” “expect” “rtend” “pla,” “project” “is confde
Slide 3: Glossary of Terms
GLOSSARY OF TERMS + Q-21 or Qt 2021 First Quarter of 2021 + 0221 or 022021 Second Quarter of 2021 + 08-21 oF 03 2021 Third Quarter of 2021 + 421 oF G4 2021 — Fourh Quarter of 2021 + Q-220r 1 2022 First Quarter of 2022 + 02-220" 02 2022 Seoond Quarter of 2022 + 08-2207 03 2022 Third Quarter of 2022 +
Slide 4: Q4 2023 Overview
Q4 2023 Overview Ticker Market Capitalization Price /TBV") Assets Loans, net Deposits Shareholders’ Equity NPAs@)/Assets Leverage Ratio (Company) Leverage Ratio (Bank) Shares Outstanding Institutional Ownership Bank Website Investor Website ({) TRV= Tenge Book Vae (Q)NPRS = Nonpedorming Assets COMPA
Slide 5: Investment Considerations
INVESTMENT CONSIDERATIONS ¥ History of proftable operations, driven by strong organicloan growth and core depositbase Y Continued emphasis on expense management and historically stable operating efficiency ratio V Net interest Margin increased 10.2% to 3.79% in 2023 comparedto 3.44% in 2022 Y — Corp
Slide 6: Profile | Management Team
PROFILE | MANAGEMENT TEAM Y Experienced managementteam with proven track record of franchise growth and development ¥ Community leaders who know their clients Y History of profitable bank operations Sammie D. Dixon, Jr. Vice Chairman, President and Chief Executive Officer ‘Age: 64 | 26 years banking
Slide 7: Mission
MISSION PURPOSE CORE VALUES CORPORATE CULTURE Who we are. What we stand for. Building bankers to serve our clients and community in order to optimize shareholder value. Banking done right, right away. + Passion — level of intense excellence and commitment beyond simply meeting requirements + Grace—h
Slide 8: Corporate Culture
CORPORATE CULTURE ifferent Banking Model V Prime Meridian Bank promotes and maintains a culture of openness and transparency to encourage exposure of team members to all aspects of banking. y Teammembers, executive officers and . 2018, 2019, 2020, 2021, 2022, 2023 board members interact to resolve P
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS, Diluted Earnings Per Share Return on Average Assets $2.68 191% Diluted EPS ROAE GAAP 2023 GAAP 2023 a nad ve coe te ts $3.97 17.65% ee) ee) ee Po som Diluted EPS ROAE ose | | PTPP 2023 PTPP 2023 I i | | 1.07% ROAA 17.58% um (mth me me 200 at me Ev) GAAP 2023 Net Loans CAGR soe!
Slide 10: Net Interest Drivers
NET INTEREST DRIVERS (dollars in millions and represents average period-ending balance) Average Securities Yield Average Loan Yield I Net Loans Average Cost of Interest-Bearing Liabilities MH Noninterest- Bearing Deposits Se call il Ill Interest Bearing Liabilities (fr PRIM O MERIDIAN INVESTORS.PRIM
Slide 11: Building Franchise Value
Total Assets (in mon: BUILDING FRANCHISE VALUE let Loans (nmiions) r coon 388% fe respective yea. Source: SOP alcompary documents (fy > PRIME ( MERIDIAN NVESTORS.PRIMEMERIDIANBANK.COM | TCX PMG 14
Slide 12: Building Shareholder Value
BUILDING SHAREHOLDER VALUE Total Common Equity (n cacr-93% Book Value Per Share Net income (in thousands) Earnings Per Share (! 7 cacr - 88% Notes: Pime Men jot, al nancial datas of December 31 oftierespecive yea. Soure: SEP Gi se $128 milion in 2008;ust over $2.0 milion in Deventer, 2010 Brough wea
Slide 13: Strong Record of Pre-Tax Pre-Provision (PTPP) Performance (Non-GAAP)
STRONG RECORD OF PRE-TAX PRE-PROVISION (PTPP) PERFORMANCE (Non-GAAP) PTPP Operating Earnings (Nc PTPP Earnings Per Share, Fully Diluted (Non-GAAP) PTPP Return On Average Equity (Non-c (fy > PRIME “A MERIDIAN HOLDING COMPANY @
Slide 14: Balance Sheet - Bond Portfolio Statistics
BALANCE SHEET— BOND PORTFOLIO STATISTICS Investment Securities Segmentation Portfolio: December 31, 2023 Total Investments: $136.3 million 21.54% Net Unrealized Gain (Loss) AFS: ($7.8 million) 33.20% EFFECTIVE AVG AVG QUARTER DURATION YIELD LIFE 4Q23 3.45 274% 468 3023 3.62 267% 495 2023 3.74 2.63%
Slide 15: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY A Fixed Rate Loans $188.7 millon * Weighted Average Maturity 5 8 years A Variable Rate Loans $463.2 million * $58.7 million ST Variable Rate (0-12 Month reset * $404.5 milion LT Variable Rate (>12 Month reset) Fixed vs Variable Rate Loans in iors % Change in Projected Basel
Slide 16: Disciplined Credit Processes
DISCIPLINED CREDIT PROCESSES (im thousands) Granular Portfolio— Lending Exposure Limits Concentration limits set for primary v Secured Legal Limit -Bank $ 21,644 segments of the portfolio. ¥ Secured In-House Limit $ 8,000 Y Top 25 Relationships $168,288 Intemal company data as of 1231/2023, * Decent
Slide 17: CRE Commitments & Exposure
CRE COMMITMENTS & EXPOSURE (dollars in thousands) v As part of its overall risk management program, Prime Meridian Bank pursues a program of controlled growth in its Commercial Real Estate (CRE) portfolio and maintains its CRE exposure within regulatory guidelines Total RiskBased Capital-Bank $ 92,1
Slide 18: Loan Portfolio
LOAN PORTFOLIO Total Loans (in millions) $484 $497 $596 $652 Loans (in thousands) Loan Portfolio Real Estate MorigageLoans ‘a Composite ‘Commercial RealEstate (CRE) $ 223795 Comparison Residential Real Estate and HELOC 2easTe ‘Sonsinuction ______ fa * Commercial Real Estate (ORE) ‘Tidal Real Estate
Slide 19: Residential Loan Portfolio
RESIDENTIAL LOAN PORTFOLIO Total Residential Loans (in millions) $158 $184 $224 $255 . . on Residential Residential Loans (in thousands) Loan Portfolio Residential Real Estate and HELOC. fee Composite 14OwnerOccupied&HELOC $ 168,416 Comparison 1-4Non-Owner Occupied 2433 sg ‘Mutifamily: 2725 = 1-4 Ow
Slide 20: Core Funding
CORE FUNDING Total Deposits (in millions) $581 = $763 $749 * Core Funding v Company's depositfranchise is comprised Composite of 25% noninterest-bearing deposits om Comparison i ™ 1 Noninterest Bearing Deposits (in thousands) 1 Money Market os = NOW Noninterest Bearing S$ 189426 Savings MoneyMarket
Slide 21: Core Funding
CORE FUNDING Deposit Highlights Q4 2023 + Diversified core deposit base and balanced distribution between commercial and retail clients. + Average balance per account of $48,700 + Non-core funding represents $55.6 million, or 9.7% of total interest-bearing liabilities. + Q4-23 average cost of funds
Slide 22: Non-Maturity Deposits
Non-Matvrity Deposits + Average new non-maturity deposit volume of $19.5 million, and 167 new accounts for 4th quarter 2023 + — Focus on noninterest-bearing and NOW accounts. + 8.5% year-over-year growth in the number of non-maturity deposit accounts. Net New Non-Maturity Deposit Accounts Net New No
Slide 23: Total Liquidity
Cash and Cash Unpledged Debt Available Credit Maximum Available Equivalents Securities (FairValue) Lines Brokered + Wholesale $28.4 million - — $118.4 million $176.1 million -F $213.6 million On-Balance Sheet Liquidity Off-Balance Sheet Liquidity $146.8 million + $389.7 million TOTAL LIQUIDITY $536.
Slide 24: Asset Quality
Asset Quality 1.00 aiag NPAs(") / Total Assets (%) 0.80 0.70 0.60 0.52 0.50 0.40 0.40 0.30 0.20 0.19 ° [| = 0.00 200 || 2019 2020 2021 2022 2023 (NPA=Nengerorming Assets Source: S&P Global and intemal company documents. Alfinancial daa as of December 31 of he respective year unless cherwise noted. O
Slide 25: Deposit Market Share
Deposit MARKET SHARE Total Deposit YoY Deposit _ 5-Year Deposit Institution 3 2023 (%) Leon, FL Wells Fargo Bank NA sD 1 1 18.34 22.48 (24.94) 501 Capita City Bank FL 2 2 17.04 15.08 394 944 Bank of America NA Ne 5 3 15.66 1801 (4.02) 1182 Truist Bank Ne 4 4 11.80 1283 (15.43) (182) Prime Meridian B
Slide 26: Appendix | Tables
Appendix | TABLES
Slide 27: Financial Highlights (unaudited)
Financial Highlights (unaudited) (dollars in thousands exceptper share amounts) 49723 3923 2Q'28 1923 49722 Per Share Data: Eamungs per common share - Basic s oss $ oes $ on $s om $ oss Enmnings per common share - Diluted s oss $s 06 $ 070 § om $ oss ‘Book vale per common share s 2453 $ peo $ 2325 §
Slide 28: Condensed Consolidated Statements of Earnings
Condensed Consolidated Statements of Earnings (in thousands except per share amounts) ‘2 Amual cath dividends were paid during the frst quarters of 2023 and 2022, ius HOLDING COMPANY INVESTORS.PRIMEMERIDIANBANK.COM | OTCQX: PMHG 28
Slide 29: Condensed Consolidated Statements of Earnings (unaudited)
Condensed Consolidated Statements of Earnings (unaudited) (in thousands except per share amounts) 4Q23 3928 2928 19:23 4Q22 Interest income ‘Loans s oss $ so $ 8370 $ gous 7683 Debt securities 921 319 ‘5 933 938 ‘Oter 237 24 188 ™ 7 Total interest income Ts TOI 58 is F068 Interest expense Deposits 3
Slide 30: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (inthousands) 49:23 3Q'28, 29:25 1928, 4922 i Canandited— —Cnandited)— —CUnandted) Unaudited) Andie ets Cash & cash equivalents s mais $ rao $ 199 $ mrs $3978 Debt securities available for sale 124495 133838 126792 129748 19.36 Debt securities held to mansity 11
Slide 31: Results of Operations (unaudited)
Results of Operations (unaudited) (dollars in thousands) 39123 Taterest Yie Average and Rate) Balance. Dividends Interest-earning assets: Loans) S622 $ 9577 596% $ 620297 $ 8939 ‘Loans held for sale 5730 3 565 5850 2 Debt securities 134004 sa 274 BTL 319 Other 20501 257 349 17398 2a ‘Total interest-
Slide 32: Results of Operations (unaudited)
Results of Operations (unaudited) (dollars in thousands) (dollars tm thousands) Interest-eaming assets: Loans) Loans held for sale Debt securities Other ‘Total interest-earning assets Noninterest-eaming assets ‘Total assets Interest-bearing liabilities: ‘Savings, NOW and money-market deposits Time d
Slide 33: Reconciliation of Non-GAAP Disclosures
RECONCILIATION OF NON-GAAP DISCLOSURES ‘Non-GAAP Measures and Ratio Reconciliation (Unaudited) (dollars in thousands except per share amowots) 49723 3Q'23 2923 1923 4Q22 ‘NetIncome ‘Net eamings (GAAP) s 1830 $ 210 227 $ 201 $s 262 Plus: Provision (credit) for credit losses ud 175 325 28 29 ‘Plus: in
Slide 34: Reconciliation of Non-GAAP Disclosures
RECONCILIATION OF NON-GAAP DISCLOSURES ‘Non-GAAP Measures and Ratio Reconciliation (Unaudited) (dollars in thousands except per share amowots) 4923 3Q23 2923 1923 4922 Adjusted Average Loan Yield: Net loans, excluding loans held for sale S 66127 $ BITE $—GIATHA SKI SER TIS Less PPP loans 6) a 4s) as
Slide 35: Reconciliation of Non-GAAP Disclosures
RECONCILIATION OF NON-GAAP DISCLOSURES ‘Non-GAAP Measures and Ratio Reconciliation (Unaudited) (dollars in thousands except per share amowots) 4923 3Q23 2923 19’ 4Q22 Stockholders Equity (GAAP) s 976 $ 74787 $ 717 $ new $ ‘Less: Intangibles - - " ‘Tangible Stockholders’ Equity (non-GAAP) x Bw mR FT
Slide 36: Reconciliation of Non-GAAP Disclosures
RECONCILIATION OF NON-GAAP DISCLOSURES ‘Non-GAAP Measures and Ratio Reconciliation (Unaudited) (dollars in thousands except per share amowots) For the Year Ended December 31, 7023 2022 2021 7020 2019 ‘Net Income Neteamings (GAAP) s sm ges $ 3M S$ 4458S 330 Plus: Provision (credit) for credit losses
Slide 37: Reconciliation of Non-GAAP Disclosures
RECONCILIATION OF NON-GAAP DISCLOSURES ‘Non-GAAP Measures and Ratio Reconciliation (Unaudited) (dollars in thousands except per share amowots) For the Year Ended December 31, 2023 2022 2021 2020 201s Adjusted Average Loan Yield: jet loans, excluding loans held for sale s 616127 $ 588715 $ 490198 $ 4
Prime Meridian Holding — FY2023 Earnings Presentation on 6ix