Exhibit 99.1

FOR IMMEDIATE RELEASE

Prime Meridian Holding Company Reports

THIRD Quarter 2020 Results

COVID-19 Update

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets and significantly increased unemployment levels.  The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments and the duration of the pandemic and actions taken by governmental authorities to slow the spread of the disease and mitigate its economic impact.

Management believes credit quality deterioration directly related to the pandemic still could materialize in the future. Through September 30, 2020, the Company has accommodated 70 requests for payment deferrals or modifications on loans totaling $42.4 million, or 11.5% of the Bank’s portfolio loans, excluding PPP loans.  Approximately 88.9% of the requests were for loans secured with real estate.  At quarter end, 62 of these 70 loan modification requests, totaling $34.7 million, had reverted back to original pre-modification terms and are being paid as agreed. The tables below give more detail on loan modification activity and PPP loan originations through September 30, 2020.

Active Loan Deferral Requests 

September 30, 2020

(dollars in thousands)

PPP Loans by Industry

September 30, 2020

(dollars in thousands)

Earnings Summary (Unaudited)

(dollars in thousands)

On a linked quarter basis, the Company’s performance primarily benefitted from the $606,000 decrease in the provision for loan losses. Growth in both net interest income and noninterest income, driven primarily by interest and fees on loans and fee income from two back-to-back interest rate swap transactions, and lower interest and noninterest expense also contributed to the quarter's higher earnings. Higher income tax expense, due to higher income before taxes, partially offset these positive net income drivers. 

Compared to the same period a year ago, the $517,000 increase in net earnings reflects higher interest income on loans and higher noninterest income (driven by mortgage revenue and fee income) and lower interest and noninterest expense.  An increase in the provision for loan losses and income tax expense partially offset these positive contributions to net income. 

A 20.3% increase in interest income from loans, propelled by the origination of commercial real estate loans and PPP loans, combined with lower deposit funding costs, resulted in the 17.8% increase in net interest income for the nine months ended September 30, 2020 compared to the same period a year ago.  Offsetting this $2.0 million increase in net interest income is a $1.9 million increase in the provision for loan losses, due primarily to charge-off activity in the second quarter and $559,000 in cumulative unallocated reserves to provide for potential credit deterioration associated with the COVID-19 global pandemic. Year-to-date loan growth (excluding PPP loans) is approximately $23 million higher in 2020 than 2019, also contributing to the higher provision.

Interest income (Unaudited)

(dollars in thousands)

On a linked quarter basis and compared to the third quarter of 2019, the increase in net interest income reflects a change in the balance sheet mix with funds shifting out of federal funds sold, deposits with banks and securities and into loans. The average loan balances increased $146.8 million, or 46.9%, from the third quarter of 2019, with more than half of the loan growth coming from PPP loan originations in the second and third quarters of 2020.  Excluding PPP loans, the average loan balance still increased approximately $64.6 million, or 20.6%, from the same period last year, boosted primarily by commercial real estate loan originations.  

Interest expense (Unaudited)

(dollars in thousands)

Despite higher balances of interest-bearing liabilities, total interest expense declined $55,000 from the second quarter of 2020 and $229,000 from the third quarter of 2019.  Management has strategically lowered interest rates on deposits resulting in a 49-basis-point decrease since the third quarter of 2019. 

Margin Analysis (Unaudited)

(dollars in thousands)

While there has been net interest margin compression since the third quarter of 2019, there was slight improvement on a linked quarter basis.  A shift in the earning assets mix from cash, federal funds sold, and securities to loans combined with overall lower cost of funds resulted in the 11-basis-point improvement in net interest margin.

Compared to a year ago, yield compression from PPP loans combined with lower market interest rates has negatively impacted the Company's net interest margin. Subtracting out the impact of the PPP loans, the Company's adjusted average loan yield was 4.73%, compared to 5.23% in the third quarter of 2019.  (Please refer to "Non-GAAP Measures and Ratio Reconciliation" in the Tables on pages 12-13 for more detail). Looking forward, management expects fluctuations in its net interest margin, in part, due to the uncertain timing and methods of PPP loans exiting the balance sheet and the resulting shift in the earnings assets mix. Pressure from declining loan yields was partially offset by lower deposit costs and an increase in the average balance of noninterest-bearing deposits as a percent of the average balance of total deposits from 23.2% in the third quarter of 2019 to 27.5% in the third quarter of 2020.

Provision for Loan Losses

Comparing the third quarter to the second quarter of 2020, the provision for loan losses decreased approximately 49.4%, or $606,000. The Company took $686,000 in net charge-offs during the second quarter compared to $36,000 in the third quarter, contributing to the large variance in the provision between the two quarters.

The provision for loan losses for the quarter and nine months ended September 30, 2020 increased substantially over the same periods in 2019.  The Company recognized $1.1 million in net charge-offs for the first nine months of 2020 (unrelated to the COVID-19 pandemic) and year-to-date loan growth (excluding PPP loans) is approximately $23 million higher in 2020 than 2019.  The charge-offs, in conjunction with an increase in general and specific reserves and a $559,000 addition to unallocated reserves in anticipation of possible COVID-19 related credit deterioration, has resulted in higher provision expense in 2020. 

Noninterest income (Unaudited)

(dollars in thousands)

On a linked quarter basis, noninterest income increased across all categories, with the exception of income from bank-owned life insurance, which remained constant. The increase in total noninterest income was largely driven by a $135,000 increase in other income, resulting primarily from the origination of back-to-back client interest rate swaps during the third quarter. Mortgage banking revenue remained fairly flat over the second quarter due to a longer than normal holding period for held-for-sale loans, driven by a large volume of refinance activity in the general mortgage market.

Compared to the third quarter of 2019, growth in debit card/ATM net revenue, mortgage banking net revenue, and other income significantly outweighed declines in income from bank-owned life insurance and service charges and fees on deposit accounts, resulting in the $200,000 increase year-over-year.  Increases in debit card/ATM net revenue largely stemmed from the Bank processing more debit card transactions, while the decline in service charges and fees from 2019 levels is attributed to slowed business activity resulting from COVID-19.  The mortgage team has reported strong results in 2020, already surpassing 2019 production by units, volume, and gain on sales revenue.  As previously discussed, the increase in other income resulted from the Company's addition of an interest rate hedging program which allows commercial loan clients to swap from variable to fixed interest rates. 

Noninterest expense (Unaudited)

(dollars in thousands)

On a linked quarter basis, a $48,000 decline in salaries and benefits and $26,000 decline in other expense were the driving factors in the decrease in noninterest expense. The Company reported lower commissions and payroll taxes in the third quarter due, in part, to the longer turnover period for held-for-sale loans.  The $26,000 decline in other noninterest expense is mainly attributable to decreases in printing and supplies and other miscellaneous expenses. The Company recognized higher miscellaneous expenses in the second quarter associated with its virtual annual shareholder's meeting and the printing and mailing of its annual proxy materials.

Compared to the third quarter of 2019, deferred loan origination fees increased in the third quarter of 2020 due to portfolio loan growth and the higher inventory of held-for-sale mortgage loans in the Bank's loan portfolio at quarter-end, causing a decline in salaries and employee benefits expense.  In addition, marketing costs are down $75,000, or 43.6%, and travel and entertainment expenses are down $43,000, or 98.5%, as the COVID-19 pandemic continues to limit travel and group activities. These savings were partially offset by the $62,000 increase in the FDIC assessment from the third quarter of 2019 when the Deposit Insurance Fund Reserve Ratio exceeded its 1.38% threshold and resulted in a credit towards the Bank's quarterly assessment. 

Balance Sheet

At September 30, 2020, the Company reported $620.7 million in total assets, $555.2 million in deposits, and $465.6 million in net portfolio loans. This compares to $500.9 million in total assets, $438.3 million in deposits, and $337.7 million in net portfolio loans at December 31, 2019. Loan growth occurred in all categories, with the exception of consumer loans which declined slightly.  Nearly all of the net growth in the commercial sector stemmed from PPP loan originations as excess client liquidity has tempered non-PPP commercial loan growth.  Excluding PPP loans, the Company still achieved double digit loan growth, or approximately 13.3%, since year-end due mostly to strong loan production in the commercial real estate and residential real estate sectors.  The composition of the Bank’s loan portfolio was as follows on the indicated dates:

Prime Meridian Holding Company and Subsidiary

Loans by Class

(dollars in thousands)

The $117.0 million increase in deposits since December 31, 2019 is attributed to increased market share, deposits associated with PPP loans, and conversion of new PPP clients to full banking relationships.  Furthermore, existing clients have maintained additional liquidity in the current environment. PPP deposits were estimated to be $34.7 million at June 30, 2020 and $31.7 million at September 30, 2020. While management anticipates some shrinkage in deposits as PPP funds are spent, management expects the majority of the increase in total deposits will remain long term.

Total stockholders’ equity was $58.7 million, or 9.5% of total assets, at September 30, 2020 compared to $55.9 million at December 31, 2019, or 11.2% of total assets.  Increases in retained earnings and accumulated other comprehensive income were partially offset by the Company's $1.2 million share repurchase that was initiated toward the end of the first quarter.  Book value per share increased from $17.51 at December 31, 2019 to $18.81 at September 30, 2020, with 3,117,842 common shares outstanding.

As of September 30, 2020, the Bank was considered to be “well capitalized” with a Tier 1 Leverage Capital Ratio of 9.06%, a 13.79% Common Equity Tier 1 Capital Ratio, a 13.79% Tier 1 Risk-Based Capital Ratio, and a 15.04% Total Risk-Based Capital Ratio.  Since December 31, 2019, the Holding Company has injected $6 million into the Bank.  Also, during the third quarter, the Company closed on a $15.0 million 5-year revolving Line of Credit, enhancing its liquidity sources to support the ongoing capital needs of the Bank.  As of September 30, 2020, there were no outstanding borrowings under this Line of Credit. 

Asset Quality

Loans totaling $1.3 million were deemed to be impaired under the Bank’s policy at September 30, 2020, with reserves on impaired loans totaling $258,000.  At September 30, 2020, the Bank had five nonaccrual loans in the aggregate amount of $1.3 million, compared to twelve nonaccrual loans totaling $2.6 million at December 31, 2019.  At September 30, 2020, the Company reported no loans greater than 90 days past due and accruing and $234,000 in other real estate owned. Net charge-offs, totaling $36,000 for the quarter ended September 30, 2020, were predominantly in the consumer loan category and not related to the COVID-19 pandemic. Nonperforming assets as a percentage of total assets stood at 0.25% at the end of the third quarter. Management believes that the allowance for loan losses which was $5.8 million, or 1.49% of gross loans (excluding PPP loans), at September 30, 2020 is adequate.

About Prime Meridian Holding Company

Headquartered in Tallahassee, Florida, Prime Meridian Holding Company (OTCQX: PMHG) offers a broad range of banking services through its wholly owned subsidiary, Prime Meridian Bank, a Florida state-chartered non-member bank. Founded in 2008, the Bank now serves the Tallahassee and Lakeland/Winter Haven Metropolitan Statistical Areas (MSA), including clients in North and Central Florida as well as South Georgia and South Alabama. The Bank currently has four Florida locations: two in Tallahassee, Florida, one in Crawfordville, Florida, and one in Lakeland, Florida. As of September 30, 2020, the Bank had 90 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, U.S. generally accepted accounting principles (GAAP). We refer to those financial measures and ratios as "non-GAAP financial measures." We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results.

We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present, and future periods.

These non-GAAP measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures is included at the end of the financial statement tables.

Tables Follow

Prime Meridian Holding Company and Subsidiary

Condensed Consolidated Statements of Earnings (Unaudited)

(in thousands except per share amounts)

⁽¹⁾ Annual cash dividends were paid during the first quarters of 2020 and 2019.