PRIME MERIDIAN HOLDING CO Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

Management's discussion and analysis is presented to aid the reader in
understanding and evaluating the financial condition and results of operations
of Prime Meridian Holding Company, and its wholly-owned subsidiary, Prime
Meridian Bank. This discussion and analysis should be read with the condensed
consolidated financial statements, the footnotes thereto, and the other
financial data included in this report and in our annual report on Form 10-K for
the year ended December 31, 2021. Results of operations for the three months
ended March 31, 2022are not necessarily indicative of results that may be
attained for any other period. The following discussion and analysis present our
financial condition and results of operations on a consolidated basis, however,
because we conduct all of our material business operations through the Bank, the
discussion and analysis relate to activities primarily conducted at the
subsidiary level.

Certain information in this report may include "forward-looking statements" as
defined by federal securities law. 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

Our ability to predict results or the effect of future plans or strategies is
inherently uncertain. Factors that could have a material adverse effect on our
and our subsidiary's operations include, but are not limited to, changes in:

  • local, regional, and national economic and business conditions;

  • banking laws, compliance, and the regulatory environment;

WE and global securities markets, public debt markets and other capital


  • monetary and fiscal policies of the U.S. Government;

  • litigation, tax, and other regulatory matters;

• the demand for banking services, loan and deposit products in our market


  • quality and composition of our loan or investment portfolios;

  • risks inherent in making loans such as repayment risk and fluctuating
    collateral values;

  • competition;

• attract and retain key personnel, including our management team and


• technology, product distribution channels, end-user demands and customer acceptance.

    new products;

  • consumer spending, borrowing and savings habits;

  • any failure or breach of our operational systems, information systems or
    infrastructure, or those of our third-party vendors and other service
    providers; including cyber-attacks;

• natural disasters, public unrest, bad weather, pandemics, public health,

and other conditions affecting our operations or those of our customers;

• other economic, competitive, governmental, regulatory or technological aspects

the factors that affect us; and

• application and interpretation of accounting principles and guidelines.


Prime Meridian Holding Company ("PMHG") was incorporated as a Florida
corporation on May 25, 2010, and is the one-bank holding company for, and sole
shareholder of, Prime Meridian Bank (the "Bank") (collectively, the "Company").
The Bank opened for business on February 4, 2008 and was acquired by PMHG on
September 16, 2010. PMHG has no significant operations other than owning the
stock of the Bank. The Bank offers a broad array of commercial and retail
banking services through four full-service offices located in Tallahassee,
Crawfordville, and Lakeland, Florida and through its online banking platform.

As a one-bank holding company, we generate most of our revenue from interest on
loans and investments. Our primary source of funding for our loans is deposits.
Our largest expenses are interest on those deposits and salaries and employee
benefits. We measure our performance through our net interest margin, return on
average assets, and return on average equity, while maintaining appropriate
regulatory leverage and risk-based capital ratios.

The following table shows selected information for the periods ended or at the
dates indicated:

                                                        At or for the
                                     Three Months           Year            Three Months
                                        Ended               Ended              Ended
                                                        December 31,
                                    March 31, 2022          2021           March 31, 2021
Average equity as a percentage
of average assets                              8.28 %            8.67 %               9.00 %
Equity to total assets at end of
period                                         7.59              7.97                 8.48
Return on average assets(1)                    1.05              1.11                 1.32
Return on average equity(1)                   12.70             12.81                14.72
Noninterest expense to average
assets(1)                                      1.77              1.87       


Nonperforming loans to total
loans at end of period                            -                 -       


Nonperforming assets to total
assets                                            -                 -                 0.11

(1) Annualized for the three months ended March 31, 2022 and 2021


Our critical accounting policies which involve significant judgments and
assumptions that have a material impact on the carrying value of certain assets
and liabilities and used in preparation of the Condensed Consolidated Financial
Statements as of March 31, 2022, have remained unchanged from the disclosures
presented in our Annual Report on Form 10-K for the year ended December 31,


The extent to which the COVID-19 pandemic may continue to impact our business,
results of operations, and financial condition, as well as our regulatory
capital and liquidity ratios will depend on future developments. We continue to
monitor the state of the pandemic and national and local responses to ensure the
safety of our clients and employees.  At March 31, 2022, all loans which were on
payment deferrals or modifications have reverted back to their premodification



Average assets totaled $852.8 million and $674.8 million for the three months
ended March 31, 2022 and 2021, respectively, an increase of $178.0 million, or
26.4%, over the comparable period in 2021. Comparing the first quarters of
2021 and 2022, 79.0% of the growth in average assets stemmed from an increase in
other interest-earning assets funded by higher deposit inflows. The average
balance of PPP loans decreased $61.2 million to $9.7 million from the first
quarter of 2021 to the first quarter of 2022.

Investment Securities. Our primary objective in managing our investment
portfolio is to maintain a portfolio of high quality, highly liquid investments
yielding competitive returns. We use the investment securities portfolio for
several purposes. It serves as a vehicle to manage interest rate and prepayment
risk, to generate interest and dividend income, to provide liquidity to meet
funding requirements, and to provide collateral for pledging to secure the
deposit of public funds at the Bank. At March 31, 2022, our debt securities
investment portfolio included U.S. government agency securities, U.S. government
treasury securities, municipal securities, mortgage-backed securities, and
asset-backed securities. As of the same date, this portfolio had a fair market
value of $107.7 million and an amortized cost value of $112.5 million. At March
31, 2022 and December 31, 2021, our investment securities portfolio represented
approximately 12.5% and 8.8% of our total assets, respectively. The average
yield on the average balance of investment securities for the three months ended
March 31, 2022 was 1.83%, compared to 1.67% for the comparable period in 2021.

Loans. Our primary earning asset is our loan portfolio and our primary source of
income is the interest earned on the loan portfolio. Our loan portfolio consists
of commercial real estate loans, construction loans, and commercial loans made
to small-to-medium sized companies and their owners, as well as residential real
estate loans, including first and second mortgages, and consumer loans. Our goal
is to maintain a high-quality portfolio of loans through sound underwriting and
lending practices. We work diligently to attract new lending clients through
direct solicitation by our loan officers, utilizing relationship networks from
existing clients, competitive pricing, and innovative structure. Our loans are
priced based upon the degree of risk, collateral, loan amount, and maturity.

Excluding $10.2 million in PPP loan forgiveness during the first quarter of
2022, the Company's net loan growth was essentially flat from year-end. Strong
loan production ($32.8 million in new fundings) and $19.9 million in draws on
existing facilities were offset by approximately $41.9 million in loan
prepayments and $11.9 million in curtailments and amortization. At March 31,
2022, PPP loans comprised $4.9 million, or 1.0%, of total loans.  The remaining
fees to be collected on this balance, net of costs, totals $274,000.  In total,
approximately 83.4% of the total loan portfolio was collateralized by commercial
and residential real estate mortgages at March 31, 2022 compared to 82.7% at
December 31, 2021.

Nonperforming assets.  At March 31, 2022 and December 31, 2021, the Company had
no nonperforming assets. We generally place loans on nonaccrual status when they
become 90 days or more past due, unless they are well secured and in the process
of collection. We also place loans on nonaccrual status if they are less than 90
days past due if the collection of principal or interest is in doubt. When a
loan is placed on nonaccrual status, any interest previously accrued, but not
collected, is reversed from income. At March 31, 2022, and December 31, 2021,
the Bank had no loans on nonaccrual status. Accounting standards require the
Company to identify loans as impaired loans when, based on current information
and events, it is probable that the Company will be unable to collect the
scheduled payments of principal or interest when due according to the
contractual terms of the loan agreement. These standards require that impaired
loans be valued at the present value of expected future cash flows, discounted
at the loan's effective interest rate, using one of the following methods: the
observable market price of the loan or the fair value of the underlying
collateral if the loan is collateral dependent. We implement these standards in
our monthly review of the adequacy of the allowance for loan losses and identify
and value impaired loans in accordance with GAAP.

Allowance for Loan Losses. Management's policy is to maintain the allowance for
loan losses at a level sufficient to absorb probable losses inherent in the loan
portfolio as of the balance sheet date. The allowance is increased by the
provision for loan losses and decreased by charge-offs, net of recoveries.
During the first quarter of 2022, the Bank reported a $371,000 credit for loan
losses due to flat loan growth (excluding PPP activity) and a $284,000 net
recovery during the quarter which reduced the historical loss factor on
commercial loans by 19 basis points. Management believes the allowance for loan
losses, which was $5.9 million or 1.22% of gross loans (excluding PPP
loans) at March 31, 2022 is adequate to cover losses inherent in the loan

Deposits. Deposits are the major source of the Company's funds for lending and
other investment purposes. Total deposits at March 31, 2022 were $787.9 million,
an increase of $25.0 million, or 3.3%, from December 31, 2021, with growth
coming from savings, NOW, and money-market accounts and attributed to expansion
of existing relationships and the addition of new clients. Management believes
that the potential exists for our deposit levels to fluctuate in the near future
due to the unprecedented level of liquidity in the market following the stimulus
efforts put in place to curtail the negative economic impact of the COVID-19
pandemic. The average balance of noninterest-bearing deposits accounted for
26.9% of the average balance of total deposits for the three months ended March
31, 2022, compared to 28.6% for the three months ended March 31, 2021.

Borrowings. The Bank has an agreement with the Federal Home Loan Bank of Atlanta
("FHLB") and pledges its qualified loans as collateral which would allow the
Bank, as of March 31, 2022, to borrow up to $86.5 million. In addition, the
Bank maintains unsecured lines of credit with correspondent banks that totaled
$47.0 million at March 31, 2022. There were no outstanding balances under any of
these lines at March 31, 2022.

In 2020, the Company entered into a Promissory Note (the "Note") and a Security
Agreement with Thomasville National Bank ("TNB"). Pursuant to the Note, the
Company obtained a $15 million revolving line of credit with a 5-year term. The
interest rate adjusts daily to the then-current Wall Street Journal Prime Rate
and was 3.50% at March 31, 2022.  Pursuant to the Security Agreement, the
Company has pledged to TNB all of the outstanding shares of common stock of the
Company's wholly-owned subsidiary, the Bank.  At March 31, 2022, the Company had
a $3,975,000 outstanding loan balance and incurred $31,000 in year-to-date
interest expense under this line.



Net interest income constitutes the principal source of income for the Bank and
results from the excess of interest income on interest-earning assets over
interest expense on interest-bearing liabilities. The principal interest-earning
assets are investment securities and loans. Interest-bearing liabilities
primarily consist of time deposits, interest-bearing checking accounts, savings
deposits, and money-market accounts. Funds attracted by these interest-bearing
liabilities are invested in interest-earning assets. Accordingly, net interest
income depends upon the volume of average interest-earning assets and average
interest-bearing liabilities as well as the interest rates earned or paid on
these assets and liabilities. The following tables set forth information
regarding: (i) the total dollar amount of interest and dividend income of the
Company from interest-earning assets and the resultant average yields; (ii) the
total dollar amount of interest expense on interest-bearing liabilities and the
resultant average costs; (iii) net interest income; (iv) interest-rate spread;
(v) net interest margin; and (vi) weighted-average yields and rates. Yields and
costs were derived by dividing annualized income or expense by the average
balance of assets or liabilities. The yields and costs depicted in the table
include the amortization of fees, which are considered to constitute adjustments
to yields.

As shown in the following table, there was compression in the Company's net
interest margin for the three month period ended March 31, 2022 due to a shift
in the asset mix towards lower-yielding earning assets triggered by excess
liquidity in the market and the resulting high level of cash balances on the
Bank's balance sheet.

                                                For the Three Months Ended March 31,
                                          2022                                         2021
                                       Interest                                     Interest
                         Average         and           Yield/         Average         and           Yield/
(dollars in
thousands)               Balance      Dividends        Rate(5)        Balance      Dividends        Rate(5)
Loans(1)                $ 489,263     $    5,684            4.65 %   $ 484,455     $    5,699            4.71 %
Loans held for sale        10,550            100            3.79        13,370            106            3.17
Debt securities
available for sale         84,088            385            1.83        59,629            249            1.67
Other(2)                  230,348            124            0.22        89,646             49            0.22


earning interest

assets                    814,249     $    6,293            3.09 %     647,100     $    6,103            3.77 %
assets                     38,599                                       27,743
Total assets            $ 852,848                                    $ 674,843

Savings, NOW and
money-market deposits   $ 517,506     $      335            0.26 %   $ 379,031     $      401            0.42 %
Time deposits              48,920             68            0.56        54,456            136            1.00


interest bearing

deposits                  566,426            403            0.28       433,487            537            0.50
Other borrowings            3,717             31            3.34            17              -               -
liabilities               570,143     $      434            0.30 %     433,504     $      537            0.50 %

Not bearing interest

deposits                  208,793                                      


Not bearing interest

liabilities                 3,328                                        


Stockholders' equity       70,584                                       


Total liabilities and
stockholders' equity    $ 852,848                                    $ 

674 843

Net earning assets      $ 244,106                                    $ 213,596
Net interest income                   $    5,859                                   $    5,566
Interest rate spread
(3)                                                         2.79 %                                       3.27 %
Net interest
margin(4)                                                   2.88 %                                       3.44 %

Ratio of
assets to average
liabilities                142.81 %                                     149.27 %

(1)   Includes nonaccrual loans
(2)   Other interest-earning assets include
federal funds sold, interest-bearing deposits and
FHLB stock.
(3)  Interest rate spread is the difference
between the total interest-earning asset yield
and the rate paid on total interest-bearing
(4)   Net interest margin is net interest income
divided by total average interest-earning assets,
(5)   Annualized


Comparison of Operating Results for the Three Months Ended March 31, 2022
And 2021

Earnings Summary
(dollars in thousands)
                                                                Change 1Q'22 vs. 1Q'21
                                       1Q'22       1Q'21         Amount         Percentage
Net Interest Income                  $ 5,859     $ 5,566     $      293                5.3 %
Provision (credit) for loan losses      (371 )         -           (371 )                -
Noninterest income                       518         672           (154 )            (22.9 )
Noninterest expense                    3,780       3,297            483               14.6
Income Taxes                             727         707             20                2.8
Net earnings                         $ 2,241     $ 2,234     $        7                0.3 %

Compared to the same period a year ago, net earnings were relatively flat as
higher interest income from securities and deposits with banks, lower interest
expense, and the credit for loan losses were offset by lower noninterest income,
higher noninterest expense and slightly higher income taxes.

Net Interest Income

Our operating results depend primarily on our net interest income, which is the
difference between interest and dividend income on interest-earning assets such
as loans and securities, and interest expense on interest-bearing liabilities
such as deposits.

Interest income
(dollars in thousands)
                                                    Change 1Q'22 vs. 1Q'21
                           1Q'22       1Q'21         Amount         Percentage
Interest income:
Loans                    $ 5,784     $ 5,805     $      (21 )             (0.4 %)
Securities                   385         249            136               54.6
Other                        124          49             75              153.1
Total interest income    $ 6,293     $ 6,103     $      190                3.1 %
Interest expense:
Deposits                     403         537     $     (134 )            (25.0 %)
Other borrowings              31           -             31                N/A
Total interest expense       434         537           (103 )            (19.2 )
Net interest income      $ 5,859     $ 5,566     $      293                5.3 %

Compared to the first quarter of 2021, the increase in net interest income
resulted from higher interest income on securities and deposits with banks
(driven by both volume and rate) and lower interest expense (due to management's
strategic reduction of deposit costs in the first quarter). Fee and interest
income from PPP loans declined $529,000 when compared to the first quarter of
2021 as the majority of PPP loans have moved through the forgiveness
process. Despite higher balances of interest-bearing liabilities, total interest
expense declined $103,000 from the first quarter of 2021 as the average rate
paid on interest-bearing liabilities declined 20 basis points from the first
quarter of 2021. The Company's net interest margin of 2.88% was down 56 basis
points from the first quarter of 2021, primarily attributed to the shift in the
earning asset mix from PPP loans to cash.


Provision for Loan Losses

The provision for loan losses is charged to earnings to increase the total loan
loss allowance to a level deemed appropriate by management. The provision is
based upon the volume and type of lending conducted by the Bank, industry
standards, general economic conditions, particularly as they relate to our
market areas, and other factors related to our historic loss experience and the
collectability of the loan portfolio. Excluding PPP activity, net loan growth
from December 31, 2021 was essentially flat. In addition, the Bank realized
a $284,000 net recovery during the first quarter of 2022 which reduced the
historical loss factor on commercial loans by 19 basis points.  The combination
of these factors led to a $371,000 credit for loan losses in the first quarter
of 2022.

While management believes the estimates and assumptions used in its
determination of the adequacy of the allowance are reasonable, there can be no
assurance that such estimates and assumptions will not be proven incorrect in
the future, or that the actual amount of future losses will not exceed the
amount of the established allowance for loan losses, or that any increased
allowance for loan losses that may be required will not adversely impact our
financial condition and results of operations. In addition, the determination of
the amount of our allowance for loan losses is subject to review by bank
regulators, as part of the routine examination process, which may result in
additions to our provision for loan losses based upon their judgment of
information available to them at the time of examination.

Noninterest income
(dollars in thousands)                                                       Change 1Q'22 vs. 1Q'21
                                                1Q'22          1Q'21         Amount          Percentage
Service charges and fees on deposit
accounts                                   $       68     $       53     $       15                28.3 %
Debit card/ATM revenue, net                       129            109             20                18.3
Mortgage banking revenue, net                     165            301           (136 )             (45.2 )
Income from bank-owned life insurance              95             63             32                50.8
Gain on sale of debt securities
available for sale                                  -            108           (108 )            (100.0 )
Other income                                       61             38             23                60.5
Total noninterest income                   $      518     $      672     $     (154 )             (22.9 %)

Compared to a year ago, the two main drivers of the decline in non-interest income were lower income from mortgage banks and the lack of a gain on the sale of available-for-sale debt securities. The decline in Mortgage Banking revenue was anticipated given rising rates and the high level of refinancing activity that occurred in 2021.

Noninterest expense
(dollars in thousands)                                            Change 1Q'22 vs. 1Q'21
                                          1Q'22       1Q'21        Amount        Percentage

Salaries and benefits $2,160 $1,852 $308

           16.6 %
Occupancy and equipment                     408         386            22               5.7
Professional fees                           146         130            16              12.3
Marketing                                   167         140            27              19.3
FDIC Assessment                             124          70            54              77.1
Software maintenance and amortization       242         250            (8 )            (3.2 )
Other                                       533         469            64              13.6
Total noninterest expense               $ 3,780     $ 3,297     $     483              14.6 %

Compared to the same period a year ago, nearly half of the increase in total
noninterest expense is attributed to increased salaries.  The Bank reported
higher head count with 99 full-time equivalents (FTEs) at March 31, 2022
compared to 88 FTEs a year ago.  Annual raises, higher group insurance costs,
higher incentive accrual, and increases to other employee benefit accounts also
contributed to the overall increase.

Income Taxes

Income taxes are based on amounts reported in the condensed consolidated
statements of earnings after adjustments for nontaxable income and nondeductible
expenses and consist of taxes currently due plus deferred taxes on temporary
differences in the recognition of income and expense for tax and financial
statement purposes. Income taxes were $727,000 for the three months ended March
31, 2022, compared to income taxes of $707,000 for the three months ended March
31, 2021, with the increase attributed to slightly higher pre-tax earnings
in 2022. The effective tax rate was 24.5% in the first quarter of 2022 versus
24.0% in the first quarter of 2021.



Liquidity describes our ability to meet financial obligations, including lending
commitments and contingencies, which arise during the normal course of business.
Liquidity is primarily needed to meet the borrowing and deposit withdrawal
requirements of the Company's clients, as well as meet current and planned
expenditures. Management monitors the liquidity position daily.

Our liquidity is derived primarily from our deposit base, scheduled amortization
and prepayments of loans and investment securities, funds provided by
operations, and capital. Additionally, as a commercial bank, we are expected to
maintain an adequate liquidity position. The liquidity position may consist of
cash on hand, cash on demand deposit with correspondent banks, federal funds
sold, and unpledged marketable securities such as United States government
agency securities, municipal securities, mortgage-backed securities, and
asset-backed securities.

The Bank also has external sources of funds through the FHLB, unsecured lines of
credit with correspondent banks, and the State of Florida's Qualified Public
Deposit ("QPD") Program. At March 31, 2022, the Bank had access to approximately
$86.5 million of available lines of credit secured by qualifying collateral with
the FHLB, in addition to $47.0 million in unsecured lines of credit maintained
with correspondent banks.

The Company has a $15 million revolving line of credit with TNB. From March 31, 2022the Company’s outstanding borrowings under this line amount to $3,975,000.

Some of our securities are pledged to collateralize certain deposits through our
participation in the State of Florida's QPD program. The market value of
securities pledged to the QPD program was $13.6 million at March 31, 2022
compared to $11.9 million at December 31, 2021. Our primary liquid assets,
excluding assets pledged to the QPD program, accounted for 37.9% and 35.1% of
total assets at March 31, 2022 and December 31, 2021, respectively.

Our core deposits consist of noninterest-bearing accounts, NOW accounts,
money-market accounts, time deposits $250,000 or less, and savings accounts. We
closely monitor our level of certificates of deposit greater than $250,000 and
other large deposits. At March 31, 2022, total deposits were $787.9 million, of
which $20.0 million were in certificates of deposits greater than $250,000,
excluding Individual Retirement Accounts (IRAs). We maintain a Contingency
Funding Plan ("CFP") that identifies liquidity needs and weighs alternate
courses of action designed to address those needs in emergency situations. We
perform a monthly cash flow analysis and stress test the CFP to evaluate the
expected funding needs and funding capacity during a liquidity stress event. We
believe that the sources of available liquidity are adequate to meet all
reasonably immediate short-term and intermediate-term demands and do not know of
any trends, events, or uncertainties that may result in a significant adverse
effect on our liquidity position.


Stockholders' equity was $65.8 million at March 31, 2022 compared to
$67.0 million at December 31, 2021. The $1.3 million change in equity is mostly
attributed to a $3.3 million increase in the unrealized losses of our investment
portfolio, partially offset by retention of earnings. In 2020, the Company
obtained a $15 million revolving line of credit with TNB. At its discretion, the
Company may take draws on that line and may contribute the proceeds as capital
to the Bank.  During the first quarter of 2022, the Company made a $400,000 draw
under this line that was used to partially fund the $567,000 cash dividend to
shareholders. At March 31, 2022, the Company had a $3,975,000 outstanding loan
balance and incurred year-to-date interest expense of $31,000 under this
revolving line of credit.

At March 31, 2022, the Bank was considered to be "well capitalized" under the
FDIC's Prompt Corrective Action regulations with an 8.56% Tier 1 Leverage
Capital Ratio, a 13.60% Equity Tier 1 Risk-Based Capital Ratio, a 13.60% Tier 1
Risk-Based Capital Ratio, and a 14.70% Total Risk-Based Capital Ratio, all above
the minimum ratios to be considered "well capitalized."

The following is a summary at March 31, 2022 and December 31, 2021 of the
regulatory capital requirements to be "well capitalized" and the Bank's capital

                                                            For Capital Adequacy               For Well Capitalized
                                  Actual                          Purposes                           Purposes
(dollars in
thousands)               Amount        Percentage         Amount          Percentage        Amount           Percentage
As of March 31, 2022
Tier 1 Leverage
Capital                 $  72,985             8.56 %   $     34,098              4.00 %   $    42,623               5.00 %
Common Equity Tier 1
Risk-based Capital         72,985            13.60           24,145              4.50          34,876               6.50
Tier 1 Risk-based
Capital                    72,985            13.60           32,193              6.00          42,924               8.00
Total Risk-based
Capital                    78,872            14.70           42,924              8.00          53,655              10.00

As of December 31,
Tier 1 Leverage
Capital                 $  70,548             8.53 %   $     33,071              4.00 %   $    41,338               5.00 %
Common Equity Tier 1
Risk-based Capital         70,548            13.45           23,596              4.50          34,083               6.50
Tier 1 Risk-based
Capital                    70,548            13.45           31,461              6.00          41,948               8.00
Total Risk-based
Capital                    76,522            14.59           41,948              8.00          52,435              10.00


The Bank is also subject to the following capital threshold requirements under the FDIC Quick Remedies Regulations.

                                                   Threshold Ratios
                                         Total      Tier 1     Tier 1    Tier 1
                                       Risk-Based Risk-Based Risk-Based Leverage
                                        Capital    Capital    Capital   Capital
Capital Category                         Ratio      Ratio      Ratio     Ratio

Well capitalized                         10.00%     8.00%      6.50%     5.00%

Adequately Capitalized                   8.00%      6.00%      4.50%     4.00%

Undercapitalized                        < 8.00%    < 6.00%    < 4.50%   < 4.00%

Significantly underfunded

Critically Undercapitalized                Tangible Equity/Total Assets ? 2%

Until PMHG has $3 billion in total consolidated assets, it will not be subject to any consolidated capital requirement.


Refer to Note 10 in the notes to condensed consolidated financial statements
included in this Form 10-Q for the period ending March 31, 2022 for a discussion
of off-balance sheet arrangements.

© Edgar Online, source Previews

About Virginia Ahn

Check Also

Could Elon Musk’s Twitter deal give China influence on the site?

Tesla CEO Elon Musk celebrates the opening of the automaker’s factory in Shanghai on January …